Heng Huat Resources Group Bhd, a company involved in manufacturing and trading of coconut and oil palm biomass materials, is scheduled to be listed in ACE Market of Bursa Malaysia on 25th July 2014.
The Initial Public Offering (IPO) consists of 46.5 million new ordinary shares and offer for sale of 14.66 million shares at an IPO price of RM0.45 per share at RM0.10 par value. 49.16 million shares will be for private placement, 5 million shares to the eligible employees while the remaining 7 million shares will be opened to the Malaysian public.
The IPO will raise about RM20.93 million in proceeds. Out of this, RM4 million will be use for capital expenditures, RM9.38 million for repayment of bank borrowing, RM4.55 million working capital & RM3 million is for listing expenses.
Heng Huat Resources Group principal activities are in manufacturing and trading of coconut and oil palm biomass materials and value-added products, as well as manufacturing and marketing of mattresses and related products.
In addition, it provides oil palm empty fruit bunch fiber and coconut fiber for various applications, including mattress, briquette, coconut fiber sheet, and geotextile, paper pulp, landscaping, and horticulture; coconut peat for fertigation and soil conditioning applications; and coconut fiber sheets for mattress.
More information regarding the company can be found in Heng Huat Resources Group webpage.
Heng Huat Resources Group intends to pay 20 percent of its profit after tax as dividend. Base on 2013 figures & IPO price of RM0.45, this translate to dividend yield of 2.40 percent or 0.96 sen per share.
The table below is the financial summary for Heng Huat Resources Group Bhd.
| FYE Jun 2011 | FYE Jun 2012 | FYE Jun 2013 | |
|---|---|---|---|
| Revenue (RM’000) | 31,702 | 62,965 | 73,740 |
| Profit after Tax (RM’000) | 13,715 | 12,635 | 9,892 |
| Earnings per Share (sen)* | 6.66 | 6.14 | 4.81 |
| Price Earnings Ratio (x)* | 6.00 | 6.52 | 8.32 |
* Based on number of shares post IPO
** Annualize
Kenanga Investment Bank is the main adviser, sponsor, underwriter and placement agent of the IPO.
For those who are interested in Heng Huat Resources Group IPO, you may subscribe at ATM machines or via Internet Banking. The subscription period is opened until 16th July 2014 at 5pm. Tentative balloting date is on 18th July while the allotment date is on 23rd July 2014.
Heng Huat Resources Group stock name in Bursa Malaysia is “HHGROUP”.
View Heng Huat Resources Group prospectus in Bursa Malaysia webpage.
What do you think about Heng Huat Resources Group IPO? Are you going to subscribe?
Fair Value / Target Price
Kenanga – RM0.53
TA Securities – RM0.48