share_log

RIMBACO GROUP GLOBAL LIMITED(1953.HK):新股报告

RIMBACO GROUP GLOBAL LIMITED (1953.HK): IPO Report

中泰國際 ·  Apr 14, 2020 00:00  · Researches

  Company profile

Rimbaco is a Malaysian building construction contractor founded in 1985. Currently, the company is involved in 21 building construction projects, of which 13 are factory projects and 8 are institutional, commercial or residential projects. The total amount of the original contract is about RM1.66 billion.

Chinese and Thai views

A number of policies stimulate the Malaysian construction industry: According to CITC's strategy, West Malaysia accounts for more than 85% of the total value of construction projects completed in Malaysia. The construction value of West Malaysia is expected to increase from RM132.3 billion in 2019 to RM166.2 billion in 2023, with a compound annual growth rate of 5.9%. According to the 2019 Malaysian Budget, one of the main initiatives is to allocate RM1.5 billion to the public housing scheme. To support the state's booming economy, Penang is undertaking comprehensive development projects worth MYR 1 billion to develop new towns, such as the Penang International Commercial City with an estimated cost of RM9 billion.

In terms of operating performance: In the 2017-2019 fiscal year, the company's operating income was RM350 million, HKM160 million, and RM260 million respectively, of which revenue from the five major customers accounted for 95.1%, 81.1% and 86.1% respectively, while the single largest customer accounted for 59.3%, 36.1% and 31.6% respectively; gross margins were 11.9%, 16.8%, and 12.4%, respectively. The decline in gross margin in 2019 was due to a decrease in the number of factory projects with high surplus margins; material costs accounted for about 5% and 12.5% of service costs, respectively 40.6% and 27.3%; net interest rates were 8.7%, 11.1%, and 4.7% respectively; the decline in 2019 was due to listing expenses; the project winning rates were 33%, 33% and 17%, respectively. In addition, the company has a total of 6 building construction projects that have begun but are yet to be completed. The original contract amount was about RM980 million, and the remaining unconfirmed revenue is estimated to be around RM260 million, RM380 million, and RM26 million. Revenue was confirmed in fiscal year 20-22, respectively.

In terms of valuation: Based on the 1.26 billion share capital after the global public offering, the company's market value is HK$5-580 million, which is lower than the average of the Hong Kong stock industry. The price-earnings ratio of the company in 2019 was about 21.7-25.0 times, higher than the industry average; the net price-earnings ratio was about 1.90-2.00 times, higher than the industry average. In terms of profitability, ROE and ROA in 2019 were 12.9% and 5.3%, respectively, lower than the industry average. The sponsor's 19-year history has a record of 1 square meter increase, yet in recent years, only one new IPO, which also belongs to the Malaysian construction industry, did not break on the first day. Considering that the IPO market focused mainly on another biotech company during the same period, we gave it a score of 52 and rated it “no subscription.”

Risk warning: (1) market competition risk, (2) impact of project bid rate, (3) high concentration of the five major customers

The translation is provided by third-party software.


The above content is for informational or educational purposes only and does not constitute any investment advice related to Futu. Although we strive to ensure the truthfulness, accuracy, and originality of all such content, we cannot guarantee it.
    Write a comment