The Company is a regional communications solutions and services provider with operations in Singapore, Thailand and the Philippines covering four main segments:
- In-Building Coverage
- Outdoor Construction
- Telecommunications Implementation
- Maintenance Services
I am not privy to the projected performance for 2015. Assuming it makes a fully diluted EPS of around 0.36 cents, the PE ratio is still a very high double digit number > 40x.
I don't like the fact that the revenue is overly concentrated in M1.
What i like about the Company
- It's a regional company with operations in higher growth countries like Thailand and Philippines and not limited to Singapore.
- Even though it is a small listing, the majority of the proceeds (66%) will be used for business. The Invitation expenses makes up the balance.
- Company finally turned around this year for the first 9 months.
- Interesting corporate shareholders in CMC Engineering and Tee International, which resulted in 84% being locked up.
- Interesting appointment of Alex Siow as independent director, who used to work as Starhub
Some of my concerns
- It has a small cap company with short operating history, having started in 2011 and making losses for last 3 years
- M1 is a major customer at between 34-47% of the revenue! Heavily reliant and M1 is also facing tough environment in Singapore
- It is a competitive landscape and the Company is right down the value chain with no recurring source of income
- Seems like a business created by a father for his son...
Mr IPO ratings
I will give it a one Chilli rating - buy only if you are in the mood to punt.
From a fundamental perspective, really nothing to shout about. I don't really like the fact that it is over reliant on M1 as well as the prospects of the sector. The IPO valuation is also too high. I struggle to give it a higher rating for fundamental reasons and will run road if i can make money. (you may want to buy Tee International instead) ^_^
Having said that, the free float of 24m is really small and can be easily taken up by friends and family of Tee International and CMC Engineering. It is not too difficult to place out the shares well.
Mr IPO is vested with 100 lots. Let's see how it performs but he won't overstay his welcome and will run road where possible.