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Thursday, 9 July 2009

JLJ Holdings Limited

JLJ Holdings Limited is a provider of precision mould design and fabrication, injection molding and value-added services. The Group provides design, fabrication and sale of precision plastic injection moulds (“MDF”), precision plastic injection molding (“PPIM”) services and other PPIM-related value added services at its production facilities in Singapore, Johor of Malaysia and Kunshan of the People’s Republic of China.

MDF Business

The Group produces plastic injection moulds for the consumer electronics, household appliances, automotive and computer peripherals industries. Such moulds are then used to manufacture different types of precision plastic components which are typically used as parts of its customers’ finished products, such as mobile phones, household appliances, computer peripherals, MP3 players and automotive components.

PPIM Business

The Group offers a variety of PPIM services including single-shot moulding, double-shot moulding, insert moulding and gas-assisted moulding. Each type of moulding allows different types of precision plastic components to be produced, allowing us to produce a wide range of precision plastic components which are typically used as parts of our customers’ finished products including mobile phones, computer peripherals and MP3 players.The Group also offers value added services, which entail sub-assembly, laser etching, ultrasonic welding, printing services and mechanical assembly services.

JLJ is going for a Catalist listing (not another catalist... !?) and is offering 19m shares (16m new and 3m vendor) at $0.27 each via placement. The offer will end on 9 July. The listing expenses is $1.55m and the total fund raised. Only $2.77m will be left for the company... sigh... what a waste of time!!!

The company sales and profit for FY 31 Dec 2008 are $50.8m and $4.8m respectively. Assuming the company is able to achieve similar levels of profit in FY 2009 and that the service agreement is in place, the net profit will be $4,728,221. Based on the post IPO shares of 123,551,245 shares, the EPS will be Singapore 3.8 cents. Based on the IPO price of 27c, the IPO is priced at a forward 7.1x PE. The market cap is $33.4m.

Considering that Meiban and Hi-P are trading at low single digit PEs of less than 5x, it makes JLJ Holdings looks expensive relatively to the more established companies with bigger market cap and profitability. I would avoid investing in this company and put my money into either Meiban or Hi-P instead if i really want exposure in this sector.

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