Southern Cable Group Berhad

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Open to apply: 29/09/2020
Close to apply: 06/10/2020
Listing date: 16/10/2020

Market Cap: RM272 mil

Total Shares: 800mil shares (Public apply: 40mil, Company Insider/Miti/Private Placement/other: 169.348mil)

Manufacturing of cable & wires

Sarawak Cable: 4.5% (loss making)
Olympic Cable: 15.6%  
Sindutch cable: n/a, (loss making)
Pan-international: 11.7% 
Tai Sin Electric: 4.5% (loss making)

Business
Manufacturing of cable & wires for power distribution.
- Power cabless & wires (e.g. cable on the power tower on road site)
- Communications cables & wires (e.g. LAN wires for internet)
- Control and Instrumentation cables & wires (industry use cable, 

Fundamental
Market: Ace Market
Price: RM0.34 (EPS:0.0357)
P/E: PE7.04
ROE (Pro Forma III): 7.21 
ROE:  16.22 (2019), 17.79 (2018), 15.00 (2017), 13.74 (2016)
Cash & fixed deposit after IPO: RM per shares
NA after IPO: RM0.32
Total debt to current asset after IPO: 0.53  (Debt: 209.553mil, Non-Current Asset: 70.040mil, Current asset: 
393.25mil)
Dividend policy: 15% PAT dividend policy.

Past Financial Performance (Revenue, EPS)
2020 (FPE June): RM241.086 mil (EPS: 0.0114)
2019: RM656.687 mil (EPS: 0.0357)
2018: RM683.199 mil (EPS: 0.0328)
2017: RM595.694 mil (EPS: 0.0227)
2016: RM470.656 mil (EPS: 0.0177)
*EPS in prospectus using EPS before dilutes, EPS here amend diluted based on 800mil shares.  

Net Profit Margin
2020: 3.79%
2019: 4.35%
2018: 3.84%
2017: 3.05%
2016: 3.01%

After IPO Sharesholding
Rizvi Bin Abdul Halim: 0.05%
Tung Eng Hai: 35.69%
Wong Meng Kee: 36.55%
Wong Kar Wai: 0.05%
Daphne Choy Gaik Choo: 0.05%
Eugene Lee Cheng Hoe: 0.05%

Directors Remuneration for FYE2020 (from gross profit 2019)
Rizvi Bin Abdul Halim: RM42k
Tung Eng Hai: RM1.583 mil 
Wong Meng Kee: RM0.409 mil
Wong Kar Wai: RM42k 
Daphne Choy Gaik Choo: RM42k 
Eugene Lee Cheng Hoe: RM42k
Total director remuneration from PBT: RM2.16mil or 3.21%

Key Management Remuneration  for FYE2020 (from gross profit 2019)
Ooi In Keong: RM350k-400k
Song Swee Kim: RM300k-350k
Zen Azhar Bin Shuib: RM250k-300k
key management remuneration from PBT: RM900k-1.05mil or 1.56%

Use of fund
Capital expenditure: 42.15%
Repayment bank borrowing: 12.91%
Working capital: 38.62%
Listing Expenses: 6.32%

Good thing is:
1. Product is continue have demand for development. 
2. PE7.04 consider discounted from countery PE. (PE low for reason)
3. Have fixed dividend policy. 

The bad things:
1. Cable & wire industry is not having good profit. Event their competitor also suffer low net profit margin & loss making. 
2.  Revenue is dropping & 5 years net profit margin never above 10%.
3. IPO fund 38.62% use to pay debt. 
4. ROE is dropping past 3 years.

Conclusions (Blogger is not wrote any recommendation & suggestion. All is personal opinion)
Not attractive, and investment might difficult to growth. 

*Valuation is only personal opinion & view. Perception & forecast will change if any new quarter result release. Reader take their own risk & should do own homework to follow up every quarter result to adjust forecast of fundamental value of the company.