i-stone group berhad dyson

i-Stone Group Bhd’s IPO: 8 Things to Know about it

On 21 June 2019, i-Stone Group Bhd (i-Stone) has extended an invitation to the public to subscribe its IPO shares at RM 0.16 a share. You may download its IPO documents here: 

i-Stone’s IPO 

Part 1

i-Stone’s IPO

Part 2

The application has closed on 8 July 2019. In this article, I’ll go through my findings from the IPO document and here are 8 things to know about i-Stone.

#1: Business Model 

i-Stone designs and manufactures specialized automation machines that would be used to automate manufacturing processes which include fabrication, test & inspection, assembly, transporting, packaging and storage.

Also, i-Stone derives additional income from selling complementary products such as manufacturing of metal frames, panels, and precision parts. 

i-Stone had relocated to its new factory at Taman Teknologi Johor in Senai since October 2018. It has 72 assembly bays, which is able to manufacture 864 brand new specialised automation machines presently. It is an increase from a total of 600 new machines in 2017. 


Annual Capacity

Actual Production

Utilisation Rate (%)









2019 (Present)




#2: Geographical Markets 

i-Stone’s principal markets are in Malaysia and Singapore. They had contributed 78.2% and 12.5% of group revenues in 2018. Its balance 9.3% of sales had been derived from the Philippines, Indonesia, Taiwan, UK, USA, Japan, and India. 

Source: Page 13 of i-Stone’s IPO Document

#3: Financial Results

Revenues have grown from RM 44.1 million in 2015 to RM 67.6 million in 2018. It is contributed from higher orders from its main customer, Dyson Group. As a result, it has contributed to a hike in adjusted earnings from RM 2.99 million in 2015 to RM 9.49 million in 2018.

Its earnings figures above have been adjusted to reflect i-Stone’s earnings without tax savings under Pioneer Status Incentives granted under the PIA from 5 December 2013 to 4 December 2018. i-Stone has not renewed the incentive and will be subjected to prevailing tax rate of 24.0% starting from Year Assessment (YA) 2019. 

Return on Equity (ROE) increased from 22.27% in 2015 to 42.95% in 2018. This is because its earnings growth had exceeded its growth in shareholders’ equity for the last 4 years.

Figures in RM ‘000 unless stated otherwise











Adjusted Shareholders’ Earnings*





Earnings per Share (Sen)





Return on Equity (%)





Source: Page 186 & 208 of i-Stone’s IPO Documents

#4: Balance Sheet Strength 

As of 31 December 2018, i-Stone has RM 12.14 million in non-current liabilities and RM 22.10 million in shareholders’ equity.

Also, it has reported RM 25.86 million in current assets and RM 14.57 million in current liabilities. Thus, its current ratio is 1.77. 






Current Ratio





Gearing Ratio





Source: Page 209 of i-Stone’s IPO Documents

#5: IPO Proceeds 

i-Stone intends to raise RM 39.09 million in gross proceeds and uses it for: 

Source: Page 27 of i-Stone’s IPO Documents

  •  Process & Product Development (RM 4.2 million)

i-Stone plans to manufacture standard modules which could be used to reduce manufacturing lead time.

It budgets RM 1.0 million to recruit four engineers to be its permanent staff and buy components to manufacture standard modules, which include AC/DC Power Source and Meter, E&E Components and as well as Mechanical Components.

In addition, it budgets RM 3.2 million to develop and introduce new features to its machines which include deep learning system, an advanced data management system known as i-MES, and fully automated joint -test systems known as i-FCT. 

  • Repayment of Borrowings (RM 13.5 million)  

Presently, i-Stone has RM 18.17 million in bank borrowings.

It intends to use the gross proceeds to repay RM 11.67 million in term loan facility from Maybank & RM 1.81 million in outstanding overdraft facility.

Combined, i-Stone would have RM 0.65 million in tax savings per annum. 

  • D&D Centre (RM 6.8 million) 

i-Stone intends to spend RM 6.8 million to build a new design and development (D&D) centre.

i-Stone expects to submit its building plan and relevant permit by Q2 2019 and expects the full completion of its construction within 4 years after its IPO listing. 

  • Capital Expenditures (RM 5.2 million)

It plans to use RM 4.3 million to buy CNC machines, measuring instruments and accessories, welding stations, forming machines and 2 solidcam and solidworks software.

The remainder RM 0.9 million is allocated to buy 10 robotic arms that would be used for marketing & demonstrative purposes. 

  • Working Capital (RM 5.9 million)

This includes workforce expansion, marketing expenses, and purchases of raw materials. 

  • Listing Expenses (RM 3.5 million) 

#6: Management 

After the IPO listing, One United Equity Sdn Bhd (OUE) would emerge as its key shareholder with 27.0% shareholdings.

Tee Sook Sing is the largest shareholder with 5.5% direct shareholdings and her interests in OUE. Tee is appointed as its Managing Director. 

Chan Kok San, Chin Chung Lek, and Chan Sai Kong are substantial shareholders of i-Stone with 20.3%, 7.4% and 4.8% shareholdings respectively. Chan Kok San and Chin Chung Lek are appointed as Executive Directors of the company. Chan Sai Kong remains a substantial shareholder of i-Stone. 

i-Stone’s Managing Director and Executive Director are former electronic engineers at Dyson and have over 16 years of experience in the manufacturing business, thus positioning the group well to pursue future growth milestones.

#7: Key Risk 

i-Stone derived 65.5% of its 2018 revenues from Dyson Group of Companies.

It is subjected to concentration risk of 1 customer, thus having its financial results dependent greatly on Dyson in the future. 

#8: Valuation 

At current offer of RM 0.16 a share, i-Stone’s IPO shares are offered at P/E Ratio of 20.51 based on 0.78 sen in adjusted earnings per share (EPS) in 2018. It has a net assets of RM 0.05 a share.

Thus, the offer is at P/B Ratio of 3.20. It does not have a definite dividend policy to-date. Hence, calculation of dividend yield will not be given. 


i-Stone is a major supplier for most of Dyson’s test and inspection customized machines and have established a mutual, good relationship with Dyson.

With that, it has enabled them to ride on Dyson’s capacity growth over the long run and delivered growth in sales and earnings. However, that also brings about a huge crucial risk of reliance on a single customer.

Want to know more about the stock? Check out the analyst report for i-Stone Berhad here


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