{"id":7039,"date":"2019-08-23T16:48:18","date_gmt":"2019-08-23T08:48:18","guid":{"rendered":"https:\/\/www.smallcapasia.com\/?p=7039"},"modified":"2019-08-23T16:49:47","modified_gmt":"2019-08-23T08:49:47","slug":"i-stone-group-bhds-ipo-8-things-to-know-about-it","status":"publish","type":"post","link":"https:\/\/www.smallcapasia.com\/zh-hans\/i-stone-group-bhds-ipo-8-things-to-know-about-it\/","title":{"rendered":"i-Stone Group Bhd’s IPO: 8 Things to Know about it"},"content":{"rendered":"

i-Stone Group Bhd’s IPO: 8 Things to Know about it<\/strong><\/h2>\n

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:\u00a0<\/span><\/p>\n\n\n\n\n
\n

i-Stone\u2019s IPO\u00a0<\/span><\/p>\n<\/td>\n

\n

Part 1<\/span><\/a><\/p>\n<\/td>\n<\/tr>\n

\n

i-Stone\u2019s IPO<\/span><\/p>\n<\/td>\n

\n

Part 2<\/span><\/a><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The application has closed on 8 July 2019. <\/span>In this article, I\u2019ll go through my findings from the IPO document and here are 8 things to know about i-Stone.<\/p>\n

#1: Business Model\u00a0<\/b><\/h2>\n

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. <\/span><\/p>\n

Also, i-Stone derives additional income from selling complementary products such as manufacturing of metal frames, panels, and precision parts.\u00a0<\/span><\/p>\n

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.\u00a0<\/span><\/p>\n\n\n\n\n\n\n
\n

Year<\/span><\/p>\n<\/td>\n

\n

Annual Capacity<\/span><\/p>\n<\/td>\n

\n

Actual Production<\/span><\/p>\n<\/td>\n

\n

Utilisation Rate (%)<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

2017<\/span><\/p>\n<\/td>\n

\n

600<\/span><\/p>\n<\/td>\n

\n

600<\/span><\/p>\n<\/td>\n

\n

100.00%<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

2018<\/span><\/p>\n<\/td>\n

\n

756<\/span><\/p>\n<\/td>\n

\n

687<\/span><\/p>\n<\/td>\n

\n

90.87%<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

2019 (Present)<\/span><\/p>\n<\/td>\n

\n

864<\/span><\/p>\n<\/td>\n

\n

n\/a<\/span><\/p>\n<\/td>\n

n\/a<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

#2: Geographical Markets\u00a0<\/b><\/h2>\n

i-Stone\u2019s 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.\u00a0<\/span><\/p>\n

\"\"<\/a>Source: Page 13 of i-Stone\u2019s IPO Document <\/span><\/em><\/p>\n

[thrive_lead_lock id=’5359′]<\/p>\n

#3: Financial Results<\/b><\/h2>\n

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. <\/span><\/p>\n

Its earnings figures above have been adjusted to reflect i-Stone\u2019s 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.\u00a0<\/span><\/p>\n

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\u2019 equity for the last 4 years. <\/span>
\n<\/span><\/p>\n


\n<\/span>Figures in RM \u2018000 unless stated otherwise<\/b><\/p>\n\n\n\n\n\n\n\n
Year<\/span><\/td>\n\n

2015<\/span><\/p>\n<\/td>\n

\n

2016<\/span><\/p>\n<\/td>\n

\n

2017<\/span><\/p>\n<\/td>\n

\n

2018<\/span><\/p>\n<\/td>\n<\/tr>\n

Revenues<\/span><\/td>\n\n

44,124<\/span><\/p>\n<\/td>\n

\n

43,127<\/span><\/p>\n<\/td>\n

\n

60,381<\/span><\/p>\n<\/td>\n

\n

67,591<\/span><\/p>\n<\/td>\n<\/tr>\n

Adjusted Shareholders’ Earnings*<\/span><\/td>\n\n

2,992<\/span><\/p>\n<\/td>\n

\n

3,826<\/span><\/p>\n<\/td>\n

\n

6,973<\/span><\/p>\n<\/td>\n

\n

9,491<\/span><\/p>\n<\/td>\n<\/tr>\n

Earnings per Share (Sen)<\/span><\/td>\n\n

0.24<\/span><\/p>\n<\/td>\n

\n

0.31<\/span><\/p>\n<\/td>\n

\n

0.57<\/span><\/p>\n<\/td>\n

\n

0.78<\/span><\/p>\n<\/td>\n<\/tr>\n

Return on Equity (%)<\/span><\/td>\n\n

22.27%<\/span><\/p>\n<\/td>\n

\n

24.16%<\/span><\/p>\n<\/td>\n

\n

52.24%<\/span><\/p>\n<\/td>\n

\n

42.95%<\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Source: Page 186 & 208 of i-Stone\u2019s IPO Documents<\/span><\/p>\n

#4: Balance Sheet Strength<\/b>\u00a0<\/span><\/h2>\n

As of 31 December 2018, i-Stone has RM 12.14 million in non-current liabilities and RM 22.10 million in shareholders\u2019 equity.<\/span><\/p>\n

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.\u00a0<\/span><\/p>\n\n\n\n\n\n
Year<\/span><\/td>\n\n

2015<\/span><\/p>\n<\/td>\n

\n

2016<\/span><\/p>\n<\/td>\n

\n

2017<\/span><\/p>\n<\/td>\n

\n

2018<\/span><\/p>\n<\/td>\n<\/tr>\n

Current Ratio<\/span><\/td>\n\n

2.86<\/span><\/p>\n<\/td>\n

\n

2.94<\/span><\/p>\n<\/td>\n

\n

3.30<\/span><\/p>\n<\/td>\n

\n

3.40<\/span><\/p>\n<\/td>\n<\/tr>\n

Gearing Ratio<\/span><\/td>\n\n

9.06%<\/span><\/p>\n<\/td>\n

\n

1.95%<\/span><\/p>\n<\/td>\n

\n

0.21%<\/span><\/p>\n<\/td>\n

\n

0.00%<\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Source: Page 209 of i-Stone\u2019s IPO Documents<\/span><\/p>\n

#5: IPO Proceeds<\/b>\u00a0<\/span><\/h2>\n

i-Stone intends to raise RM 39.09 million in gross proceeds and uses it for:\u00a0<\/span><\/p>\n

\"\"<\/a><\/p>\n

Source: Page 27 of i-Stone\u2019s IPO Documents<\/span><\/em><\/p>\n