Copyright@http://lchipo.blogspot.com/

Follow us on facebook: https://www.facebook.com/LCH-Trading-Signal-103388431222067/

Open to apply: 22/06/2021
Close to apply: 29/06/2021
Balloting: 02/07/2021
Listing date: 13/07/2021

Share Capital
Market Cap: RM100.373 mil
Total Shares: 223.0515 mil shares
Industry (Net Profit %)
Employee engagement platforms market, 2017-2020: CAGR 14.69%

Competitors compare (Profit before tax margin%)
Accenture PLC: PE33.8
Capgemini SE: PE28
HCL Technologies Limited: PE21.13
Infosys Limited: PE33
International Business Machines Corporation: PE24
Tech Mahindra Limited: PE21
Wipro Limited:PE28

Business
1. HCM: Human Capital Management (Consulting and implementation, Sale of software licences, Technical support and maintenance services).
2. IT staff augmentation services
3. HCM technology applications
Malaysia: 45.53%
Singapore: 11.37%
Thailand: 29.82%
Indonesia: 13.07%
Others: 0.21%

Fundamental
1.Market: Ace Market
2.Price: RM0.45 (EPS:RM0.034)
3.P/E: PE13.24
4.ROE(Pro Forma III): 32.22%
5.ROE: 103%(2020), -%(2019), 16.16%(2018), 2.95%(2017)
6.Cash & fixed deposit after IPO: 0.0509
7.NA after IPO: RM0.10
8.Total debt to current asset after IPO: 0.288 (Debt:6.922mil, Non-Current Asset: 4.594mil, Current asset: 24.049mil)
9.Dividend policy: No fixed dividend policy. 

Past Financial Performance (Revenue, Earning Per shares, PAT%)
2020: RM25.331 mil (Eps: 0.0340),PAT%: 29.74%
2019: RM15.439 mil (Eps: 0.0200),PAT%: 29.11%
2018: RM12.549 mil (Eps: 0.0007),PAT%: 1.41%
2017: RM6.808 mil (Eps: 0.0004),PAT%: 1.29%
*EPS 2020 & 2019 prospecture book pg234 might not correct. 

After IPO Sharesholding (Director)
Dato’ CM Vignaesvaran A/L Jeyandran: 0.11%
Tan Chee Seng: 33.26%
Lee Miew Lan: 17.84%
Liew Yu Hoe: 1.63%
Goh Keng Tat: 0.11%
Sim Seng Loong @ Tai Seng: 0.11%

Directors & Key Management Remuneration for FYE2021 (from gross profit 2020)
Total director remuneration: RM2.125 mil
key management remuneration: RM0.3 mil- 0.35mil
total (max): RM2.475 mil or 16.13%  

Use of fund
Business expansion into Philippines: 9.98%
Expansion of Feet’s and Lark in Southeast Asia: 25.30% 
R&D Research: 16.34%
Working capital: 30.13%
Listing expenses: 18.25%

Highlight
1. Expansion business into Philippines.
2. Expansion of Feet’s and Lark in Southeast Asia
3. Have successful experience in Msia, S'pore, Thailand & Indonesia. 

Good thing is:
1. PE13.24 is accepetable. 
2. Revenue from multiple country. 
3. IPO fund 81.75% use for business expansion.
4. Revenue is increase over the 4 years. 

The bad things:
1. ROE is not stable (ROE unable to use for estimationd). 
2. Trade receivable sudently increase to RM11.805mil in 2020 (not overdue yet).
3. 18.25% IPO fund use for listing expenses is over average lisiting expenses percentage.
4. Directors & top management remuneration is over 16% from the gross profit. 

Conclusions (Blogger is not wrote any recommendation & suggestion. All is personal opinion and reader should take their own risk in investment decision)
This is a IPO company that seek for expansion. Reader have to aware on the unable of the ROE, & have to hold it for aim for growth. It consider high risk and also come with high return potential category come company. This is not a dividend / passive income generated company for investor at this moment. For more on risk vs business expand ratio can refer to below chart.