KUALA LUMPUR (Jan 10): PublicInvest Research has derived a fair value of 28 sen for soon-to-be-listed Powerwell Holdings Bhd.
Powerwell, which is slated to be listed on Jan 22, is principally involved in the design, manufacturing and trading of electricity distribution products which comprise low voltage (LV) switchboards, medium voltage (MV) switchgears and related products.
In an IPO note today, the research house said Powerwell is authorised by Siemens to manufacture and sell its SIVACON S8 LV switchboards and SIMOPRIME MV Switchgears, while also authorised by Schneider Malaysia to manufacture and sell its Prisma iPM switchboards.
“Selling both to the domestic and overseas markets, all of Powerwell's electricity distribution products are customised equipment that are tailored to the needs of various types of projects such as residential, commercial and industrial buildings, social amenities and infrastructure developments.
“Excluding the one-off listing expenses, we derive a fair value of 28 sen based on a 13x PE multiple to its FY2020F core EPS of 2.2 sen,” it said.
PublicInvest Research said the IPO is expected to raise approximately RM21.9 million from the issuance of 87.4m new shares.
It said besides utilising 47.0% of IPO proceeds for capital expenditure to streamline operations, 17.7% of the proceeds are allocated as certification expenditure to enhance competitiveness for future growth.
The research house said Powerwell’s competitive strengths include: i) having a proven track record, ii) maintaining strong business relationships with multinational companies, iii) providing customised products that cater for a wide range of customer demand and project requirements across different industry segments, and iv) manufacturing electricity distribution products that meet internationally-recognised standards.