ES Sunlogy will be listing on ACE Market of Bursa Malaysia on 20th February 2025. Let us dig into some important info before you go for IPO application.
Business Breakdown: What Does ES Sunlogy Do?
The Basics: IPO Details & Key Dates
When it comes to IPO, the dates are common and must see.
- Listing on: Bursa Malaysia’s ACE Market
- IPO Price: RM 0.30
- Market Cap: RM 210 million (based on the enlarged share base)
- PE Ratio: 15x (FY24 earnings)
Mark your calendars! The IPO opens on January 27, 2025, and closes on February 5, 2025. Balloting’s happening on February 10, and the listing date is set for February 20.
Where’s the Money Going?
One of the first things to check in any IPO is how they plan to use the funds. Here’s the breakdown for ES Sunlogy:
- Development and construction of Selarong LSSPV Plant: RM 14.1 million (33.6%)
- Repayment of borrowings: RM 14 million (33.3%)
- General working capital: RM 9.18 million (21.9%)
- Purchase of ERP system: RM 0.72 million (1.7%)
- Estimated listing expenses: RM 4 million (9.5%)
What we can see from here is that, it seems that the project of Selarong LSSPV is quite important to the company where it required one third of the total IPO funds.
However, we do need to take note of another one third of the IPO funds is used to repay the company’s borrowing.
Good thing is the company is able to lower down the monthly interest needed to pay; on another perspective is that the company does not utilize the fund for better development (other than Selarong LSSPV project), instead use for other purposes.
Financials: Revenue Growth & Margins
Next, let’s look at ES Sunlogy’s financials.
- Revenue: ES Sunlogy’s revenue posted RM 191.09 million in FYE2024, compared to RM 136.73 million in FYE2023 increased by RM 54.36 million or 39.76%. In overall, revenue of the group grew significantly since FYE2021, CAGR achieved 51.56%.
- Gross Profit Margin (GPM): ES Sunlogy’s gross profit margin managed to maintain GPM at 16% level for the past 3 years from FYE2022 – FYE2024, FYE2021 achieved GPM of 11.5%.
- Net Profit Margin (NPM): Net profit margin for ES Sunlogy achieved 7.1% in FYE2024, down from 8.6% in FYE2023, due to higher other income & net gain on impairment loss on financial assets in FYE2023, at the same time higher distribution expenses, administration & other expenses in FYE2024.
Balance Sheet: Financial Health at a Glance
Since ES Sunlogy will utilize one third of IPO funds to replay borrowing, we shall zoom into the balance sheet and look at the figure.
- Long-Term & Short-Term Borrowings: Total borrowings of the Group stood at RM 81.52 million as at 31st July 2024 (FYE2024), and it occupied 54% of total liabilities and 39% of total assets held by the Group.
- Contract Assets: Contract assets of ES Sunlogy are increasing over the years, FYE2024 stood at RM 35.07 million, which is 17% of total assets of the Group.
- Total Liabilities / Total Assets: ES Sunlogy’s total liabilities over total assets stood at 72% as at FYE2024.
Conclusion
ES Sunlogy business nature is quite similar to CBH Engineering Holding (CBH) which listed on ACE market of Bursa Malaysia on 16th January 2025.
Coincidentally, there is another company which also listed early this year on ACE market – Swift Energy Technology (SET), where the business operations are similar in term of some services rendered to their clients.
There is not so possible to compare 3 companies together directly, but ES Sunlogy & CBH are similar in terms of their services provided.
However, we can take a rough look at the gross profit margin by two companies in FYE2024, there was 16.2% vs 29.93% for ES Sunlogy & CBH respectively.
ES Sunlogy do not intend to pay dividends as for now until the listing and future still need to depend on management’s discretion to do so.
Therefore, there is only capital growth expected from the company itself.
Prospects of the Group much depends on the ability of the management to tender projects and successfully secure the projects.
Anyway, do keep an eye on company’s future prospects and growth.