Thursday, 10 June 2021

(Short Post) OTS Holdings Limited IPO Thoughts

 


Will be a short post as there is only 1 million public shares available for application. 

As such the allocation could be a disaster (similar to Econ Healthcare)


Pros

1) Good Revenue Growth that is driven by gain in profits

Being a food manufactuer company, improving margins is important. As such, the company has done well improving its margins from 2019 to 2020. This has further improved in 1H 2021. As such, if the company does sustain its growth, it does not look expensive at all given a forward IPO PE of around 7.5 not accounting IPO Expenses.


2) Malaysia Growth Segment and Incentive to Manager is via profits.

Looking at the revenue segment by country, one can identify quickly that the expansion in Malaysia is the reason for the growth in profits.
From 1.4m in 2018 to 2.3m in 2019 to 7.4m in 2020, this growth trajectory itself is pretty impressive. However in 1H 2021, it has grown to 7.5m which has overtaken the whole of 2020. As such, while it is hard to assess the extent of growth it can have, it seems like they have done very well for a company entering a newer market.


On a closer look, Mr Teh the general manager of its Malaysia segment will be paid 10% of profit before tax as a performance incentive based on the Malaysia operations. This incentive does not count for 1 off fair value gains in investments and properties. As such, he is incentivized to deliver higher profits and as such enjoy higher bonuses. From the early signs, I would say he is paid well and he deserves to be paid well as he has done really well in Malaysia since the entry into the market in Mid 2017.


Cons

1) The company made 2.9m profits in 1H 2021 and 2H 2021 should be a better half as usually 2H would be better than 1H. As such it makes little sense to be listing and raising a net amount of around 6 million.

2) As the company is involved in the productions of canned foods, the company does face price wars from its competitors and as such it does not have the ability to pass on price increases as well if its competitors does not. This meant that any improvements in margins have to be via production improvements and improving revenue.


Conclusion

Its hard to find reasons listing such a good company. On paper it looks like a decently priced company that could be a multi bagger should it show good growth. Given by how Malaysia has been a success, one wonders if Indonesia and Philippines be half as successful, the growth would be tremendous. 

To add on to that, Malaysia has a larger population and such canned food would be a choice during Covid times. As such, while it is hard to estimate the revenue growth, its safe to say that the demand for canned food will remain to be strong.

Given by how low the public share offering is, probably buying from the opening market would be ideal if the price offers a reasonable PE. Its one of the IPO shares that I would not mind holding post IPO. 




5 comments:

  1. Driving license test has always been hard for everyone to make it through but novelty DMV experts has put in place the best and easier ways for you to obtain a a drivers license of any country and Class from home without any stress with just a Click away . Fake driver license , How to get a fake drivers license that works , how to get a fake drivers license from the dmv , Fake license , FAKE DRIVER LICENSE
    Buy fake driving license online , Fake drivers license , how to get a fake drivers license that works , fake driving, fake driving school, fake driving school full
    fakedrivingschool .

    Wickr Me : octapustickets
    EMAIL: pompanopapers1@protonmail.com
    Whatsapp: +1(408) 872-5899
    TELEGRAM : @OCTAPUSTICKETS
    Visit: noveltydmvexperts.com

    ReplyDelete
    Replies
    1. I was searching for loan to sort out my bills& debts, then i saw comments about Blank ATM Credit Card that can be hacked to withdraw money from any ATM machines around you . I doubted thus but decided to give it a try by contacting { cyberhackingcompany@gmail.com} they responded with their guidelines on how the card works. I was assured that the card can withdraw $5,000 instant per day & was credited with$50,000,000.00 so i requested for one & paid the delivery fee to obtain the card, after 24 hours later, i was shock to see the UPS agent in my resident with a parcel{card} i signed and went back inside and confirmed the card work's after the agent left. This is no doubts because i have the card & has made used of the card. This hackers are USA based hackers set out to help people with financial freedom!! Contact these email if you wants to get rich with this Via: cyberhackingcompany@gmail.com ..    

      Delete
    2. ● Hello, we are offering service for Online CC /w High Balance which is ATM Card. You can use it anywhere in the world to withdraw money from any ATM machine. Contact us with the following email address: harrisonblankatmcard@gmail.com -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 
      -- -- --------------What are the list, cost and how do i purchase the card?  Contact us on: Email: harrisonblankatmcard@gmail.com
      ★  How it works? Our cards are loaded with balance of $5,000 to $100,000 with different daily withdraw limit depending on the card you are ordering and you can use the ATM card to withdraw cash anywhere. 
      ★  Is this real? Yes, as shown in the video, we withdraw cash multiple times without any issues. You can do it too. 
      ★  Can i be traced? No, your withdraw/transactions are completely anonymous. 
      ★  Is this legal? We'll leave that for you to asnwer but we have not had any issues when doing this method. ★  Are people using this? Absolutely, people have quit most of their hard jobs to withdraw money instantly. Men and women use this card but we dont deal with kids or anyone below 18yrs
      ★  How do I get my card? We will ship your card with Pin 2 hours after receiving clear payment from you and the card will be send to you through courier delivery services. Our package usually delivered within 2-3 business day. Once you receive the card you can start cashing out. 
      ★   Are you guys for real? YES: we are 100% real and been doing this since 2015 and once you withdraw with our card please do drop a comment right here for other people to see we are being serious here. -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --                EMAIL US AT: harrisonblankatmcard@gmail.com or WhatsApp +15593840001

      Delete
  2. ● Hello, we are offering service for Online CC /w High Balance which is ATM Card. You can use it anywhere in the world to withdraw money from any ATM machine. Contact us with the following email address: harrisonblankatmcard@gmail.com -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 
    -- -- --------------What are the list, cost and how do i purchase the card?  Contact us on: Email: harrisonblankatmcard@gmail.com
    ★  How it works? Our cards are loaded with balance of $5,000 to $100,000 with different daily withdraw limit depending on the card you are ordering and you can use the ATM card to withdraw cash anywhere. 
    ★  Is this real? Yes, as shown in the video, we withdraw cash multiple times without any issues. You can do it too. 
    ★  Can i be traced? No, your withdraw/transactions are completely anonymous. 
    ★  Is this legal? We'll leave that for you to asnwer but we have not had any issues when doing this method. ★  Are people using this? Absolutely, people have quit most of their hard jobs to withdraw money instantly. Men and women use this card but we dont deal with kids or anyone below 18yrs
    ★  How do I get my card? We will ship your card with Pin 2 hours after receiving clear payment from you and the card will be send to you through courier delivery services. Our package usually delivered within 2-3 business day. Once you receive the card you can start cashing out. 
    ★   Are you guys for real? YES: we are 100% real and been doing this since 2015 and once you withdraw with our card please do drop a comment right here for other people to see we are being serious here. -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --                EMAIL US AT: harrisonblankatmcard@gmail.com or WhatsApp +15593840001

    ReplyDelete
  3. I have read Your Article and Learn a lot from it. I can Imagine the time it took to get all this expertise exposed . You can also look here to see where to easily get a FAKE BANK STATEMENT I've bookmark your site and furthermore include RSS. keep us refreshed all the time.

    ReplyDelete