KUALA LUMPUR (Dec 30): PublicInvest Research has derived a fair value of 54 sen for soon-to-be-listed NationGate Holdings Bhd based on a circa 14 times PE multiple to its financial year 2023 (FY23) forecasted earnings per share of 3.9 sen.
In a note on Friday (Dec 30), the research house said the initial public offering (IPO) is expected to raise approximately RM165.5 million from the issuance of 435.5 million new shares.
“Besides utilising 3.6% of the proceeds for purchase of machinery and equipment, 29.2% are allocated for working capital requirements and 63.8% for repayment of bank borrowings,” it said.
PublicInvest said NationGate’s growth will be driven by expansion of its electronics manufacturing services offerings to its existing customers, securement of more new customers, business collaboration with GoldTek Technology Co Ltd, and expansion of its SMT assembly capacity.
It said the company’s competitive strengths include having the technical capabilities and sizeable manufacturing footprint, having established business relationships with international customers, commitment towards stringent quality assurance, and having an experienced management team.
Meanwhile, it said key drivers may include rapid changing technologies and increasing electronics content in new manufactured products, continuing pursuit of leaner capital structure by manufacturers, presence of an established electronics cluster in Malaysia, broad range of end-user market, and continuing government support in Malaysia.
NationGate is tentatively slated to be listed on the ACE Market of Bursa Malaysia on Jan 12 with an IPO price of 38 sen.