KUALA LUMPUR (Nov 28): Apex Securities Bhd has valued ACE Market-bound Critical Holdings Bhd at between 40 sen and 43 sen, and said that with its initial public offering (IPO) price at 35 sen, its price-earnings ratio of 13.6 times for the financial year ended June 30, 2023 (FY2023) is lower against indirect peers, such as engineering services providers Kinergy Advancement Bhd and Pansar Bhd.
Critical Holdings is primarily involved in the provision of mechanical, electrical and process utilities for critical facilities.
The group offers solutions for data centres, cleanrooms, plant rooms and services and maintenance to various markets, such as semiconductors, renewable energy, pharmaceuticals, healthcare and data centres.
Downsides
In a IPO flash note on Tuesday, the research house said Critical Holdings’ business is dependent on a project-on-project basis, and hence, revenue streams are based on a contractual basis. Contracts are awarded through competitive tenders, it said.
“Any form of delay or poor workmanship that does not meet the contractual agreement may render the group liable to potential claims for liquidated and ascertained damages from clients.
“[Also noteworthy is Critical Holdings’] customer concentration: Revenue from its top five customers collectively accounted for approximately 46%-68% of total revenue for FY2020-FY2023,” the research house said.
