KUALA LUMPUR (Oct 26): Public Investment Bank Bhd has assigned a fair value of 70 sen on SKA Capital Bhd, which translates into a 63% premium over its initial public offering (IPO) price of 43 sen.
This fair value was calculated using a lower price-to-earnings multiplier of 16 times, compared with the industry standard of 20 times, reflecting the company’s smaller market capitalisation and its projected 2027 profits, the house said in a note on Monday.
The ACE Market-bound company mainly provides substation engineering services, underground utilities engineering services and trading of electrical devices, electrical equipment and construction materials for power infrastructure engineering.
Public Investment sees SKA Capital well-positioned for continued growth in electricity demand and sustained power-generation investment, driven by long-term economic growth and data centre expansion.
The house forecast SKA Capital’s earnings to grow at a three-year compound annual growth rate (CAGR) of 27%.
"Growth will be supported by expanding underground utilities engineering capabilities through machinery acquisitions and greater internalisation of HDD (horizontal drilling) works, alongside efforts to secure larger and more complex projects across Peninsular Malaysia, leveraging its established track record, comprehensive service offerings, strong industry credentials and experienced management team," it said.
The company recently raised RM103.4 million for its IPO, RM72.3 million of which will go to the company for working capital, listing expenses, performance bonds to secure future projects, and to purchase new machinery and equipment, including expanding its in-house horizontal directional drilling capabilities.
SKA Capital’s listing is scheduled for Nov 11.
TA Securities Holdings Bhd is the principal adviser, sponsor, underwriter and placement agent for the IPO.
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