Cable and wire manufacturer Southern Cable Group Bhd is seeking a listing on the ACE Market of Bursa Malaysia to raise funds for its business expansion and enhance its existing and new operating facilities in Malaysia.

In a draft prospectus filed with the Securities Commission Malaysia, Southern Cable's initial public offering entails the issuance of 104.67 million new shares, representing 26.17% of its enlarged issued share capital, and an offer for sale of 10 million shares by one of its promoters Sino Shield Sdn Bhd.

Of the public issue, 20 million shares will be made available for application by the Malaysian public via balloting, 11 million shares to eligible directors and employees, 33.67 million to be placed to selected investors, and 40 million shares to selected Bumiputera investors.

The company’s promoters and selling shareholders are Sino which holds a 51.73% stake in Southern Cable; Semangat Handal Sdn Bhd (43.35%); and the rest is held by Southern Cable executive director Wong Meng Kee, his wife Tung Cheng Im, who is also costing manager of Southern Cable, Cheng Im's sister Tung Siew Luan and other individual shareholders.

The shareholders of Semangat are Fawiza Binti Faiz and Redzuan Bin Husain, while that of Sino are Southern Cable managing director Tung Eng Hai, his wife Ooi Gaik Bee and Wong.

Upon listing, the promoters will hold in aggregate 38.32% of the enlarged issued share capital.

Southern Cable said of the total proceeds from the IPO, 42.15% will be used for capital expenditure and expansion, 14.73% to repay bank borrowings, 36.8% for working capital, and the rest to pay listing expenses.

Southern Cable comprises three wholly-owned subsidiaries, namely Southern Cable Sdn Bhd, Nextol Polymer Sdn Bhd and Daya Forwarding Sdn Bhd.

The cable and wire manufacturing operations accounted for 90.1% of total revenue for the financial year ended Dec 31, 2018 (FY18). The remaining 9.9% were derived from related products and services.

Its principal market is Malaysia, which contributed 98.4% of total revenue for FY18. As at May 29, 2019, Southern Cable is a registered supplier of cables and wires with Tenaga Nasional Bhd, Sabah Electricity Sdn Bhd, Telekom Malaysia Bhd and Petroliam Nasional Bhd.

Southern Cable's order book stood at RM242.63 million as at May 29, 2019.

The group posted a 44.3% increase in net profit to RM26.23 million in FY18 from RM18.19 million the previous year, while revenue rose 14.7% to RM683.2 million from RM595.69 million in FY17.

Southern Cable said it plans to pay out at least 15% of its net profit in dividends, post-listing.

MIDF Amanah Investment Bank Bhd, as its sole underwriter, has agreed to underwrite 31 million shares.

https://www.theedgemarkets.com/article/sout...iness-expansion

This post has been edited by nexona88: Oct 14 2020, 04:46 PM

Listing in late March?

Really wrong timing if list in March

cable manufacturing
is the future bright in this industry?
can't visit their website http://www.southerncable.com.my/.
donno their BOD and management.
Only found their FB fan page, which is only setup last year March 2019

This post has been edited by Rainings: Feb 27 2020, 10:50 PM

some of these IPO companies, they only set up their website when they know they are going to get IPO'd. Just to get the public exposure going.

Southern Cable to raise RM71.2m from ACE Market IPO

KUALA LUMPUR (Sept 29): Cable and wire manufacturer Southern Cable Group Bhd is aiming to raise RM71.2 million from its initial public offering (IPO) on the ACE Market of Bursa Malaysia.

Southern Cable manufactures cables and wires that are used for power distribution and transmission, communications as well as control and instrumentation applications.

The key supporting activities for the cable and wire manufacturing operations include furnace and casting operations and manufacturing of plastic compounds.

In a statement today in conjunction with its prospectus launch, Southern Cable managing director Tung Eng Hai said the group’s listing on the ACE Market is aimed at elevating Southern Cable’s profile and raise funds to expand production capacity of cables and wires and plastic compound materials to cater for future growth

Southern Cable services various industry sectors, such as power distribution and transmission, telecommunications, building and construction, infrastructure, manufacturing and processing industries, including oil and gas (O&G) processing and petrochemical plants.

Its customers include Tenaga Nasional Berhad (TNB) and Telekom Malaysia Bhd ™, and it has supplied cables and wires for the Refinery and Petrochemical Integrated Development (Rapid) project in Pengerang, Johor and the Mass Rapid Transit (MRT) Sungai Buloh-Kajang Line (MRT 1).

From the total proceeds raised, the group has allocated RM30 million for capital expenditure and expansion.

Of this, RM18.5 million is allocated to purchase and upgrade machinery and equipment, followed by RM7.5 million to construct new factories, and RM4 million to fund the purchase and installation of enterprise resource planning (ERP) information technology systems.

Meanwhile, RM27.5 million will be set aside as working capital, while RM9.2 million will be utilised for repayment of bank borrowings and RM4.5 million to defray estimated listing expenses.

Tung said the construction of two new factories near its current production plants in Kuala Ketil, Kedah will increase the total built-up area from more than 416,000 sq ft to more than 480,000 sq ft.

“Together with the new machines and upgrade in current factory, this will expand our total production capacity by 9,050km of cables and wires to 40,130km of cables and wires per year by the first half of 2022.

“To support the higher production capacity, we are setting up a new polyvinyl chloride (PVC) compound production plant next to our current factory in Sungai Petani, Kedah, [to be completed] by the first half of 2022.

“With this plant, we target to increase our manufacturing capacity of PVC compound material by 4,200 tonnes to 12,000 tonnes per year,” he said.

Tung said these initiatives should strengthen the company's position in the cable and wire sector.

Southern Cable’s IPO entails a public issue of 209.3 million new shares and an offer for sale of 20 million existing shares at an issue price of 34 sen per share.

Out of 209.3 million new shares, 40 million shares are allocated for application by the Malaysian public, followed by 22 million shares for application by eligible directors, employees and persons who have contributed to the success of the group.

Meanwhile, 67.3 million shares under the public issue are allocated for private placement to selected investors, and 80 million shares to identified bumiputera investors approved by the Ministry of International Trade and Industry (MITI).

Some 20 million existing shares will be offered for sale by way of private placement to selected investors.

From the financial year ended Dec 31, 2016 (FY16) to FY19, Southern Cable’s group revenue increased from RM470.7 million to RM656.7 million, reporting a three-year compound annual growth rate (CAGR) of 11.7%.

The group's net profit reported a three-year CAGR of 26.4% from RM14.2 million to RM28.5 million for the same time frame.

Southern Cable intends to implement a dividend policy of distributing a minimum of 15% of its annual net profit to shareholders of the group.

With the prospectus launch, applications for Southern Cable’s IPO will open today and close on Tuesday, Oct 6, at 5pm.

Southern Cable targets to list on the ACE Market on Oct 16.

MIDF Amanah Investment Bank Bhd is the principal adviser, sponsor, sole underwriter and placement agent for the IPO exercise.


From The Edge

Million dollar question from aunties and uncles:

so can buy mou?

This post has been edited by tehoice: Sep 30 2020, 09:33 AM

How ya ?

Which one better

If you want to sell on the first day of listing, go for the cheaper one.

PE10x at IPO price.

Why always many ipo stick together like last time.
Can focus our fund...

apply small lots lohhh
no harm trying geh.
normally IPO on first day sure hot hot hot and up a bit then will come down to ipo price or near IPO price.

How to apply for ipo? Using mplus can?

use your online banking or atm also can apply.

or if you wanna fill the white form, you can also ask for it, fill the form manually, then buy bank draft and send everything to the share registrar before the closing date.

so long you have a legit open CDS account then you can apply for IPO already.

It's client include TNB & TM...
So there's some growth... Esp TM... In rural areas... Such as Sabah 🤑

lai, any other info you want to know, my ex koliq working on this ipo. her first ipo baby deal.

First day IPO will up by how many %?

hahaha that 1 another crystal ball needed, but i'm guessing around 40c.

so maybe we could be looking at a 20% gain instantly.

Oh really...
Good to know 👍

Well what's the company personal views on the prospect...
Can they win more contracts with current covid 19 situation.....

Also what's the TP for this IPO 🤑

How's the prospect of the company's business? Is it a touch and go or for long-term play?

to me, prospect is bright, they have secured order book of up to RM405million to be recognised in the books by 2022. in the next 2 years.

but one thing i dont like is that the margin is a bit too low to my liking, less than 5% PAT margin. if it's like 8-10% then ok lah. but the plus point on this is that their PAT margin has been on growing trend since 2016 albeit the lower recorded PAT margin.

minimum dividend policy = 15% of PAT per annum. which is not too bad.

Took a deeper dive into the prospectus, their main competitor will be Sarawak Cable which has poorer financials, which Southern cable win in every aspect apart for the slightly lower revenue. Apart from this Sarawak Cable, next would be Olympic Cable Company (subsidiary of OSK Holdings Berhad), Pan-international Wire & Cable (subsidiary of PIE Industrial Berhad), the rest are listed elsewhere. which totally no match in terms of fundamentals. Can take a closer look at page 221 of the prospectus.

COVID 19 situation is something beyond the company's control as described by them, but their order book can sustain them until 2022 already. so anything extra is a bonus.

to me, this could be a mid-term play like 3-5 years and the valuation is kinda reasonable at slightly less than 10x PE.

Dilution at NA per share is also very small at 5.88% only. unlike some of the IPO which they dilute the public shareholders a lot during IPO stage.

Thank you so much for the comprehensive reply, this is so much information!

As you described, the PAT margin does look a little bit too close for comfort.

Dumb question: How does the commodity price (steel/aluminium etc.) affect this company? I presume most of the materials used are somewhere along those line?

Thanks once again

very nice opinion.. will definitely try to apply for a punt.. thanks for the time/effort

Yes, the PAT margin is the only thing i don't like about the company, otherwise it looks like a well managed company to me.

Verbatim extraction of the concern on prices of raw material for you below:

Fluctuations in the prices of copper and aluminium may affect our profitability if we are unable to pass through the costs increment to the customers

Our main raw materials consist of copper cathodes, aluminium ingots, copper and aluminium rods, and copper wires used to make conductors for our cables and wires. For FYE 31 December 2016, FYE 31 December 2017, FYE 31 December 2018, FYE 31 December 2019 and FPE 30 June 2020, the total purchases of copper based materials include copper cathode, copper rods and wires, and annealed copper tapes accounted for 59.78%, 63.22%, 63.44%, 62.23% and 62.42% of our total purchases of materials and services respectively. Purchases of aluminium based materials including aluminium ingots and aluminium alloy rods constituted 12.45%, 7.93%, 11.25%, 16.62% and 18.42% of our total purchases of materials and services for FYE 31 December 2016, FYE 31 December 2017, FYE 31 December 2018, FYE 31 December 2019 and FPE 30 June 2020 respectively.

As copper and aluminium are globally traded commodity metals, we are subject to global price fluctuations and the risk of any unfavourable price changes will directly affect our margins and profitability if we are unable to pass through the costs increment to the customers.

The prices of copper and aluminium are influenced by global macroeconomic factors including, among others, supply and demand for the metals, energy costs to process these metals, transportation costs and currency exchange rates, all of these factors are beyond our control. Although we engaged an external party to provide commodity advisory services including trends and information on metal prices, there is no assurance that we would not be adversely affected by fluctuations in the prices of copper and aluminium.

We have contractual agreements with customers that allow us to adjust the selling price of power and communications cables and wires taking into consideration, among others, the fluctuations in the prices of copper and aluminium within specified time indicated in the agreements for the contractual period. For FYE 31 December 2018, FYE 31 December 2019 and FPE 30 June 2020, revenue from these types of customers accounted for 28.08%, 24.94% and 16.69% of our total revenue.


no problem, all i did was using about 40-60 mins of my time just now to screen through the prospectus only. I also learn at the same time i share these information with you guys.

It is very easy to read the prospectus if you know what you want to see and where you can find them in the prospectus, don't be scared by the 400-500 pages of the prospectus, you can zoom in very quickly.

Actually, reading and extracting information from the prospectus is very easy compared to preparing the prospectus, it takes monthsssss to do it, i know the pain because i been through that. hahahah

anyway, some additional information for you guys. something i really like about the company is how they manage their cash flow.

Please refer to page 282 of the prospectus for the historical cash flow table which they have very healthy and growing positive cash flow from operation.

they have also paid down a lot of borrowings in 2019.

their net cash position is at the all time high in 2019 (financial year ended 2019). This year surely not gonna be so high due to the MCO, but i think they are heading to the right direction.

you can read in detailed of their cash flow position from FYE2018 to FYE 2019 on page 287.

turn to page 294 for the key financial ratios.

their gearing ratio has been declining from 1.42 to 0.88 from 2016 to 2019 although it is slightly higher for the FPE2020 at 0.95.

the current ratio although is not as good as what I always wanted i.e. 2 times, but theirs improved from 1.33 to 1.71 from 2016 to 2019, the improvement proved to be well managed company.

This is coupled with their improvement in the inventory turnover period from 72 days to 38 days from 2016 to 2019. means your stock can only last 38 days in your warehouse and they will be sold off. the 73 days for FPE2020 is due to MCO, understandable.

overall, it looks like they are managing their company relatively well.

Thank you so much!

Seems like their exposure to raw material price fluctuation is still at est. 70% mark.

Not sure how much fluctuation this would translate to in scale, but is definitely an interesting piece of information for me to research on.

Once again, you sir, deserve a medal. Have a great day!

That a very good read and also nicely analytic

What i like about their company is their history of reduced cost of good sales which i think will have a direct impact to the EPS

Overall stilla good thing and try to ballot some shares first.

thank you and my pleasure.

do share more after you have taken a deeper look into it yea. have a good weekend~!

the cable business is not a growth industry
you may be looking at improving financial ratios but its only because they hardly have any capacity expansion plans

you may see they have major clients like TNB/TM using their cables, but alot of times major projects have smaller portions of assignments where the contractors are free to use whatever "affordable" cables available to them, so you may see big names but the contributions may be insignificant. nevertheless TNB remains key customer as seen from its prospectus but its a rather tough business to be in as there is hardly any moat in the cable business; southern cables are known to be in the "middle ground" between imported and lesser known cheap cables

Anyone use Rhbnow online banking to apply before?

So far ok?

This post has been edited by sl3ge: Oct 2 2020, 08:16 PM

It is a small company. Small portion of business from TNB is huge for it already. The fact that TNB contracted it shows they have confidence

I like this. But I will point out that sarawak cable is doing great in its cable business. Its losses come from helicopter and energy generation business. I feel Sarawak cable is quite fishy. Otherwise, the cable business is a steady and good business.

Normally how high the chance to get when we subscribe to IPO? The optimax IPO @0.3 and price already double now @0.77. Can Southern cable also follow the similar trend, we shall see on next friday

I would say 20 to 30 percent chance

anyone subscribing this?

Sarawak cable didnt really do so well though. but i too, think that cable business has it potential.

i don't think it could be that high, unless you're talking about trying to subscribe like 300k or 500 shares, then your chance is very high.

We can wait for the ballot table to be out then we can see our chances. typically around 10-15% chance probably.

I dont belive you. It can't be that low.

Example of solarvest ballot. Chances of a meaningful amount as he mentioned is very low.. unless you apply for a very low or a very high amount



This post has been edited by Krv23490: Oct 6 2020, 01:55 PM

My house fengsui up that by 20 percent.

send some my way pls, i applied samaiden.. this one still on the fence, or should i just whack only hahaha

Whack only. If you don't have my fengshui, probably won't get either. No harm trying.

You should open your windows for sunlight to come in. Fengshui direct at solar energy company

open liao whole house.. hehe.. did you apply samaiden ?

No, i apply southern cable. I change all my wireless device to wire. All my house electronics will be on before the balloting day.

lol, still don't believe me? hahahah okayyyyyyyyyyyyyyyy

nvm la, maybe he's that person who applied for 5 mil shares, so he 100% get allotted some shares.

no need what fengshui also 100% chance kena ady.

tehoice is right tho. Especially ACE market companies where the retail portion is small vs larger main market offerings. the oversubscription for almost all ACE market listing are mad - and that should be the indicator. Chances of getting it is very very low.

Yeah. He also posted the balloting table. But I know my house fengshui very tiptop, I arrange my house so I can get the ipo.

this is sure win strategy, looking forward to your positive news next week

Updated below is the press release and the IPO subscription table for your reference.

10 times oversubscribed. good or bad?

did you get it? watch out for your own account to find out

Edit: Public portion for mine is about 15.7 times oversubscribed. means lower chance in getting already. sad....

This post has been edited by tehoice: Oct 8 2020, 06:43 PM


Attached File(s)
 Southern_Cable___Press_Release_IPO_Subscription.pdf ( 147.9k ) Number of downloads: 99
 Southern_Cable___IPO_Subscription.pdf ( 242.29k ) Number of downloads: 123

My chance to get is only 8%. Same as samaiden.

When will we know? Mine is pending. If I didn't get I hope they refund by tommorow so I can subscribe for aneka ipo, tommorow last date for aneka jaringan.

over the next few days, i doubt it will be today though, i think likely to be monday-wednesday. if you get, then you will have the allotted shares credited into your CDS account on Thursday, ahead of the IPO on Friday.

hopefully can get this time

I subscribe 20k unit but got 0...

Aiks didn't get any for this IPO...Might be a good thing cause the allocated shares quite high..

so at the end got kena allocated?

No luck with this IPO too....

pbb still pending.... anyone using pbb to apply?

No lucky...

Didn't get any. Must be lousy ipo. My house Feng shui protect me

aiyo dun la like that.. i got it..

haiz... if manage to get into Aneka, hope good luck this time

Didn't get straight says lousy IPO???
😤

Don't worry. My house Feng Sui protect danger specific to me. May be lousy ipo to me, not necessarily to others.

Solar Calendar, can extend the protection or not? I wanna subscribe also

Buy n keep

I get nothing .....look likes damn hard to get this one

Hehe...
Superb cover-up 🤣

Hope won't disappoint 💰🤑

Applied for 150 lots but only get 100 lots. On the other hand, Samaiden failed me LOL.

better than nothing lah. i also didnt get it. sien. hahaha
so pop corn watch the show this friday.

Yawor. Better than nothing. Its my first time applying IPO. Did you apply DIY and Aneka too? But i guess we should not discuss it here

applied aneka but not diy.

Maybank still shows my application as pending. Anyone using Maybank has gotten the result?

Noticed the partial refund on sunday. Transaction date oct 9.

yes money back on 9oct for maybank

Yes, I applied through Maybank.. and still pending for result... Not sure what is going on.. Never happened before
Called Boardroom to check, the lady said still haven't finalised…
But Balloting result is out, by now they should know who are successful and refund the unsuccessful applications... It's not right to hold our fund for so long..

Today only you will know the result whether successful or not successful. Yesterday they just balloted, so by right before 7.30pm you will know if your saving have extra money because of the rejected application. For my experience, MAYBANK always refund to us immediately for unsuccessful application. You can ignore the status pending or whatsoever.

This is Southern Cable.. Balloting on 8 Oct, so by right I should get the result on 9 Oct.
Yesterday's balloting was Aneka

u can check the Samaiden thread.
It intermittently happen this issue, no worry

I see... Thanks!

Looks like inconsistent behavior for MBB...some has gotten back, some not...it has been 2 working days since you all got the refund, but not me

Yes, I do agree. The few thousands could have been used to generate some small income, but instead it is being held back. Hopefully we will get the refund today. Been applying IPOs on MBB since few years ago, first time this has happened to me.

Opps my bad. I was confused lolll.

Latest Southern Cable TP 88 SEN👌👍

based on your prediction pattern, i will minus 40-50%, but will still be untung, so all good.

ehehehehehh

60c also good enough

100% profit enough liao

Well cannot be very greedy 😂

EARLy BIRDS....hot spicy , tender , crunchy WORMS WAITING... .

88 SEN with in reach...after all heard the Charman used to be A Goleng Kaki !

talk cock again?

T/O: 0.335, below IPO price

This post has been edited by kailc: Oct 16 2020, 08:44 AM

Bad opening.

Mr Talk Cock, where is ur tp 88 cents ? will happen 10 years later ?

This post has been edited by kailc: Oct 16 2020, 08:59 AM

ATTACCKKKKKKKKKKKKKKKKKKK