Capital markets executive summary | Mon 10 Jul 2023

Capital markets executive summary | Mon 10 Jul 2023

Master Tec plans to list on the ACE Market

The company manufactures power cables, and control and instrumentation cables. It also trades power cables and fibre optic cables. The initial public offering (IPO) entails a public issue of 158.1m new shares and offer for sale of 127.5m existing shares. The IPO proceeds will be used for the construction of new power cable manufacturing plants, for purchase of new machineries and equipment, for working capital, and for listing costs. The new shares comprise 51m for the Malaysian public, 2.14m for directors and employees, and 104.96m for private placement to selected investors. The existing shares will be privately placed to identified Bumiputera investors approved by the Ministry of Investment, Trade and Industry. The company’s dividend payout ratio is 30% of its profit after tax. Net profit grew from RM5.26m in FY2020 to RM5.53m in FY2021 to RM19.55m in FY2022. Revenue rose from RM162.31m in FY2020 to RM275.88m in FY2021 to RM362.69m in FY2022. SJ Securities is the principal adviser, sponsor, sole placement agent and sole underwriter.

Samaiden signs 20-year PPA with Yakult

Samaiden Capital Management Sdn Bhd, its wholly-owned subsidiary, secured the power purchase agreement agreement (PPA) with the Japanese global beverage company. The company will supply renewable energy generated from solar facilities at 2 locations – Seremban with 496.26 kilowatt peak (kWp) capacity and Glenmarie with 212.22kWp. Samaiden, as the investor in the agreement, will be responsible for the installation, operation and maintenance of the solar power systems, thereby ensuring a consistent and reliable supply of renewable energy. Yakult signed the agreement to advance its green initiatives and support its mission of providing healthy beverages whilst caring for the environment. The arrangement offers Yakult the ability to lower its carbon emissions by 705.96 tonnes annually. Samaiden closed at RM1.15.

TM Tech’s AAA and P1 ratings affirmed

Following an internal reorganisation by Telekom Malaysia, its core businesses were transferred to TM Tech. RAM Ratings expects TM to continue dominating the local fixed-broadband, fixed-line services and telecommunication industry. The company’s important role and strong bond with the government anchor its position. RAM’s rating methodology for government-linked entities suggest that TM will most likely receive extraordinary support from the government if financial distress occurs. TM’s revenue climbed 5.1% in FY2022, supported by Unifi and TM Global. It managed to keep costs down with the unadjusted operating profit before depreciation, interest and tax (OPBDIT) margin at 39.7%. Improved earnings and active debt management helped gearing fall to 0.87 times at end-Dec 2022 whereas funds from operations debt coverage (FFODC) was 0.65 times. The counter closed at RM4.79.

DUKE 3 sukuk wakalah AA- rating affirmed

Lebuhraya DUKE Fasa 3 Sdn Bhd holds the concession for the 32-km Setiawangsa-Pantai Expressway which ends on 5 Aug 2069. MARC Ratings affirmed the rating on the RM3.64b sukuk. The rating reflects a fully amortising repayment profile that foresees traffic ramp-up with RM5m 1st repayment on 23 Aug 2024 and annual debt service is back loaded with RM440m maturing in 2039. The repayment profile lets the highway build up traffic volume, generate cash and meet financial obligations. The rating also accounts for the alignment within mature catchment areas. The company received its Certificate of Practical Completion on 21 May 2023. Inspections by Lembaga Lebuhraya Malaysia are ongoing with full opening expected by end-Jul. Average finance service cover ratio (FSCR) is 2.1 times and minimum is 1.5 times against the 1.5 times covenant. The financing structure offers a 30-year tail period, enough room for refinancing, if necessary. Ekovest closed at 37 sen.

Thyssenkrupp’s hydrogen unit Nucera lists on Frankfurt stock exchange

Interest in hydrogen as an energy alternative to reduce carbon emissions has been growing. Nucera manufactures electrolysers, which can be used to produce green hydrogen by using electricity from renewable energy sources such as solar or wind. Shares of the company started trading at EUR20.20 (RM102) on Fri, above the initial public offering (IPO) price, thereby valuing the company at EUR2.5b. Almost 25% of the company’s enlarged shares were offered with Thyssenkrupp, which raised EUR600m, keeping its majority. Italy-based Industrie De Nora holds 34%. The IPO, the world’s largest for a hydrogen company, was Europe’s 2nd largest this year, after Italian gambling firm Lottomatica listed in Milan. The IPO proceeds will be used by Nucera to expand its alkaline water electrolysis business, which is expected to take a long time before sustainable profits materialise.