Technical | Fundamental Analysis Discussion Stocks Listed In Bursa

Thursday, November 27, 2014

IPO - EATech

EATech: A shipping and marine services provider plans to diversify its business into upstream oil and gas (O&G) and bid for risk sharing contracts (RSCs) to develop marginal oilfelds.
EA Technique is now deciding on the right partners to form a joint-venture company, in which it prefers to hold a majority stake, to bid for RSC projects. It is one of 42 companies under Johor Corp’s Intrapreneur Development Scheme. It is controlled by Kulim (Malaysia) Bhd which has a 65.4% indirect stake held through Sindora Bhd.
Abdul Hak currently owns a 24.6% stake, while his wife Datin Hamidah Omar has the remaining 10% interest. These shareholdings will be diluted once the group is listed.
It hopes to raise RM68.4 million through the issuance of 114 million shares, equivalent to 25.6% of its enlarged, issued and paid-up capital. The amount is based on the assumption of 60 sen per share, translating into a market capital- isation of RM302.4 million.
43.9% of the listing proceeds will be used to pay bank borrowings, 42.7% for capi-tal expenditure, and 6.7% each for working capital and listing expenses.
EA Technique currently operates 32 marine vessels, of which it owns 23, with nine chartered from external parties.
Proceeds from the listing will be used to gradually increase its vessels from 23 to 38. It (the increase of vessels) will be through acquisition and construction of new ones at our facility in Perak.
The group’s order book currently stands at RM1 billion, including optional contract extensions of some RM297 million, which will keep the group busy until 2025.
For the financial year ended Dec 31, 2013 (FY13), EA Technique’s net profit tripled to RM56.9 million from RM18.91 million from FY12, while revenue grew 18% to RM121.12 million from RM102.72 million, on strong performance of port services and minor fabrication.
On a segmental basis, EA Technique’s marine transportation business contributed 59.3% to total revenue, followed by port services (37.2%) and minor fabrication (3.5%).
EA Technique’s main customers — Petronas Trading Corp Sdn Bhd and Petronas Maritime Ser-vices Sdn Bhd — formed the bulk of its revenue of 63% in FY13.
To limit the group’s reliance on a single customer for its businesses, it secured a RM260 million contract in July 2013 to build, operate and charter out six units of Z-Peller harbour tugboats to Northport (Malaysia) Bhd over a period of 10 years.
EA Technique is currently the largest local harbour tugboat operator in the country, providing services to five ports.

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