Background

Elridge Energy Holdings Berhad (Elridge) is principally involved in the manufacturing and trading of biomass fuel products, mainly comprising palm kernel shell (PKS) and wood pellets. The group’s products are used as energy sources that are burned or combusted to generate electricity or heat. Revenue is primarily driven by export to markets in Indonesia, Japan and Singapore.

IPO Statistic

The IPO entails a public issue of 350mn new ordinary shares, and an offer for sale of 350mn existing ordinary shares, at an IPO price of RM0.29/share.

Public Issue:

• 80.0mn new shares for application by the Malaysian public;

• 20.0mn new shares for application by eligible parties;

• 250.0mn new shares for private placement to selected investors, and

• 350.0mn offer for sale of existing shares

Main Competitive Advantages

1. Strong export-driven revenue base backed by proprietary production processes. 2. Proven track record in the biomass fuel industry; and 3. Strategic plant locations.

Valuation

At an IPO price of RM0.29/share, Elridge is priced at a trailing PER of 24.6x FY23 EPS. We value the company at 18.6x FY25 EPS, arriving at a fair value of RM0.47/share.

Source: TA Research - 9 Aug 2024