TMK Chemical Berhad's initial public offering (IPO) subscription period is notably brief, opening on November 25 and closing on November 29, 2024. This four-day window is shorter than the typical one to two weeks allotted for IPO subscriptions. Additionally, the company is expected to release its quarterly financial report by November 29, coinciding with the subscription deadline.
The timing raises concerns that if the forthcoming financial report reveals unfavourable results, it could negatively impact investor sentiment and the stock's performance upon listing.
For the financial year ended December 31, 2023, TMK Chemical reported a profit after tax (PAT) of RM91.6 million, a decrease of nearly 40% from RM150.34 million in FY2022. Revenue also declined by 12% to RM1.31 billion from RM1.48 billion in the previous year. TMK’s full-year 2024 performance will depend heavily on the continued ramp-up of the Baling Plant which commence operation in May 2024 and management’s ability to improve profit margins.
Investors should exercise caution and consider awaiting the release of the latest Quarterly financial report before making investment decisions. This approach allows for a more informed assessment of the company's financial health and prospects. But what if the quarterly report is release after 5pm on 29th Nov?

Supreme Consolidated Resources Bhd (SCRB), formerly known as Qilin Integrated Resources Bhd, is a Sarawak-based distributor of fast-moving consumer goods (FMCG), including frozen and chilled food products, ambient food and beverages, and non-food items. The company is transitioning from the LEAP Market to the ACE Market of Bursa Malaysia, with its initial public offering (IPO) application closing on November 15, 2024.

Performance on the LEAP Market:
While detailed financial performance data during its tenure on the LEAP Market is limited, SCRB has demonstrated growth in its distribution network and product offerings. The move to the ACE Market is intended to enhance liquidity and provide access to a broader investor base.

IPO Details:
The IPO is priced at RM0.25 per share, aiming to raise approximately RM17.5 million. The proceeds are allocated as follows:

62.86% (RM11 million): Expansion of warehouse facilities to increase storage capacity by over 1,500 pallets, supporting product line growth.

22.86% (RM4 million): Working capital to support daily operations and business expansion.

Remaining funds: Covering listing-related expenses.

Analyst Insights:
Analysts have expressed optimism about SCRB's growth prospects, citing the company's plans to widen distribution channels into Sabah, expand warehouse facilities, and capitalize on a positive industry outlook in Sarawak. A fair value of RM0.40 per share has been suggested, indicating a potential 60% upside from the IPO price.

Considerations for Potential Investors:
Growth Potential: SCRB's strategic initiatives, including warehouse expansion and market penetration into Sabah, position the company for potential growth.

Industry Position: As a key distributor in the Sarawak and Sabah regions, SCRB benefits from established relationships and market knowledge.

Market Conditions: The FMCG sector's performance and broader economic factors can influence SCRB's success.

Financial Health:

Fundamentals
1. Market & Pricing: Listed on the ACE Market at RM0.25, SCRB’s stock offers an accessible entry point for investors interested in mid-sized growth potential.

2. Profitability Ratios:
P/E Ratio: With a forecasted P/E of 11.9, the valuation appears fair, suggesting a reasonable entry price for expected earnings.
ROE: The company’s ROE has improved slightly, projecting 10.3% post-IPO, indicating effective use of reinvested capital.


3. Assets and Debt:
Debt: A total debt-to-current asset ratio of 0.478 shows that current assets can comfortably cover debt, indicating prudent financial management.
Net Asset: Though net assets are nil, the current and non-current assets provide stability.

4. Dividend Policy: Without a formal dividend policy, SCRB is focused on growth, making returns likely through stock appreciation.

5. Shariah Status: As Shariah-compliant, SCRB is accessible to a broader, Islamic-compliant investor base.

Past Financial Performance
1. Revenue Growth: SCRB’s revenue has increased from RM187.5 million in 2021 to RM199.6 million in 2023, with RM132.7 million achieved in the first seven months of 2024, indicating ongoing demand.

2. Profit Margins:
PAT: PAT has ranged from 3.89% to 4.74%, reflecting a stable but modest profit margin typical in FMCG distribution.

3. EPS: EPS has grown steadily, enhancing shareholder value.

Summary
SCRB’s growth potential, steady revenue, and manageable debt position make it an appealing option for those prioritizing capital growth. With returns expected through stock appreciation, SCRB offers a stable yet growth-oriented investment case.

Conclusion:
I would invest in the company as investing in SCRB's IPO presents an opportunity to participate in the company's growth trajectory within the Malaysian FMCG distribution sector. The planned use of IPO proceeds for capacity expansion and working capital suggests a focus on scaling operations. However, as with any investment, it is crucial each individual to their own assessment thorough due diligence, considering both the company's fundamentals and prevailing market conditions, to make their own decision.

Since its listing on Bursa, DCHCARE has encountered considerable financial challenges, reporting a net loss of RM18.49 million over the past twelve months and maintaining a negative profit margin of 32.82%. The stock has exhibited marked volatility, with weekly fluctuations averaging 10%, placing it among the top 25% of the most volatile stocks on the Malaysian market.

I believe the company’s strategy to expand its aesthetic services footprint—from 12 outlets in Q2 2023 to 17 in Q2 2024—alongside the launch of new product lines under the Ten Doctors brand and four additional outlets dedicated to slimming services, shows a strong commitment to growth. This increase, bringing the total to 21 outlets in Q2 2024 compared to the previous year’s 12, could create favourable prospects for financial recovery. However, the success of these initiatives will likely depend on broader market conditions and prevailing investor sentiment.

DC Healthcare Holdings Berhad, has been actively expanding its operations by opening new branches across Malaysia. Their aggressive growth strategy has led to increased administrative and advertising expenses, contributing to recent financial losses. For instance, in the fourth quarter ended December 31, 2023, the company reported a net loss of RM1.07 million, despite achieving a revenue of RM17.57 million.

The share price has experienced a significant decline, closing at RM0.16 on November 8, 2024, marking a 69.23% drop over the past year. This downturn can be attributed to the financial losses and market concerns regarding the sustainability of its rapid expansion.

But I think the company's strategic initiatives, such as the establishment of new clinics in key locations like Johor Bahru and Ipoh, aim to tap into high-income markets and drive future revenue growth. Additionally, the implementation of an Employee Share Option Scheme (ESOS) is intended to align employee interests with company performance, potentially enhancing operational efficiency and profitability.

And I think, the share price may remain under pressure in the short term due to ongoing financial challenges and market scepticism. However, if the company's expansion efforts lead to increased market share and profitability, and if the ESOS successfully motivates employees to drive performance, there is potential for share price recovery in the medium to long term.

I think this will rebound sooner than later by 2nd Quarter 2025