SKYWORLD DEVELOPMENT BERHAD

Open to apply: 20 June 2023
Close to apply: 27 June 2023
Balloting: 30 June 2023
Listing date: 10 July 2023

Share Capital
Market cap: RM800 mil
Total Shares: 1,000,000,000 shares

Industry CARG
Residential Property Transactions in KL, volume (CAGR2018-2022): 4.7%
Commercial Property Transactions in KL, volume (CAGR2018-2022): 4.0%
Overhang of High.rise Residential Properties in KL, volume (CAGR2018-2022): 5.4%
Overhang of Hlgh.rise Commercial Properties in KL, volume (CAGR2017-2021): 34.7%
Industry competitors comparison (net profit%)
Skyworld: 13.2% (forecast PE8.99)
IJM: 20.1% (PE35.26)
SP Setia Bhd: 8.2%  (PE:7.1)
Sunway Bhd: 14.5% (PE11.79)
Matrix: 22.5% (PE8.64)
Ecowld: 7.7% (PE15.71)
Simeprop: 11.4%(PE9.73)

Others: -43.6% to 31.2%

Business (FPE 2023)
Urban property developer focusing on the development (principle market KL)
-Residential and commercial (FPE2023: 60.52%)
-affordable properties (FPE2023: 39.39%)
Others
-Management services
-Construction
-E-commerce platform

Fundamental
1.Market: Main Market
2.Price: RM0.80
3.Forecast P/E: 8.99 (if full conversion of ICPS)
4.ROE(Pro Forma III): 12.52%
5.ROE:  22.42%(FPE2022), 17.55%(FYE2021), 21.93%(FYE2020)
6.Net asset: RM0.71
7.Total debt to current asset IPO (proforma): 1.08 (Debt: 754.531mil, Non-Current Asset: 772.970mil, Current asset: 695.867mil)
8.Dividend policy: 20% PAT dividend policy.
9. Shariah status: Yes

Past Financial Performance (Revenue, Earning Per shares, PAT%)
2023 (FPE 31Dec, 9 mth): RM615.461 mil (Eps: 0.0858), PAT: 14.86%
2022 (FYE 31Mar): RM790.437 mil (Eps: 0.1043), PAT: 13.19%
2021 (FYE 31Mar): RM488.797 mil (Eps: 0.0633), PAT: 12.95%
2020 (FYE 31Mar): RM523.860 mil (Eps: 0.0652), PAT: 12.46%

Major customer (2022)
Did not have major customer. 

Major Sharesholders
Datuk Seri Ng Thien Phing: 41.48%
Datuk Lam Soo Keong @ Low Soo Keong: 10.07%
Lee Chee Seng: 4.72%
Zafidi Bin Mohamad: 3.73%

Directors & Key Management Remuneration for FYE2024
(from Revenue & other income 2022)
Total director remuneration: RM6.110 mil
key management remuneration: RM1.190 mil – RM1.340 mil
total (max): RM7.45 mil or 2.98%

Use of funds
Acquisition of land for development: 60.10%
Working capital for project development: 21.15%
Repayment of bank borrowings: 12.02%
Estimated listing expenses: 6.73%
 

Conclusions (Blogger is not wrote any recommendation & suggestion. All is personal opinion and reader should take their own risk in investment decision)
Overall, property market still not encourage in coming 2-3 years. The industry itself might effect the company future performance. 

*Valuation is only personal opinion & view. Perception & forecast will change if any new quarter result release. Reader take their own risk & should do own homework to follow up every quarter result to adjust forecast of fundamental value of the company.