PublicInvest sets 36 sen FV on Yew Lee Pacific Group

by ANIS HAZIM / pic source: Yew Lee Pacific Group’s Facebook

PUBLIC Investment Bank Bhd (PublicInvest) has assigned a fair value (FV) of 36 sen on ACE Market-bound Yew Lee Pacific Group Bhd or price-earnings multiple of 18 to its financial year of 2023 earnings per share (EPS) of two sen.

Yew Lee Pacific Group’s IPO shares are offered at 28 sen apiece. The stock is scheduled to be listed on June 7.

The manufacturer of industrial brushes as well as trading of industrial hardware and machinery parts intended to diversify its customer base with enhancement and expansion of its existing product offerings.

The group also plans to improve the automation levels of its manufacturing process, while expanding its trading of industrial hardware and machinery parts business.

Yew Lee Pacific Group’s IPO is expected to raise RM37.3 million from the issuance of 133.1 million new shares.

It plans to utilise 12.3% of the proceeds as working capital while 29.2% will go towards the purchase of new manufacturing machinery and equipment. Some 19.6% will to for the construction of a new warehouse facility and office building.

PublicInvest noted Yew Lee Pacific Group’s competitive strengths included its ability to manufacture custom-made industrial brushes, its provision of a comprehensive range of products and its commitment to stringent quality assurance.

Yew Lee Pacific Group’s strengths include its fleet of advanced types of machinery and equipment, established relationships with its customers and suppliers, and experienced EDs and management team.

“Key drivers may include expansion in manufacturing industries as well as growing sophistication in manufacturing technology, together with expansion in a broad range of end-user markets,” PublicInvest noted in a report on the company today.

Downside risks include competition from other industry players, dependency on major customers, absence of long-term contracts, fluctuation in foreign exchange and dependency on foreign workers in its manufacturing facilities.