Pansar associate plans IPO

Pansar Bhd's exclusive JCB 3S centre in Kuching. - Filepic

PETALING JAYA: Sarawak-based Pansar Bhd’s 20% associate company, Reservoir Link Energy Bhd (RLEB), has submitted its prospectus exposure for a proposed Ace Market listing on Bursa Malaysia.

RLEB is an upstream oil and gas (O&G) services provider.

Licensed as a Petroliam Nasional Bhd vendor in the “well perforating equipment and services” category, it is principally involved in the provision of perforating solutions and services and ancillary equipment for the O&G field services industry.

RLEB started out in November 2008 as an exclusive agent to supply perforating products in Malaysia.

Pansar first acquired the stake in RLEB back in 2014 for RM12.8mil.

RLEB is valued at 227.87 million shares with a paid-up capital of RM22.79mil, based on a June 28 filing by Pansar.

Thus, in today’s terms, Pansar owns 45.57 million shares in RLEB, which is equivalent to its 20% stake.

Should the listing go through, RLEB will have an enlarged share capital of 285 million.

“This is an opportunity for Pansar to further explore the O&G industry, ” noted one analyst.

Pansar managing director Datuk Tai Hee is also non-executive chairman of RLEB.

Numbers-wise, the company is growing very fast. Hence, the analyst is of the opinion that RLEB’s growth is still in the beginning stages, and far from its full potential.

Based on the prospectus exposure, RLEB’s net profit jumped from RM1.01mil to RM3.02mil between 2017 and 2018.

Its revenue also increased from RM20.87mil to RM45.09mil during that period.

Meanwhile, Pansar started off as a hardware shop in 1961 and is today a full-fledged engineered solutions provider.

As an engineered solutions provider, the Pansar group has six business segments – marine and industrial; building products; wood engineering and supplies; electrical and office automation; heavy equipment as well as mechanical and electrical.

For its fourth quarter ended March 31, 2019, net profit more than doubled to RM3.53mil from RM1.83mil in the previous year.

In May this year, Pansar announced that its wholly owned subsidiary, Pansar Engineering Services Sdn Bhd, had been awarded the Sibu Flood Mitigation Project Phase 3 that is worth RM78mil by Kiasan Engineering Sdn Bhd.

Sibu is situated alongside the Rejang River in Sarawak, and is known for taking the full brunt of seasonal monsoons.

Since 2011, the Department of Irrigation and Drainage Malaysia has implemented Flood Mitigation Phases 1 & 2 and residents have since noticed a marked decrease in flood occurrences.

An analyst familiar with the construction industry said that with the award of the flood mitigation project and the state government’s intention to spend more on infrastructure projects in Sarawak, Pansar is in quite a good position to secure more infrastructure projects.

At its current share price of 46 sen, Pansar has a market capitalisation of RM212.52mil and is trading at a price earnings ratio of 26.44 times. It also has a dividend yield of 2.2%.

Pan Sarawak Sdn Bhd is the single largest shareholder in the company with a 65.26% stake. Datuk James Tai Cheong, who is the chairman of the company alongside Tai Hee, are indirect substantial shareholders via their stakes in Pan Sarawak.

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