PETALING JAYA: ACE Market-bound PMW International Bhd
’s operations are expected to be supported by the growing electricity consumption and rapid expansion of Malaysia’s utility infrastructure.
PMW International is primarily involved in the design, manufacturing, and sale of pre-stressed spun concrete poles, piles and related products which mainly serve sectors such as electricity, telecommunication, decorative lighting poles for streets and parks, transportation and advertisement poles.
The group also manufactures moulds, machinery and metal products, and provides rental services for moulds and machinery.
PMW International is looking to raise RM60.7mil from its listing scheduled for Nov 18. The initial public offering (IPO) entailed a public issue of 178.4 million new ordinary shares and an offer for sale of 89.21 million shares at an IPO price of 34 sen a share, representing 30% of the group’s enlarged issued share capital.
At that price, it said PMW International is valued at 17.9 times financial year 2024 (FY24) earnings per share (EPS).
The research house said it derives a fair value of 45 sen per share by applying a target price-to-earnings ratio (PE) of 18 times to FY26 EPS.
“The target multiple implies a 10% premium to the peer average trailing PE of 16.4 times, which we view as justified given PMW International’s larger market capitalisation and stronger earnings growth outlook supported by its healthy order book and established market position,” TA Research said in a report yesterday.
The research house noted the group’s main competitive advantages include being the key beneficiary of Malaysia’s infrastructure upcycles, having a diversified footprint across different sectors and capacity expansion to drive growth.
On the other hand, PMW International’s key risks include being dependent on securing new contracts and continuous order intake, slowdown in infrastructure project rollout and fluctuations in raw material prices.
Looking ahead, TA Research projected that the group would register a year-on-year (y-o-y) earnings growth of 12.4%, 10.8% and 9.6% to RM19.1mil, RM21.1mil and RM23.1mil for FY25, FY26 and FY27, respectively.
“The growth is mainly driven by the following assumptions, namely, annual revenue growth rate of 13% for its trading, manufacturing and rental of moulds and machinery divisions; and gross margin assumptions of 16.8%, 16.6% and 16.5% for FY25, FY26 and FY27,” it said.
In FY24, revenue increased significantly by 22.6% y-o-y to RM165.3mil, also mainly contributed by increased sales in the manufacturing and trading segments.
With the increase in revenue, core net profit increased 10.3% y-o-y to RM17mil, supported by lower input costs and effective cost optimisation measures.
PMW International planned to utilise the proceeds from its IPO for the construction of a new facility at Tanjung Manis, Sarawak and the purchase of new machinery and equipment.
The group has plans to establish the Tanjung Manis facility on about 29 acres of land to produce spun poles and piles for infrastructure development, particularly in peat soil areas.
