Stock Name: MCLEAN
Company Name: MCLEAN TECHNOLOGIES BERHAD
Research House: RHB
KUALA LUMPUR: RHB Research Institutes has accorded Mclean Technologies Bhd, which will make its debut on Bursa Malaysia on Tuesday, May 10 at 57 sen, based on 7.5 times FY11 earnings per share.
Its offer of 2.7 million new shares offered to the public under its listing exercise at 52 sen each was oversubscribed by'' 100.49 times.
Mclean is mainly involved in precision cleaning and washing solutions for various components as well as plastic injection moulding for the hard disk drives (HDD) and automotive industries.
RHB Research said on Monday,'' May 9 Mclean plans to increase its capacity in China in addition to upgrading its capabilities to high precision cleaning. This follows Seagate's relocation of its manufacturing operations (excluding its media and product development operations) out of Singapore to China which could translate into higher demand for third party precision cleaning.
'The company also plans to set up alternative cleaning technologies in order to cater to its customer's requirements. By using carbon dioxide gas (vs. de-ionised (DI) water currently), it is able to expand its precision cleaning services to a wider range of components with different characteristics such as magnets and motor based assembly,' said the research house.
It said Mclean will continue to position itself in Singapore as it remains a critical market for the HDD industry.
'Going forward, Singapore is expected to be a key producer of disk media substrates with approximately 50% of the world's total output. Therefore, the company will continue to focus on Singapore to serve this market in addition to venturing into other industries,' it said.
On the basis of its valuations, RHB Research said it derived a target PER of 7.5 times for MCT which implies 38.5% discount to regional peers valuations that are broadly similar to the hard disk drive industry.
'Therefore, we estimate a fair value of 57 sen based on 7.5 times FY11 EPS. Note that we have not diluted our EPS estimates for the 58.7 million free warrants as issued in the IPO as the warrants will only expire in 2016.
'However, if we assume the warrants are converted based on the exercise price of 52 sen for the warrants, our fully diluted EPS would imply 27.6% dilution,' it said.
Company Name: MCLEAN TECHNOLOGIES BERHAD
Research House: RHB
KUALA LUMPUR: RHB Research Institutes has accorded Mclean Technologies Bhd, which will make its debut on Bursa Malaysia on Tuesday, May 10 at 57 sen, based on 7.5 times FY11 earnings per share.
Its offer of 2.7 million new shares offered to the public under its listing exercise at 52 sen each was oversubscribed by'' 100.49 times.
Mclean is mainly involved in precision cleaning and washing solutions for various components as well as plastic injection moulding for the hard disk drives (HDD) and automotive industries.
RHB Research said on Monday,'' May 9 Mclean plans to increase its capacity in China in addition to upgrading its capabilities to high precision cleaning. This follows Seagate's relocation of its manufacturing operations (excluding its media and product development operations) out of Singapore to China which could translate into higher demand for third party precision cleaning.
'The company also plans to set up alternative cleaning technologies in order to cater to its customer's requirements. By using carbon dioxide gas (vs. de-ionised (DI) water currently), it is able to expand its precision cleaning services to a wider range of components with different characteristics such as magnets and motor based assembly,' said the research house.
It said Mclean will continue to position itself in Singapore as it remains a critical market for the HDD industry.
'Going forward, Singapore is expected to be a key producer of disk media substrates with approximately 50% of the world's total output. Therefore, the company will continue to focus on Singapore to serve this market in addition to venturing into other industries,' it said.
On the basis of its valuations, RHB Research said it derived a target PER of 7.5 times for MCT which implies 38.5% discount to regional peers valuations that are broadly similar to the hard disk drive industry.
'Therefore, we estimate a fair value of 57 sen based on 7.5 times FY11 EPS. Note that we have not diluted our EPS estimates for the 58.7 million free warrants as issued in the IPO as the warrants will only expire in 2016.
'However, if we assume the warrants are converted based on the exercise price of 52 sen for the warrants, our fully diluted EPS would imply 27.6% dilution,' it said.
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