BCMALL

[winston]

not vested

JF Apex Research fair value for BCM Alliance at 31 sen

KUALA LUMPUR: JF Apex Research has ascribed a fair value of 31 sen for BCM Alliance – which supplies equipment for the commercial laundry and medical devices -- which is 63% above its offer price of 19 sen.

It said on Thursday its valuation was pegged at 13 times FY17 EPS forecast of 2.4 sen.

“Our target price-to-earnings ratio (PER) is lower than the trading and services industry’s average PER of 18 times in view of its smaller market cap,” it said.

JF Apex Research said BCM Alliance can deliver earnings growth of 14% for FY16F and 46% for FY17F. Bassed on the fair value, this is 63% above from the listing price of 19 sen.

BCM Alliance provides equipment in the commercial laundry equipment and medical devices industry in Malaysia.

It also distributes for well-established and well-known brands of commercial laundry equipment and medical devices.

It sources a number of reputable international brands and manufacturers such as Alliance Laundry, Hitachi Medical Systems (S) Ptd Ltd, and STERIS Corporation.

“We opine that BCM’s role as a distributor is not easily replaceable as the equipment manufacturers and end-users for both business segments are still heavily reliant on the group for its extensive technical support, timely delivery of products as well as comprehensive training services for operating and maintenance of the equipment.

“We reckon that the group enjoys healthy business model as its commercial laundry business segment renders exciting growth opportunity with mushrooming of self-service launderettes locally,” it said.

BCM Alliance also supplies medical imaging equipment, disinfection, sterilisation and surgical room products to about 28 branches of hospitals under KPJ Healthcare Group and 10 medical centres of Columbia Asia Group.

The research house said the company's medical devices business segment offers stable earnings underpinned by defensive healthcare sector.

Based on the study done by the consultant Protégé Associates, the medical devices industry in Malaysia was valued at RM10.2b in 2015, and is expected to reach RM17.4b in 2020 with forecast CAGR of 11.2% from 2016 till 2020.

It said the sustainable demand for medical devices will be underpinned by the growing and ageing population, prevalence of chronic lifestyle disease with rising patients seeking for treatment and diagnosis, increasing healthcare expenditure, as well as increasing number of hospitals and medical centres which require a wide range of advanced medical devices and equipment.

“We are upbeat on the Group’s future plans to introduce sanitising and hygienising cabinet (an alternative to remove odours and bacteria from garments),” it added.

BCM Alliance also targets to expand its product range to include wet cleaning machines (as an alternative to traditional dry cleaning processes) as it is the most environmentally sensitive professional method of garment cleaning and generates better results for removing stains, especially on certain fabrics.

As for its medical devices business segment, the group aims to extend its product range to pre-treatment, testing and health management tools such as blood pressure, blood glucose, body fat, body composition monitors, respiratory care products by supplying to local pharmacies.

Source: The Star

http://www.thestar.com.my/business/busi ... at-31-sen/

[winston]

not vested

BCM Alliance declares first dividend

KUALA LUMPUR: BCM Alliance Bhd has declared a first interim single-tier dividend of 0.4 sen per share to shareholders on the company’s record of depositors as of Nov 7, 2016.

The distributor of commercial laundry equipment and medical devices got listed on the Ace Market of Bursa Malaysia yesterday, opening 8 sen higher at 27 sen, on a volume of 9.62 million shares.

“We are happy with the share price performance as it shows that investors are confident of the company.

“In addition, we expect to perform better this year, as compared to last year, with new projects and orders coming in, which we will announce accordingly.

“The recommendation on the first interim single-tier dividend is to reward the shareholders who have put their trust in BCM Alliance’s initial public offering (IPO),” said BCM Alliance managing director Liaw Chong Lin. The first interim single-tier dividend amounting to approximately RM1.69mil will be paid on November 21.

BCM Alliance successfully raised RM16.01mil from its public issue of 84.25 million new shares at an issue price of 19 sen per share, of which 22 million new shares were made available to the Malaysian public.

Its IPO was oversubscribed by 49.94 times, valued at RM212.94mil.

This makes BCM Alliance the highest subscribed IPO in terms of public category this year. For the second quarter ended June 30, 2016, the company registered 4% higher revenue of RM17.7mil and 32.1% higher net profit of RM2.59mil.

This is attributed to the increase in revenue contribution from both commercial laundry equipment and medical device segments.

“In 2015, the company’s revenue contribution from the commercial laundry equipment segment was 60%, while medical devices made up 40%.

“Going forward, we expect both segments’ contributions to be on par,” said Liaw.

From the total IPO proceeds, RM2.60mil (16.2%) will be used to set up a chain of self-service launderette outlets, RM7.70mil (48.1%) for the purchase of new commercial laundry equipment and medical devices, RM3.21mil (20.1%) to fund the day-to-day working capital expenses, while the remaining RM2.5mil (15.6%) will be spent on listing expenses.

The chain of self-service launderette outlets will comprise of an additional 11 “Speed Queen” concept stores in the Klang Valley, Johor, Penang, Malacca, Negri Sembilan, Terengganu and Kelantan by the end of 2018.

To date, one Speed Queen outlet has been established in Taman United.

Speed Queen is a vended commercial laundry equipment brand manufactured by Alliance Laundry Systems LLC.

BCM Alliance operates CS Laundry System Sdn Bhd, which is involved in the supply, testing, installation, and commissioning of commercial laundry equipment.

The company also operates Best Contact (M) Sdn Bhd and Maymedic Technology Sdn Bhd, which are involved in the supply, testing, installation and commissioning of medical devices.

BCM Alliance closed at 21.5 sen yesterday, with 203.42 million shares changing hands.

Source: The Star

http://www.thestar.com.my/business/busi ... -dividend/

[winston]

not vested

Trading Buy: BCMALL - 0187
(Last price: RM0.195, Potential upside +25.6%)

Company Profile
• BCMALL is principally involved in the distribution of equipment, specialising in the commercial laundry equipment and medical devices industries in Malaysia.

Trading Catalyst

• Despite a competitive commercial laundry equipment business, we remain sanguine on BCMALL, spearheaded by the medical devices segment and newly acquired 51% stake in healthcare company Cypress Medic S/B in Feb.

• Valuation is attractive at 9x (7.6x ex-cash) FY19 P/E (35% below historical 14x P/E and 53% below ACE market FY17 P/E of 19.3x), supported by a robust FY17-19E EPS CAGR of 42% and net cash of RM14m or 3.3sen/share.

• Bullish downtrend channel breakout to spur prices towards RM0.21-0.245 levels.

Technical View
• Resistance: RM0.210 / RM0.225 / RM0.245
• Support: RM0.185 / RM0.175
• Cut loss: RM0.170

Key Financial Stats
• FY19 PE: 9x (7.6x ex-cash)
• FY17-19E EPS CAGR: 42%

Source: Bloomberg, HLIB

[winston]

not vested

Trading Buy: BCMALL - 0187
(Last price: RM0.215, Potential upside +27.9%)

Company Profile
• BCMALL (listed on ACE market in Oct 2016 at RM0.19/share) is principally involved in the distribution of equipment, specialising in the commercial laundry equipment and medical devices industries in Malaysia.

Trading Catalyst

• Despite facing challenges in the commercial laundry equipment sales (2QFY18 revenue -7.7% YoY), we remain sanguine on BCMALL, spearheaded by the robust medical devices segment (+139% YoY) after acquiring a 51% stake in healthcare company Cypress Medic S/B in Feb.

• Valuation is attractive at 8.3x (6.9x ex-cash) FY19 P/E (37% below historical 13.2x P/E since listing), supported by a resilient 7% FY19 EPS growth and net cash of RM15m or 3.6sen/share;

• Technically, BCM is likely to test RM0.25-0.275 levels after a brief sideways trend

Technical View
• Resistance: RM0.225 / RM0.250 / RM0.275
• Support: RM0.200 / RM0.195
• Cut loss: RM0.190

Key Financial Stats
• Trading at 8.3x FY19E P/E (ex-cash 6.9x), supported by a steady 7% FY19 EPS growth.

Source: HLIB