PETALING JAYA: KHPT Holdings Bhd is expected to achieve net profit growth rates of 5.1% and 12.9%, reaching RM6.6mil for financial year 2024 (FY24) and RM7.5mil for FY25, respectively, says TA Research.
The research house said the increase in the earnings for the automotive parts manufacturer was expected to stem from higher sales volumes of automotive parts and components, along with improved margins, while projecting that automotive parts sales volume would rise by 1% in FY24 and 4% in FY25.
Additionally, the group’s gross margin is expected to improve to 13.2% in FY24 and 14% in FY25 from 12.4% in FY23, the research house added.
En route to a listing on Bursa Malaysia, KHPT is primarily involved in the manufacturing and sale of automotive parts and components, including body parts, seat structures, and other components such as engine and absorber parts.
The group operates with 45 press machines and four types of production lines, with a specific production line utilised depending on the type of parts and components being produced.
Based on an independent market research report by Smith Zander International, KHPT held a market share of approximately 0.41% in Malaysia’s metal parts and accessories for motor vehicles in 2023, based on its revenue.
The ongoing growth of local automotive manufacturers, particularly Perusahaan Otomobil Kedua Sdn Bhd (Perodua) and Proton Holdings Bhd, is anticipated to benefit suppliers of parts and components for the production of Proton and Perodua vehicles, including KHPT.
Based on an initial public offering (IPO) price of 20 sen per share, KHPT is valued at a price-earnings ratio (PE) of 12.8 times FY23 core earnings per share (EPS).
TA Research assigned a value of 20 sen a share to KHPT using a PE of 11 times for its 2025 EPS, aligning it with the weighted average PE of comparable companies in the automotive sector.
On a pro forma basis, KHPT’s balance sheet is expected to improve from a net gearing of 0.21 times to 0.10 times after the listing and the utilisation of its IPO proceeds.
KHPT’s IPO entails a public issue of 108,644,300 new ordinary shares and an offer for sale of 38,226,600 shares at an IPO price of 20 sen a share.
