Fire Victor to be first firm of its kind on Thai bourse after IPO
Fire Victor plans to launch an initial public offering on the Market for Alternative Investment early next month, becoming the first distributor of fire-protection equipment on the Thai stock market.
The company, which will be traded from November 13 under the FIRE symbol, will float 90 million shares, equivalent to 25.71 per cent of paid-up capital after the IPO.
Prasert Patradhilok, president of Advisory Plus, the financial adviser for FIRE, said that because of the firm’s small size, the IPO price would not be set by a traditional book-building process, but by appraising the companies valuations based on research conducted by security houses.
Panthita Sae-Eng, assistant managing director of Thanachart Securities, said that according to research papers produced by Thanachart and Ktzmico Securities, the two underwriters of the FIRE IPO, its fair value was estimated at Bt4.20 to Bt4.25 per share, based on a price-to-earnings ratio of 17-18 times. The par value is Bt0.50 per share.
“Investors will be offered a significant discount,” she said.
The final IPO price will be set on October 31.
Panthita said Fire Victor was outstanding for its “asset-light” balance sheet, and a trading firm that possesses a portfolio of brands, including its own brands and world-class trademarks such as Victaulic, which commands nearly 70 per cent of the local market.
Fire Victor managing director Wirat Sukchai said that during the past three years the company had booked average revenue growth of 18 per cent and had been able to maintain gross profit margin of 28-29 per cent, and net profit margin of 11-12 per cent. This year, despite the political crisis and economic slowdown, it has still maintained gross profit at 26 per cent, and expects to achieve some sales growth, though less than 15 per cent.
Although Fire Victor has a low debt-to-equity ratio of only 0.6 time, it is raising funds from the stock market because the firm wants to lift its profile and accelerate its growth, he said. Formerly part of Harn Engineering, Fire Victor is an importer and distributor of fire-protection equipment and air-conditioning systems for buildings and factories. It currently handles more than 25 brands, including 14 under authorised distributorship contracts, two under sole distributorship (Potter Electric and Weiss), and three of its own brands.
From January to June this year, Fire Victor posted net profit of Bt30.52 million on total revenue of Bt276.52 million. The company has consistently grown its revenue from Bt381.23 million in 2011 to Bt495.75 million in 2012, and to Bt521.26 million last year, as well as its net profit from Bt40.36 million to Bt58.95 million to Bt61.61 million during the same period.
Wirat said Fire Victor had a 25-per-cent share of the market, which has two other key players that together holding 55 per cent.
“Our outstanding point is that we are in a growing business. The government has issued laws that require condominium and other buildings with areas of 10,000 square metres or more to install fire-protection equipment throughout. This is our channel for growth,” he said.
The IPO proceeds will be used for opening a branch in Rayong, as the firm is gearing up to cater more to petrochemical companies, investing in computer hardware and SAP’s software system, to pay back some debts, and to use as working capital.
After the IPO, the company will increase its paid-up capital to Bt175 million, from Bt130 million at present.
