IPO FACTSHEET

WENTEL ENGINEERING HOLDINGS BERHAD

ACE MARKET | 6 FEBRUARY 2024 | INDUSTRIAL PRODUCTS & SERVICES | SHARIAH COMPLIANT

IPO STATISTICS
IPO Price (RM) 0.26 Use of Proceed (RM71.03 million from new issue)
Fund Raised (RM million) 71.03 from new issue Proceed Utilisation RM million
11.96 from offer for sale Part finance the construction of 2 blocks of single storey 40.00
TOTAL: 82.99 factory (with double storey office) and 2 blocks of workers’
Enlarged issued share capital upon 1,150.00 hostel
listing (million shares) Part finance the purchase of new machinery and equipment 25.03
IPO Market Capitalisation (RM million) 299.00 Estimated listing expenses 6.00
Price Earnings Ratio (PER) 14.61x

BUSINESS OVERVIEW
Business Activities Business Model

Wentel Group is principally involved in the fabrication of semifinished metal

products, fabrication of metal parts and assembly of finished products,
supported by its in-house facilities including computer numerical control (CNC)
machines and other manufacturing equipment as well as surface treatment and
coating facilities. Operating from its fabrication plants (rented premises at Lot
11 and Lot 58 with a total built-up area of approximately 164,121 sq ft) at
Taman Perindustrian Larkin in Johor Bahru, Wentel Group’s business activities
are segmented as follow:

▪ Fabrication of semifinished metal products such as metal bodies and

accessories to be used in security screening equipment and CNC machines,
which are then supplied to its customers who are equipment manufacturers
where the products will need to undergo additional manufacturing
processes to become finished products;
(1)
▪ Fabrication of metal parts include support blocks, brackets, panels, cover Semifinished metal products comprise metal bodies and accessories;
(2)
The United States accounted for 0.39%, 1.30%, 1.71% and 0.50% of its total revenue
plates, cable covers, housings, channels and tunnels, which are used by its for the FYE2020 to FYE2022, and FPE2023 respectively;
customers who are manufacturers of semiconductor manufacturing (3)
Prior to FYE2022, the Group had an indirect distribution channel where 2 of its top 5
equipment, medical diagnostic equipment, industrial 3D printers, customers placed their orders through Wencor;
(4)
Others include manufacturers of passenger coaches and industrial 3D printers.
passenger coaches and security screening equipment;
▪ Assembly of finished products involving assembling the materials
Competitive Strengths
procured from its customer’s approved suppliers together with the
aluminium plates that it fabricates in-house to produce a complete
• Established track record of approximately 22 years to serve as a
operational walk-through metal detector. Its assembly process covers
reference site for potential customers;
electrical, electronic and mechanical parts, components and systems as
• Physical presence in Singapore providing an additional market for
well as electrical wiring and processing system installation, and functional
business growth. Singapore market accounted for 33.95% and 30.48%
testing of the finished products.
of its total revenue for the FYE2022 and FPE2023 respectively;
• Range of production facilities to meet the needs of customers for
Production Capacity and Utilisation
fabricated semifinished metal products and metal parts;
Major Machinery and No. of units Average Utilisation • Quality programmes and certifications such as ISO9001:2015 to
equipment* age (years) rate as at support its commitment and emphasis on product quality.
FPE2023 (%)
CNC laser cutting and/or 8 8 73
turret punching
CNC bending 12 9 63
Welding 14 4 54
CNC milling 8 6 67
*Exclude surface coating machines

GROWTH STRATEGIES AND FUTURE PLANS

▪ Expansion of production facilities by constructing a new manufacturing plant on a 426,074 sq ft freehold land which was acquired in 2018. The new
manufacturing plant will comprise 2 blocks of single storey factory for the fabrication of semifinished metal products, meta parts and assembly operations, and
2 blocks of workers’ hostel. Current operations at Lot 58 will be shifted to the new manufacturing plant upon completion of its construction. The operation of
both the new manufacturing plant and existing manufacturing plant at Lot 11 is expected to provide an additional 169,990 sq ft of net built-up areas.
▪ Purchase machinery and equipment for the new manufacturing plant.

PROMOTERS & SUBSTANTIAL SHAREHOLDERS

Promoter/ Substantial Designation Shareholding after IPO (%)

Shareholder Direct Indirect
Wong Kim Fatt(1) Promoter and substantial shareholder 37.07 17.16
Ban Kim Wah(1) Promoter and substantial shareholder. Non-Independent Non-Executive Chairman 13.25 -
Loo Sok Ching(1) Promoter and substantial shareholder 0.60 53.63
Wong Chun Wei Promoter. Non-Independent Executive Director - -
Wencor (M) Sdn Bhd(1) Substantial shareholder 16.56 -
Tai Yuan Heng Substantial shareholder. General Manager 4.77 -

(1)
Subject to moratorium to the entire shareholdings for a period of 6 months from the date of admission, and an aggregated shareholding amounting to at least 45% under the second 6-
months moratorium. For the remaining moratorium period of up to year 3, they may sell, transfer or assign up to a maximum of one-third of their shares per annum on a straight-line
basis.

All information in the factsheet are extracted from the prospectus unless stated otherwise. Investors should make the investment decision by referring to the prospectus for full details.
Prepared by Bursa Digital Research. Kindly refer to the disclaimer on the last page.
FINANCIAL PERFORMANCE & PEER ANALYSIS

FYE – Financial year ended/ ending 31 December; FPE – 9-month financial period ended 30 September

Revenue and GP Margin Revenue Breakdown by Geographical Markets

Malaysia Singapore United States

140 26.5% 30% FPE2023 69.0% 30.5% 0.5%

25.2% 25.3%
FYE2022 64.3% 34.0% 1.7%
120 25%
FYE2021 57.6% 41.1% 1.3%
100 117.5
16.6% 20% FYE2020 75.3% 24.3%
80
89.9 15%
60 Revenue Breakdown by Business Activities
72.1
64.8 10%
40 Fabrication of semifinished metal products
Fabrication of metal parts
20 5%
Assembly of finished products

0 0%
FYE2020 FYE2021 FYE2022 FPE2023 FPE2023 75.6% 16.7% 7.8%

FYE2022 67.6% 22.5% 9.9%

Revenue (RM mil) GP Margin (%)
FYE2021 67.8% 24.1% 8.1%

FYE2020 80.5% 11.5% 7.9%

Profit and Margin

Peer Analysis

30.0 25% Company PAT Margin (%) PER (x)

Wentel Engineering Holdings Berhad 17.4 14.61
25.0 20%
25.7 Frencken Group Ltd (SGX)(1) 6.6 14.58
20.0 Dufu Technology Corp. Bhd 22.0 48.97
20.5 15% UWC Bhd 20.25 126.06
15.0 Grand Venture Technology Lyd (SGX) (2) 10.17 18.37
17.3
10% CPE Technology Bhd 20.85 N.A.
10.0 13.7 14.5
Coraza Integrated Technology Bhd 10.26 36.78
11.0 5% SFP Tech Holdings Bhd 37.28 55.91
5.0
JHM Consolidated Bhd(3) 6.09 27.61
4.2 3.6
0.0 0%
FYE2020 FYE2021 FYE2022 FPE2023
(1)
Comparable through its subsidiary, Frencken Mechatronics (M) Sdn Bhd
(2)
Comparable through its subsidiary, Grand Venture Technology Sdn Bhd
PBT (RM mil) PAT (RM mil) (3)
Comparable through its subsidiary, MACE Instrumentation Sdn Bhd
PBT Margin (%) PAT Margin (%)
Note: Selected peers in Malaysia as identified in the Independent Market Research
Report. PAT margin and Trailing 12-month PER from Bloomberg at the time of research
except for Wentel Engineering Holdings Berhad’s PAT margin for FYE2022 and PER at IPO.

KEY RISK FACTORS

▪ Dependency on certain major customers which contributed significantly to its total revenue – Rapiscan Group, Customer E Group, Mahino Asia Pte Ltd and
Customer D Group collectively accounted for 87.68% and 89.27% of its total revenue for the FYE2022 and FPE2023 respectively;
▪ Risk of foreign currency exchange rate fluctuations – its revenue transacted in foreign currencies, namely USD and SGD, accounted for 67.00% and 64.92% to
its total revenue for the FYE2022 and FPE2023 respectively. Its purchases of materials and services that were denominated in foreign currencies accounted for
37.63% and 43.94% of its total purchases of materials and services for the FYE2022 and FPE2023 respectively. The Group recorded a net loss of RM0.47 million
on foreign currency exchange for the FYE2020 but a net gain for the subsequent rest of financial years/ period under review;
▪ Risk of fluctuations in the market prices of metal input materials – purchases of steel, lead and aluminium input materials collectively accounted for 53.13%
and 52.51% of its total purchases of input materials and services in FYE2022 and FPE2023 respectively. Any increase in the market prices of the metal input
materials may increase its costs, and its margins and financial performance is dependent on its ability to pass on the increased costs to its customers.
▪ Changes and uncertainties in the security screening equipment manufacturing industry which accounted for 63.34% and 66.16% of its total revenue
respectively. The Group’s financial performance and margin may be adversely affected if it fails to increase its capacity and resources adequately and timely
for increased demand, or if the demand for security screening equipment were to decline unexpectedly;
▪ Absence of long-term contracts with its customers;
▪ No assurance on the successful implementation of its business strategies and plans;
▪ Dependency on its key senior management team;
▪ Risk of returns or warranty claims from its customers for any non-conformity or defective products – the value of the products returned from its customers
amounted to RM0.21 million and RM0.14 million for the FYE2022 and FPE2023 respectively.
▪ Requirements to comply with health, safety and environment (HSE) laws and regulations.
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