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The acquisition of Iconn Inc. by Cape EMS Berhad appears to have both potential benefits and risks.
Benefits:
1. The acquisition is in line with Cape EMS’s strategic focus on its core competency in providing electronic manufacturing services (EMS) of electronic products.
2. The acquisition will integrate iConn’s design and engineering capabilities into Cape EMS’s process, allowing the group to expand its EMS segment’s range of services, thereby improving its appeal to existing and potential customers.
3. The acquisition is expected to contribute positively to Cape EMS’s future earnings as it would enable to recognize the financial performance of iConn as part of the company’s consolidated financial statements.
4. The acquisition will help strengthen Cape’s presence in the US market and position it for robust growth in the coming years.
5. The acquisition will allow Cape EMS to benefit from iConn’s present business and tackle new opportunities.
Risks:
1. The acquisition is expected to be completed in the fourth quarter (4Q) of 2023, which means there could be potential delays or complications that might affect the timeline.
2. The proposed private placement, which is also expected to be completed in 4Q of 2023, is not expected to have any material effect on the earnings and earning per share (EPS) of Cape EMS for the financial year (FY) 2023. However, there would be a dilution in the EPS of the Cape EMS group for FY 2023 due to the increase in the number of Cape EMS shares in issue arising from the proposed private placement.
3. The acquisition is subject to completion of due diligence, execution of employment/consultancy agreements, Cape EMS having in place definitive financing arrangements, approval by board of Cape EMS board and other closing conditions.
4. A break fee of $0.165 million will be payable by either Cape EMS or Iconn in case of termination under certain circumstances.
The company was listed on the Main Market of Bursa Malaysia Securities Berhad on Dec 16, 2021.
As per the data available, Aurelius Technologies is trading at the highest valuations, with trailing 12-month and forward 12-month price-earnings ratios of 28.7 times and 20.7 times respectively.
Some reasons why CEB could be considered a buy or not:
Why Cape EMS might be a buy:
1. Financial Performance: As of Q1 2024, the company reported a revenue of 154.48M MYR, which is a 12.47% increase year over year. The net income was 13.40M MYR, a 57.71% increase. This indicates that the company is growing and could be a good investment.
2. Market Position: Cape EMS Bhd provides electronics manufacturing services (EMS) and other related supporting goods and services in Asia, the United States, and Europe. This wide market reach could be a positive sign for potential investors.
3. Dividend Yield: The company has a dividend yield of 1.62%, which could be attractive to income-focused investors.
Why Cape EMS might not be a buy:
1. Operating Expense: The operating expense for Q1 2024 was 10.04M MYR, a 22.95% increase. This could indicate that the company’s costs are rising, which might impact profitability.
Besides your clear comparison, I'm wondering why ATech has moved up since its listing while CEB has continued to decline. I've taken a large position in this stock, betting on a trend reversal, and I hope I'm right.
Lousy master guru, why you put this guru name and still wondering ??? is exactly same as Atech, u go check ipo that time also dip down to 1.42, then double up to rm3 ...ceb also ipo dip down until now, just sit back and watch the show, don't call yourself guru if you buy with no confidence, no confidence don't buy.
