Future Plans for Growth:

  • The group plans to reconstruct a new factory.

The group plans to reconstruct a new factory producing automotive lubricants and fluids using blenders and automated fill-and-finish production lines, together with a warehouse to store its in-house branded automotive lubricants. The land is currently owned by the Managing Director Datuk Ow Kee Foo, located at Ulu Tiram Johor which measures approximately 1.01 hectare and has an existing 1-storey detached factory with annexed 2-storey office building erected thereon. RM4.79m (18.70% of IPO proceeds) will be allocated for the reconstruction and refurbishment of the factory cum warehouse.

  • Purchase of new machinery

The group also intends to purchase new machinery and equipment, with RM6.01m (22.58% of IPO proceeds) allocated for it. This includes an allocation of RM2.57m of the RM6.01m IPO proceeds to purchase raw materials for the blending production lines.

  • Tapping into EV charging segment.

On top of that, the group plans to market, trade and distribute its in-house branded EV charger starting 2Q25. This aims to diversify the group’s revenue streams and benefit from the anticipated growth in EV ownership in Malaysia. RM0.84m (3.14% of IPO proceeds) will be allocated for it.

M+ Fair Value

We assign a fair value of RM0.26 per share for MSB, representing a 30.0% upside from its IPO price of RM0.20. This valuation is based on a P/E ratio of 14.5x, pegged to the mid-FY26F EPS of 1.78 sen. While the 12-month forward P/E and historical average P/E among its peers stand at 9.0x-11.0x, we believe the ascribed P/E is justified, given MSB’s strong fundamentals, supported by a solid ROE and net profit margin of 23.0% and 12.9%, respectively, outperforming the peer average of 12.4% and 9.7%, respectively.