• CRITICAL plans to increase its exposure in the new regions by setting up regional offices, coupled with an expansion of technical personnel and the acquisition of new tools to capture the growing demand for critical facilities.
• At the IPO offer price of RM0.35, CRITICAL is trading at 13.6x based on FY23 core net EPS of 2.58 sen. Meanwhile, CRITICAL’s forward P/E valuation for FY24-25f is estimated at 11.1x and 10.5x, respectively.
• We arrived at our fair value of RM0.44 (25.7% potential upside from its IPO price) by ascribing a target P/E of 14x to our forecasted FY24f EPS of 3.15sen. The assigned P/E is at a 47.4% discount to CRITICAL’s selected peers’ average P/E of 26.3x, due to CRITICAL having a relatively smaller market capitalisation.