KUCHING: SIG Gases Bhd (SIG Gases) started its industrial gas business in 1996 through its first plant in Senai, Johor.
GAS DISTRIBUTOR: OSK Research says SIG Gases distributes gas directly and through intermediaries such as dealers and industrial gas refillers to its customers in various industries such as shipbuilding, metal fabrication, oil and gas and many others.
Today, the company has emerged into a ‘one-stop’ industrial gas solution provider by manufacturing, refilling and distributing various industrial gases to over 1,000 customers despite having a presence mainly in Peninsular Malaysia.
OSK Research Sdn Bhd (OSK Research) gathered that SIG Gases is ranked third in the industry, after Mox-Linde Group, being the biggest player with operations in both the peninsula and Sabah and Sarawak for the local market, followed by Air Products Malaysia Sdn Bhd (Air Products).
The other two notable competitors were B.I.G Industrial Gas Sdn Bhd, which was the largest supplier of industrial gases in Sarawak and Eastern Oxygen Industries Sdn Bhd, which also operated in the Sarawak market.
The research house gathered that the other smaller players had a different geographical presence from SIG Gases.
OSK Research said that SIG Gases has facilities located in Senai, Nilai, Puchong, Kuantan, Bukit Minyak and Krubong.
It distributed gas directly and through intermediaries such as dealers and industrial gas refillers to its customers in various industries such as ship building, metal fabrication, oil and gas and many others.
The research house stated that this extensive network enabled the group to cater to the growing demand of industrial gas nationwide.
Based on OSK Research’s financial year 2010 (FY10) earnings per share forecast of 6.2 sen, it believed the initial public offering (IPO) price of RM0.58 per share was reasonable, in the price earnings (PE) band of nine to 10 times.
The research house’s target price for the company was RM0.62 per share, based on a price earnings ratio (PER) of ten times earnings per share (EPS), representing a discount to its listed peers like the Air Products and Chemical Inc, which were trading at an estimated PER of 13 times to 15 times for FY10 to FY11 consensus estimates.