IPO - PKS Holdings Limited, page-88

Its funny to read almost all the posts here are about allocations, register etc .

Anyway , lets talk about PKS as a business and what is my rationale behind investing in PKS .

22.8 mil mcap
19.7 mil EV
2.1 mil EBIDTA FY18
1.2 mil EBIDTA 1HFY19



This is a healthcare software business (SAAS) as a Clinical Decision Support System automating basic clinical decisions, billing and invoicing, and data entry leading to cost savings and efficiencies for health care companies often leading to millions of dollars of savings. The most interesting aspect of the system is any clinician can write simple rules without having to be a IT expert within a couple of minutes.

PKS was originally established in May 1996 to develop and commercialise knowledge handling systems based upon the concept of ‘RippleDown Rules’ developed by Professor Paul Compton in the School of Computer Science and Engineering at the University of New South Wales, Sydney. Now it operates around the world and has commercial validation as it has Abbot, Philips, Thermo Fisher Scientific amongst others.

This business is being sold by the Duchen Family .It makes about $2.1m EBITDA a year for them . Also the duchen family didn't reinvest the capital into the business and that explains why it is not growing at superior speed .But after they will get IPO funds , I am very confident about their growth rate.

Bombora Funds management are behind the raise . They are a specialist fund who invests at the Pre-IPO phase and then helps get the business ready for IPO. They then continue to invest in the IPO. They have a very good track record i.e. ACF, JAN and RHP all being amazing IPOs and most of them are dividend giving solid companies now.

Following are the reasons why I like PKS as a medium to long term investment .

• PKS has never lost a customer
• It Can do well with a focused sales strategy and growth capital
• Very cheap valuation for a SAAS business
• Already has global reach. Commercial agreement with Abbot, Philips and Thermo Fisher Scientific.
• 80% of revenue is recurring
• Annuity type revenue streams with FY18 EBIDTA margin of 54 %

IMO it should do very well but i feel it is strictly for medium to long term investors as it might not stag more than 15 to 20 % .In a long run it got a potential to be a big winner which can create 30 to 50 % compounding growth for years to come.

All IMO

DYOR

GLTAH