Simkat IPO on 21 October: Nine-Month Profit Up 184%, but Payables Nearly Quadrupled

Simkat's IPO is scheduled for Wednesday, 21 October 2026, on Farabourse's second market. The figure of 25,337 rials per share is the announced valuation price, not a confirmed auction price. How much of Tabriz Wire and Cable Manufacturing's nine-month profit actually turned into cash? The amended financial statement shows operating cash flow above net profit, but a jump in payables complicates the answer.

Background

According to Boursenews' 20 October report of Farabourse's notice, 32,444,824 shares, or 4% of the company, go to qualified investors at auction in the first stage, with a limit of 405,600 shares per eligible code. At least 64,889,647 shares, or 8%, go to other applicants at a fixed price in the second stage. The combined planned offer is 97,334,471 shares, as recorded in Sahmino's calendar. The first-stage maximum is neither a public investor's quota nor a confirmed allocation. The public-stage price and allocation await the final trading notice.

The company's fiscal year ends on 21 December 2026. Its amended, unaudited standalone statements for the nine months to 22 September 2026 were filed under Codal tracing number 1611396 on 14 October. The nine-month 2025 comparative column was restated, so it is the proper comparison for profit growth. Mehr's 17 October account of the IPO briefing reports an adviser valuation of roughly 2.4 trillion tomans, prepared on 21 May 2026. An adviser valuation is not a guarantee of the auction's clearing price.

Profit and cash

All figures in the filed tables are in million rials. Nine-month operating revenue to 22 September 2026 was 50,873,947 million rials versus 26,379,823 million in the restated comparable period, growth of about 93%. Gross profit rose from 3,705,046 to 10,371,736 million rials; operating profit from 3,407,642 to 9,757,716 million. Finance costs rose from 1,281,736 to 3,394,124 million rials over the same nine-month periods. The rise in funding costs is a material counterpoint to the stronger operating result.

Net profit was 4,901,848 million rials versus 1,726,403 million a year earlier, up about 184%: (4,901,848 / 1,726,403 - 1) × 100. Subtracting the current year's 1,500,349 million rial tax charge from pre-tax profit of 6,402,197 million rials independently reproduces the net profit figure. As one million rials equals 100,000 tomans, that net profit is about 490.18 billion tomans. Net operating cash flow for the same company and period was 5,411,150 million rials, about 541.12 billion tomans, compared with 421,966 million rials a year earlier. Accounting profit and operating cash flow were both positive, with the latter larger.

The 22 September 2026 balance sheet must be compared with the previous fiscal year end, 21 December 2025, not with the preceding nine-month income statement. Trade and other payables stood at 16,451,375 million rials against 4,150,280 million, about 3.96 times as much. Trade and other receivables were 13,739,600 versus 6,744,192 million rials, and inventory was 11,605,809 versus 6,675,617 million. Cash on hand was 5,726,199 versus 904,463 million rials, while short-term borrowings were 5,215,762 versus 2,702,048 million. These are balances on two dates, not a nine-month year-on-year growth series.

What drove the result

In a 10 October disclosure, Codal number 1609569, the company attributed higher operating profit to domestic sales growth, more customers, selling rates and product mix. Credit sales recognise profit before a customer pays. Credit purchases similarly defer payments to suppliers. Across the two balance-sheet dates, the combined increase in receivables and inventory is about 11,926,600 million rials; the increase in payables is about 12,301,095 million. That mechanism is consistent with positive operating cash flow partly supported by supplier credit, but those balance movements alone cannot reconstruct the complete cash-flow statement or prove a single cause.

In another filing on 11 October, Codal number 1609825, Simkat called its cash from operations low because receivables had increased and used the phrase 'about 15 percent' without specifying its denominator or period. The percentage cannot be labelled a cash-to-profit ratio for the amended nine-month statements. A 19 October clarification, number 1614227, called the phrase 'unofficial invoice' in the prospectus a typing error and said it had been corrected. The corrected prospectus, rather than the original wording, is the reference for that issue.

Outlook

The company filed 811,121 million rials in registered capital, equivalent to 811,121,000 shares at 1,000 rials nominal value each. Dividing nine-month net profit of 4,901,848 million rials by the share count gives around 6,043 rials per share. Dividing the 25,337 rial valuation price by that result gives 4.19. This is a multiple of unaudited nine-month earnings, not an exchange trailing-twelve-month P/E. Mehr reported the chief executive's forecast of 536 billion tomans in net profit for the full fiscal year. If it materialises, the valuation price implies about 3.8 times forecast annual earnings. A forecast is not a realised profit or an auction price.

Five times recorded nine-month earnings of 6,043 rials per share is 30,215 rials. Below that threshold the price is under five times the recorded nine-month profit; at or above it, that specific comparison ceases to hold. This is a testable valuation threshold, not an independent fair-value estimate or a guaranteed share-price target. At the valuation price, 405,600 first-stage shares have an illustrative value of about 10.28 billion rials, or 1.028 billion tomans; the actual auction price can change this figure, and the first-stage cap does not apply to every public applicant.

Bottom line

The answer to the cash question: Simkat's amended statement records operating cash flow above nine-month net profit, but receivables and especially payables have risen sharply, so collections and supplier credit must be tested in the next reporting period. Reading: while Simkat trades below 30,215 rials, its price is under five times nine-month earnings of 6,043 rials a share; the condition is that recorded profit holds, the horizon is the first 20 sessions after the offering, and invalidation is a close at or above 30,215 rials. This is a calculation for comparing offer prices, not an existing Sahmino trade call on a stock that has not yet listed.

What to follow

Compare the auction's clearing price with the 25,337 rial valuation price. In later statements, read receivables, payables and operating cash flow together. Once trading begins, select the electrical machinery industry in the Sahmino screener and compare Simkat with peers on the same earnings period. The earlier Fakour IPO provides another worked offering example.

Terms

Valuation price: the announced reference figure, not the auction result. Nine-month earnings per share: nine months of recorded profit divided by the number of shares. Operating cash flow: net cash from operations including working-capital movements during the reporting period.