Wednesday, 11 July 2007

RH Energy Ltd

RH Energy provides oil and gas intergration services that includes design, engineering, procurement, construction and installation services to the oil and gas pipeline, storage operators, and oil companies. Its IPO closed on 9 July at 32 cents each and it debuts today on 11 July. Please refer to prospectus here.


4m public offer shares
68m placements shares
Manager, Underwriter and Placement Agent: CIMB

This IPO was 3 chillis hot from the on set as it came from the oil and gas sector. For FY 2006, the sales was S$26m and net profit was S$6.38m. Based on the post-IPO share of 284.93m, the EPS is 2.24 Singapore cents. As of today, Federal is trading at 18x historical PE and KS Energy is trading at 17x historical PE. RH Energy closed at 87 cents today (up an whooping 55 cents from its IPO price or 172%). At 87 cents, it is richly valued at 39x historical PE. Assuming its profit grow at 50% in 2007, its forward PE will drop to 26x and that is still more expensive than KS Energy and Federal (If market is 'efficient', either KS and Federal catches up or RH Energy comes down). A stunning debut for RH Energy nevertheless and finally CIMB can heave a sign of relief as its track record turned for the better.

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