Monday, 16 July 2007

Wanxiang International Ltd


Wanxiang International Ltd manufactures flavours and fragrances. The Company's products are sold to wholesalers and dealers; as raw materials in other fragrances and as raw materials in consumer goods. The prospectus is here.

Public offer: 4.6m shares at 29 cents each
Placement offer: 87.4m shares
Manager: Mitsubishi UFJ Securities (Singapore) Limited

This is the 'first of its kind' on SGX for flavours and fragrances, in this regard, you will not find any comparables here. Interestingly, the Company said that it has 6 major competitors for its major products and 3 comes from India!
Revenue for 2006 is RMB 313m and net profit after tax is RMB 44.2m. Based on post-IPO shares of 334.8m, the EPS is RMB 13.22 cents (or 2.65 Singapore cents). Assuming a decent 20% growth rate in top and bottom line for the next 2 years, the EPS for 2007 will be around 3.18 Singapore cents and for 2008, the EPS will be around 3.8 Singapore cents . Since this is the first of its kind here, i will give it some premium in valuation and based on a 10-15x PE multiple, the fair value for range between 32 cents and 47 cents based on 2007 figures and between 38 cents and 57 cents based on 2008 earnings projections.
Don't miss it but it will be super difficult to get this from the ATM. (whats new?!) :)

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