Thursday, 13 September 2007
(IPO booth at Raffles Place)
It has been such a long time! Parkway Life REIT was last listed on 23 August and the next IPO will only list on 26 September. Well, at least it is a good sign and indication that the IPO market could be reviving and thankfully they send a more decent looking one to test the market. I will come up with a more detailed analysis over the next few days (fingers getting too rusty already from the lack of writing). Check back here again for a more detailed update and the 'fair value'.
Just by looking at the industry and the pictures on the prospectus, i would give it an interim 'stag and 2 chillis rating'.
Public shares - 5m
Placement shares - 155.4m
Price - $0.38
Managers - Jointly by SBI E2 Capital and CIMB
The Company is one of the largest producers and suppliers of downstream petrochemical products and are engaged in the fractionation of raw LPG for the production and sale of propylene, polypropylene and LPG.
The profits for Sinostar ramped up spectacularly in FY 2006 where net income is S$19.321m on sales of S$199m. It is a pity that there is no 1H2007 figures in the prospectus. Sales and profits are likley to exceed 2006 figures. Assuming a 30% increase in net profit in FY 2007 and a 30% increase in net profit in FY 2008, the net income will be $32.6m. Based on the post capital shares of 640m shares, the EPS will be 5.1 cents. Based on a fair market PE multiple of 10x-15x, our fair value is approximately $0.51 to $0.76. Looks like a stag to me.