Monday, 31 December 2007

Singapore IPO 2007 ranking


(Source: Bloomberg)

Here is the ranking of the IPO underwriters in Singapore for the year 2007. UBS ranked no.1 on the list in terms of amount raised, while DBS ranked top in terms of the number of issues it underwrote. Sterling Coleman lead in terms of the fees earned.

Here is wishing all blog readers a happy and prosperous 2008.

Sunday, 16 December 2007

JES International Holdings Limited

The Company is a major PRC shipbuilding group with production facilities capable of producing different types of vessels. It produces bulk carriers, containerships, ocean engineering vessels (mainly crane barges for offshore oil sector and offshore construction building works) and RO/RO vessels. Our customers include major shipowners based in Europe, Canada and Asia, including the PRC.

Public offer of 16.195m shares at $0.67 per share.
Placement offer of 356.94m shares at $0.67 per share.

2006 results:
Revenue US$159.7 million
Net profit US$17.3 million

2007 1H results:
Revenue US$77.8 million
Net profit US$11.2 million

Assuming full year profit is doubled to US$22.4m, the EPS will be US 1.96 cents or Singapore 2.83 cents. Based on IPO price of S$0.67, it is priced at 2007 PE of 23x. Assuming EPS grow by another 30% in FY2008 to Singapore 3.68 cents, based on PE range of 20x-25x, the fair value will be between 74 cents and 92 cents.

While i certainly like this sector (ship building sector) in China, it is unusual to see the "Authority" requesting the following risks to be highlighted. Perhaps they know something which we dont!??! Anyway, the bigger rival listed here is Yang Zi Jiang and it is trading at around 35x 2007F PE.
The 'warning' on the prospectus is listed below and it is a serous issue if they are unable to deliver the vessels to its clients on time!

At the request of the Authority, we have been asked to prominently highlight the following specific risks to be considered in connection with an investment in the Offering Shares:

Because our existing shipyard is operating at full capacity, we may not be able to successfully coordinate the construction of vessels to meet their scheduled delivery dates if the New Facility is not constructed within the scheduled time or at all.

Our contemplated construction of the New Facility is subject to certain conditions and may not be consummated within a reasonable time or at all. If the New Facility is not completed as planned, we could be exposed to potential liabilities under contracts for vessels intended to be constructed at the New Facility if such contracts become effective.

We have no control over the purchase price in relation to the contemplated acquisition of the land use rights in relation to the 405 mu Land as the land use rights are subject to a listing-for-sale process, and if such purchase price is higher than we expected, our business, financial condition, results of operations and prospects could be adversely affected.

Our Audit Committee may find it difficult to reject the acquisition of the 405 mu Land on which we intend to construct our New Facility, even if the purchase price is significantly above our budget, as there may not be suitable alternative land available in the vicinity of our existing shipyard.

As a result of the above, an investment in the Offering Shares should be considered highly speculative in nature. See “Risk Factors — Specific Risks” herein. See also “Risk Factors” herein for a discussion of other factors to be considered in connection with an investment in the Offering Shares.


The pre-ipo investors look rather interesting with Tommie Goh, Gay Chee Cheong, Chew Hua Seng and other prominent pre-ipo investors group and fund in this company, however, the bad IPO timing and big float is a serious concern here even though the grey price is heard to be +10 cents.

I will give it a miss for now since i am just back from vacation and not "in-tune" with the market right now but i give it a 2 Chillis rating due to the high valuation of its listed rival (Yang Zi Jiang) and the good growth prospects for the ship building sector in China.

United Overseas Australia Limited

United Overseas Australia Limited is a property developer and property investment company based predominantly in Kuala Lumpur, Malaysia. (Why is it not called United Overseas Malaysia ?!?! The name is so misleading!).
2m Public Shares at $0.38
53m Placement shares at $0.38
Issue Manager: HL Bank.
I have not done any detailed analysis on this Company as i personally think the property cycle may be toppish. I will avoid this counter.

Mercator Lines (Singapore) Limited

Mercator Lines is a leading Indian-owned international dry bulk shipping company focused on India and other high growth markets such as China.

This IPO was launched while I was on my annual vacation, thus there is no write up on it.

Anyway, it has proven to be a flop as it was priced at $0.76 eventually, versus an initial indicative price range of $0.76 to $0.94. Even then that did not help as it closed at 60cents on the first day of its debut, which is 21% below its IPO price!

What a disappointment and it further worsen the IPO sentiments in Singapore.

Thursday, 6 December 2007

KTL Global Limited



KTL is a supplier of rigging equipment and related services to customers mainly in the offshore Oil & Gas and marine industries.

Public - 2m shares at $0.28
Placement - 38m shares
Manager: Philip Capital

FY07 (30 June 2007):

Revenue : S$41.8m
Net profit: S$10.3m ($6.1m comes from sale of Leashold property)
EPS: Singapore 2.6 cents
Market cap based on IPO price : S$44.8m

After stripping out the one-time gain from sale of leasehold property, the net profit is $4.17m and based on 160m post-ipo shares, EPS is Singapore 2.6 cents. Assuming FY08 grow by 30%, EPS will be Singapore 3.38 cents. Based on IPO price of 28 cents, it is trading at forward PE of 8x. Assuming a PE range of 8-10x, the fair value is between 27 cents to 34 cents. A small upside from IPO price.

I will give it a miss due to the low number of shares for public tranche as well as the fact that it is within its fair value range.

Soon Lian Holdings Limited



Soon Lian Holdings is a specialist supplier of over 1,200 different aluminium alloy products. The products are mainly sold to the marine and precision engineering industries.

Public offer - 1m shares at $0.21
Placement offer - 26m shares at $0.21.
Manager: Philip Capital

FY07:

1H revenue : S$19.8m
1H net profit: S$2.7m

FY06:

Revenue: S$31m
Net profit: S$3.3m

Assume FY2007 revenue doubled to S$40m and net profit to S$5.4m, the EPS for 2007 will be around Singapore 5 cents based on post IPO 108m shares. The market cap based on IPO price will be S$22.6m. The Company will be listed on SESDAQ and is a ultra small cap company. The listing PE is around 4.2x. Downside is limited due to the cheap valuation.

I will give it a 1 Chilli rating and give it a miss.

Wednesday, 5 December 2007

First Resources Limited

First Resource is one of the largest private sector of crude palm oil in Indonesia. There are 3 listed peers in Singapore, Golden Agri, Wilmar and Indo-Agri.

Total Offering: Placement 222 million shares and Public 3 million shares at $1.10 per share.
Manager and Underwriter: Citi
Sub-underwriter : UOB Kay Hian

FY 2006:
Revenue : US$ 94.7m
Net profit : US$ 38.8m

FY 2007:
Revenue : US$ 168m (Assume 1H07 x 2)
Net profit : US$ 75m (Assume 1H07 x 2)
EPS (post-IPO) : US 3.2 cents or Singapore 4.64 cents.

Based on IPO price of $1.10, it is priced at a FY07 PE multiple of 23.7x

Peers Valuation:

Golden Agri - Trading at FY06 Historical PE of 13x (use historical as Q307 a bit erratic)
Indo-Agri - Trading at FY07 Est PE of 23.5x
Wilmar - Trading at FY07 Est PE of 24.6x

First Resources is fairly valued based on FY07 projections and the IPO price of $1.10. Any upside is likely to come from the FY08 projections as well as the high interest from Bio-Diesel projects due to the high oil prices.

Heard that the grey is currently up +10c to +15c from the IPO price. If this counter was listed a 2 months back, it would have enjoyed a very decent debut. My view is that this counter will likely debut with a stag of 10% to 20% upside from IPO price. I would give it a 2 Chilli ratings for long term prospects and profitability and the good peer valuation and share price movement will likely lend further support to this counter.

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