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IPO Chilli Ratings

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Singapore Institute of Advanced Medicine Holdings Ltd

Singapore Institute of Advanced Medicine Holdings Ltd ("Sam" or the "Company") is offering 114m new shares comprising 4.415m Public Offer Shares and 109.585m Placement Shares at $0.23 each for a listing on Catalist.  The Company aims to raise $26.2m and the majority of the proceeds will be used to repay debt and the balance for working capital. The market cap based on the IPO price is $231.8m and the offer will close on 14 Feb at 12 noon and starts trading on 16 Feb 2024 at 9am.   Principal Business SAM is a healthcare service provider using advanced technology for early and accurate diagnosis to detect and treat cancer, neurodegenerative and cardiovascular diseases.  SAM has strategic collaborations with public and private institutions for research and clinical work.  SAM's goal is to create a comprehensive one-stop ambulatory cancer centre to undertake the challenges to fight cancer and is one of the first to adopt proto beam therapy treatment in Singapore. Fi
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Heng Long International Ltd



Heng Long International Ltd is offering 68m New shares at S$0.34 per share with 3m for the public and 65m via placement. Heng Long started in 1950s and is one of the world's 5 top-tier tanneries. (I never knew that until today. hahaha. A crocodile dundee in our own backyard! Don't play play..) Heng Long sources, tans and processes raw crocodilian skins into finished leather.

Revenue for FY2007 is S$66.23m and net profit is S$11.142m. The NTA is 25.9 cents post IPO and EPS based on post-ipo shares is Singapore 4.157 cents. At the IPO price of 34 cents, the issue is priced at a historical PE of 8.2x. The market cap is $91.1m based on the IPO price.

Actually i quite like this unique business with not many similar competitors in Singapore and the promise to pay 30% of the net profit for FY2008 as dividends. However, what i dont really like is the 'family-style' management team. The 2 Managing Directors are brothers and their wives are also helping out in the business. One of the MD's spouse has a title of Payroll Manager and the other has a title of Treasury and Corporate Affairs. All 4 of them used to make between $250,000 to $499,999 per annum for FY 2007. While you can do that as a private company, it is really good to see that the wives have the discipline to 'take a pay cut' to below $250,000 per annum for FY2008. Frankly, a good Financial Controller will be able to take on the functions currently undertaken by both the spouses. In addition, what is the point of having a payroll manager when you already have a HR Manager and a Financial Controller?!

I would have given it a 2 Chilli rating if not for the current bearish IPO sentiments and the 'family-run' management team. While i am unable to predict FY2008 performance, a 20% increase in EPS and a PE valuation of 8 to 10x will imply a fair value of 40 cents to 50 cents.
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