Wednesday, 5 August 2009

Mary Chia Holdings Limited


(This person is not Mary Chia :P but the spokeswomen "李锦梅")

Mary Chia Holdings Limted is one of the leading lifestyle and wellness service provider in Singapore. It is offering 24.565m new shares at 23 cents per share to investors via placement only and will be listed on the Catalist and the offer will close on 6 Aug 2009 at 12pm.

Revenue has grown from $10.84m in FY2006 to $13.46m in FY 2008 while net profit increased from $0.75m to $3.05m in the same period. The NTA post IPO will be 3.3 cents. The earnings per share for FY 2008 assuming the service agreement is in place will be 1.60 cents and based on the IPO price of 23 cents, the company is being priced at a historical PER of 14.4x (expensive!). The market cap post IPO will be $37.6m

You would have known by now that i dont like Catalist listings as a high percentage of the proceeds raised are paid to the Sponsors. I have no idea what is the point of raising $5m and giving $2m away. It is crazy! In addition, post listing, the mother - Mary Chia and her daughter - Wendy Ho, own 81% of the company and investors are purely minority shareholders. Prior to the IPO, the company has also declared generous dividend to its owners and the company still owes money to the founders post IPO. Given the low profitability, the Company will still pay generous package of at least $500,000 to the founders.

Avoid this IPO. The business is too localised with many unlisted competitors such as Expressions and Jean Yip.

5 comments:

Loh Hon Chun said...

Totally agree. Even without reading any financials, I personally do not think Mary Chia is unique or stand-out in the market.

Thien Rong said...

Agree too, I believe Jean Yip have more outlets too.

2Y Capital said...

thanks for the comments guys. Did u two get PEC? :)

Loh Hon Chun said...

Tried to get PEC but then unable to get it.

Sky said...

Any opinion on the upcoming latitude tree IPO? The recent lucrative premium incurred from PEC and Mary Chia IPO had defied financial analysis and spur my interest in short term trading.

Any idea how do i approach to apply for this placement? I'm new to catalyst IPO and my PEC work was made easier with online application. Help is much appreciated!

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