Wednesday, 14 October 2009

Jason Marine Group Limited


Jason Marine Group Limited is one of the leading providers of integrated solutions of a wide range of marine communication, navigation and automation systems based in Singapore.  The company is offering 16m New Shares at 21 cents (of which 15.5m will be via placement and the rest via public offer). It is encouraging to see companies trying to list on Catalist actually attempted to make a public offering. This is very refreshing vis-a-vis what was being done by Primepartners for most Catalist listings. The offer will end on 19 Oct 2009 at 12pm. The market cap post IPO will be S$22.3 million.

Revenue grew from S$40.7m in FY2007 to S$70.9m and net profit grew from S$1.6m to S$6.4m in the same period.  The Financial Year ends on 31 March 2009 and the EPS for FY 2009 based on post invitation shares is Singapore 6.03 cents and that translate into a listing PER of 3.48x.  Assuming the EPS grow by 25% in FY 2010 and a fair value PE of 4-5x for Catalist listings, the EPS will be 7.54 cents and the fair value will be between 30 cents to37 cents.

Tuesday, 6 October 2009

Hengyang Petrochemical Logistics Limited

Hengyang Petrochemical Logistics Limited is the first "S-chip" to go for a Catalist listing. Not sure what so "glam"about this though but the Company is principally engaged in the storage and transportation of liquid petrochemical products.  The company currently has 37 storage tanks with a 97,600 m3 capacity.  The company has commenced construction and installation of another 12 new carbon steel storage tanks to be completed in Q4 2009.  Another facility will be completed in 2 phases will add another 118 new storage tanks and 300,000 m3 capacity.  The company is offering 18m new shares via placement at $0.38 each and the offer will end on 8 Oct 2009. 

Revenue for FY 2008 is RMB 65.3m and profit after tax is RMB 25.9m. The first half 2009 revenue is RMB 31.7m (decrease of 3%) and profit after tax is RMB 9.97m (decrease of 31.5%),  Assuming the service agreement is in place and based on the post-invitation no. of shares, the EPS for FY 2008 will be 4.32 cents. This translate into a historical PER of 8.8x at listing. With the profit declining by 31% and assuming this trend continue, FY2009 full year EPS is likely to be 3.024 cents and that will translate into a forward PER of 12.5x. The market cap is $44.8 million based on the IPO price.

The company is one of the "better-looking"catalist listing but is fully priced at the IPO price. However, the future plans looked somewhat exciting as more storage capacity come on stream progressively. Lets see if the management can deliver value to its shareholders next time.

 

Monday, 5 October 2009

Goodland Group Limited

Goodland Group Limited is placing 30m new shares at 20cents each for a Catalist listing.  The company is a boutique property developer engaged in the development and sale of residential properties in Singapore.  The company focused on small and medium sized landed housing and residential apartments.The offer will close on 6 Oct 2009.

Based on the IPO price, the company is priced at a premium to its NTA by 266% and at 16.7 times FY 2008 PER based on the post IPO share capital and pro forma earnings assuming the service agreements were in place.

Personally, i never like property developers as the earnings are likely to be lumpy, subject to market cycles and hard to predict as revenue comes on stream. The overpriced IPO is not helping and with the weak market sentiments, it will be amazing if it can do well on debut.

Saturday, 3 October 2009

Parkway Holdings (Kim Eng initiates Buy with $3.24 PT)

Event
Kim Eng is initiating coverage on Parkway with a Buy recommendation and a $3.24 price target. You can access the full report here.

Our Take

Miles ahead of its competitors
Parkway is the "de facto" standard for highly complex medical procedures, and a class above its peers. We are excited about their upcoming Novena hospital as it is setting itself miles ahead of its competitors. We are also looking forward to its exciting growth tragectory through the rapid expansion of its hospital operations in Asia.  At 13x FY10F PER (including gains from sale of 1/3 of medical suites at Novena), Parkway is still trading close to 'crisis-level' valuations. 

Sale of medical suites poses as potentially strong catalysts
The strongest near term catalyst could come from the potential sale of 1/3 of its medical suites at the new and upcoming hospital at Novena. Parkway is preparing to launch them in 1Q10, at indicative selling price of $3500psf. Proceeds from the sale (~$200m) can be deployed towards reducing the Group's net gearing, which currently stands at 0.4x. Parkway is likely to be successful during the first launch due to the pent-up demand from doctors and recent transactions done at Farrer Park Mediplex (at $3000-3500 psf)

Action
We initiate coverage on Parkway with a target price of $3.24, based on a SOTP valuation. It has been a laggard in the recent rally. The timing is ripe for a strong entry now.  

Friday, 2 October 2009

Ziwo Holdings Ltd




















Ziwo Holdings Ltd is "different" from most recent IPOs in that the vendors are cashing out big time (in full to be exact)!  The company is offering 121.512m shares consisting of 60m New shares and 61.612m Vendor shares. Ziwo is engaged in the research and development, manufacture and sale of SBR and other foamed materials. A closer look at the vendors throw out some interesting shareholders such as a Venture Capital firm, an ex-minister, a market player who recently took stakes in many small caps, a partner in an accounting firm, among others.

Revenue for FY 2008 is RMB 286.8m and net profit is RMB 57.7m. The EPS for FY 2008 after accounting for service agreement and new share base is 4.60 cents. Based on the IPO price of 23.5 cents, that translate into a historical PE of 5.1x.  The market cap is S$58.56m. Q1 2009 revenue stands at RMB 76.9m and net profit at RMB 22.7m. The Q1 net profit is actually very impressive and is already 40% of FY2008 full year profit. Assuming a more conservative 50% growth in profit for FY2009, the EPS for FY2009 will be 6.9 cents and with a fair value range of 4-7x PE will translate into a price of 28 cents to 48 cents.

It is interesting to note that Group I investors that came in April 2008 paid 11.75c while Group II investors that came in Feb 2009 paid 8.03 cents. I guess that is because Group II investors came in at the peak of the Financial crisis and is rewarded for taking that risk. It is also interesting to note that all the pre-ipo investors are cashing out at the IPO. Do you really believe that the underwriters will allow the pre-IPO investors to 'cash out' big time"?

It will certainly be interesting to see how the shares are being placed out at IPO and who they are placed out to. In my personal view, this is an innovative way to avoid the usual 6 to 12 months moratorium for the pre-IPO investors. By "selling out" at IPO and then getting friendly parties to underwrite and subscribe for the shares, the vendors effectively strike 2 birds with one stone. First, they are able to avoid moratorium on the remaining shares and second, they are able to control who the shares are placed out to and thereafter, perform some post IPO support to the shares.

This stock will be interesting to watch at IPO and worth a stag, barring any major crash in the US and local market.

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