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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

Leader Environmental Technologies Limited


Leader Environmental Technologies Limited ("LET" or the "Company") is offering 116.5m shares (2 m public shares, 114.5m placement shares) at $0.21 each. The Company is an environmental protection solutions provider in China and is engaged in the R&D, manufacturing, assembly, installation and support services of environmental protection systems. It services include dust elimination, desulphurization.

Revenue grew from RMB 100.7m in FY2007 to RMB 181.7 in FY2009. Net profit grew from RMB 39.7m to 64.3m during the same period. Net margin is hovering above a healthy 28% for the 3 years. The IPO will close on 14 July 2010 and 12 pm.

The company is listing at a historical FY2009 PER of 7x based on enlarged share cap and assuming service level agreements were already in place and based on the IPO price, the market cap will be $92.74 million.

While i do like this industry, this company actually bring up old memories of a former S-chip that was a market favourite but has since come under judicial management - Sino Environment. Sino used to be a market darling, rising to more than $3.50 at its peak but is now languishing at 13.5 cents. Many people lost their fortune in that company.

There is always a huge risk investing in Chinese companies, especially with regards to the quality (or even existence) of the earnings in the accounts. The fact that this is a S-Chip audited by Ernst & Young, one of the remaining big 4 accounting firms, may bring a little more comfort than usual. The company will also declare at least 10% of its FY2010 earnings as dividends.

As mentioned in my earlier part, i like this industry. China will have to focus more on enviromental protection in the coming years. The only concern i have is more management specific, i.e, can the management be trusted. Will the company go bust a few years after listing?

Assuming EPS grow by 25% in FY2010 and EPS will be 3.75 Singapore cents. Based on the 21 cents IPO price, company is listing at prospective PE of 5.60x. A fair value of 8-10x will imply a price of 30c to 37.5c. The low public float will mean that it will be quite difficult to get it from the public tranche.

Comments

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Ernest Lim said…
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Cheers Ernest