Thursday, 11 February 2010

Cogent Holdings Limited

Cogent Holdings Limited is offering 92m shares at $0.22 each. (Of which 2m shares are of public offer and 90m shares are via placement). The IPO will close on 23 Feb 2010, 12pm.

Cogent has more than 30 years of operating history and is one of the leading full service logistics management services  provider in Singapore offering Transport management service, Warehousing and Container Deport management service and Automotive logistics management services.


Revenue grew from S$27.5 million in FY2006 to S$60.1 million in FY2008 and net profit grew from $1.3 million to $7.0 million in the same period. For the 1st 6 months ending 30 June 2009, the revenue is $29.4m  and the net profit is $3.7m. 

The company intends to pay dividends of at least 50% of its FY2009 profit attributable to shareholders and at least 20% of its profit for FY2010.  Assuming the net profit is $13.3m, the dividend paid out will be $6.65m and based on the post-IPO shares of 319m shares, that will translate into an EPS of 4.17 Singapore cents and Dividend Per Share of  2.08 cents.  The projected yield will be 9.45% for FY2009. At the listing price of $0.22, the company is listing at a historical PE of 5.27x. The Company may also pay out the dividends on a quarterly basis.

It is interesting to note that the company is paying out a majority of the $ it raised from the IPO as dividends as the amount raised from selling new shares amounted to $9.1m but the Company will be paying out approximately $6.7m as dividends (assuming the FY2009 projected profit is $13.3m). Post IPO, the Tan brothers will still hold 71.2% of the company.

While i dont really like the sector, the company is attractively priced for the IPO as its competitors such as Freight Links and Poh Tiong Choon are trading at 8~10x PE. Assuming Cogent trades at 7-8x PE for FY2009, the fair value will be around 29 cents to 33 cents. Company should be worth a stag but the public tranche of only 2m shares means that investors who apply at the ATM will need lady luck to smile on them.

Tuesday, 2 February 2010

China Hu An Cable Holdings Ltd

China Hu An Cable Holdings Ltd ("Hu An Cable") is offering 176m shares at $0.42 each of which 118m shares were new shares and 58m vendor shares. 5m shares will be via public offering and 171m shares via placement. The IPO will end on 4 Feb 2010,  12pm. There is a 30m over-allotment option and CIMB will act as the stabilising manager. The market cap post listing will be $246.9m.

Hu An Cable is a wire and cable product manufacturer in China and its products are used across various industries.

Revenue has grown from RMB 788m in FY2006 to RMB 1,385m in FY2008 and net profit has grown from RMB 46m to RMB 92.5m during the same period.  Based on the post-IPO shares, the EPS for FY2008 is RMB 15.7 cents.  For the 9 months ending FP2009, the revenue is RMB 943m and the net profit is RMB103m. The EPS is RMB 17.5 cents for FP2009.  Assuming a simple pro-rating, the EPS will be 23.3 cents and that will translate into Singapore 4.66 cents. At the IPO price of $0.42, the IPO is priced at a 9x PE for FY 2009.

The Company does not intend to pay out any dividend for FY2009 but intends to pay out 15% for it FY2010 net profit.

Based on the FY 2009 "pro-rated" results, at the IPO price of $0.42 per share, the Company is fairly valued using average listing multiples for newly listed S-Chips. I believe upside is limited at this juncture but investors may want to revisit this company after the full year FY2009 or 1H 2010 results are released.

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