XMH Holdings Ltd is issuing 100.95m shares (85m New Shares and 15.95m Vendor) at 25 cents each. 1.5m shares will be for public and the bulk via placement.
The Company is a diesel engine, propulsion and power generation solutions provider in the marine and industrial sectors. Revenue for FY2010 is S$74.5m and net profit is S$17.58m. The offer will close on 24 Jan 2011 at 12pm.
The NAV per share is about 7 cents post listing and EPS for FY2010 assuming service agreement in place and based on enlarged share cap is 4.01 cents and that will translate into a listing PER of about 6.25x. The market cap based on offer price is S$100m.
Prior to the listing, the Company paid a generous dividend of $17m to its shareholders, which i think, is "common" among listing companies.
The company is priced to sell at such low PER. I think downside is limited but the problem for public investors will be to get the shares via the allotment. A PER range of 7-9x will mean a fair value of 28c to 36c. The only "worrying" part will be the huge placement tranche but i guess it could be well absorbed as all investment banks and securities firms will want it to succeed to start the IPO ball again.