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IPO Chilli Ratings

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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

Neo Group Limited

Neo Group Limited ("Neo" or "Company) is offering 22m New Shares at $0.30 each comprising 1m shares for public and 21m shares via placement. The IPO closes on 9 July at 12pm.


The Company is basically a food caterer and was ranked by Euromonitor as the no.1 events caterer in Singapore. 


It has 3 brands, namely "Neo Garden Catering", "Orange Clove" and "Deli Hub". It also operates 16 food chain outlets as at 2 July 2012 under the "Umisushi" brand. Revenue grew from S$22.7m in FY 2010 to $38.4m in FY 2012 and net profit grew from $2.2m to $5.4m in the same period. EPS based on post-IPO shares and assuming the service agreement was in place will be around 3.10 Singapore cents. That translate into a historical PER of around 9.7x.  Based on the IPO price, the market cap is around $43.2m 


The Company intends to distribute not less than 60% of its net profits attributable to shareholders in each of FY2013, FY2014 and FY2015. (wow. that is a serious undertaking! first time i see a company provides "bao jiak" dividends for 3 years). It is also interesting to note that 84.72% of the company will be locked up for 1 years and with 'reducing balance' being locked up over 3 years. This is quite innovative indeed to demonstrate confidence in the company. I remember reading about the CEO's success story in the newspaper, quite an impressive story for a 'rags-to-riches' millionaire.  


Assuming the EPS remained the same and with a dividend payout of 60%, the dividend per share will be around 1.86 Singapore cents. An investment of 1,000 shares at $0.30 will imply a yield of around 6.2%. That is very decent indeed if the business remains "constant" for the next 3 years.


The listed competitors includes Select Group Limited (currently trading at 2011 PE of around 8.9x and unlisted Kriston Food and Beverage which has filed for bankruptcy recently. I would rate Neo Group as fairly valued and even though it is a small cap company, the 6.2% yield (assuming the company continues to generate the same level of profits) is indeed attractive. With limited number of shares being issued and with majority of it tightly controlled, this stock should do well on its debut and may attract long term investors seeking for good yields. A "buy" for me and 2 chillis rating despite its small cap status.  

Comments

This is a wonderful article written by you. I am glad reading this. Many companies reduced or cut entirely their dividends during the financial crisis, most maintained their dividend.

Singapore dividends
Anonymous said…
I did my sums too and ended up with ~7% dividend payout. May I know what are the numbers you used to arrive at the 6.2% payout?
Mr. IPO said…
I have assumed the service agreement is in place and based on the enlarged share capital post IPO.
Anonymous said…
well done. Keep up the good work
Panty King said…
DIE DIE DIE MARKET DROPPING SIAO LIAO
Anonymous said…
CHER PAI SIAO LIAO
sgx dividends said…
Article is very impressive. I have one query please do share how to Invest in High Dividend Paying Stocks?

Singapore dividends