Thursday, 27 September 2012

Gaylin Holdings Limited (Preview)

Just after i complained about a Singapore IPO Famine on Tuesday, someone asked me today if I want to subscribe for the placement shares of the upcoming company - Gaylin Holdings Limited. The draft prospectus is here. Finally i see some decent local company going for IPO!



Hence the reason for the preview this time (usually i not so free :-P).

Anyway, the indicative issue statistics as follows:

Existing no. of shares = 300m.
New shares to be issued pursuant to the IPO = 110m
No vendor share sale

IPO price = S$0.35 - S$0.37
Total IPO raising = S$38.5m - S$40.7m
Market cap @IPO = S$143m - S$151m
Target IPO launch date is mid Oct.

My "gut" feeling of the IPO as follows:

  1. Current market sentiment is positive and that should spill over to the IPO.
  2. Company is in the Oil and Gas sector which is one of the 'hottest' right now in the region looking at how Ezion and Ezra are winning contracts. They have been around for a long time and is one of the Enterprise 50 winner in 2009. 
  3. My back of the envelope computation show that the listing historical PER is around 11x, which may present a small upside to around 13-15x if based on historical PER. I am not privy to the future growth but understand that it may get exciting. 
  4. The company is giving out 30% of its net profit for FY2013 and FY2014, which again based on back of envelope calculation show a yield of around 3-4% assuming profit level remain the same. This should provide some 'down-side' protection given that you can participate in both yield and growth. 
  5. Vendors are not selling!
So here you go. Facts presented above. You decide for yourself if you want to call your CIMB broker (or their sub placement agents). Their 'track record' in recent times have been pretty mix depending on how you measure it.

Leave a comment here or in my facebook to tell me if i should indicate my interest or what you will do if you are in my shoes (assuming allocation is not an issue and i will be allotted what i indicate).

1. Hoot 500 lots
2. Buy 100 lots
3. Tikam 10 lots.
4. Don't bother.Your friend bluff you one.

The video on the Company below. Video is the way to go?


19 comments:

Anonymous said...

Hi, why do you think market sentiment is positive? isit still, with tension in Europe & US over debt concerns

Mr. IPO said...

Well.. Currently our market is still going up strongly. Haven't really see any correction. My only concern is if it will last till oct. haha. Even the news of a possible technical recession or tensions between china and japan doesn't seem to "affect" the market.

Anonymous said...

How do you compare this with Nordic?

Mr. IPO said...

Sorry but what u mean by nordic ? A competitor ? The 2 competitors cited are franklin offshore and ktl global.

Anonymous said...

Hi. Did you take up the Gaylin IPO placement?

Mr. IPO said...

Yep

Anonymous said...

Hi, can I ask what is the list of sub-placement agents? I asked CIMB Securities but they said placement application is not yet open.

Anonymous said...

I wonder how u have put in an order when it's not opened yet..

I also wonder how u managed to know the price of the IPO price range when book is not even open

Prelim prospectus also did not mention any sub placement agent is in IPO

Mr. IPO said...

I also wonder why I know. Probably they mistaken Mr. IPO can help them anchor the IPO.

They didn't realise mr. IPO. is only a small player and not cornerstone investors.

Anonymous said...

Erm I'm not sure who is the Anonymous who posted at 526pm but I'm the one who posted at 130pm.

I would really like to know how to check the list of sub-placement agents. Because I do not have a CIMB securities account at the moment and wondering if it is worth opening one.

Mr. IPO said...

next time please "identify yourself" la, through a nickname will also be good. :0)

sub-placement agents sometimes are 'verbal one' ...so you wont see it on the prospectus. I also dont know how to check since i told you this came from a friend....

Mr. IPO said...

Placement results out and priced at 35c :)

small-fly said...

The inventiry turnaround up to 600+ days which I felt a bit too long holding cost. The dividend payout is also not guaranteed. So far no cornerstone investors ....

Mr. IPO said...

This company is a stockist serving the oil and gas players. Let's see if they managed to find some cornerstone when the IPO is launched.

Anonymous said...

So did you go with option 1, 2, 3 or somewhere in between?

Mr. IPO said...

Well..... Will share when the IPO is launch... :)

CT said...

Dear Mr. IPO,
I calculated the post listing NAV to be 8.53 cents and its Price/NAV ratio to be 4.1, excluding listing costs. Isn't this very high? The ratio for the Gas & Oil Sector is 1.16 while that for its named competitor, KTL Global, is only 0.61. Further, the FY2012 revenue for both companies are about the same. Theoretically, a high Price/NAV gives poor investing value for subscribers as one stand to lose plenty should the company liquidate or delist.
Pls advise if it is still worth it. Thanks.

Mr. IPO said...

I think it depends on which methodology u using ? Not sure if nav is the right measure for this counter or sector though. I tend to look at profitability and EV/EBITDA. Frankly for IPO counters I look also at sentiments to stag them. Unfortunately KTL is a poor comparable due to its poor profitability. Will analyse further when the prospectus is registered. Don't buy if ur analysis tell u not to ah ... :)

CT said...

You are probably right. KTL has poor profitability and may therefore be not comparable. Btw, my previous calculation of the post listing Price/NAV ratio has an error. Including the new capital injection, the ratio should be 1.96 instead. Agree with you that profitability is more important. I will go for it.

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