With an operating history since 1974, Gaylin is one of Singapore's largest multi-disciplinary specialists providers of rigging and lifting solutions to the global oil & gas industry.
Assuming the service agreement is in place, the EPS for FY2012 using the enlarged share capital of 410m shares is 3 Singapore cents and that translate to a historical PER of 11.6x
Use of Proceeds
The use of proceeds is stated above and based on the prospectus, it is for acquisition of a South Korean company but not much information was provided.
The Company intends to distribute not less than 30% of its FY2013 and FY2014 net profits as dividends. Assuming EPS remain the same at Singapore 3 cents (assuming service agreement in place), the dividend per share will be Singapore 0.9 cents. That works out to be a yield of around 2.6%. This should provide some downside protection but I didn't see it working in Courts Asia recent decline.
Pre-IPO investors came in at around 12% to 15% discount to the IPO Price and they are not cashing out at the IPO. The major owners will continue to own around 61% of the Company post IPO through investment holding company, Keh Swee. All of them have agreed to be lock up for a period of 6 months.
With the 4 brothers and the many relatives, Gaylin most likely still look and smell like a family business... not sure if this is good optically. Sounds like a Qian Hu where all the siblings are working together?
Luckily they changed their auditor to Deloitte & Touche to create a better image and was given a clean bill of health. The previous auditor has received some shares from his investment in the Exchangeable Bonds under the name of Rhodus. Most likely he is also advising them on the listing as his conversion is based on a certain % of the issue size.
Oil & Gas Industry
I like the Oil & Gas sector in which the Company operates in. You have seen Ezra and Ezion doing well lately and based on my investigations, this sector will continue to drive demand in this region.
Placement in hot demand?
Please note that i am heavily vested in this counter through the placement tranche. However, the demand was apparently quite hot as my initial allocation was reduced by 65%.My guess is that the over-allotment shares will be issued.
I am guessing
Assuming the EPS grow by 20%, the implied EPS will be around Singapore 3.84 cents. Many companies in this Oil & Gas sector is trading at PEs between 10-15x. A fair trading range could be between Singapore 38.5 to 57.5 cents.
Given my vested interest, my views is definitely biased and i will give it a 2 Chilli rating to support my vested interest and my intention is to hit and run if the market allows. At least i tell you in advance ah... :oP