Logistics Holdings Limited ("the Company) launched its IPO for a Catalist listing via placement of 42.075m shares where 31.875m are New shares and the balance vendor shares at $0.23 each. The prospectus is here.
The Company has a track record of 27 years and is principally engaged in building and construction works for government and government related bodies. The IPO will be listed on 18 Jan 2013 at 9am. Since this is a "Placement only" IPO, there is no public tranche.
Based on the enlarged share cap of 170m shares and assuming the service agreement was in place, the EPS for FY2012 = Singapore 2.576 cents. This translate into a listing PER of 8.9x. The market cap based on the IPO price is $39m.
Not sure who Lim Chye Kim is but he is described as "not related" to the major owners. He invested at 22 cents, which is not much cheaper than the public investors (good sign). Post IPO, he will hold 3.9% of the Company and has undertaken not to sell the company for first 6 months and not to divest more than 50% of his holdings from the 7th to 12th month. Is he the in-house magician that will perform some magic to the share price post IPO since he will be there for the next 12 months? Perhaps informed blog readers can shed some light? haha
The order books appeared to be very healthy and as of 6 Dec 2012, stand at S$232.90m. The Company intends to distribute not less than 20% of its profit to shareholders as dividends for FY 2013. I am not privy to the forecasts but assuming the profits for FY2013 remained the same as FY2012, the dividends will be 20% x EPS of 2.576 Singapore cents = 0.5152. That translate into a yield of 2.24%.
The Company is a long established one and has a "blue chip" clientele of primarily government agencies. That is quite amazing and bad debts is unlikely to be an issue if the company delivered according to the contract specifications.
I will not attempt to give a fair value since there is no public tranche. The recent Kori IPO is still 22% above its IPO price and closed above 14% above its IPO price on the first day. Its performance table below.
If you have been following my blog, you will know how i view small cap catalist companies in the construction industry somemore. hahaha. Probably a big "Avoid"
An old friend ask me if i am keen to take some placement shares. Since this is the first IPO of the year and will list on an auspicious date of 18th Jan, i decided to be part of the action! Wish me luck? Huat ah.... :)