Saturday, 1 June 2013

Tee Land Limited



Tee Land Limited ("Tee Land" or the "Company") is offering 115m shares at $0.54 each comprising 6m Public Offer Shares and 109m Placement Shares. The prospectus is here. The IPO will close on 4 June at 12pm and starts trading on 6 June. An over-allotment option of 23m shares have been granted to the stabilizing manager.

You have to understand that this is a "corporate carveout" or spin-out. Nothing has changed fundamentally, similar to how Fragrance Group spinning out its hotel arm, Global Premium or Capitaland spinning out CapmallAsia

I guess the advantage to shareholders of Tee International is that it help separate the risk (property and development) from its other business and investors can now choose which piece of the business they like to invest in. To be honest, i never really know that Tee International is a property developer.

Business

Anyway, back to Tee Land. Tee Land is a property developer with a "track record" of residential property development in Singapore. The Company intends to focus on quality property development and expand into commercial and industrial property development. It also intends to strengthen its position in Malaysia, Thailand and Vietnam as well as expand into new markets such as Myanmar, Sri Lanka and New Zealand.

Financial Highlights

 

The Company had a revenue of $7.9m for FY2012 and a profit of $1.54m The 6 months audited revenue is $6.7m and profit is $0.67m. Basically you can see that this is a "boutique developer" with "wide-swinging" revenue and profit figures. You should have known by now my dislike for construction-related and property developers as it is really tough to second guess what future performances will be. In any case, the fact that it is a small boutique developer does not help. and i am not sure if it will have the financial resources to expand to so many countries to as far as New Zealand?

Risk Factors

They have stated out a lot for risk for you (as in all prospectus) investing in their company. Go read them from page 26-38. 13 pages of risk factors and i do think many of the risk factors are real. The Company is subject to the cooling property measures in Singapore, land sites available for sale, economic and political conditions of the countries which they operate in, and basically they are a small fish in a big pond.

Use of proceeds

The estimated net proceeds of $57.8m is to be used for new projects ($26m), repay loans to Tee International ($15m), repay bank loans ($6m) and for working capital (balance).

Key Ratios

The NAV is 31.5c versus the IPO price of 54c, implying a PB of 1.72x. The historical PER is more than 136.7x (before even considering the enlarged share cap). The company shall have a market cap of $241.3m post IPO.

Dividend

The Company intends to distribute not less than 50% of its net profit for FY2013 to shareholders. Again, i am not privy to how much profit 2013 will bring, perhaps those in the know or who have attended the roadshow can help shed some light. This info is usually 'verbalized' at such roadshows.

"Prominent Pre-IPO shareholders"

The Company managed to "attract' prominent local investors such as Mr. Koh Wee Meng (billionaire founder of Fragrance Group) and Tommie Goh, the ex founder of JIT and 2G capital. They came in at 25c, so it is a "no-brainer" for them but you will have to think very hard why you are coming in at 54c.

Fair value

I am sorry to tell you that i don't know how to give you a fair value. Most small developers (Hiap Hoe or Singholdings) here are trading below book value. You can see that Fragrance is at 1.85x PB, perhaps that is why Mr. Koh can better appreciate this company than most ordinary folks like you and me. I will prefer Kepland or a bigger developer anytime.

(Source: Shareinvestor)

In addition, i have to tell you that i am not too impressed with the track record of SAC Capital either.

Conclusion

Perhaps Mr. Koh and Mr Goh's friends will support this stock during the initial IPO so i will give it a 1 chilli rating (buy only if you like it) but i will avoid it for the longer term and for fundamental reasons (Chopped Chilli). 

Happy IPOing

40 comments:

Anonymous said...

So, are you buying? :D

Mr. IPO said...

I am not his friend leh? Waiting for my syndicate friend to tell me. Hahaha

Anonymous said...

hey Mr IPO can you do a review of IHC catalist listing? Their prospectus is uploaded in MAS already.

Thanks.

Anonymous said...

Isn't Oxley holdings a better buy?

Mr. IPO said...

I didn't check but probably should be better valuation. :)

Mr. IPO said...

Not registered yet la...

Anonymous said...

Hi Mr IPO. In view of the recent sharp fall in Reits, how likely you think SPH and/or OUE will drop their idea of the IPO? Thanks

Mr. IPO said...

I have no idea. I understand that DBS was lining up cornerstones for SPH REIT last week and the yield as a low 5.2%. if the market for retail REIT is 6%, then probably SPH will then need to adjust its price prior to the launch, otherwise no rationale investors will bite. So it really depends on the market, pricing and demand.

Anonymous said...

Tee Land will open 60 cents .. Myanmar play is a supporting factor..

strongly controlled share so will not tank like Asian TV which is placed out to many investors.

Anonymous said...

Hi Mr IPO, understand that SPH IPO got quite some chance to go ahead from your previous post, how about OUE? You think there is a fairly good chance it will? Wondering when will the 2 IPOS be launched if they do. I got some impression SPH may be in July but OUE much later? Ty

Anonymous said...

Hey Mr IPO, can I ask does Asian Pay TV give the Dividend quarterly or semi annually? Thanks!

Anonymous said...



[[ anonymous 7 ]]


re : Anonymous said...

Hey Mr IPO, can I ask does Asian Pay TV give the Dividend quarterly or semi annually? Thanks!


============================

Questions like the one above may be better answered by calling somebody like the following :


Full Company Name: Asian Pay Television Trust

Incorporated in : SINGAPORE
Incorporated on :
ISIN Code : SG2F77993036


Registered Office : Macquarie APTT Management Pte. Limited
10 Marina Boulevard
#17-01 Tower 2 Marina Bay Financial Centre
Singapore 018983
Telephone: 65 66010888
Fax: 65 66010653


The above information is taken from the SGX website; so all the information is all there.



Anonymous said...




[[ anonymous 7 ]]


re : I understand that DBS was lining up cornerstones for SPH REIT last week and the yield as a low 5.2%

========

And that is exactly the problem. The lower interest rates go, the more overpriced the counter. Which implies a few things :

a. whatever gains made elsewhere (through stagging or any other ways), will have to be used to pay for this said overpricing. If so, I see no profits!

b. to attain / maintain a certain level (say $50) of passive "income", more and more money has to be put into the counter. If so, you are getting poorer!

c. as these counters get more and more overpriced, they become more susceptible to what the USA money printing Federal Reserve would do. Which is presumably not what you want.


All the above arises from artificially lowering rates and printing money.

And yet, some people seem to think the higher prices go the better! Because they are getting wealthy or something. How odd.

They are not thinking straight. Definitely Chopped chillis to them.


Mr. IPO said...

It was in my post. Semi annually.

Mr. IPO said...

I really have no idea la. It all depends on the pricing and valuation and demand. Probably both will go ahead if prices correctly based on the market then. However having said that, the companies must accept the "lower valuation".

Anonymous said...



[[ anonymous 7 ]]


Re : However having said that, the companies must accept the "lower valuation".

=========================

I often wonder who would buy my shares off me at these prices.

Which fool would buy shares off me at prices I would not even pay myself.

And if somebody is paying these prices, they are only paying me with printed money. And that is not much use to me either.




Anonymous said...

Mr ipo,

I write to thank you for your accurate assessment on the ipo of Tee Land.

You have helped to save my $2 and I am sure other readers have benefited too.

Yours sincere reader

Mr. IPO said...

You are most welcome. I need to analyze it myself anyway so might as well share my findings. ^_^

Anonymous said...



[[ anonymous 7 ]]


Tee Land (S9B.SI)

closed 56 cents 06 June 2013;
High / Low : 57 / 54 cents;
volume : 180,004,000.


Quite a lot of volume for shares that only sold 6 million to the retail public.




Anonymous said...

Hi Mr IPO

Thank you for all the wonderful post on the IPOs. High yield plays such as telcos and reits were recently hit hard due to the probable tapering of QE. So far preference share eg. DBS 4.7, Hyflux 6% and OCC 5.1% has gone down somewhat too. I would appreciate if you could share your views on preference share price due to ending of QE and hence the interest rate rise. Is it likely to dip sharply soon too?

Thank you for your wonderful post on the various IPO post again.

Anonymous said...

[[ anonymous 7 ]]


Some thoughts on this yield-play, on whether to buy any existing instruments (as opposed to instruments yet to be issued).



Question :

a. have Singapore banks decided on their Basel III debt instruments yet? And what currency to issue?

b. Have Singapore banks actually issued any Basel III debt instruments yet?

c. Have Singapore corporate entities resolved outstanding funding issues satisfactorily?


What implications of a,b,c, for investors and fund allocation?

Anonymous said...



[[ anonymous 7 ]]


URL :
http://www.ft.com/cms/s/0/01923b22-cf6a-11e2-a050-00144feab7de.html#ixzz2VfSIf2fx


June 7, 2013 2:22 pm

At the start of last month, buyers of UK Treasury 4.25 per cent 2032 stock paid £125. Today, they wish they had sold in May and gone away, as the price has crumbled below £120 in little over a month. It is true, of course, that if those buyers hold on for another 19 years, they will get the guaranteed 2.6 per cent redemption yield (3.4 per cent annual income followed by a 20 per cent capital loss).


=======================

So, Mr IPO, anyone else, what should I do in the above situation?

(actually, short of money printing, there is no solution)



Mr. IPO said...

You are welcome. I can only guess that prices of those instruments will drop once interest rate goes up. (I am guessing). Having said that, you will have to ask why you invest in those shares in the first place. Is it for yield to be held till maturity?

Mr. IPO said...

Seems like the solution is never to "chase" up the prices. Why pay 125 that pays par eventually :P

Anonymous said...



[[ anonymous 7 ]]


Sorry for ruining your holiday, Mr IPO.

No, I did not buy that stock (which is actually a bond)

And yes, beware of any institutional arrangements that force buyers into stocks (bonds). Like retirement funds, regular monthly investments and nonsense like that.


This will hit all the young(er) investors before they fully realise the problem. They have been warned.



Even if there are no institutional arrangements forcing people into stocks, the prospect of price rises will suck people in.

Play the game, and please, don't believe it.

All these instrumentation (eg stock prices etc etc) have been going wrong of late.

Like with the AirFrance Airbus that eventually plunged into the Indian Ocean, it is a problem of faulty instrumentation-reading misguiding those with little common-sense.

Play, but don't believe. In particular, provision for a crash (which may or may not occur right-away).

The provisioning time is now, and not at a time of the Federal Reserve's choosing.




Anonymous said...



[[ anonymous 7 ]]


for those who do market-positioning, you may want to understand there is a "beached whale floundering around".

This beached whale is the Federal Reserve.

Don't let this Federal Reserve suck you in.

Articles like the following splashed in the newspapers, do not make difference. There is still a beached whale, and there is also still you to suck in to the mess.


=========== article :


Data shows Fed help still needed

...... the economy is growing modestly but not enough to convince the Federal Reserve to scale back the amount of cash it is pumping into the banking system. [[ ... blah blah blah ]]


Mr. IPO said...

Haha you are not ruining my hols just that I can't think properly during this period. :P plus your questions are pretty "deep" and you probably had the answers already. Hahaha

Anonymous said...



[[ anonymous 7 ]]


still, whatever, I do not want to ruin your holiday.

Anonymous said...





[[ anonymous 7 ]]


for info only
==============


Tee Land (S9B.SI)

closed 51 cents 10 June 2013;
High / Low : 0.580 / 0.510;
volume : 149,651,000

=======================


Some lessons in this :

a. do not say - the float is tightly controlled, so its OK

b. do not say - Mr Koh and friends are involved, so its OK

c. do not say - there is a syndicate so its OK.

d. do not say - the Federal Reserve has your back and is printing money, so its OK lets party on (what happens after that!)


Everyone knows what the problem is, and where the problem is coming from, so beware.

One way of making money is to keep it. And if you don't have money, please don't dig a hole for yourself somewhere.

Stop punting around like a one-club golfer.

You know where the problem is coming from.








Anonymous said...

Hello Mr Anonymous 7,
You're an expert, experience and have lots of wisdom. Would you like to start your blog to share with others?
Looking forward to read your blog!
C ya and CHEERS!

Anonymous said...




[[ anonymous 7 ]]


I'm afraid you have to make do with comments.

Besides, I have no intention of starting a "newspaper" and bothering myself with what plans the MDA has next.

If you like, try the Straits Times.








Anonymous said...



[[ anonymous 7 ]]



hah! looks like my bid was hit.

have now a few more shares of (some company). relatively small position added.

I think I'd look forward to the dividend, and also the proposed preferential IPO later in the year.

Not an SGX counter. Not proposing anyone follow my actions.





Anonymous said...

[[ anonymous 7 ]]


out of interest, tee land (S9B.SI) :

13 Jun 2013 04:22:22 PM
Last Done $0.455
Volume 5,444,000

Anonymous said...

[[ anonymous 7 ]]


Asian Stocks Climb From $1.1 Trillion Slump on U.S. Data

URL :http://www.bloomberg.com/news/2013-06-14/asian-stocks-rise-on-u-s-data-after-entering-correction.html



===

yes, I've sold today. Nett cash raised. Profit taken between yesterday and today.

Increased wealth perhaps, but no wealth-effect will be observed. Ie, keep the cash.

~Simple.
~Done.

Anonymous said...




[[ anonymous 7 ]]


As for Tee Land (S9B.SI) :

14 Jun 2013 - Close

Last 0.445
Vol 3,998,000
High 0.465
Low 0.440


No body wants to buy anymore? Myanmar, Property, Tight float.
No-one wants to buy?

Anonymous said...

That uncle anonymous 7 go again! Trying to tell the world how good or smart he was again and again.... Full of Bullshiting :'(
Go and start your blog and see can have a million hit or not...

Anonymous said...



[[ anonymous 7 ]]


Where's the bullshitting?

Point out where the bull shitting is?

Which part is the bull-shitting?

Anonymous said...



[[ anonymous 7 ]]


Let me give it to you straight up, rather than beating about the bush.


The whole point of some style of investing is to rip off the stupid money. To rip, rip and rip again until they get the lesson. And even then some people don't get it.

Why should I want a million hits on a blog? I want the money; what is a million-hits to me.


However, of late, it has become so stupid that I thought I should say something about it.

Call it bullshit, call it anything you like. Still, I say, don't fall into the trap of printed-money.

Like the message, loath the message, that's not really my problem.


In "good" news, if that's what you like to hear, see some nice moves by others from Business Times.

Sorry to spoil anyone's holidays.





Published June 14, 2013


Indonesia preparing steps to deal with ending of QE: deputy finmin


The Indonesian central bank's move was unexpected but followed a flurry of measures this week, including a pledge to supply dollars and buy government bonds - PHOTO: BLOOMBERG



[JAKARTA] Indonesia is preparing measures to cope with any economic turbulence that could stem from the reduction of quantitative easing, a deputy finance minister said on Friday.

Mahendra Siregar told journalists that he was anticipating turbulence when easing programmes are cut back.

"We are preparing measures if (the turbulence) QE is prolonged," he said.

On Thursday, the Indonesian central bank raised the benchmark interest rate by 25 basis points to 6.0 per cent.

Anonymous said...

Oh dear!
There go again....
Some 1,
Shiting again....

Anonymous said...

He who think too highly of himself, think he is smarter then the market, will one may learn his lesson and pay tuition fees to Mr Market.

This one day may be tomorrow, next week. next month but will come eventually.

Let move on and don't mess up Mr IPO's blog.

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