Tuesday, 30 July 2013

Rex International - Balloting Results

This is a very hot IPO and a very stupid one for public investors as it was oversubscribed by 153x!. Investors who applied for 1 to 499 lots only get 1 share each! I believe this is to prevent "flippers" from flipping out?!


Mr IPO's results

Wifey account get 1 lot! (this is ridiculous!) while i have 20 lots from placement tranche. Let's see if can make $ or not.


I will be away for 3 days! Wouldn't be able to entertain you and may not be able report on MoneyMax Balloting Results.

Happy IPOing

Friday, 26 July 2013

MoneyMax Financial Services Ltd



MoneyMax Financial Services Ltd ("MoneyMax or the "Company") is offering 53.8m New Shares at $0.30 each for a listing on Catalist. The offer comprises 51.8m Placement Shares and a paltry 2m Public Offer. The prospectus is here. The market cap post IPO is around $106m.

The IPO will close on 31 July 2013 at 12pm.

Principal Business

The Company is a leading market player in the pawnbroking business. In other words, it is a now a "glorified and esteemed" money lender for fast liquidity and lender of last resort (other than the illegal loan-sharks) as seen by the advertisements using Mark Lee (and Michelle Chia for its key competitor).  


Island-wide Coverage



The Company has 27 outlets in Singapore and seems like they are everywhere in Singapore. The questions you have to ask is whether they have reached their maximum potential? Can they bring their business model elsewhere?

Financial Highlights


You can see an interesting trend. The retail trading of pre-owned jewelry generated a lot of revenue but little profits whereas the pawnbroking business generating little revenue but contributed a lot to the profit. As i told you above, it is a glorified and legalized  "lender of last resort" (didn't want to use the name of a fish here). The profit margin of retailing is 2.2% whereas that of pawnbroking is 32.6%!


Based on the post-invitation share cap of 353.8m shares, the EPS assuming the service agreement is in place is around Singapore 1.485c, At the IPO price of 30c, it is listing at a historical PER an unbelievable 20x! I hope the forward earnings (which i am not privy to) better justify this high PE.

Use of Proceeds

The IPO proceeds will be used mainly to expand outlets and for working capital.

Dividends

The Company did not pay out any dividend since incorporation (which is good) but did not commit to pay out any dividend in future either. I would expect the cash dividend to be paid once the business reaches maturity.

Shareholders

The shareholding structure is pretty simple. The founders (more known as the business owners of Soo Kee and SK Jewellery) owns about 84.7% of the Company post listing with the public holding only the remaining 15.2%. I understand from sources that the founders even helped placed out half of the public shares (to families and friends?), which explains why the demand is very hot and is very difficult even to lay hands on the placement tranche.

Story on the pawn-broking industry here

This is what i heard from a person who works in this industry. I am not sure if this is true but you can tell me. There are two types of licenses issued. One is the type of license held by Maxi-Cash and Money-Max. They come under the 'new type' of licenses issued where they can operate more outlets with less paid-up capital but they have to fulfill certain conditions.  I understand the new type of license was given because Singapore wants to clean up this industry which in the past, was more 'shady' and less 'institutionalized'. You can see that Moneymax is actually "CaseTrust" accredited!

Key Competitor

The one and only key competitor is Maxi-Cash Financial Services Ltd which was listed on 22 June last year. My earlier preview last year is here.

Similarities between Money Max and Maxi-Cash
  • Both the owners own a Jewellery business (Maxi-Cash owners own the Goldheart, Lee Hwa and Aspial chains)
  • Both shares are listed at $0.30. (I believe Maxi-cash has a subsequent share split)
  • Both users local artistes to as their brand ambassadors.
  • Both are listed at historical PER of >20x
  • Both have outlets all over the place. (Maxi-Cash has around 29 outlets)
Maxi-Cash

Maxi-Cash's public tranche of 2.25m shares was 88.5x subscribed. The IPO price (adjusted to $0.208) went up by 30% on its first day. After one year, the share price has more than doubled and the market cap now stands at $200m. Maxi-Cash is currently trading at a multiple of 43x!  For FY2012, Maxi-Cash reported revenue of $100.5m and net profit of $4.2m. The adjusted EPS is around 0.975 cents. Hence from a valuation angle, MoneyMax offers better relative (not absolute) value vis-a-vis Maxi-Cash. However, Maxi-cash paid a dividend last year.


Will MoneyMax follow the footsteps of Maxi-Cash as well in terms of share price movement?

What i like about the Company
  • Simple business to understand.
  • Strong historical growth trajectory
  • The Company "discontinue" sales to Soo Kee and SK Jewellery from corporate governance perspective.
  • Offers relatively better "value" than its key competitor, Maxi-Cash
My concerns
  • Is the company reaching saturation point in Singapore?.
  • Is business scalable beyond Singapore since this is a licensed industry?
  • High valuation 
  • Small Float
Mr IPO's views and ratings

On one hand, my mind is telling me the company is over-valued on a stand-alone basis, on the other hand, my heart is telling me that this will somewhat follow the footsteps of Maxi-Cash. The fact that Maxi-Cash is grossly over-valued is "helping" the case to push for a higher Chilli ratings for MoneyMax. I understand the demand for the placement tranche of MoneyMax is very strong. Given the small public float and well organized placement exercise, I will give it a 3 Chilli ratings for this IPO. Please note that I am vested.

Wednesday, 24 July 2013

OUE Hospitality Trust - Balloting Results



OUE Hospitality Trust ("OUE HT") announced that its public offering was 19.1x subscribed. This is pretty strong set of subscription numbers, thereby endorsing its "decision" to do this IPO one day after SPH REIT. Trading will start tomorrow at 2pm. The announcement is here and the press release is here.

The balloting table for the public offering is as follows:


You can see that investors who applied for less than 50 lots receive 61.7% of the public offer and have a higher balloting ratio as well. ^_^ 

Mr IPO's result

Only used one account to apply this time and it is salted vegetable life this week despite the good probability. :(



Congratulations to those who got the shares. Don't ask me what to do with your money. I have given you what i think will be the fair value range




Tuesday, 23 July 2013

SPH REIT - Balloting Results

SPH announced its balloting results.

The placement tranche was oversubscribed 42x and the public offering was oversubscribed by 25x. 

The balloting table is as below:

It is not difficult to get. If you apply for 50 lots, you will get 50% chance of getting 4 lots each, which in my view, is very low quantum!!

Mr IPO's results

Ok not successful for me but wifey got 3 lots.  Probably I never wear my red underwear when i apply for the shares.  :(

But thankfully, still have 15 lots from placement tranche :P

Happy IPOing.


Rex International Holding Limited

Rex International Holding Limited ("Rex" or the "Company) is offering 142.5m new shares at $0.50 each for a Catalist listing. 140m shares is for an international placement (outside USA) and 2.5m shares is for a public offering. There will be an over-allotment option of 28m shares if exercised. The IPO will close on 29 July 12pm.  The market cap prior to the over-allotment option is S$488.34m and that will make it one of the top 5 Catalist companies in terms of market cap.

The link to the prospectus is here.

Principal Business

Rex is independent oil and gas exploration and production ("E&P") company. It is somewhat similar to KrisEnergy (if that is what you want to ask) except that it claimed to have access to a proprietary and innovative exploration technologies called "Rex Technologies" which helped to mitigate exploration risks and reduces costs of exploration.

Rex Technologies

According to the prospectus, the technologies were developed by the founders, Dr. Karl Lidgren and Mr. Hans Lidgren. It comprises of Rex Gravity, Rex Seepage and Rex Virtual Drilling.  


Basically, it allows seismic responses to be interpreted and accurately pinpoints the exact location of oil reservoirs. (sounds quite interesting to me but i have mentioned in my previous post on KrisEnergy that i am a layman). The application of Rex Technologies significantly reduces the need for exploration and appraisal drilling, thus reducing the time taken, risks and costs involved in the exploration process.

According to the prospectus, it has been 100% accurate in its prediction on 18 external tests  conducted over the last 24 months and the success ratio for drills using the Rex Technologies has been in excess of 50%. (That is pretty high in the Oil & Gas world). 

The access of this technology has allowed Rex to procure concessions in the Middle East, licenses in Norway and participating interests in the USA. Below is a table demonstrating the "superior" Rex Technologies.


Concessions

The concessions acquired by Rex is as follows:


It is interesting to note that they have started drilling on the first well in USA on 7 May 2013 and the production is expected in Q4 2013. They will also start drilling in Middle East and Norway. Further details on the concessions are as follow:


International Network of Strategic Partners


The company has a good panel of strategic partners.

Financials


Frankly, nothing to talk about except that this is a loss making company still trying to "get the oil flowing". Somewhat similar to KrisEnergy except that it is even more early stage and have not incurred much exploration costs?

Use of Proceeds

We must know where the money is going into and they are mainly to pay for drilling expenses. In other words, you have to trust the management to drill the right holes.


Shareholders

The founders will hold about 55% of the company post listing. The other shareholders as follow (assuming over-allotment in full).


What i like is that the Pre-IPO investors are not cashing out at the IPO price. Pre-IPO investors came in at around 40c except for Shroders who paid only low 0.87 cents! The pre-IPO investors in Singapore consists of the "who's who" include Tommie Goh. However, what i don't like to see is that Asia merchant Capital II Limited is a PE Fund related to Prime Partners, who is also acting as the Manager and Sponsor of this deal. There could be potential conflict of interest (i am not suggesting that there is). The list of pre-ipo investors is on page 84. Fram shareholders consist of some HNWs and PE funds and the list is on page 92 of the prospectus.

What i like about the Company
  • Interesting proprietary technology which they can 'license' out or get oil concessions.
  • Less capital intensive vis-a-vis a normal E&P company
  • Potential to 'struck oil' faster
My concerns
  • An early stage and small company in exploration play
  • High valuation of Company. Not sure is it for the concession rights or for the intellectual property of the company.
  • Oman is not known for its Oil & Gas play.
  • Rex Technologies is not 'proven' 
  • Investors are bearing the risk of exploration.
  • Assets are located far away from Singapore and this means key management are not based here either. 
  • Unlike KrisEnergy, there is no "key independent and strategic" shareholder to "validate and support" the IPO valuation
  • Unlike KrisEnergy, the management team is not proven yet.
Mr IPO's views and ratings

This IPO is riding on the "coat tail" of KrisEnergy which I have given it a 3 Chillis rating previously. KrisEnergy has performed respectably on its debut and the interest might spill over to Rex International. As mentioned, i am not an Oil & Gas expert although i do like the sector. 

I am giving it a 2 Chilli ratings based purely on gut feel that the interest from KrisEnergy will spill over. (This view might change if price of KrisEnergy collapse in the coming days. If you intent to apply for the shares, you might want to do it nearer to the IPO closing date. ^_^) 

Investors will need to take a leap of faith that the management will deliver in the next 12 to 24 months as they are bearing the costs of exploration. 

Please note that i am vested and my intent is as what the rating mentioned - "hit and run". 

(will post a picture of my ratings going forward)





Sunday, 21 July 2013

SPH REIT or OUE HT

It was a fun weekend. Thanks to Facebook readers who participated in the 'online' poll. The poll question was:



Thanks to the support, we have quite a few comments. 




Please become a friend if you want to participate in future polls and you can private message me on FaceBook as well. I will try to answer all messages whenever i can.

Back to the question on SPH REIT or OUE HT. My analysis as follows:



SPH REIT

The peer valuation indicate that upside for SPH REIT is limited as it was priced at the top end of the book-building range. However, this was a function of the overwhelming demand from institutions which resulted in a staggering 42x over subscription under current market conditions. As such, there could be spill-over demand from investors who were not allocated in full. In addition, the public tranche is quite decent and i think retail investors will want to participate given that SPH is a well known brand and you can see the advertisements on the REIT for the last few days. I think retail investors will probably be out in full force.

In this regard, in my view, if you want to flip SPH REIT, it is possible but you will need to a decent allocation of at least 5 lots to cover your commission. That means applying 20 lots or more at the ATM.

OUE REIT


Surprisingly we see the CEO saying leaving something on the table for investors. Based on my analysis above, that is quite true as it is slightly more attractive priced against its peers.

Again, in my view, if you want to flip OUE HT, it is possible but you will need to a decent allocation of at least 5 lots to cover your commission. That means applying 20 lots or more at the ATM.

What will Mr. IPO do?

Mr. IPO intends to apply for both IPOs and flip it but it will probably not be as profitable as KrisEnergy. 

Happy IPOing


Friday, 19 July 2013

Singapore Kitchen Equipment - Balloting Results

Singapore Kitchen Equipment ("SKE") announced its balloting results.

The offer was around 5.6x subscribed and the balloting table is below.


I never apply for this so good luck to those who are successful.

Thursday, 18 July 2013

KrisEnergy Ltd - Balloting Results

KrisEnergy announced its balloting results. The announcement is here.

Balloting Results - Public tranche

The balloting table is below. The public tranche was oversubscribed by 22.9x. 

It is not easy to get it. If you apply for 10 lots, your probability is 20%. The probability improved to 30% for those who applied for 50 lots and 40% for 100 lots.

You can see that those who applied for 100 lots will get the lion's share of the public offer.

Directors' and Investors who receive more than 5% of the Offering



First time i see the directors so "on" and so many of them applied for the shares. haha hope they are not "flippers". :-P

Anyway, the investors who get more than 5% of the shares in the table above. Good to see Fidelity there.

Mr. IPO's balloting results


Mr. IPO is pretty lucky this time. Got 18 lots for his own account and 9 lots from wifey's account (not declared to her). keke.

Don't ask me how I did it or what is the secret ^_^ cos i won't tell you.... :-P

OUE Hospitality Trust


OUE Hospitality Trust ("OUE HT" or the "Trust") finalized its offer at the 'bottom' range of the book-building range of $0.88.

OUE HT is offering 434.598m Units of which 383.462m will be via placement and 51.136m Units via public offer. The Sponsor will receive 626.782m Units and the Cornerstone will subscribe for 247.22m Units. The market cap for OUE HT will be $1.738 billion. There will be an over-allotment of 68.182m units. The final registered prospectus is here.

My preview post is here. Again, i will not repeat what i have previously discussed in the preview post but dive straight into the key points.


Key timetable
18 July 2013:   Public offer starts
23 July 2013:   Public offer ends at 12pm.
25 July 2013:   Starts trading at 2pm.

Forecasted yield


One way in which you can view this is that you are 'guaranteed' a minimum yield of 4.5% due to the master lease agreement and long term lease at the retail mall.  The upside will come from the hotel hospitality business.

What i like about OUE HT
  • Opportunity to invest in Mandarin Orchard and Mandarin Gallery on Orchard Road.
  • Stable distribution with downside protection due to long term master lease agreement
  • Right of first refusal on the Sponsor's pipeline
  • An experienced CEO with track record.
My concerns
  • Relatively shorter lease life of the properties

OUE HT has a projected yield of 7.36% and price to book of 0.97x and leverage of 33.8%. 

Ascendas HT is trading at 8.6% yield and price to book of 1.04x. Leverage 35%
CDL HT is trading at 6.4% yield and price to book of 1.07x. Leverage 28%
Far East HT is trading at 5.9% yield and price to book of 0.97x. Leverage 29%

Mr IPO's comments and ratings

Given the peers' valuation and that they are not exactly comparable, i think OUE HT is priced fairly. My gut feel is that it will probably trade between yields of 6.8%-7.5%. In this regard, it will represent a trading range of between 86 cents and 95 cents with slight upside bias from its listing price.

Frankly i am not sure why they have to close the IPO one day after SPH REIT. Investors will be forced to choose and split their cash application and this may not work in OUE H-Trust's favor given that SPH REIT has been priced at the top of its range due to overwhelming demand.

I am going to give OUE HT a one chilli rating as well but if you asked me to compare between SPH Reit and OUE HT, i think SPH REIT is probably going to perform slightly better than OUE HT post-listing.  

I will not have placement shares on OUE HT and will spend the next few days thinking about whether i will apply for this.

Happy decision making! ^_^ but don't ask me to make that decision for you please...

Wednesday, 17 July 2013

SPH Reit


SPH Reit launched its IPO at the top end of the book-building range of $0.90 and the placement tranche was a whopping 42x oversubscribed and i have to admit i am surprised by this 'overwhelming' demand which unfortunately depressed the yield and potential upside.

My preview post on 11 July 2013 is here and the final prospectus is here. I will not repeat what i had said in my earlier preview post but will highlight what i think will be interesting to readers. (Can someone email me the SPH REIT booth at Raffles Place if they see one?)

Issue details

Placement tranche: 224.902m Units
Public tranche: 83.982m Units
Cornerstone:  251m Units
Application closing date:  22 July 2013 12pm
Listing date: 24 July 2013 2pm
First distribution: On or before 27 Feb 2014


Forecast yield

At $0.90, SPH Reit will distribute a forecasted annualized yield of 5.58% for 2H FY2013 and 5.79% for FY2014

What i like about the REIT
  • Premier upscale retail mall at the heart of Orchard Road
  • SPH continue to hold 70%, which creates strong alignment of interest  
  • Fresh 99 year leasehold on Paragon and close to 99 years on Clementi Mall
  • Exposure to the healthcare services sector which is resilient (via Paragon)
  • Right of First Refusal on SPH's properties.
  • Leverage of 27.3%
What i don't really like
  • Paid a slight premium to NAV
  • Artificial income support by SPH to Clementi Mall
  • Starhill Global is trading around yield of 5.67% and a price to book of 0.88x (leverage 30%)
  • Capitamall is trading around 5.03% and a price to book of 1.21x (leverage 35%)
  • Frasers CT is trading around 5.6% and a price to book of 1.24x (leverage 30%)
  • Suntec is trading around 5.76% and price to book of 0.77x (leverage 36%)
Mr IPO's views

Looking at the peers' valuation, the yield seemed to be between 5% (Capitamall) to 5.7% (Suntec) and between 0.77x (Suntec) to 1.24x (Capitamall) in terms of price-to-book. I will not use the price to book as the benchmark has proved to be too wide ranging.

Assuming a yield of between 5% to 5.7%, the trading range will be between 88c and 99c. 

Don't expect any fireworks as the REIT is priced fairly. The "overwhelming" institutional demand and "over-allotment" stablization will probably lend support to SPH with slight upside potential. 

I will give it a 1 chilli rating. I would have given it a higher rating if it had been priced at 85c. Investors may be better off buying into SPH which gives the investor an exposure into both REIT and publishing. (I have not done any work on this idea though, you may want to work out your sums and tell me the results).

Happy IPOing. I will be vested via some placement shares.

Sunday, 14 July 2013

Singapore Kitchen Equipment Limited


Singapore Kitchen Equipment Limited ("SKE" or the "Company") is offering 23m New Shares at $0.20 each of which 2.25m is for the public and the balance 20.75m via placement. The prospectus is here.

The IPO will end on 18 July at 12pm and will list on Catalist. The market cap will be $30m.

Principal business

The Company was founded in 1996 and is a leading Singapore-based commercial and industrial kitchen solutions providers for the F&B and hospitality industry.

It currently markets the Qson brand  of kitchen equipment and clients include Jumbo Group of Restaurants, Ah Yat, Soup Restaurant, Pu Tien and Hard Rock.

Financial Higlights


The revenue has been growing slowly from $15.1m in FY2010 to $16.6m in FY2012. The net profit grew from $749k to $2.237m (excluding one off gain) during the same period.

Assuming the service agreement has been in place in FY2012 and removing off all the one off gain, the net profit will come in at $1,874,740. The EPS will be around Singapore 1.25 cents. That translate into a historical PER of around 16x. Not exactly good value if you ask me.

Dividends

The Company intends to distribute at least 40% of its net profit for the next 3 years. Assuming recurring EPS of 1.25 x 40% = DPS of 0.5 cents, the dividend yield will be around 2.5%. That is probably quite achievable given the stability of the business. 

Shareholdings

The husband and wife team will hold around 54% of the company with another executive director holding 27%. The public will hold around 15%. As such, the free float is extremely small.

My Views and Ratings

This is a small cap company in a very niche segment. Some of its clients like Soup Restaurant is listed but trading at 11x PE. One of the independent director Eugene Wong is pretty well connected within the F&B Segment as he sits on Japan Food, Neo Group etc and his fund invested in the Paradise Group as well. 

In my view, the historical valuation is pretty expensive at 16x PE unless the company can scale up its profitability post listing. The low IPO price of $0.20 and the low free float would probably mean that share price can be supported if placed out to strong hands. I will give it a one chilli rating and kudos to CIMB who at least let the public has some chance to invest in the Company if they want .

KrisEnergy Ltd


KrisEnergy Ltd ("KrisEnergy" or the "Company") is offering 151.993m shares at $1.10 each for each for which 132.093m will be for international offer and 19.9m shares for the public. The offering will be upsized by another 30.398m shares if the demand is good. The prospectus is here. The market cap will be $1.15b based on the IPO price.

The IPO will close on 17 July 12pm.

Before you read further, i have to warn you that i am not an oil & gas expert, I do not know how to value this company nor its oil and gas reserves. What i have written below are based on my layman knowledge and pure gut instinct. I like the upstream segment and has positive vibes on this company and my views are very biased.

Principal Business
KrisEnergy is an independent upstream company focused on the exploration for, and development and production of oil and gas in Southeast Asia. It has 14 contract areas in four countries and is involved in the entire exploration-to-production life cycle.

Use of IPO proceeds

There will be no vendor sale (except during over-allotment) and the proceeds from IPO will be used for the following reasons
30% - acquisitions
55% - capital expenditures
15% - working capital

Financial Highlights

The financials above showed losses for the last 3 years but frankly we should look beyond the figures because the Company is just starting up and incurring exploration costs to develop its oil and gas fields. A better "non IFRS" financials to use will be the one below.


I will jump straight into the figures that matter most. Let's take a look at the average realized sale price and the revenue and EBITDAX figure. In case you don't know what EBITDAX means, EBITDA = Earnings before interest, tax, depreciation and amortization. X means exploration cost. The EBITDAX for the last three years have been fairly impressive considering that the company was only founded in 2009. The EBITDAX is around US$47m to US$62m. 


The EBITAX has hovered consistently around US$60m. It should go up if more production comes on stream as assets become mature.

Reserves


Frankly, I don't know how to value the reserves. I am no expert but just know that 2P reserves is like "proven at 50%" and 2C is the more risky ones and 1P is the "best" proven reserves.

Shareholders


KrisEnergy is owned by First Reserve and they will still own about 45.2% assuming the over-allotment is exercised. Keppel Corp will own around 31.4% of the Company and Cornerstone will own 5.1% with the balance held by public investors. In 2009, First Reserve backed the management team with $500m of equity. Obviously, they must have done their homework and due diligence on the management team.

Another comfort i have is that Keppel Corporation is paying about $0.91 per share. It is not really too far away from the $1.10 IPO price and will form a 'psychological support'. The cornerstone investors will also be coming in at $1.10 per share, although i don't really have much to talk about the cornerstone investors.

What i really like about the Company
  • Experienced and proven team. This team has at least 20 years of experience in the oil and gas industry in Southeast Asia and a proven track record. The founders have worked together since 1997, having established, list and divest Pearl Energy. (See paragraph on "Another Pearl Energy in the making" below.)
  • The concessions are widely diversified in Southeast Asia. See picture below. It helps spread out the geo-political risk and the expertise can be reassigned from one area to another depending on the stage in which they are in (exploration or production etc).
  • The diversified portfolio allows the company to use the cashflows from the more mature assets to fund the exploration and development of the less mature assets. Oil fields in SEA are still vastly under developed and there is a huge pent up demand should the potential be realized.
  • Keppel Corporation is the controlling shareholder. Obviously, Keppel, being one of the largest rig makers in the world, has already done its due diligence on the Company. It's acquisition in KrisEnergy is obviously strategic as it allows Keppel to move up the value chain to upstream. Having a strong parent in Keppel bodes well for the firm. Keppel recently exercised its call option to buy another 16% in the company. The news is here. In total, Keppel will own 31% of the Company post listing.
  • First Reserve is a big PE firm specializing in this sector, having backed many successful companies and is one of the best in this space.
  • One and only listed company that is in this space listed on SGX.
My concerns
  • Exploration is a high risk high reward game. The Company may not "hit" pay dirt after exploration and all the costs may go to waste.
  • The Company will need all the cash it needs to develop the oil fields and will not be able to pay dividends for many years.
  • The current NAV per share (adjusted for IPO proceeds and shares) is around $0.58 (versus the $1.10 share price). Are we paying too high a valuation for future "unknown" earnings?
  • CEO is pretty advanced in age at 66 years old.
  • First Reserve may want to cash out in the next few years and sell down its shares.

Another Pearl Energy in the making?

If you have been watching the market for as long as i had, you will remember a similar company listed in Singapore called Pearl Energy.  Pearl Energy was listed in April 2005 at $0.70, very well received and debuts above 90c on the first day. It was delisted in March 2006 at $1.95 and the news is here. This is also reflected in the prospectus and it is the same team which we will be 'backing'.


Mr IPO's views

I don't have a fair value for you as i don't know how to compute one. Most similar E&P companies listed in US are loss making as well but their share price will shoot up whenever they discover a huge proven reserves. This investment is not suitable for everyone and in my view is pretty high risk. However, there are several mitigating factors such as a strong controlling shareholder buying in at 91 cents, a proven management team and one and only E&P company listed on SGX. In this regard, i will give it a 3 chilli rating (based purely on gut feel). Will it be Déjà vu one more time on debut?

I will try to find out more about the demand for institutional shares next week and will post it in my comments section. Check back here if you want the latest updates and whether Mr. IPO will apply for the shares.



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