Saturday, 6 July 2013

ISOTEAM LTD



This is getting out of hand... a 3rd Catalist listing in a row with no public tranche. The Managers and underwriter all lost "something" during the recent turmoil that they don't dare to do a public tranche or they know the public has become smarter? :-P

ISOTEAM ("ISO" or the "Company") was founded in 1998 and is a building maintenance and estate upgrading "specialist". The Company spend a lot of time projecting its "green image" (which is good) but at the core, it is just a maintenance and contractor involved in Repairs & Redecoration Works ("R&R") and Addition and Alteration works ("A&A").

The Company is apply to list on Catalist and is offering 32.2m shares at $0.22 each via placement. The prospectus is here. The offer will end on 10 July at 12pm. The market cap post IPO is around $25.9m

Financial Highlights


I think they should use something which investors can see clearly. Such picture above is not very helpful. Anyway, revenue grew from $26.6m in FY2010 to $35.4m in FY2012 and net profit grew from $2.6m to $3.4m in the same period (even though there was a blip in FY2011). At least this company looks and feels more "promising" than the fasteners company just reviewed. (not that i am recommending a buy).

The EPS assuming service agreement is in place and based on enlarged share cap is 2.09 cents. That translate into a listing PER of 10.5x. The order books looked pretty good and that may translate into better earnings in FY2013 and FY2014.

Shareholders


Interesting to see Nippon Paint Singapore taking a stake in this company. Probably due to the close working relationship between the 2 firms.

My Ratings

You know i am not a fan of small cap catalist companies and the fact that there is no public tranche render my Chilli ratings "useless". Are they trying to make me out of job? :-P 

In any case, i would have given it a zero to 1 Chilli rating if there was a public tranche.

Not getting too happy watching from the sidelines (again). Hope i will get some real IPO soon!!

33 comments:

Anonymous said...

Mr IPO
I m impress with their 'green' initiative as they are currently upgrading my estate. I think they r very different from other Renovation Contractors in town. I have faith on it. Can I invest on them for mid long term? What do you expect on its share performance?

Anonymous said...

Hi Mr IPO, I personally love the format as it is very creative to use what the company is doing to represent the bar charts. Nevertheless, important is the proft and the order book are both quite positive. I will consider to invest on it. What do you advice?

Anonymous said...

Hey IPOGuru, it is Okay without public tranche. Won't it be safer if only place out to close relatives and friends. Company will ensure it is profitable as not to disappointed their relatives / friends.

Mr. IPO said...

3 comments from the same person or not ah? Anyway, my replies as follow:

1. If you like what they are doing and would like to invest in them, please do so but i wouldn't be able to tell you what the share price performance will be.

2. Revenue and net profit seemed to be on an uptrend with a good order book. But not for me personally. I don't like the industry and the small cap per se.

3. It is ok without public tranche of course. But it also means you wouldn't be able to buy it at the IPO price if everything is via placement. I am not sure if it is "safer" to place out to close friends and relatives but that is one way to look at it provided the friends and relatives are vested for a long term.

Anonymous said...

Dear Mr IPO
its price if 0.22 over valued or reasonable?
I am looking for short term gain

Mr. IPO said...

Ok probably you took the placement. I think short term wise, the low price should be supported but it depends on two things. The people they placed out to and the forward earnings. Both of which I am not privy to. If I have to guess, I think will open around 22-26 range. 10x historical is not cheap for a small cap company in a niche area.

Anonymous said...

Thanks Mr IPO for your opinion. BTW, the prospectus shown that PE is 7x not 10x. How you arrive 10x? Have a pleasant weekennd.

Anonymous said...

Do you hint that anything > 0.26, is not advisable to invest?

Anonymous said...

Good day. I posted the 2nd comment. Thank for your professional view.

Mr. IPO said...

7x is based on the old share cap structure before the public comes in and before accounting for the new service agreement. I usually use the enlarged share cap because nothing has changed due to the listing and investors like you and me comes in at the public tranche.

I won't be able to tell you whether above 26c is a good buy unless you can tell me what this years and next year's EPS will be. I am not even saying 22c is a good buy. 22-26 is just a guess of the opening price range. Haha.

Anonymous said...

Thank you. Will you be continue to provide 'opinion' after the opening? I am looking forward. How you view PS?

Mr. IPO said...

Nope. I do not usually provide opinion post listing. That will be the role of Mr. market. ^_^

Anonymous said...

MR IPO,
SINCE U SO 'NEGATIVE' ON SMALL CAP IPO OR LISTING @ CATALIST, I GUESS INVESTORS SHALL STAY OUT FROM ALL OF IT? BTW, THE LISTING REQUIREMENTS @ MAIN BOARD R SO HIGH NOW, HOW MANY LOCAL SME R QUALIFY? ANY UPCOMING MAIN BOARD IPO THAT U RECOMMEND BESIDES REIT?
MIKE LUDGE

Mr. IPO said...

Well. I leave it to other investors who can better appreciate the small caps. This is just my view. Once in a while, a gem might appear. Haven't taken a look at the pipeline yet but I think there is one or two that can be interesting. An energy play which Keppel recently took a stake.

Mr. IPO said...

And please don't "shout" next time or I won't answer. :-P

Anonymous said...

THANK U SO MUCH.

Anonymous said...

Hi, all the interesting comments. But seem like you always negative about small cap IPO. Hope you can give some encouragement and possitive supports to our local SME.......

Mr. IPO said...

Err...Do you mean I need to say good things about them even when I don't believe in them...?

Mr. IPO said...

But having said that, I am also negative on big caps. Hahaha. Like Asian Pay TV etc. so it is driven more like fundamentals valuation than whether it is big or small caps per se.

Anonymous said...

But, sure not 100% all bad ma. Suggest you give some possitive comments on those 'potential' SME in order small investors like us can invest. Anyway, just my two cents worth of thinking. Enjoying reading your posting.

Mr. IPO said...

Hahaha. Unfortunately I don't have the skill sets to pick out the good potential SMEs for IPO. having said that, there are many SMEs in the open market which one can consider. During a crisis, buying into SMEs that are fundamentally sound will yield better results. Actually hor, if you look at my SRS portfolio, I do have a few SMEs. NeraTel, UMS, Riverstone. So you can't say I don't support SMEs hor. Haha

Anonymous said...

Boss, those are already grandfather time liao. Anyway, thanks for your sharing.

Anonymous said...

Hi Mr IPO, can you kindly recommend a book that could give me an introduction on how to analyze like the way you do please?

Mr. IPO said...

The book is "how to differentiate the gems from stones in IPO" written by Mr. IPO to be released soon. ^_^ ... I will treat your comments as a compliment. Haha. Let me think about it and revert.

Anonymous said...

Thanks.. Would love to study more about these..

Ong said...

Mr IPO. Please post who you think is collect. Support you.

Mr. IPO said...

Ah Ong. You meant post what I think is correct ? Don't worry, I always do that. Keke or else won't have supporters la. Haha

Anonymous said...

Hi, the real action is here! I hope! Can you do a post on SPH reit? Its draft prospectus is available already. Btw, do you know the opening date for placement?

Wilson said...

Hi Mr IPO

SPH Reit and OUE Reit have both lodged their preliminary IPO prospectus.

What are your views?

Cheers.

Mr. IPO said...

Haha both rushing to be first ah.... :-P

Few months ago I would have been very excited...
Now ah... Need to think thrice...

Mr. IPO said...

Hi Mr IPO, can you kindly recommend a book that could give me an introduction on how to analyze like the way you do please?

After giving it much thoughts, frankly, i don't know if there is a book that will teach you to "analyze like how i do".

It has been a combination of knowing how the various valuation methodologies work + paying school fees to Mr. Market + experience gained over the years + watching the markets + reading widely.

As such, my views are very biased due to my personal experiences. So you have to accept that when you read my blogs. Just like i am biased towards small caps and China stocks :P

Anonymous said...

Dear Mr ipo,

Congrats. You seem to have attracted quite a lot of new readers.. I think it is good; though many of their comments are of poor quality... Perhaps, they would benefit and learn from you along the way...

I really respect your patience and your generosity.

Mr. IPO said...

Wow kana cornered. Haha

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