Xyec Holdings ("Xyec" or the "Company") is offering 25m Placement Shares at $0.26 each for a listing on Catalist. There is no public tranche and frankly, i don't want to spend too much time on this so please don't expect a lengthy write up.
The IPO will close on 16 Sep and list on 18 Sep and the prospectus is here.
Xyec provides engineering and IT consultancy services for major manufacturing industries in Japan, such as the automobile and aerospace industries.
Its a small revenue generating company with less than S$100m in FY2013 and a net profit of around $1.2m.
The listing PER based on enlarged share cap and assuming service agreement is in place is approximately 14.7x. It is not attractive to me and expensive.
Based on the listing price, the market cap is around $28.61m
The Company intends to pay 20% of its net profit after tax as dividends for FY2014, FY2015 and FY2016.
I will give it a 0 Chilli Rating for the following reasons:
- Expensive listing valuation
- Small firm located in a competitive sector
- A small cap Japanese company listing on Catalist. It is a matter of time before investors here forgets about it and do expect poor trading liquidity and lower valuation to follow suit.
This is not the kind of IPO i am hoping to see. SGX will need to get its act together to attract better companies to list here.