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Singapore IPOs: Why I No Longer Cover Every Listing

Some readers may have noticed that I have not been writing about every Singapore IPO since last year. The simple reason is that life has become busier. Between my day job, an increasingly packed travel schedule, family commitments and desire to play more golf, I have become much more selective about how I spend my time.  Writing detailed IPO reviews takes time — reading prospectuses, analysing financials, comparing valuations and understanding the competitive landscape. While I still enjoy investing and writing, I no longer feel the need to cover every IPO that comes to market. Instead, going forward, I will probably focus only on IPOs where I am seriously considering investing my own money or where there is something particularly interesting that is worth discussing. I suspect this will make the blog more useful as well. Rather than writing about every deal, I can spend more time sharing my thoughts on the handful that I believe deserve attention. That bring...

CMZ Holdings Ltd

CMZ Holdings Ltd produces and sells metal, resin and nylon zippers directly to manufacturers in the mid-high end market of the garment industry. The prospectus is here.

Public Offer: 1.8m shares (very difficult to get from balloting).
Placement Offer: 74.363m
Manager: Omega Capital Limited


Under the current IPO sentiments, it seemed that many companies are rushing out to be listed and this seemingly 'one product' company is no exception (hmm China's YKK ?). The Company managed to leverage on the boom in the garment industry in China to record impressive growth from FY2004 to FY2006. Sales for 2006 is RMB 159.3m (S$ 31.8m) and net profit of 38m (S$7.6m). EPS for 2006 based on enlarged share capital of 304.6m shares is RMB 12.5 (2.5 Singapore Cents). Based on IPO price of 23 cents, it is priced at an historical PE of 9.2x. Assuming EPS grow by 50% for 2007, the 2007F EPS is 3.75 Singapore Cents and based on its listed peers valuation of 10x-15x PE, the fair value for CMZ is in the range of 37 cents to 56 cents.

Good luck if you managed to get this IPO from the ATM! I wasted by my $2 again :(

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