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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...
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Reyphon Agriceutical Limited


(IPO booth at Raffles Place on a rainy day)

Reyphon Agriceutical Limited is a manufacturer of agriceutical products and its principal products are gibberellic acids and plant antibiotic. The prospectus is here.

Public offer: 2m shares at 39 cents
Placement offer: 76.6m shares
Closing date: 30 July 2007
Manager: Philip Capital



This is an interesting company amidst the hoo-har about food safety in China. China passes its first draft on Food Safety today. The tighter regulation for food safety will actually mean good news to ISO-certified agriceutical companies like Reyphon and i believed Reyphon is 'first-of-its-kind' listing on SGX. I cannot recall a similar companies in this field. The listing of this company also means a windfall for Sinomen as it holds 52% of Reyphon post-IPO.

The growth of this Company has been very impressive and it is likely that this growth can be sustained with the increased in production facilities post its listing. EPS for 2006 based on post ipo share of 313.8m shares is Singapore 2.694 cents. Assuming its profit grow by another 50% in 2007, the EPS will be 4.041 cents. Based on valuation matrix of 15-20x PE, the fair value price will range between 61 cents and 81 cents, a significant upside from IPO price and under current sentiments, it will even exceed my 81 cents fair value if investors priced towards 2008 estimates.

Just hoot it although i must say that it will be extremely tough to get it (what'z new ah?)
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Mr. IPO said…
After doing a more detailed analysis, peers will include China XLX and this China XLX is trading at high PE mulitple!
27 July 2007 at 17:38
Anonymous said…
hi..whats the net effect on Sinomem's share price if, say, Reyphon closes at 80ct?
27 July 2007 at 19:54
Anonymous said…
hi.i thought Sinomem owns 68% of Reyphon...how did you get your figure pls?...

tx!
27 July 2007 at 19:57
2Y Capital said…
68% is before the IPO. Post IPO (i.e including the new shares issuance) the % drop to 52%. It is on page 73 of the prospectus.

It is always difficult to 'quantify' the impact of Reyphon on Sinomen but it will be a positive one. Somewhat like the impact which Swiber has on Swissco.
29 July 2007 at 22:54
Anonymous said…
with 29% capacity expansion ready only during end of FY07
and around 98% utilization rate at the moment... dont think that profit can grow by 50%, at best 30%
2 August 2007 at 10:42
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