Uni-Asia Finance Corporation

(IPO booth at Raffles Place... not the right timing to get prospectus i guess)

The Company is an Asian-based structure finance arrangement and alternative assets investment firm. The prospectus is here.

Public Offer: 3.3 million shares at $0.55 each
Placement Offer: 62.1 million shares
Manager: DBS
Closing Date: 15 Aug 2007

This IPO is priced very 'cheaply' with a Post-IPO NAV of 51.7 cents versus its IPO price of 55 cents. It is also priced at a historical 7.6x PE based on post-IPO shares of 240.4m shares and FY06 EPS. I believed this IPO will be undersubcribed if it is not priced so cheaply!

Despite being vested from the IPO placement tranche, i would advise investors to avoid this IPO for the following reasons:

1. Companies in Structure Finance business has not performed well post-ipo. Without digging deeper into the amount of dividends paid since listing, as of 10 Aug 2007, Babcock & Brown (structured finance) is still 13% below its IPO price.


2. Companies in "Shipping Trust" business has not performed well post-ipo as well. First Ship Lease Trust is still 7% below IPO.


3. The business is priced in US$ and I believed US$ will continue to weaken against S$.


4. Sentiments towards IPO has been very weak due to the recent market turmoil and the premium above its IPO price for recent listing is less than 10%.


5. ETLA closed below its IPO price, reflecting the weak market sentiments.

While the IPO is cheap, if you are looking for a significant 'stag', I dont think you can find in Uni-Asia. My recommendation is to avoid this company if your intention is to 'punt' the IPO. Put your IPO application fee of S$2 to better use elsewhere.