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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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Sinostar


(IPO booth at Raffles Place)

It has been such a long time! Parkway Life REIT was last listed on 23 August and the next IPO will only list on 26 September. Well, at least it is a good sign and indication that the IPO market could be reviving and thankfully they send a more decent looking one to test the market. I will come up with a more detailed analysis over the next few days (fingers getting too rusty already from the lack of writing). Check back here again for a more detailed update and the 'fair value'.

Just by looking at the industry and the pictures on the prospectus, i would give it an interim 'stag and 2 chillis rating'.





Public shares - 5m
Placement shares - 155.4m
Price - $0.38
Managers - Jointly by SBI E2 Capital and CIMB

The Company is one of the largest producers and suppliers of downstream petrochemical products and are engaged in the fractionation of raw LPG for the production and sale of propylene, polypropylene and LPG.

The profits for Sinostar ramped up spectacularly in FY 2006 where net income is S$19.321m on sales of S$199m. It is a pity that there is no 1H2007 figures in the prospectus. Sales and profits are likley to exceed 2006 figures. Assuming a 30% increase in net profit in FY 2007 and a 30% increase in net profit in FY 2008, the net income will be $32.6m. Based on the post capital shares of 640m shares, the EPS will be 5.1 cents. Based on a fair market PE multiple of 10x-15x, our fair value is approximately $0.51 to $0.76. Looks like a stag to me.

Good night.
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your betting partner said…
hi there

just to check wat do stags n chillis mean in terms of rating?

so is this ipo good?
14 September 2007 at 21:42
Mr. IPO said…
Hi Predator,

1 Chili - avoid
2 Chili - Stag (>10% premium at IPO debut)
3 Chili - Hoot (>50% premium at IPO debut)
17 September 2007 at 08:11
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