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Sunday, 13 January 2008

Afor Limited

(IPO booth at Raffles Place. It was unusually crowded due to freebies offered by the launch of My Paper).

Afor Limited is a one-stop premium retailer specialising in the sale of Apple brand products and its complementary products.

1m public shares at $0.33 each
22.5m placement shares.
Issue Manager: DMG & Partners and Primepartners Corporate Finance
Closing date: 16 January 2008

FY2007 ended 30 June 2007

Revenue - S$60m
Net profit - S$3.47m
EPS based on post share cap of 93.5m = 3.71 cents
PE based on IPO price - 8.9x

This is basically the listing of a mama shop selling someone else's product. While we can easily write off this company as one without its own products and is just a concept retailer, the encouraging thing about this entreprenuer is that he has shown you that if you have the correct concept and know the market well, you can be profitable.

A retail shop selling Apple products is more profitable than Creative with its own brands and patents?! Creative should perhaps just concentrate on R&D and sell its technology to Apple for marketing and branding.

Anyway, Apple products have also given people as the 'cool' thing to have, and the next in-thing will be the iphone that will be brought into Singapore in 2008. Challenger 1H07 sales is $65m and net profit is $3.8m, assuming a full year profit of $7.6m, the EPS is 4.06 cents and PE is around 6.77x. Challenger is trading at a cheaper valuation as compared to Afor.

Conclusion: There are better stocks with cheaper valuation around.

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