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Food Innovators Holding Limited

Food Innovators Holdings Limited ("FIH" or the "Company") is offering 14m shares at $0.22 each, for which 13m shares will be through placement and the remaining 1m shares via a Public Offer. The IPO will close on 14 Nov at 12 noon and starts trading on 16 Oct 9am.  FIH has two business models - the first is to be a master lease and sublease the space to other tenants and the second is to operate and manage restaurants.  The Company currently has 12 restaurants in Japan, 10 in Singapore and 4 in Malaysia. The market cap based on the IPO price is around $24.9m. Financial Highlights FIH's revenue grew from $37.8m in FY2022 to $43.8m in FY2024. It is quite funny to see that being a master land lease holder has a higher margin than operating the restaurants, once again illustrating the point that it is better to be a landlord to shake leg and collect rent. According to the prospectus, the PER is around 19x. The Company intends to pay 20% of its net profit after tax a
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Centraland Limited


(IPO booth at Raffles Place)

The Company is a premium brand property developer in Zhengzhou City, the provincial capital of Henan Province, which is one of the most populated provinces in PRC. It is principally engaged in the development and sale of residential and commercial properties.

5m Offer shares at S$0.50 each by public offer
240m Placement shares at S$0.50 each.
Issue Manager: Boulton Capital Asia Pte Ltd
Underwriter and Placement Agent: UOB Kay Hian
Closing date: 30 January 2008, 12pm.

It is really hard to value this company just using a prospectus without knowing where the land is located and the future income stream that can be derived from those properties. This is really the first BIG CAP listing on SGX in 2008 where the post market capitalisation of Centraland is worth approximately S$922.5 million based on the IPO price of $0.50!

Audited FY 2006:

Revenue : S$55 million
Net income : S$ 10.8 million

1H FY07:

Revenue : S$29.8 million
Net income: S$ 4.6 million
EPS (post-IPO shares) = 0.19 cents

Assume full year FY07 revenue is $60m, net come is $9.2m, EPS is 0.38 cents

SGX listed peers:

Yanlord Land has a current market cap of $4.8b on SGX and is considered one of the top property developer in China with strong foothold in key cities. FY06: Sales $952m, net income $170m, EPS 11.36 cents.

China Yuanbang has a current market cap of $201 million. FYJun 07: Sales S$67m, net income $15.6m, EPS 3.1 cents.

Sunshine Holdings has a market cap of $158m. FY06: Sales $119m, net income $30m, EPS 3.8c
Landbank 840,000 sqm.

My Comments:

If you are looking at historical financial figures, mostly likely you will come to a conclusion that the Company is overvalued. Its Earnings Per Share is nowhere near Yanlord and is not even as good as smaller cap companies like Sunshine and China Yuanbang. So what you are paying for is for the 'landbank' which Centraland is holding. While i know where the Zhengzhou City is located, i have no idea how much the land is worth. All I can rely on is the valuation from independent valuer CB Richard Ellis. In addition, i have no idea about the earnings from the current projects that are coming on-stream either.

Since i dont know much about the Company (even from the prospectus) and looking at the marco fundamentals where the stock market is very volatile and the Chinese government's measures to cool the China property market, my personal view is to avoid this sector for now.
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