Old Chang Kee Ltd

(Old Change Kee Store at Golden Shoe)

This is the first IPO stock on the Singapore stock exchange to be launched in year 2008 and i must say the Company is either very brave to have its IPO launched or very desparate for cash.
Westcomb did not set up any booth to distribute the prospectus and i believe that is financially wise since the public tranche is only 1m shares and this is really a 'microcap' company.

Share price - $0.20
No. of shares - 25m (24m placement, 1m public)
Issue Manager - Westcomb
Closing Date - 14 Jan 2008

With the post-ipo market cap of only $18.7m, this is really a micro cap company. My comments is that unless you are in love with Old Chang Kee curry puff and believes that the puff'o will dominate the world market one day like McDonalds, you avoid this stock. The financials for 2007 1st half actually showing the Old Chang Kee is 'stagnating' with no growth. Put it this way, the raw material prices are increasing but can OCK pass on the costs to consumers?

Assuming i give the most bullish forecast where 2007 EPS (post-IPO) is 3.5 cents, the Company is trading at 5.7x PE. I think that is already fairly valued for a company that is currently not showing any growth. With low barriers to entry and difficulty in scaling up this business, my suggestion is to avoid this counter and give it a 1 chilli rating. Perhaps this company may because more valuable as a 'shell company' for acquisition eventually (in a reverse takeover).