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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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Yongmao Holdings Limited


(a very small IPO booth at Raffles Place)

3.8 million Public Offer shares at $0.35 each
107.75 million Placement shares at $0.35
Manager, Underwriter and Placement Agent: CIMB
Closing date: 19 Feb 2008

Yongmao Holdings designs and manufacture a wide range of towercranes and towercrane components and accessories. You can have a detailed write up at Kleer's blog, thus i wont waste time to repeat the same information.

Q1 EPS based on enlarged share capital is 1.73 cents and using a simple Q1 EPS x 4, the EPS for FY2008 (ending 31 March 2008) will be 6.92 cents. Based on the IPO price of 35 cents, it attractively priced Yongmao at only 5.06x PE. There will be potential upside as the Company is running at close to full capacity and that the proceeds will be used to double its current capacity and the new manufacturing facility will be completed by end of this year. Another good thing which i like is the diversified customer base from differing geographical regions.

I cant think of any similar companies listed on SGX. Tat Hong, one of a substantial shareholder of Yongmao, is trading at around 12-15x PE. Assuming a fair value of around 9-11x, the fair value should range from 63 cents to 76 censts. I think the IPO price of Yongmao is attractively priced for a strong stag. Try your luck at the ATM!
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