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IPO Chilli Ratings

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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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Market Sentiments & IPOs

Last Friday we saw that launch of 3 IPOs, namely Joyas, Roxy-Pacific and Liheng, of which the biggest will be Li Heng. The underwriters tried to launch the IPOs when market was in the midst of staging a technical rebound and improving sentiments; what the underwriters didn't expect was the steep decline on Wall Street on Friday which dampened the mood and sentiments on Monday.

This period is one of the toughest to launch an IPO unless the owners are willing to sell their companies at very low single digit PEs (maybe 3-4x PE) if they want the price to remain above water post the listing. Let see how it goes for the 3 brave ones. I will follow up with a more detailed analysis of the 3 companies in the coming days but unless you are belong to the brave ones, my suggestion is to avoid applying for the IPOs for now. The risk is just not worth the effort.
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