Skip to main content

IPO Chilli Ratings

IPO Chilli Ratings
Click to understand how it works

Featured

Posted by

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...
1 comment
Read more
Labels
Posted by

Roxy-Pacific Holdings Limited


(IPO booth in Raffles Place. Photo compliments from Fergus)

Roxy Pacific is basically a niche property developer and the owner of Mercure Roxy Hotel. In FY 2006, its revenue is $48.8m and net profit is $5.2m. The IPO details are:

7m shares for Public at $0.30 each.
126m private placement shares at $0.30 each.
Issue Manager: Hong Leong Finance
Closing date: 10 March 2008 12pm.

Revalued NAV per share as of Dec 31, 2006 = 45.39 cents. This is higher than the IPO price of 30 cents. I do have to caution that "Valuation" is a rather subjective matter as it depends greatly on many different factors. In this regard, the revalued NAV may not represent the actual value in a real transaction. Based on the IPO price of 30 cents and post-invitation shares of 636,560,000 the market cap is around S$190.97 million.

The 1H 2007 revenue is $42.4m and net profit is S$7.7m. Frankly it is not easy to do a forecast for a property developer cum hotel operator because the revenue of a property developer depends greatly on the projects on hand and the revenue recognition policy while the revenue from a hotel is fairly stable and depends on the occupancy and room rates. Assuming i do the lazy way of doubling the 1H profits for FY2007, the revenue for 2007 will be around $85m and the net profit will be $15.4 million. EPS will be 2.4 cents. Based on the IPO price of 30 cents, the 07PE is around 12.5x.

Listed competitors on SGX includes Fragrance and Fragrance is trading at a better valuation of 13x 2007 PE as well as a premium to its NAV. If we use Fragrance as a key comparison, it seemed that Roxy is undervalued and there will be further upside if it can trade towards its revised NAV of 46 cents.

Personally i dont really fancy the Singapore property market and will avoid the IPO market for now given the extremely volatile market conditions for both the stock and property markets.
Email Post
Labels:

Comments

Post a Comment