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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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Hisaka Holdings Ltd



The Company is issuing 64m new shares at $0.23 and selling 26m vendor shares. The public will get to ballot for 4.5m shares while the rest of the 88.5m shares will be sold via placement. The IPO will close on 6 May at 12pm and the IPO will be launched on 8 May 2008. Based on the IPO price of $0.23 and post shares of 200.6m, the market cap of the Company will be S$46.1 million.

The company is an automation solutions providers in Singapore and specialise in mechanical motion products. The production facilities are located in Singapore Malaysia and China.

Financial Highlights - Revenue in FY2005 was S$33.7m and grew to $56.5m in FY2007. The net profit grew from S$2.4m to $6.0m in the same period. While the growth is somewhat impressive, the net margin is low at 10%.

While this is a small cap company with so-so profit, it is interesting to note that Mr. Cheng Ee Chew is paid more than $500,000 per year while Mr. Cheng Ee Lieng is paid more than $250,000 per year (before performance bonus for FY2008). The both of them accounted for more than 12.5% of the net profit for FY2007 and being a listed company, i think this high% is hardly justifiable. The independent directors will do well to do a thorough benchmark of the executive remuneration against similar companies.

Assuming profit for 2008 grow by 15%, the net earnings will be $6.9m and EPS will be 3.44 cents. Assuming a fair value PE of 6x-8x, the fair value will be between 20.5 cents to 27.5 cents.

Personally i think the Company is a mediocre company and the profit growth is not spectacular. At the IPO price, it is already fairly valued and with the high executive payroll, my suggestion to long term investors is to give this company a miss.
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Anonymous said…
Wow!

Nice short, and sweet analysis!

I like. (The analysis, not the company of course)
4 May 2008 at 22:07
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