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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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Healthway Medical Corporation Limited



Healthway Medical Corporation Limited is offering 135.5m shares (95.5m New shares and 40m Vendor shares) at 36 cents each. The Company is one of the largest healthcare outpatient service provider in Singapore. (This is like the Raffles Medical Group when it just started out, eventually, it will want to set up its own specialty practices and hospitals to improve the margins.)

Frankly to me, Singapore is already a small and saturated market and the listing is 'inevitable' to tap new capital to expand overseas. As you can see from the revenue, it has grown from S$66.6m in FY2005 to S$84.6m in FY2007. Net profit increased from S$13m to $16.6m over the same period. The joke is that the Company has a pro-forma Net Tangible Liability of 4.02 cents and a net asset value of 9.21 cents post IPO dilution based on 31 Dec 2007. The EPS is approximately Singapore 1.20 cents (assuming service agreement is in place and based on outstanding shares post-IPO).

At 1.20 cents EPS, the IPO is priced at 30x historical PE! Assuming EPS grow by a very "aggressive" 20%, the EPS for FY2008 will be Singapore 1.44 cents and that will translate into a PE of 25x.

For the year ending 31 Dec 2007, Raffles Medical Group has revenue of S$168m and net profit of S$35m. The EPS was 7.36 cents and as of 29 June 2008, RMG is now trading at a valuation of 20x historical. It took RMG a few years and i believed the earnings only 'spike up' after the Raffles Hospital was set up. In my view, the execution of Healthway is still a big question mark and at this IPO valuation, investors are better off parking there money in Raffles Medical Group. In addition, some accounts of the Companies in Healthway are qualified by the auditors... the market cap of Healthway based on the IPO price is $487.8 million (w0w...).

My view is forget about this IPO and put your $ to better valued stocks elsewhere. If you really must invest in this Healthcare sector, you may want to do a more indepth analysis on Raffles Medical Group.
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Anonymous said…
you were absolutely right!
30 August 2008 at 14:00
Anonymous said…
The chairman Fun Kow Hin must be joking
5 July 2013 at 11:51
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