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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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Sino Construction Limited



Sino Construction Limited was established in 1998 and is principally engaged in building construction and civil engineering activities in Daqing City, the PRC. The Company is offering 152.698m shares where 6.398m shares are offer for public and 146.3m shares are for placement at 39 cents each.

I never like the construction sector. If this sector is already considered "dirty" in Singapore with all the under-table bribery and gifts, how "clean" can it be in China. In addition, this Company is registered as a Class II, that is, it can tender for projects up to RMB 500m (or S$100m) and personally i think that is on the 'low' side. In addition, it is only a smallish construction in a small city of Daqing in the province of Heilongjiang. The net profit for FY2007 is RMB168.5 million. The EPS post IPO is RMB 28.25 cents or Singapore 5.65 cents. The NTA is only 12.2 Singapore cents. Pre-IPO investors came in at 23.4 cents (versus the IPO price of 39 cents) and most of them are selling out half of their shareholdings at the IPO.

Assuming EPS grow by 10% in FY2008, it will be 6.2 cents. At IPO price of 39 cents, it is priced at forward PE of 6.3x. I think the issue is fairly priced under such weak IPO sentiments and there will not be any upside. I cant recall any construction firms that are listed on SGX but would consider this Company as fully valued and in a sector that i personally dont like. I will avoid applying for this IPO.
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