Skip to main content

IPO Chilli Ratings

IPO Chilli Ratings
Click to understand how it works

Featured

Posted by

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
Post a Comment
Read more
Labels
Posted by

Heng Long International Ltd



Heng Long International Ltd is offering 68m New shares at S$0.34 per share with 3m for the public and 65m via placement. Heng Long started in 1950s and is one of the world's 5 top-tier tanneries. (I never knew that until today. hahaha. A crocodile dundee in our own backyard! Don't play play..) Heng Long sources, tans and processes raw crocodilian skins into finished leather.

Revenue for FY2007 is S$66.23m and net profit is S$11.142m. The NTA is 25.9 cents post IPO and EPS based on post-ipo shares is Singapore 4.157 cents. At the IPO price of 34 cents, the issue is priced at a historical PE of 8.2x. The market cap is $91.1m based on the IPO price.

Actually i quite like this unique business with not many similar competitors in Singapore and the promise to pay 30% of the net profit for FY2008 as dividends. However, what i dont really like is the 'family-style' management team. The 2 Managing Directors are brothers and their wives are also helping out in the business. One of the MD's spouse has a title of Payroll Manager and the other has a title of Treasury and Corporate Affairs. All 4 of them used to make between $250,000 to $499,999 per annum for FY 2007. While you can do that as a private company, it is really good to see that the wives have the discipline to 'take a pay cut' to below $250,000 per annum for FY2008. Frankly, a good Financial Controller will be able to take on the functions currently undertaken by both the spouses. In addition, what is the point of having a payroll manager when you already have a HR Manager and a Financial Controller?!

I would have given it a 2 Chilli rating if not for the current bearish IPO sentiments and the 'family-run' management team. While i am unable to predict FY2008 performance, a 20% increase in EPS and a PE valuation of 8 to 10x will imply a fair value of 40 cents to 50 cents.
Email Post
Labels:

Comments

Post a Comment