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IPO Chilli Ratings

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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China Kunda Technology Holdings Limited

It has been a bleak month for IPOs worldwide, not just in Singapore. Basically, the underwriters will not launch any IPOs unless the Company, IPO consultants and pre-IPO investors can find their own 'anchor placees'. One of my pre-ipo investment was still "stuck" in the MAS Opera as the anchor was unable to 'furnish the cheque' needed.

China Kunda is offering 95.284m shares of which 67.2m are new shares and the rest are vendor shares. China Kunda is a provider of precision moulds, plastic injection parts, in-mould decoration products to the electronics, electrical, automobile and specialised devices industries. The market cap post-listing is S$68.8 million. IPO will close on 7 Oct at 12pm.

Unaudited 9 months sales for 2008 is HK$76.55m and profit after tax HK$39.448m. Assuming the sales are evenly spread out, the full year profit will be HK$102m and net profit will be HK$52.6m and based on 320m shares, the EPS will be 16.44 HK cents (or about Singapore 3.04 cents). Based on the IPO price of 21.5 cents, it is valued at 7x PE. Frankly, under such economic climate, i cant foresee the company to do better in 2009 than in 2008, perhaps that is one reason why it has to list NOW intead of postponing the IPO.

Pre-IPO investors are getting a 50% discount and most likely they are also helping to ensure the IPO is "launched" successfully. It is also very rare to see such a young CFO being appointed as executive director of the Company as well.

My view is that the IPO is fully valued with some many S-chips trading at 3-5x PE currently, it makes no sense to invest in this Company based on the IPO price. Investors should be able to get in at cheaper prices post listing. Avoid.
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