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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 ...
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Otto Marine Limited




Finally i have an IPO to write about... the last IPO China Kunda was more than one month ago on Oct 9, 2008... the IPO market has been dead for a long while!

Otto Marine Limited is offering 235,295,000 shares at $0.51 per share (206.045m New shares and 29.25m vendor shares). The Company is an offshore maring group engaged in shipbuilding, ship repair and conversion and ship chartering. The revenue for FY2007 is S$314 million and net profit was S$41.9 million. The IPO will close on 26 Nov 2008 at 12pm and list on 28 Nov 2008. 3 cornerstone investors will subscribe for 146.234m shares (or 62% of the offering). Only 1m shares will be offered to the public, which make this public tranche "for show" as the underwriters have no choice since the public sentiments for IPO is really weak at this juncture. It is really amazing that the IPO can go through since this is really a big float at S$120m raised and it is a good sign that the IPO is able to attract key cornerstone investors. It is a vote of confidence by institutional investors to this Company. However, do note that there is no moratorium on the cornerstone investors.

At 51 Singapore cents, the IPO is priced at a historical PE of 14.36 (EPS of 3.55 cents for FY2007 based on fully diluted basis using the enlarged share cap). The first 5 months EPS is 2.77 cents (fully diluted basis). Assuming full year EPS is 6.65 Singapore cents for FY2008, the IPO is priced at 7.67x PE.

Assuming a 25% growth in FY2009, the EPS will grow to 8.3 Singapore cents. Most of its peers are also trading at single digit PEs and I would say the issue is fairly priced for the IPO. Assuming a PE fair value of 5-7x PE for FY2009, the fair value will be between 42 cents to 58 cents. The presence of institutional investors like Standard Chartered Private Equity does bode well for this Company as they typically have a longer investment horizon of 3 to5 years.
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