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Saturday, 24 January 2009

Happy "牛" Year


Thursday, 22 January 2009

Westminister Travel Limited

Westminister Travel Limited started the IPO ball rolling for 2009 but it is a Catalist listing. The Manager and Sponsor is Primepartners while the Placement Agent is SBI E2 Capital. The Company is a "one-stop" travel management and services group offering a wide range of travel products and services.

The Company is offering 43m shares (30m New Shares and 13 m vendor shares) at 23.5 cents. The IPO is already closed (sorry, i was too tired to do this earlier) and will open for trading on 22 Jan 2009. At the time of writing this, the shares was fully placed out to the exact number (no public tranche).

The market cap is $65.8m based on 250m outstanding shares. (Asia travel's market cap is also $65.8m at the close of 22 Jan 2009). The pro-forma net profit for FY2008 will be $5.3m had the service agreements be in place and that translate to an EPS of 2.12 Singapore cents. That will translate into a historical PE of 11x, which is what Asia Travel is trading at right now. The Company intends to pay >50% of its consolidated net profit for FY2009. After the IPO, Dato Dr. Wong will own 58.7% of the Company.

The revenue of the Company has not shown significant growth while its profit hovers between HK$37 m and HK$52m between FY2006 to FY2008. With a global recession looming and airlines cutting capacity amidst poor demand, it is no wonder this company has to be the "first" IPO for 2009. It has to get listed before the revenue and profit plummet even further. (If not for the close relationship with the Sponsor and Placement Agent, i doubt any Sponsor or Manager or Placement Agent will launch an IPO now).

Even during bull run, i would hesitate to invest in such a company, not to mention the challenging times in which we are in now. Avoid this IPO unless you are doing 'national service" and was given some placing commission for taking the risk.

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