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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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Great Group Holdings Limited


Great Group Holdings is an established undergarment manufacturer in the PRC.  It is the contract manufacturer for ODM and OEM basis as well as under the "GRAT.UNIC" brand.  The Company is offering 65m new shares and 15m vendor shares at $0.295 each. 78m shares will be via placement and 2m shares via public offering. The offer will end on 23 Sep 2009 at 12pm.

Revenue grew from RMB 146.4m in FY 2006 to RMB 400.8m in FY 2008 and net profit grew from RMB 22.2m to RMB 70.8m in the same period. Assuming the service agreement was in place at the end of FY2008, the EPS per share will drop from 7.2 Singapore cents to 7.15 Singapore cents. Based on the post-IPO shares of 265m shares, the pro-forma EPS will be Singapore 5.40 cents and that translate into a historical listing PE of 5.46x.  The NAV per share after listing is 18.29 cents and the market cap is $78.18m. It is a shame that i could not find 1H 2009 unaudited results in the prospectus considering that we are already in Sep 2009!

The directors intend to distribute 20% of its net pforit for each of FY 2009 and FY 2010. Unfortunately, i am unable to predict what kind of profits we can see in this year and next even though the historical growth rates has been impressive as there are no 1H09 earnings included in the prospectus. In most normal cases, if the company is doing well, they would be "dying" to include the 1H figures in the prospectus. I really wonder what is the SGX regulations with regards to this (unless i am really blur and miss out the figures in the prospectus).

Listed S chips in the garment sector include Bright Orient, China Fashion and they are either not doing well or trading at pathetic valuations.  As such i believe the IPO is fairly priced. Assuming a PE range of 4-6x for this undergarment company, the fair value will be 22 cents to 32 cents. Looking at the trend of the last 2 S chip IPOs, Passion and China Gaoxian, i suggest giving this IPO a miss if your only intention is to 'stag' it.
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usurper said…
You are right. Should give it a miss. Same sentiment as you.
19 December 2009 at 10:16
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