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Saturday, 23 October 2010

Oxley Holdings Limited

Oxley Holdings Limited is offering 224m New Shares at $0.38 each by way of placement for a Catalist listing (that what is the point of having an IPO booth?).  The Company is a property developer specializing in residential cum commercial developments. The Company intend to distribute at least 50% of its net profits as dividend in FY2011, at least 30% in FY2012 and at least 20% from FY2013-2015. (wow this is the longest commitment for a dividend payout policy i have ever seen). The offer will close on 27 Oct at 12pm (but not for public). The market cap will be $565.8m (much bigger market cap than some mainboard listed companies....)

The company did not disclose its revenue line but its net profit after tax for year ending 30 June 2010 is a paltry $549k. EPS based fully diluted basis is Singapore 0.04 cents. That translate into a historical listing PER of 875x which appeared to be "expensive" but we will need to know what is the projected earnings stream coming on in FY2011. The NAV per share (post IPO) is 8c versus what investors are paying for 38c! Pre-IPO investors paid 21.3c. The owners and pre-ipo investors controlled 85% of the company post IPO and will be under moratorium. As you can visualise, the stock will be tightly controlled and as in most Collin Stewart's IPO, the prices post IPO will be 'well managed'.

Personally, my gut view is that the counter is overpriced with possible consolidation in the property sector in the next few quarters.  But since this offer is "by invitation"only, most probably the invited guys will be privy to more detailed prospects/earnings than what we can skim from the prospectus. This counter is for investors who like niche property developer exposed to the Singapore-property sector but certainly not for me.


Anonymous said...

since it only by placement, and it mention in the prospectus that application is only via the BLUE application form. how can we apply for it since prospectus doesnt even comes with the form..

2Y Capital said...

Get the blue forms from Collins Stewart, but unfortunately, usually cant get it. More for 'publicity'

Anonymous said...

Hello. I am new in the investment market. If I am interested in getting Oxley Holdings Ltd IPO, will it be possible (jus like any other IPO)? Anyway. Thanks for your constant advise and analysis on IPO.

Anonymous said...

i thot IPO - Initial "Public" Offer. since when company is allowed list w/o giving public a chance to subscribe? and what is the rationale behind?

2Y Capital said...

This is a catalist listing and the rules surrounding catalist listing are "less stringent". The no. of public shareholders required to ínvest are also lower than mainboard listing. As long as the underwriter is able to find the minimum no. of shareholders required, no public tranche is required. I don't think this is the first company to do all the shares via placements. There are other counters that have done it before. Sometimes the rationale is that they only want to place out to 'strong hands', at other times, it is because running a public tranche is too costly.

Anonymous said...

What's your opinion of this company now?

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