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Wednesday, 26 January 2011

Malaysia Smelting Corporation Berhad

My sincere apologies for this late posting as I have been extremely busy lately both with work and personal matters. 

Malaysia Smelting Corporation Berhad ("SMC" or "Company") is offering 25m shares at S$1.75 per share and each board is 100 shares.  SMC is one of the world's leading integrated producer of refined tin metal and is a subsidiary of The Straits Trading Company listed on the SGX. SMC is already listed in Bursa Malaysia since 1994 and has a market cap of about RM360m.

This is once again a dual-listing project, similar to Sri Trang from Thailand.

For the 9 months 2010, the company made an impairment on the non-tin assets and suffered a net loss of RM72.4m.  The financial performance has been rather erratic with FY2007 net profit at Rm75.8m only to suffer a loss of RM43.8m in FY2008 and to recover to RM65.4m in FY2009 and FY2010 is likely to suffer a loss. Maybe i should say that the results are rather consistent - one good year followed by a bad year and then good year again. :P

I will give this company's IPO a miss.  

Monday, 24 January 2011

Zhongmin BH

For records only (I am not even aware of this Catalist listing on 20 Jan 2011. There is no "public"tranche)

The Group is principally engaged in the ownership and operation of the “中闽百汇” department store in Xiamen City, which is one of the largest underground retail malls in Fujian Province, China. Spanning an estimated built-in area of 28,746 sqm, the Xiamen Store is located in the commercial centre of Xiamen City, strategically located at a transportation hub where bus terminals (to both within and outside of Xiamen City), bus rapid transit and the high speed train (to various major cities in China) are located.

The Xiamen Store offers a wide range of quality merchandise and customer-oriented services catering to middle to high level income bracket consumers. International brands featured in the Xiamen Store include BreadTalk, Nike, Adidas, Bossini and Baleno. The Group also manages six department stores under the “中闽百汇“ brand name in Quanzhou and Zhangzhou Cities in Fujian Province, China. These managed stores have an aggregate estimated built-in area of 59,638 sqm. In return for its management services and the use of the “中闽百汇“ brand name, the Group is paid management fees.

Saturday, 22 January 2011

Sri Trang Argo-Industry Public Company Limited

Sri Trang Argo-Industry Public Company Limited is offering 280m shares at a maximum offering price of $1.60.  The offer will close on 24 Jan at 6pm (interesting timing?). The company is already listed Stock Exchange of Thailand and is one of the largest processors of natural rubber.  It is encouraging to see such dual listings finally as we have been seeing a lot of SGX-listed companies going for dual listing elsewhere in the region.

Thailand was the world's largest natural rubber producer in 2009 (hmm...frankly i always thought it was Malaysia, i guess that is because we associated Thailand with Jasmine rice instead).  The company is involved in the entire natural rubber supply chain.

Revenue for FY2009 was 46m Baht but for the first 9 months of 2010, the revenue has reached 61.3m Baht. This is 104% higher than the same period in 2009. Profit for 9 months ending 30 Sep 2010 is 3,183m Baht.  In Singapore dollars terms, the audited revenue for 9M is $2.6 billion and net profit after tax is $136m.  The company's capacity will also increased from 755k tonnes in 2009 to 1.5m tonnes in FY2012.

Extracting the results and translating into SGD, the 'historical' results is presented on the left.  The Singapore issue of 280m shares will represent 21.9% of the issued and outstanding share capital post listing. 14m shares will be for public and the rest via placement.

The final offer price will depend on the demand for its shares during the book-building period but retail investors will have to subscribe at the maximum offering price of $1.60 The company also have a generous dividend policy of paying out 30% of net profit for each financial year.

Based on the enlarged share capital, the projected 2010 EPS is $0.14 and based on the IPO price of $1.60, that translate into a "dual-listing" PER of 11.4x. Assuming EPS grow by 25% in FY2011 due to increased rubber price, capacity and demand, the PER will drop to 9x. Assuming a fair value range of 12-15x, the fair value will range from $2.10 to $2.60. I quite like this company, sector and prospects. I will give it a 3 Chilli ratings.

24 Jan 2011 update:  I have given it a 3 Chillis rating based on a longer term perspective. For short term trading, a lot depends on its performance on the Thai market as well. I am not sure if Singapore markets will typically give it a higher valuation than the Thai market as there are not many similar 'dual listing' cases here. For investors who want to stag, I believe it should still be possible but the final pricing would be a key determinant and hopefully the underwriters and company will leave so food on the table.

Harry's Holdings Ltd

Harry's Holdings Ltd is placing out 24m new shares at $0.22 for a listing on Catalist. It managed to grow from a single bar in Boat Quay in 1992 to a leading F&B operator today.

Revenue grew from $27m in FY2007 to $37m in FY2009 and net profit is around $2m for that 2 years with a dip in FY2008. The offer will end on 24 Jan at 12pm.

The Company is listing at a PER of 11.4x assuming the service agreement is in place and based on post IPO number of shares. Market cap is $20.9m. Basically at $21m, it is a ultra small cap and you 'cant' apply for it. Don't see much prospects unless it can venture out of Singapore or create some ultra profitable F&B outlets. 

Wednesday, 19 January 2011

XMH Holdings Ltd

XMH Holdings Ltd is issuing 100.95m shares (85m New Shares and 15.95m Vendor) at 25 cents each. 1.5m shares will be for public and the bulk via placement.  

The Company is a diesel engine, propulsion and power generation solutions provider in the marine and industrial sectors. Revenue for FY2010 is S$74.5m and net profit is S$17.58m.  The offer will close on 24 Jan 2011 at 12pm.

The NAV per share is about 7 cents post listing and EPS for FY2010 assuming service agreement in place and based on enlarged share cap is 4.01 cents and that will translate into a listing PER of about 6.25x. The market cap based on offer price is S$100m.

Prior to the listing, the Company paid a generous dividend of $17m to its shareholders, which i think, is "common" among listing companies.

The company is priced to sell at such low PER. I think downside is limited but the problem for public investors will be to get the shares via the allotment. A PER range of 7-9x will mean a fair value of 28c to 36c. The only "worrying" part will be the huge placement tranche but i guess it could be well absorbed as all investment banks and securities firms will want it to succeed to start the IPO ball again.

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