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Singapore IPOs: Why I No Longer Cover Every Listing

Some readers may have noticed that I have not been writing about every Singapore IPO since last year. The simple reason is that life has become busier. Between my day job, an increasingly packed travel schedule, family commitments and desire to play more golf, I have become much more selective about how I spend my time.  Writing detailed IPO reviews takes time — reading prospectuses, analysing financials, comparing valuations and understanding the competitive landscape. While I still enjoy investing and writing, I no longer feel the need to cover every IPO that comes to market. Instead, going forward, I will probably focus only on IPOs where I am seriously considering investing my own money or where there is something particularly interesting that is worth discussing. I suspect this will make the blog more useful as well. Rather than writing about every deal, I can spend more time sharing my thoughts on the handful that I believe deserve attention. That bring...
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Dyna-Mac Holdings Ltd

Dyna-Mac Holdings Ltd ("Company") is issuing 436m shares (186m New shares and 250m Vendor shares) at $0.35 each. 5m shares will be via public offer and 431m shares via placement. The Company has also provided for up to 30m shares under  an over-allotment scheme.  The application will end on 28 Feb at 12pm.


The Company is a multi-disciplinary specialist provider of detailed engineering, procurement and construction services to the offshore oil & gas, marine construction and other industries. Revenue and net profit has been swinging from FY2008 to FY2010. I believe this is in tandem with the demand for oil & gas. Revenue for FY2010 comes in at $218.5m and net profit was $25.5m. HY2011 revenue and net profit came in at below HY2010 by more than 20%. Assuming the full year adjusted EPS comes in at Singapore 2.24 cents, the company is listing at a forward PER of 15.6x. The market cap at IPO price is $315.1m. Investors should also note that the NTA per share post IPO is 11.33c versus the 35c paid.


The Company is heavily dependent on SBM and Modec for its business and this risk was once again highlighted on the front cover of the prospectus. It is interesting to note that post listing, Lim Tze Jong and Keppel Shipyard will control 79.4% of the company. In addition, Keppel Shipyard will have the first right of refusal should Mr Lim decide to sell out. It is a good sign that Keppel Shipyard would like to acquire the company strategically as long as the 2 major customers have no issue with Keppel becoming a substantial shareholder. 


While i like the sector and the company, for the purpose of this listing, i believe it is already fairly priced. Keppel Shipyard coming in as a cornerstone investor will no doubt help to support its share price but the company is listing in a challenging environment where there are political unrest in the middle east. There isn't much public float to talk about and the share price is likely to be supported if the over-allotment option is activated.  My personal view is that there is not much 'meat' to stag but long term investors may want to consider buying this company should share price drop post its listing. 
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Anonymous said…
what is your view on perennial china retail trust?
1 March 2011 at 20:59
Mr. IPO said…
It all depends on the pricing and the yield.
1 March 2011 at 23:12
Anonymous said…
1 buck.
about 3 %
1 March 2011 at 23:24
newbb said…
Kindly also advise on Hutchinson Port IPO (USD0.91 - USD1.08)...always appreciate your review.
3 March 2011 at 14:16
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