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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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TA Corporation

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TA Corporation ("TA" or "the Company") is an established property and construction company in Singapore. It is offering 122m shares (113m new and 9m vendor) at a price of $0.28 each. The no. of shares for public amounted to only 2m, which is not unexpected given the current market conditions. The IPO closed on 17 Nov 2011.


At the date of the prospectus, the order book was approximately $316m. Revenue hit $235.5m and net profit to shareholders was $30.1m in FY2010. Adjusted EPS for FY2010 based on the enlarged share cap was Singapore 6.5 cents. The listing PER is about 4.3x. The NAV per share post listing was 30.1 cents, higher than the IPO price of $0.28. The market cap is $130.2m based on the IPO price. First half results showed a revenue of $45.5m and a net profit of $5.8m (to shareholders). Adjusted EPS for first half is 1.2 Singapore cents. As illustrated, the results can be very lumpy in nature, indicating how cyclical the industry can be.


Let's take a look at its listed peers here:
Lian Beng is currently trading at historical PER of 3.4x and an EPS of 9.1 Singapore cents for year ended 31 May 2011.
Chip Eng Seng is trading at historical PER of 2.4x and an EPS of 16.6 Singapore cents for year ended 31 Dec 2010.
Yongnam is trading at historical PER of 6.0x and an EPS of 4.1 Singapore cents for year ended 31 Dec 2010.


In terms of valuation, TA Corporation is valued at a higher valuation than Lian Beng and Chip Eng Seng but lower than Yongnam.  The current "IPO" bull run may provide some upside in the opening hours but don't expect the euphoria to last for too long. The "bigger" float of 122m shares means that there will be active sellers should the price run too far ahead of its rivals and traders might as well switch from TA to other construction companies.
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Dennis The Menance said…
I would like to comment about public offering. New issues are almost always bad investments the vast majority of these stocks are way way over priced on purpose in many cases. I always recommend that investors stay away from these stocks
7 December 2011 at 03:45
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