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IPO Chilli Ratings

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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Far East Hospitality Trust (Preview)

I took a quick glance at the draft IPO prospectus.

Just the structure alone, its is much better than the Ascendas Hospitality Trust where all the hotels are parked under the Hotel Reit and not under the business trust.

According to the email, the price will range from 86c (6% annualised yield) and 93c (6.5% annualised yield) for FY 12E.

The presence of reputable cornerstone investors are also very reassuring and it will be them who will dictate the pricing.

CDL H-Trust is trading at 5.7% yield and Ascott Residence Trust is trading at 7.2% yield. In this regard, my only complaint is that the yields are on the 'low side'. It will be good if Far East can leave some meat on the table by pricing the issue at the mid to lower end of 86 cents. If it prices it at 93c, i am afraid the upside is probably limited. My guess is 88c ? :-P

Anyway, with regards to this email, probably i will ask for some allocation and hope that it will be priced at the lower end. The hotels are mid-scale but well-located (mostly) within the Orchard area except for one Changi Village Hotel... :-P

Happy IPOing. I will give the chilly ratings when the final pricing is out but it will likely be either 1 or 2 chillis rating.

Subsequent update to this post

 Please find a fact sheet about this IPO from OCBC.
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Comments

Hamz said…
Will it be a good investment? I'm new to stocks and have been looking at the recent ipos.. Not sure if I should try to apply for this.. Amy advice?
6 August 2012 at 23:43
Mr. IPO said…
Will let u have the chilli ratings when the final pricing is out.
7 August 2012 at 21:51
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