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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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Declout Limited



Declout Limited ("Declout" or the "Company") is offering 31m placement shares at $0.25 each for a Catalist listing. The market cap based on the IPO price will be S$51m. The website is here and the prospectus is here.

Declout is a IT solutions provider mainly targeting "Vertical Domain Clouds", starting with the online gaming sector. While online gaming has huge potential, it has unfortunately, in my view, failed to take off in a significant way in the Southeast Asia region even though IAH was one of the pioneers here. I believe IAH is one of the clients of declout. 

Financial Highlights


The revenue has increased from $833k in FY2009 to $38m in FY2011 and the profit increased from $59k to $1m during the same period.  The 1Q2012 revenue continued to show a nice traction over the same period last year.


Based on the EPS of Singapore 0.52 cents, the Company is valued at the historical PER of 48x.


I am guessing

I am not privy to 2012 sales and profit projections. Assuming the EPS grow by 25% in FY2012, the implied EPS will be Singapore 0.65 cents. The implied forward PE will be 38x, which in my view is expensive. Even if EPS doubled to 1.04 Singapore cents, the valuation is still very rich at 24x.

Conclusion

The listing is probably a "friends and family" round where they helped to list the Company on the Catalist. Since this offer is not open to retail investors, i will not attempt to dissect it further but would have probably avoided it in any case as the company is too early stage for me and is selling at very rich valuation. At the IPO price, it is priced at more than 1x to its FY2011 revenue and 50x its FY2011 earnings. 


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James said…
Kind of disappointed the IPO only has a placement tranche. I think the cloud computing has a huge potential, especially for the corporate sector.
As for the valuation, I think IT companies usually have very rich valuations?
17 October 2012 at 19:38
Mr. IPO said…
Err not really. U may want to check out the tech companies in US. not very rich if I remember correctly.
17 October 2012 at 20:45
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