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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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Mapletree Greater China Commercial Trust (Final pricing)

Mapletree Greater China Commercial Trust ("MGCCT") finalized its IPO pricing at the top end of the indicative range of 93c. This is due to overwhelming demand for its units by the institutions. The IPO prospectus is here and the announcement by Mapletree is here.

There is a strong support from 11 Cornerstone Investors and the book was well covered. The Public Offer offering of 265,357,000 Units (less 50,304,000 reserved) will open on 9am 28 Feb 2013 and end on 5 March 2013 12pm.

Comparable

The yield is viewed to be quite attractive versus its key comparable, Link Reit (SEHK:823), which is trading at a yield of about 3.5% today. Hong Kong-listed Link Reit owns and operates a large number of retail assets formerly owned by the Hong Kong government and is viewed as a key comp.

Assuming MGCCT trades at that level, it will imply a good upside of $1.49!

However, I will not be so "greedy" but believe that given the quality of its assets, it deserves a good debut and Link REIT investors should "switch out" of Link and re-invest into MGCCT. A fair value yield of 4.5%-5% will imply a fair trading range of 104 to 116 cents. Having said that, it will be Singapore's largest IPO in 2 years thus I think the upside may be limited by the large float. A debut above $1 will be a good performance for me.
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Anonymous said…
Hi Mr IPO,
Do you know what's the NAV of this trust ? Tks
28 February 2013 at 14:54
Mr. IPO said…
1.02x price to book at 93c.
28 February 2013 at 14:59
Anonymous said…
So its still relatively cheap? A million dollar question : Do you think it can go below its Ipo price given that it will be oversubscribed ??
28 February 2013 at 15:39
Anonymous said…
It appears the two properties are leasehold with rather short lease left (35 and 41 years if I'm not mistaken). That's not very positive for NAV appreciation :(
28 February 2013 at 19:10
Anonymous said…
Hi, how do you think the extra stamp duties by the Hong Kong government will affect this?
28 February 2013 at 21:53
Mr Dutyfree said…
I only got enough case now to Press 51 lots. I am wondering if should press. Looking for short term stag: 7% return, can?

broker for kayhian and ocbc tell me institutional demand v strong.
1 March 2013 at 21:57
Mr. IPO said…
Should be achievable.
1 March 2013 at 22:16
Anonymous said…
Hi

I went to do a valuation myself using Fortune REIT and CRCT mixture as 0.76 of asset of MGCCT is Hong Kong Mall and 0.24 is China office.

Apparently, if you take Fortune REIT book price of 0.766 x 0.76 + CRCT book price of 1.387 x 0.24, you should get a book price of MGCCT of only 0.912.

Thus, this means price will be 0.848 (There is this nagging risk that I cannot minus off). Together with its short lease life.

But if we do the same for yield, we should get MGCCT price of 1.06 trading at yield 4.93%

Thus, we can expect the stock to trade at 0.85 to 1.06.

No stagging possibility.....

2 March 2013 at 18:13
Mr. IPO said…
I think you cannot just add like that la. The underlying quality of the assets is important. You can't just compare using NAV. Plus i am not sure how your "methodology" works..why combine crcr with fortune and skip Link reit? keke it is good that you are doing your own analysis thus if you don't like like the results after your analysis, i would suggest not to buy. :)
2 March 2013 at 18:30
Anonymous said…
Mr ipo,

This one really fast.

My money came back into my UOB a/c already at 2.10 pm.
6 March 2013 at 14:48
lzw said…
I've been partially refunded (stated as "1st refund") to my bank account, the portion not refunded being the equivalent of 12 lots. However, I just checked and do not see any MGCCT holdings in my CDP account... ?

Is it safe to assume I am alloted 12 lots ?
6 March 2013 at 22:08
Mr. IPO said…
Usually it is indicative of your allotment. If you use DBS internet banking, you can check the ESA results online.
6 March 2013 at 22:38
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