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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 ...

GDS Global Limited

GDS Global Limited ("GDS") is offering 17.5m shares at $0.25 each, comprising 12m New Shares and 5.5m Vendor Shares for IPO on the Catalist. 1m shares will be for public offer and the balance 16.5m share via placement. The offer will close on 17 April 12pm and starts trading on 19 April. At least CIMB is doing something more "courageous" than some other boutique outlets. It is letting public investors have a "chance" to play in the Catalist field and i must applaud them for that.

According to the prospectus, GDS is one of the leading commercial and industrial door manufacturer in Singapore.It is also one of the few players who are able to supply steel insulated fire shutters.  

Financial Highlights


As you can see from the financial highlights, this is a truly small cap company with low revenue and profit levels. In my personal view, investing in such small companies can be very risky.

Dividends

The Company intends to pay dividends of not less than 30% of its net profits attributable to shareholders in each of FY2013, 2014 and 2015. While this is a good intention, somehow, may not be appropriate for a firm who is supposedly growing at a fast pace and needs the cash for expansion.

Vendor Sale

For such a small cap catalist listing, i don't like the owners to be seen as cashing out. They should issue more shares instead of selling out.

Valuation

Assuming the service agreement has been in place and based on the enlarged share of 112m, the listing PER will be 10.92x. This is not exactly good value and even if i factor in a 20% growth (just a guess) in 2013, the PER is around 9x. The market cap based on the IPO price is around $28m.

Peer comparison

There is a listed peer in KLW. The website is here. KLW is trading at a PER of 48x and has a market cap of $20m but this doesnt mean that GDS is a good buy. In fact, i wouldn't have invested in KLW in the first place.

Conclusion

The Company is listing on the back of positive market sentiments and at a low absolute price of $0.25, there will be no lack of punters and speculators. My prediction is that given the small float, it will probably open with a bang and the subsequent movements will depend greatly on whether the stock is cornered or not. You may want to try your luck but note that this is not for long term investing and remember to be thankful if you can stag it as there will probably be heartache for people who chase this stocks post listing. I will avoid for long term investment but may consider it for a quick punt. 



Comments

Anonymous saidā€¦
you buying to stag?? I am tempted to buy since there has been an IPO famine and since most likely won't get (exposure only lose 2 dollars).

I think upside is very limited but the only Big Draw factors to buy: (1) IPO famine, (2) Small tranche

It might be another Gaylin though --> first day open FLAT then suddenly chiong!!
Anonymous saidā€¦
Hey

Can you you link me to the ipo prospectus?

Thanks
Mr. IPO saidā€¦
Don't think will be like gaylin. This stock is not "cheap".
Mr. IPO saidā€¦
I am outside right now. You can find it at the sgx website under IPO. Tell me if you can't find it. :)
Anonymous saidā€¦
Hi, i am new to IPO offerings. May i ask if there's any information that i can get about where they launch their ipo seminal or event and is it possible for us to participate their launching seminal/event? Hope any kind friend can reply to my fb (TEH Ken) or bizcar@live.com.sg. Thank very much.
Anonymous saidā€¦
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