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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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Huationg Global Limited



This is more for records purposes

Huationg Global Limited ("Huationg" or the "Company") is offering 27.5m shares at $0.20 each for placement for a listing on Catalist. The offer has closed on 5 Dec and will commence trading on 9 Dec 2014. The market cap based on the IPO price will be around $30.3m

Principal Activities

The Company is engaged in the provision of civil engineering services for infrastructure projects and ancillary inland logistics support services. As of the date of the prospectus, the Company has an order book of S$114.3m which will be recognized as revenue over the next 3 years.


I list the major ongoing projects above for your information.

Financial Highlights


Based on the adjusted EPS of 2.79 (assuming service agreement is in place and post IPO shares), the Company is listing at a PER of around 7.2x, which is reasonable. Based on the 1H 2014 EPS of 1.98 cents, it represents a growth of 49% over the prior year. 

Assuming full year EPS is 25% growth, the EPS will be around 3.49 cents and that translate into a PER of ~5.7x. Having said that, i am just "guessing" the EPS figure and is not privy to how the full year results will turn out.

Interestingly, the NTA per share is 24.69 cents. In other words, the Company is listing below its book value.

Mr IPO ratings

I will skip the what i like about the Company and my concerns since the IPO has already closed. Regular readers know i don't like this sector per se and that it is such a small cap family-owned company. The Ng family will continue to own ~80% of the Company post IPO, perhaps this is one reason why they are fine with a "lower than market" IPO valuation.

I have to say the IPO is priced very reasonably, as such i believe there will be some upside to the stock price. My gut feel is that it will trade between 23 to 28 cents (slight premium to its NTA) but liquidity will dry up over time.

Happy digging


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