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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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GCCP Resources Limited



GCCP Resources Limited ("GCCP" or the "Company") is placing out 122m shares at $0.23 each. GCCP is principally engaged in the quarrying and processing of limestone and according to the prospectus, the Company has one of the biggest GCC-grade calcium carbonate reserves in Malaysia. The IPO will close on 28 April at 12pm and starts trading on 30 April 9am. The market cap is $274.5m.

Quarries


The Company has two quarries of approximately ~26.3m tonnes of calcium carbonate reserves and according to the prospectus, the value of the quarries is in the range of between US$170m - US$580m.... with a preferred value of US$310m (seriously?)

What is Calcium Carbonate used for?


In case you are wondering, there are many uses for calcium carbonate, including my secondary school days lab experiment of blowing carbon dioxide into a calcium carbonate solution to turn it chalky. 


The consumption is expected to increase by between 3.5% to 4.1% per annum and the price outlook remained positive for the near term.

 
Financial Performance

Nothing to shout about as the Company continues to be loss-making and not operationally ready. I am not privy to 2015 forecasts.

What i like about the Company
  • Accounts is audited by a big 4, Ernst & Young.
  • Market cap is below the appraised value of the quarries.
  • Alan Wang is one of the pre-placement investors ~1.1% but his effective cost is only 11.2 cents versus public tranche of 23c! I would view it more positively if he is in at the IPO price.
My Concerns
  • Loss making company to the tune of MYR10.7m for 9M2014. Company is not operationally ready yet
  • Environmental unfriendly but essential resources play
  • Investors here are lukewarm to resources play looking at how CNMC goldmine traded
  • Not sure how true the appraised values are as i am not an expert in this
Mr IPO ratings

Since there is no public tranche and the company is not even operationally ready, i will give it a zero chilli rating. Buy only if you really like the "chalky lime water" experiment during your secondary school days or buy when the cloudy outlook of this Company turns clearer! 
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SGX stock trading said…
Great description over the singapore financial market, mentioning some of teh IPOs of companies listed under SGX mainboard.
18 May 2015 at 17:19
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