Home » Aggregator Summary » Singapore IPO

Singapore IPO




    Syndicate content
    This blog is dedicated to companies listing on SGX Mainboard and the Catalist.
    URL: http://singapore-ipos.blogspot.com/
    Updated: 3 weeks 4 days ago

    Singapore IPO

      Keong Hong Holdings Limited
      Keong Hong Holdings Limited ("KHH" or "the Company") is offering 27m New Shares at S$0.24 each for a listing on Catalist. The Company is a provider of a broad range of building construction services. As of 30 Sep 2011, the order book was S$541m.


      The timing couldn't  been "better". Right smack in between the new property measures (additional stamp duties) and the European crisis. 


      The revenue grew from $78m in FY2008 to $125m in FY2010. Net profit grew from $1.4m to $8.1m and net margin improved from 1.9% to 6.5% during the same period.


      There are no public tranche in this IPO. The NTA after considering the new shares issues is $0.2094. The fully diluted EPS based on the enlarged share cap and assuming the service agreements were in place is Singapore 4.94 cents and that translate into a historical listing PER of around 4.85x. Based on the IPO issue price, the market cap is around S$38.4m.


      This is the second 'construction' related company to list in recent weeks after TA Corporation.  As company is not issuing shares for the general public, i will not attempt to determine its fair value.  However, looking at the historical listing PER, the Company is definitely fairly valued. Any upside will be considered a bonus.


      TA Corporation
      For records only


      TA Corporation ("TA" or "the Company") is an established property and construction company in Singapore. It is offering 122m shares (113m new and 9m vendor) at a price of $0.28 each. The no. of shares for public amounted to only 2m, which is not unexpected given the current market conditions. The IPO closed on 17 Nov 2011.


      At the date of the prospectus, the order book was approximately $316m. Revenue hit $235.5m and net profit to shareholders was $30.1m in FY2010. Adjusted EPS for FY2010 based on the enlarged share cap was Singapore 6.5 cents. The listing PER is about 4.3x. The NAV per share post listing was 30.1 cents, higher than the IPO price of $0.28. The market cap is $130.2m based on the IPO price. First half results showed a revenue of $45.5m and a net profit of $5.8m (to shareholders). Adjusted EPS for first half is 1.2 Singapore cents. As illustrated, the results can be very lumpy in nature, indicating how cyclical the industry can be.


      Let's take a look at its listed peers here:
      Lian Beng is currently trading at historical PER of 3.4x and an EPS of 9.1 Singapore cents for year ended 31 May 2011.
      Chip Eng Seng is trading at historical PER of 2.4x and an EPS of 16.6 Singapore cents for year ended 31 Dec 2010.
      Yongnam is trading at historical PER of 6.0x and an EPS of 4.1 Singapore cents for year ended 31 Dec 2010.


      In terms of valuation, TA Corporation is valued at a higher valuation than Lian Beng and Chip Eng Seng but lower than Yongnam.  The current "IPO" bull run may provide some upside in the opening hours but don't expect the euphoria to last for too long. The "bigger" float of 122m shares means that there will be active sellers should the price run too far ahead of its rivals and traders might as well switch from TA to other construction companies.


      JK Tech Holdings Limited
      For records purpose only


      JK Tech Holdings Limited ("JK Tech" or "the Company") placed out 10m new shares at $0.20 each for a listing on Catalist.  The offer closed on 10 Nov 2011. 


      The Company is a one stop provider of IT products, services and solutions to companies. It reported a revenue of $19.8m for FY2011 with a net profit of $2.7m. The EPS based on the enlarged post IPO share cap was 4.08 Singapore cents. That translate into a listing PER of 4.9x. The market cap post listing is only $13.27m, ultra small cap company.


      Just a note of caution: For ultra small cap company like JK Tech or Libra, the free float is actually very small. Imagine the number of shares for free float is 66.4m x 30% = 19.9m shares. At 20 cents, the free float translate into $3.98m value. In other words, the founders just need to find 10 friends to take about $400k each to absorb the free float and push up the price thereafter. That is why you see wild swings in prices of such stocks if they are being targeted by speculators. The name of the game is 'dont be the last one holding the baby'.