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    Singapore IPO

      Indofood Consumer Branded Products
      30/08/2010
      Indofood Consumer Branded Products to launch IPO on 28-30 September, appoints underwriters 
      Story
      Indofood Consumer Branded Products (ICBP), a unit of Indonesian foods company Indofood Sukses Makmur, plans to launch an initial public offering of a 20% stake on 28–30 September 2010. A report in the online edition of Kontan cited the company’s IPO prospectus. ICBP will use 70%-80% of the IPO proceeds for settling its debt and the remaining funds will be used to boost its working capital, the item noted. In the first quarter 2010, ICBP got IDR 4.11tn in loans from its shareholders, the report added.

      The company appointed Kim Eng Securities, Credit Suisse Securities Indonesia, Deutsche Securities Indonesia and Mandiri Sekuritas underwriters for the offering, according to the report.

      ICBP plans to raise IDR 4tn–IDR 5tn (USD 555m) from the IPO.
      Source
      Kontan
      Value
      USD 555m (targeted IPO proceeds)
      Stake Value
      20% 
       


      New Blog Designs
      Dear IPO blog readers,


      Just wanted to drop a note to tell you that i have 'revamped' both my blogs 


      Singapore IPO blog will remain dedicated to the Singapore IPO market while i am now more actively updating my personal blog on financial freedom. 


      Do drop by my blogs to take a look. If you are a blog owner and would like to do a link exchange to either of the blogs, just drop me a email (slower response) or directly into the comments and i will do the necessary linkage.


      Happy investing and trading. I will share more on the topic on what i think is the fastest way of reaching financial freedom in my personal blog in the coming weeks. :) 


      Consciencefood Holding Limited
      Consciencefood, an Indonesian maker of instant noodles, launched an initial public offer to raise $18.8m.

      It is selling 104m shares at 22 cents apiece. The placement of 96m new shares and almost 8m vendor shares represents 26.3% of the company’s enlarged share capital.

      Two million shares are available for public subscription, while the remaining 102m will be placed out.

      The invitation opened yesterday and will close at noon next Tuesday (3 Aug 2010). Listing and trading of the shares on the Singapore Exchange is expected to start at 9am next Thursday. Collins Stewart is the manager, underwriter and placement agent for the public offer.

      This is the "instant noodle food" play primarily in Indonesia. Hence if you are bullish on this sector and country, you should be 'exposed' here. Do note that the barriers to entry is low and there are many "competing brands" in the market.


      The bulk of the fund raising is to establish a new manufacturing plant in Jarkarta.

      Financially, the company has grown pretty fast over the last few years. Assuming the Service Agreement is in place since 1 Jan 2009 and based on the post-IPO number of shares, the EPS of 2009 will be 2.96 Singapore cents.  Based on the IPO price of 22 cents, it is listing at a historical PE of 7.43x.  The market cap post listing will be $87.2 million.

      The pre-ipo investors are Phillip Ventures, Asean China, UVM Venture and Aventures and they are the main vendors in this IPO. They received their shares based on a 45% discount to the IPO price. (overhang in shares post moratorium 6 months later?)

      While it is good to see more regional companies coming to list in Singapore, it is hard to be bullish where most of the IPOs tanked below its issue price post listing in recent weeks.


      Consciencefood Holding Limited
      Consciencefood, an Indonesian maker of instant noodles, launched an initial public offer to raise $18.8m.

      It is selling 104m shares at 22 cents apiece. The placement of 96m new shares and almost 8m vendor shares represents 26.3% of the company’s enlarged share capital.

      Two million shares are available for public subscription, while the remaining 102m will be placed out.

      The invitation opened yesterday and will close at noon next Tuesday (3 Aug 2010). Listing and trading of the shares on the Singapore Exchange is expected to start at 9am next Thursday. Collins Stewart is the manager, underwriter and placement agent for the public offer.

      This is the "instant noodle food" play primarily in Indonesia. Hence if you are bullish on this sector and country, you should be 'exposed' here. Do note that the barriers to entry is low and there are many "competing brands" in the market.


      The bulk of the fund raising is to establish a new manufacturing plant in Jarkarta.

      Financially, the company has grown pretty fast over the last few years. Assuming the Service Agreement is in place since 1 Jan 2009 and based on the post-IPO number of shares, the EPS of 2009 will be 2.96 Singapore cents.  Based on the IPO price of 22 cents, it is listing at a historical PE of 7.43x.  The market cap post listing will be $87.2 million.

      The pre-ipo investors are Phillip Ventures, Asean China, UVM Venture and Aventures and they are the main vendors in this IPO. They received their shares based on a 45% discount to the IPO price. (overhang in shares post moratorium 6 months later?)
      Kreuz Holdings Limited
      Kreuz and its subsidiaries (collectively, the “Group”) is principally engaged in the provision of subsea services which includes activities supporting new offshore installation and construction projects, as well as inspection, repair and maintenance (“IRM”) of existing offshore production and pipeline facilities.



      The subsea services offered by the Group are mainly performed through air diving (up to depths of 165 feet), saturation diving (depths of between 60 to 1,000 feet) and remotely operated vehicles (“ROVs”). The key operating assets to be owned by the Group include two work accommodation/dive support vessels Swiber Supporter and Swiber Glorious, one 12-man saturation diving system (K-SAT 02) and six air diving systems. The Group also has a stable pool of experienced offshore skilled personnel whom it can deploy to work on offshore projects.

      The Group is offering 80m New Shares at $0.27 each with 4.5m shares for the public and the rest via placement. This is basically a "PIPE" deal where a listed company "spun out" its profitable subsidiary to raise more funds for expansion. In this case, the listed company is Swiber. Revenue for FY2009 is US$56.4m and net profit is US$11.9m. Post IPO, Swiber will own aboout 63.2% of Kreuz. The offer will end on 27 July 2010 at 12pm. The EPS based on audited 2009 figures and adjusted for service agreement as well as enlarged share cap is 3.54 Singapore cents and that translate into a listing historical PER of 7.63x. The share cap based on the IPO price will be S$136.89m and this means it is one of the "bigger' Catalist listed company. I guess Kreuz headed for Catalist is because it doesnt have the 3 year track record and the Catalist allows it to raise funds quickly.

      I am not sure why but it seemed that new investors are getting in at 27 cents while the original shareholders have paid between 31.92c to 52.90c per share. Quite unusual to see that. Public will hold around 15.8% of the company. The order book as of the prospectus was approximately US$ 133.2m. The order will be completed between 5 to 60 months.

      Business wise, i think the company is well positioned and the sector is attractive but may be overly dependent on Swiber as well as too "concentrated" on the "sub-sea" segment of the oil & gas industry. Overall, i like this company and could be a 'gem' in the making if they can get their business strategies right.

      The IPO is fairly priced with possibly upside potential as Ezra and Swiber are trading at 10-12x PE multiples. Assuming EPS is 'unchanged' for FY2010, the fair value will be between 35c to 42c. It is always good if the prospectus can give you an idea of what the FY2010 EPS is likely to be but unfortunately, we can never tell from the prospectus. These are figures which only cornerstone investors or the underwriters will know but they will only share with you 'verbally'.      The Group generally works through main contractors (including the Swiber Group) to provide services to end-customers who are major oil and gas companies such as British Gas India Pvt Ltd, Brunei Shell Petroleum Co Sdn Bhd (“Brunei Shell”), Reliance Industries Limited, Conoco Philips Inc, Alam Maritime Resources Berhad and Petroliam Nasional Berhard. The offshore projects that the Group has supported are located in India, Malaysia, Brunei, Myanmar, Indonesia and Thailand.


      Kreuz Holdings Limited
      Kreuz and its subsidiaries (collectively, the “Group”) is principally engaged in the provision of subsea services which includes activities supporting new offshore installation and construction projects, as well as inspection, repair and maintenance (“IRM”) of existing offshore production and pipeline facilities.



      The subsea services offered by the Group are mainly performed through air diving (up to depths of 165 feet), saturation diving (depths of between 60 to 1,000 feet) and remotely operated vehicles (“ROVs”). The key operating assets to be owned by the Group include two work accommodation/dive support vessels Swiber Supporter and Swiber Glorious, one 12-man saturation diving system (K-SAT 02) and six air diving systems. The Group also has a stable pool of experienced offshore skilled personnel whom it can deploy to work on offshore projects.


      The Group is offering 80m New Shares at $0.27 each with 4.5m shares for the public and the rest via placement. This is basically a "PIPE" deal where a listed company "spun out" its profitable subsidiary to raise more funds for expansion. In this case, the listed company is Swiber. Revenue for FY2009 is US$56.4m and net profit is US$11.9m. Post IPO, Swiber will own aboout 63.2% of Kreuz. The offer will end on 27 July 2010 at 12pm. The EPS based on audited 2009 figures and adjusted for service agreement as well as enlarged share cap is 3.54 Singapore cents and that translate into a listing historical PER of 7.63x. The share cap based on the IPO price will be S$136.89m and this means it is one of the "bigger' Catalist listed company. I guess Kreuz headed for Catalist is because it doesnt have the 3 year track record and the Catalist allows it to raise funds quickly.

      I am not sure why but it seemed that new investors are getting in at 27 cents while the original shareholders have paid between 31.92c to 52.90c per share. Quite unusual to see that. Public will hold around 15.8% of the company. The order book as of the prospectus was approximately US$ 133.2m. The order will be completed between 5 to 60 months.

      Business wise, i think the company is well positioned and the sector is attractive but may be overly dependent on Swiber as well as too "concentrated" on the "sub-sea" segment of the oil & gas industry. Overall, i like this company and could be a 'gem' in the making if they can get their business strategies right.

      The IPO is fairly priced with possibly upside potential as Ezra and Swiber are trading at 10-12x PE multiples. Assuming EPS is 'unchanged' for FY2010, the fair value will be between 35c to 42c. It is always good if the prospectus can give you an idea of what the FY2010 EPS is likely to be but unfortunately, we can never tell from the prospectus. These are figures which only cornerstone investors or the underwriters will know but they will only share with you 'verbally'.      The Group generally works through main contractors (including the Swiber Group) to provide services to end-customers who are major oil and gas companies such as British Gas India Pvt Ltd, Brunei Shell Petroleum Co Sdn Bhd (“Brunei Shell”), Reliance Industries Limited, Conoco Philips Inc, Alam Maritime Resources Berhad and Petroliam Nasional Berhard. The offshore projects that the Group has supported are located in India, Malaysia, Brunei, Myanmar, Indonesia and Thailand.
      Smartflex Holdings Ltd
      Smartflex Holdings Ltd is a provider of IC module assembly and testing sevices for contact and dual interface smart cards based in Singapore.

      The Company is offering 13m New shares at $0.22 each where 1.5m shares is via public offering and the rest via placement. Offer will close on 15 July at 12pm. The market cap is S$18.1m.

      Revenue grew from US$14.6min FY 2007 to US$18.1m in FY2009. Profit after tax grew from US$1.2m to US$1.9 during the same period. EPS based on post IPO shares will be 2.33 US cents for FY2009. Based on post IPO shares and assuming service level agreement is in place in FY2009, the company is being listed at a PER of 6.65x.  The company intends to pay out 20% of its net profit attributable to sharesholders as dividend for FY2010.

      The IPO is fairly priced and the market cap is too small. I personally dont favour such tech counters for long term investing and would avoid this IPO.


      Smartflex Holdings Ltd
      Smartflex Holdings Ltd is a provider of IC module assembly and testing sevices for contact and dual interface smart cards based in Singapore.

      The Company is offering 13m New shares at $0.22 each where 1.5m shares is via public offering and the rest via placement. Offer will close on 15 July at 12pm. The market cap is S$18.1m.

      Revenue grew from US$14.6min FY 2007 to US$18.1m in FY2009. Profit after tax grew from US$1.2m to US$1.9 during the same period. EPS based on post IPO shares will be 2.33 US cents for FY2009. Based on post IPO shares and assuming service level agreement is in place in FY2009, the company is being listed at a PER of 6.65x.  The company intends to pay out 20% of its net profit attributable to sharesholders as dividend for FY2010.

      The IPO is fairly priced and the market cap is too small. I personally dont favour such tech counters for long term investing and would avoid this IPO.
      Leader Environmental Technologies Limited

      Leader Environmental Technologies Limited ("LET" or the "Company") is offering 116.5m shares (2 m public shares, 114.5m placement shares) at $0.21 each. The Company is an environmental protection solutions provider in China and is engaged in the R&D, manufacturing, assembly, installation and support services of environmental protection systems. It services include dust elimination, desulphurization.

      Revenue grew from RMB 100.7m in FY2007 to RMB 181.7 in FY2009. Net profit grew from RMB 39.7m to 64.3m during the same period. Net margin is hovering above a healthy 28% for the 3 years. The IPO will close on 14 July 2010 and 12 pm.

      The company is listing at a historical FY2009 PER of 7x based on enlarged share cap and assuming service level agreements were already in place and based on the IPO price, the market cap will be $92.74 million.

      While i do like this industry, this company actually bring up old memories of a former S-chip that was a market favourite but has since come under judicial management - Sino Environment. Sino used to be a market darling, rising to more than $3.50 at its peak but is now languishing at 13.5 cents. Many people lost their fortune in that company.

      There is always a huge risk investing in Chinese companies, especially with regards to the quality (or even existence) of the earnings in the accounts. The fact that this is a S-Chip audited by Ernst & Young, one of the remaining big 4 accounting firms, may bring a little more comfort than usual. The company will also declare at least 10% of its FY2010 earnings as dividends.

      As mentioned in my earlier part, i like this industry. China will have to focus more on enviromental protection in the coming years. The only concern i have is more management specific, i.e, can the management be trusted. Will the company go bust a few years after listing?

      Assuming EPS grow by 25% in FY2010 and EPS will be 3.75 Singapore cents. Based on the 21 cents IPO price, company is listing at prospective PE of 5.60x. A fair value of 8-10x will imply a price of 30c to 37.5c. The low public float will mean that it will be quite difficult to get it from the public tranche.


      Leader Environmental Technologies Limited
      Leader Environmental Technologies Limited ("LET" or the "Company") is offering 116.5m shares (2 m public shares, 114.5m placement shares) at $0.21 each. The Company is an environmental protection solutions provider in China and is engaged in the R&D, manufacturing, assembly, installation and support services of environmental protection systems. It services include dust elimination, desulphurization.

      Revenue grew from RMB 100.7m in FY2007 to RMB 181.7 in FY2009. Net profit grew from RMB 39.7m to 64.3m during the same period. Net margin is hovering above a healthy 28% for the 3 years. The IPO will close on 14 July 2010 and 12 pm.

      The company is listing at a historical FY2009 PER of 7x based on enlarged share cap and assuming service level agreements were already in place and based on the IPO price, the market cap will be $92.74 million.

      While i do like this industry, this company actually bring up old memories of a former S-chip that was a market favourite but has since come under judicial management - Sino Environment. Sino used to be a market darling, rising to more than $3.50 at its peak but is now languishing at 13.5 cents. Many people lost their fortune in that company.

      There is always a huge risk investing in Chinese companies, especially with regards to the quality (or even existence) of the earnings in the accounts. The fact that this is a S-Chip audited by Ernst & Young, one of the remaining big 4 accounting firms, may bring a little more comfort than usual. The company will also declare at least 10% of its FY2010 earnings as dividends.

      As mentioned in my earlier part, i like this industry. China will have to focus more on enviromental protection in the coming years. The only concern i have is more management specific, i.e, can the management be trusted. Will the company go bust a few years after listing?

      Assuming EPS grow by 25% in FY2010 and EPS will be 3.75 Singapore cents. Based on the 21 cents IPO price, company is listing at prospective PE of 5.60x. A fair value of 8-10x will imply a price of 30c to 37.5c. The low public float will mean that it will be quite difficult to get it from the public tranche.