Out of the last 30 IPO in SGX, there is only 5 counters trade above water now. They are:
CHINA FIBRETECH LTD (IPO price $0.21, Last Closed $0.245, Up 16.7%)
YONGMAO HOLDINGS LIMITED (IPO price $0.35, Last Traded $0.37, Up 5.7%)
WEE HUR HOLDINGS LTD. (IPO price $0.25, Last Traded $0.265, Up 6%)
OLD CHANG KEE LTD. (IPO price $0.20, Last Traded $0.24, Up 20%)
KTL GLOBAL LIMITED (IPO price $0.28, Last Traded $0.295, Up 5.4%)
One fact worth to note is that 2 out of 5 winners, Wee Hur and YongMao are construction related stock.
Now, we have another potential hero coming on board: HAI Leck Holdings
Hai Leck Holdings Limited is an integrated service provider of scaffolding, corrosion prevention and insulation works mainly for the oil & gas and petrochemical industries.
Hai Leck Holdings launches IPO at 26 cents a share with market capitalization of S$84.5 million. The net proceeds from the issue of the New Shares (after deducting estimated issue expenses) is approximately S$19.8 million.
This amount is insignificant if compare to the dividend distributed upon their Restructuring Exercise amounting to S$78,874,000 (among others dividend declared) in respect of FY2007.
The dividend is mainly come from the disposal of their stake in Hiap Seng Engineering Ltd. If this proceed is retained for expansion instead of distributed to their shareholders pocket, then there is no need for this IPO.
This company basically is debt free with stable stream of revenue and profit from their operation. What surprises me is the valuation of the company, even with relatively high NTA of 16.5 cents.
This is what we read from The Business Times 15 August 2008:
“At 26 cents a share, the offer is pegged at a price earnings ratio of 8.1, based on net earnings per share of 3.2 cents for the financial year ended June 30, 2007, and pre-IPO capital of 240 million ordinary shares.”
However, this is flaw.
When we pay 26 cents a share, we are actually paying for one share out of 325,000,000 shares post-invitation. Based on the same net earning and financial year, we are actually paying price earning ratio of 11.0 times!!
They have many competitors on Jurong Island and Bukom but none of them is public listed except CWT Limited with a small segment of corrosion protection activity. The more realistic comparison is with Rotary Engineering, OKP Holding Limited, Tat Hong and Tiong Woon, even though they do not do the exactly same trades.
I do not have convenient access to the financial data for all these companies. However, you may comfortably assume that they are not traded at double digit price earning ratio. An analyst report by CIMB on Yongnam Holdings Limited dated 15 August 2008 show that a basket of 5 construction stocks has simple average of 5.56 times FY08 and 4.6 times FY09. (Note: I think there is some error in calculating the simple average on the said report, my figure is re-calculated)
Noted also the small market capatalization.
I may have missed something but I am not buying anything appeared to have been priced exorbitant in this type of bear market. Disclaimer as usual. Please correct me if I’m wrong.
Important Date To Note:
26 August 2008, at 12.00 noon Close of Application List
27 August 2008 Balloting of applications
28 August 2008, at 9.00 a.m. Commence trading
The Invitation is for 85,000,000 New Shares at S$0.26
- 4,500,000 Offer Shares and
- 80,500,000 Placement Shares
The Company Website:
http://www.haileck.com/
The Prospectus at OPERA
CHINA FIBRETECH LTD (IPO price $0.21, Last Closed $0.245, Up 16.7%)
YONGMAO HOLDINGS LIMITED (IPO price $0.35, Last Traded $0.37, Up 5.7%)
WEE HUR HOLDINGS LTD. (IPO price $0.25, Last Traded $0.265, Up 6%)
OLD CHANG KEE LTD. (IPO price $0.20, Last Traded $0.24, Up 20%)
KTL GLOBAL LIMITED (IPO price $0.28, Last Traded $0.295, Up 5.4%)
One fact worth to note is that 2 out of 5 winners, Wee Hur and YongMao are construction related stock.
Now, we have another potential hero coming on board: HAI Leck Holdings
Hai Leck Holdings Limited is an integrated service provider of scaffolding, corrosion prevention and insulation works mainly for the oil & gas and petrochemical industries.
Hai Leck Holdings launches IPO at 26 cents a share with market capitalization of S$84.5 million. The net proceeds from the issue of the New Shares (after deducting estimated issue expenses) is approximately S$19.8 million.
This amount is insignificant if compare to the dividend distributed upon their Restructuring Exercise amounting to S$78,874,000 (among others dividend declared) in respect of FY2007.
The dividend is mainly come from the disposal of their stake in Hiap Seng Engineering Ltd. If this proceed is retained for expansion instead of distributed to their shareholders pocket, then there is no need for this IPO.
This company basically is debt free with stable stream of revenue and profit from their operation. What surprises me is the valuation of the company, even with relatively high NTA of 16.5 cents.
This is what we read from The Business Times 15 August 2008:
“At 26 cents a share, the offer is pegged at a price earnings ratio of 8.1, based on net earnings per share of 3.2 cents for the financial year ended June 30, 2007, and pre-IPO capital of 240 million ordinary shares.”
However, this is flaw.
When we pay 26 cents a share, we are actually paying for one share out of 325,000,000 shares post-invitation. Based on the same net earning and financial year, we are actually paying price earning ratio of 11.0 times!!
They have many competitors on Jurong Island and Bukom but none of them is public listed except CWT Limited with a small segment of corrosion protection activity. The more realistic comparison is with Rotary Engineering, OKP Holding Limited, Tat Hong and Tiong Woon, even though they do not do the exactly same trades.
I do not have convenient access to the financial data for all these companies. However, you may comfortably assume that they are not traded at double digit price earning ratio. An analyst report by CIMB on Yongnam Holdings Limited dated 15 August 2008 show that a basket of 5 construction stocks has simple average of 5.56 times FY08 and 4.6 times FY09. (Note: I think there is some error in calculating the simple average on the said report, my figure is re-calculated)
Noted also the small market capatalization.
I may have missed something but I am not buying anything appeared to have been priced exorbitant in this type of bear market. Disclaimer as usual. Please correct me if I’m wrong.
Important Date To Note:
26 August 2008, at 12.00 noon Close of Application List
27 August 2008 Balloting of applications
28 August 2008, at 9.00 a.m. Commence trading
The Invitation is for 85,000,000 New Shares at S$0.26
- 4,500,000 Offer Shares and
- 80,500,000 Placement Shares
The Company Website:
http://www.haileck.com/
The Prospectus at OPERA
0 comments
Post a Comment