Singapore O&G Balloting Results (Public Tranche 332 times OVER-Subscribed!)

As I have mentioned in my previous post, I said that SOG (Singapore O&G) is pretty much going to be a great hit. and how true it is; just take a look at the balloting results below:

A total of 730 million shares are applied for only 2.2 million shares, a whooping 332 times subscription rate!

On a side note, it seems the higher chances of getting a successful allocation goes to those who ballot for 1 lot. For those who do not know how to read the ratio; take for example for the 10 to 49 lots band, the chances of successful allocation is 7.07% (7/99).

Good luck to those who are successful in the application, the stock will definitely get a pop in the morning 9am.. As for me, I will be waiting by the side to await a chance to get in again through the open market then...

Is Singapore O&G (SOG) going to be another Healthcare IPO darling?

The new kid on the block to join the Booming healthcare fraternity is Singapore-based healthcare firm, Singapore O&G Ltd ("SOG" in short). You can find the IPO Prospectus here.

Intro
According to its propectus & factsheet, SOG is a niche player in the healthcare industry as it focuses on the women's healthcare, with middle-level professionals as its main target audience. Thus, their primary focus is skewed towards the following: pregnancy care and delivery, the female reproductive system, and gynaecological and breast cancer.

SOG's total of 8 clinics are situated in five different locations as highlight below:

• 2 clinics in Parkway East Medical Centre, 
• 3 clinics in Gleneagles Medical Centre, 
• 1 clinic in Thomson Medical Centre, 
• 1 clinic in Mount Elizabeth Novena Specialist Centre 
• 1 clinic at Cassia Crescent.

In case some people are not sure, Gynaes often work by themselves but are stationed across different clinics for the usage of the equipment and stuff. I searched for one doctor (Dr Beh Suan Tiong) based in Thomson Medical and found out he got his own website -> http://drbeh.com.sg/.

The way i see it, this company is formed by several gynaes with the aim of doing an IPO and expanding beyond their individual medical practice (something like what Q&M Dental has done years back).

Details of IPO

From the picture seen on the left, its a rather tight timeline to subscribe for the public tranche of 2.2 million shares while 41.4mil will be placement shares.

The shares are offered at 25 cents a piece and will be listed on the Catalist board.

If fully subscribed, the company will raise S$10.9 million through the public offering. The company will use the IPO proceeds for working capital, to enhance investments in healthcare professionals and synergistic businesses, and also to expand its business operations.

Financial Performance & Investment Merits

A picture is worth a thousand words so i shall let the 2 pictures do the talking below. The main gist is that the company's financials are in good shape, with a steady increase in profits. What amaze me is the 35+% net profit margins.. it just shows how profitable delivering a baby is (milking our monies everytime we go back for a 5min checkup!~).

My thoughts

People may think that by distributing 90% of the dividends, the company is becoming more like a cash cow and unlikely to grow in strength from here.

However, by doing a comparison to the time Q&M dental was listed (in yr 2009);

they actually started off the exact same way. Fast forward 6 years and their share price just skyrocketed >100%! over the past year on the back of a string of acquisitions being announced.

Personally, i feel that this IPO will garner lots of interest due to 3 main reasons:

1. Just look at all the healthcare stocks in Singapore (Talkmed, Q&M Dental, Raffles Medical etc.) and how their share prices have shot up. SOG would do well to ride on the healthcare boom right now.
2. Healthcare industry is one highly predictable industry, as we can easily visualise on how the private sector is serving the affluent market. In most cases, people want to give the best to their family members and would not scrimp on this.
3. High net profit margins and huge free cash flow are 2 important metrics for a company to expand steadily without any burden of debt. 
4. Lastly, a moderate P/E ratio of 12.82 (based on FY14 EPS) and potential 7.3% dividend yield are deeply enticing.

With that, i wish my readers all the best and Huat Ah!

QT Vascular IPO - upcoming IPO

Recently, the IPO fever seems to heat up again. While there are 2 upcoming IPOs, QT Vascular and PACC Offshore Services Holdings (POSH); the former seems to be down-played due to the lack of advertising and significantly smaller size.

Introduction

QT Vascular produces devices to treat diseased arteries in the heart and elsewhere, aims to develop new products and enhance its existing ones. The company, which operates out of California and Singapore, registered revenue of US$1.5m for FYSep12, and doubled to US$3m in FY13. 

Current flagship product is a balloon catheter known as the "Chocolate" PTA balloon device, which is implanted to treat peripheral artery disease, or blocked arteries in the leg. It is the first Singapore-designed device to win approval from the US FDA. 

The company counts multi-national pharmaceutical company Johnson & Johnson, the Economic Development Board's Biomedical Sciences Investment Fund, and homegrown Juniper Capital among its major shareholders. QT Vascular is working with UOB Kay Hian and Prime Partners for the IPO.

Details of IPO
The company will list on the Catalist, with a placement of 196,429,000 new shares, at S$0.28 each. This translates to about S$50 million in proceeds, less fees. The offering is not made public and only Each of Three Arch Partners, BMSIF and J&JDC intends to subscribe for Placement Shares in the Placement.

QT Vascular will use S$5 million for commercial expansion and marketing purposes, while S$15 million will be used for new product development. The rest of the proceeds – S$30 million, will be used for general working capital purposes.

The IPO Prospectus can be found here.

Opinion of IPO

Since you are not able to buy it before it list in Catalist, should you buy after the IPO? IMO, it's a no-no. Just look at the continued losses it has been making.

Secondly, It doesn't even have a website!? Maybe it's only me who cannot find it though. Lastly, Biomedical technology companies similarly like Biosensors tend to fluctuate a lot based on the Patents and successful breakthrough next time. While it may work in the U.S. due to strong coverage, it may not bode so well for a rather small Catalist company like QT Vascular.

IPO Summary - Guide to Picking Winning IPOs

Despite a see-sawing, slow market, we are seeing many new IPOs for the year 2012.

Experts said prospects of higher liquidity and increased risk appetite have boosted confidence in IPOs.
Some examples include Furniture retail store operator Courts Asia, Indonesia's Geo Energy Resources... Religare Health Trust... And soon, 2 new IPOs, namely: Gaylin Holdings Limited & Dynasty Reit.

If you take a look at Shareinvestor IPO website, you can see that the closing dates are nearing for the last 2 IPOs so you have to hurry if you want to apply for them!

Anyway back to the main topic for today's post... So how well are the IPOs doing so far?

*Drumroll.....*

IPO Performance Summary

Credits to http://www.shareinvestor.com/ipo/index.html for the info.

As you can see from the chart, there are quite an equal number of winners or losers in the list of 25 IPOs.
Many people want to know the secrets to Winning IPOs so here are my insights:

1) Market Sentiment/Feel for the IPO

If you look at the list on top, Courts are a no-no in the forums (check out hardwarezone, sharejunction, shareinvestor forums). It's because they are listed before and many people lost money with it.

The immediate thought that goes to people minds is "Want to bluff my money again? No way!"

Secondly, if the company is listing at a time when major stock indexes are all falling, then no matter how good it is, people are still afraid to commit too much money too!

In the end, it boils down to understanding the psychology or "feel" of fellow investors...

2. Proposed usage of funds raised from IPO

Stay away from IPOs where they are using bulk of the funds raised to repay debt (e.g. bank borrowings). In such instances, the company is typically improving their financial position (rather than looking at your welfare)

My own investment strategy is to look at both value + growth.

If there is no growth involved, there are many more other IPOs that i can choose from. 

3. Past financial performance

When you look at the list, you are able to differentiate the winners into 2 groups:

(i) Consistent growing Sales + Profits: people look at these IPOs for growth and capital gains in the future

(ii) Trusts + Reits: Owning these will translate to stable dividend yields supported by good financial performance. (my dad usually diversified his portfolio by applying for such IPOs while fulfilling his desire to tikam tikam... lol)

4. Management team

Such information may be hard to access... but you can try media interviews, as well as press conferences when the management teams announce the launch of their IPO, etc.

Another important source is the prospectus. Review the ROE (Return over Equity) ratio - it measures a firm's efficiency in generating $$ using the equity (capital) they have.

5. PE ratio (a valuation shortcut)

PE ratio is derived by dividing the price of the IPO by the latest earnings figure. 

E.g. if PE ratio is 10, you are paying 10 times the price for $1 earnings. Alternatively, it also means it will take 10 years before the price you paid for is equal to the earnings made by the company (assuming earnings stay constant)

A high PE ratio (over-valued) will tend to scare investors away.. so a good guage refers to anything 10 and below...

That's all i have for you... feel free to share your opinions below and everyone (including me) can learn from it :D

Hope you like my post and can do me a favour by "Like"-ing my facebook page at www.facebook.com/kissinvesting. Thanks & HUAT AH!

Courts Asia IPO - The familiar furniture + electronics MEGAMALL!

Which company do you think of when you hear the word "furniture"?

For me... it's Courts, then Furniture mall, Vhive etc...

What about "Home electronics"?

For me... it's Courts, then Harvey Norman, Best Denki, Gain City etc...

We seldom hear of a familiar Household Brand Name IPO but here it is... THE

 

i) http://www.businesstimes.com.sg/breaking-news/singapore/courts-asia-launches-ipo-20121008

ii) http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1230206/1/.html

Details of IPO

i) Listing Price: $0.77 per share

ii) Courts is offering 178 million shares, of which 60 million are new shares.

iii) 4 cornerstone investors - JF Asset Management Ltd, New Silk Road Investment Pte Ltd, Target Asset Management Pte Ltd and Value Partners Hong Kong Ltd - which have taken up 44 percent of the IPO.

iv) IPO Prospectus here.

Details of Courts Asia Limited

Gauging on how they will be utilizing the proceeds (not fixing on the % of net profit they plan to give out as dividends); they are embarking on a growth path and aiming towards the Indonesia market.

Personally, i think that it will bode well for Courts for 2 reasons:
1) There is no major player in the Indonesia market (under-penetrated market) 
2) It has a large fast growing middle class => more demand for electrical, IT and furniture products

Courts Competitive Landscape

Courts operate in only 2 countries so far, Singapore and Malaysia. And surprisingly, they have provided the competitive landscape due to Euromonitor...

It's quite an interesting read... but i was tempted to go buy Challenger and Senheng instead due to the CAGR (Compounded Annual Growth Rate) though...
But i have to say Courts is doing not bad as opposed to other firms...

Courts Financial Statements

A few points to note:

• Sales & Net Profit growing slowly but steadily
• however, Net profit margin at only roughly 5.5%
• EPS of 7.03 (after ipo) & Price of $0.77 signify => P/E ratio of 10.95
• Trade Receivables & Payables at a significant Premium over Net Profit, and with their retained earnings only a mere $5m, they must utilize the IPO profits carefully. (A strong step = big risks)

Conclusion

If you would ask me, i think that Courts IPO is not bad... think of Maxi-cash IPO (ipo price debut at $0.35, now it's $0.44 range). More importantly, it has the Brand X factor in which many retail investors will likely rope in...

Especially when many investors now have the cash but are held back from investing in properties due to the new increased downpayment for private properties.

Nevertheless, remember to do your own research using the prospectus!

Hope you like my post and can do me a favour by "Like"-ing my facebook page at www.facebook.com/kissinvesting. Thanks & HUAT AH!

Far East Hospitality IPO - Sure Profits?

After some quiet time without any interesting IPOs,

Here comes a favourite among Singapore conservative investors: Far East Hospitality IPO!

First and foremost - The Details of the IPO

• Prospectus Link here
• Offering Price: $0.93
• Opening & Closing Time for IPO; Commencement of Trading Time

• Targeting to raise about S$1.49 billion, Far East Hospitality Trust is the largest initial public offering (IPO) in Singapore this year.
• Trust's portfolio consists of seven hotels and four serviced residences in Singapore and is valued at over S$2 billion
• 4th hospitality trust in Singapore; Other three: CDL Hospitality Trusts, Ascott Residence Trust & Ascendas Hospitality Business Trust.

Pros

1. Institutional tranche of the IPO was over 30 times subscribed.
2. All the properties are situated in Singapore; easy to conduct due diligence on tenancy rate & stable outlook since Singapore tourism is still growing healthily
3. REITs have out-performed the STI as a whole & is seen by the local investors as safe yield plays -> more interest -> higher price

Cons

1. High Price of $0.93 is deterring some investors from joining the "fun"
2. Yield of 6% is slightly lower compared to other REITs

My 2 Cents

Ever since the STI has risen by so much, people are waiting on the sidelines for more positive indicators. I believe people will utilize their cash-pile to subscribe into IPOs while they are on the wait.

Furthermore, with cornerstone investors like Aberdeen Asia, APG, NTUC income & the IPO being 30x subscribed shows Great Demand!

Nevertheless, i won't recommend people to hold onto this stock as a 6% yield for hospitality Reit isn't really sufficient for me since you are taking more risks as compared to Healthcare Reits or Shopping Mall Reits which are more stable.

Punt and Get out of there Asap! :D

Hope you like my post and can do me a favour by "Like"-ing my facebook page at www.facebook.com/kissinvesting. Thanks & HUAT AH!

JB Foods IPO - Chocolate World!

I got the email from my stockbroker on JB Foods Analysis and would like to share with you all:

JB Foods IPO Analyst Report

And the IPO Prospectus

Oh ya.. and its website - http://www.jbcocoa.com/ [don't laugh why i put this link here... You cannot even find it when you search for "jb foods"!!!]

Short Intro

JB Foods, a major cocoa ingredient producer in Malaysia, has launched an initial public offering (IPO) of 100 million shares comprising 84 million new shares and 16 million vendor shares at 30 cents each on the Singapore Exchange (SGX) mainboard.

The placement size is 97 million shares and the public-offer tranche is three million shares. The invitation shares represent 25 per cent of the company's post-IPO enlarged share capital of 400 million shares. Based on the company's share capital and invitation price, its market capitalisation will be $120 million.

It now produces and sells cocoa butter, cocoa powder, cocoa liquor and cocoa cake with cocoa powder and cocoa butter accounting for more than 90 per cent of its revenue.

It has a production capacity of 60,000 tonnes of cocoa bean equivalent per year and in FY2010 a market share of 13.3 per cent in Malaysia based on revenue.

Last year, JB Foods reported revenue of RM691 million (S$276 million) and net profit of RM51 million. Besides expanding its factory in Malaysia, the company is also exploring options to acquire two cocoa processing factories in Germany and Indonesia. 

JB Foods intends to recommend and distribute not less than 30 per cent of its net profit attributable to shareholders this financial year.

Key Points to Note

• Based on Post-IPO 400m shares, JB Foods' EPS is at 0.1275 RM, converted to around S$ 0.0507. And P/E Ratio = $0.30 / $0.051 = 6.
• Malaysia’s cocoa grinding industry had shown healthy growth with a CAGR of 4.7% for grinding volume from 2004 to 2010.
• Steady Increasing Revenue + Profit after Tax throughout 3 years.

My Take

JB Foods may be neglected to the over-casting of shadow by IHH and people will have their money stuck there. Considering the positive market outlook for IPOs and a low P/E ratio, i believe JB Foods may be a hidden gem.

Nevertheless, i also don't recommend holding it for the long term as it is in an industry with such slow CAGR of only 4.7%. There are much better choices out there. :)


Sorry for the late post and the IPO is finished. You can still buy when it comes right up on the trading day at 9am! :D

Hope you like my post and can do me a favour by "Like"-ing my facebook page at www.facebook.com/kissinvesting. Thanks & HUAT AH!

IHH IPO - 60x oversubscribed by Institutions!

I believe you have read from the newspapers and saw from the other websites how IHH will be expecting HUGE.. (60x oversubscribed by institutions!) demand. 

I shall cut short the whole story and make it not repetitive as what you read from elsewhere. 

First up - IPO Details

IPO Prospectus (Mind you, it's 1390 Pages!!!) - http://info.sgx.com/webipo.nsf/a550a7e7a8393629482578f6002916ce/3a15fe76d40a099048257a320037428f/$FILE/P.Papillion%20(IHH)%20-%20SG%20Version%20dated%202%20Jul%202012.pdf

Indicative Timetable 

Allocation of Shares

Of the base offer of 2.23 billion shares, 62 per cent have been pre-allocated to cornerstone investors (Cornerstone stands for rock, kidding... it means they will not sell the shares for a long period of time, usually 6 months).

About 350 million shares will be offered to the public in Malaysia and Singapore.

Ok... let's go to the Pros n Cons everyone waiting for!

Upside

• IHH Healthcare Berhad is a BIG, leading healthcare provider in 8 countries, majority in Singapore, Malaysia and Turkey.
• Former Parkway Healthcare being de-listed by IHH and now IHH is coming back for a listing in a whole new and bigger way! 
• Management believes IHH will overtake HCA listed in NYSE as the number one healthcare service provider in the world in three to five years time.
• IPO being propped up by pre-election encouragement from the government and by cash-rich state funds
• IHH follows through the Great momentum set by Felda Global Ventures last week, and while Felda soars 20% in the first day of debut (http://finance.yahoo.com/news/palm-oil-giant-felda-soars-stock-market-debut-053631417--finance.html); it is the hype that brings many investors to think that IHH will have the same impact.

Downside

• 90% of the proceeds raised will be used to pay off bank loans! No money from the listing is used to expand the company at all! However, according to the management, they plan to lower the debt to lower levels using the IPO and then borrow higher again to expand the next time... Not really a wise move if they take on too much debt...
• Based on the prospectus, the EPS using the enlarged share capital was US 0.96 cents and US 0.64 cents for the year 2011 and 3 months to 2012 respectively. This translate into a historical listing PER of 93x for FY2011.

Conclusion

Although IHH IPO is there to pay off their high debts and listing at quite expensive levels, it will definitely have a strong impact on the price. This flurry of IPOs should be somewhat linked to the government elections because when the public subscribe to the IPO and earn money -> happy -> vote for them. (Hahaha! My way of thinking) 

You may not have to worry about the price since there are 22 cornerstone investors covering your backside as you buy into this listing... whenever there is selling on the stock, these big institutions will surely ask someone to "suck up the selling" and maintain the price as where it is.

I am following http://singapore-ipos.blogspot.sg/2012/07/ihh-healthcare-berhad.html and i will also do a Hit-n-Run if i am applying for it. 

Another perspective: When you look at all the forums and hear from your investing friends, they are ALL interested in applying for the IPOs => Over-subscription liao!!! Therefore, if you are just applying 1 - 10 lots, i don't think there is high hope of being balloted.

However, if you look at the indicative timetable, you will see that they will refund you on 23 July and trading will start only on 25 July. Therefore, play it both ways!

1. Subscribe for the IPO first (before 12 July!) & Test your luck
2. Keep track of whether they refund you the amount on 23 July. Be prepared to stick to the computer at 8.59am and buy at whatever price it lists! Sell at a profit margin you are comfortable with :)

Good Luck to All! HUAT AH!

Hope you like my post and can do me a favour by "Like"-ing my facebook page at www.facebook.com/kissinvesting. Thanks & HUAT AH!

Neo Group IPO - A Good Buy?

Introduction

Covered by the Hype and massive public advertisement/awareness over IHH IPO, there is another local firm which is also launching its IPO, starting trading even before IHH.

The local catering company is Neo Group Limited and it has launched an initial public offering (IPO) of  1m shares for public and 21m shares via placement at 30 cents each for a Catalist listing on Singapore Exchange.

The IPO closes on 9 July (Monday!) at 12pm and starts trading on 11 July at 9am. Check out Neo group prospectus here!

The invitation shares on its platter - which constitute 15.3 per cent of the group's enlarged share capital of 144 million shares - comprise one million public-offer shares and 21 million placement shares.

The placement shares "have already been oversubscribed", according to Neo Group's executive director Elvis Lee. He also said there were no cornerstone subscribers as the company "spread out its investors".

Background [i would like to give credit to http://singapore-ipos.blogspot.sg for the wonderful insight to the IPO too]

Neo group is started from MR NEO Kah Kiat, a self-made millionaire who drop out after Secondary 2 as he felt that a diploma or a degree would not guarantee riches and respect. 

He started his business at the age of 20 with $15,000 borrowed from relatives and friends after amassing useful experience by helping out at a relative's chap chye peng (economical rice) stall between ages 15 and 17 (Read his whole story here). 

Today, Neo group owns:

• 3 catering companies ("Neo Garden Catering", "Orange Clove" and "Deli Hub")
• A yacht chartering service (http://www.neogroup.com.sg/ny/services.html)
• A Umi-sushi chain with 16 outlets & expanding (http://www.neogroup.com.sg/brands/umisushi/index.html) 
• A wine cellar 

Reasons to Buy:

1. Ranked by Euromonitor as the no.1 events caterer in Singapore.
2. Too many awards :p (You can see for yourself here)
3. Net Profit increasing steadily from S$2.2m to S$2.8m to $5.4m from FY2010 to FY2012.
4. Intends to distribute Dividends not less than 60% of its net profits (equal to around 6% yield on $0.30) attributable to shareholders in each of FY2013, FY2014 and FY2015.
5. MORATORIUM - All existing shareholders have each undertaken to have 100%, 70% and 40% of their respective shareholdings in our Company moratorised in the first, second and third year from the date of admission of our Company to Catalist. (meaning they will not sell off their shares based on the % according to the year!)
6. Proceeds used to Expand and develop our Food Catering Business & Food Retail Business

Conclusion: 

If you look at market-changing companies like Microsoft, Apple, UOB etc; they always have a leader at the helm of the company.

And i seriously believe that Mr Neo, founder of the Neo Group, is a man of such calibre and able to lead the company to greater heights. Few people have the courage and the dreams to drop out at age 14 and worked as hard as he needs to achieve his wealth and success.

With only 1million (1000 lots) issued for the public, no. of shares being issued is quite limited & majority of it held by the existing shareholders (who are sticking to the Moratorium mentioned above), this stock should do well on its debut and may attract long term investors seeking for good yields. 

Seldom do you come across a company CEO with his rags to riches story and I personally have patronized his catering and Umi-sushi outlet before... I will buy the IPO and also go on a yacht trip with my friends or gf next time! :D


Hope you like my post and can do me a favour by "Like"-ing my facebook page at www.facebook.com/kissinvesting. Thanks & HUAT AH!

Maxi Cash IPO - To Buy or Not

Michelle Chia, the spokesperson for Maxi Cash!

Amid the Chaos of Europe and US, there is one catalist listing that caught everyone's attention and familiar to us Singaporeans - Maxi Cash! You can see a press release here.

I have seen many forums and read up a bit on the news and its prospectus; and the views are inconsistent on whether this IPO will soar on its debut...

Let's look at its corporate profile:

Pawnbroker Maxi-Cash Financial Services Corporation Ltd Operations are concentrated on 2 business segments - Pawnbroking and Retail and trading of pre-owned jewellery and
watches.

Maxi Cash is a subsidiary of mainboard-listed jewellery retailer and property developer Aspial Corporation - formerly Lee Hwa Holdings.

And the Summarized Financial Statements are here below:

Now lets talk about the Pros and Cons of this company and finally an opinion by myself.

The Pros:

1. Well established market position (13%) of the whole industry; 24 locations islandwide near amenities such as Bus Interchanges and Mrt Stations.
2. Strong Brand Name - thats why all the people in the forums are talking about it!
3. Experienced Management Team in Jewellery Industry; Parent company is aspial corporation too.
4. Different Feel - A "bank-like" modern feel sets it apart from its competitors & thus, more likely to attract youngsters and business people.
5. Anti-cyclical industry -
   People poor people have to pawn = Earn Interest!
   People rich people buy jewellery = Earn Capital gains!

The Cons:

1. Short period of time from startup to listing (not enough time to analyse it thoroughly)
2. Stigma against such slow moving stocks where Operations are in Singapore (Old Chang Kee, Mary Chia etc)
3. 33% Premium to NTA -> Fundamentally overpriced
4. Subject to Gold, Jewellery asset prices + low interest rate changes
5. Competitive environment with many old established pawnshops around.

An Independent Opinion

I think despite the global woes, Maxi Cash is a well-known company and the price may soar in the first few days. 

I will rate it as a short term Buy and Sell within days or even 1 day because of many uncertainness behind it + everyday you may have bad news from whichever region that will come crashing down the stock.

Hope you like my post and can do me a favour by "Like"-ing my facebook page at www.facebook.com/kissinvesting. Thanks & HUAT AH!

IPO-mania: Starland, Global Premium Hotels Launch Singapore IPOs

Got this article from Bizdaily and find that many A property developer and a hotel operator launched separate initial public offerings (IPOs) Thursday, both looking to tap into the recovering equities market in Singapore.

Singaporean property developer Starland Holdings Limited priced its IPO at S$0.22 per share that will help the firm raise S$4.9 million. Starland will list 22.2 million new shares in the Catalist board of
Singapore Exchange, which represents about 15.3 per cent of its post-placement share capital of 144,733,000 shares. At the IPO price of S$0.22, it is priced at a historical price to
earnings ratio of approximately 14.2 times. The placement price also represents a discount of approximately 47.9 per cent over the adjusted NAV (net asset value) per share.

Starland plans to use the net proceeds of approximately S$3.1 million to acquire and build up its landbank for future development as well as for general working capital. The group develops properties in China, particularly in the province of Chongqing. Starland said the demand for homes there is growing at a steady pace, especially from first time buyers and upgraders due to a rapid urbanisation rate.

Chongqing is one of China’s fastest growing economies. From 2004 to 2010, Chongqing's GDP output grew at a compounded rate of 17.3 per cent annually. Its per capita disposable income grew at a CAGR of 12.9 per cent, and foreign direct investments grew at a CAGR of 58.5 per cent.

Starland believes that it is timely for investors to participate in its IPO, as they are coming into the group at the start of its growth path. “With the IPO, Starland will also be able to leverage on the status as a public listed company to help boost its brand in China, which will help us facilitate business needs such as acquiring more land,” it said in a statement.

For the financial year ending 30 September 2011, Starland’s revenue reached RMB77.7 million (S$15.36 million) with a net profit of RMB9.3 million. In terms of financial position as at 30 September 2011, the group’s cash and bank balances stood at RMB11.7 million, with zero gearing. The valuation of the group’s land bank for future developments is 3.8 times the cost of the land, which amounted to RMB339.1 million
compared to the land cost of RMB87.5 million. Starland’s placement will close at 12.00 noon on 25 April 2012 and trading of shares is expected to commence on April 27. PrimePartners Corporate Finance is the manager, sponsor and placement agent of the IPO.

Meanwhile, Global Premium Hotels Limited (GPH), the hotel and hospitality unit of Fragrance Group, priced its 450 million new shares at S$0.26 apiece, with an over-allotment option of 67.5 million shares.
GPH wants to raise S$117.0 million from its IPO to fund the acquisition of Fragrance Group's hotel portfolio. Fragrance will retain majority ownership of GPH.

The group said it is confident Singapore's integrated resorts and more frequent flights by budget carriers into the country will support its expansion plans. "This IPO or restructuring exercise will streamline the group's portfolio – one will be property development and the other, hotel development and operations,” said Eddie Lim Chee Chong, CEO of Global Premium Hotels Limited. "This will give investors a clear choice of what they want to invest in – the hospitality industry or another  property counter. With this, we are able to focus on both businesses – property development, and hotel development and operations,” he added.

The group owns 22 economy and mid-tier hotels in Singapore worth over S$747.5 million. GPH’s public offer will close on April 24 and is expected to begin trading on April 26. OCBC is the issue manager,  underwriter and placement agent of the IPO.

Starland and Global Premium Hotels’ offerings will be the fourth and fifth IPOs in Singapore so far this year after the listings of blood bank group Cordlife, palm oil firm Bumitama and engineering firm Civmec. Some other groups have been tipped to launch IPOs in Singapore. The list includes English football champions Manchester United, India’s Reliance Communications, Finnish equipment group Cargotec and motor racing group Formula One.

Comments:

I think that the IPO markets now are ripe for playing... With the "Sell in May" Syndrome coming.. IPOs may be a quick way of how people will utilise their cash holdings to earn quick bucks... And thats what i am doing to do as well!