Compared to thirty companies listed in 2008, Initial Public Offerings (IPOs) for 2009 have been meagre with only five companies listed on Catalist. The heydays of numerous IPOs have long gone but listing aspirants appear to be slowly creeping back. There were 76 new listings worldwide in 2Q09, a 46% increase from 1Q09. In Singapore, recent global stock market rallies may have revived corporate interest in listing public as more companies lodged their prospectus with the Monetary Authority of Singapore.

From June to early July, three companies (China Gaoxian Fibre Fabric Holdings, Great Group Holdings, PEC) have lodged their prospectus in a bid to catch the rally. All three companies are aiming for a listing on the Mainboard while waiting for approval from the authorities. This issue, Shares Investment (Singapore) evaluates how the five IPOs listed in 2009 have fared so far, starting with the most recent listing.

Moulding The Future
JLJ Holdings (JLJ) specializes in design, fabrication and sale of precision plastic injection moulds, precision plastic injection molding (PPIM) services and other PPIM-related value added services. Listed on 10 July at $0.270 apiece, JLJ’s shares have remained within the range of $0.240 – $0.275 for the past week despite the current rally.

Among all the five IPOs, JLJ’s shares have dipped the least. Using Hi-P International and China Kunda Technology Holdings as a form of comparison since both companies also specializes in plastic moulding, JLJ is likely to suffer a slight dip in revenue in the current market. Furthermore, JLJ would have to cut down on selling expenses and raw material costs if it expects to see an increment in profits.

Piping Specialist
Listed on 8 July, Heatec Jietong (Heatec) provides piping and heat exchanger services in Singapore, servicing the global marine & oil & gas industries. Its piping division has been continuously voted best Piping Contractor by all major shipyards in Singapore – specializing in FPSO and oil rig high pressure piping works whereas its heat exchanger business has extended its services abroad to China. At an offer price of $0.275, Heatec closed at $0.245 (see table) as of 17 July.

Crude oil futures have been extending gains, in tandem with the recent rally. In a Credit Suisse report, analysts wrote that they expect to see some consolidation above the US$60 mark in the coming days as there are no important data releases due that could provide an additional impulse to the oil market. Rising global equity markets could buoy sentiment among energy traders, which would in turn benefit companies such as Heatec.

Pulling Black Gold
Another listed player in the global marine oil and gas industry, Teho International (Teho) supplies rigging and mooring equipment as well as related services to its customers. Rigging equipment is mainly used to be assembled with other connectors and fittings for lifting purposes. Mooring equipment on the other hand, is used for docking a vessel to the dock. On its opening debut, Teho reached a high of $0.380 before closing at $0.315 with 10.84m shares traded, the highest volume among all five IPOs. Despite closing lower, it was still at a 31.3% premium over its listing price of $0.240.

As of 17 July, Teho closed at $0.230, 4.2%, below its listing price. In a situation similar to Heatec, Teho’s future prospects rely heavily on oil prices. If oil prices were to drop to US$50 and below, there would be no incentives for oil and gas companies to venture offshore for oil, as the production costs exceed the financial benefits in return.

Scrumptious 
Japanese Cuisine
Fancy a delicious authentic Japanese cuisine? Well, Japan Foods Holding (Japan Foods) offers a wide variety of Japanese food such as ramen and bento sets. Japan Foods is involved in the selling of sub-franchises in Japanese food and operating its own Japanese restaurants. Japan Foods’ stable of restaurants include the popular ‘Ajisen Ramen’, ‘Aji Tei’ and ‘Hokkyokusei’. In September 2008, Japan Foods obtained the ‘Ajisen Ramen’ franchise rights for 50 years till 2058 which include countries such as Vietnam, Indonesia and Malaysia.

Offered at $0.20 apiece, Japan Foods fell to a low of $0.150 on its second day of trading but have since been hovering in the $0.190 – $0.205 range. Japan Foods’ FY09 revenue rose 25.1% but overall earnings dropped 4.7% as selling and other expenses increased at a higher rate. Comparing Japan Foods with its peer, Apex-Pal International which specializes in Japanese food and operates in similar fashion, Japan Foods has performed well to be able to rake in profits amidst challenging economic backdrop for FY09 as compared to Apex-Pal International which incurred losses for FY08.

Travelling Made Easy
Among all the companies listed in 2009, Westminster Travel (Westminster) fared the worst since its listing. Its share price fell 44.7% since the day of its debut on 23 January at an offer price of $0.235. A one-stop travel management services group offering a wide range of travel products and services, Westminster is principally engaged in the provision of corporate travel services and the wholesale of air tickets and hotel rooms. It also provides leisure travel services.

Due to the current financial crisis and the occurrence of H1N1 flu, the travel industry has been hit badly as a result of more people staying indoors. Corporations have also cut down on overseas travel, relying instead on video conferencing in order to reduce costs and preventing them from getting infected with H1N1. According to its FY09 report, Westminster’s highest revenue generator came from Hong Kong, approximately 84.4%. Fast forward to the current climate, it would be hard to envisage people travelling to Hong Kong which is one of the more infected countries with H1N1.

A New Entrant
By the time this publication hits the streets, another new listing, Singapore Medical Group (SMG) would have made its catalist debut on 23 July. SMG provides specialist healthcare services including refractive surgery, sports medicine and cancer treatment. It is placing out 25.6m shares at $0.21 each based on PER of 5.7 times. It would be interesting to see how well SMG will fare given the lacklustre performances of its predecessors.