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Navigating Through The IPO Game
Perspective | 31 August 2012
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By: Louis Kent Lee
Articles (199) Profile

If being in the stock market is like playing a snooker game, we have about a few more months before sinking the final ball in December. In a snooker game, one needs to know his best chances before he decides to take the shot, and assess if the taken shot is in line with his overall game plan. In reference to the snooker innuendos, we’ve rounded up the Initial Public Offerings (IPOs) we have seen so far this year (as at 24 August), which is presented in table 1 below.

Table 1

From the lot, we have singled out four IPOs which have been able to stay above the water and reflected positive gains till date, when comparing its closing stock price against both their debut and issue price.

IHH Healthcare – The healthcare giant saw a 10.06 percent jump in its stock price, compared to its issue price of $1.113 when it first debuted at $1.225 on 25 July. Comparing its stock price on 24 August to the issue price, IHH revealed an 11.41 percent return, albeit a lower 1.22 percent gain was seen under the same comparison, against its debut price of $1.225. This however should not be a sole judge on IHH’s performance, and what it has in store for investors in the future.

In its 1H12 results release, IHH reported a substantial surge in earnings of approximately 195 percent, largely on the back of the 137 percent jump in revenue and 118 percent increase in its other operating income. The strong earnings performance was mainly due to a large recognition of profit from the sale of medical suites at its Mount Elizabeth Novena Specialist Centre.

Leveraging on its large scale of operations and, IHH is well positioned to benefit even more from markets it already commands leadership positions in (Singapore, Malaysia and Turkey). The mentioned key markets are popular medical hubs, and the demand for quality healthcare services is further backed by a rapidly aging population and supportive government policies.

Frost & Sullivan reported that IHH commands a 43.9 percent market share of licensed beds in Singapore (largest private healthcare operator) in 2011. This percentage share is likely to see an increase after the opening of its new high end, state of the art 333 bed Mount Elizabeth Novena Hospital (MENH) in July. IHH’s management revealed that the initial start for MENH was promising, with more than 200 admissions and surgeries made. The management is expecting to achieve positive EBITDA (earnings before interest, tax, depreciation and amortisation) in 2H13, as it targets the ramp up of MENH on a steeper gradient.

According to Bloomberg, IHH currently has nine BUYs and three HOLDs.

Maxi-Cash – The lion city’s first listed pawnbroker debuted at $0.39 on 22 June, which saw a 30 percent jump when compared to its issue price of $0.30 on the debut day. Comparing its stock price on 24 August to the issue price, Maxi-Cash revealed a 40 percent return, while the same comparison against its debut price on 24 August revealed a 7.69 percent return.

Commanding a network of 24 retail pawnshops, Maxi-Cash has the largest pawnshop network in Singapore, which translates to a market share of 13 percent. In its 1H12 earnings, Maxi-Cash reported earnings growth to $1.7 million from 1H11’s $0.3 million as revenue registered a 35 percent increase, largely attributable to higher interest income from its growing pledge book and sales of unredeemed pledges from its pawnbroking business, and better growth from its pre-owned jewellery and watches businesses.

Despite the fervent growth, Maxi-Cash might feel some headwinds in the short term as it expects to open additional pawnshops in 2H12, and typically the opening of additional pawnshops will have a mixed impact on its performance. This impact relates to the substantial start-up costs during the license application period and increase in operating costs when the business commences.

We have branched Bumitama Agri and Civmec into two separate investment pieces.

As long as we are still on the IPO game, it is necessary to introduce the new company that was just listed on the exchange this week. This is none other than Far East Hospitality Trust.

Louis is a qualified accountant with the ACCA, and is the Research Editor at Shares Investment magazine.

Please click here for more information about this author.

IHH Healthcare  1.900 +0.050 +2.70%   
Business: One of the largest listed private healthcare providers in Asia and worldwide. [FY18 Turnover] Parkway Pantai (64.7%), Acibadem Hldgs (31.9%), IMU (2.2%), PLife REIT (1.2%).

Insight: May-19, 1Q19 revenue rose 27.6% as a result of the... Read More
Maxi-Cash Financial Services Corp  0.128 -0.001 -0.78%   
Business: Pawnbroker. [FY18 Turnover] Retail & trading of jewellery & branded merchandise (75.4%), pawnbroking (20.2%), money lending (4.4%).

Insight: May-19, 1Q19 revenue slid 13.5% due to lower sales... Read More
Bumitama Agri  0.575 -- --   
Business: Co produces and trades in crude palm oil (CPO), palm kernel (PK), and related products for refineries in Indonesia.

Insight: Feb-19, FY18 revenue increased 3.1% mainly due to ... Read More
Civmec  0.330 -- --   
Business: An integrated, multi-disciplinary construction & engineering services provider. [FY18 Turnover] Metals & minerals (61%), infrastructure (19.5%), oil & gas (19.5%).

Insight: Aug-18, FY18, Co reported a net profit of $26.2m, ... Read More
Far East Hospitality Trust  0.655 +0.015 +2.34%   
Business: Invests in a diversified portfolio of income-producing hospitality-related real estate in Singapore. [FY18 Turnover] Hotels & services residences (80.6%), retails & offices (19.4%).

Insight: May-19, 1Q19 gross revenue increased 8% to $27.8m ... Read More
Sysma Hldgs  -- -- --   
Business: Co is engaged in providing building construction svcs to the private sector in S'pore. [FY17 Turnover] Building construction (67.1%), property development (32.9%).

Insight: Mar-18, 1H18 revenue grew by 47.2% to $59.7m mainl... Read More
Ascendas Hospitality Trust  1.050 -- --   
Business: A stapled group comprising Ascendas Hospitality Real Estate Investment Trust and Ascendas Hospitality Business Trust.

Insight: May-19, FY19 revenue fell 6.3% to $190.5m while NP... Read More
Sincap Group  0.006 +0.001 +20.00%   
Business: Co primarily trades in thermal coal.

Insight: Mar-18, FY17 revenue grew by 40% to Rmb306.7m main... Read More
Neo Group  -- -- --   
Business: A leading food catering group. [FY19 Turnover] Food catering (45.2%), food manufacturing (27%), supplies & trading (17.9%), food retail (9.3%), other business (0.6%).

Insight: May-19, FY19 revenue inched up 1.6% with increased... Read More
Swee Hong  -- -- --   
Business: Co is engaged in civil engrg works and micro-tunnelling works as a main contractor. [FY18 Turnover] Civil engineering (96.4%), tunnelling (3.6%).

Insight: May-19, 3Q19 revenue fell 60.8% to $4.6m due to lo... Read More
Starland Hldgs  -- -- --   
Business: Co develops integrated residential and commercial properties in China. [FY18 Turnover] Property development (96.6%), rental income (3.4%).

Insight: Feb-19, FY18 revenue fell 33.6% to Rmb67.1m mainly... Read More
Cordlife Group  0.455 -0.020 -4.21%   
Business: Co is in the business of cord lining banking and holds the largest market share of private cord blood banks in Singapore, Indonesia and the Philippines.

Insight: Feb-19, 18M18 revenue increased 13% to $12.1.m mai... Read More

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The Shares Investment editorial team welcomes constructive feedback on our coverage and content. We would also be delighted to answer any questions on the above article. Leave us a comment below, and we'll get back to you shortly!

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