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IPO Chilli Ratings

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Singapore Institute of Advanced Medicine Holdings Ltd

Singapore Institute of Advanced Medicine Holdings Ltd ("Sam" or the "Company") is offering 114m new shares comprising 4.415m Public Offer Shares and 109.585m Placement Shares at $0.23 each for a listing on Catalist.  The Company aims to raise $26.2m and the majority of the proceeds will be used to repay debt and the balance for working capital. The market cap based on the IPO price is $231.8m and the offer will close on 14 Feb at 12 noon and starts trading on 16 Feb 2024 at 9am.   Principal Business SAM is a healthcare service provider using advanced technology for early and accurate diagnosis to detect and treat cancer, neurodegenerative and cardiovascular diseases.  SAM has strategic collaborations with public and private institutions for research and clinical work.  SAM's goal is to create a comprehensive one-stop ambulatory cancer centre to undertake the challenges to fight cancer and is one of the first to adopt proto beam therapy treatment in Singapore. Fi

Accordia Golf Trust

Accordia Golf Trust ("AGT" or the "Company") is the first business trust with golf course assets in Japan. 

The IPO will close on 24 July at 12pm (page 77 says 24 July 4 pm). I am not sure why the manager chose to give public investors a pathetic 2 days to make a decision. Probably this is because the placement tranche is fully subscribed. The listing will happen on 1 August 2014 at 2pm. 

There will be up to 782m placement units of which 164.592m units are to placement holders in Singapore, 41.163m units for public investors and 576.27m units for Japanese investors.  The price is between S$0.97 to $1 and will be finalized when the IPO closes. There will also be an over allotment of 41.22m units. The market cap will be around $1.066 to $1.099 b depending on the final agreed price. 

I have to say the business trust structure is getting innovative with more interesting assets even though in general, they have not really done well on the local bourse. (Just look at Hutchison Port). 



Principle business

The initial portfolio consists of 89 golf courses and related assets valued at S$1.85b. Most of the assets are centrally located in Japan. 




Yield

The yield projected to be about 9.1% for  FY2015. However it will drop to 7% if we include non recurring items. 













What I like about the Company

• High barriers of entry in land scarce Japan created obstacles for competitors 
• Aging population as retired people has more time to pursue this hobby but that can also be a weakness if the earning power decline. 
•  The return of golf as a sporting event for the Olympics and Tokyo hosting the event in 2020. 
• High brand awareness and utilization rates on the courses with 5% market share. 
• Strong sponsor who has earmarked 26 golf courses that could be offered to AGT.
• The sponsor will continue to hold at least 25% of the trust post IPO to ensure alignment of interest. 

My concerns

•  The game is waning in popularity among younger generation. There is a chart on the declining number of golfers. 
•  Transfer pricing issues between related parties. 
•  The post IPO performance for business trusts (Asian Pay TV, Hutchison Port) are really disappointing and Japanese assets have never performed well (Saizen, Croesus Retail Trust). 
• If you look at the financials on page 64, the revenue is stagnant and the profits increase is derived from declining labour cost. I am concerned about future profitability. 
• JPY exposure for Singapore investors. Less so for Japanese investors. 

Valuation

I didn't have the time to analyze the NAV per share. Perhaps some readers can help but purely evaluated this from a yield perspective. You have seen how HPHT and Asian Pay TV, despite the yields are languishing. The 9% initial yield is more like the sponsor giving a price discount on his assets. The yield will drop further if it is priced at $1 instead of $0.97. 

My ratings 

I will give it a one chilli rating and will give it a miss. Buy only if you like the assets, is happy with a 6-7% yield and believes it is sustainable. 

On a side note, I have forgotten how to play golf as it is too time consuming. Perhaps it is a timely reminder to clean up the clubs in my store room and put it on eBay. Any takers? 

Happy goofing :-P

Comments

Anonymous said…
Thank you and enjoy your trip! :-)
I counted NAV about 75 yen, so 95% of NAV/price
Mr. IPO said…
Thanks tony! Appreciate it
Anonymous said…
any statistics on results?
Mr. IPO said…
Not out yet lor
Anonymous said…
Still not out?
Mr. IPO said…
Since it is undersubscribed, the result will be whatever u apply for you get lor....
Anonymous said…
Hi Mr IPO,

Given the lower price now at 0.785 cts, please advise what's the current distribution rate ?

Would you consider buying into this counter if it drops further?

Thanks and regards.
Mr. IPO said…
I am not really into this stock.