Secura Group listed on the Catalist on 28 Jan this year, which is about six months ago. In an analysis prior to the IPO, writer Mr IPO made the following observations on his blog about the business and the IPO price. The share price has underperformed and last Friday, it closed at 18.1 cents, which is below the IPO price of 25 cents. The underperformance since IPO is in line with Mr IPO's earlier take on its (less than sterling) investment merits -- so far -- and its overvaluation at IPO.
 Photo: CompanyWhat I like about the Company
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| ♦ One-chilli rating |
 "It's a very mixed feeling for me. My gut feel is that the share will debut above its IPO Price but don't overstay your welcome. It's a one chilli rating for me as this is not a clear compelling buy and the towkays definitely didn't leave any meat on the table."-- Mr IPO |
- While cheque printing is a stable business, it is also a sunset business. People still writing cheques will belong to "the older generation". Technology has since changed the way people pay for services. One good example will be i used to write cheque to pay my credit card bills but have since moved on to online platform such as Internet banking or www.axs.com.sg
- Uncertain and volatile markets sentiments may affect the debut
- Very rich valuation. There are many beaten down stocks that are currently worth a second look vis-a-vis this Company debuting at high valuation
- While the detachable warrants is novel, it creates another layer of complication to retail investors, who may not fully appreciate how warrants work
- Misleading prospectus where they list the PER of FY2014 at 8.9x, knowing jolly well that $5m of the net profit in FY2014 was non-recurring and using a pre invitation share capital as the denominator!
- The Company took out the cash prior to the IPO through dividends amounting to around $12.8m over the last 3 years. If the prospects is so good, why didn't they keep the cash in the Company to grow the business?
- Huge placement tranche of more than 100m shares may mean selling pressure
My Ratings
| Stock price | 18.1 cents |
| 52-week range | 15 - 25.5 cents |
| PE (ttm) | 20.57 |
| Market cap | S$72.4 million |
| Shares outstanding | 400 million |
| Dividend yield (ttm) |
1.66% |
| Source: Bloomberg |
It's a very mixed feeling for me. My gut feel is that the share will debut above its IPO Price but don't overstay your welcome. It's a one chilli rating for me as this is not a clear compelling buy and the towkays definitely didn't leave any meat on the table.
Mr. IPO is a Chartered Financial Analyst and a Chartered Accountant. He currently works as an investment professional.
Secura Group's recent Powerpoint materials are here.
Mr. IPO is a Chartered Financial Analyst and a Chartered Accountant. He currently works as an investment professional.
Secura Group's recent Powerpoint materials are here.