YET ANOTHER Singapore-listed company is seeking a foreign dual listing in order to raise funds and achieve a better valuation for its Singapore-listed shares.
Serial System, a distributor of semiconductors and electronic components, today said it intends to offer and list Taiwan Depository Receipts (TDRs) of up to 90 million new ordinary shares.
The TDR shares will constitute approximately 11.9% of the existing issued share capital, and 10.6% of the enlarged share capital of the company.
It joins 7 other Singapore-listed companies which have announced their TDR plans and are waiting to be listed.
Four others have successfully listed their TDRs – Oceanus, Yangzijiang Shipbuilding, Super Group and China Taisan.
All these companies’ stock price performance since the announcement of their TDR plans were the subject of a Business Times article yesterday.
A key conclusion: the launch of the TDRs appears to have improved the valuation of the companies. All the companies that have launched TDRs or announced plans for TDRs have shown an improvement in their price-to-book ratio and price-earnings multiples.
BT said this could be due to the improvement in the general market sentiment. Still, based on the few companies studied, chances of out-performance outweigh under-performance. So from that perspective, TDRs are not a futile exercise after all.
Serial reported a 0.89 cent earnings per share for the half year ended June, a sharp jump from 0.19 cents in the previous corresponding period.
The annualized EPS is 1.78 cents, which translates into a PE of 8.1X based on the recent stock closing price of 14.5 cents.
The net assets backing per share was 13.58 cents.
In a recent report, NRA Capital raised its target price for Serial from S$0.14 to S$0.19, still pegged at 10x FY10 PER. It is forecasting a net profit growth of 17.6% to $16.7 million next year.
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