Placement of 30,077,000 Placement Shares at S$0.26 each, payable in full on application.
ST Group Food Industries Holdings Limited is offering 30.077 mil placement shares for its IPO on Catalist at $0.26 per share. Market capitalization based on 246 mil shares is S$64 mil. The offer will close on 1st July at 12 noon and start trading on 3rd July at 9 am.
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Business Overview
The Company with a history dating back to 2011, It is an established F&B group headquartered in Australia, which owns exclusive franchise and licence rights to the following 6 internationally popular F&B brands or concepts in various territories in Australia, New Zealand, Malaysia and England, United Kingdom – "PappaRich", "NeNe Chicken", "Hokkaido Baked Cheese Tart", "Gong Cha", "IPPUDO" and "iDarts". We have also developed 2 of our own brands – "PAFU" and "KURIMU".
The Company has 38 owned outlets, 63 sub-franchised / sub-licensed outlets and cover 4 geographical markets.
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Financial Highlight
Base on the offered document, the group has been growing steadily on their revenue on average by A$6 mil yearly from FY2016 to FY2018. Just HY2019 the revenue is A$24 mil and we could see that there is a possiblities it can hit A$50 mil when FY close.
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Valuation
Based on the price of the Placement Shares and the Group’s historical net earnings per share for the financial year ended 31 December 2018, the Group’s price-to-earnings ratio, calculated using it's pre-IPO issued and paid-up share capital is 19.5 times and PB is 4.26 times.
Conclusion
52% of the group outlets in Australia and New Zealand are
leased from landlords of major shopping centers. The group also has a central kitchen which will serve the operations in Australia and New Zealand.
What I like about their operating model is the sales are generated by F&B retails and they are not overly dependent on major customers. The group will also expend into Malaysia by setting up a central kitchen and corporate office to support the business in Malaysia.
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