Closing date and time for Public Offer : 07 July 2005, 1200Hrs
Application Balloting Result : 08 July 2005
Start Trading : 14 July 2005, 0900Hrs
Maximum Price per Share : S$1.27
PE : Around 7X (Based on 2004 Earning per share)
Current Dividend Policy:
- Dividend pay-out ratio for the year end 31 Dec 05 is expected to be at least 30% of profit after tax for the year ending 31 Dec 05;
- current desire to maintain dividend payout ratio within the overall objective of maximizing shareholder value over the longer term
- pay an annual dividend with respect to a finanical year, the dividend payment will generally be paid in the first or second quarter of the following financial year.
Point to Note:
- In the past, the dividend will be declared and paid dividends in Korean Won. After the completion of the offering, dividend will be declared and paid in U.S dollars.
- Payment will be made in U.S. dollars to the CDP and CDP will then convert such proceeds into Singapore dollars. Amount of Singapore dollars payable to shareholder wil be affected by fluctuations in the exchange rate between Singapore dollar and the U.S. dollar.
Finanical Note: From the finanical information, the sale and profit has been increasing and the cost of sale has been decreasing for the three years.For more information, please refer to the prospectus
How to Apply:
- Apply at ATMs of DBS, PSOB, UOB, or OCBC
- Internet Banking at www.dbs.com or www.uob.com.sg
- Printed application forms
Action: With the low PE and the good track record in the past few years, I think I will apply for the IPO. Look like a better deal than those earlier IPO offers this year.
Disclaimer : Use the above information at your own risk! We'll not be responsible for any losses incurred.
15 comments:
SINGAPORE (XFN-ASIA) - The initial public offering (IPO) of STX Pan Ocean, the shipping arm of South Korea's STX Corp, is priced reasonably, said Goldman Sachs, the IPO's lead manager, global coordinator and sole book runner.
"It is quite reasonable," Ronald Lee, managing director of Goldman Sachs's investment banking division, told reporters.
STX Pan Ocean is selling 600 mln new and vendor shares at 0.96-1.27 sgd per share. The IPO prices will be fixed on July 8 and trading on the Singapore Exchange is expected to begin on July 14.
Based on the maximum price, Lee said STX Pan Ocean is being offered at prospective 2005 price-earnings ratio (PER) of four times, making STX Pan Ocean comparable to its peers, Lee said. Based on historical 2004 PER, STX Pan Ocean is being offered at almost seven times.
STX Pan Ocean did not give an earnings forecast for 2005 in its IPO prospectus.
In the first quarter to March 2005, STX Pan Ocean posted a net profit of 83.5 mln usd, up from 73.1 mln usd the year before.
"The second quarter will be better than the first," STX Pan Ocean president Jung-Chul Lee said when asked to provide an earnings outlook.
In 2004, STX Pan Ocean posted a net profit of 163.6 mln usd, up from 22.9 mln usd in 2003.
STX Pan Ocean's optimism springs from expectations that demand from China will remain strong.
The government measures aimed at cooling the overheating Chinese economy are only temporary and demand in China will eventually turn around, STX Pan Ocean's Lee said.
"Demand is still growing," he said.
In particular, Lee expects that China will become a net importer of coal by 2010 as domestic demand is expected to overshoot domestic supply by then.
"This will boost demand for dry bulk shipping," Lee said.
Lee said that, apart from strong Chinese demand, shipping capacity will be limited in the next few years as new vessels being ordered will most likely replace existing capacity.
"There has been no significant amount of vessel demolition in recent years. Vessel demolition will be inevitable in the next few years," Lee said.
The majority of STX Pan Ocean's revenue comes from its dry bulk shipping operations, but it aims to diversify its revenue base by increasing contributions from its car carrier and tanker operations.
Lee said STX Pan Ocean is aiming to have 30 pct of its revenue by 2010 come from its car carrier and tanker operations, up from less than 10 pct now.
Of the estimated net proceeds of 247 mln sgd from the sale of 200 mln new STX Pan Ocean shares at the maximum price, STX Pan Ocean is earmarking about 185 mln sgd to buy tankers and other vessels. The rest of the proceeds will be used for general corporate purposes.
STX Pan Ocean currently operates a fleet of 57 owned vessels and 200 vessels on charter. Among the vessels it owns are dry bulk carriers, container vessels, car carriers and tankers.
Good thread here,
http://info.channelnewsasia.com/bb/viewtopic.php?t=12522
What's for sure abt this IPO is, the original shareholders are going to rake in fantastic returns for a 6mths+ investment.
1) They just had a 1-for-50 split, so they are going to hold a majority stake even after selling some of their shares in the IPO.
2) They just paid themselves a US$1 div for FY2004 (US$0.10 in '03 before the current shareholders bought over the co.). If one of the stated objective of this IPO is to raise funds for expansion of their fleet,.... why did they pay themselves such a high dividend?
3) NAV will increase after the IPO, at the expense of the new shareholders. ie. the $1.27 that u put in will be worth much less if the co. were to be liquidated. But, the original shareholders will benefit.
4) The directors are all going to get a big pay jump. 6 of them will get $250k- <$500k fm yr 2005. It's prob to reward them for a successful IPO .
Unfortunately, after scanning thro' 1/3 of the prospectus, I still can't find any good reason for me to apply. Instead, I find the above info (on why it's good for the existing shareholders if we apply) plus lots of paragraphs on the risk involved for new investors. It's as if they are telling me "I told You So" first even before I apply
Also, we need to pay $1.27 immediately even tho' they'll go thro' a book building exercise 1st. Would be better if we could put in our bid at the lower end of <$1 if we still want to take the risk. Anyway, I'll wait till the last day before making a decision. Hopefully, we get to see more professional analysts' reports in this thread before then
PS. For those investing in Korea Stock Mkt, I'd suggest u buy the shares of the existing shareholders of STX instead. They are going to make some good extraordinary profits fm this IPO!
Talked to a friend yesterday, and went to check. Base on 2004 earnings, NOL is trading at 3.5 PER.
I am seeing too many advertisments about this IPO, don't really like it.
I will not apply for this.
Bloomberg News
FRIDAY, JULY 1, 2005
Shares of China Cosco Holdings, China's biggest container shipping line, fell 10 percent Thursday on their first day of trading in Hong Kong, amid concern that an expected decline in freight rates next year would cut its earnings.
The share price dropped to 3.825 Hong Kong dollars, or 49 U.S. cents, from an offer price of 4.25 dollars. It was the third most actively traded stock on the Hong Kong exchange, with 981 million dollars of shares changing hands.
China Cosco raised 9.52 billion dollars through its initial public offering, after pricing the shares at the bottom of a targeted range.
Freight rates, which rose during a four-year boom in China's exports to the United States and Europe, may fall next year as new vessels come into service, the London-based Drewry Shipping Consultants said. China Cosco has eight ships on order, including four that can each carry 10,050 boxes, the world's biggest by capacity.
"The market is concerned about oversupply," said Stella Lau, a fund manager at East Asia Asset Management in Hong Kong. "It really depends on whether the growth in demand will absorb the increase in supply."
China Cosco was the 11th stock to slump on its first day of trading in Hong Kong this year, according to Bloomberg data. The shipping line's chief executive Wei Jiafu, read a Chinese couplet predicting its "longevity with heaven and earth" at a ceremony on Thursday after shares began trading. He declined to answer questions.
China Cosco, controlled by the government through China Ocean Shipping, sold shares at 6.7 times forecast 2005 earnings, making its shares more expensive than the stocks of Evergreen Marine and Neptune Orient Lines, Asia's two biggest container lines by capacity .
At the closing price, China Cosco was trading at 6 times its forecast earnings of 0.635 dollars a share. Evergreen trades at about 6.2 times forecast 2005 profit and Neptune at about 4 times.
HSBC Holdings, J.P. Morgan Chase and UBS, which arranged the share sale, bought 95.86 million shares, or a stake of 1.56 percent, after the container line raised less than the maximum it had sought in the offer.
They would post a combined loss of 40.8 million dollars on paper, based on Thursday's closing price.
Fund managers placed orders for three times the shares offered to them in the IPO, China Cosco said Wednesday. Individual investors in Hong Kong subscribed for about half of the shares available to them.
China Cosco's net income could drop to 3.5 billion yuan, or $423 million, in 2006 as cargo shipping rates fall, according to an estimate by HSBC. China Cosco may report a profit of at least 4.15 billion yuan this year, compared with 4.16 billion yuan in 2004, the company said in its prospectus.
Global shipping capacity may grow 16 percent next year, almost twice as fast as demand, Drewry, which compiles data for the shipping industry, said.
China Cosco said the eight vessels that it had ordered would be delivered between 2007 and 2009. The company operates 119 vessels with a combined capacity of 303,197 boxes through the wholly owned Cosco Container Lines, Asia's third-biggest transporter of cargo boxes by capacity last year.
Just for the fun of it, my prediction,
IPO Price after book building = $1.00~$1.10
Retail Subscription = Over-subscribed 5x (only 30Mil on offer to retail)
1st Day Price = Also $1.00~$1.10
Even at this predicted price, I won't be applying for the IPO unless there's any last min. good news
Ok. The IPO application for STX has finally closed. I should know the balloting result by tomorrow. Keep all of you informed of the result. Chance of getting it will not be high.
08 July 2005
14:29
*SKOREA'S STX PAN OCEAN SINGAPORE IPO PRICED AT 0.90 SGD/SHR - GOLDMAN SACHS
Comments - May make money if u get it
SINGAPORE (XFN-ASIA) - The initial public offering (IPO) of STX Pan Ocean, the shipping arm of South Korea's STX Corp, has been priced at 0.90 sgd per share, below the indicative price range of 0.96-1.27 sgd, said Goldman Sachs, the lead manager, global coordinator and sole book runner.
"The main thing that affected sentiment in the IPO was the London bombing, " Ronald Lee, the managing director of Goldman Sachs's investment banking division, told XFN-Asia.
The IPO closed yesterday, when London was hit by a series of bombs that killed at least 38 people and wounded hundreds.
Lee added that the recent disappointing performance of container shipping line China COSCO Holdings also hurt sentiment towards STX Pan Ocean's IPO.
STX Pan Ocean is selling via the IPO 200 mln new shares and 400 mln vendor shares sold by existing shareholders, including STX Shipbuilding and POS Ship Management. STX Shipbuilding's stake in STX Pan Ocean will be cut to 38.9 pct from 50.90, while POS Ship Management is selling its entire 19.5 pct stake in STX Pan Ocean.
The retail tranche of the IPO was at least 30 mln shares, with the rest of the IPO shares to be sold to institutional investors via placement.
Despite the negative sentiment in the market, Lee said the IPO was fully taken up, with the retail tranche 2.6 times subscribed and institutional tranche 1.6 times subscribed.
STX Pan Ocean will start trading on the Singapore Exchange on July 14.
Well the ballot result for STX Pan Ocean is out. Below is the information for ballot result:
Share Applied For........ Number of share offer
1.....................................1
2 to 4...............................2
5 to 9...............................2
10 to 19............................3
20 to 29............................8
50 to 99............................25
100 to 499.........................50
500 to 999.........................99
1000 and above..................211
Comment:
It was quite a surprise that they allocated quite a good ratio for small time invester. It may be due to London bombing as people cut their booking in STX Pan Ocean IPO. Another surprise is that the share is priced at $0.90, which mean the PE is around 5 time based on 2004 earning. This should improve the interest of the share when it start trading on 14 July 2005.
I manage to get 2 lots of STX Pan Ocean through the IPO application. :) Hoping it let me earn some pocket money when it started trading on 14 July.
STX will start trading tomorrow. will keep a look out at the stock price. Have vested interest on the stock.
STX Pan Ocean started trading today at SGX. With a price of $0.945 at opening, it started with a bang in the earlier morning trading hitting all day high of $1.07. It finally closed at $0.97 with a volume of 70821K. STX Pan Ocean has the highest volume trading in SGX market. At least, STX is trading in positive region with a gain of 7.7% debut trading. Not too bad, consider some analysts predicated that it will be trading under $0.90 before the markter start. I finally manage to sell my STX shares at $0.97 today after I fail to sell it at $1.03 and then $1.00 in morning. Too bad , that I am not selling it during the initial ramp up stage. At least, I still manage to around get around 6% yield after I deduct the IPO application fee and the new trading charge of $25.00
Thursday July 14, 11:02 AM
UPDATE: STX Pan Ocean Shrs Rise 7.8% On Singapore Debut
.
SINGAPORE (Dow Jones)--South Korea's biggest dry bulk goods shipper, STX Pan Ocean Ltd. (STXP.ZZ), made a strong debut on the Singapore Exchange Thursday, closing at a 7.8% premium to its initial public offer price despite weak demand during the IPO.
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The shares rose as much as 19% to S$1.07 in early trade before pulling back to close at S$0.97, but still above the IPO price of S$0.90 and within the S$0.96 to S$1.27 indicative range for the IPO.
Based on the S$0.90 offer price and the issue size of 600 million new and vendor shares, the STX offer raised S$540 million, which makes it the biggest IPO in Singapore so far this year.
Investors were attracted by the company's cheap valuation and its dividend yield, a trader with a local brokerage said.
STX has said that the dividend payout ratio for the year ending Dec. 31 is expected to be at least 30% of its net profit.
Net profit in its last financial year was US$164 million, up from US$23 million in 2003.
STX, the first Korean company to list in Singapore, was forced last week to cut the IPO price because of negative market sentiment after the terrorist bombings in London.
Another factor in the IPO being priced below the indicative range was negative sentiment toward shipping companies.
There are concerns a slowing global economy and an expected jump in the supply of container ships will depress global freight rates. Dry bulk shipping rates are already at two-year lows, analysts say.
Investors had worried that STX would suffer the same fate as China COSCO Holdings Ltd. (1919.HK), whose shares fell 10% on their Hong Kong debut last month, traders said.
Based on S$0.90 a share, STX is priced at about 3 times its 2005 earnings, compared with China COSCO's multiple of 6.7 when it went public.
Just over 40% of STX shares have been floated, leaving STX Shipbuilding and Korea Development Bank as its biggest shareholders with 38.9% and 18.7% respectively.
The company intends to use the IPO proceeds to expand the business, including the acquisition of tankers and new building contracts.
Well, I think this company has the most advertiement on TV for it IPO listing. Before the launch, it has already create an impact on television. Even after debut listing, they are still showing advertisment informing investers or viewers that it has successfully launch or started trading at SGX. Cool.
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