Sunday, June 05, 2011

New IPOs

Following the Mclean debacle (which is still drifting to neverneverland), we have a slew of IPOs coming through. Funnily, during such a difficult period like May/June, we have these IPOs trying their luck.

UOA Development - Its not a REIT, let's get that clear. I would not look too closely on their assumed dividend yield. Its a mid-sized property developer, and a pretty decent one too. A large part of the weightage is on how successful Bangsar South will be. Some 65% of new projects will be in Bangsar South, and they are planning some RM8bn in new projects, you do the math.

Brand wise, its strong and formidable for a mid sized player. Its a lot better managed than some family owned property developers. IPO price RM2.52, should have been a bit higher.

Its a simple equation really, Klang Valley, strong brand and delivery. RNAV RM3.57. It should not reach RNAV. I think fair value will be between RM3.10-3.20.

XOX - IPO price 80 sen. Its a MVNO, it basically has zilch assets. To me, this is a business model that crumbles easily. Its barriers to entry are flimsy. Its hard to do proper verifcation of subscribers. Its hard to maintain subscribers. Which is to say, subcribers may be easy to grow but there is no certainty that they will be loyal. There is nothing that ties them down. For example, if DIGI comes in with a free 200 minutes for every RM100, there is no safety net for them.

The light may be that of XOX managed to pull in sustainable numbers, Celcom could very well buy them out. Verdict: dodgy. Maybe volatile on day one which may afford some trading opportunities but I wouldn't be holding on anytime soon. 80 sen is a very high price for a 10 sen par services based company with almost zilch hard assets.

NOTE: The above opinion is not an invitation to buy or sell. It serves as a blogging activity of my investing thoughts and ideas, this does not represent an investment advisory service as I charge no subscription or management fees (donations are welcomed though). The content on this site is provided as general information only and should not be taken as investment advice. All site content, shall not be construed as a recommendation to buy or sell any security or financial instrument. The ideas expressed are solely the opinions of the author. Any action that you take as a result of information, analysis, or commentary on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.


jimmy said...

Very nice photo on your home page. 2 kids with 2 fighting cocks. Is this picture taken by you?

Goh Kong Chee said...

Good analysis and hope to hear a comment on MSM IPO soon.

steve said...

UOA and XOX are already history. Now MSM. Please comment on MSM. Thank you!

k said...

very likey ur "cockey" wallpaper...

m said...

TQ Dali. Comments on coming big ones pls :)
MSM, Bumi Armada, Eversandai

ccdev said...


very nice, short & sweet.
hope it will be a regular thing like "Dali's IPO excerp" or something like that. cheers!