ST Group Food Industries Holdings Limited – IPO

Share:

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. 

ST Group IPO Timetable

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.

ST Group Outlets

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.

ST Group Financial Highlights

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.      

Author: The Financial Guy

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