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Trans-Cab offers 153m shares in IPO

krafty

Alfrescian (Inf)
Asset
Trans-cab Holdings Ltd., the second largest taxi operator in Singapore by fleet size, has launched its IPO at S$0.68 per Share (“Offering Price”), in connection with its proposed listing on the Main Board of the SGX-ST.
- Global Offering of 168,000,000 Shares priced at top end of book building range of S$0.65 to S$0.68 to raise at least S$114.2 million
- Public Offer opens at 9.00 am on 13 November 2014 and closes at 12.00 noon on 18 November 2014
- Market capitalisation expected to be approximately S$456 million upon listing
Use of Proceeds
Trans-cab intends to utilise the net proceeds of approximately S$97.8 million from the Global Offering for the following purposes:
- S$30.0 million to fund the expansion of its taxi operations;
- S$30.0 million for the diversification into other transport businesses;
- S$4.0 million for investment in technology and innovation;
- S$3.0 million for the construction and refurbishment of the Group’s new corporate headquarters; and
- the balance for general working capital.
 

krafty

Alfrescian (Inf)
Asset
i am buying to support the teo guy, think he deserved every sinkie support. someone with humble beginnings who worked with his bare hands to achieve his success today. respect!:cool:
 

Cerebral

Alfrescian (InfP) [Comp]
Generous Asset
So much being set aside for working capital means they need money or have no fucking idea how to use it
 

eErotica69

Alfrescian (InfP)
Generous Asset
Trans-cab Holdings IPO - Riding Beside The Big Boys Comfort Delgro and SMRT

metable
12 November 2014: Opening of the Offering
18 November 2014, 12.00 noon: Close of the Offering
19 November 2014: Balloting of applications, if necessary (in the event of an oversubscription for the Public Offer Shares)
20 November 2014, 9.00 a.m. : Commence trading on a “ready” basis
25 November 2014: Settlement date for all trades done on a “ready” basis


I don't really talk about IPOs at all as most of them are pretty speculative and definitely not recommended for value investors. However Trans-cab falls in the transport industry which got me pretty interested as I previously blogged and invested in Comfort Delgro. I had since sold for a small profit and sadly it continued raging upwards!

While transport companies such as SMRT and Comfort Delgro currently trade at excessive valuations of 20 times earnings upwards, new Trans-cab shares will be sold at just around 14 times earnings. Their core business is in the operation of taxis while branching out to other services such as repair/maintenance, diesel pump stations and call centre operations.

Revenues and earnings trends looks good (like in every other prospectus), however do note that in 2013 total assets took a hit due to restructuring(sale of assets and a gain which is added to earnings)

One important thing that new investors coming in should take note would be the dilution in NAV. Pre-IPO the NAV is only 14.2 cents per share! as new investors come in at 68 cents a piece, this boosts the old shareholders while diluting the new comers.

Post IPO the NAV per share would be 25.5 cents which gives it a price to book ratio of close to 2.6 times. The initial feel is that this figure seems a bit excessive, however compared to Comfort Delgro which trades at 2.5 times and SMRT at 2.8 times, this seems in line.

Lastly earnings per share comes in at around 4.9 cents, so at its IPO price of 68 cents it would trade at close to 14 times earnings. I think that the valuation is pretty reasonable, leaving it with a small upside on initial trading (probably selling for 15 times earnings upwards)

Conclusion

From a value investing point of view it doesn't really look cheap but more towards fairly priced. There's a lack of margin of safety due to the high price to book, and PE wise you really wanna just pay like 12 times or less for such a slow grower.

However from a trading point of view this looks like a good bet! With all the hype in transport stocks that had sent CD and SMRT soaring to 20 times earnings, TCH could easily fall within the 15-20 times range. I think the IPO will be heavily subscribed and lucky punters that got allocated would be happy selling out at around say 75-80 cents.

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http://stockbrokerplayspoker.blogspot.sg/
 

eErotica69

Alfrescian (InfP)
Generous Asset
Your mother's chee buy also offer share.. Can buy one for your dog.

Dear all, please pardon our jiu hu kia Tonychat as he spends his childhood in that kind of environment in jiu hu.

So he thought every mothers are same same as his mother :oIo::oIo::oIo:
 
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krafty

Alfrescian (Inf)
Asset
cannot...its ipo bank is dbs, so you have to go thru them. i think dateline is monday. you have to go to dbs personally to subscribe, which i think they will ask you to open an account with them.

Just another question I dont have any account with POSB/DBS so can I use UOB to buy the shares?
 
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