Half-Time Report: How IPOs In Singapore Are Faring In 2018?

The Singapore Initial Public Offering (IPO) market has seen another lacklustre year with eight company listings, one reverse takeover (RTO) and one bond listing in the year-to-date 2018.

Despite the challenges SGX has been facing and a depressed market since the second quarter of 2018, SGX continues to offer a global capital marketplace, with the promise of stability and clear policies, to companies looking to raise funds in the island nation. Here are the latest listings of 2018 and how they have fared so far.

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# 1 Memories Group Limited (SGX: 1H4)

Technically, Memories Group listing on the SGX came via a reverse takeover offer (RTO) rather than an IPO. A spin-off of SGX-listed Yoma Strategic Holdings, this Myanmar-focused tourism-related company is the largest operator of hot air balloon in the country – Balloons over Bagan. In addition, it also operates a hostel business, with two hostels, and owns a 4.3-acre piece of land that will be developed into a commercial and hospitality development.

Memories Group placed shares out at $0.25 during its RTO. Today, it is trading at $0.18, representing a decline of close to 28%.

# 2 LY Corporation Limited (SGX: 1H8)

The first IPO to list in 2018, LY Corporation is one of Malaysia’s leading manufacturers and exporters of wooden bedroom furniture with over 40 years of track record.

Listed at an IPO price of $0.26, LY Corporation closed 9.6% higher on the day of its opening. Since then, its share price has tapered to $0.25, or 3.8% under its IPO price.

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# 3 ayondo Ltd. (SGX: 1I5)

Billed as the first fintech pure play on the SGX, ayondo is in the business of social trading, allowing retail traders and investors on its platform to share and follow other traders’ trading and investment strategies “automatically, proportionally and on a real-time basis”.

Shares of ayondo was sold at $0.26 during its IPO on 26 March 2018. Its share price dipped to $0.24 on the opening day, before tanking to $0.075 cents today. This is 71.1% under its IPO price.

# 4 Sasseur REIT (SGX: CRPU)

The first real estate investment trust (REIT) and only mainboard listing in 2018, Sasseur REIT is the first outlet mall REIT to be listed in Asia. Offering investors unique exposure to the Chinese retail outlet mall sector, Sasseur REIT has a portfolio of four malls in Chongqing, Bishan, Hefei and Kunming.

Its sponsor, Sasseur, has at least two other outlet malls that may be injected into the REIT for further growth in the future. It also has three other outlet malls in the pipeline that can also provide long-term expansion prospects for the REIT.

Listed at an IPO price of $0.80, Sasseur REIT closed marginally higher on its opening day at $0.805. Today, Sasseur REIT is trading at $0.735.

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# 5 SLB Development Ltd. (SGX: 1J10)

Spun off from Lian Beng Group, SLB Development has 17 years of experience as a property developer of projects ranging from small to large scale residential, mixed-use industrial and commercial properties. It has also expanded into the China market since 2014 and is seeking expansion within Asia Pacific, Western Europe and Norther America.

On its first day of trading on 20 April 2018, its share price surged close to 13% from its IPO price of $0.23. Today, shares in the company are trading at $0.199.

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# 6 Asian Healthcare Specialists (SGX: 1J3)

With five senior and experienced orthopaedics specialists in four clinical establishments, AHS provides a wide spectrum of general and subspecialised orthopaedic, trauma and sports services.

Selling its IPO shares at $0.23, AHS saw its share price spiked to $0.345 on its opening. Today, it is trading 27.4% above its IPO price at $0.27.

# 7 Hyphens Pharma Intl Limited (SGX: 1J5)

Securing three cornerstone investors in Nikko Asset Management Asia Limited, Qilin Asset Management and Maxi-Harvest Group, Hyphens Pharma public offer was 152 times subscribed.

Hyphens Pharma represent leading pharmaceutical and consumer healthcare group listed on the SGX. With strong presence in Singapore, Vietnam, Malaysia, Indonesia and Philippines, Hyphens Pharma has three core business segments – speciality pharmaceutical, proprietary brands and medical hypermart and digital.

Debuting on the SGX on 18 May 2018, its share price rose 15.4% from its IPO price of $0.26 before gradually simmering down to trade $0.235 today.

# 8 Jawala Inc. (SGX: 1J7)

Jawala is one of five stocks on the SGX with exposure to the paper and forest products industry. Being 18.5 times oversubscribed, Jawala is focused on the management of forestry resources and the planting and extraction of timber.

With a 100 years license to manage over 11,000 hectares in Sabah, it has plans to develop the plantation site for harvest from 2026, increase log production by acquiring new industrial tree plantations and continuing to invest in R&D to improve wood yields, quality as well as develop sustainable practices.

Since rising marginally from its IPO price of $0.25 on the opening day, shares in Jawala has stabilised at $0.245, or down 2% lower. One of the main reasons for this may be that shares are tightly held by its majority shareholder Datuk Jema Khan.

# 9 Astrea IV4.35%B280614 (SGX: RMRB)

Unlike the other eight companies listed above, the Astrea IV is a bond. Astrea IV has three tranches of bonds, with only the Class A-1 Bonds available to retail investors.

Issued by the Azalea Asset Management Group, a unit of Singapore’s Temasek Holdings, the Astrea IV’s Class A-1 Bonds pays out an annual coupon of 4.35%. This enables retail investors to gain exposure to private equity and visible cashflows, backed by private equity, from their investments.

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With a scheduled call date of five years, the Astrea IV bonds offers a mid-term bond investment to investors in Singapore. Listed on 18 June 2018, the Astrea IV bonds has already increased 3.5% in price to $1.035.

# 10 PropNex Limited (SGX: OYY)

PropNex is the latest IPO to hit the Singapore market. In the business of real estate brokering, property management and real estate consultancy and with over 7,000 sales persons, PropNex is the largest real estate agency in Singapore by salesforce.

Listed on 2 July 2018 at an IPO price of $0.65, the group’s share price opened at $0.685 and rose up to $0.745 by the end of the day. This is a one-day gain of close to 14.6%.

Summary Of IPOs In 2018 (As at 2 July 2018)

* Available to retail investors

Performance Tracking the Straits Times Index

While the IPOs in 2018 look to be performing at a sub-par rate, we should not ignore the fact that the overall market has been losing steam in the second quarter of 2018. To-date, the Straits Times Index (STI) has tanked 4.2%.

IPO companies, often smaller and much more volatile compared to STI-listed companies, are expected to be dragged lower than blue-chip stocks during periods of uncertainty.

Another thing to consider is that oversubscription of an IPO also does not always translate into better performance of a company. Ultimately, we still need to research what we’re investing into.

While many companies, including blue-chips have experienced depressed share prices in 2018, it could be a good time for savvier investors to pick up stocks that have been oversold. For those who aren’t quite sure, continuing periodic investments in the STI may be a good idea to lower your average cost yet not get burnt by further market reversals.

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