$$$ KPO and CZM $$$: IPO - Hyphens Pharma International Limited

Monday, May 14, 2018

IPO - Hyphens Pharma International Limited

It has been a while since there was an IPO that interest us me. CZM is not joining because she has never heard of this company or their products. Neither have I but I am just a number guy. You can find the prospectus here.

Hyphens Pharma International Limited is a pharmaceuticals/medical company with the following 3 core businesses:
- Specialty pharma principals (53.6% of 2017 total revenue)
- Proprietary brands (11.4% of 2017 total revenue)
- Medical hypermart and digital (35.0% of 2017 total revenue)

There will be 29,600,000 Invitation Shares with 3,000,000 Public Offer Shares and 26,600,000 Placement Shares at S$0.26. The closing date will be 16 May 2018 at 12 pm and it will start trading on 18 May 2018 at 9 am.

From what I can understand, they sell/distribute drugs:
- Specialty pharma principals = selling/distributing other companies' drugs
- Proprietary brands = selling their own drugs + patents (Ceradan and TDF)
- Medical hypermart and digital = selling drugs online

With an IPO price of $0.26 and an EPS of 2.0 cents, the stock will be trading/listing at a PE of 13. My eyes blink $_$ when I saw this as healthcare related stocks generally trade at a huge premium!

Their dividend policy states that they intend to distribute at least 30% of net profits. Assuming EPS remains constant for 2018, that will translate to a dividend yield of (0.02 x 0.3) / 0.26 ~ 2.31%. What I dislike is that they have already paid themselves handsomely before the IPO >.<

The valuation is so cheap that even with an average PE of 15 (not industry average), the IPO looks like a bao jiak (sure win) using my IPO Hit and Run Calculator (sell on day 1 with the assumption that it trades at the expected average PE). Even Mr. IPO gave a 3 chill ratings which mean "This IPO is hot. Your $2 is probably going to buy you a romantic dinner for 2 with a bottle of red wine included. Likely opening price: More than 20% upside". You can find his analysis here.

I applied 40,000 shares for placement but was not allocated any. My broker asked me to try my luck at ATM -.- Pretty hot? Huat ah!

Update on 17th May 2018 - KPO has no luck in IPO

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  1. Wah...bao jiak... sure a lot of people hoot at ATM. How could anyone actually apply for placement a?

    1. haha. bao jiak comes with some assumption*. DBS is the bookrunner so if you have trading account with them, they will offer you?

  2. I see... thanks. Did you manage to get any? I got nothing LOL

    1. No luck in IPO! I updated the article. lol

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