Old Chang Kee - Newly listed stock on SGX (IPO)
Old Chang Kee IPO listed today. Below From Uobkayhian:
Issue statistics: Offer size: 25.0m new sharesPublic Tranche - 1.0m sharesPlacement Tranche - 24.0m sharesPrice: S$0.20Revenue S$’000 yoy % chgFY05 29,045 +39.0FY06 33,784 +16.3
Net profit S$’000 yoy % chg
FY05 3,207 +54.0
FY06 3,039 -5.2
The net proceeds from the issue of the New Shares (after deducting the estimated expenses in relation to the
Invitation) pursuant to this Invitation are estimated to be approximately
S$3.3 million.
The proceeds are intended for the following uses:
(a) approximately S$1 million to expand our overseas
(b) approximately S$1 million to increase and refurbish our Singapore retail outlets
(c) approximately S$0.5 million for expansion through strategic alliances, acquisitions, joint ventures and franchises
(d) the balance to be used for general working capital requirements for our Group’s businesses
My views:
My paper, (a free newspaper in Singapore) reported that Old Chang Kee expects to see a dip in FY2007 net profit due to rising raw materials. My view is that raw materials will continue to increase in China and Singapore. Thus Net profit FY08 could be affected as well. What matter is the intensity of rise in cost versus revenue.
Although their equity raising is to raise profile rather than cash, their business strategy has to bring in the desired amount of profits.
It is Old Chang Kee’s 2nd regional expansion since 1990s.
Do you agree that it is more likely to attract people from rural to the city than from city to rural? Although setting business in ChongQing is relatively cheaper about 30-40%, it is more hype to set up in Beijing and Shanghai and then expand to other cities rather than from Chongqing to Chengdu. Would a city dweller goes to rural area for food or would a rural person go to city for food? In terms of food, which is better or prestigious? Would you derive a lot of pleasure eating Macdonald’s in USA or eating Macdonald in a rural area where it’s the only fast food restaurant available (luxury)?
Anyway, I like Old Chang Kee curry puffs, corn pies and their fried squid heads…^_^
Just a penny for your thoughts…
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