By: Kleer
Closing date of application: 12 December 2007
Commencement of trading: 14 December 2007
Established in the 1960's, KTL Global is a supplier of rigging equipment and related services. Their customers are mainly in the offshore Oil & Gas and marine industries, and also in the engineering and construction industries.
Their sales and marketing team covers mainly Singapore, SE Asia, and Middle East. They also sell to customers in other parts of Asia and Europe.
Key Competitive Strengths:
- With more than 60 years experience in the business, they have a long history and established track record with their customers and suppliers.
- Their business is globally diversified, having already made inroads to overseas markets such as Vietnam, UAE, India, Egypt, PRC, and Australia.
- Revenue and profit has been growing annually at 12.7% and 62% respectively for the past three years.
Key Growth Plans:
- To install one additional BOPA film production line, to double production capacity from 5,400 to 10,800 tonnes per annum.
- To expand the range of their release papers by installing a UV cured film production line, with a production capacity of 3,000 tonnes per annum.
- To install one additional 2-A2MPS production line, to double production capacity from 1,500 to 3,000 tonnes per annum.
Financial figures
Intended IPO price: $0.28
No. of shares available for public offer: 2m
No. of shares available for placement offer: 38m
Total post invitation share capital: Approx. 160m
Note: Unaudited 4QFY2007 figures were available in the prospectus.
FY2006
Revenue: $35.7m
Profit: $3.2m
NAV: 0.149
EPS: 0.02
EPS % Incr: 100%
PE ratio: 14x
Price: 0.28
4QFY2007
Revenue: $41.9m
Profit: $4.2m
NAV: 0.171 (incl. IPO proceeds)
EPS: 0.026
EPS Incr: 30% (Est.)
PE Ratio: 10.8x
Price 0.28
Dividend policy: No fixed policy.
Conclusion:
There are several small cap oil & gas service providers listed on SGX, though KTL would probably be one of the smallest in terms of market cap, total share capital, and sales revenue.
Most of those stocks trade between 12x - 16x PE, but because of its small size:
I believe KTL should trade at a
Fair Value of $0.32 or 12x PE only.
Probability of getting allotted for the IPO - VERY LOW
I have only included the key points of the prospectus. Certain information have been omitted in order to keep my write-up short, but you can find the entire prospectus here.
Source: Extraordinary Profits
