Amtek

Amtek: expect a weak showing when the IPO, priced at $1.30, debuts today. Overall subscription for the IPO was 1.4x, the lowest amongst all IPOs this year. The public tranche offer, initially at 20m shares, was undersubscribed. Remainder shares were reallocated under the institutional tranche. Off the 200m vendor shares offered, the eventual split btwn private/ public shares was 188/ 12…

investors cool response may be due to the perception that the IPO is a means for the PE firms behind Amtek to cash out, rather than for growing the company. Valuations also appear steep on both absolute and relative basis, for the maker of precision metal, plastic and rubber components. Amtek trades at 5.6x P/B on 22.6% ROE; and at 21x P/E, vs Spore-listed peers’ at 4.9-8.9x P/E.