Friday, February 1, 2013

Halcyon Agri

Halcyon Agri: surges 40.3% to $0.505 from its $0.36 IPO price, as players greet Singapore's first IPO of 2013 with open arms. While the Catalist listing may be getting support from players' recent infatuation with penny plays and small caps, the midstream rubber-processor's plan to pay FY12-13 dividends of at least 25% of net profit likely offers an extra fillip. Based on FY11 profit of US$4.4 m, a 25% payout rate and the 290 m share base, the dividend would have been US$0.00379/share, or around S$0.00469/share; 9M12 profit was US$9.2 m. Players may also be reacting to global economic recovery hopes, as demand for rubber is largely dependent on the macro-economy; rubber prices have rebounded after touching a nearly three-year low in Aug and are expected to remain on the upside, at least in 1Q. The International Rubber Consortium forecasts natural rubber prices at US$4/kg in 1Q from US$3.10- 3.35/kg currently. Halcyon placed 44 m new shares and 17 m vendor shares at $0.36 each; estimated net proceeds post expenses of about $19.6 m are earmarked for expanding and upgrading its processing facilities and general working capital.

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