ValueMax

ValueMax: Voyage values the upcoming listing debutante at $0.82. Says the IPO looks attractively priced as the issue price of $0.51 translates to FY12 P/E of 16.7x, vs 22.4x for MoneyMax and 47.4x for Maxi-Cash. The application list closes 28 Oct 2013, and trading will commence 30 Oct. Mgt has outlined plans to expand more aggressively post-IPO, giving promise of further upside in FY14. Compared to MoneyMax and Maxi-Cash, ValueMax has already been operating out of Malaysia for about seven years. ValueMax seems to be more receptive towards inorganic growth. The acquisition of existing pawnshops will allow the company to capture good locations and existing customer bases, as the market becomes increasingly well penetrated. Another “curveball” move is ValueMax’s plan to open a high end pawnshop in Singapore, catering to pledges of value more than S$50,000, thus capturing a new market segment. Voyage expects the company’s revenue to grow by about 10% to 11% annually in FY14 and FY15 as it expands its network of outlets. Higher contribution from pawnbroking business is also expected to raise net margin from 3.2% in FY12 to 5.3% by FY14. In all, it expects ValueMax to post a steady rebound in FY14 and report net profit of $19.6m (EPS of 3.67¢).