MS Holdings (IPO)

MS Holdings IPO: ($0.25) Carving its niche in mobile cranes Crane rental operator MS Holdings has priced its listing offer of 27m placement shares (comprising 20m new shares and 7m vendor shares) at $0.25 to list on the Catalist board. The net proceeds of $3.8m will be used for the development of its mobile crane trading business, acquisition of mobile cranes and hauling equipment and working capital. Post-IPO, MS Holdings will have a free float of 26.5%, with its controlling shareholders holding 73.5% of total outstanding shares. MS Holdings is one of Singapore’s leading crane rental companies in Singapore, which focuses on providing mobile cranes and lorry cranes in a wide range of lifting operations. The group have a fleet of 25 mobile cranes with lifting capacities ranging from 25 to 750 tons, and a fleet of hauling equipment which comprises prime movers and trailers. Mobile cranes usually have short set-up time due to their ability to travel on roads thus eliminating the need for special equipment to transport them to jobsites. For FY14, MS Holdings booked net profit of $3.2m (-34.4% y/y) and revenue of $17.0m (+1.8% y/y), with repeat customers accounting for more than 80.0% of the group’s revenue in FY14. On its prospects, MS Holdings expects sustained demand for its cranes and services, guiding that for 2015 and 2016, average construction demand in Singapore is expected to be sustained at between $25.0b and $34.0b p.a. The group believes that the trading of mobile cranes is complementary to its mobile crane rental business and will support its fleet renewal strategy. Based on the IPO price of $0.25, MS Holdings trades at 7.8x FY14 P/E and 1.02x P/B with a total market capitalization of $25.5m. Notable listed peers on SGX include Tiong Woon (6.2x trailing P/E, 0.54x P/B), Tat Hong (16.4x trailing P/E, 0.73x P/B) and Hiap Tong (12.7x trailing P/E, 0.71x P/B). The placement offer closes on 5 Nov ’14 at noon, with trading expected to commence on 7 Nov ’14 at 9 am. UOB is the sponsor, issue manager and placement agent for the IPO.