Soo Kee: Trading debut for jeweller Soo Kee Group. The IPO of 112.5m new shares (103.5m placement and 9m public offer) at $0.30 each was 1.1x subscribed.
Post-IPO, Soo Kee will have an enlarged share count of 562.5m shares.
The group has a retail network of over 60 stores in Singapore and Malaysia, with the former contributing 86% of total sales and the remaining from the latter.
Soo Kee intends to use the $31.6m net proceeds raised to expand its network and introduce new product lines (38%), capex for its new Changi Business Park Headquarters (10%), as well as loan repayment (19%) and working capital (33%).
With economic growth expanding at the slowest rate since 2009, consumer discretionary spending is expected to be crimped and does not bode well for the jeweller.
At the current price, Soo Kee is valued at a rather hefty 15.6x historical P/E, compared to STI's 13.7x, especially with the changing consumer patterns towards online stores and the limited growth in Singapore and Malaysia.
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