Kori (IPO)

Kori: is a Spore-based engineering and construction services company. To offer 28.2m shares (25.6m new + 2.6m vendor) at 25cts apiece, by way of placement only. Kori is expecting to raise net proceeds of ~$4.4m from the new shares, $3m of which is for the expansion of its 2 core businesses of structural steelworks and tunnelling services in Spore, $0.1m for growing its tunnelling services in overseas markets through JVs and strategic alliances, and $0.3m for its general working capital. The remaining $1m will be for the purchase of land in Iskandar, Malaysia, where it plans to relocate its Spore storage yard next year. Due to the small size of the IPO, the $2m in listing expenses to be borne by the co, translates to more than 30% of the gross proceeds of $6.4m, which is expensive from a percentage stand point. Post placement adjusted NAV/sh as at 1H12 is 31.93cts, which translates to 0.78x P/B. Post placement EPS for FY11 and 1H12 is 6.06cts and 5.16cts. This translates to 4.1x FY11 P/E and 2.4x annualized 1H12 P/E.