Japfa

Its a highly confusing (too many mother nature drivers) primary production business cleverly packaged into a protein story that is meeting rising consumer demand in core Asian markets. After I read the prospectus, I decided to give it a miss.

Buddies views welcome...

https://opera.mas.gov.sg/ExtPortal/Publi...4fa754e6e7
http://www.businesstimes.com.sg/premium/...s-20140730

PUBLISHED JULY 30, 2014
Japfa to offer shares at an indicative price of 75-87 cents
Bookrunners see strong interest from investors in its IPO
BYANGELA TAN
angelat@sph.com.sg

JAPFA Limited, a producer of multiple protein foods whose executive deputy chairman is Indonesian tycoon Handojo Santosa, lodged its preliminary prospectus yesterday, seeking to list its shares on the main board of Singapore Exchange.
According to market sources, the company behind the 'So Good' and 'Greenfields' brands is looking to offer up to 285.2 million shares at an indicative price of 75 to 87 Singapore cents a share.
This comprises a base offer of 248 million shares and an over-allotment of up to 37.2 million shares.
Due to the sterling performances of recent initial public offerings such as those of Australia-based miner Alliance Mineral Assets and South Korean film production company Spackman Entertainment Group, bookrunners are already seeing strong interest from local and regional investors.

Another big fan of 8s, 8 of Aug IPO with total offer of 248m shares raising S$198m, public tranche of 16.8m shares @$0.80... should be fine since they think that they are "under-priced by 5-10%" for the IPO. IPO closes 15 Aug Wednesday with trading expected to start 15 Aug, Friday

SHAKY IPO MARKET, BUT...
Mega farmer Japfa is not cowed

Meat, dairy producer aims to plough ahead; reap $198m in proceeds
Published on Aug 8, 2014 1:17 AM


By Melissa Tan

ONE firm is still raring to brave the market, with a public offer kicking off today, despite the postponing of one big listing and after other recent floats have flopped.

Industrial mega farmer Japfa, controlled by Indonesia's Santosa family, is launching a $198 million initial public offering (IPO) in Singapore, its base.

Japfa chief executive Tan Yong Nang told a briefing yesterday that the meat and dairy producer plans to go ahead with the Singapore Exchange mainboard listing.

Its fresh commitment to proceed came right after oil and gas firm Samudra Energy postponed on Wednesday its planned Singapore IPO, citing market volatility.

The two most recent debuts here, Accordia Golf Trust and Terratech, are underwater as the local market weakens on the doldrums afflicting Wall Street.

Mr Tan said at Japfa's office in Ngee Ann City yesterday that the firm wants to raise funds to expand its regional business and is unfazed by temporary headwinds.

Japfa produces staple protein food such as milk, poultry and beef, and makes the Greenfields brand of milk sold in Singapore.

"We are all farmers, we don't time the market. I won't kill the livestock just because the price is bad today, we continue to grow them because we believe in the long term," he said.

"In the short term even if we underprice by 5, 10 per cent, I don't think it's a big deal for us."

Japfa is offering 248 million shares at 80 cents apiece, a price that Mr Tan said he believed was "the right price today".

This will raise $198 million in total, much less than the at least $250 million it had reportedly been planning to raise.

The Santosa family owns nearly all of Japfa but will have a 77 per cent stake in the company after Japfa's IPO.

Indications of interest from institutional investors amounted to about 5.1 times the number of shares in its international offer tranche, the company said in a statement yesterday.

That tranche boasts 231.2 million shares, accounting for 93 per cent of the IPO shares.

The Singapore public offer has 16.8 million shares, or just 7 per cent of the total.

Mr Tan said Japfa aims to use the IPO proceeds partly to grow its dairy business in China. It wants to build a hub of five mega farms in Inner Mongolia, which he estimated would likely cost about US$350 million (S$437 million). Each of these farms could have more than 10,000 cows.

Recent debuts on the Singapore Exchange have not fared particularly well.

Golf course owner Accordia, which began trading on the mainboard last Friday, lost 1.5 cents yesterday to close at 83 cents. This is 14 per cent below its IPO price of 97 cents.

Catalist-listed marble producer Terratech Group sank 0.7 cents to hit 17.1 cents yesterday, 26 per cent below the IPO price of 23 cents. It began trading on Wednesday last week.

Upcoming listings include German office real estate investment trust (Reit) manager IReit Global Group, which is expected to begin trading on the mainboard next Wednesday.

Japfa's Singapore public offer opens this morning and closes on Wednesday.

Its shares are expected to begin trading next Friday.

melissat@sph.com.sg

Background story

LONG-TERM PERSPECTIVE

We are all farmers, we don't time the market. I won't kill the livestock just because the price is bad today, we continue to grow them because we believe in the long term. In the short term even if we underprice by 5, 10 per cent, I don't think it's a big deal for us.

- Japfa chief executive Tan Yong Nang, on why the meat and dairy producer plans to go ahead with the Singapore Exchange mainboard listing

http://www.businesstimes.com.sg/premium/...o-20140808

PUBLISHED AUGUST 08, 2014
Indonesian meat, dairy producer launches Singapore IPO
Japfa plans to use S$187.3m net proceeds to develop China dairy business
BYANDREA SOH
sandrea@sph.com.sg @AndreaSohBT

IN spite of the decision by Samudra Energy to pull the plug on its initial public offering (IPO), Indonesian meat and dairy producer Japfa Ltd is moving ahead with its own: its public offer opens today, and the firm expects to make its debut on the mainboard of Singapore Exchange next Friday.
Samudra Energy, an Indonesian oil and gas firm, had cited current market volatility as the reason. Market observers, however, pointed to more company-specific factors, such as the upstream oil and gas sector being unfamiliar to investors in Singapore.
In a press briefing yesterday, Japfa's CEO Tan Yong Nang said the firm is here for the long term, and that "it doesn't really matter" if the share price moves 5-10 per cent in either direction upon listing.
"We believe we're a good company. For a good company, whether it is good times or bad times, there will be interest in you," he said. "Frankly, we're farmers, we don't time the market."

Japfa’s IPO Draws Strong Demand From Investors
* Singapore Public Offer of 16,800,000 shares approximately 9.7 times subscribed
* Offering of 248,000,000 shares approximately 5.0 times subscribed
* Over-allotment of 37,200,000 shares due to strong investor demand
* Trading debut on the Mainboard of the SGX-ST at 9.00 a.m. on 15 August 2014

Singapore, 14 August 2014 – Leading agri-food company, Japfa Ltd. (“Japfa”, or together with its subsidiaries, the “Group”) today announced that its initial public offering (“IPO” or the “Offering”) of 248,000,000 ordinary shares (the “Offering Shares”) priced at S$0.80 per share, has attracted strong investor demand.

so good
looking at the over-subscription, there are hot $ by the sideline

unfortunately no cornerstone reported in the allocation and being Indonesia based, forex is a constant malice...

(15-08-2014, 12:11 AM)pianist Wrote: so good
looking at the over-subscription, there are hot $ by the sideline

(15-08-2014, 06:26 AM)greengiraffe Wrote: unfortunately no cornerstone reported in the allocation and being Indonesia based, forex is a constant malice...

(15-08-2014, 12:11 AM)pianist Wrote: so good
looking at the over-subscription, there are hot $ by the sideline

Good morning!
was thinking to stag this although I don't really like the counter. Somehow I find sporean like food/agriculture stock, worth a punt IMO.

Anyway got zero

Japfa initiated at ‘buy’ with $1.16 target price by DBS

DBS Group Research has initiated coverage of Japfa, the integrated dairy, animal protein, and consumer foods producer, with a “buy” call and a 12-month target price of $1.16, representing an upside of 36%.

The research house says Japfa has been actively expanding in all of its business segments not only in Indonesia, but also in China, India, Vietnam and Myanmar – where per capita demand for dairy, animal protein and branded consumer foods is still rising.

“With over 40 years of track record and significant market shares in most of its businesses, we expect Japfa to continue capitalising on Asia’s demographic dividend. We expect the group to deliver FY13-16F bottom line CAGR of 53% and core ROE of 9.2% -11.8% in FY14F-16F,” analyst Ben Santoso writes in the initiation report dated Sep 25.

“Japfa’s growth will primarily be driven by capacity expansions in China and Indonesia, where strong dairy and animal protein demand continues to drive both volume and prices.” says Santoso. “As the second largest poultry player and an established branded dairy producer in Indonesia, as well as a fast-growing dairy farmer in China; Japfa is a beneficiary of Asia’s growing requirement for animal protein.”

Japfa’s prospective earnings growth rate is also superior to its peers in Indonesia, thanks to its fast-growing dairy segment, significant market shares and brand recognition, adds the research house. DBS values Japfa at US$1.65 billion ($2 billion), based on sum-of-parts valuation, employing comparative EV/EBITDA multiples.

“We believe the counter remains undervalued at the current level,” Santoso concludes.

Japfa is up 1.75% at 87 cents as at 12:08 pm Singapore time.
http://www.theedgesingapore.com/the-dail...y-dbs.html

1. The loan to equity ratio ratio - watch out for it.

2. If it is so good - why it don't list in Indonesia?

As per report up till 30 June 2014

Mountain of debt >$1 billion USD vs Mcap of 1.272Billion SGD.
Debt is financed at ~8%(USD 80million/year)
Cash eq. is only ~$180million
No dividends
High PE ~18.5 (though I dun put much into this metric)
To cap it all off no margin of safety.

They would need to milk a lot of cows just to service the debt and further expansion would likely result in rights/warrant issues.

I wouldn't touch this stock with a ten-foot pole, not sure what those people at DBS Research are smoking...