Neo Group

[CityFarmer]

Stagging IPOs can be quite profitable especially when my investment fund was low.
It was one of my favourite activites in the earlier day of investment since the potential gain of stagging is actually quite high.

Since there is a good possibility of some money left on the table for some of the IPOs, why not take some?
Doing a proper analysed of the IPO will give a good gut feel of whether the stag will be profitable.

Neo group will most likely be above water.
As for IHH, I think the IPO price sucks although it is likely to be above water.(a few cents??)

I had stagged many IPOs but I think none of them remains in my portfolio.

I had asked myself the same question, when i was looking at the IPOs of Sheng Siong and Maxi-Cash.

IMO, it is rational to pick up a arbitration (Warren Buffet term) or Asset-play (Peter Lynch term) when opportunity arises. But it is irrational to pick up an IPO stock simply base on timing the pricing.

After hours of effort, i am still not able to convince myself there are arbitration (or asset-play) opportunities for both of them. So i had decided to opt out.

Well, base on the pricing after the IPOs, I had missed a fortune. But I am still holding on the guidance that "no buy base on timing of pricing".

[dzwm87]

Neo group will most likely be above water.
As for IHH, I think the IPO price sucks although it is likely to be above water.(a few cents??)

I had stagged many IPOs but I think none of them remains in my portfolio.

NEO group is priced in at 6.8x P/E.. just a gut feel but I supposed as a retail play and with such a reasonable valuation, it should be able to remain above water.

IHH, on the other hand, is tricky. It is extremely expensive but somehow, the lure of it as a defensive stock and also with the over-subscription from institutional investor might probably allow it to be above water though on a marginal basis.

I'm surprised there is little being covered on IHH in this forum.

*not applying for Neo Group*

[lonewolf]

It's hard to stag IPO nowadays. Gone are the heydays in the late 90's where its possible to stag IPOs for very handsome gains; sometimes in excess of >100%. My personal best stags were I-one (now known as Xpress Holdings) for $1.52 (vs IPO 38c), Mediaring for $1.80 (vs IPO 53c).

My last successful IPO stag was GP Hotels for a measly gain of 3.5c over its IPO price.

[yeokiwi]

It's hard to stag IPO nowadays. Gone are the heydays in the late 90's where its possible to stag IPOs for very handsome gains; sometimes in excess of >100%. My personal best stags were I-one (now known as Xpress Holdings) for $1.52 (vs IPO 38c), Mediaring for $1.80 (vs IPO 53c).

My last successful IPO stag was GP Hotels for a measly gain of 3.5c over its IPO price.

I got I-one too..haha. Sold at good price.
My recent good stags were Capitalmall asia and GLP.
The recent failed stag was Mapletree Commercial.

I-one forum thread, rather interesting to read after so many years.
http://forum.shareinvestor.com/archive/0...BC4_1.html

[propertyinvestor]

Super Manipulated Stock

[ValueBeliever]

Looks like NEO is also 1 of the rare few that manage to have such a high premium over IPO, close to 50% and if as mentioned likely payout of 60% of earnings as dividend, its still a respectable 6% yield at this price, if forward earnings (30% growth) forcast EPS 4.7cts?

In absolute 47cts, NEO looks expensive vs Select and Japan Food?

[Musicwhiz]

Some relevant questions:-

1) Neo Group's valuations versus competitors (local, regional)
2) Market Share of the catering market versus competitors
3) Margins versus competitors
4) ROE/ROIC versus competitors
5) BS strength, FCF generation history
6) Prospects for business, expansion capabilities (saturated market?, overseas expansion?)
7) Coverage in Singapore, variety of food offered
8) Customer Profile - residential/commercial breakdown?
9) Growth of each segment - flat, mild +ve, -ve?

Just some thoughts.

[RBM]

The following Edge Weekend piece, highly favorable to Neo Group, caught my eye. Seperately, I have posted the excerpt regarding Kingsmen on the Kingsmen VB thread about ten minutes ago................

QUOTE
Neo Group gets a Boost from Special Events
By Chan Chao Peh

As you read this emailer, the multi-million F1 race cars are probably doing their practice runs for the annual motoring sport spectacle that is helping to boost Singapore’s status as a leading destination for meetings, conventions and events.

Kingsmen Creatives, a home-grown leading regional provider of design and fitting out services, has been a beneficiary of events like F1. Ever since the F1 races began here, Kingsmen has been booking revenues of between $8 to 9 million a year, as it helps not only to build hospitality suites, direction signs, and also lease furniture for the crew, hosts and guests thronging the areas around the circuit.

With ticket prices starting from $58 even for the humblest one-day “walkabout”, not everyone can afford to have a seat to soak in the glitz of the race and the roar of the vehicles. However, the city circuit of the race means it is possible for companies and organisations located within buildings surrounding the track to organise their own F1-themed parties. Naturally, such events need caterers, and Neo Group, which is the largest events caterer around, has received orders from some of these customers.

According to research firm Euromonitor, the company, which was listed in July at 30 cents, owns a 9% share of the $306.6 million events catering market here. Interestingly, the company’s 12% growth in revenue of $18.76 million for the 1HFY13 ended July 31 did not come mainly from the catering business. Of the some $2.01 million increase in revenue, $1.7 million came from the company’s food retail business, mainly under the Umisushi brand of Japanese outlets, as the company opened three more outlets compared to the year earlier. The company plans to increase the number of outlets from 17 now to 30 by 2016. Catering, which is run under brands like Orange Clove and Neo Garden Catering, grew $0.33 million or 2.6% year-on-year, in the same period.

Yet, the company’s earnings in the half year fell 55.3% y-o-y to $703,000, as the company booked costs of $830,000 incurred during its recent listing, which was 15 times subscribed. The company also incurred higher rental and staff costs.

Neo Group, with chairman and CEO Neo Kah Kiat owning more than 70% of the shares, has declared an interim dividend of 0.49 cents, which is equivalent to its entire earnings in the past six months. The company, in its prospectus, has committed to pay at least 60% of its earnings in dividends for up to FY2015.

The company believes that it is in a growing market for several reasons. First, there is a growing number of household units, driven mainly by new immigrants; next, there is a number of growing dual-income families which means less time to cook and higher spending power to eat out. Lastly, consumer spending on food has increased – with a compounded annual growth rate of 6.9% between 2009 and 2011, and 5.6% expected between 2012 and 2014, according to Euromonitor.

In an unrated report, UOB KayHian notes that Neo Group is now trading at 7.6 times earnings. By contrast, other food companies like Select Group and Breadtalk Group are trading at 12.2 and 12.9 times respectively. The company closed on Sept 21 at 32 cents. What makes the company interesting, however, is its $10 million in cash and equivalents (6.9 cents per share), partly boosted by net proceeds from its IPO of $5.77 million. “Management has plans to increase its market share through acquisitions or JVs of local or even overseas competitors,” the brokerage states.

A larger company will enable it to achieve better economies of scale. It can now serve 15,000 people per day and the company wants to double this capacity, by consolidating its various kitchens into a new facility costing up to $38.8 million, that has a total size of 27,000 sq ft. The company, which is now net cash, is likely to borrow to build this new facility.

UNQUOTE

Not Vested

[CityFarmer]

I have visited Neo Group web site for their catering service. The pricing is at a premium over other caterer, about 20% more. I have not tried, so not sure on their catering quality.

The impression is the catering service is target more to corporate customers and high-end functions.

[setan]

During last Christmas celebration, my company ordered from Del Hub and I find out that one of their dish worth mentioning is their curry chicken.

Overall, the food are quite good.