EuroSports Global Limited

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[Image: Eurosports.png]

Excerpt from Prospectus:

Invitation in respect of 80,000,000 Invitation Shares comprising 40,000,000 New Shares and 40,000,000 Vendor Shares, as follows:
(i) 1,500,000 Offer Shares at S$0.28 for each Offer Share by way of public offer; and
(ii) 78,500,000 Placement Shares at S$0.28 for each Placement Share by way of placement, payable in full on application.

Closing Date : 15 January 2014

Issue Manager and Underwriter : CIMB Securities (Singapore) Pte. Ltd.

Corporate Profile :
EuroSports Global Limited specialises in the business of distribution of ultra-luxury automobiles and luxury automobiles and provision of after-sales services.

Our automobile distribution business retails new ultra-luxury automobiles and luxury automobiles as well as pre-owned automobiles. As at the Latest Practicable Date, we carry automobile brands comprising mainly Lamborghini, Pagani and Alfa Romeo, and customised automobiles supplied by Touring Superleggera.

The provision of our after-sales services includes sales of automobile parts and accessories. We are the only authorised service centre in Singapore for all the automobile brands we carry. Incidentally, we also operate an automobile leasing business as an ancillary business complementing our automobile distribution business.

Since September 2012, we have embarked on the luxury watch distribution and retail business. We secured the exclusive distributorship rights for the deLaCour brand of watches for Singapore, Malaysia, Indonesia, Thailand and Brunei since November 2012.

Download Prospectus Here : http://infopub.sgx.com/Apps?A=COW_IPO_Co...uddies.com

[AndrewHW]

Interesting IPO. I will read the prospectus (link) to understand more on the business of high-end automobile dealership. Thanks for posting.

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[Image: lambo.png]

[felixleong]

very interesting read, thanks for sharing of the info I really appreciate it. Thanks

At PE 10 this looks really cheap, maybe I shall tikom tikom a bit

However this industry looks pretty cyclical, will try to read more and understand this industry more well first.

[CY09]

You do know from its prospectus its Q1 earnings are lower YoY than FY13 Q1 If we are to extrapolate that, the PE will be higher than 10.

And while Lambo may not be affected much by the new COE changes, I will prefer to sit on the side-lines to see how the new COE measures will affect Eurosports before deciding to invest.

The closest competitor I can find listed on the SGX is Tan Chong International which is trading at 5.6xPE with a div yield of 3.1%. However Tan Chong is more diversified in product offerings and geographic segment. In my view, this is better as the Singapore car dealership industry is highly competitive due to govt regulation. Hence diversification across Asia is a better prospect than being concentrated in Singapore. Going by this premise, Eurosports should only command a 5-6x PE ratio at best.

[felixleong]

http://singapore-ipos.blogspot.sg/2014/0...mited.html

After reading more, I kinda feel that from a value point of view maybe TCIL (Tan Chong International) is more attractive.

However thanks for sharing ^^

[GPD]

My assessment:
- Upside uncertain
- Downside certain (see page 101 - TREND INFORMATION)
- the sale of the models they carry is either flat (Lamborghini) or declining (Alfa Romeo - page 98)
- "possible" special dividend as "sweetener".

- CEO and dy CEO very generous in their pay package (see their remureration - page 135). Performance bonus can be up to 1% of NPT for both of them (NPM for 2013 was 9.7%). They were both paying themselves 750k to 1 mil range currently. Somehow I felt that their business potential got too much uncertainties but yet they want certainty in their pay. Seems like IPO-ing is one possible way to achieve that.

Sorry if i painted a gloomy picture for those interested and others may have different views.

[safetyfirst]

For long term investors, the most important thing is do not focus too much on its special dividend, it will need a lot of cash for its capital expenditure at 7 & 9 chang charn road, so it will probably do a rights issue later.

Also with the new government taxes on the high end luxury cars, the lambos will cost an additional 300-400k, i am of the impression that it is quite significant. In the years ahead, this car business is going to be tough.

For short term investors, the special dividend may be a strong carrot for fluctuating stock price after IPO

[GPD]

The special dividend is probably to improve the attraction of the subscription and tinkled me a little but having read through the prospectus more thoroughly, I turned away. Also if it does happen, it will be one year from now.

Also noted that in page 42, of the $19.32mil proceed net of fees, only $8.46mil goes to the company which is less than half! The remaining goes to the two CEOs. Good move!

[opmi]

Why did Gohs want to get it listed? To cash out via 40m vendor shares? The other 40m for working capital to pay salaries etc?