Top 8 IPOs to invest in Singapore 2017

Looking for other stock picks? Check our lists of Top 8 blue chip stocks, Top 8 REITs, and Top 8 small cap stocks to buy in Singapore.

Singapore has seen a good number of IPOs in the small to mid-cap segments as well as REITS for the past 3 years from 2015 to 2017.

Typically, a company’s founder or co-founders cedes control over a portion of their shares in order to tap funds from institutional investors and retail investors for further expansion. Other benefits of going public include raising the company’s public profile in the investing community.

A successful listing in Singapore also indicates that a company’s financials have been prepared in accordance to international financial accounting standards which boosts confidence in the governance track record by the key management of the company.

Investors considering newly listed companies may be able to reap the benefits of post IPO coverage where investors under appraised the future growth prospects due to limited analyst coverage or the absence of long shareholder-friendly financial track records.

That being said, it is best to go back the underlying fundamentals of the company by analysing the historical financials as a basis for future growth. Investors with strong foresight may be able to reap the potential higher returns offered by these new listings.

In this segment, we have narrowed down the top 8 IPOs that are already listed in Singapore Exchange that investors can consider investing through the secondary market.

 

Kimly

Kimly Limited is a coffee shop operator with 64 food outlets plus 121 food stalls. For the past 3 years, it maintained a solid earnings growth of 9.9% CAGR from S$20.1 million to S$24.2 million over the period FY2014 to FY2016. The profitability track record of Kimly Limited is unquestionable. In addition, it is backed by a Temasek linked institutional investor Heliconia Capital Management. Investors may reap the additional benefits of dividends as the company pledged to pay out at least 50% of net profits as dividends. Investors are also able to tap into the company’s plans to undertake acquisitions in the future.

 

Procurri Corporation

Procurri Corporation Limited is a global provider of data centre equipment and life-cycle services. The explosion of big data trend bodes well for the company’s future operating in the segment. The company boasts solid financials as well, where the net profit grew in excess of 100% from FY2013 to FY2015. From FY2015 to FY2016, the company managed to grow its revenue for at a rate of 10%. Its P/E ratio of 13 times historical earnings would make it a decent purchase for investors wanting to have a tech company exposure.

 

United Global

United Global Limited manufactures and trades in lubricants and petroleum and oil-based products in South East Asia region as well as China and international markets. The company is engaged in manufacturing petroleum based products for industrial use. While it seems like an unexciting business model, the shares are backed by uninterrupted net profits. The company is also trading at a dividend yield of 4.59% and a fair P/E of 10 times historical earnings. It has also announced the proposed acquisition of a lubricant supplier in Indonesia which is subject to shareholder vote via an EGM. The successful resolution may see United Global Limited strengthening its foothold on the Indonesian market.

 

Dasin Retail Trust

Dasin Retail Trust is a non-REIT business Trust which went public on January 2017. It holds shopping mall real estate assets in Guangdong, China and is managed by a professional property manager, almost similar to the running of a REIT. One of the key attractiveness of business trust is the high distribution yield of the security. Dasin Retail Trust is projected to pay out between 6.1 to 7.2 cents per unit for financial year ending FY2018 and this will give investors a return of above 7% from the current price of SGD0.80 per unit. It has the intention of acquiring a fourth mall and all its malls currently enjoy a strong occupancy rate of over 99% which provides the cash flow to the support the dividend distributions.

Jumbo Group

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Jumbo Group is another solid company worth investing that debuted on the Singapore Exchange about 1.5 years ago. It is a popular seafood restaurant operator famous for its signature Chilli Crab which is well loved by all Singaporeans and overseas travellers. It currently has 16 outlets in Singapore and 3 outlets in China and has bold plans to increase store expansion to China. Its financials are no slouch as its net profit grew 18% from S$13 million to S$15 million from FY2015 to FY2016. This strong growth stock is backed by decent dividends as well and it is currently trading at about 2.5% dividend yield. Moreover, it has the strong high profile investor support of Mr Ron Sim who is the successful founder of OSIM.

 

BHG Retail REIT

Another top new listing worth investing is BHG Retail REIT, which went public in 2016. Its main properties comprised of prime shopping malls in urban China cities. Investors are also anchored on the fact that the asset management arm of China CITIC Bank, one of China’s largest commercial banks bought a huge block of units amounting to 68m units at a price of SGD0.745 per unit, about 5% higher than current market price, bringing its effective stake to about 14% of the total shareholder base. Its annualized dividend payout translates into an effective yield of 7% at current market prices, almost comparable to other top yielding dividend and REIT stocks, making it a top buy at current prices.

EC World REIT

EC World REIT is another REIT listing that investors can seriously consider as a solid investment. Its recent financials make good projection case for its future growth in distribution per unit. It is a logistics focused REIT where its property portfolio comprises of warehouse and port support structures strategically located in Industrial areas across China. It is currently trading at a projected annualized 7% dividend yield which gives investors some solid dividend income to fall back.

 

Katrina Group

Investors interested in F&B group IPOs can consider Katrina Group. Its F&B brands under its operation include Bali Thai and Indobox. Its net profit has been on a steady uptrend since 2013 to 2015 with a CAGR growth of 8.6% but dipped in 2016 due to one off IPO expenses. Nevertheless revenue saw increase of 10% from FY2015 to FY2016. The company has been rewarding shareholders with dividends as well which translates into a dividend yield of about 3% per annum. It plans to add on to its 32 strong restaurants in Singapore by expanding to Malaysia with 2 new planned store openings. Investors may be able to ride on the expansion and be financially rewarded in the future via capital growth.

 

Looking for other stock picks? Check our lists of Top 8 blue chip stocks, Top 8 REITs, and Top 8 small cap stocks to buy in Singapore.

(By Chee Hoong Chan)

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