4 Stocks This Week (IPOs) [18 Jun 2017]: HRnetGroup; WCG; Sanli Environmental; Aoxin Q&M
Despite the US Federal Reserve raising interest rates and indicating at least another round of raise this year, ongoing geopolitical uncertainties in the US and Eurozone kept markets muted this week.
The quarter of a percentage point raise brought interest rates to 1.25%, underscoring continued progress in the world’s biggest economy.
In Singapore, there has also been a surprising twist of events in the traditionally quiet political arena. Many Singaporeans must be quite updated with all the disagreements in the Lee family, as well as alleged abuse of power by Prime Minister Lee Hsien Loong, due to regular social media updates by all three Lee siblings.
In terms of the country’s economic situation, non-oil domestic exports (NODX) decreased 1.2% in May. Due to a stronger than expected first quarter, many market watchers were still on the fence as to what this meant for the Singapore economy.
This resulted in a small decline, of close to 0.7%, in the benchmark Straits Times Index (STI) this week.
In 2016, there were more delistings than listings on the Singapore exchange. As IPOs are a measure of the vibrancy of financial markets, it is important that the exchange progressed from the transitionary year.
With eight Initial Public Offerings (IPO) at close to half-time in 2017, the country is still one short of the halfway mark for IPOs in 2016, which stood at 18. This number is also short of the close to 14 companies that have delisted from the Singapore exchange so far.
#1 HRnetGroup Ltd (SGX: CHZ)
HRnetGroup listed on the Mainboard of the Singapore exchange on Friday (16 June 2017). At an issue price of $0.90, the group started trading on SGX 5.6% higher at $0.95, before closing the day at $0.925.
It also has several cornerstone investors owning stakes in the company. They were Aberdeen Asset Management Asia, FIL Investment Management (Hong Kong), Meiji Yasuda Asset Management as well as Heliconia Capital Management which was already an investor before the IPO.
With a market capitalisation of more than $900 million, HRnetGroup is the first recruitment agency to list in Singapore. With established brands such as RecruitExpress, HRnet One, PeopleSearch, PeopleFirst and RecruitFirst in its portfolio, the company has a footprint in numerous Asian markets including Singapore, Kuala Lumpur, Bangkok, Hong Kong, Taipei, Guangzhou, Shanghai, Beijing, Tokyo and Seoul.
#2 World Class Global Ltd (SGX: 1E6)
WCG was listed on the Catalist list of the Singapore exchange on Thursday (15 June 2017). It was offered to investors at an issue price of $0.26. It made its debut on SGX at a share price of $0.275, or 5.8% higher. It ended the week slightly lower, but still above its IPO price, at $0.27.
WCG is a spin-off Australian and Malaysian property development arm of locally listed Aspial Corporation. Aspial also has businesses in retail jewellery, pawnbroking and its Singapore property development business.
With a market capitalisation of close to $245 million, it is in the business of property development in Australia and Malaysia. The group has three projects in Cairns and Melbourne and has two upcoming projects in Brisbane, in Australia. It also has three upcoming shophouse projects in Penang, Malaysia.
#3 Sanli Environmental Ltd (SGX: 1E3)
Sanli Environmental was listed on the Catalist list of the Singapore stock exchange on Thursday (8 June 2017). Offered to investors at an IPO price of $0.225, its stock opened strong on its debut at $0.40, or close to 77.8% higher. Its share price has tapered and closed the week at $0.32, which is still 42.2% higher than its IPO price.
In the business of waste and water management, it attracted investors including Vanda 1 Investments, managed by Temasek-backed Heliconia Capital Management, and ICH Gemini Asia Growth Fund, as well as from private investors.
Sanli has a market capitalisation of over $60 million and operates predominantly in Singapore, with 99% of its revenue so far this year coming from the local market.
It has stated that some of its IPO proceeds will go toward expanding its regional presence in Malaysia, Indonesia and Myanmar. The bulk of it will be set aside as working capital to secure larger scale projects.
#4 Aoxin Q&M Group Limited (SGX: 1D4)
Aoxin Q&M is a spin-off of local dental group, Q&M Dental’s dental services, equipment and supplies business in Northern China. Listed on the Catalist list of the Singapore exchange on 26 April 2017, it debuted at $0.23, or 15.0% higher than its IPO price of $0.20.
It ended the first week of trading on a high, at over 55.0% higher, at $0.31. Over the following weeks, its share price has settled back down at $0.24 on Friday (16 June 2017).
At a market capitalisation of close to $85 million, the company is set to leverage on the thriving dental healthcare market in China where there is room for expansion.
4 Stocks This Week is not a recommendation from us to buy or sell any of these stocks. For investors who are keen to find out more, you should continue researching about them before making your investment decisions.
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