F&B player YKGI slips 10.5% on Catalist trading debut to S$0.179

YKGI, the operator of Yew Kee Duck Rice and bubble tea brand Chicha San Chen’s Singapore franchise, fell 10.5 per cent or S$0.021 from its initial public offering (IPO) price of S$0.20 on its first trading day on the Catalist board of the Singapore Exchange.

YKGI opened on its debut at S$0.20 on Monday (Feb 6), but fell after market open.

At 9.05 am, the counter was trading at S$0.195, down 2.5 per cent from the IPO price. Some 0.7 million shares had changed hands as at that time. The stock hit a low of S$0.175 at 9.45 am, Bloomberg data showed.

The counter last traded at S$0.18 prior to the midday break, down 10 per cent from the IPO price. It rose to as high as S$0.186 in the second half of the day, before paring some gains thereafter. About four million shares changed hands over the course of the day.

YKGI had on Jan 26 launched its IPO, seeking to raise gross proceeds of about S$16.6 million through the sale of 82.8 million shares at a price tag of S$0.20 apiece. 

Of these, some 53.8 million shares were new shares, while the remaining 29 million shares were vendor shares sold by the group’s current shareholder. There was no public offer. 

These placement shares will constitute about 19.5 per cent of YKGI’s enlarged issued share capital post-IPO. Based on the issue price, the company will have a market capitalisation of S$85 million at listing.

YKGI has a total of eight food and beverage (F&B) related brands under its portfolio. Apart from Yew Kee Duck Rice and Chicha San Chen brands – for which YKGI is the exclusive franchisee – the group also operates others including the My Kampung Chicken Rice, PastaGo, Victoria Bakery and XO Minced Meat Noodles brands.

It expanded into food court management in 2017, and currently operates food courts under the My Kampung and Fine Food brands.

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YKGI’s chief executive Seah Qin Quan had told The Business Times in an interview prior to the company’s listing that the funds from the IPO would primarily be used for expansion across the brands. 

Seah said the funds would be used to propel Yew Kee Duck Rice – which currently operates only in Singapore – into new markets across South-east Asia. The group is also looking to push Chicha San Chen into new markets. Apart from Singapore, the bubble tea brand already operates in countries like Malaysia, Cambodia, the Philippines, China and the United States.  

Funds from the IPO will also be channelled towards building YKGI’s PastaGo and Victoria Bakery brands. 

According to documents lodged, YKGI recorded an unaudited net profit of about S$2.4 million for the first half of 2022, versus S$3.7 million in the corresponding period for 2021. The group’s audited net profit for FY2021 came in at S$8.9 million. Revenue was S$26.8 million in H1 2022, down slightly from revenue of S$27.6 million in the year-ago period.

YKGI said that it will also strengthen its supply chain capabilities by expanding and upgrading its central kitchen and warehouse to ramp up capacity and improve operational and cost efficiencies. The group will also expand its franchising and sub-franchising operations, as well as accelerate growth through strategic acquisitions and joint venture partnerships.

YKGI’s directors had also said in the lead-up to the listing that they intend to recommend dividends of at least 50 per cent of the group’s earnings for FY2023 and FY2024.