KinderWorld's offer to raise S$71.4m kicks off bunch of new IPOs on SGX

Singapore

A CLUTCH of new initial public offerings (IPOs) is coming to town.

KinderWorld is aiming to raise up to S$71.4 million for its mainboard listing on the Singapore Exchange (SGX) that could value the company at between S$300.5 million and S$349.3 million.

The Vietnam-based private-school operator is selling 105 million new shares at a price range of S$0.585 to S$0.68 per share, according to deal terms seen by The Business Times.

Bookbuilding is ongoing and the price will be fixed on July 9, with trading to commence on the mainboard on July 17, according to the indicative timeline.

Based on the price range, KinderWorld will be listed at 25.9 to 30.1 times its pro forma net profit of S$11.6 million for the financial year ended June 30, 2018.

For comparison, MindChamps, an operator and franchisor of premium-range pre-school centres in Singapore, went public in 2017 at 37 times its historical earnings. MindChamps now trades at 23.6 times its trailing earnings.

Overseas Education, which operates private foreign system-based Overseas Family School, trades at 17 times trailing earnings.

KinderWorld has 15 campuses in Vietnam where 3,782 students from the ages of 18 months to 18 years are enrolled.

That makes it the largest owner-operator in Vietnam's foreign-invested international schools business, it said.

The group offers a through-train programme from preschool to pre-university, and tuition fees are within the low-mid to mid-tier segments to cater to the growing middle class population, it said.

IPO proceeds will be used to open more schools in Vietnam, in locations such as Hanoi and Ho Chi Minh City.

KinderWorld has no fixed dividend policy, but intends to distribute at least 60 per cent of its net profit, excluding exceptional items, as dividends this year and next.

The group made a pro forma net profit of S$6.5 million in the six months ended Dec 31, 2018, with a 21.9 per cent net profit margin.

Kingsmead Asset Management and clients of DBS Vickers are cornerstone investors in the IPO, and will take up 30.8 million shares. Four million shares will be offered to the public and 70.3 million shares will be placed out. There is also an over-allotment option for five million shares.

DBS is KinderWorld's sole issue manager. Maybank Kim Eng is joint bookrunner.

Meanwhile, Singapore's Catalist board continues to draw a wide variety of listing hopefuls, the latest being a Russian operator of crop and dairy farms, and a local healthcare group.

Don Agro International and Ardmore Medical Group both lodged draft prospectuses for initial public offerings on the Catalist board last Friday.

Don Agro, led by Russian businessman Evgeny Tugolukov, has a land bank of around 53,200 hectares in Russia's Rostov region, of which 40,800 hectares are leased and 41,167 hectares are arable land.

It farms commercial crops like winter wheat, sunflower, sorghum, corn and flax. It also owns about 4,124 heads of dairy cattle, including 2,062 milking cows.

Russia's Molvest Group is the biggest buyer of milk from Don Agro. Its largest crop customers include Bunge, Aston JSC and Grain Service.

Last year, Don Agro made a net profit of S$6.4 million, on revenue of S$24.4 million.

It plans to use the IPO proceeds to buy more arable land in Rostov and to acquire new equipment and machinery like seeders, tractors and harvesters.

The offering is by placement only. PrimePartners Corporate Finance is the sponsor and issue manager.

Separately, Ardmore Medical Group, which specialises in the fields of orthopaedic surgery, aesthetics and wellness, and anaesthesiology and pain management, is also eyeing a Catalist IPO.

Ardmore has five medical doctors practising at four medical clinics in central Singapore, and operates one medical spa.

It made a pro forma net profit of S$4.1 million on revenue of S$10 million for 2018.

It plans to use the IPO proceeds to grow organically and through acquisitions or joint ventures.

SAC Capital is the sponsor and issue manager.

Pricing details for the two Catalist IPOs are not out yet.