LHN Logistics ends Catalist debut at S$0.185; 7.5% below IPO price

THE logistics arm of LHN Limited , LHN Logistics , capped its trading debut on the Singapore Exchange’s Catalist board on Friday (Apr 29) 7.5 per cent or S$0.015 below its initial public offering (IPO) price of S$0.20.

This gives the company a market capitalisation of S$31.0 million and an implied price to earnings ratio of 9.3 times. The company posted a net profit of S$3.3 million for the year ended Sep 30, 2021. The theoretical earnings per share would be S$0.0198 in FY2021, based on the enlarged share capital of 167.7 million shares post-placement. 

The company said that S$3.2 million of the approximately S$3.6 million in total net proceeds from the IPO would partially finance the construction of LHN Logistics’ ISO tank depot at 7 Gul Avenue. 

The remainder would go towards the expansion of the company’s transportation fleet and acquisition of moving equipment. 

Speaking to The Business Times after the listing ceremony, executive chairman of LHN Logistics Kelvin Lim said that the company will begin building out its ISO tank Depot at 7 Gul Avenue.

He added that the company will also begin looking at expanding its presence in the South-east Asian region beyond its current operations in Singapore, Malaysia and Thailand. In the second quarter of this year, LHN Logistics will begin container depot operations in Myanmar.

“Myanmar, being a net export country, requires a lot of container movement with imports of consumer goods and exports of commodities, so this has brought us a good foundation in terms of the business,” he said.

He also believes that South-east Asia will see greater attention as a result of geopolitical uncertainty that the world is seeing now.

”I do believe that there could be a shift in global supply chains more towards Asean…with the uncertainties in China lately with their zero-Covid policy and uncertainty in the European countries with the lack of natural resources with the Ukraine-Russia war, we have seen a lot of attention in Asean,” he said, adding that this would bring more manufacturing operations into the region.

In a bourse filing on Thursday, the company announced that the 25.2 million placement shares it offered were fully subscribed. 

Notable subscribers include Pheim Asset Management, Lion Global Investors and Eagle Liner Shipping Agencies, which purchased 17.8 per cent, 14.3 per cent and 11.9 per cent of the placement shares respectively.