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5 Things You Need To Know About The IPO Of ZICO Holdings Inc.

ZICO Holdings Inc. (SGX: 40W) will be officially listed on the Catalist board of Singapore’s stock market today. ZICO’s initial public offering is a very interesting one as the company is the first professional services firm to list in Singapore this year.

In fact, its line of business is rather rare – the only possible comparable company in Singapore’s stock market right now is Boardroom Limited (SGX: B10). Here are five things you need to know about ZICO.

1) No shares are available for the public

ZICO would be issuing 48 million new shares of itself during the listing, but none will be made available to the generable public. Instead, the shares are offered to specified investors and the notable ones include Khazanah Nasional Berhad’s director, Tan Sri Mohamed Azman Bin Yahya; CIMB Group Holdings Berhad’s Chairman, Dato’ Sri Nazir Razak; and asset manager Fidelity’s FIL Investment Management (Hong Kong) Limited.

2) A history of the firm

ZICO can trace its history back to Zaid Ibrahim & Co, a renowned law firm in Malaysia. ZICO was previously known as ZI Holdings Inc., and was set up to mainly serve the customers of Zaid Ibrahim & Co. Today, ZICO has three main business segments – namely Advisory & Transactional Services, Management & Support Services, and Licensing Services – and derives slightly more than two-thirds of its revenue from Malaysia.

3) The use of the ZICO brand

ZICO only provides its legal services in jurisdictions where it has permission to do so. In other cases, the company provides its legal services through the ZICOlaw Network. Found within the network are law firms using the ZICO or Zaid Ibrahim brand; usage of the brands is based on a licencing agreement between the company and the member firms of ZICOlaw Network.

In ZICO’s own words:

“[The company] provides legal services only to the extent permitted in the relevant jurisdictions. In other jurisdictions, we cooperate with and support independent and autonomous law firms who are members of the ZICOlaw Network, in compliance with local professional regulations.”

4) Valuation

Based on ZICO’s listing price of S$0.30 and its audited earnings per share for 2013, its shares would have a price to earnings (PE) ratio of 17.3. In comparison, Boardroom Limited is valued at 13.5 times its trailing earnings and has a dividend yield of 5.4%.

5) Market capitalisation and use of funds

ZICO, which would be the second listing in Singapore this month, is raising S$14.4 million in the IPO, of which S$8.0 million will be used to expand its business operations. Another S$1.0 million will be spent on Information Technology updates while the rest of the S$5.4 million will be used to cover general working capital and listing expenses. The company would have a market capitalisation of S$80.1 million after its listing and a share count of 267.1 million shares.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Stanley Lim doesn’t own shares in any companies mentioned.