MENU

MindChamps PreSchool Limited IPO: The Weekend Round-Up Plus 1 Bonus Item That You Need to Know

Shares of MindChamps PreSchool Limited (SGX: CNE) started trading on Friday.

The company filed its initial public offering (IPO) prospectus a week before its public debut. At the time of the filing, MindChamps PreSchool had a network of 54 centres. 10 centres are owned and operated by the company itself, while another 44 are owned and operated by franchisees.

Here’s what we have learned so far:

1. The basic overview

Learn more about the history of MindChamps, its founder, and how many shares went on sale. We also learnt that Singapore Press Holdings Limited (SGX: T39) increased its stake to 26.84% prior to the IPO. The stake will be around 20% after the IPO.

2. How it makes money

As Foolish investors, we should always start with the most basic question: How does the company make money?

Beyond that, how much do parents pay per month for each student? How many students does MindChamps PreSchool have per preschool centre? How much does the company make from its franchisees? What does a typical contract with a franchise look like? All these will be answered in the article here.

3. Growth, growth, growth

We gaze into the future and outline four possible ways that MindChamps Preschool can increase its revenue. For one, school fees are likely to be increased every year as it expands its educational scope. The company also plans to license out to more franchisees, and acquire other businesses to grow.

4. Don’t forget the risks  

As the song goes, every rose has its thorn.

Every company has its inherent risks. Some risks might be under its control, but there are risks that are not in its hands. Find out four potential risks that we gleaned from its IPO prospectus.

5. The bonus level, unlocked

Here’s one for the income investors out there. With the new year just around the corner, MindChamps PreSchool has stated its intention to pay a dividend for 2018:

“Moving forward, our Board intends to recommend and distribute dividends of at least 40% of our net profit after tax (excluding exceptional items) generated in FY2018, as we wish to reward our Shareholders for participating in our Group’s growth.”

To be sure, the company has also stated that it does not have a dividend policy. There will also be no dividend paid out for 2017 as it intends to reinvest its profits into the business.

Keep up to date on the latest financial and stock market news by signing up now for a FREE subscription to The Motley Fool's investing newsletter, Take Stock SingaporeIt will teach you how you can grow your wealth in the years ahead too.

Also, like us on Facebook to follow our latest hot articles. The Motley Fool's purpose is to help the world invest, better.

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