Thus far in 2018, five companies have gone public. Hyphens Pharma International Limited is set to join those companies in the stock market towards the end of this week as it is seeking an initial public offering (IPO) of its own. Here are 10 things you should know about the latest IPO:
1. Hyphens is one of Singapore’s leading specialty pharmaceutical and consumer healthcare groups with a history dating back to 1998. The group has three main core business segments – specialty pharma principals, proprietary brands, and medical hypermart and digital.
2. In a nutshell, Hyphens markets specialty pharmaceutical products to medical specialists, primary care physicians and pharmacies. It also markets its dermo-cosmetic products mainly through medical professionals. Apart from these, it has a retail distribution channel for its health supplement products, which are sold under the Ocean Health brand. To add on, Hyphens also operates a medical hypermart to supply pharmaceutical products and medical supplies.
3. The company is offering 29.6 million new shares, of which three million will be allocated to the public, at S$0.26 per share. Separately, three cornerstone investors will take up another 30.4 million shares, which translates to a 10.1% stake in Hyphens. The firm is expected to have a market capitalisation of S$78.0 million based on the IPO price and post-IPO share count of 300 million shares.
4. Hyphens is looking to raise net proceeds of around S$13.5 million from the listing. The group plans to use the proceeds for business expansion (S$7.0 million), to set up an integrated facility (S$3.0 million), and for general corporate and working capital purposes (S$3.5 million).
5. As part of its growth plans, Hyphens intends to launch five products under its proprietary brands this year, and to capitalise on its first-mover advantage as Singapore’s first pharmaceutical wholesaler to establish an online platform and capture new digital opportunities.
6. The following shows the revenue and net profit trends for the past three years, and the revenue breakdown by geography in 2017:
Source: Hyphens Pharma International Limited IPO prospectus
7. Hyphens’ balance sheet is strong. As at 31 December 2017, it had S$12.3 million in cash and cash equivalents, with total borrowings of just S$4.0 million.
8. The group does not have a fixed dividend policy, but it intends to distribute at least 30% of its net profit each for 2018 and 2019 as dividends.
9. Hyphens, at S$0.26 apiece, would be trading at a price-to-earnings ratio of 12.8 times.
10. The IPO closes on 16 May 2018 (12:00 pm), and trading of Hyphens’ shares is expected to commence on 18 May 2018 (9:00 am).
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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 Sudhan P doesn’t own shares in any companies mentioned.