Sino Construction launches IPO - Review

SINO CONSTRUCTION LIMITED
Indicative time/date Event
12.00 noon on 10 June 2008 Close of Application List
11 June 2008 Balloting of applications
9.00 a.m. on 12 June 2008 Commence trading on a “ready” basis

Offer Price at $0.39 each

Not much energy to talk about IPO now because of last night DJ doing a stunt show. Not that my hsi put is not enough to please me (allow me to show off a bit, sorry :-)), but, who want to invest in IPO in coming week?

The public offer share is only consist of 4.1% of overall invitation share. To my knowledge, currently there is no pure China construction stock listed in SGX. Therefore, no direct comparison is possible.

As usual, all Sino figures look fantastic: Good revenue growth, good profit growth and strong cash flow. But that is what happened in the past.

NTA is 17.99 cents compare to IPO price of 39 cents. For construction stock, NTA normally do not carry too much weight. Who want to buy a second hand concrete mixer truck and tower crane? Anyway, we can take it as a consolation.

Sino has price earning ratio, PE of 5.89 times which is lower then CIMB compiled Singapore construction stock average of 7.8 times (Lowest Hor Kew: 5 times, Highest Tat Hong: 10.4 times).

What I want from a China IPO is potential explosive growth in hot sector. Construction….. may be last year, but not in today’s term or near future. Please do not expect Sino going to involve in Sichuan reconstruction contract too, simply because Daqing and Siquan are too far apart.

The market sentiment is going to worsen in coming week. The market volume is decreasing daily. I will definitely not going to apply for balloting.

The valuation at 39cent is fairly valued, but I expect you can get it from the post-ipo open market with a good discount.

If you really want to have a piece of action from China Construction stock IPO, I would advise to apply it on the last day last minute to gauge the market sentiment. Good luck!