IPO   

ARA Asset Management IPO -avoid with a 10-ft pole

This stock NTA is only about 17.5cts.  If I remember correctly from prosp.

Dulation to new investor is 88%. I can confirm this as 88 is big and nice number.

 

 

 

 

http://159.43.254.157/sgxnews/sgxnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com:20071101:SGX_21731

 

Resukt......here.

http://159.43.254.157/sgxnews/sgxnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com:20071101:SGX_21731

 

is the result out???

 

 

 

Applied but got none.
Sianz.

 

IPO Statistics

Bloomberg ticker ARA SP

Closing Date 31 Oct 2007, 12.00 pm

Commence Trading 2 Nov 2007, 12.00 pm

Listing Status SGX Mainboard

Nature of Business

Real Estate Fund Management

Date of prospectus 26 Oct 2007

Issue size: 205.2m Offer Shares - 181.9m Placement Shares, 23.3m Public Shares (incl. 8.3m Reserved Shares)

Offer price S$1.15

Gross proceeds ($?m) S$84.0m

Key Manager, Underwriter & Placement Agent Joint Global Coordinators, Bookrunners & Underwriters- Credit Suisse and DBS Bank

Co-Manager & Underwriter ? CIMB

Sub-underwriter for the Public Offer ? AmFraser

Historical PER for FY06 43.6x

The first fund management company on SGX. ARA Asset Management Limited (ARA) is an Asian real estate fund management company. It is seeking to list on the SGX Mainboard with the raising of net proceeds of S$73.9m. Listing is expected on 2 Nov 07 and when listed ARA will be the first real estate fund management company to be listed on the SGX.

Highly scaleable business model. ARA?s revenue model is feebased and comes from managing third party funds. As business model, it is highly scalable and any increase in assets under management (AUM) flows directly to bottom-line. ARA has three business segments: REIT Management, Private Real Estate Fund Management and Specialist Equity Fund Management & Corporate Finance Advisory Services.

Stable income with good growth potential. ARA?s revenue is very stable and comes from the management of long term vehicles like REITs, as well as any new private funds which generally have a life span of 5 - 7 years. As the fee is a fixed percentage of the AUM, and its portfolio is well diversified (each of the REITs it manages focuses on different geographies and in different sectors), ARA?s revenue is very stable and should be immune to property cycles. As for growth, this comes in the form of acquisition fees, establishment of new REITs, and increase in asset values through revaluation as well as new funds. Finally it also enjoys an extra kicker in the form of performance fees and profit participation, which also aligns its interest with that of investors.

Weakness is people dependent. As in any service industry, the key weakness is its dependence on key personnel. In that context, ARA is not immune to staff turnover. However, to minimize this impact, ARA has implemented a profit sharing scheme, which offers its employees 10% of ARA?s performance fees.

A suite of globally reputable partners and investors. ARA has a strong business relationship with Hong Kong?s Cheung Kong Group. This relationship offers ARA potential business opportunities and access to the Group?s real estate properties. Additionally, its strong reputation in the industry and good past performance have enticed CalPERS (California Public Employees? Retirement System) to park US$500m with it. Together with other strategic partners and investors like Merrill Lynch, Dubai Islamic Bank and DLJ Real Estate Capital Partners, ARA?s stature and expertise have been given a credible and strong vote of confidence.

Rosy sector outlook. Asia real estate has been enjoying a boom in the past few years. The positive trend appears to be intact and backed by strong economic fundamentals. With this positive climate, ARA?s management aims to double the total amount of AUM and FUM combined over the next 2 ? 3 years. Finally, ARA has a targeted dividend payout ratio of 70% and a gearing ratio of 35%. We do not have a rating on ARA.

SWOT ANALYSIS

STRENGTHS
ARA?s Chairman Justin Chiu and CEO John Lim both have a substantial amount of experience in real estate, which exceeds 26 years. Combined with the other senior employees, ARA?s senior management actually has an average of more than 20 years of relevant experience. Equipped with this wealth of experience, ARA is more than capable of driving the business forward. Alongside its founding shareholder Cheung Kong Group, a multibillion multinational conglomerate, ARA?s private estate funds have also pulled in renowned partners and institutional investors such as Merrill Lynch, Dubai Islamic Bank, DLJ Real Estate Capital Partners (an affiliate of Credit Suisse) and most recently CalPERS (California Public Employees? Retirement System), US?s biggest pension fund. This not only bears testament to ARA?s expertise in real estate management, but also foster potential future business opportunities between them and ARA. ARA?s impressive historical financial performance lends further credibility towards its future growth. For the period between FY04 and FY06, turnover and bottomline growth have climbed up at a CAGR of 129.2% and 306.9% respectively. This is accompanied by an increase in profit margin from 14.5% in FY04 to 46.1% in 1H07. ARA?s diversified coverage in terms of geography and sector also makes it less susceptible to any adverse effects in a single country of operation or sector. Finally, the income stability of its main revenue arms ? REIT and Private Funds, serves as a further incentive for potential investors.

WEAKNESSES
Exposure to several countries notwithstanding, ARA?s business is still purely based in Asia, where its member countries share certain similarities, in terms of economic policies and business environment. This makes ARA susceptible to any adverse effects within the Asian region. Also, currently more than 90% of its revenues are derived from its REIT Management segment. As such, its topline would be severely affected if management services are terminated for any one of the four existing REITs under management. Furthermore, ARA?s management has limited experience in managing its second business segment - private real estate and specialist equity funds. In fact, its main experience in this area is derived from managing AIFEREF, a fund which only closed in 2004.

OPPORTUNITIES
As the real estate industry moves in lockstep with economic growth, the recent and projected GDP growth across Asia signifies a positive trend for companies who operate within the industry, including property development, REITs, infrastructure, building and construction. This has resulted in the real estate industry experiencing high growth and liquidity. ARA is one of them. It also stands to benefit from the influx of international funds into Asia?s real estate sector, as both its REITs and private real estate funds are focused on key markets in Asia, such as Hong Kong, Singapore, China and Malaysia. Moreover, the positive sentiment within the real estate industry has boosted the attractiveness of REIT?s income stability, as exhibited by an upward trend in Asia?s REITs market ? from 8 (as at 31 Dec 02) to 92 (as at 30 Jun 07). This represents another positive sign for ARA, whose bulk of revenue comes from REIT Management.

THREATS
ARA, similar to all real estate companies, falls victim to the cyclicality of the sector. Any downturns in Asia?s present economic growth would put a dent to its bottomline. In fact, with the current robust growth in Singapore, Hong Kong and China where ARA?s businesses are largely based, concerns of inflationary pressures and an overheated market have already been raised. Any anti-inflationary policies by the local governments will most likely dampen market sentiments. As ARA?s financials are recorded in the currencies of Hong Kong and Singapore, it is prone to the fluctuations in exchange rates. Where competition is concerned, there are relatively few barriers to entry for new private fund management firms to enter the market. Moreover, with the increasing allocation of capital to the real estate sector, it leads to decreased opportunities for ARA. The presence of an increasing number of hedge funds and private funds, who are incidentally also increasing in size, makes it harder to raise capital in the future.

Background
ARA Asset Management Limited (ARA) is an Asian real estate fund management company, whose business consists of three main segments, including REIT Management, Private Real Estate Fund Management and Specialist Equity Fund Management & Corporate Finance Advisory Services. Established in 2002, ARA is an affiliate of a leading Hong Kong-based multinational conglomerate ? Cheung Kong Group, and has expanded its Assets Under Management (AUM) to US$4.7b as of 30 Jun 07. The charts below provide greater details of ARA?s structure and business model as well as its recent financial performance.

 

REIT IPO. ARA IPO-ing at $1.15ct, good demand by funds, closing on 31-10-2007. good luck to those trying at ATM.

 

Vested 10 lots to see how it will perform in the market start. Good luck to those who are IPO~ing as well. Cheers

 

 

ARA Asset Management Ltd, which launched its initial public offering (IPO) last Friday, expects a strong institutional response to its offer. Sources said the institutional portion of the offer - comprising 88 per cent of the IPO or 181.9 million shares - is expected to be oversubscribed by over 30 times. The IPO was launched last Friday - a total of 205.2 million ordinary shares in the capital of ARA, at an offer price of $1.15. The retail portion comprises 23.3 million shares. ARA's business segments comprise real estate investment trust (Reit) management, private real estate fund management, specialist equity fund management as well as corporate finance advisory services. An industry source told BT that the strong interest was due to the stable and long-term growth associated with Reit management. People believe there is ample opportunity for growth in Asia, so they increasingly want to allocate funds towards Asian real estate, the source said. In addition, ARA's recent procurement of a US$500 million investment from US pension fund Calpers in its closed-end private real estate fund, ARA Asia Dragon Fund, was also seen as a strong vote of confidence.

 

so negative ? anyone else have other opinions ?

 

One of the yardstick for gauging whether one is overpaying too much is to countercheck what one is paying for per share versus what the Company's existing shareholders are paying for per share prior to the IPO.

From page 135 of ARA's IPO prospectus, Company's existing shareholders paid only $0.002 per share.

All new shareholders from IPO will have to pay $1.15 per share.

Premium difference is a whopping 57,400% (a new investor will be paying about 575 times more.)

 

Real estate firm ARA Asset Management has priced its $277 million IPO at $1.15 per share, the top end of its indicative price range.

The firm, partly owned by Hong Kong tycoon Li Ka-shing's flagship group Cheung Kong (Holdings), sold 243 million new and vendor shares, according to its prospectus. It said it would use proceeds from the public share sale as seed capital for an Asian investment fund as well as Reits.

 

i hv alot of respect for Cheung Kong (CK)too.

true ARA is owned partially by CK, so is Tom.com (remember that one launched during the dot.com mania in HK)

Tom.com teaches many people in HK that Mr. Superman (CK's humble boss) will not hesitate to take your money if you're overly exuberant. If people want to overpay alot, Superman is more than happy to oblige. By the ARA major shareholder is John Lim of JL Investment.

take care and trade without regrets.

 

ARA files for Singapore listing

SINGAPORE - Real estate fund firm ARA Asset Management on Tuesday filed its prospectus in Singapore for an initial public offering which sources close to the deal said may raise US$200 million for its shareholders and the firm.

Singapore-based ARA, which managed US$4.7 billion of assets at the end of June, said the company would offer new shares while two of its shareholders, JL Investment Group, and Cheung Kong Investment would also sell shares in the firm.

JL Investment Group, owned by ARA chief executive John Lim, owns 70 per cent of the firm while Cheung Kong Investment, a unit of Asia's richest man Li Ka-shing's flagship group, owns the rest.

The prospectus did not say how big a stake the key shareholders plan to offload in the IPO.

But sources close to the deal said the firm would sell 243 million shares, or 42 per cent, of the enlarged share capital.

The real estate fund management firm has appointed Credit Suisse and Singapore's DBS Bank as lead managers, the prospectus said.

The firm manages private funds and real estate investment trusts, or Reits, including two which are listed in Singapore - Fortune Reit and Suntec Reit.

ARA also manages Prosperity Reit in Hong Kong and AmFIRST Reit in Malaysia, according to its website.

Its private funds include Al Islami Far Eastern Real Estate Fund and China Capital Partners.

The propectus said that the IPO would raise S$39.8 million as seed capital for ARA Asia Dragon Fund and S$21.4 for other real estate projects and the remaining for working capital.

It said the ARA Asia Dragon Fund plans to raise US$1.3 billion for real estate projects in Asia.

The firm plans to organise investor roadshows from Oct 9 to Oct 23, while the IPO is expected to be priced on Oct 25, the source said. The company will be tentatively listed on Nov 5, the source added. -- REUTERS

 

Hi Bro..this stock belongs to HK Cheung Kong group..shd be ok...linked to Sunteic REIT...but reit shares very slow to move I held SuntecREIT for nearly a year b4 it moved to $2.00 previously....Parkway reit is trading below IPO price of $1.28..now ab $1.22

 

give ARA ipo a  miss.

go for marco polo marine instead.

 

Price at $1.15

Price to Book at 8.84 times

Historical P/E at 43.5 times

P/CF of 33.85 times

Estimeated historical earnings yield of 2.29% (without any dividend guidance given and based on P/CF and earnings yield, likely future dividend payout likely yield less than 1%)

There are some market talks that Uni-asia shares were manipulated to make ARA's ipo valuation look acceptable. Who are involved? SGX and CAD should investigate to establish any truth or just plain rumour in that.

Feel free to comment if any