IPO   

Heng Long Intl at $0.34

Heng Long International, Singapore-based supplier of crocodile leather used in luxury labels like Prada, Stefano Ricci, may face dismal reception when it starts trading on SGX Wed, traders say

"In this kind of market, nobody loves an IPO," says trader at bank-backed brokerage. Local house analyst says prospect of reduced consumer spending due to slowdown in economic growth may partly hurting sentiment; "in general, we should start to see more cautious spending, especially on the luxury front."

Heng Long plans to use $21.4 million net proceeds to strengthen sourcing capabilities, reduce bank loans, fund working capital.

 

Hahaha! I saw the name wrongly and thought that Hong Leong company is now selling crocodile skins!

 

 

The crocodile skin tannery launched an IPO of 68m new shares for a listing on the main board. Heng Long is one of the world's top 5 crocodile skin tanners - and the only one in Asia. 65 m of the shares on offer are placement shares. The other 3m are available to the public. The new shares represent 24.5% of Heng Long's enlarged share capital. Based on the issue price of $0.34 and net EPS of $0.056 cents for the financial year ended Dec 31 '07, the IPO shares have a PER of 6x.

The company plans to use part of the $23.1m gross proceeds from the IPO to hire more staff to boost production. Heng Long also plans to invest in a larger tannery in the next three to five years, consolidating its two existing tanneries in Singapore which now process 281,000 crocodile skins a year. It hopes to capitalise on its position as one of only two independent crocodile leather tanners worldwide.

For FY2007, Heng Long reported revenue of $66.23m, with Europe accounting for 57.5%. Revenue in the previous year came to $52.7m. Net profit attributable to shareholders totalled $11.14m, up from $6.15m for FY2006. The share offer closes at noon on July 7. Trading begins on Jul 9. CIMB-GK Securities is manager, underwriter and placement agent for the IPO.