Tuesday, July 10, 2012

IHH Healthcare Berhad

IHH Healthcare Berhad

Offer Price: $1.18*
(*subject to applicable refunds based on the Final Retail Price)
Offer Size: 2234.65m new shares
Singapore offering (public, directors, employees): 140.635m 
Public Tranche – 52m 
Historical PE: >90x (FY11)
Market Cap (post-IPO): M$23 billion / S$9 billion
Open: 3 July 2012
Close: 11 July 2012, 5pm
Trading: 25 July 2012, 9.00 a.m. (on “ready” basis)

Frankly, this is one IPO that I don't think I need
to say much. Very simple, SUBSCRIBE!
Yes, I know that IHH is going to use 90% of the
listing proceeds to pay debts, and the stock is 
listed with a high valuation of forward PE of 20
times, but this is one stock that I really can't miss.
There are a few investment theme that will be 
mentioned every now and then, and in fact it
is the future trend, and we are talking about aging,
private medical healthcare. If you are an investor, then you
really need to put some money into this stock.

IHH IPO attracted a listed of reputed cornerstone
investor and in total there are 22 of them as below:
1. AIA Group Limited’s subsidiaries
2. Blackrock Investment Management, LLC
3. Capital Group International, Inc’s wholly-owned subsidiaries:
4. Capital Research Global Investors
5. CIMB-Principal Asset Management Berhad
6. CMY Capital Markets Sdn Bhd
7. Eastspring Investments Berhad
8. Employees Provident Fund Board
9. Fullerton Fund Management Company Ltd
10. The Government of Singapore Investment Corporation Pte Ltd
11. HPL Investers Pte Ltd and Como Holdings Inc.
12. Hwang Investment Management Berhad
13. International Finance Corporation
14. JF Asset Management Limited
15. Keck Seng (Malaysia) Berhad and Keck Seng Investments
(Hong Kong) Limited
16. Kencana Capital Sdn Bhd
17. Kuwait Investment Authority
18. Lembaga Tabung Haji
19. Mezzanine Equities N.V.
20. Newton Investment Management Limited
21. Och-Ziff Capital Management Group’s affiliates
22. Permodalan Nasional Berhad

Cornerstone Investors to take up an aggregate of 1,387.5m
IPO shares representing approximately 17.22% of the enlarged
issued & paid-up share capital. Lock-up period for investors 
subscribing for >50 mln shares is 6 months. 
Is the list impressive or what?

After listing, IHH will become the third biggest IPO this year
after Facebook and Felda, and the 2nd healthcare provider
by Market Cap in the world, with 4900 hospital beds in in 30
hospitals and 60 medical centres in Singapore, with 3,300 new
beds in the pipeline (Parkway hospitals), Malaysia (Pantai ), 
India (Apollo ) and Turkey (Acibadem ). IHH has the ambitious
but achievable target of becoming the  number 1 healthcare 
provider in 3-5 years, which is currently occupy by HCA Holdings
in US. I believe that with such vision, its high valuation is justifiable. 

One thing to note will be if you are unsuccessful in your 
IPO application or only receive a portion of what you applied, 
the money will only be returned or refunded on the 23th July. 
This is to say that your application money will be "stuck"
for >2 weeks. If you need to use some money within 
this period, please do not show hand and then all got no
money to use or to apply for the next IPO, JB Food, which
should be out soon.  

If history were to repeat itself from what we saw from Felda
IPO, then we can expect a 10<x<15% kind of debut, which
will be a good return for some traders. We have 22 big shots
willing to be the cornerstones of the IPO, and that include
our very own GIC, there must be value and upside potential
that they see that they are willing to subscribe for the share.
Yes, the valuation is expensive and on the risky high side,
but I believe that it will still be a success as "Malaysia is a
bright spot on the otherwise dark canvas of global finance",
as described by PM Najib. In a word: Subscribe.
In a few words: Use the spare cash to Subscribe

Source: IHH Healthcare Berhad very thick IPO Propspectus, 
Lim & Tan Daily View on IHH Healthcare IPO 

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