Tambun Indah Land Berhad IPO

HO Ho HO tis the season to be jolly and to apply for promising new IPOs. On cue for listing on 18th of January in the year of our Lord 2011 is Tambun Indah Land Berhad at offer price to public of 70 sen per unit (par value at 50 sen each). After some initial hand-wringing, Yours Truly checked out the figures on the prospectus and from industry sources in the pearl of the orient i hear tell that this here is a promising little company indeed. It's a Penang-based property developer pretty famous in Penang and it has a low gearing ratio of 0.17 times currently (its prospectus says that its gearing ratio will be reduced to 0.12 times after listing by utilising some of the proceeds of its listing). Their future projects will probably be more on the mainland in seberang perai where land is cheaper and more plentiful than on the isle. They are also scouting around for suitable land in the Klang valley but nothing concrete there has come up yet, for now at least. Its price earnings ratio for 2007 is 6.76, for 2008 it's 5.63, for 2009 it's 5.54 and for 2010 (estimate) it's 9.99 respectively. Which is fairly respectable, given the downturn in economy of the last couple of years. They have of course, a 3-year preceding profit track record (proft after tax for 2007 is at RM19.558 million, for 2008 RM23.476 million, for 2009 RM23.764 million respectively) for main board listing on Bursa. They're projecting proceeds of around RM22million+ from this IPO. A few things conspire in favour of Tambun Indah's listing: it's an all-Malaysian company; it's board of directors are loan-averse (they like internally-generated funds to drive their expansion such as this IPO); they're well-known and established in penang; the stock market is currently on an uptrend and hungry for promising new companies; Malaysia which falls under the emerging economies' sphere of economic influence is reaping the rewards of being in the right place at the right time as are promising new companies coming up for listing on the bursa. Soooo...fingers crossed and hope to get some of the goodies this time. The closing date for Tambun Indah's IPO application is at 5pm, 6th January. Balloting is on 10/01/2011 and allotment is on 17/01/2011.

Post Blog Note: But having said all the above, Tambun's debut price was less impressive than some others. Eventhough Tambun was oversubscribed by over 18 times, it commanded a premium of slightly over 10sen only on listing day. This as compared to Benalec Bhd, a land reclamation outfit which listed at around the same time but commanded a premium of over 35 sen over its offer price of RM1-00 (on 20/01/2011 its premium has gone up to 47 sen). Perhaps the smaller property developers aren't that attractive to the market. So far all companies coming up for a listing after the New Year have enjoyed a premium over their offer price. So for now, almost ANY tom dick or harry IPO is a winner it seems.

Post Post Blog Note: Woaaah, Tambun has fallen to 68.5 sen today, that's BELOW its IPO offer price. What's up with that?