Martin Lee @ Sg
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Maxi-Cash IPO

Fancy owning a piece of a pawnshop?

Now you can.

Pawnbroker Maxi-Cash, which is now wholly owned by Aspial, will be launching an IPO on the Catalist board.

Maxi-Cash is provider of financial services in the form of pawnbroking and the retail and trading of pre-owned jewellery and watches.

Maxi-Cash said it was offering 56 million new shares priced at S$0.30 each. 53.75 million shares will be for a private placement while the remaining 2.25 million shares will be offered to retail investors in Singapore.

The IPO shares represent nearly 18.9% of the group’s enlarged share capital of 296 million shares immediately post-IPO. This works out to a market capitalization of $88.8 million based on the offer price of $0.30.

Maxi-Cash had a net profit of $3.11 million in 2011. Losses of $1.26 million and $4.7 million were made in 2010 and 2009 due to business start-up costs.

The Maxi-Cash IPO starts from today and will close at noon on 20th June. The shares are expected to commence trading at 9am on 22nd June.

Without looking at the prospectus to see the earnings forecast and growth prospect, it’s difficult to tell whether the IPO is cheap or expensive. If based only on the 2011 earnings of $3.11 million, then it would definitely be a no go.

However, the company is still in a growth phrase and it’s revenue has increased significantly from approximately S$10.0 million in FY2009 to S$54.9 million in FY2010 and S$87.7 million in FY2011. It will be interesting to see what kind of estimates are given for the next few years.

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