Home Investment IPO Snapshot XMH Holdings - Engined for Growth

XMH Holdings - Engined for Growth

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XMH Holdings is a Singapore-based supplier of marine and industrial diesel engines and generators. Buy, stag or avoid?

Upsides

  • Distributes 7 product brands across a wide product range.
  • Largest worldwide distributor of Mitsubishi marine engines since 2005
  • Gross margins improved from 18% to about 28% in the past 3-years
  • Current order book of S$72.4m is almost one year worth of sales in 2010
  • Attractive P/E of around 5

Downsides

  • Net-asset value pre-IPO is just 2.9c per share. At NAV of 7.0c post-IPO, issue price of 25c is 3.6 times NAV
  • Business model as a distributor entails little proprietary intellectual property
  • Market capitalization of S$100m puts it outside the radar of most institutional investors

Similar to

  • MTQ (which has an engine division)

Conclusion

  • Neutral. IPO offer closes on 24 Jan 2011.

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Last Updated ( Sunday, 16 January 2011 05:56 )  
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