SOFTLOGIC IPO - PROSPECTUS

laxman917576 · 1 SOFTLOGIC IPO - PROSPECTUS Tue May 31, 2011 1:41 pm

laxman917576

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http://www.softlogic.lk/ipo/ipo-docs/Softlogic%20Prospectus%20Final%20File.pdf
COMMENTS......

innam · 2 Re: SOFTLOGIC IPO - PROSPECTUS Tue May 31, 2011 2:07 pm

innam

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At first glance looks ridiculously overpriced.
9 months earnings is 630 million, which if you annualize and adjust for the new issue of shares give an (annualized) EPS of 1.1
that means the PE is more than 26. It will take a lot future "magic" prospects to justify such pricing.
The key point for retailers is in page 48
14 million shares were sold in March/April 2010 for Rs 72 this was split into 10 in February 2011. which means that there are 140 million (nearly the same amount of shares as the IPO) which have cost their owners Rs 7.2
Will those who own 140 million shares at a cost of Rs 7.2 dump it on to the market at 20 levels?
part of the answer can be found in page 49. Bartleet finance has sold 3.5 million shares (which cost them 7.2) for Rs 24 each in March 2011.
so the shares were sold to certain connected parties at Rs 7.2 in 2010, they were sold in the grey market for Rs 24 in March 2011 AND NOW retailers are expected to pay Rs 29 in June 2011.

investor.sl · 3 Re: SOFTLOGIC IPO - PROSPECTUS Tue May 31, 2011 2:13 pm

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RockStock · 4 Re: SOFTLOGIC IPO - PROSPECTUS Tue May 31, 2011 2:22 pm

RockStock

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Another guerrilla marketing IPO, Disapointing

kidrock · 5 Re: SOFTLOGIC IPO - PROSPECTUS Tue May 31, 2011 2:32 pm

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innam

corect me if I am wrong, but it says Basic earnings per share for 9 months is 0.98. When annualized should be (.98/9)*12 = 1.30 ?

cse.alpha · 6 Re: SOFTLOGIC IPO - PROSPECTUS Tue May 31, 2011 2:54 pm

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innam wrote:

part of the answer can be found in page 49. Bartleet finance has sold 3.5 million shares (which cost them 7.2) for Rs 24 each in March 2011.

so the shares were sold to certain connected parties at Rs 7.2 in 2010, they were sold in the grey market for Rs 24 in March 2011 AND NOW retailers are expected to pay Rs 29 in June 2011.

Strategic Insurance Brokers (Pvt) Ltd appears to be a Bartleet company - they bought Softlogic shares at Rs 24 from Bartleet finance in March 2011

http://www.ibsl.gov.lk/insurance_brokers/Strategic_Insurance_Brokers.htm

milanka · 7 Re: SOFTLOGIC IPO - PROSPECTUS Tue May 31, 2011 3:11 pm

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The Bartleet TransCapital group includes: Bartleet Finance Ltd., Bartleet Mallory Stock Brokers (Pvt.) Ltd., Strategic Insurance (Pvt.) Ltd. and Life Insurance Lanka (Pvt.) Ltd.

Directors:
Mr. A.S. Jayawardena (Chairman) Mr. A. I. Fernando (Managing Director) Mr. Eraj Wijesinghe, Mr. Sunil Wijesinghe, Mr. R. Muralitharan

http://lankabusinessnews.com/11.02.February/088.BTCL.html

Gaja · 8 Re: SOFTLOGIC IPO - PROSPECTUS Tue May 31, 2011 3:17 pm

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kidrock wrote:innam

corect me if I am wrong, but it says Basic earnings per share for 9 months is 0.98. When annualized should be (.98/9)*12 = 1.30 ?

whether we can directly annualized the EPS, or do we need to consider the impact on the EPS due to the increase in the number of shares by way of IPO

innam · 9 Re: SOFTLOGIC IPO - PROSPECTUS Tue May 31, 2011 3:42 pm

innam

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kidrock wrote:innam

corect me if I am wrong, but it says Basic earnings per share for 9 months is 0.98. When annualized should be (.98/9)*12 = 1.30 ?

I've added in the new shares being issued in the IPO, end of the day the annualization is an assumption. soemone else can say that the IPO proceeds will reduce interest cost etc. But whatever way you look at it a PE of over 20 is far too high for hospital centric mini conglomerate.

kidrock · 10 Re: SOFTLOGIC IPO - PROSPECTUS Tue May 31, 2011 3:47 pm

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100% agreed

TuskerLK · 11 Re: SOFTLOGIC IPO - PROSPECTUS Tue May 31, 2011 3:58 pm

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Softlogic is a heavily geared company,

Total loans including OD and current portion of the interest bearing loans is above 8.75bn,

while the total shareholder funds except minority is merely 2.82bn.

Out of the nine month profit posted 165 mn is from revaluation of asset...

I feel EXPO is far better than this...

http://forum.srilankaequity.com/t2882-expolanka-facts-from-prospectus-valuation

econ · 12 Re: SOFTLOGIC IPO - PROSPECTUS Tue May 31, 2011 4:04 pm

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Massively over valued another IPO as expected.
they want to fool retailers and collect money to pay their large gearing..

SS · 13 Re: SOFTLOGIC IPO - PROSPECTUS Tue May 31, 2011 4:45 pm

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Check the Effective Income Tax percentage

2010 - 39%
2011 - 24% (excl Revaluation)

No sufficient information is given about the tax expense. They are suppose to give a detailed reconciliation about the tax expense but not given. There is large reduction in tax which has contributed to the increase in the net profit for the period.

TuskerLK · 14 Re: SOFTLOGIC IPO - PROSPECTUS Tue May 31, 2011 5:36 pm

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The 9months EPS excluding the asset revaluation is 0.777 and the annualized EPS is 1.03 rupees. which means 28 times PE.

Seems the IPO price is close to the JKH market PE

hhperera · 15 Re: SOFTLOGIC IPO - PROSPECTUS Tue May 31, 2011 6:33 pm

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"Ridiculously Overpriced" - Understatement.

Wouldn't advice anyone to touch it even with a thirty foot pole!

hhperera · 16 Re: SOFTLOGIC IPO - PROSPECTUS Tue May 31, 2011 6:57 pm

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I think it's worth mentioning, doesn't look like JKH themselves bought
any shares in the private placement. (lack of faith in the company?)

widanage · 17 Re: SOFTLOGIC IPO - PROSPECTUS Tue May 31, 2011 11:11 pm

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innam wrote:

part of the answer can be found in page 49. Bartleet finance has sold 3.5 million shares (which cost them 7.2) for Rs 24 each in March 2011.

Friends,

Is Bartleet Finance (BF) a registered finance company???

If the answer is yes....

They have done the transaction in March 2011 and it will improve the bottom line if BF for the quarter ended 31.03.2011. As per CBSL regulation BF must be on board before 30 June. In their introductory document (or prospectus) their EPS will be leveraged through the capital gain of this sale.

Be Aware....

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SOFTLOGIC IPO - PROSPECTUS

1 SOFTLOGIC IPO - PROSPECTUS Tue May 31, 2011 1:41 pm

laxman917576

2 Re: SOFTLOGIC IPO - PROSPECTUS Tue May 31, 2011 2:07 pm

innam

3 Re: SOFTLOGIC IPO - PROSPECTUS Tue May 31, 2011 2:13 pm

investor.sl

4 Re: SOFTLOGIC IPO - PROSPECTUS Tue May 31, 2011 2:22 pm

RockStock

5 Re: SOFTLOGIC IPO - PROSPECTUS Tue May 31, 2011 2:32 pm

kidrock

6 Re: SOFTLOGIC IPO - PROSPECTUS Tue May 31, 2011 2:54 pm

cse.alpha

7 Re: SOFTLOGIC IPO - PROSPECTUS Tue May 31, 2011 3:11 pm

milanka

8 Re: SOFTLOGIC IPO - PROSPECTUS Tue May 31, 2011 3:17 pm

Gaja

9 Re: SOFTLOGIC IPO - PROSPECTUS Tue May 31, 2011 3:42 pm

innam

10 Re: SOFTLOGIC IPO - PROSPECTUS Tue May 31, 2011 3:47 pm

kidrock

11 Re: SOFTLOGIC IPO - PROSPECTUS Tue May 31, 2011 3:58 pm

TuskerLK

12 Re: SOFTLOGIC IPO - PROSPECTUS Tue May 31, 2011 4:04 pm

econ

13 Re: SOFTLOGIC IPO - PROSPECTUS Tue May 31, 2011 4:45 pm

SS

14 Re: SOFTLOGIC IPO - PROSPECTUS Tue May 31, 2011 5:36 pm

TuskerLK

15 Re: SOFTLOGIC IPO - PROSPECTUS Tue May 31, 2011 6:33 pm

hhperera

16 Re: SOFTLOGIC IPO - PROSPECTUS Tue May 31, 2011 6:57 pm

hhperera

17 Re: SOFTLOGIC IPO - PROSPECTUS Tue May 31, 2011 11:11 pm

widanage

18 Re: SOFTLOGIC IPO - PROSPECTUS

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