EXPOLANKA HOLDINGS PLC (EXPO.N0000)

In Expo research report by Asha Phillip they have mentioned,
"Buy - Mid to Long term"

tkc wrote:In Expo research report by Asha Phillip they have mentioned,
"Buy - Mid to Long term"

Definitely a buy. Majority of the stock brokers are of the same view. Those who think of buying in the secondary market at less than Rs. 14 are going to be disappointed. This IPO is already heavily oversubscribed. My advice to retail investors is buy and hold if possible. You will still gain if you want to offload when trading begins.

uditha9 wrote:

saaj wrote:

econ wrote:company is good but the problem is ethics.
why double standard for rich institutions and poor retailers.

yeah i think shar pretty much answered ur question here....yeah the 6 rupee shares were issued a while back...i think close to a year back....and yeah..it was the personal stakes of some of the owners...as opposed to the company shares itself...so as far as i see it...its a clear soup here...buy it at 14...and i think that it could go up to abt 25 easily on the first trading day

i think you are day dreaming

Saaj may have been day dreaming a few days ago but right now the vibe is too strong and Saaj may be right. Go out there and feel the pulse. Talk to the stock brokers. The company is respected and well managed, and too good to miss out. Even those who had reservations are coming out in support of "Buy...short term to long term"

shar wrote:Talk to the stock brokers. The company is respected and well managed, and too good to miss out. Even those who had reservations are coming out in support of "Buy...short term to long term"

As per news report today non of the brokers recommend Expo Lanka as short term..

http://www.ft.lk/2011/05/11/majority-of-brokers-recommend-expolanka-ipo/

yeah, good point made by shar.....either for short term trading, or long term gains....its a good buy

most of the up coming IPO's are not going to bring us short term bucks...at least in medium term only we can expect a good return,expo also no difference to this...

Majority of broking firms are recommending subscription to the Expolanka Holdings IPO worth Rs. 2.4 billion largest so far this year.

Despite reservations largely from those who are keen for a quick buck, most stock brokers are recommending the IPO as a solid investment with long term upside.
The Daily FT yesterday did a quick take on ‘available for comment’ brokers and majority of those who responded recommend the IPO. Some however had reservations.
The CEOs to whom FT spoke were Acuity Stockbrokers CEO Deva Ellapola, Bartleet Mallory Stockbrokers Director Angelo Ranasinghe, SC Securities Director and CEO Harsha Fernando, Ceylinco Stockbrokers Director and General Manager Sriyan Gurusinghe, Asha Philips Director and CEO Dimuth Abeysekara, DNH Financials CEO Seedantha Kulathilake, Taprobane Securities CEO Dinal Wijemanna, Richard Peiris Securities CEO Jayantha Perera and IIFL Ceylon CEO Priyani Ratna Gopal. Asia Securities and Heraymilla have recommended as ‘Buy’ as well as IPO-linked brokers JKSB and CT Smithstockbrokers.
This is in contrast to few brokers and analysts who have raised various issues over the higher IPO pricing of Rs. 14 in relation to the Rs. 6 per share sell down last year. This criticism is despite being aware that fundamentals of Expolanka as well its underlying performance had dramatically changed between the pricing for private placement stage and the IPO. Incidentally shares acquired in the selldown were privately trading three times its price and at a high of Rs. 23 owing to demand.
Sources said that basis for pricing for the sell down was 2009/10 earnings and other market factors. The prospectus of the private placement also implied that those who take up might not have an exit for 1 or 2 years as Expolanka didn’t have immediate plans to go public.  In reality Expolanka had outperformed most optimistic forecasters. For example its gross profit was Rs. 4.4 and Rs. 4.5 billion in FY 2009 and FY 2010 whereas within the first nine months of FY 11, this figure had been surpassed at Rs. 4.6 billion.  After tax profit which ranged between Rs. 391 million and Rs. 591 million in FY 09 and FY10, had almost tripled to Rs. 1.45 billion in the nine months of FY11.     
Forecasting a tripling of after tax profits would have been challenging and questioned. When private placement was structured the ASPI was also not as high but was getting re-rated following the bubble in mid-2010 whilst only in February 2011 the ASPI hit an all time high.
Some also noted that the 22% increase in earnings multiples (over private placement pricing and IPO pricing) wasn’t substantial but the very outperformance of Expolanka results within the nine months of FY11 should expose the true underlying value of the IPO price and the stock’s earnings potential in the medium to long-term.
In the private market the Expolanka shares obtained during the sell down at Rs. 6 were trading three times above and a high as Rs. 23 levels reinforcing the appetite within discerning investors looking for long term value.  In that context claims by some that those who subscribed to the sell down dumping the stock in the secondary market has little credence.
Acuity Stockbrokers CEO Deva Ellapola said that Expolanka is recommended for “investors” and not “gamblers” or those who are looking for quick gain. “Listing of Expolanka is the best recent thing that could have happened to the market. Given the fact it was family controlled for 30 years and is eventually going public is an eye opener for all other family concerns,” he opined adding that these bigger significances had got sidestepped in the debate over the differences of opinion on valuations.
Leading brokers JKSB and CT Smith though linked respectively to the Lead managers JK Capital and joint managers CT Capital have recommended the IPO whilst Heraymila Securities had done the same though noting sell down pricing was a sore point. Asia Securities/Asia Wealth too has recommended the IPO as ‘Buy’. NDB Stockbrokers will release its report today whilst a few brokers have only provided an analysis of Expolanka performances etc. though not recommending buy or not.
The IPO of 172 million shares at Rs. 14 each will officially open tomorrow whilst unofficially indications are that it has been oversubscribed at least by two times.
Director of Bartleet Mallory Stockbrokers Angelo Ranasinghe who nodded ‘yes’ when asked about recommendation stated, “We are confident in the management and is interested in the well diversified company with good business both here and abroad. We are also confident in areas of business Expo Lanka has diversified into. It would bring good long term to medium term benefits.” Ranasinghe also commented that people should be confident on both John Keells and CT Capital who are managers to the issue and hold respected positions in the market.
Director and CEO of SC Securities Harsha Fernando agreeing with Ranasinghe stated that such a large company on an IPO is important for the country. “We have had quite a bit of listing during the past year and a half; however the majority were smaller listings. The size of the company and its diversified business will lead the way for other such large companies to follow,” Fernando said.
“This is great and is a good opportunity for our investors.” Director and General Manager of Ceylinco Stockbrokers Sriyan Gurusinghe also stated that it is a good stock and yes, they will be recommending it.
CEO of DNH Financials Seedantha Kulathilake stated that on a medium to long term base, the IPO will be recommended to the clients while CEO of Taprobane Securities Dinal Wijemanna agreed.
 CEO of Richard Peiris Securities Jayantha Perera meanwhile expressed that the company will take a neutral view in the stance. “We have advised the client with all the information we know and left it to the client to decide rather than taking a major call on this. The company is a sound one and we are positives on the outcome.” He also agreed that though short term may not be the answer, medium and long term outcome will be much better.
Asha Philips CEO and Director Dimuthu Abeysekara said Expolanka IPO is recommended on a medium to long-term basis.
A stockbroker who wished to remain anonymous however added that with all the rumours involved and the shares offered at Rs.6 in a sell-down people are hesitant in placing their confidence on the IPO.
Heraymila Securities in a research report said: “We recommend investors subscribe to the EXPO IPO. It is an exposure to a well-managed, geographically diversified and growing logistics business. The issue price of Rs. 14 offers upside to our intrinsic valuation of Rs. 17.” This recommendation was despite tactical sore point on pre IPO price.
CT Smith Stockbrokers said at the IPO price of Rs.14, Expolanka trades at PER multiples of 15.1X FY12E and 11.2X FY13E, offering strong recurring EPS Growth of 42% in FY12E and 35% FY13E, whilst also providing attractive ROE’s of 28% in FY12E and 27% in FY13E. The Group also has a comparatively attractive PEG ratio of 0.4X in FY12E. “With high growth expectations, strong regional presence, a recognised brand name and capable management team, we expect Expolanka to outperform the market in the medium to longer term. We thus recommend, SUBSCRIBE,” it said in its research report.
John Keells Stock Brokers said in its research report concluded as saying: “With an asset light business model that consistently delivers high ROEs the counter should trade at a significant premium to the current market FY12E multiple of 15x. At Rs. 14 the company is trading at 18.2x FY11E earnings and at 13.6x FY12E compared to the market which is trading at 18.4x FY11E and 15.0x FY12E. With a four year earnings CAGR of 26% as well as ROEs between 24-25% we feel that the counter should trade at multiples of 20x in line with the Diversified sector. We recommend SUBSCRIBE.”
FT Insights
Broker pulse on Expolanka IPO
Broker        Comment
    Acuity         Yes
    Asha Phillip     Yes/Medium to Long Term
    Asia Securities     Yes
    Assetline     Neutral/Yes Long Term
    Ceylinco     Yes
    CT Smith    Yes
    DNH        Yes/Medium to Long Term
    Heraymila    Yes
    IIFL Ceylon    Yes/Long Term
    John Keells    Yes
    NDB        Report Out Today
    Richard Peiris     Neutral/Yes Long Term
    SC Securities    Yes
    Taprobane    Yes

Courtesy - Daily FT

The question is when did they say "No" in public.

5 of the brokers have said "Medium to Long Term". So I guess we better wait and see for a while before jumping into waters.

Most brokers are just focusing on short term commission income by trading in Expo shares, not on client well-being. Independent high quality research is a very rare thing.

And I wonder if some of these stock broker firm bosses have also invested in Expo shares in private deal. We only know the big names, but who are in the 130 million 'other' shareholders who got Expo shares at Rs.6 in december 2010?

Make up your own mind, don't always believe what brokers say.

brokers need to fill there pockets

DXB2252 wrote:brokers need to fill there pockets

I have been taking part in this forum since last January. Since then I have hardly noticed any post saying that "I was successful because I followed my broker's advice !". In general, it was other way round. This forum comprises of fairly good membership & it reflects a fair sentiment. Therefore I do not have any strong feeling for accepting broker's advices in making investments. This is my 100% personal view.

where is The " MR Long Term " a.k.a JBS recommendation
Is there any one with JBS ?

good point SS. I dont remember any broker saying no for an IPO. What did they say for UBC or Freelanka. And now what has happened?

More activity in market means more brokerage. How much would have brokers earned from UBC and Free Lanka. Ultimately who were the winners........

Stock brokers are like that , ...now if this is oversubscribed they can concentrate on JKH shares next...

Please guide me!

Post by mushrif.m@gmail.com Yesterday at 10:54 pm

Hi members,

Can you all give me an advice. According to my broker advice i bought onal shares yesterday and after that only i know it is a overvalued share. currently it has decreased by 8 rs. there are two more days to pay the due. If i get the owner ship of that will it be Worthy? (Bought at 103 1000 shares)

Please guide me!

One more recent example !!!!

saaj wrote:

econ wrote:company is good but the problem is ethics.
why double standard for rich institutions and poor retailers.

yeah i think shar pretty much answered ur question here....yeah the 6 rupee shares were issued a while back...i think close to a year back....and yeah..it was the personal stakes of some of the owners...as opposed to the company shares itself...so as far as i see it...its a clear soup here...buy it at 14...and i think that it could go up to abt 25 easily on the first trading day

i find very unusual coincidence. who ever who is praising expolanka are members who joined the forum 3 -4 days back.

uditha9 wrote:
i find very unusual coincidence. who ever who is praising expolanka are members who joined the forum 3 -4 days back.

Nope mate, I'm positive on Expo, but a member and and on-line follower of the site for last couple of months...

The matter is not how long we have been in this site, instead what our view on the matter based on how we shaped ourselves for risk and what we learnt from past IPOs...(hope you remember the revenue recognition issue with the LGL, finally those who argued against forced to shut their mouths when the share started to shine....)

Brokers are here to buy & sell. IF they don't recommend, they don't have business, Simple!

But to me it's a daylight robbery , a financial crime. Based on 3Q, their value is Rs6.00 and based on 4Q, it become Rs.14.00 without any major changes.

Can you believe!

[quote="tinyman"]

uditha9 wrote:
i find very unusual coincidence. who ever who is praising expolanka are members who joined the forum 3 -4 days back.

Tinyman, you said it right. Sometimes it needs new blood to put things right when some comments are misleading. Read the Daily FT today and you will find majority of stock brokers recommend the Expolanka IPO.

They may not have said anything about short term, but that's my personal opinion. The bottom line is Expolanka is going to be a very good IPO

what will be the first day price of expolanka?

Rs 34 Start and 54 end

Do not make misleading comments without any facts.Same said for FLCH,UBC as well.Retailers, pls do not allow others to play with the little money you have

Pichchiya wrote:Do not make misleading comments without any facts.Same said for FLCH,UBC as well.Retailers, pls do not allow others to play with the little money you have

Nicely said my friend!!

udul wrote:what will be the first day price of expolanka?

1 st of all there is no such a rule "investors should sell their shares which have bought from an IPO on the 1st trading day"....
Don't follow 1st day price....
If you have positive feeling about company's future no need to worry about 1st day price....

My guess is 22...

With a drop in early june to about 17-18.

Dear All, Now the game is over, we all made their own decision regarding this IPO, of which lot of arguments and discussions took place, I feel it’s good to have a forum like this which puts all the factors into the lime light.

I was quite confident on this IPO and went for it under retailer category, further advised some medium worth (somewhere between high net-worth and Retailer category) investors to apply for this IPO.

Followings are the reasons I based my recommendation...

1. Basically Expo is a good share & a blue-ship also
­ Lucrative freight forwarding business
­ Possible Future growth in their strategic investments and core business areas.

2. Involvement of JKH
­ Most of us see the involvement of JKH as the whole reason for the blunder. but what I sensed was they value their reputation than the 8 rupee gain that they can make through selling their Placement shares at issue price.

­ If we look at this fact in a different way, Expo IPO first day trading price will be an issue for JKH reputation. If it close below 14 then JKH will face severe criticisms. On the other side if the share price manages to reach a reasonable level to give some good return; then JKH can up their collars.

­ So I assumed that JKH will try to keep the price up on the day one to prove what they have managed and promoted is a good investment.

­ I just tried to rationalize this thought...presently whatever the number of share JKH owns is at the cost of 6 rupees per share, which is way below the issue price of 14, so will not be at a loss until the market price reach 6 rupees.

­ Further they have indicated that they will be applying for the IPO also, which means they are not bothered about the average cost is going up.

­ So what I assumed is they will buy from the market to keep the price considerably higher than the issue price.

­ Say they are ready to buy from the market till their average cost equals to the issue price of 14; following can be expected
­ If they are to double their holdings (in-terms of no of shares) - the average price they would pay is would be 22 rupees.

I.e. Placement shares = 1000 X 6/=
Purchasing from the market = 1000
Expected average cost = 14, thus the total investment = 2000 X 14 =28000
Average cost of the share purchased from the market = (28000-6000)/1000
22/=

­ If the selling pressure is more than what is required to reach 22/=, then JKH may end up increasing their holding by more than double (while keeping their average cost below or equal to 14).

Each of us had a reason to go or not to go for this IPO, some people looked at this as an issue of Ethics, some others went behind the crowd, some dared to take the risk but at low exposure, some were prepared to go for it at high volumes.

Nobody knows who is going to be the winners, but we can share our reasons for our decisions on this non-conventional IPO.

This IPO is not for retailers. this is for institutions and hnwi guys.

What kind of a behavior can we expect from other share holders who got this share @6/-. Will they sell it on the first day with over 100% gain.

@Avilon, would you prefer to realize 100% gain when there is a potential for more than 200% gain,NO will be the answer, then why we should be feared of such situation. Infact those who got the shares are not retailers,but HNWI and institutions which has more than enough capacity to hold. Out of those few short-termers who got shares at 6 sold of on the gray market for 20-24 per share.