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UI boustead ipo
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Alignment
Elite |
08-Mar-2026 10:21
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Trying to predict the day 1 share price movement is difficult. As Graham/Buffett says in the short run the market is a voting machine. It depends partly on what else is going on in the day, including what actions the bookrunner banks take to support the share price. As you can see from the prospectus there is a long list of big banks that are involved in this share issuance. Also important is trying to judge how desperate the seller is to maximise the IPO price itself versus how much value they left on the table to allow the share price to appreciate post IPO. Logically, the more shares the seller is holding after IPO then the less they care about the IPO price itself and the more they care about the price going up after the IPO. Looking beyond the first day and the more as we move to what Graham/Buffett describes as a weighing machine in the long run I think one can have more confidence that, at least based on current market conditions this company&rsquo s share price is undervalued compared to comparable peers (which is of course by design). I imagine the choice of S$0.88 as an IPO price is meant to help comparison to the Sept 2025 IPO of Centurion REIT which is a somewhat similar business priced at a somewhat similar DPU yield and also with a largely similar bank bookrunner base. For what it is worth, Centurion REIT&rsquo s share price went up 9% on the day of the IPO itself, and was up 30% compared to the IPO price 5 months later on 27 Feb the day before the start of the Iran/US war. Since then it has fallen a couple of % in the last week from S$1.15 to S$1.09 now, but at S$1.09 is still 24% above the S$0.88 issue price. In this case at least the undervaluation at IPO is far bigger than any negative impact of the war. Which is not necessarily surprising for a real estate business with long term lease contracts some of which is inflation protected and where interest costs have been somewhat fixed ahead of IPO. Companies are often prepared for IPO in this way to be stable and resilient for the immediate future and in that sense are probably better positioned than the average SGX company. UI Boustead REIT for instance has an average debt maturity of over 4 years. In conclusion one never knows for sure, but these are some points to consider. |
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HVRRVH
Elite |
07-Mar-2026 12:11
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The only negative is the unfavourable marco environment now, with wars raging on in Middle East and elsewhere. A typical case of crsis vs opportunities. If investors stay away, the IPO may receive lukewarm response and allotment could be just fully met or even not fully taken up. In the latter scenario then IPO price should fall when open for trading. If it is oversubsribe, it may still fall but less likely especially with, should it required, DBS stabilisation buyback of 8.1% of total offering unit which is 54,634,800 units. I will apply some as usually the issuer will try to meet their own intial yield forecast, in this case 7.8% so it is likely that maiden DPU will be about 6.8 cents. If the market compress it to 5-6%, the share price could be well above $1. This could happen if the market sees the reit as stable with valuable assets. I will not apply too many units because it will be pointless if the application is redhot, as the allotment could be in the range of below 20% of the amount applied, in that case even a million units applicaiton will get only 20,000 units. If the IPO is not well received, the price may fall below IPO price then can buy from open market. |
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mvkhem
Member |
07-Mar-2026 11:25
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Shifus .. can anyone share your some knowledge in this ipo. Is this worth buying or will it open below ipo taking into recent turmoil.?TIA. |
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