RE&S Holdings made a stellar debut on the Singapore Exchange (SGX) yesterday with the stock closing 40.9 per cent above its issue price of 22 cents.
Investors were so keen to get a slice of the Japanese food and beverage group that it was among the most active stocks on the SGX in early trade.
It opened at 35.5 cents, 61.4 per cent higher than its issue price, and dipped to 34.5 cents by around 9.15am with about 9.3 million shares having changed hands.
It closed at 31 cents with a total of about 16.3 million shares worth $5.6 million traded.
The SGX noted yesterday that there are 13 restaurants and food retail stocks listed here with a combined market capitalisation of about $18.5 billion, excluding RE&S. These 13 stocks, including Sheng Siong Group and Jumbo Group, have averaged a total return of 19.1 per cent so far this year.
RE&S, which has listed on the Catalist board, said on Tuesday that it had received "strong interest" from investors for its initial public offering (IPO) of 38 million shares at 22 cents apiece. A total of 32 million invitation shares were 37.8 times subscribed. The remaining six million reserved shares were fully allocated.
The institutional investors that subscribed for the placement shares included Lion Global Investors, Nikko Asset Management Asia and Qilin Asset Management. Each was allotted 5 per cent of the invitation shares.
Separate from the invitation, sole cornerstone investor Orchid 2 Investments, which is managed by Temasek Holdings' wholly owned subsidiary Heliconia Capital Management, subscribed for all 16 million cornerstone shares at 22 cents apiece.
RE&S has a diversified portfolio with a strong track record of over 25 years, a wide range of offerings with a multi-price-point strategy, and an experienced management team, PhillipCapital said.
However, it warned that the 2018 first-half earnings will not be "rosy" due to factors such as downtime costs and equipment write-offs from the reconstruction of Shokutsu Ten food street into a Japanese food alley in the first quarter and IPO expenses, although earnings should "normalise" in the second half of the 2018 financial year.
