No Signboard seafood restaurant chain seeking to raise S$35m in IPO

No Signboard Holdings Ltd started taking orders this week for an initial public offering that could value the company at as much as S$130 million. PHOTO: FACEBOOK/NO SIGNBOARD ESPLANADE

HONG KONG (BLOOMBERG) - Singapore seafood hawkers have been competing for decades in the city-state's notoriously cutthroat culinary scene. Now they're vying for the favor of stock market investors.

No Signboard Holdings Ltd, known for its signature white pepper crab dish, started taking orders this week for an initial public offering that could value the company at as much as S$130 million. It's seeking to replicate the success of long-time rival Jumbo Group, the chili crab purveyor whose shares have more than doubled since its first-time share sale in October 2015.

Investors are already lining up for No Signboard's offering. Local businessmen are committing some of their own money including Kenneth Goi, chief operating officer of property developer GSH Cor, and David Lam, founder of bulk container provider Goodpack, according to a prospectus. An asset management arm of JPMorgan Chase & Co has also agreed to buy stock as a cornerstone investor, the prospectus shows.

"It's a very unique type of restaurant," said Toshihiko Takamoto, a Singapore-based money manager at Asset Management One, who said he's enjoyed meals at No Signboard outlets. "A lot of retail investors will probably like this deal, especially if the company starts handing out dividends. It's a familiar name to them."

No Signboard's IPO is seeking to raise as much as S$35 million. Investors are being offered 125 million shares at S$0.23 to S$0.28 apiece, according to terms for the deal obtained by Bloomberg.

Proceeds will go toward developing the company's beer operations, which sell proprietary brews under the Draft Denmark brand, as well as establishing a new chain of casual dining restaurants and expanding its ready meal business.

The deal comes at a time when Singapore's Straits Times Index is trading at a two-year high as it rides the global stock market rally. Companies on the benchmark gauge are trading at an average 15.7 times this year's estimated earnings, a premium of about 12 per cent over its five-year average, according to data compiled by Bloomberg.

The restaurant chain traces its origins back to the late 1970s, when it started as a hawker stall without a signboard. The grandmother of the company's current executive directors began the business at the Mattar Road Hawker Centre at a time when crab was a less popular dish, the prospectus shows.

No Signboard reported pro-forma net income of S$7 million last year, down from S$9 million in 2015. Revenue on that basis rose 22 per cent to S$30.9 million.

No Signboard is taking investor orders through Nov 17. It aims to price the offering on Nov 23 and begin trading on Singapore's junior Catalist market on Nov 30, the terms show. Oversea-Chinese Banking Corp is sole bookrunner of the offering, while RHT Capital Pte is acting as issue manager and sponsor.

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