IPO - singapore stock Sinostar

Public shares - 5m
Placement shares - 155.4m
Price - $0.38
Closing date: 24 september 2007
Managers - Jointly by SBI E2 Capital and CIMB

The Company is one of the largest producers and suppliers of downstream petrochemical products and are engaged in the fractionation of raw LPG for the production and sale of propylene, polypropylene and LPG.

The profits for Sinostar rose spectacularly in FY06 to RMB97m from RMB15.4m in FY05. However, there is no 1H07 figures in the prospectus.

To estimate the potential worth of Sinostar, let's assume that profit in FY07 grow 30% and FY08 profit grow 20%, so FY08 profit could reach RMB152m or S$30m. Based on the post IPO 640m shares, the EPS will be 4.8 cents.
Based on a PE multiple of 10x-15x, potential fair value could be in the range of $0.48 to $0.72.