i love SG IPO and bought many, but for this I'm sitting out
There is an old folklore in Singapore that you can easily make money by buying IPO via ATM machine. So to test that saying I started crunching the numbers. After crunching the numbers on SG IPO over 2018 to 2020 (comparing IPO price and first day closing price), there are 26 winners and 10 losers. if we just buy all IPO (do note that we might not get it if it is oversubscribed) and then sell it at closing, the average returns was 2.56%. 2.56% in a day WOW!!
However, the problem with this strategy is that winners are usually those that are oversubscribed and the losers undersubscribed. So that means that you might not get your hands on the winners but you will definitely get your hands on the losers. Plus, I'm a long term investor not a trader so the way forward for me is to evaluate each IPO company and make a decision on each one. Since there are more winners than losers, that means it is easier to find a diamond in the rough here.
I had applied to $EHG.SG$ $OTS.SG$ $6AZB.SG$ $YYY.SG$ $GRN.SG$ $DHLU.SG$ $DCRU.SG$ $EVS.SG$.
However, for $NXR.SG$, I decided to take a backseat and not apply for it instead. why? because of the following concerns I have
1. the rapid net profit increase was due to a one off trace together effort. It is known that this trace together and safe entry will be phased out already. So can the company still make extraordinary profits?
2. the PE after taking the trace together contribution is way too high, at more than 200.
3. So once trace together is phased out, will they have enough mega project to keep the profits that high?
The risk rewards ratio is not very attractive to me so I will be watching how this company financial will be like in the next few years.
I had applied to $EHG.SG$ $OTS.SG$ $6AZB.SG$ $YYY.SG$ $GRN.SG$ $DHLU.SG$ $DCRU.SG$ $EVS.SG$.
However, for $NXR.SG$, I decided to take a backseat and not apply for it instead. why? because of the following concerns I have
1. the rapid net profit increase was due to a one off trace together effort. It is known that this trace together and safe entry will be phased out already. So can the company still make extraordinary profits?
2. the PE after taking the trace together contribution is way too high, at more than 200.
3. So once trace together is phased out, will they have enough mega project to keep the profits that high?
The risk rewards ratio is not very attractive to me so I will be watching how this company financial will be like in the next few years.
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toomanyscammers : usually after one successful project by an up and coming tech co, they tend to still enjoy good market impressions subsequently, I feel. Esp in this era where tech is rising, more eyes will be on them I feel and more opportunities may knock on their door, be it from govt projects etc. thus, I do feel they may have potential but I haven't read up on them yet too or checked out this IPO enough - heard about it on the day it was released. so due to the lack of knowledge, not going for the IPO yet. anyways, too late alrdy. but also, I noticed that prices tend to rise then drop after the IPO, based on some past two to three IPOs. so I am thinking this will drop below IPO price soon too xD which I think it alrdy has :) just whether it's a good long-term investment - that's the one I need to ensure first too
doctorpot1 OP toomanyscammers : yea, my biggest worry for this ticker is that once trace together is phased out and their business goes back to normal then the PE is >200. Too crazy already. hahahha![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
watching but not buying
toomanyscammers doctorpot1 OP : Haha I need to read up more on them first, to see what other opportunities or skill sets they have besides the tracetogether project. If they can expand their product line or services from there, maybe will have good potential. Maybe like an sg crowstrike? Hahah
High Profit Low Loss : I usually do not like to subscribe to IPO. I like businesses that are in the market for more than 5 years and above.
This allows me to look into records.
Moreover as you said trace-together is a one off thing.
Subsequently their business has to be sustained by other means.
So absolutely agreed with you on this crucial point.
doctorpot1 OP High Profit Low Loss : I like to look at IPO companies because they usually debut below fair value. This is because they want to sell all of their shares offered so usually that mean giving discount on the price. If they set too high the IPO will flop and they won't get enough cash to fund their needs, plus the underwriters won't get the full fees. so usually the underwriters will price it at a discount to ensure the IPO will be oversubscribed and they earn the sweet sweet profit.
High Profit Low Loss : IPO companies are out to raise funds. Those underwriters have upper hands over us retailer investors.
There is nothing wrong with subscribing to IPO, but I feel it’s speculative. In my own opinion. As the saying goes “beauty is in The Eye of the beholder.”
Silvie High Profit Low Loss : good
doctorpot1 OP High Profit Low Loss : yea recent SG IPO are quite speculative. They launched 3 SPACs which are already speculative in nature. The $ENV.SG$ also was a weird one, seems like insiders are doing a pump and dump or something like that pump to 450% then now came back down. and now iWOW with a >200PE if trace together is excluded.
sometimes there are good one though, like Temasek bond $6AZB.SG$ and well known REITs like $DCRU.SG$ and $DHLU.SG$. by huge well known companies and some have primary listing elsewhere.
High Profit Low Loss : Agreed with you, bonds and reits are defensive in nature so I don’t mind this kind of IPO.
102182682 : But no easy to strike ipo let’s say your capital is little
doctorpot1 OP 102182682 : yea it is not easy to strike those good ipo with little capital. the fees would be too high if capital too little. somemore most of the time applicants will only get a portion of what they applied for. apply 10k unit only get 6k units. unless is etf, those sure get 100% allocation.
des10 : thank you for crunching the numbers and for your insight.![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
doctorpot1 OP des10 : no problem![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
toomanyscammers : doc omgosh we meet here. lol. I saw this post as I was reading the comments section of ots hahahaha. oh man so u ipoed for that too. I have two same ipos as u. this and yyy. haha. both are going opposite from their ipo trend hahaha. what happenedddd. did u hold from ipo or u sold rebought halfway or sold forever le? haha. I sold then rebought. think that was my mistake maybe. looks like need to wait long for yyy cos china economy looks like it needs time to rebound. luncheon meat, wah. I dunno what to say. it has a far jump to recover to break even for me haha. I went to check tracetgr after reading Ur post actually to test the profitability theory. wow. surprisingly, still surviving. much better than our ots anyways lol. I also thought it'll drop post tracetgr too