Sunday, 9 August 2015

MONEY MATTERS : SBS PH (INITIAL PUBLIC OFFERING)


By the time you are reading this, the bell may have already rung for SBS Philippines Corporation. Securities and Exchange Commission (SEC) has approved their official listing date, which is 10th of August 2015. After so long, another initial public offering (IPO) went live. I have to be honest, most of the quick-buck gains I have realised come as a result of riding the IPO wave. It's not the safest - true, but that's where materiality (how much money are you willing to put in the line) and calculated risk comes into play.

As per usual, I won't do the academic approach because, well - my brain cells can't accommodate it :D Seriously, you can read the whole prospectus over the web. Better yet, drop SBS a visit on their website. *Photo above was taken from their website.

Why did I decide to invest?
1. Their client base. They have Jollibee, San Miguel, Alaska and NutriAsia as their customers. They also provide chemicals to Semirara Mining Company. In a nutshell, they have a pretty strong market share so income will inevitably follow {specially now that they are backed up with public funding}.

2. Their products are sustainable. The Philippines is a highly consumer-based market. With this landscape, good bottom line figures are believable.

3. The initial price. Php 2.75 per share for 1,000 share (as a minimum). Seriously, your Php 2,750 can balloon into something humongous over time. 

There would always be weaker points, of course. One of the obvious is that it is apparent that most of the decision making rests on the shoulders of Mr. Sytengco. It actually surprised me that their website is http://www.sytengco.com/. I mean, this clearly spells FAMILY OWNED CORPORATION, which is... well, normal among the brood of blue chip companies in the PSE. 

So, what's my personal strategy?

I intentionally emphasised the word personal (you know the usual caveat). I will ride the IPO wave and pull out my money when it doubles :D I aim for a 100% return but we'll see. As I've mentioned, I've made some money on Xurpas (X), SSI, Max's and DD's IPO before. I hope for the same with SBS.

As for long term investments, I plan to stick with reliable recos. I just can't gamble most of my investment fund into companies that I am not familiar with :)

What's your take on IPO? Do you usually participate or ignore the mob? -CMK
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