ROBINS: A Secret Shortcut to Get a Hold of CRC’s IPO!
Due to the large size of CRC’s IPO, it’s quite difficult for investors to acquire or may only acquire in a small amount, but there is a shortcut!
After Central Retail Corporation (CRC) set the size and the price of its IPO, there was a question from investors on how to get this IPO?
Investors generally have to subscribe for IPO via the brokerage. However, due to the large size of CRC’s IPO, it’s quite difficult for investors to acquire or may only acquire in a small amount.
The shortcut to surely get CRC’s IPO is to buy Robinson Public Company Limited (ROBINS)’s shares in the market as shareholders of ROBINS will get 1.39-1.66 of CRC shares for each of ROBINS share.
Central Retail Corporation has set a preliminary price range for an IPO at 40-48 baht per share. That means that if the selling price is at 40 Baht, the share swab rate will be at 1.66 of CRC per 1 share of ROBINS. But if the selling price is at 48 Baht, the share swab rate will be at 1.39 of CRC per 1 share of ROBINS. This is considered to be a premium price!
There is another interesting highlight. If the selling price is at 40 Baht, the price-earnings ratio (P/E) will be at 28x. But if the selling price is at 48 Baht, the P/E will be at 33.5x, similarly to the P/E average of the department store groups which is at 33.9x. Other retail stocks such as CPALL has P/E at 34.5x while GLOBAL’s P/E is at 35.3x, MAKRO is at 28.2x and HMPRO is at 37.8x.
By comparing the last three years of revenues, ROBINS had total revenue of 30,767 million baht in 2016, 30,860 million baht in 2017, 32,106 million baht in 2018, and 12,266 million baht in the first nine months of 2019.
For CRC, total revenue of 2016 was at 176,281 million baht, 178,998 million baht in 2017, 206,575 million baht in 2018 and 159,506 million baht in the first nine months of 2019.
These figures show that revenue of ROBINS is just a small part of CRC while CRC is now the retail brand owners of the top three main businesses, which are fashions, hardline and foods. The company also has 1,922 stores in Thailand such as Central department store, Robinson Super Sport, Central Marketing Group, Power Buy, Thai Watsadu, TOP, Family Mart and Robinson Lifestyle Center.
Overseas, CRC has 133 department stores in 40 provinces in Vietnam and 9 high-end department stores in Italy.
Every asset of CRC is tangible, not like the assets of Asset World Corp Company Limited (AWC) which requires about 1-2 years to be tangible.
However, the risk of CRC is its growth is not eye-catching but rather more stable, so it may not suit for the short term speculation but rather for the long run investment.