Tuesday, July 30, 2013

MoneyMax Financial Services Ltd

MoneyMax Financial Services Ltd

Download the Prospectus here


Offer Price: $0.30
Offer Size: 53.8m new shares
Public Tranche – 2m shares
Placement Tranche – 51.8m shares
NAV per share (post-IPO): $0.156
Historical PE: 15.5 (FY12)
Market Cap (post-IPO): S$106.1m
Open: 25 July 2013
Close: 31 July 2013 12pm
Trading: 2 August 2013 9.00 a.m. (on “ready” basis)


MoneyMax Financial Services Ltd ("MoneyMax or "The Company") is engaged in providing pawnbroking services, and the retail and trading of preowned jewellery and watches. As one of Singapore’s largest pawnbroking chains, the company currently operates 27 outlets across Singapore under two brands, MoneyMax and Cash Online.

The company began operations under the MoneyMax brand in 2008 and acquired the Cash Online brand in 2013. The customers are typically individuals who require short-term funds and are able to pledge valuable personal articles, such as jewellery and branded watches, as collateral.

Two of the company’s outlets specialise in retailing a wide range of pre-owned watches and jewellery. The pre-owned watches include mid- to high-end luxury brands. The company also retails pre-owned precious coins, such as gold coins, commemorative medallions and gold bars. 

Financial Highlights

Use of IPO Proceeds 


Business Strategy

• Expand its network of outlets
• Refurbish and improve existing outlets
• Expand the range of pre-owned jewellery and watches
• Increase branding and marketing activities
• Expand through acquisitions, joint ventures and/or strategic alliances

Competitive Strengths 
• A well-established market player
• Capable and experienced management team
• Strong emphasis on maintaining a sound and effective system of internal controls and risk management
• Extensive network of outlets which offers convenient access to their services

Key Risks

• Regulatory requirements for operations
• Require significant capital outlay and the group relies on external financing to fund its operations
• Changes in interest rates may affect profitability
• Susceptible to gold price volatility
• Susceptible to foreign exchange rate risks and fluctuations
• Inadequate insurance coverage
• Inaccurate appraisal of pledged collateral

My Personal View

I believe that most readers will show-hand and apply for 
the MoneyMax IPO with or without my pesonal view on the
counter. Many of you may not get the allocation for Rex
International IPO and want to to re-invest the money-returned
minus $2 back into the jackpot again. Guess what, I will
do the same too.

Ok, let me do some more analysis on the counter first.
I believe that the readers should know that this is the 2nd
pawnbroker to list in SGX following the success of Maxi-cash's
listing on June 2012. Both have jewellery business as
MoneyMax's boss also own SK and Soo Kee, while Maxi-cash's
boss own Goldheart, Li Hwa and Aspial. Both company also
listed at 30cts, so it seems that the underwriters have done
the homework very properly. If we were to look at the performance
of Maxi-cash since its listing last year June, one can only
give a thumb-up. It gave out bonus shares on a 1-5 basis
in November 2012 and another 1-5 bonus share in February 2013.
I am expecting that MoneyMax management know what to
do to please the shareholder now that they have a "role-model"
to look at and follow. Some people said that the pawnbroking business
will only thrive when the economy is bad. I opt to differ on such
short-sighted statement. The whole world is changing everyday 
and so must the old-tested belief to be changed as well.

I am re-investing my ammo back to this IPO in the hope that
I will get more from the counter. Do take note that I won't be
selling the share on debut as this will be my holding stock
for a short time, before I decide on the next move.

Sources: MoneyMax IPO Prospectus, The Straits Times and
UOB KH IPO Fact Sheet on MoneyMax