Asaleo Care Limited IPO

[macduffy]

Have any of the disappointed Gentrack punters had a look at this one?

https://www.asaleocareoffer.com/

Great brands, strong market position. Unfortunately, retail sales are largely in the hands of the Aust and NZ supermarket duos - do they risk being squeezed in the way that Goodman Fielder were?

[mark100]

I've put in for some. The IPOs have been good for me lately so I'll roll the dice on another! If it prices in the lower half of its indicated range I see reasonable upside

See comment below from AFR although note Bell Potter is one of the brokers. Also note the comment about being protected from imports due to the bulky/lightweight nature of the products


Bell Potter’s Charlie Aitken has told clients to consider “sensibly priced” private equity floats, in particular Asaleo Care, the owner of brands including Sorbent, Libra, Purex, Handee and TENA.

“I believe it will be another initial public offer winner from private equity,” Aitken wrote in a research note to clients on Friday.

Investors often point to the Myer experience as a reason never to buy from private equity, “but analysis of returns from recent PE floats suggests that approach has cost sceptics serious performance as the majority of PE IPOs have performed well to very well in the secondary market”.

“If anything, recent history suggests private equity IPOs could prove to be an attractive investment, particularly if the PE seller retains a meaningful stake in the listed company,” Aitken adds. Aitken’s Bell Potter is one of the brokers floating the consumer goods company.

Asaleo offers pure-play exposure to a suite of number 1 or number 2-ranked Australian consumer staples brands “exposure, which is almost impossible to get elsewhere in Australia”.

“Through a significant capital investment program over the last few years, the company now also manufactures at or near the bottom of the industry cost curve, and is protected from imports due to the bulky/lightweight nature of the products,” Aitken says.

Asaleo’s offer comes priced between 13.5 times and 15 times 2014 current year price-to-earnings multiple and 5 per cent to 5.6 per cent CY14 annualised dividend yield.

Aitken reckons this looks attractive versus other similar domestic players (Coca-Cola Amatil, Ansell) trading around 16 times, and international competitors like Kimberly-Clark at 18 times.

[macduffy]

Asaleo - ASY - made a solid if unspectacular debut and finished at $1.675 - 2.5c up on the IPO price of $1.65.

I took a punt and took a few.

[macduffy]

A pleasant surprise when I checked the SP today. Now at $1.875 - there must be a good interim report on its way!

[macduffy]

A "solid" half year from Asaleo. (Yes, I know I'm talking to myself here!)

Shareprice now at two bucks!

:)

[soulman]

A "solid" half year from Asaleo. (Yes, I know I'm talking to myself here!)

Shareprice now at two bucks!

:)

I prefer MCP. Between the 2, MCP seems cheaper, although there is more than meets the eye. :)

[macduffy]

Asaleo - AHY - now at $2.11.

Certainly not cheap, soulman, and I'll reassess when the trend bends at the end.

I've held MCP in the past but see them as more a wholesaler/distributor than a manufacturer and as such more at risk in that their business depends on obtaining and retaining agencies for big brand name merchandise. Quick to admit that I havn't kept up with them so may be missing something here.

Cheers

[soulman]

True. One is a manufacturer and the other a distributor. Better volume and margins in the manufacturer.

Another reason for their shares increase now as it seems, in hindsight, is their impending inclusion into the ASX200.

I just don't like their net debt level McDuff. If anyone bought at IPO, you would let it ride to maybe $2.50 to $3.00.