Market Commentary: AllDay Mart Gears Up for a P6-Billion IPO

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Market Issue or Event

The Villar Group of Companies’ AllDay Mart is gearing up for an Initial Public Offering (IPO) worth P6 billion.

 

Our Partner Broker’s View and Commentary

Based on the company’s IPO prospectus, nearly 78% or P4.1 Billion of the net proceeds will be allocated for debt repayment while the balance will be spent for CAPEX and expansion of store network.

As of the first half of 2021, total loans stood at P4.7 Billion and management expects the debt repayment would translate to up to P264 Million in interest expense savings. Based on a post-IPO outstanding shares of 22.9 Billion, full-year 2020 net income of P219.6 Million, and the maximum offer price of P0.80/share, we note that the trailing 2020 P/E is at 83.3x.

Factoring in the lower interest expense and assuming the 13% year-on-year growth of its annualized full-year 2021 revenues is maintained until 2022, we estimate 2022 P/E to translate to 47x P/E.

We note that MerryMart (MM), its closest peer comparable, is currently trading at ~490.0x 2021 P/E. Stand by as we would provide further updates after the final offer price has been confirmed.

 

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AP Securities (formerly Angping & Associates Securities)
AP Securities (formerly Angping & Associates Securities)

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