IPO Analysis: Robinsons Retail Holdings Inc. (RRHI)

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Is it good to invest in the initial public offering (IPO) of Robinsons Retail Holdings?

The truth is, no one can certainly say if it will be profitable to invest in any IPO. In the past, several companies had their stock prices shot up immediately after the IPO, giving instant profits to investors, while some had its stock price plunge after the IPO, only to recover months or even years later.

There’s no tried and tested formula to determine if a company’s IPO is worth investing in. But it helps to have guidance from the country’s top stock brokerage firms!

One useful source of information is PinoyInvestor, a premium stocks newsletter that consolidates stock picks, company analyses, and broker reports from five of the Philippines’ top stock brokers.

In this week’s issue, the PinoyInvestor Stocks Report offers a comprehensive analysis and recommendation on the upcoming IPO of Robinsons Retail Holdings Inc. (RRHI).

Here are basic information about the RRHI initial public offering.

Robinsons Retail Holdings Inc. (RRHI)

Robinsons Retail Holdings owns various retail brands found in Robinsons and other malls. It has over 30 years of experience in the retail industry and is considered one of the major retailers in the Philippines. Starting with one department store in 1980, Robinsons expanded into supermarkets in 1985 and then to DIY (“Do It Yourself”) stores in 1994. Robinsons grew more with convenience stores, specialty stores and drug stores and has set up stores for known local and international brands such as Handyman, True Value, Topshop, Dorothy Perkins, Mini Stop, South Star Drug, Saizen, Daiso, G2000 and Toys R Us. At present, Robinsons has 75 supermarkets, 36 department stores, 114 DIY stores, 345 convenience stores, 223 drug stores and 147 specialty stores all over the Philippines.

In its initial public offering, Robinsons is offering 461.90 million shares at an average price of P60.50 per share (indicative price range of P55 to P66 per share) with an over-allotment option of 22.85 million shares. The company will raise at least P27.95 billion, without the over-allotment option, 86% of which shall be used for the expansion of supermarkets, convenience stores and other stores. The other 7% of the proceeds will be used for renovation of existing stores. Remaining funds will be used for debt payment and other general purposes.

Should you invest in the RRHI IPO?

To learn more about the valuation, profitability, and financial condition of Travellers Hotel Group, sign up or login to PinoyInvestor to access this week’s Stocks Report. The report also contains the recommendation of Angping Securities as regards the RRHI IPO.

 

By the way, PinoyInvestor currently has an ongoing promo where you can get for FREE iPhone 5S, iPad, iPad Mini, Samsung Galaxy S4 and SM and Ayala Malls gift certificates.

Read it here: PinoyInvestor’s FREE iPhone, iPad, Gadgets Giveaway!

About the Author

James Ryan Jonas teaches business strategy, investments, and entrepreneurship at the University of the Philippines (UP). He is also the Executive Director of UP Provident Fund Inc., managing and investing P3.1 Billion ($56 Million) worth of retirement funds on behalf of thousands of UP employees.

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