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RE&S Holdings Limited IPO Summary

Core Content

RE&S Holdings Limited is a leading F&B group in Singapore and Malaysia, specializing in authentic Japanese cuisine and dining experiences. Established in 1988, the company operates 77 F&B outlets across both markets, divided into two main segments: Full-Service Restaurants and Quick-Service Restaurants, Convenience and Others. It also has a central kitchen and a procurement office in Japan, which supports its operations and exports seafood products to the Asian region.

Main Business Segments

Full-Service Restaurants (74.4% of FY2017 Revenue)

• Operates 34 Full-Service Restaurants in Singapore and 5 in Malaysia.
• Offers a range of dining experiences from upmarket to casual and family-style.
• Average ticket prices range from S$15 to S$200 depending on the brand and type of dining.

Quick-Service Restaurants, Convenience and Others (25.6% of FY2017 Revenue)

• Includes 38 outlets such as Food Kiosks, Japanese Bakery, and Food Retail Outlets.
• Provides take-away meals and convenience services with average ticket prices below S$15.
• The central kitchen supports this segment with ready-to-eat meals and cost efficiencies.

Key Financials (FY15–FY17)

Investment Highlights

• Resilient Business Model: Diversified portfolio with a strong track record over 25 years, a wide range of offerings, and experienced management.
• Growth Strategy: Expansion into the Quick-Service Restaurants (QSR) segment and ready-to-eat meals, which offer higher margins and faster growth potential.
• Central Kitchen: Operates a central kitchen with 12 food processing lines, enabling economies of scale, cost efficiency, and product consistency.
• IPO Details:
  • IPO Price: SGD 0.22
  • Total New Share Issue: 54,000,000 shares
  • Placement Tranche: 35,000,000 shares
  • Public Tranche: 3,000,000 shares
  • Cornerstone Placement: 16,000,000 shares
  • Listing Status: Catalist
  • Closing Date (Public): 20-Nov-17
  • Trading Date: 22-Nov-17
  • Lead Manager: DBS Bank

Major Shareholders

Peer Comparison

Investment Thesis

• Strong Track Record: Over 25 years of experience in the F&B industry, with a focus on Japanese cuisine.
• Diversified Portfolio: 20 well-recognized brands across various price points and dining experiences.
• Margin Improvement: Expansion into QSR segment and ready-to-eat meals can improve margins and cash flow.
• Management: Led by experienced management with a strong focus on innovation and customer preferences.

Use of Proceeds

SWOT Analysis

Strengths

• Established track record and recognized brand in Singapore
• Strong and dedicated management team
• Diversified business portfolio
• Economies of scale and consistent quality

Weaknesses

• Competitive business landscape
• Labour-intensive operations

Opportunities

• Refurbishment and improvement of existing outlets
• Expansion of stores network
• Increase sales channels via consignment and online delivery
• Introduction of new dining concepts
• Tap into ready-to-eat meal market
• Acquisitions and strategic partnerships

Threats

• Regulatory changes
• Supply shocks on raw materials and labor
• Outbreaks of diseases or food scares

Research & Investment Recommendation

• Total Return: > +20% – Recommendation: Buy
• Total Return: +5% to +20% – Recommendation: Accumulate
• Total Return: -5% to +5% – Recommendation: Neutral
• Total Return: -5% to -20% – Recommendation: Reduce
• Total Return: < -20% – Recommendation: Sell

Disclaimer

This report is distributed by Phillip Securities (Hong Kong) Limited and is not intended to provide tailored investment advice. It is based on information from the IPO Prospectus and Bloomberg. Investors should seek financial advice before making any investment decisions. The report may not be redistributed or disclosed without the express written consent of Phillip Securities (Hong Kong) Limited.