School operator KinderWorld scraps SGX IPO citing market conditions

Source: KinderWorld International Group (KIG) Limited website

KinderWorld International Group Ltd, which operates schools in Southeast Asia, has shelved its plans to conduct an initial public offering (IPO) on the Singapore Exchange (SGX) Mainboard.

The Vietnam-headquartered company had lodged its preliminary prospectus on June 27 without specifying any details about the issue size, timing or pricing.

“Kinderworld International Group and its advisers are evaluating the current market conditions and geo-political climate, and have retimed its proposed initial public offering to better tap the Singapore capital markets at a more favourable time,” the company said in a statement.

It reiterated that its balance sheet is healthy with sufficient funds that can help the company grow in targeted markets.

KinderWorld had earlier disclosed in its prospectus that it planned to use part of the IPO proceeds to expand its operations in Vietnam and target new markets.

Bloomberg had last year reported that KinderWorld was exploring an S$70 million ($53 million) Singapore IPO at an S$300-million valuation.

In comparison, SGX-listed education firm MindChamps PreSchool Limited has an enterprise value of S$136.49 million and was last trading at 23.36 times its historical twelve-month price-earnings (P/E) multiples.

International school operator Overseas Education Limited’s enterprise value stood at S$196.57 million on Wednesday and had traded at approximately 16.98 times twelve-month P/E multiples.

Of late, macroeconomic factors such as stock market volatility, Brexit concerns and the ongoing US-China trade tensions have prompted a host of companies to hold off their IPO plans and adopt a ‘wait-and-watch’ policy.

And, it’s not about Singapore alone. Warburg Pincus-backed real estate company ESR Cayman Ltd (ESR) called off a proposed IPO on the Hong Kong stock exchange last month. In a media statement, ESR cited “current market conditions” behind its decision.

In Singapore, delistings outpaced IPOsin the first half of this year as take-private offers surged. The country recorded a total of nine IPOs in the January-June period and 13 take-private offers, which led to subsequent delistings or mergers, according to a DBS Bank research report released in July 2019.