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Stock Comment: North Star Meat Merchants IPO approved by PSE

North Star Meatmonger [NSTAR 10.00 pre-IPO] https://www.philstar.com/business/2022/06/01/2185244/north-star-meat-merchants-ipo-approved-pse had its IPO approved by the PSE on June 24. The company, which is a meat seller and supplier to SM Group’s vast network of grocery stores, will set its final prices for the IPO offering on June 8, conduct the offering from June 13-17 and then on June 24 note.

While the data may have changed slightly from the preliminary prospectus we saw when NSTAR originally filed with the SEC, nothing else seems to have changed in the guts of the deal: NSTAR is still trying to make 4.5 billion pesos to be raised through the sale of 360 million pesos of primary shares, 32 million secondary shares and an additional 58 million secondary shares sold as an over-allotment option to fund the Stabilization Fund.

According to NSTAR’s prospectus, from 2019 to 2021, NSTAR’s revenue grew at a compound annual growth rate (CAGR) of 39.7% and its net income grew at a CAGR of 131.9% during the same period.

“CAGR” is used to express the compound annual growth such that in the case of NSTAR’s net income over this three year span it has achieved a compound net income growth of 131.9% per annum. (Here’s an Investopedia article on CAGR, it’s a very useful metric!)

MB bottom line

Now it’s “go time” because the IPO is officially on the PSE plan.

Getting there is no easy feat, and I knew in my heart that NSTAR would likely be pushed off its preliminary prospectus dates because they overlapped so much with VistaREIT’s IPO.

Regardless, NSTAR has its days blocked on the calendar, and now its underwriters, BDO Capital and China bank [CHIB 27.00]will be phoning their institutional buyers like crazy to see what price Anthony Ng can command for a 25% stake in his vast (and growing) meat supply empire.

NSTAR will be the third IPO this month Raslag [ASLAG 2.00 pre-IPO] and VistaREIT [VREIT 1.75 pre-IPO]but the first this year in the non-restaurant food ecosystem.

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