Asian Pay Television Trust, owner of Taiwan’s third-largest cable television operator, slumped on its first day of trading in Singapore to become the world’s worst initial public offering this year on concern marginal earnings growth will limit its ability to sustain dividends.
The stock sank 5.2% to close at 92 cents, retreating from an intraday high of $1.005. That makes the IPO the worst among companies that raised at least $1 billion worldwide, according to data compiled by Bloomberg. The benchmark Straits Time Index dropped 1.1%.
The trust, which owns Taiwan Broadband Communications Co., sold 1.44 billion shares at 97 cents each, raising $1.39 billion in its initial share sale. The stock offers a projected yield of 8.5% for 2014 based on the price for its IPO, according to its prospectus. That compares with the estimated dividend yield of 4.9% for StarHub, Singapore’s biggest cable TV operator, for the next 12 months, according to data compiled by Bloomberg.
“People don’t understand where the valuation is coming from,” said Jason Hughes, Singapore-based head of sales at CMC Markets. “Investors could be questioning what sort of growth can be expected going forward.”
Asian Pay Television expects revenue to increase to $310.8 million this year and to $323.8 million in 2014, according to the prospectus. That compares with $308.7 million in 2012.
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