December 19, 2006, 11:13 am

FFHL, final blog piece of '06 and...Happy Holidays

Well throughout the year we've been putting pretty much one free analysis piece on the blog each week, usually Sunday/Monday. Most often the piece has been one that debuted the previous week. With the holidays approaching we'll publish our final free analysis piece for 2006.

Keep in mind we do an analysis piece on every ipo before it hits the market. They're all available to subscribers at

This week's is a promising little China ipo that debuted earlier today. Note that does have a position in FFHL at approximately $8.55.

Happy Holidays from!

FFHL - Fuwei Films Holdings

FFHL - Fuwei Films Holdings plans on 4.3 million shares(assuming over-allotment) at a range of $8-$10. Maxim Group will lead underwrite the deal, with WR Hambrecht and Chardan Capital Markets co-managing. Post-offering FFHL will have 13 million shares outstanding for a market cap of $117 million on a pricing of $9. IPO proceeds will be invested in a new production line and to further FFHL's technology and operations.

From the prospectus:

'We develop, manufacture and distribute high quality plastic film using the biaxial oriented stretch technique, otherwise known as BOPET film (biaxially oriented polyethylene terephthalate). Our BOPET film is widely used in consumer based packaging (such as the food, pharmaceutical, cosmetics, tobacco and alcohol industries), imaging (such as masking film, printing plates and microfilms), electronics and electrical industries (such as wire and cable wrap, capacitors and motor insulation), as well as in magnetic products (such as audio and video tapes).'

FFHL, which commenced operations in 2003, believes they are one of the top BOPET manufacturers in China. FFHL sells to over 300 customers in China, The United States, Japan and Southeast Asia. Customers include some of the largest companies engaged in flexible packaging, including Alcan.

Printing film, stamping film and metallization film accounts for 65% of revenues. Specialty products such as anti-counterfeit film, laser holographic base film and single/double surface matte account for 15% of revenues. The largest segment of revenues comes from the packaged foods industry. Majority of sales are to packaged goods companies in the eastern section of China. Companies in China account for 80% of 2006 revenues, outside of China 20%. FFHL estimates that revenues outside of China will continue to increase as an overall % of revenues.

Not being an expert on BOPET, I'm going to quote from the prospectus on FFHL's BOPET film:

'BOPET is a high quality plastic film manufactured using the biaxial oriented stretch (transverse and machine direction) technique. Our advanced production process improves the physical properties of the plastic film such as its tensile strength, resistance to impact, resistance to tearing and malleability. The high dimensional stability of the film over a wide range of humidity and temperature fulfills the basic requirements for flexible packaging. The film is light-weight, non-toxic, odorless, transparent, glossy, moisture-resistant, and retains high barrier resistance, making it suitable for many forms of flexible packaging, printing, laminating, aluminum-plating and other processes. In addition, it retains high dielectric strength and volume resistance even at high temperatures, which are essential qualities for electrical and electronic uses. The three-layer structure of CBOPET gives the film added properties which enables us to develop high quality BOPET products...BOPET film is manufactured from polyethylene terephthalate (PET) resin, which is a petrochemical product. BOPET film is produced by melting the granulated PET resin and extruding it into a flat sheet. This sheet is stretched to 3.0 to 3.6 times its original length, and then horizontally to 3.6 times its width, before being heat-set and finally wound into reels.'

Products: 1)Printing base film used in printing and lamination; 2)Stamping foil base film used for packaging of luxury items to increase the aesthetic presentation of an item; 3) Metallization or aluminum plating base film used for vacuum aluminum plating for paper or flexible plastic lamination; 4)Laser holographic base film which may be used as anti-counterfeit purposes and can also be used in packaging to help enhance the aesthetic appeal of food, medicine, cosmetics, cigarettes and alcohol; 5) Matte film used for printing, metallization, stamping and transferring; 6) High-gloss film used for aesthetically enhanced packaging purposes. 6) Thick BOPET film to targeted to replace the the higher priced imported thick BOPET film. FFHL will commence manufacturing of thick BOPET film after ipo.

FFHL has a 100% market share in China for their Matte film and Laser Holographic base film.

As noted in #6, FFHL will be utilizing ipo monies to invest in new production lines capable of increasing the capacity of the production as well produce thicker films of 50 to 200 microns. FFHL expects to expand into the electrical and electronic film markets with these thicker films. Targeted will be thin film LCD screens. Currently much of the film used in LCD screens in China is imported. FFHL believes they can use their low cost production capabilities in China to manufacture and sell their new films cheaper then the imports.

FFHL is seeing an increase in their raw materials costs, namely polyethylene terephthalate(PET). Raw materials costs were 81% of total product costs through 6 months of 2006, up from 77% in 2005.


$2 1/2 per share in cash post-offering.

2 X.s book value on a $9 pricing.

Since inception in 2003, revenues have grown steadily...although revenues were flat year to year from 2004-2005. Revenues both years came in at approximately $43-$45 million US. Revenues have picked up in 2006, although the third quarter was relatively a weak one for FFHL.

Production utilization was approximately 87% in 2005.

2006 - Full year revenues appear on track for $51-$54 million, a 20% increase over 2005. Gross margins are rather slim at 23%. Due to rising costs of raw materials gross margins for '06 are actually down a bit from '05's 25%. FFHL has a very low tax rate currently. That should continue for the foreseeable future hitting no higher then 7% the next 3 years. Net margins for FFHL in 2006 appear as if they will be in the 15% range. Earnings per share for 2006 look to be in the $0.55 - $0.60 range. On a pricing of $9, FFHL would be trading 15-16 X's 2006 earnings.

Looking into 2007, I would expect revenues to accelerate a bit more then 20% due to FFHL's new production capacity coming on line. In addition FFHL will be manufacturing thicker film for the electronics industry, I would expect at least 25%-30% revenue growth in 2007. I would expect earnings per share to increase at approximately the same pace as revenues. I would not be surprised to see FFHL earn $0.75+ per share in 2007. If FFHL does earn $0.75 in 2007, at $9 it would trade 12 X's forward earnings.

FFHL is a small Chinese microcap showing solid growth and ipo'ing at a very reasonable multiple. The initial market cap of $117 million on a $9 pricing really leaves a lot of potential longer term upside should FFHL continue to perform. I like the initial valuation here and recommend FFHL in range and a bit above.

December 18, 2006, 6:15 pm

and 2006 ipo market comes to a close

9 deals this week to end the bloated December calendar. With all the aggressive pricings and opens, most of the December ipo crop has not been able to hold initial opens short term. It has been a fantastic environment for those high fee generators able to grab large allocations. For the individual though, it has been a tricky period...almost the opposite of August/September/October when no one was paying attention to ipos and many of the good ones opened in the aftermarket at very good risk/reward levels.

DBTK - Double-Take Software

DBTK - Double-Take Software plans on offering 7.5 million shares at a range of $9 - $11. 2.5 million shares of the offering will be sold by insiders. Cowen and Weisel are lead managing CIBC and Pacific Crest co-managing. Post-offering DBTK will have 20.5 million shares outstanding for a market cap of $205 million on a $10 pricing. 1/4 of the ipo proceeds will go to pre-ipo preferred shares, 3/4's for general corporate purposes.

ABS Capital Partners is the primary selling shareholder and will own 30% of DBTK post-offering. ABS is a venture capital firm involved in a number of ipos over the years. Portfolio highlights the past several years have been Symbion(SMBI) and Liquidity Services(LQDT).

From the prospectus:

'Double-Take Software develops, sells and supports affordable software that reduces downtime and protects data for business-critical systems. We believe that we are the leading supplier of replication software for Microsoft server environments and that our business is distinguished by our focus on software license sales, our productive distribution network and our efficient services infrastructure.'

DBTK backs up primary servers by replicating data on them. By continuous replication of data and applications changes on a company/organization's primary servers, DBTK's software provides and instant back-up in case of primary server failure. The duplicate server is ready to go in an instant should the primary go down. DBTK's software products have been around awhile, since 1995. In the ever changing tech world that nearly makes DBTK ancient. Note that prior to 2006, Double-Take was doing business as NSI software. They altered the name to match their primary product, Double-Take software.

DBTK's software monitors and captures file system activity and replicates only changed files. It also protects data. DBTK's software works primarily with servers running Microsoft and Microsoft Windows type file applications. These servers and applications include Microsoft Exchange Server, Microsoft SQL Server, Microsoft SharePoint Portal Server and Oracle Database. DBTK recently released a version of their software for virtual networks.

DBTK's solutions costs approximately $4,000 and easily loads onto servers. Price point for the DBTK software has not materially changed since 2003. To date DBTK has sold over 100,000 licenses to over 10,000 organizations including over half the Fortune 500. DBTK sells through distribution partners including manufacturers Dell and Hewlett Packard and distributors such Tech Data and Bell Microproducts.

Competitors in this space include EMC owned Legato, Neverfail Group, Symantec owned Veritas. and CA owned XOsoft.

In 5/06, DBTK purchased Sunbelt System Software which they renamed Double-Take EMEA. Purpose of the acquisitions was to increase sales outside the US. Revenues of Sunbelt accounted for 10-15% of DBTK's 2005/2006 revenues.

In 12/05 DBTK resolved a lawsuit filed by EMC's Legato unit. In the agreement, DBTK agreed to pay EMC/Legato $3.6 million and purchase $500,000 of product annually from 2007-2010.


$2 a share in cash post-offering, no debt. No dividends planned.

Software licenses account for 65%, maintenance and service fees 35%.

DBTK's revenues were fairly small through 2001. In 2003 and 2004 revenues increased to the $20+ million annual level. Fueled in part by growing organic demand as well as the purchase of Sunbelt, revenues have increased more strongly in 2005 and through the first 9 months of 2006. Assuming the Sunbelt purchase had been made 1/1/05. DBTK would have booked $51 million in revenues in 2005. Backing out the one time legal settlement charge, 2005 would have been the first year DBTK booked positive net earnings.

2006 - Through 9 months revenues are on track for $62-$65 million in revenues for the full year, a 25% increase. As is often the case in the software sector, gross margins are strong at 85%. As is also customary in this sector, operating expenses are dominated by sales and marketing expense. Total operating expenses for '06 look to be approximately 73% of total revenues. This is an improvement on 2005's 83% operating expense margin. DBTK seems to be moving in the right direction with expenses, to really become profitable however they'll need to get the operating expense margin down closer to 50%.

Plugging in full taxes, net margins for 2006 look to be in the 8% range. Earnings per share should be approximately $0.25 per share. Note that due to loss carry forwards, DBTK will have a very low tax rate in 2006 and their actual earnings per share numbers will be reported higher. I like to plug in full taxes in order to have a better view of the company going forward post-ipo. On a pricing of $10, DBTK would be trading 40 X's 2006 earnings.

Looking into 2007, much depends on DBTK's ability to grow the top-line. Based in growth since 2001, there does appear to be a solid organic demand growth for DBTK's software. The price point of $4,000 coupled with the critical need fulfillment of DBTK's product really should prevent a steep revenue decline if enterprise spending on technology slows appreciably. If we assume 20% revenue growth in 2007, DBTK should be able to expand net margins due to better operating expense ratios. If DBTK is able to book $75-$80 million in 2007 revenues they should earn $0.35 - $0.40 per share. At $10, DBTK would be trading 27 X's forward earnings.

DBTK's Double-Take software product has been around for a decade. It appears to be one of the more cost-efficient and easy to implement data protection and replication products on the market. Data and application protection is a good spot to be. As is usual with these small tech ipos, DBTK will not be priced at bargain levels. They will need to continue to book solid revenue growth to grow into initial valuation. At a $200 cap though in a solid sector booking 25% revenue growth in 2006, this deal should work in range. Solid small cap software ipo

December 10, 2006, 7:04 am


18 on the ipo schedule this week. There simply is not enough demand to soak up this supply if they continue to price anything decent at range or above...and then open them well up from there. As always we'll have a complete analysis piece on this week's ipo crop before they come to market.

piece below was written and published to site for subscribers more then a week before HLYS priced and opened. As the piece indicates, yes HLYS is a fad and yes I like it under $30 short to mid-term.

HLYS - Heelys

HLYS - Heelys plans on offering 7.2 million shares(assuming over-allotment is exercised) at a range of $16-$18. Insiders plan on selling 4 million of the 7.2 million shares. Bear Stearns and Wachovia are lead managing the deal, JP Morgan and CIBC co-managing. Of note Wachovia was also the lead manager in the VLCM and ZUMZ ipos, two successful ipos with a similar demographic base as HLYS. Post-offering HLYS will have 27 million shares outstanding for a market cap of $486 million on a $18 pricing. roughly 40% of ipo proceeds will go towards repaying all outstanding debt, the remainder towards expanding HLYS infrastructure, include sales, support and manufacturing.

Capital Southwest Ventures will own 34% of HLYS post-offering.

From the prospectus:

'We are a designer, marketer and distributor of innovative, action sports-inspired products under the HEELYS brand targeted to the youth market. Our primary product, HEELYS-wheeled footwear, is patented, dual-purpose footwear that incorporates a stealth, removable wheel in the heel. HEELYS-wheeled footwear allows the user to seamlessly transition from walking or running to skating by shifting weight to the heel. Users can transform HEELYS-wheeled footwear into street footwear by removing the wheel.'

The HEELYS footwear product accounts for nearly all of HLYS revenue. All manufacturing is outsourced to Asia. First product was introduced in 2000.

The slogan is a tad corny, "Freedom is a wheel in your sole." Target demographic is girls and boys ages 6-14 and those with an 'action sports' interest. 'Action Sports' equals skateboarding, snowboarding, in-line skating etc...

HEELYS are sold through a distribution network and can be purchased in sporting goods retailers, specialty footwear retailers and department stores. A sampling of locations that sell HEELYS include Dicks Sporting Goods, The Sports Authority, Modell's, Nordstrom, Journeys and Mervyn's. They are also available at various online retailers including Over the past 2 years sales at The Sports Authority and Journeys has each accounted for 10%-12% of all revenues.

Sales in the US account for 85% of revenues currently. HLYS estimates that HEELYS are available in over 5,000 locations currently.

HEELYS list fro $50-$100 per pair.

HLYS marketing historically has focused on event driven marketing. In the past year, HLYS has made substantial increases in their television advertising budget currently airing commercials on ABC Family, Nickelodeon and The Cartoon Network.

The growth curve took awhile to get moving, but sales of HEELYS footwear have skyrocketed the past 2 years. HLYS, HEELYS brand wheeled footwear sold 697,000 pairs in 2004, 1.4 million pairs in 2005 and 3.9 million pairs in the nine-month period ended September 30, 2006. That kind of recent growth puts this deal in a similar category as CROX.

Patents - Much like with CROX, HLYS is highly susceptible to knock-off products. Part of CROX continued strength has been their success in protecting their patents over the past year. Much like CROX, HLYS depends on one unique footwear product for nearly all revenues. To protect that product HLYS has 77 patents issued or pending in more than 25 countries. In addition to the patents HLYS has an exclusive worldwide license to use intellectual property related to the technology used in the grind-and-roll HEELYS-wheeled footwear. While it appears HLYS has been successful in keeping competitors out of the US market, they've not fared as well in Asia. Net sales in Asia decreased from $12.1 million in 2003 to $5.4 million in 2004, primarily due to the presence of lower priced counterfeit, knockoff and infringing products in certain Asian markets, In addition HLYS Japanese patent was found to be invalid. The growth in US sales has eclipsed these Asian revenue losses, one will need to keep a close high going forward on HLYS ability to protect their HEELYS products in the US. Thus far HLYS has been quite successful in defending their patents and intellectual property in the US.


$1 per share in cash post offering, no debt.

Revenues from 2001-2004 were essentially flat in the $20-$25 million range. The first half of 2005 was more of the same. After that HLYS revenues went stratospheric. Their past 7 quarters of revenue beginning with the 3/05 quarter(in millions rounded): 3/05 - $5; 6/05 - $11; 9/05 - $13; 12/05 - $15; 3/06 - $14; 6/06 - $31; 9/06 - $73.

I'm not certain I've seen a company make a quarterly revenue leap like this. for four years HLYS was booking $5-$6 million a quarter in revenues and then they made a nice little jump for 4 quarters beginning 6/05 to $11-$15 million quarterly. That was a nice increase, however the past two quarters of $31 million and $73 million are nothing short of amazing fast growth. Yes accounts receivable have grown the past 2 quarters, however they've not grown out of line with the revenue growth. The only reasonable explanation appears to be that even though these HEELYS were around for 5 years, it took until the summer of 2006 for them to really catch on.

4th quarter historically has been the strongest, responsible for 30% of annual revenues.

With this growth in 2006, looking at 2004/2005 become irrelevant.

2006 - I'm going to be conservative and factor in sequentially flat quarterly revenue for 4th quarter. HLYS recognizes revenues upon shipment and revenues their past three quarters have been $14 million, $32 million and $73 million. There is a chance that HLYS shipped too much product third period, just based on the recognized revenue growth. I think conservatively HLYS does $200 million in 2006 revenues, which would be an $80 million fourth quarter. Yes there is a chance HLYS exceeds this by quite a bit, however the recent growth here is so powerful it does make it difficult to continue to assume similar going forward. Should note that a search on news articles brings many mentions of HEELYS being sold out in certain areas for Christmas as soon as they hit the shelf, so again there is a chance that $80 million in 4th quarter revenues is too low.

$200 million in '06 revenues would be 350% increases over 2005. 35% gross margins, strong operating margins of 24%. HLYS is really spending very little overall on GSA compared to revenues past 2 quarters. Net margins for '06 should be 16%. Earnings per share should be $1.20. On a pricing of $18, HLYS would be trading 15 X's 2006 earnings.

15 X's '06 earnings for a company that should book 350% revenue growth isn't close. I would expect HLYS to price and open much higher then $16-$18 pricing range.

Note - HEELYS are on nearly every 'worst' or 'most dangerous' toy list by consumer safety groups. One would assume sneakers with wheels would be on these lists and would also generate their fair share of injuries to the wearers.

Is HLYS a fad? Oh most certainly. I would submit that since HLYS popularity is dependent on the whims of those 15 and younger, HLYS is far more a fad type company then CROX. CROX is at least a footwear choice one can make over a long period of time and a number of years and pairs. HLYS look like a one-shot deal by kids that 'gotta' have them now'. I would expect HLYS stock to receive similar massive short interest as CROX. The revenue growth in 2006 has been so powerful though, short and mid-term that will be the driver here.

conclusion - I'm really not 100% sure CROX are a fad that will fade sooner then later. HLYS I am certain is a fad that will fade. Oh yes this is as much a fad stock as you'll find. At pricing range it doesn't matter if HLYS is a fad though, Currently they're hitting it out of the park, and worries of a fad type stock really wouldn't come into play until a much higher valuation then pricing range. I would submit that any price under $30 and all the fad talk in the world doesn't matter when HLYS blows out their 4th quarter 2006,,,,which they will. If the market gets carried away on valuing HLYS initially then yes worries of when the fad will end come into play.

The massive 2006 revenue growth makes HLYS a buy in range and nicely above. Fad or not, pricing range is too cheap for this massive recent revenue growth.

December 5, 2006, 12:49 am

Year end ipos

Looks like 20+ ipos on the calendar for the remainder of 2006. Investment banks are trying to jam as many as they can into the market before holiday break. When we've a week like next with 14-15 scheduled, it tends to mute initial aftermarket performance.

pre-ipo analysis as well as an active forum at

OMAB - Grupo Aeroportuario Del Centro Norte

OMAB - Grupo Aeroportuario Del Centro Norte(Central North Airport Group) plans on conduction a dual offering in the US and Mexico. In the US, OMAB plans to offer 12 million ADS. In Mexico, OMAB plans to offer an equivalent of 12 million ADS in the form of actual shares. Both offerings assume the over-allotment is exercised. A total of 24 million ADS and ADS equivalent shares will be offered combined in the US and Mexico at a range of $14.50 - $16.50. All of the shares will be sold insiders, in this case the majority shareholder. Much like 2006 IPO PAC, this ipo is being conducted as a step by the Mexican Government to divest and privatize airport ownership. The selling stockholder is a trust established by the Ministry of Communications and Transportation with NAFIN, a Mexican development bank owned and controlled by the Mexican government. Through this offering, the Mexican government will be 100% divested of OMAB, assuming over-allotment is exercised.

Citigroup is lead managing the ipo, UBS and Scotia co-managing. Post offering OMAB will have an ADS equivalent of 50 million shares/ADS outstanding for a market cap of $775 million on a $15.50 pricing.

There is no use of proceeds as all ipo monies will be going to the trust set up by the Mexican government.

Post-offering an entity owned 75% by Empresas ICA and 25% by Aeroports de Paris will own 15% of outstanding shares but will control OMAB through a separate class of shares. In addition ICA itself will own another 35% of OMAB's common shares post-ipo. ICA is Mexico's largest engineering, procurement and construction company. Essentially ICA will be the majority and controlling shareholder of OMAB.

From the prospectus:

'We were incorporated in 1998 as part of the Mexican government's program for the opening of Mexico's airports to private investment. We hold concessions to operate, maintain and develop 13 airports in Mexico, which are concentrated in the country's central and northern regions. Each of our concessions has a term of 50 years beginning on November 1, 1998.'

Of the 13 airports, only one is in a major metropolitan area, Monterrey. Traffic in the Monterrey airport accounts for nearly 45% of OMAB's traffic for all 13 airports. In addition to Monterrey, OMAB operates airports in 3 tourist destinations(Acapulco, Mazatlan and Zihuatanejo) as well as 9 smaller cities including Chihuahua, Tampico and Ciudad Juarez. All cities combined have a population base of 24 million.

Total airport traffic in all of OMAB cities totaled 15% of all Mexican airport traffic in 2005. Traffic in OMAB's airports will be close to 12 million passengers in 2006.

Mexico was the eighth largest tourist destination in the world in 2005 in terms of international arriving tourists. Mazatlan is the 5th largest tourist destination in Mexico, Acapulco the 7th.

Monterrey - 3rd largest city in Mexico in population with 4.2 million in the greater metro area. The Mexican government has recently created an initiative to decrease passenger and cargo traffic in Mexico City. As part of the plan Monterrey has been chosen as one of the alternative transportation hub airports.

Domestic airlines account for 75% of OMAB's passenger traffic with Aeromexico accounting for 25% itself. International airlines. accounts for 25% of OMAB's total passenger traffic.

Traditionally air travel in Mexico was too expensive for any but upper class citizens and international travelers. A driver for these Mexican airport ipos is the fairly new proliferation of low cost carriers commencing and/or expanding operations throughout the country. This has opened up air travel for a much wider cross section of the Mexican population.

Regulation. About 80% of OMAB's annual revenues are derived from aeronautical services related to the use of facilities and primarily consist of a fee for each departing passenger, aircraft landing fees, an aircraft parking fee, a fee for the transfer of passengers from the aircraft to the terminal building and a security charge for each departing passenger. All of these services are regulated by the Mexican government under a 'maximum rate' per workload structure. Note that while this means OMAB can not charge more then the 'maximum rate' per workload set at each airport, OMAB is not restricted from generating higher revenues due to increased traffic.

20% of OMAB's revenues is unregulated revenues, predominantly car parking fees and royalty fees from airport concessions. Like many airports throughout Mexico, OMAB has modernized many of their terminals and expect to continue to grow the commercial revenue royalty base going forward.

Risks - OMAB is highly dependent on overall passenger traffic in their airports. In both the 80's and 90's Mexico experienced periods of economic instability which resulted in runaway inflation and the devaluation of the currency. While the country has stabilized and grown throughout this decade, economic slowdowns have historically effected the Mexican economy to a much greater degree then in the US. If the US slips into a recession, it is a pretty safe assumption that the Mexican economy will suffer to a greater extent. Really anything that slows air travel in Mexico will have a negative impact on OMAB.


$3 a share in cash post-offering, no debt.

1.1 X's book value on a $15.50 pricing.

OMAB does plan on paying an annual dividend. It appears it will be paid in an annual lump sum and will consist of a minimum of $0.60 annually plus and additional funds available for distribution. In 9/06 OMAB declared a dividend of $0.78 for the full year ending 9/30/06. Assuming a similar payout in 9/07, OMAB would be yielding 5% annually.

After slowing air traffic post 9/11 and recession, OMAB has steadily grown revenues the past 3 years. Overall revenues in 2005 were $122 million, an 11% increase over 2004.

2006 - After a strong 3rd quarter, through 9 months of 2006 overall revenues appear poised to increase 19% to $145 million for the full year. Operating margins are a strong 38%. Net margins an equally impressive 32%. Net earnings in 2006 should be in the $0.90 - $0.95 range. On a pricing of $15.50 OMAB would be trading 17 X's 2006 estimated earnings.

A quick comparison with similar PAC. PAC ipo'd in February 2006 at $21 a share and currently trades at $38 a share.

PAC - $2.15 billion cap, trades a bit over 1 X's book value and 25 X's 2006 earnings. PAC yields 2.6%.

OMAB - $775 million at $15.50. Would trade a bit over 1 X's book value and 17 X's 2006 estimates. At $15.50, OMAB would be yielding 5%.

Conclusion - This is a solid offering in a space that has already seen an earlier ipo appreciate 80%+. OMAB has a quasi monopoly in each of their markets being the only airport in each area. As long as nothing seriously derails overall passenger and cargo traffic in their cities, OMAB should trade well above ipo price mid-term+. Recommend strongly.

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