Choo Chiang Holdings, quoted on the Catalist since July 2015, plans to transfer its listing to the Mainboard. It has on March 18 made an application to the exchange to do so.

 

" The board is of the view that a listing on the Mainboard would be in line with the group&rsquo s long- term strategy and a listing on the Mainboard would enhance the long-term value for shareholders of the company," reads the company' s announcement on March 19.

 

Choo Chiang, headed by executive chairman Thomas Lim and executive director Rocky Lim, is a leading local distributor and retailer of electrical products and accessories. It operates a network of retail outlets and an in-house logistics capability.

 

In the last four financial years, Choo Chiang' s earnings ranged from $9.02 million in its FY2022 to $11.8 million in FY2024 before easing to $9.52 million in the most recent FY2025.

 

The company says it has maintained " healthy" gross margins as well, an indication of its resilient core distribution business, plus recurring rental income.

 

" Given the company&rsquo s market position, stage of development and financial stability, the directors are of the view that the proposed listing transfer is timely and appropriate," the company says.

 

Choo Chiang says that a mainboard listing will raise its public profile and make it more visible to a more diverse investor base, and thereby improve liquidity, broaden the shareholder base and potentially enhance valuation over the medium to long term.

 

Local retailer and distributor of electrical products Choo Chiang Holdings 42E 0.00% is poised to be a beneficiary of the construction recovery and a buoyant resale property market, according to Lim & Tan Securities analyst Chan En Jie in his March 22 report.

 

This is apparent in the group&rsquo s latest FY2022 ended Dec 31, 2022, results, which saw revenue growing by 10.3% y-o-y to $87.6 million, while profits gained 5.3% y-o-y to $9.0 million. Total dividend were at 2.2 cents, higher than 2.0 cents a year ago, representing a favourable 6.6% dividend yield based on the current share price.

 

Chan views the group&rsquo s ex-cash P/E of 5.2 times and FY2022 return on equity (ROE) of 15.7% as attractive. He has also kept his &lsquo buy&rsquo call and 48 cents target price on the counter.

 

In Chan&rsquo s opinion, the outlook for Choo Chiang remains positive for the year ahead, driven by strong demand from customers and project sales. Despite raw material price pressures and an inflationary environment, margins have also remained stable.

 

The group is also shielded from interest-rate hikes as it does not have any interest-bearing debt. A portion of its $23.3 million cash pile is invested in fixed deposits which can provide additional interest income in FY2023.

 

&ldquo A potential divestment of its non-core investment properties can also be reinvested into the higher-yielding distribution business and act as a share price catalyst,&rdquo says Chan.