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Lincotrade: New Growth Biz after RTO of Fabchem
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tedlim
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10-Aug-2022 10:18
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Newly-listed Lincotrade aims to leverage tourism rebound with hotel upgrading works
INTERIOR fit-out company Lincotrade & Associates Holdings is looking to leverage increased demand for hotel upgrading works as hoteliers prepare for post-pandemic demand.
The company, which also provides interior fit-out services to residential projects, and constructs showflats and sales galleries, listed on the Singapore Exchange on Monday (Aug 8) through a reverse takeover of Fabchem China.
This comes after Fabchem China disposed its stake in mining explosives manufacturer Shandong Yinguang Technology in March this year.
In an interview with The Business Times, Lincotrade&rsquo s business development director Jackie Soh said he expects more hotels to engage in upgrading works as the tourism industry emerges from the pandemic.
The company, which has 30 years of experience in the interior fit-out industry, recently completed its largest project to-date for the serviced apartment Citadines Raffles Place Singapore at CapitaSpring. It worked on the interior design of the rooms and the guest-facing areas of the facility.
The project boosted Lincotrade revenue and profits for its most recent financial year, ended Jun 30, 2021.
Revenue increased 99.4 per cent year on year to S$37.3 million, while net profit came in at S$2.4 million &ndash reversing from a loss of S$1.6 million a year earlier.
&ldquo We are also participating in a few tenders for hotel upgrading projects,&rdquo Soh said, noting that the company had an order book of S$76.7 million, as at Jun 17, that will be filled in the next 2 years.
The company also believes it has an advantage over its peers, which exited the market or cut manpower during the pandemic to save costs.
&ldquo Over this Covid-19 period, I think a few of my peers have given up their businesses they have sent their workers back, so they do not have the capacity to take on larger-scale projects,&rdquo he said, adding that the company kept its close-to-100 employees through the pandemic.
In the residential segment, Lincotrade makes fittings such as doors and kitchen cabinets for apartments.
When building showflats for these apartments, of which it has a 30 per cent market share in, the company gets specifications for the respective condominium projects &ndash giving it an advantage in preparing for tenders, Soh said.
Soh said the company is dealing with higher costs by factoring these into its tender submissions. It is also leveraging economies of scale with its projects, to try and secure cheaper materials directly.
&ldquo We bring in plywood from Malaysia, rather than buying from local suppliers. Because our projects are larger in scale, we can buy in bulk,&rdquo he said.
The company had also planned to issue up to 13.7 million new placement shares at S$0.22 per share, to raise up to S$3 million for fees and working capital, and had on Jul 27 appointed RHB Bank and Moomoo Financial Singapore as placement agents.
This issue price represents a premium of about 120 per cent to the volume-weighted average price of S$0.10 per share based on trades on the mainboard, where Fabchem China was previously listed.
In a completion announcement on Aug 3, however, the company said only 5.5 million new shares will be placed out.
At the current share price, the company has a market capitalisation of S$32.7 million based on its enlarged share capital of 172 million. It trades 13.9 times its full-year earnings in FY2021 &ndash based on FY2021 numbers provided in the circular.
After the listing and placement, Soh and managing director Jimmy Tan Jit Meng will hold 26.4 per cent of the company&rsquo s shares, while director Tan Chee Khoon will hold 13.2 per cent of shares. Henry Wee and Sun Bowen, who were the controlling shareholders of Fabchem China, will continue to hold an indirect interest in the company of 14.3 per cent and 8.8 per cent, respectively. Public shareholders will hold a 7.2 per cent stake in the company.
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tedlim
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10-Aug-2022 10:15
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Interior Fit-Out Specialist, Lincotrade & Associates Holdings Limited to Debut on the Catalist Board of the SGX-ST on 8 August 2022
&bull Completion of Fabchem' s acquisition of Lincotrade & Associates Pte Ltd, being a reverse takeover
&bull Lincotrade has over 30 years of experience in the interior fitting-out industry and have established a proven business track record since its inception
&bull As at 17 June 2022, Lincotrade has an order book of approximately S$76.7 million that will be generally fulfilled in the next two years
Lincotrade & Associates Holdings Limited, (&ldquo Lincotrade&rdquo or the &ldquo Company&rdquo or &ldquo 立 鎧 企 業 &rdquo and together with its subsidiaries, the &ldquo Group&rdquo ) is pleased to announce that it will commence trading on the Catalist Board of the SGX-ST today at 9.00 a.m. after the completion of Fabchem China Limited&rsquo s (&ldquo Fabchem&rdquo ) acquisition of Lincotrade & Associates Pte Ltd, being a reverse takeover.
On 22 July 2022, Fabchem&rsquo s shareholders approved all resolutions at the Extraordinary General Meeting (&ldquo EGM&rdquo ) including the proposed acquisition of Lincotrade & Associates Pte Ltd. RHB Bank Berhad is the Financial Adviser to Fabchem in respect of the proposed acquisition and has been appointed as the Continuing Sponsor of the Company with effect from 8 August 2022.
Following the EGM, on 27 July 2022, Fabchem appointed RHB Bank Berhad and Moomoo Financial Singapore Pte. Ltd. as the joint placement agents (&ldquo Joint Placement Agents&rdquo ) in respect of the Proposed Placement. In total, 5,455,000 new shares of the Company were issued to new investors at S$0.22 each via the share placement exercise and the Company raised gross proceeds of approximately S$1.2 million.
Commenting on the listing debut of Lincotrade, Managing Director of Lincotrade, Mr. Tan Jit Meng (陈 日 明 先 生 ) said: &ldquo From humble beginnings more than thirty years ago, Lincotrade has emerged to become a specialist in interior fitting-out works with an established track record in commercial premises, residential premises and showflats.
Being a publicly listed company, we consider this to be a major milestone in our effort towards future expansion and growth. We also welcome the brand recognition that our listing on SGX will bring Lincotrade among our customers, employees and stakeholders.&rdquo
Together with new shareholders and investors, we are excited for the opportunities ahead and we look forward to unlocking the potential growth of Lincotrade&rsquo s businesses.&rdquo
LINCOTRADE: A SPECIALIST IN INTERIOR FITTING-OUT SERVICES
Established in 1991 and based in Singapore, Lincotrade is engaged in the provision of interior fitting-out services, additions and alterations (&ldquo A& A&rdquo ) works and other building construction services primarily for the following three segments:
(a) commercial premises, such as offices, hotels, shopping malls and food and beverage establishments
(b) residential premises such as condominium developments and (c) showflats and sales galleries.
Lincotrade&rsquo s interior fitting-out projects encompass space planning and lay-out, interior construction and finishing works on floorings, ceilings, partitions, doors, fixtures and fittings, mechanical, electrical and plumbing works such as air-conditioning installation, water and sewage fit-outs, lighting, power and other works. Lincotrade also provides A& A works including minor alterations, extension, conversion and upgrading of buildings as well as minor repair and improvement works. In addition, Lincotrade provides building construction services which mainly consist of the construction of showflats and sales galleries.
Proven business track record
Lincotrade has over 30 years of experience in the interior fitting-out industry and has established a proven track record since its inception. Lincotrade believes that its proven track record is a key competitive advantage in this industry in securing new projects. Based on the Industry Report by Converging Knowledge as stated in the Circular, successful tendering of projects in the Industry is highly reliant on the track record, reputation, and reliability to deliver on time and in good quality. These credentials cannot be built overnight as they take time to establish. In addition, industry expertise with experience of the market is one of the major considerations for interior fitting-out works (&ldquo IFOW&rdquo ) players to be shortlisted.
As one of the 39 contractors (out of a total of 1,868 contractors) that are registered with an L6 grading under the CR06 Workhead as at 17 June 2022, Lincotrade believes that it has a distinct advantage over its competitors.
Good relationships with suppliers, subcontractors and customers
Lincotrade enjoys good and stable business relationships with its suppliers and subcontractors. With a panel of reliable subcontractors and suppliers, Lincotrade is able to ensure the availability of subcontractors for specialised and general work that it rely on them for, maintain consistency of quality and enjoy better bargaining power and flexibility in procuring these subcontracted services and building materials.
As a dedicated interior fitting-out services provider with in-depth knowledge and experience in executing and managing interior fitting-out works for large projects, and having an established relationship with its suppliers and subcontractors for many years, Lincotrade believes that it has an edge over competitors in terms of operational efficiency and quality of services rendered.
Lincotrade&rsquo s commitment to completing projects on-time and to-specification has resulted in Lincotrade accumulating a good number of repeat customers with whom it continues to develop and expand its business.
In-house processing facilities
Since 2006, Lincotrade has had its own in-house processing facility to process, assemble and manufacture Carpentry Products to support and complement its interior fitting-out services.
Having its own processing facility allows Lincotrade to have better control over the quality, time and cost of processing which, in turn, ensures compliance with its customers&rsquo specifications and timelines.
Experienced and dedicated management team
Lincotrade is led by an experienced and dedicated management team that participates actively in the day-to-day running of its business and provides regular supervision. Its directors all have over 20 years of experience in the interior fitting-out industry and have established good working relationships with its customers, suppliers and subcontractors.
Over the years, and under their leadership, Lincotrade has completed interior fitting-out projects for various types of premises, ranging from commercial premises such as offices, hotels, food and beverage centres, shopping malls, residential developments, to mixed development premises such as academic buildings and medical centres. The diverse experience of its directors and management team has stood Lincotrade in good stead and will continue to be instrumental to its future growth and acquisition of market share.
Stringent management of quality, workplace safety and health, and environmental impact control
Lincotrade is committed to the management of quality, workplace safety and health, and environmental impact in its business.
Lincotrade has adopted and implemented a quality control system that complies with international standards. Its quality management system has been certified to ISO 9001 since January 2008.
Lincotrade has established an environmental management system to enhance its environmental performance and reduce its impact on the environment. Lincotrade&rsquo s environmental system has been certified to ISO 14001 since October 2017. In February 2016, Lincotrade was also awarded the Singapore Green Label by the Singapore Environmental Council for its wooden panel doors made from renewable and sustainable materials.
In terms of workplace safety and health, Lincotrade&rsquo s occupational safety and health management system has been certified to OHSAS 18001 since January 2008. OHSAS 18001 has since been replaced by ISO 45001 which Lincotrade obtained in September 2020. Lincotrade has further obtained a bizSAFE Star Certification since April 2009 which is the highest bizSAFE level that may be awarded under the bizSAFE programme organised under the Workplace Safety and Health Council of Singapore.
As testament to its commitment to workplace safety and health, Lincotrade received Certificates of Appreciation from the PSA Corporation Limited on three occasions, in January 2011, February 2012 and March 2017 respectively, for the attainment of good safety records.
Lincotrade believes the above accreditations help enhance its competitiveness and provide it with more potential business opportunities.
BUSINESS STRATEGIES AND FUTURE PLANS
Lincotrade&rsquo s principal business objective is to further strengthen its market position and expand its core business while exploring acquisitions, investments and other strategic alliances to diversify its income sources. In furtherance of its business objective, Lincotrade intends to pursue the following business strategies and future plans:
Focusing on larger value projects
Being an established interior fitting-out service provider in Singapore, Lincotrade plans to leverage on its market position to take on larger value projects, such as hotels and commercial buildings, in the near future.
Strengthening its brand identity
Lincotrade plans to further strengthen its brand identity in Singapore by increasing its networking efforts through engagement with developers, main contractors and subcontractors.
Exploring acquisitions, investments, strategic alliances and/or joint ventures
Depending on the market conditions and feasibility, Lincotrade will explore acquisitions, investments, strategic alliances and/or joint ventures with parties in complementary businesses in Singapore or overseas, should suitable opportunities arise. This will provide opportunities for Lincotrade to potentially to expand the scale of its business, enlarge its customer base, lower its operational risks, and/or increase its range of services.
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