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Alpina Holdings: Building Singapore&rsquo s Future, One Project at a Time
In the heart of Singapore&rsquo s ever-evolving skyline, a company has been quietly shaping the city&rsquo s infrastructure for over two decades. Alpina Holdings Limited, founded in 2003 as a small mechanical and electrical (M& E) engineering firm, has grown into a multifaceted building services specialist. From humble beginnings with Digo Corporation&rsquo s first project for a Singapore statutory board, Alpina has been working quietly behind the background, ensuring that buildings don&rsquo t just rise&mdash they thrive.
With three key segments&mdash Integrated Building Services (IBS), M& E Engineering, Alteration and Addition (A& A) Works, the company keeps its clients&rsquo buildings in Singapore humming. IBS, its revenue powerhouse, maintains building systems, while M& E tackles installations and upgrades. A& A handles renovations and civil works, and the recent dormitory investment adds a clever twist to its portfolio.
A Tough Industry, Masterfully Navigated
Singapore&rsquo s construction scene is a dynamic beast, driven by the city-state&rsquo s ambition to remain a global hub. The Building and Construction Authority forecasts demand between $25-32 billion annually through 2027, fueled by massive projects and a push for sustainability. Yet, it&rsquo s a challenging arena&mdash labor shortages, inflationary pressures, and fierce competition test every player. Alpina has faced these head-on, turning obstacles into opportunities.
In March 2024, it acquired Wan Dormitory Pte. Ltd. to secure housing for its workforce at 180 Woodlands Industrial Park E5. This wasn&rsquo t just a fix&mdash Challenges became cash flow, generating $3.6 million in rental and related income in FY2024, showcasing Alpina&rsquo s strategic flair.
Powering Up with Solar and Smarts
Alpina isn&rsquo t just reacting&mdash it&rsquo s evolving. As Singapore races toward its Green Plan 2030, targeting 2 gigawatts of solar power by decade&rsquo s end, Alpina has staked its claim. In 2022, its subsidiary Digo Corporation partnered with Terrenus Energy to win a $117 million SolarNova contract, to install solar panels across 1,198 HDB blocks and 57 government sites. This isn&rsquo t a side gig it&rsquo s a bold step into renewable energy, aligning with national priorities and diversifying revenue streams.
A Financial Comeback Worth Watching
After a tough FY2023, with a $0.2 million loss, Alpina roared back in FY2024. Revenue jumped 37.3% to $88.1 million, gross profit soared 130.4% to $10.4 million, and net profit hit $2.4 million. Gross margins expanded to 11.9%, signaling the end of pre-COVID margin pressures.
With the return back to profitability, the Company has also announced dividends for shareholders for FY2024.
Why Investors Should Care
In a city that never stops building, Alpina Holdings is more than a survivor&mdash it&rsquo s a pacesetter. Its blend of experience, adaptability, and innovation taps into Singapore&rsquo s growth story. From dormitories to solar panels, it&rsquo s rewriting the playbook for building services. For investors eyeing stability and upside, Alpina&rsquo s resurgence&mdash backed by a bulging order book through 2030&mdash makes it a stock to watch.
This is beneficial for Alpina Solar' s business. These developments will ultimately redirect attention to the solar sector, leading to an appropriate valuation for its operations, which will, in turn, contribute to an overall higher valuation for the company.
https://www.prnewswire.com/apac/news-releases/peak-energy-acquires-solar-rooftop-project-in-singapore---enters-into-long-term-virtual-power-purchase-agreement-with-arkema-302388311.html
Alpina reverses into earnings of $2.4 mil for FY2024 due to growth in construction contracts
https://www.invest-alpha.sg/view& id=957
As more HDB blocks switched to Smart Meter, it will benefit Alpina since it is one of their core business.
" ...Meanwhile, data from the new smart electric sub-meters &ndash to be installed in the consumer switch rooms of HDB blocks &ndash will allow town councils to compare energy usage across HDB blocks and track the demand and supply for individual blocks in the estate.
The data collected will also help town councils optimise maintenance cycles of the common services, as well as detect anomalies such as equipment faults, to minimise downtime..."
https://www.straitstimes.com/singapore/housing/heat-reflective-paint-initiative-to-be-rolled-out-to-all-hdb-estates-by-2030
There might be a rush to build more solar panel in 2025, due to the " EMA' s aim is to potentially achieve 1.5GWp of solar deployment by 2025, and at least 2 GWp by 2030."
https://www.channelnewsasia.com/singapore/singapore-solar-energy-deployment-cop28-grace-fu-parliament-4036886
The interesting thing about the contracts are that most of them are for maintenance which could be recurring into the future as well.
https://links.sgx.com/1.0.0/corporate-announcements/V3YT011B2VT8ZKKH/2ebb12d1b7cca8f7469bfecfb59b4dbbac29324119a0a5db80f990a7f4106ac8
Great! New award of contracts!
https://links.sgx.com/1.0.0/corporate-announcements/V3YT011B2VT8ZKKH/2ebb12d1b7cca8f7469bfecfb59b4dbbac29324119a0a5db80f990a7f4106ac8
Alpina Secured New Contracts with Aggregate Provisional Contract Sum of Approximately S$40.8 Million during the Second Half of 2024
- A total of 8 new contracts with an aggregate provisional contract sum of approximately S$40.8 million was added to the Group&rsquo s project pipeline in the second half of 2024
- The contracts have varying completion dates ranging from November 2025 to November 2028
Alpina&rsquo s Executive Chairman and Chief Executive Officer, Mr. Low Siong Yong (刘 常 勇 ), said, &ldquo With a business model specialising in IBS, M& E engineering services and A& A works, we have the flexibility to target different projects in both the public and private sectors.
Our contract wins in the second half of 2024 represents additional growth for the Group and underscores the resiliency of our business model.
Moving ahead, we will continue to innovate and expand our capabilities to deliver new value propositions to our customers and strengthen our order book.&rdquo
The solar industry in both the U.S. and overseas appears to be experiencing a downturn. The Invesco Solar ETF has decreased by 26% over the past year. This trend could benefit Alpina, as a solar panel installer, since lower industry performance might lead to reduced solar panel prices. Consequently, this could lower Alpina' s procurement costs, potentially increasing their profit margins in the future.
https://www.investing.com/news/stock-market-news/invesco-solar-etf-drops-deutsche-bank-sees-a-scaling-back-of-some-incentives-3705721
This is certainly beneficial for the company that installs solar panels. As the U.S. begins to reduce its purchases of solar panels from Southeast Asian countries, there will likely be an oversupply of suppliers, leading to a decrease in solar panel prices. Consequently, more people will be inclined to purchase solar panels, resulting in an increase in installations.
https://www.straitstimes.com/asia/se-asia/us-sets-tariffs-for-solar-panels-from-south-east-asian-nations
Just a thought - since Trump get elected, trump don' t like clean energy, trump will cause demand to reduce and eventually maybe solar panel will be cheaper and more installations will come Alpina' s way!
This HDB initiative likely stems from previous smart metering contracts with Alpina. Notably, the competitive landscape in this sector suggests that Alpina is a key player. As more HDB projects are developed in the future, Alpina is expected to secure additional business opportunities.
https://www.hdb.gov.sg/about-us/our-role/smart-and-sustainable-living/smart-hdb-town-page/hdb-smart-home-exhibition
More and more ideas to suggest Solar has a definite place in Singapore. This will be beneficial to Alpina.
https://finance.yahoo.com/news/singapore-clears-20-billion-power-061914679.html
This strengthens the company' s prospects by suggesting that in the future, the solar energy generated may not only be for public consumption but also for sale. The solar industry is rapidly expanding in Singapore, which benefits Alpina' s business significantly.
https://www.businesstimes.com.sg/singapore/microsoft-buy-solar-power-singapore-public-buildings
The current order book, along with existing recurring income, could represent the company&rsquo s earnings for the remainder of 2024. However, the consortium contract worth $115 million is anticipated to begin in 2025 and run through 2028. Typically, when a contract starts, a significant portion of the earnings is recognized right away. As a result, I expect the first half of 2025 to be strong.
https://links.sgx.com/1.0.0/corporate-announcements/602HMFORVOBPKTIU/eadec31eef856ebd4ab167ec50816d7fff0e655f78c2b60fc24f9c1d6b4eef19
This is my thought process of how this company will change - revenue will increase due to the order book and earnings will follow. Subsequently the investment property will also allow them to reduce operating expenses. Soon, they will be constantly generating operating cashflow which is much higher than the earnings due to the higher depreciation. They will be growing cash and soon dividend will increase.
This will be the track record for the next 2 years.
https://links.sgx.com/1.0.0/corporate-announcements/CCQKN8CTQLB9BE0E/9d087a8c81847a840ed1d5593f593ed95e1575e9129f0b072570d59ad8bed4cf
Amazing Results! Operating Cash turnaround from negative 1m to positive 9m! https://links.sgx.com/1.0.0/corporate-announcements/CCQKN8CTQLB9BE0E/9d087a8c81847a840ed1d5593f593ed95e1575e9129f0b072570d59ad8bed4cf
Alpina Achieved Increased Profitability in 1H2024: Posts Revenue Growth of 72.3% with Gross Profits Increasing by 64.4%
- The IBS business segment continues to be the Group&rsquo s main revenue contributor, while the M& E business segment posted strong revenue growth of 466.3% in 1H2024 as compared to 1H2023
- Gross profits increased by 64.4% in 1H2024 with the M& E business segment being the main
contributor
- Generated net cash of S$9.35 million from operating activities in 1H2024
- Healthy balance sheet with total assets of S$83.62 million and total equity of S$28.42 million as at 30 June 2024
- Added a total of 11 new contracts, the majority of which being public sector projects, with an aggregate provisional contract sum of approximately S$16.15 million to project pipeline in 1H2024
- Part of a consortium that secured a contract for the provision of integrated facilities management services for a tertiary education institution in Singapore with a provisional contract sum of approximately S$115.72 million
- Completed the acquisition of Wan Dormitory Pte. Ltd. in March 2024, which holds a property located at 180 Woodlands Industrial Park E5
Commenting on the Group&rsquo s 1H2024 results, Alpina&rsquo s Executive Chairman and Chief Executive Officer, Mr. Low Siong Yong (刘 常 勇 先 生 ), said, &ldquo With majority of the pre-COVID contracts completed overthe past two years, our margins have started to normalise with an improvement in operating cash flows and profitability. With our experience from an inflationary environment, the Group will take a more prudent approach in new tenders as we aim to take on larger scale projects ahead.
Our progress so far has been encouraging and we must now continue to intensify our efforts to ensure that the Group is firmly back to profitability with a stronger foundation for long-term growth.&rdquo
As per article, " In FY2023, Alpina announced that it has secured a total of 21 contracts with aggregate provisional contract sum of approximately S$251.1 million.
More recently in June 2024, the Group announced that it participated in the tender alongside a consortium and the consortium was successfully awarded a contract worth approximately $115.7 million to provide integrated facilities management (IFM) services for a tertiary education institution in Singapore. This contract is set to commence in January 2025 and is expected to be completed by December 2028, with an option for the customer to extend the contract for an additional 4 years and 3 months.
The strong order book expansion over the past 2 years provides good visibility for the Group&rsquo s revenue pipeline ahead."
The next few years revenue is secured. This will likely push the company to become profitable again. Moving forward in a lower interest rate environment, the company will definitely grow bigger.
https://www.smallcapasia.com/alpina-holdings-a-rising-star-in-facilities-management-solar-energy/
Alpina Holdings: A Rising Star in Facilities Management & Solar Energy
As urbanization continues to accelerate and the demand for integrated facilities management (IFM) services grows, a company is quietly carving its mark and standing out among its peers: SGX-listed Alpina Holdings (SGX: ZXY).
In addition, as solar energy adoption gains pace in Singapore, there is a growing trend of zero-energy and energy-plus buildings in Singapore that adopt energy efficiency technologies.
Alpina has positioned itself as a key player in this highly fragmented facilities management industry and solar energy sector in Singapore with strong technical expertise, a solid track record and possession of relevant licenses required in Singapore.
Alpina Holdings&rsquo Corporate Profile
Alpina Holdings, a veteran contractor headquartered in Singapore, excels in delivering comprehensive integrated building services (IBS), along with mechanical and electrical (M& E) engineering services, and alteration and addition (A& A) works, boasting a robust track record of over 20 years.
Their projects are mainly public sector projects, being projects in which the Singapore Government or a public university in Singapore is the project owner.
The company has achieved the prestigious L6 rating in the ME15 (Integrated Building Services) category, representing the apex grading for this classification.
This distinction empowers Alpina Holdings to engage in public sector IBS project tenders without any restrictions on tender or project values under this category.
Financial Performance
Alpina Holdings has consistently achieved revenue growth over the past few years, driven by a combination of organic expansion.
For the financial year ending December 31, 2023, Alpina reported an all-time high revenue of $64.1 million, an increase of 28% compared to the prior year.
However, net profits were down during the same period because the Group had to hire additional manpower and subcontractors, particularly for projects secured prior to the COVID-19 pandemic as a commitment to its customers and to meet project deadlines.
This has impacted the firm&rsquo s financial performance in recent years but are likely to abate once the past projects are completed and the company continues to secure new projects in future.
On a bright note, the company also maintained a healthy balance sheet with current assets representing 83.4% of its total assets and it comprised the following key components:
Cash and cash equivalents of approximately S$9.55 million
Trade and other receivables of approximately S$10.67 million
Contract assets of approximately S$32.38 million
Inventories of approximately S$1.37 million
This prudent financial management enables Alpina to invest in growth opportunities and weather economic uncertainties.
Management Team Experience and Ownership
Alpina Holdings is led by a seasoned and capable management team &ndash Executive Chairman and CEO Mr. Low Siong Yong and Executive Director, Mr. Tai Yoon On, who boasts over 25 years of experience each in providing IBS, M& E engineering services and A& A works.
A quick glance at the shareholder ownership shows that both the CEO (Mr. Low) and Executive Director (Mr. Tai) hold a substantial stake in the company at 44% and 36% respectively.
The management team&rsquo s substantial insider ownership ensures they are well aligned with the interests of minority retail shareholders.
Tapping on Singapore&rsquo s Booming Construction Market
Singapore&rsquo s construction sector is booming, with the Building and Construction Authority (BCA) forecasting total demand to reach a staggering $25 billion to $32 billion annually between 2024 and 2027.
This positive outlook aligns perfectly with Alpina&rsquo s core competencies: Integrated Building Services (IBS), Mechanical and Electrical (M& E) engineering, and Alteration & Addition (A& A) works.
But Alpina&rsquo s potential extends beyond traditional construction. Singapore&rsquo s ambitious plans for a Green and Smart Nation represent a multi-billion dollar opportunity. As the nation strives to improve city services, reduce energy consumption, and optimize infrastructure, Alpina&rsquo s expertise positions them as a key player in these transformative initiatives.
Here&rsquo s why Alpina is uniquely positioned to capitalize on this growth:
Proven Track Record: Alpina boasts a history of successful project execution, particularly for public sector clients like government ministries and educational institutions.
Strategic Expansion: The recent foray into Integrated Facilities Management (IFM) through Digo Corporation demonstrates Alpina&rsquo s commitment to expanding its service offerings and capturing a wider share of the market.
Alignment with National Goals: Alpina&rsquo s solutions directly address the priorities outlined in the Singapore Green Plan 2030, making them a natural partner in the nation&rsquo s green and smart transformation journey.
By leveraging these strengths and the strong tailwinds of Singapore&rsquo s growth, Alpina Holdings presents an attractive proposition for investors seeking exposure to this exciting market.
Alpina&rsquo s Bright Future in Solar Energy
Singapore basks in sunshine year-round, making solar energy a no-brainer for its renewable energy goals. Under the SolarNova programme, the city-state aims for a whopping 2 gigawatts of solar power by 2030, enough to juice up hundreds of thousands of homes.
Amid this green energy revolution, Alpina Holdings Limited is emerging as a significant player with promising prospects in the solar energy sector.
In March 2022, Alpina&rsquo s wholly-owned subsidiary, Digo Corporation Pte. Ltd., in collaboration with Terrenus Energy Pte. Ltd., secured a substantial 70 MWp project. This initiative involves installing solar panels across 1,198 HDB blocks and 57 government sites, alongside implementing smart electrical sub-meters in the HDB blocks.
Subsequently, in April 2023, Alpina Energy Pte. Ltd., another wholly-owned subsidiary, was awarded a contract worth approximately S$117 million related to the sixth solar leasing tender, marking another significant milestone in their growing order book.
Alpina&rsquo s expertise is further validated by its ME03 (Solar PV system integration) Workhead registration. This certification enables the company to undertake comprehensive services, including the installation, testing, commissioning, maintenance, and repair of grid-connected solar PV systems mounted on the ground or buildings.
As solar energy adoption accelerates in Singapore, the demand for maintenance and upgrading of solar systems is expected to rise. Alpina&rsquo s accumulated technical know-how and proven track record position the company to capitalize on these future opportunities.
Beyond installation, Alpina plans to generate and sell solar energy from its photovoltaic panels once operational, potentially creating an additional revenue stream through carbon credits.
Strong Order Book Expansion and Positive Developments
In FY2023, Alpina announced that it has secured a total of 21 contracts with aggregate provisional contract sum of approximately S$251.1 million.
More recently in June 2024, the Group announced that it participated in the tender alongside a consortium and the consortium was successfully awarded a contract worth approximately $115.7 million to provide integrated facilities management (IFM) services for a tertiary education institution in Singapore. This contract is set to commence in January 2025 and is expected to be completed by December 2028, with an option for the customer to extend the contract for an additional 4 years and 3 months.
The strong order book expansion over the past 2 years provides good visibility for the Group&rsquo s revenue pipeline ahead.
In addition, the Group completed the S$24.5 million acquisition of a workers dormitory located at 180 Woodlands Industrial Park E5, Singapore 757512, which will provide them more flexibility to control their operating costs and manage their manpower resources.
Conclusion
In conclusion, Alpina Holdings emerges as a formidable contender in Singapore&rsquo s facilities management sector, poised for sustained growth and profitability.
The recent multi-year contract win, coupled with the company&rsquo s proven track record, experienced management team, and strategic growth plans that aligns with Singapore&rsquo s green city initiatives, paints a bright picture for Alpina&rsquo s future.