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HK dual listing best option for Singapore Kitchen Equipment, board tells Sias
A DUAL listing in Hong Kong is "the most attractive and viable option" to fund Catalist-listed Singapore Kitchen Equipment's planned expansion into China, the board said on Tuesday, after questions from investor watchdog Securities Investors Association (Singapore) or Sias.
Singapore Kitchen Equipment - which makes and sells kitchen systems and equipment, and also does maintenance and servicing - applied for a dual primary listing with the Stock Exchange of Hong Kong in June 2018, only for the application to lapse six months later.
The company made a fresh application on Feb 20, which the board said would incur about S$1.61 million in costs if successful, on top of the S$1.66 million charged previously.
Sias had asked Singapore Kitchen Equipment's board to explain why the application had lapsed and whether the company tried to get an extension the first time around.
The application lapsed automatically on a six-month timetable, the board replied, adding that its operations were not affected by the extra work needed to make the application.
Sias also wanted to know why Singapore Kitchen Equipment is gunning for a listing in Hong Kong when most of its turnover comes from the Singapore business.
The board replied that it plans to move upstream into manufacturing and to expand into the Hong Kong and mainland China markets, with a Hong Kong listing to "give the company the much needed funds and exposure to the markets in these areas".
"After reviewing other sources of funding, the board/management decided on the listing as the most attractive and viable option," it added.
The board also said that - while the carrying amount of inventory as at Dec 31, 2018 stood at roughly one-quarter of the company's equity - the average holding period of finished goods is 83 days, which it deemed "not excessive".
Directors have also advised the company's management "to look into technology to manage the inventories" as the company eyes upstream manufacturing of its own goods, said the board.
The counter last traded at S$0.12 on Apr 26, 2019.