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Wong Fong Industries launches IPO for Catalist listing
LAND transport engineering solutions provider Wong Fong Industries has launched its initial public offering (IPO) for listing on the Catalist board of Singapore Exchange (SGX), which will see it raising net proceeds of S$8 million.
Wong Fong is offering 43 million new shares at S$0.23 each, which puts the company's market capitalisation at about S$54.1 million.
The firm said it intends to pay dividends of not less than 20 per cent of net profits attributable to owners of the company in both FY2016 and FY2017.
The placement will close at 12pm on July 26 and the listing of shares on Catalist is expected to commence at 9am on July 28.
Executive chairman Jimmy Lew said: "We believe that our strong and proven track record in the industry has helped us cultivate many repeat customers, who in fact accounted for approximately 59.8 per cent of our revenue in FY2015."
The group said it expects healthy demand from both the construction and logistics industries in Singapore in the future. In addition, the group expects demand growth to originate from a new three-year Automation Support Package by the government to help small and medium enterprises (SMEs) automate, drive productivity and scale up.
Wong Fong's directors believes SMEs will make additional investments in equipment to boost productivity as a result.
To meet growing demand, the group plans to expand and diversify its operations and product offerings in its core businesses as well as to expand existing facilities to enhance service and production facilities.
Wong Fong will also explore the development of new products and services in four key areas (load handling and special-purpose vehicles, waste handling, electric-mobility and defence), it said.
The S$8 million in net proceeds will be used for the expansion and diversification of the firm's operations/products, enhancement of service and production facilities; developing new products and services; and working capital and general corporate purposes.
In FY2015, the group recorded revenue of S$77.6 million while net profit was S$5.6 million.
As at June 15, the group's order book was at approximately S$42 million, out of which S$30 million is expected to be completed in FY2016 and the balance in FY2017.
United Overseas Bank is the sponsor, issue manager and placement agent for the IPO.