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Singapore “Flyer” of the Week: Soon Lian Holdings Ltd

singapore flyerSoon Lian Holdings Ltd (Catalist: 5MD) flew 32.8% so far for the week, closing at S$0.081 on Thursday.

The company is a specialist supplier of aluminum alloy products that caters a range of over 1,200 different aluminum alloy products in a various specifications and dimensions. It mainly supplies to the marine and precision engineering industries.

On 21st January 2014, Soon Lian announced that Galmon (S) Pte Ltd had exercised an option to purchase an existing property belonging to the company at 35 Tuas Avenue 2, Singapore 639464. The price of the property is S$19.8 million, without goods and services tax. The proposed sale, however, is subject to agreement from Jurong Town Corporation and successful purchase of a new property by Soon Lian (as discussed below).

The net gain on the proposed sale for Financial Year 2012 and first half of Financial Year 2013 is approximately $10.7 million and $10.6 million respectively. The net proceeds from the proposed sale will be used to fund Soon Lian’s purchase of another property at 9 Tuas Avenue 2, Singapore 639449, for S$21.5 million.

The rationale for the purchase of the property at 9 Tuas Avenue is that the built-in area of the new property, which is approximately 30% larger than the company’s existing premises at 35 Tuas Avenue 2, will provide the additional space required for its business expansion. The headquarters and warehouse will also be relocated to the new property. This was announced on 25th October 2013.

Soon Lian is trading at a historical PE of 24.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice.  Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.