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SLB Development Ltd’s Initial Public Offering: 10 Things You Need to Know

SLB Development Ltd, currently a wholly-owned subsidiary of Lian Beng Group Ltd (SGX: L03), is seeking a listing on Singapore’s Catalist board. Here are 10 things that you should note about SLB:

1. According to SLB’s initial public offering (IPO) prospectus, the company is a “diversified property developer with extensive experience and track record across the residential, mixed-use as well as industrial and commercial sectors, and property development projects ranging from small to large scale.” The company has a presence in Singapore and China.

2. The company’s competitive strengths include having a track record of undertaking many types of property development projects, having a network of business relationships with other property developers and contractors, being experienced with conducting business outside of Singapore, and possessing a skillful and dedicated management team.

3. SLB’s portfolio currently consists of five residential and mixed-use property developments such as KAP & KAP Residences at King Albert Park and NEWest at West Coast Drive, and three industrial property developments. Its pipeline property development projects include three residential sites such as Serangoon Ville and Rio Casa, and two industrial property development projects. The company also has a stake in a property development project in China’s Hebei province. As of 31 January 2018, SLB’s ongoing and pipeline projects totalled S$892 million in gross development value, with estimated development profits of S$136 million.

4. As part of its growth plans, the company is sourcing for opportunities to carry out “property development projects in Asia-Pacific, Western Europe and North America regions, including tapping on relationships with joint venture partners and networks.” This is to diversify SLBS’s revenue stream to mitigate its exposure to Singapore’s cyclical property development market.

5. For the IPO, there will be 238 million shares on offer at S$0.23 per share. Eight million shares will be available for the public, while the remaining 230 million shares will be placed to certain investors. After SLB’s IPO, Lian Beng will retain a 73.93% interest in the company.

6. Based on the listing price and post-IPO share count of 913 million shares, SLB is expected to have a market capitalisation of S$210 million.

7. The listing is set to raise net proceeds of S$51.4 million. The company plans to use the proceeds to acquire new land sites and for overseas expansion (S$18 million), fund existing property development projects in the pipeline and for other general working capital purposes (S$18.4 million), and repay a bridging loan (S$15 million).

8. For the financial year ended 31 May 2017, SLB earned revenue of S$87.6 million, and profit attributable to shareholders of S$15.9 million. Its basic and diluted earnings per share (EPS) for the year was 2.3 Singapore cents. As at the end of May 2017, SLB’s balance sheet carried S$26.3 million in cash and cash equivalents and total bank loans of S$106.7 million.

9. With a post-IPO EPS of 1.74 Singapore cents, SLB’s price-to-earnings ratio comes up to 13.2.

10. The IPO opened yesterday and closes on 18 April 2018 (12:00 pm). Trading of SLB’s shares is expected to commence on 20 April 2018 at 9:00 am.

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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.