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Alpina Holdings Limited ("Alpina")

 


Alpina Holdings Limited ("Alpina" or the "Company") is offering 37 Placement Shares, comprising 32m New Shares and 5m Vendor Shares at $0.31 each. There is no public offering and the placement will close on 26 Jan 2022 at 12 noon. The market cap based on the placement price and post IPO shares is $57.1m

(This post is for records only. Given the lack of public offering, I will not be covering this IPO in details)

Principal Business

The Company is an established Singapore-based contractor specialising in providing integrated building services ("IBS"), mechanical and electrical ("M&E") engineering services and alteration and addition ("A&A") works to public and private sector projects, with an operating history of over 17 years.


Financial Highlights

According to the prospectus (page 35), the PER based on FY2020 and assuming the service agreement is in place is around 14.1x. 

The 1H 2021 financials seemed to indicate an impressive growth of 77% over the 1H 2020 revenue numbers with net profit growing from $0.9m to $4.1m over the same period. If this is true, then the historical valuation PER of 14x is reasonable.

Proposed Dividends

The Directors intend to recommend and distribute dividends of at least 50% of profit attributable to equity holders for FY2022 and FY2023.

What I like about the Company

  • Well established presence in the IBS, M&E engineering and A&A works - The Company has an established track record in Singapore and possess its own labour with over 400 technicians
  • Experienced management team - the founders and management has extensive industry knowledge and experience 
  • Dividend paying - the company intends to pay >50% of its net profit as dividends for the next two financial years

Some of my concerns

  •  Family run business - This is a family run business. Both spouses (named Mrs Low and Mrs Tai) as well as several siblings of the founders are working in the firm. The two Mrs are pretty well remunerated, earning up to $450,000 each in FY2019 and FY2020. I am not sure why the full names of the Mrs are not disclosed in the prospectus and will leave it to the nomination committee to see if the remuneration commensurate with market levels and for the scope of work. 
  • Small cap company - The market cap is around $57m and tightly controlled by the two founders. The liquidity and trading volume may be limited post the offering and may not have an institutional following unless the market cap increases

Mr. IPO Chilli Ratings

No ratings are provided given there is no public offering. If there is one, I would probably have given it 1 Chilli.

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