Car dealer, candy maker could be first listings on SGX this year

[SINGAPORE] Automotive-solutions provider Vin’s Holdings could be the first listing on the Singapore Exchange (SGX) this year.

The car dealer, whose businesses include the sale of new parallel-import and pre-owned motor vehicles, maintenance and repair services, as well as rental and leasing, in mid-March lodged preliminary offer documents for listing on the SGX Catalist board.

In the same month, candy maker YLF Group Marketing, which manufactures and distributes its range of products in Singapore, Malaysia and Thailand, also lodged its preliminary prospectus as it mulls a Catalist listing.

The two potential initial public offerings (IPOs) come after a barren spell for the Singapore market, with no listings in the first quarter.

The last IPO on SGX was that of karaoke and live show operator Goodwill Entertainment, which made its trading debut on the Catalist board last November.

The Singapore bourse has not had a mainboard listing since the one for Digital Core Reit in December 2021, excluding the listing of three special-purpose acquisition companies (Spacs) in 2022, and the listing of live-streaming platform 17Live Group in 2023, following its business combination with the Vertex Technology Acquisition Corporation (VTAC) Spac.

Singapore has had 10 Catalist listings in the last two years – six in 2023 and four in 2024.

In the fast lane

Founded by chairman Vincent Khong, Vin’s started as a car workshop in 1987 that focused on motor-vehicle maintenance and repair as well as insurance claims. It later expanded its services to include the rental and leasing of cars to other workshops, for end customers to use while their cars were being repaired.

Khong’s son, Galvin, joined the group in 2014 and is now its chief executive officer.

Vin’s started selling new parallel-import motor vehicles in 2015.

In 2019, the group started its “floor stock financing” business, through which it purchases pre-owned motor vehicles from other car dealers and sells them back to these dealers – at a profit – to help them finance their purchase.

The group currently has two car showrooms – one at Midview City in Sin Ming and the other at Revv in Corporation Drive; it also has a workshop at AutoCity in Sin Ming and an office at Carros Centre in Kranji for handling accident reporting and insurance matters.

In its preliminary prospectus, Vin’s said that it intends to set up a new showroom in the first half of 2025.

For the latest nine-month period ended September 2024, Vin’s revenue edged up 1.1 per cent year on year to S$83.7 million.

Revenue from its automobile sales and related services – its largest business segment, which contributed to 80.6 per cent of total revenue in the first nine months of 2024 – fell 3.4 per cent to S$67.5 million, mainly due to lower demand for floor stock financing and a decline in new car sales. This was partially offset by higher pre-owned car sales.

Earnings for 9M 2024 fell 18 per cent to S$2 million, from S$2.5 million in the corresponding period the previous year.

The net profit decline was led by a 43.1 per cent jump in administrative expenses to S$6.1 million and a 26.2 per cent rise in finance expenses to S$1.5 million.

Administrative expenses rose as employee benefits climbed 34.6 per cent to S$3.5 million, largely due to new hires, salary adjustments and enhanced employee incentives.

Professional fees jumped to S$0.7 million, from S$34,000 previously, due to one-off listing expenses.

Finance expenses grew 25 per cent to S$1.5 million, mainly attributed to a higher volume of borrowings for working capital.

For reference, Vin’s recorded revenue of S$106.4 million and net profit of S$3.3 million for the full year ended December 2023.

Vin’s said that it intends to use part of its net proceeds from the potential IPO to drive its digital transformation and IT integration plans, as well as expand its showrooms, workshops and after-sales services.

RHB Bank will be the full sponsor, issue manager and placement agent for Vin’s potential IPO.

Seeking sweet success

Candy maker YLF is looking to expand its product mix, grow its distribution network in overseas markets, and explore inorganic growth through acquisitions, joint ventures or strategic alliances.

The group is led by its executive chairman and CEO Lee Tee Wei, who has clocked more than 30 years in the business of manufacturing and distribution of confectioneries.

His brothers, Lee Tee Beo and Lee Tee Yong, are YLF’s chief operating officer, and chief sales and marketing officer, respectively.

The group was started around 1975 by the parents of the Lee siblings as Yew Lian Foodstuffs Trading, which sold food and beverage products.

It then developed its own Pikin brand of plum candies and beverages in the 1980s, and registered its first Pikin trademark in Singapore in 1987. It also developed its own Beardy candy brand in 2000, and its Toy’s Castle brand of toys in 2015.

YLF has also entered into licensing agreements with international brands such as Disney and Warner Bros, under which the company designs, manufactures and distributes candies, biscuits, novelty products and stand-alone toy products, claiming these as intellectual property.

The group also distributes established third-party candy brands, such as Yupi, PEZ and Kidsmania.

YLF has a production facility in Johor and a distribution network supported by its own logistics fleet in Singapore and Malaysia, as well as through an associated company in Thailand.

For 9M 2024 ended September, revenue declined 6.9 per cent to S$24.7 million. Around half of this, or S$12.4 million, was derived from its in-house brands.

Revenue contributed by Singapore fell to S$6.4 million in 9M 2024, from S$7 million previously, mainly due to a decline in general trade customers; revenue contributed by Malaysia fell to S$15 million, from S$16.1 million previously, due to an increase in competing products.

Net profit fell 42.1 per cent to S$2 million, from S$3.4 million in 9M 2023.

For comparison, YLF reported revenue of S$34.2 million for FY2023, with net profit of S$4.2 million.

On top of Singapore, Malaysia and Thailand, the group said it has commenced expansion into Vietnam, where it has secured warehouse and office space, and begun the distribution of its products.

Xandar Capital will be the full sponsor and issue manager for YLF’s potential IPO, while KGI Securities (Singapore) will be the placement agent.