A local make-up training company has undertaken a shares-for-property swop to secure assets in Cambodia as part of ambitious plans to expand across the region.
Colour Face International (CFI) signed an agreement last week with Cambodian developer SGPD Development.
It involves CFI swopping $10.5 million worth of shares for 35 residential units in SGPD Development's luxury project The Skyline in Phnom Penh.
CFI, which runs courses on make-up, hopes to profit from the city's 5 to 9 per cent rental yield when the site is completed in 2018, chief executive Darryl Kuek told The Straits Times.
"The macro-climate in Cambodia, where property development is booming, means that the asset value has a good chance of appreciating in two to three years' time.
We are hoping that we can acquire our EduTrust certification in the first half of next year, after which we can enrol more overseas students, particularly from China, where there is a huge appreciation for Singapore education and certificates.
MR DARRYL KUEK, CFI chief executive
"But we really look at this property deal as a long-term strategy. Our rental revenue there can help bolster our Cambodian financials, and investors will be comforted by the fact that we have a $10.5 million increase in assets."
The partnership with SGPD Development is just one part of CFI's plan to prepare for expansion into Cambodia and China by 2018, when the company also expects to have its initial public offering in either Singapore or Hong Kong.
"That's what drew SGPD to us. Its investment in us is a bet that we will become listed and have a presence in China in three years," Mr Kuek noted.
Other pieces are also coming together. Earlier this month, CFI became the first overseas company to be listed on Shenzhen's Qianhai Equity Exchange, an over-the-counter (OTC) platform.
An OTC exchange is less transparent compared with a public exchange.
"I would like our investors to feel assured that the company is systematically moving towards a full-fledged public listing, that we keep hitting the milestones and KPIs (key performance indicators) we've set for ourselves," Mr Kuek added.
Another part of the multi-year plan is to widen its source of students to include more from Cambodia and China.
"We are hoping that we can acquire our EduTrust certification in the first half of next year, after which we can enrol more overseas students, particularly from China, where there is a huge appreciation for Singapore education and certificates.
"For that, we are entering China next year. For a start, we will look to have at least a recruitment office there and, eventually, open schools and other facilities."
CFI operates two teaching facilities in Singapore offering make-up classes to around 1,000 students, mostly local residents.
New courses on manicure, wellness and hairstyling are on the cards.
The booming demand for beauty and wellness services in Asia has put CFI on a rapid growth track, Mr Kuek noted, adding that the company had around $3 million in revenue for the first nine months this year - almost doubling the full-year turnover of $1.6 million last year.
"The target we have now is to keep doubling our revenue and profit every year, at least until we're closer to our planned IPO. This is possible for us as we are still a young company with a lot of growth opportunities before we mature."