Electrical products firm launches IPO

Founders of Choo Chiang Holdings, Mr Rocky Lim (left) and Mr Thomas Lim. The firm, which started with an initial investment of $12,000, raked in $70.4 million in revenue last year, with a net profit of $6 million.
Founders of Choo Chiang Holdings, Mr Rocky Lim (left) and Mr Thomas Lim. The firm, which started with an initial investment of $12,000, raked in $70.4 million in revenue last year, with a net profit of $6 million.PHOTO: CHOO CHIANG HOLDINGS

Choo Chiang Holdings is offering 33.28 million vendor shares, of which 1 million are for public offer

A local electrical product retailer and distributor launched its initial public offering (IPO) yesterday.

Choo Chiang Holdings was set up by Mr Thomas Lim in 1977 under the name Choo Chiang Electrical Trading Service. It has come a long way since his initial investment of $12,000. Last year, Choo Chiang raked in $70.4 million in revenue, with a net profit of $6 million.

The group is offering 33.28 million vendor shares, of which one million are for public offer.

The shares, to be listed on Catalist, are priced at 35 cents each, with a price-earnings ratio of 12.41 times based on earnings per share of 2.82 cents for the financial year ended December.

The management said it intends to pay out dividends of at least 30 per cent of net profit this year and next year.

Choo Chiang sells electrical products such as cables, switches, air-conditioner accessories and fans for industrial and residential use.

These products comprise third-party imported goods and Choo Chiang's proprietary CCM and CRM brands.

Mr Lim said in Mandarin that the listing "will take it up a level for our overseas suppliers to recognise us".

Financial controller Morland Fu said slow market conditions are no dampener on the decision to list. He believes that even without new construction projects, Choo Chiang will still see demand for its products coming from maintenance and renovation works.

The group is also confident of growth prospects in local public-sector construction demand.

Choo Chiang has nine retail branches here, with plans to open at least one more this year. It is also considering venturing into overseas markets, although Mr Fu said "we haven't decided which countries we are going into".

Choo Chiang expects to raise about $10.65 million in net proceeds.

All of the proceeds will go to Lim Trust, which is wholly owned by Mr Lim and his brother and co-founder, Rocky, and to third-party investment holding company Rhodus Capital, which is based in the British Virgin Islands.

The public offer closes at noon on July 27, and trading is expected to start two days later.

A version of this article appeared in the print edition of The Straits Times on July 16, 2015, with the headline 'Electrical products firm launches IPO'. Print Edition | Subscribe