Aedge Group up 5% on IPO price in SGX trading debut

Aedge Group began trading on the Singapore Exchange's Catalist board yesterday at 21 cents, one cent or 5 per cent above its initial public offering (IPO) price of 20 cents per share.

It closed flat at 21 cents after some 2.5 million shares had changed hands.

The firm - a provider of engineering, transport, security and manpower services - said last Friday evening that all 16 million placement shares in its IPO had been validly subscribed for.

The application monies received for these placement shares amounted to a total of $3.2 million as at the close of the placement at noon last Thursday.

Aedge had previously said it was looking to raise net proceeds of some $1.7 million through the IPO, with this placement representing some 15.1 per cent of the enlarged share capital of 106 million shares of the group.

Based on the given price, Aedge's market capitalisation stands at $21.2 million after the placement. This translates to a price-to-earnings ratio of 59 times.

Aedge chief executive and founder Poh Soon Keng said the majority of the funds raised will be used to finance the acquisition of property, plant and equipment, while the balance will be utilised for working capital.

In order to "remain competitive and keep abreast of rapidly changing technologies in security systems", Aedge also intends to develop and test new security solutions in line with market needs, hire new staff, and upgrade its human resource software to support its expanding operations.

The group's security and manpower services segment is its biggest revenue contributor. This segment includes security services such as guarding and system integration, cleaning services, and manpower services such as sourcing and supplying aerospace technicians to companies.

Aedge's transport services business operates a fleet of 88 buses that serve routes between nine residential estates and the Central Business District, as well as school bus services.

Although the group's engineering services division is its smallest revenue contributor, Mr Poh said the segment has been growing quickly over the past three years.

The Covid-19 pandemic had caused Aedge's net profit for the 2020 financial year ended June to fall to $400,000 from $1.3 million a year ago, while revenue fell to $23.7 million from $24.5 million last year. Net profit margin, too, slipped to 1.8 per cent from 5.1 per cent.

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