Wong Fong Industries launches IPO on Catalist board

SINGAPORE - Wong Fong Industries, a home-grown provider of land transport engineering solutions and systems, has launched its initial public offering (IPO) on the Singapore Exchange's Catalist board.

Under the offering, the company will issue 43 million new shares at 23 cents apiece - priced, raising a total of S$8 million in net proceeds, Wong Fong announced on Tuesday.

The placement is priced at a price earnings ratio of 7.9 times, based on the group's historical earnings per share of 2.9 cents for the 2015 financial year. The company's market capitalisation stands at around S$54.1 million.

The placement will close at 12pm on July 26, and the shares are expected to commence trading at 9am on July 28.

Wong Fong said it expects to see healthy demand from both the construction and logistics industries in Singapore in the coming years, despite the challenging environment today. This will be spurred in part by the Government's new Automation Support Package, which will see SMEs (small and medium-sized enterprises) make additional investments in equipment to improve productivity.

To meet growing demand, about a quarter of the net proceeds from the IPO will go towards expanding and diversifying the company's operations and product offerings through investments, mergers and acquisitions, joint ventures or strategic collaborations, said Wong Fong.

It also plans to expand its existing facilities, or acquire or lease larger manufacturing premises, as well as develop new products and services.

Wong Fong has a presence in Singapore, Malaysia and China. It counts among its customers government agencies, as well as multinational companies and SMEs (small and medium enterprises) from various industries such as infrastructure development, logistics, waste management and defence.

The group last year recorded a turnover of S$77.6 million and net profit of S$5.6 million. Its order book stands at around S$42 million as at June 15.