Letter to Shareholder

Dear Shareholders

It is our pleasure to present the inaugural annual report of Sin Ghee Huat Corporation Ltd. (“Company”) as a public listed company. Its initial public offering (“IPO”), launched in the second quarter this year, received an overwhelming response from the investment community which made the IPO a success, and we would like to take this opportunity to thank you for your support.


Strategic Focus and Future Plans
Our strategic approach anchors on specializing in the distribution of stainless steel products, especially in the austenitic grades. In focusing on the distribution of stainless steel products, we are able to offer an extensive range of over 4,000 items of stainless steel products that could be fabricated to cater to the needs of different industries, including oil & gas and petrochemical, marine and construction, amongst others. We also serve a diversified base of over 800 customers from different geographical markets, including Southeast Asia, Asia Pacific and the Middle East. Having been in this business for over two decades, our industry knowledge, sourcing capabilities and the ability to provide an extensive range of products give us an edge over the competition. The longstanding relationships we have built with a network of over 50 international suppliers from countries such as Spain, Japan, Finland, Italy, Taiwan and South Korea, ensure the availability of a comprehensive range of quality stainless steel products. Moreover, as a bulk purchaser, we stand to enjoy priority allocations from suppliers. Moving forward, we plan to penetrate further into existing markets as well as enter into new geographical markets. In addition, we plan to widen our product range to include other grades of stainless steel products, which will contribute to us maintaining our position as a “one-stop” distributor. To support our expansion, we need to boost our storage capacity in order to increase our stockholding of stainless steel products.

At this juncture, we are pleased to share that plans are in the pipeline to redevelop our existing warehouse facilities at 32 Gul Crescent. We are also in the process of developing an online requisition system to make it more convenient for customers to place orders.

Industry and Market Outlook
Looking at industry trends, we are optimistic of the prospects for the industry. Although stainless steel prices have fallen after being on an uptrend for most of the financial year ended 30 June 2007 (“FY2007”), underlying demand is expected to remain strong. Growing demand for energy worldwide has been driving activity in the oil and gas industry. With global oil demand increasing, there will be spin-off demand generated in support industries, such as ship building, oil rigs construction as well as oil and gas equipment, industries which require stainless steel products. In Asia, Singapore is reinforcing its position as a major oil refinery and petrochemical centre with the establishment of the Jurong Island Petrochemical Centre. Such developments are expected to create additional demand for stainless steel. The construction industry in Singapore is similarly showing a growth trend. According to the Ministry of Trade & Industry, the sector grew by 18% in the second quarter of 2007, up from the 12% in the first quarter1. In line with this trend is the upcoming development of the integrated resorts in Singapore. With a development of this scale, there will be strong demand for construction material and as a leading distributor of stainless steel products in Singapore, we are in a position to benefit from the development project. In general, an improving global economic climate bodes well for our industry. The economies of Singapore, Malaysia, as well as those in the Asia Pacific region and the Middle East are doing well and the resulting investments in their key industries, such as the oil & gas and petrochemical, marine and construction, among others, are expected to translate into increased demand for stainless steel products.


Financial Highlights and Note of Appreciation
Apart from our smooth transition to a public listed company, we have also delivered another milestone with an impressive set of results for FY2007. Revenue grew by 19.8% to $93.6 million while after-tax profit increased by 72.7% to $17.9 million for FY2007. Our Company continued to enjoy positive cash flow and working capital. Net cash generated from operating activities for FY2007 was $5.8 million while net proceeds from the issue of new ordinary shares pursuant to the IPO accounted for a further $15.5 million cash infusion. The Board is therefore pleased to propose a final dividend of $0.03 per ordinary share, less tax, for approval at the coming Annual General Meeting. On behalf of the Board, we also wish to thank our customers and business partners for their support and to our management and staff, for their contribution and commitment to our Company. We will continue to strive to reinforce and strengthen our Company’s position as a leading distributor of stainless steel products. Together, let us steer our Company to greater heights.

Hong Pian Tee
Non-Executive Chairman

Kua Chee Seng
Chief Executive Officer