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 |
Corporate Information