SLB Development Ltd - DBS Research 2018-04-16: IPO Factsheet

SLB Development Ltd. - DBS Vickers 2018-04-16: IPO Factsheet SLB DEVELOPMENT LTD. 1J0.SI

SLB Development Ltd. - IPO Factsheet


Lian Beng property spin-off SLB Development 

  • Offer Price: S$0.23 
  • Share Offer: 8.0m offer shares + 230m placement shares 
  • Market Cap: S$210.0m 
  • Close Date: 18 Apr 2018 at 12.00 noon 
  • Share Trading: 20 Apr 2018 at 9.00 a.m.
  • Sponsor, Issue Manager and Placement Agents: SAC Capital Private Limited 



Business 

  • SLB Development Ltd 新联明发展有限公司 (“SLB”) is a diversified property developer across the residential, mixed-use as well as industrial and commercial sectors, and property development projects ranging from small to large scale.
  • SLB has built strong networks of business relationships with other property developers and contractors, and has expanded its presence beyond Singapore to the PRC.


Competitive Strengths 


Established track record undertaking various types of property development 

  • SLB has 17 years of industry experience in Singapore’s property development industry under the Lian Beng Group. It also has a diversified track record across small to large scale, residential, mixed-use, industrial and commercial developments.

Established network of business relationships 

  • SLB has developed an established network of partners to capitalise on suitable market opportunities for future growth.

Experience venturing beyond Singapore 

  • Apart from the Gaobeidian Project in the PRC, the management team has experience exploring markets in the United Kingdom, Australia and Vietnam.


Business Strategies and Outlook

  • Acquires new development sites for land bank SLB intends to continue sourcing for development sites that are favourably located. This allows SLB to capitalise on suitable development opportunities and expand its portfolio.

Expand into overseas property development 

  • SLB has established presence in the PRC and explored markets in the United Kingdom, Australia and Vietnam. SLB intends to source for opportunities to undertake property development projects in Asia-Pacific, Western Europe and North America regions.

Strategic partnerships and joint ventures; venture into hospitality 

  • SLB intends to continue to engage in strategic partnerships and joint ventures to enhance the future growth of its business. It may venture into hospitality developments if suitable opportunities arise.


Prospects 


Improvement in residential, office and retail industry; stabilisation of industrial sector 

  • SLB observes that there is an improvement in the residential, office and retail property development industry and stabilisation of the industrial property development in Singapore.
  • The increase in the price of residential properties is encouraging in light of the upcoming launch of its Group’s Gaobeidian Project in PRC.
  • SLB is exploring potential opportunities for property developments in the UK and Asia Pacific.


Key Risks 


Affected by the political, economic and social conditions 

  • With business presence in Singapore and the PRC, changes in political, economic and social conditions in these jurisdictions may affect business operation.

Ability to obtain necessary licences 

  • Operations and business may be affected if SLB is unable to obtain the necessary certificates or licences required for each property development project.

Exposed to construction risks 

  • Profitability may be affected by factors such as shortage of construction materials, equipment and labour, which may affect the launch and timely completion of property development projects, cost overruns or increased financing costs.

Ability to source for new land sites 

  • SLB may be affected by the availability of suitable land sites, properties for redevelopment, and the fluctuations in their prices.

Fluctuations of land sites and properties value 

  • The values of land sites and properties are subject to various factors, including prevailing market condition, changes in zoning and planning guidelines, and available amenities.

Exposed to foreign exchange transaction risks 

  • SLB’s combined financial statements are denominated in S$ and RMB. Fluctuations in the exchange rates would affect its profitability.


Dividend Policy 

  • The group currently does not have a fixed dividend policy.


SWOT Analysis


Strengths

  • Established track record undertaking various types of property development.
  • Established network of business relationships
  • Experience venturing beyond Singapore.

Weakness

  • Affected by political, economic and social conditions.
  • Ability to source for new land sites.
  • Fluctuations of land sites and properties value.
  • Exposed to foreign exchange transaction risks.

Opportunities

  • Ongoing property development projects in the pipeline
  • Acquires new development sites for land bank
  • Expands into overseas property development
  • Improvement & stabilisation of property development.

Threats

  • Ability to obtain necessary licences.
  • Exposed to construction risks.



SLB Development Ltd IPO Document - link
SLB Development Ltd IPO Product Highlight Sheet - link


DBS Research DBS Vickers | http://www.dbsvickers.com/ 2018-04-16
DBS Vickers SGX Stock Analyst Report NOT RATED Maintain NOT RATED 99998 Same 99998



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