Key dates:
Public offering deadline: July 5, 2017 at 12:00 p.m.
Public Notice Application Results: July 14, 2017
Listing date: July 17, 2017
Recommended person for exclusive insurance:
Kai Financial Asia Ltd
Statistical data summary:
Number of shares offered in the global offering: 128,000,000 shares
Share of shares offered in Hong Kong: 10.0%
Offer Price: HK$0.80 to HK$1.00
Estimated amount raised: 102.4 million to HK$128 million
Admission fee per lot: HK$4,040.31
Group Overview
The Group is a construction company founded in 1999 to mainly provide foundation works and ancillary services, as well as general construction works in Hong Kong. Foundation engineering mainly includes miniature impact drilling and rock-embedded steel grounding; supporting services mainly include ground leveling and demolition work; general construction projects mainly include structural remodeling and addition projects, development of entire housing and writing buildings, etc.
In terms of ground works, the Group acts as the general contractor or subcontractor for the foundation project. As the chief contractor, the group is responsible for the core work process of the foundation project and the overall management of the foundation project, which involves appointing subcontractors to carry out other related foundation works. As a subcontractor, the Group undertakes a specific portion of the ground works assigned by the Chief Contractor. In terms of general construction projects, the Group generally acts as the general contractor for general construction projects and focuses on the overall management of general construction projects.
Industry Overview
According to the Insights Advisory Report, the total output value of ground works carried out by chief contractors in Hong Kong increased from HK$16.8 billion in 2012 to HK$17.3 billion in 2016, with a compound annual growth rate of 0.6%. The report predicts that the total output value of foundation works carried out by the chief contractor in Hong Kong will reach HK$24 billion in 2021, with a compound annual growth rate of 6.8% from 2016 to 2021.
Dangerous
Most of the Group's revenue comes from contracts obtained through competitive bidding, which are non-recurring in nature. In the three years from 2014 to 2016, construction contracts directly obtained by the Group through customers accounted for only about 13.2% of revenue. Whether a group successfully wins a bid depends on a number of factors, including pricing and other terms provided by its competitors. The Group cannot guarantee that it will successfully win bids in the future or that existing customers will be awarded new contracts to the Group. If the Group fails to maintain the quality of the contract or continues to obtain new projects, the Group's operating performance may be significantly adversely affected.
valuations
According to the prospectus, it is assumed that the global sale has been completed on December 31, 2016, and that 512 million shares will be issued according to the forecast after the share sale is completed. Shareholders should account for unaudited accounts, adjustments, and merged net worth ranges from HK$196 million to HK$220 million, equivalent to unaudited notes and adjusted net worth of tangible assets of HK$0.38 to HK$0.43 million per share.