Over the past three decades, King Wan has grown from strength to strength to expand beyond its core Mechanical and Electrical (M&E) business, and successfully ignited new growth engines to propel for greater shareholders’ value.
Through direct investments, the Group now operates in three other business sectors i.e. Vessel Ownership and Chartering, Property Development, and Operation of Workers’ Dormitory.
The Group’s M&E business provides multidisciplined engineering services, such as the design and installation of plumbing and sanitary systems, air-conditioning and mechanical ventilation systems, electrical systems, fire protection and alarm systems, communications and security systems, for the building and construction industry.
Over the years, the Group has consolidated its stature as a market leader as well as a cost-effective, multi-disciplined M&E engineering service provider in Singapore. It has successfully joined hands with reputable contractors, as well as property developers, for M&E projects covering commercial, institutional, educational, residential & industrial market segments.
Armed with a strong track record of successful public and private sectors projects, the Group remains in a very competitive position to augment its business reach and maintain the winning formula in securing new contract tenders in the years ahead.
In the past year, the M&E business has attained a robust 44% growth in revenue to S$95.4 million for the full financial year ended 31 March 2014 (FY2014) as compared to S$66.3 million recorded in the last financial year (FY2013). The surge in revenue was due to a significant increase in the total revenue generated from M&E contracts. This accounted for 96 per cent of the Group’s total turnover in the FY2014. In terms of gross profits, the Group has achieved a significant 17% increase to S$13.34 million in FY2014 from S$11.37 million in FY2013.
As at end of May 2014, King Wan has amassed approximately S$153 million worth of the M&E engineering contracts on hand, with completion dates ranging from years 2014 to 2017. The Group expects the M&E business segment to continue contributing positively to the Group’s results in the next 12 months.
In FY2014 alone, King Wan is proud to have participated in the successful completion of the M&E works for the iconic sports facility, the Singapore Sports Hub, our first foray into a project of such scale. Apart from the Singapore Sports Hub, King Wan has successfully completed commercial projects, such as The Carlton Hotel, and private condominiums including the L’Viv Condominium, The Hamilton, Jean Nouvel Residences and Goodwood Residence.
In its new order book, the Group has not only sustained the contract volume in both private and public residential projects, but also secure an increase in the variety of commercial developments. This clearly demonstrates the Group’s technical competency to undertake commercial projects with a wide array of requirements. The proportion of commercial projects in the Group’s contract portfolio is expected to rise in the short term.
Some of the new M&E projects secured for the residential sector recently include:
Among some of the notable commercial projects secured in the current year
Another component of King Wan’s core services include the provision of mobile chemical lavatories for rental and other ancilliary facilities for construction worksites as well as public and nationwide public events.
With more than 1,000 portable lavatories, King Wan is one of Singapore’s leading players in this business. Our major clients include building contractors, event organisers and tentage operators.
This segment continued to provide a stable income for King Wan with increased revenue of 29 per cent to S$3.72 million. Contributing 4 per cent to the Group’s total revenue, it has offered a steady recurring income stream for the past 18 years.
With ongoing business volume from the building and construction sector, and sports and outdoor entertainment activities in Singapore, the outlook for our portable toilet services is expected to remain steady.
Through direct investments, the Group now operates in three other business portfolio i.e. Vessel Ownership and Chartering, Property Development, and Operation of Workers’ Dormitory.
The Property Development segment engages in the development, marketing and sale of residential and commercial properties in Singapore, China, and Thailand. This is made via investments in associate companies, in partnership with business partners.
In Singapore, the Group’s investments in property developments are spearheaded by Meadows Bright Development Pte Ltd (Meadows Bright) via a 40 per cent stake in the associate company.
Comprising of 420 condominium units, the “Skywoods” is a residential development along Dairy Farm Road which is jointly developed by Meadows Bright and First Shine Properties Pte Ltd, a subsidiary of Hock Lian Seng Holdings Limited. First launched in August 2013, the project is expected to be completed by 2016.
Another ongoing project undertaken by Meadows Bright is “The Starlight Suites”, a 35-storey block comprising 105 freehold apartments located at River Valley Close. First launched in August 2010, the project is scheduled to be completed by mid-2014.
In China, the Group owns a 36.6 per cent stake in Dalian Shicheng Property Development (S) Pte Ltd, which is responsible for its property developments in Dalian. Established in 2004, the company operates a multi-phased mixed development at LuShunKou District in Dalian with a land area of approximately 240,000 square metres.
Being a multi-phased development, the project is now into phase 7 of the project, which will consist of residential as well as shop front units. The last two phases of the development, comprising of commercial areas, will be launched progressively depending on the local market conditions. The Group maintains a positive outlook on the property sector in Dalian because of the competitive land cost it has secured the project. With the LRT beside the development completed in 2014, we expect a steady demand from the targeted mass market of local population.
In Thailand, the Group has invested in the property sector through its 35% stake in the associate company, SI Property Co., Ltd. The associate owns and operates 17,308 square metres of office and commercial building in Liberty Plaza, which is located on Soi Thonglor (Sukhumvit 55) in Bangkok.
Since venturing into the vessel ownership and chartering business in January 2013, the Group made its first purchase in the form of a new Crown 58 ‘Supramax’ Bulk Carrier, named “Hai Jin”. Designed and built to carry dry bulk commodities, the carrier has a deadweight of 58,000 tons and a net tonnage of 19,582 tons. This investment was made through Gold Hyacinth Development Pte Ltd (Gold Hyacinth), a 30 per cent owned associate company held via the Group’s whollyowned subsidiary, Gold Topaz Pte Ltd.
Since the commencement of the maiden time chartering contract in March 2013, this investment has since contributed positively to King Wan’s bottomline in FY2014.
This year, King Wan has entered the growth sector of workers’ dormitory operations via a 19% stake in a consortium which will be involved in the design, development and operations of one of the largest workers’ dormitory projects in Singapore.
The consortium has successfully secured a land tender awarded by the Jurong Town Corporation (“JTC”) that will be developed into a 9,200-bed workers’ dormitory.
Moving into the new business segment in workers’ accommodation has significantly augmented our core business portfolio. Together with our experienced business partners, King Wan is confident that we will be able to make a successful foray into this growth sector and bring about higher value for our shareholders.
The new facility will be developed on a 37,170.5 square metres plot of land located at Tuas South Street, Singapore and has a lease term of 20 years. The site will enable the consortium to design, develop and operate one of the largest workers’ dormitory in Singapore. The dormitory will cater mainly to foreign workers in the marine, process and manufacturing industries. The dormitory is targeted to commence operations by 2016.
This purpose-built dormitory will be self-sufficient to meet the needs of its residents and will be outfitted with comprehensive communal facilities, which will include games rooms, TV rooms, multi-purpose halls, gymnasiums, reading rooms, a fitness corner, basketball courts, cricket fields, free Wi-Fi access at communal areas as well as sickbays and postal services. It will also have commercial facilities such as minimart, canteen, barber shop, beer garden and ATM.
The new facility will be conveniently located opposite one of the four planned recreation centres by the government for foreign workers, which is expected to be ready by end 2015.
As at the end of 2013, there were approximately 771,100 work permit holders in Singapore, a 3.9% increase from 742, 500 as at the end of 2012. The Group expects the growth in demand for foreign labour to be supported by the promising outlook for Singapore’s offshore and marine industries as well as strong demand for public sector projects.
As such, the demand for quality purpose built accommodation for these workers is expected to remain robust.
As a result of divesting its 20 per cent shares in both Environment Pulp and Paper Company Limited (EPPCO) and Ekarat Pattana Company Limited (EPC) on 25 April 2012, King Wan received THB 1,224 billion (approximately S$50.2 million), of which 5% in cash and the rest in listed Kaset Thai International Sugar Corporation Public Company Limited’s (KTIS) shares.
Based on the Sales & Purchase Agreement signed in 2012 (“SPA”), the Group now holds approximately 3.01% of KTIS issued common shares after the IPO, which is worth approximately S$45.4 million when it was listed on the Stock Exchange of Thailand (SET) on 28 April 2014. The net profits accruing from the completion of the SPA is approximately S$24 million.
With the expected returns from the KTIS, we will be in a strong position to explore more strategic investments that will add value to shareholders. We will continue to deepen our reach in the markets we are operating in and explore opportunities in other geographical markets and business segments.