The Singapore research team at UOB Kay Hian is positive on Catalist-listed Alpina Holdings’ prospects.
In an unrated report dated March 16, the team has noted the company’s strong orderbook of $151 million as at Dec 31, 2021, with the company continuing to proactively tender for new contracts.
According to the UOB Kay Hian team, Alpina’s projects mostly comprise maintenance works in Singapore’s public sector projects, which are recurring in nature.
In addition, the company’s customers are “good paymasters” which include ministries and statutory boards under the Singapore government, notes the team.
Furthermore, the company seeks to win more contracts in the space of enhanced facility management solutions. The sector should see heightened demand as more building facilities in Singapore are aging and require better care.
There are also rising needs for customised and integrated solutions in redeveloped buildings, adds the team at UOB Kay Hian.
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“Alpina has extended its scope of services and obtained registration of the FM01 (Facilities Management) Workhead – Grade M3 in 2020. On the other hand, Alpina is on the lookout for acquisitions (in the areas of cleaning services, landscape services, security services and pest control services, etc) to accelerate the extension of its integrated facilities management (IFM) services to enhance its value propositions to customers and boost its revenue streams,” it notes.
Alpina is an established local-based contractor that provides integrated building services (IBS), mechanical and electrical (M&E) engineering services, as well as alteration and addition (A&A) works.
The company launched its initial public offering (IPO) on the Catalist Board of the Singapore Exchange (SGX) in January 2022. Its shares opened on a “ready” basis on Jan 28.
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To the team, Alpina is currently trading at an annualised P/E of 6x for the FY2021, which is deemed attractive.
While the company does not have a fixed dividend policy at present, it has indicated in its prospectus, that it intends to distribute dividends of a minimum of 50% of its earnings for FY2022 and FY2023.
To this end, near-term key catalysts include Alpina's stellar performance for the 2HFY2021.
“If Alpina delivers a good set of financial results for 2021, this will reinforce the merits of its business model and build a better track record for the company, which could be a boost in market confidence,” writes the team.
“Annualising 1HFY2021 earnings of $4.1 million and deducting listing expenses of an estimated $1.2 million will result in 2021 earnings of $7.0 million, representing a 40% y-o-y growth from 2020’s earnings of $5.0 million,” it adds.
“To recap, Alpina has delayed the release of its 2021 financial results from February to around May due to a delay in the auditing process, as most of the resources have been directed to the IPO process.”
The winning of more contacts, as well as the successful acquisition of synergistic businesses that are accretive to Alpina’s earnings, are also key catalysts to the company.
Shares in Alpina closed 1.5 cents lower or 6.82% down at 20.5 cents on March 16.
Photo: Alpina Holdings
