Huationg Global

Huationg Global: Civil engineering firm, Huationg Global, opened at $0.24, 20% above its offer price of $0.20, recording a stellar trading debut. The invitation, comprising of 27.5m new shares (18.2% of enlarged share capital), was carried out by PrimePartners Corporate Finance. Huationg intends to use the net proceeds of $4.1m to take on more infrastructure projects, with allocations into working capital ($1.6m), expansion through M&As, joint ventures and strategic alliances ($1.5m), as well as to boost production capabilities for liquefied soil stabiliser ($1m). Huationg is a major player in the earthworks segment of the civil engineering field, which also provides the inland logistics support, sale of construction materials, including the manufacture and supply of liquefied soil stabiliser and sale of recycled concrete aggregate. In Singapore, Huationg was involved in the completion for numerous large infrastructural construction projects, which includes stage 3 of the Downtown Line MRT, certain Circle Line MRT stations and highways - KPE and MCE. Currently, Huationg has 15 ongoing projects, amounting to an order book of $114.3m, expected to be recognized over the next 1-3 years. These include the construction of new HDB flats in Tampines and the Loyang Bus Depot. Huationg has a BCA A2 grading, which limits tender bids up to $90m. The company aims to boost its grading to A1. The civil engineering segment contributed 73.4% of its top line in FY13, while the remaining from its recurring equipment rental business. Going forward, growth will be underpinned by the rising demand for civil engineering works, on the back of the expanding MRT network and new North-South Expressway. At $0.23, Huationg trades at 7.1x FY13 P/E, compared to its larger construction & civil engineering peers Yongnam (loss-making) and Tiong Woon (6.6x).