Advancer Global listed on the Catalist board on 11 July 2016 at an IPO price of S$0.22 per share. It has done well since, trading at 42 cents recently.
Excerpts from analyst's report
DBS Vickers analyst: Ling Lee Keng
 Advancer Global's Executive Chairman Desmond Chin receives a congratulatory banner from lion dancer at its IPO ceremony in July 2016. Next to him is Francis Chin, head of employment services at Advancer Global. Photo: SGX
Defensive Business
Growth strategies include acquiring niche business and moving up the value chain to improve profitability. The facilities management services segment, which include cleaning & stewarding and security services, is a very fragmented market with numerous small players, which is ideal for bigger players like Advancer Global to make acquisitions to consolidate its position. The recent acquisition of a security training and technology consultancy firm enables the group to scale up to the higher margins security services.
Asset-light; positive cashflow generation Advancer Global’s total non-current assets account for only about 10% of total assets as at end-Jun 16. The positive cashflow trend in the past few years is expected to continue; thus enabling the group to support an expected 50% dividend payout for the next few years. |
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| ♦ Fair value of 50c at 15x FY17F PE |
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The valuation is based on a slight 10% discount to Denmark-listed ISS's FY17F valuation, given its smaller size.
-- Ling Lee Keng, |
We believe a 15x FY17F PE valuation is fair, as Advancer Global is one of the bigger facilities management services providers here.Defensive business
Listed on the Catalist board on 11 July 2016 at an IPO price of S$0.22 per share, Advancer Global is in a fairly defensive business of offering necessity services, including workforce solutions, cleaning & stewarding and security services.
- Employment Services Business
Provision of one-stop shop services for the sourcing, employment and training of foreign domestic workers (FDWs) to households, as well as the sourcing and employment of foreign workers to, among others, corporations and organisations. Its FDW employment business is primarily carried out by Nation Employment, with seven outlets in Singapore. - Cleaning & Stewarding Business
Provision of integrated cleaning and stewarding solutions and services to, among others, hospitals, hotels, commercial and residential properties, as well as pest control services. - Security Services Business
Provision of manpower for security solutions and services to, among others, commercial, industrial and residential properties, as well as security escort services.
Key risks: Affected by laws, regulations, policies and market forces
Subject to laws, regulations and policies imposed by the government and regulatory authorities in Singapore and in the countries from which the foreign labour originates, which may influence the supply of foreign labour.
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