SUMMARY. The following table sets out the revenue by the types of services we offered during the Track Record Period: S$ % S$ % S$ % S$ % (unaudited)

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1 This summary aims to give you an overview of the information contained in this document and should be read in conjunction with the full text of this document. As this is only a summary, it does not contain all the information that may be important to you. You should read this document in its entirety before you decide to invest in the [REDACTED]. LR14.08(7)(a) There are risks associated with any investment. Some of the particular risks in investing in the [REDACTED] are set out in the section headed Risk Factors in this document. You should read that section carefully before you decide to invest in the [REDACTED]. Various expressions used in this section are defined or explained in the sections headed Definitions and Glossary of Technical Terms in this document. OVERVIEW We are a port logistics services provider specialising in handling of out-of-gauge containers and un-containerised cargoes in Singapore. During the Track Record Period, we hold licenses which permit us to operate in three business segments, namely Land Transportation Services, Stevedoring Services and Ship Husbandry Services, in the Ports managed by the Port Operator (which comprise four out of the Six Major Ports in Singapore), namely Keppel Terminal, Brani Terminal, Pasir Panjang Terminal, and Tanjong Pagar Terminal. Our business is built on a customer-oriented culture and we focus on establishing relationships with world-renowned and reputable container shipping operators who strive to provide flexible, reliable and timely services. With our proven track record in the port logistics business specialising in handling of out-of-gauge containers and un-containerised cargoes in Singapore, we have established a broad customer base comprising customers who are world-renowned and reputable container shipping operators, including Customer A, Customer B and Customer D. For details of our five largest customers during the Track Record Period, please refer to the section headed Business Customers Top five customers in this document. The following table sets out the revenue by the types of services we offered during the Track Record Period: For the year ended 31 December For the ten months ended 31 October S$ % S$ % S$ % S$ % (unaudited) Land Transportation Services... 3,805, ,712, ,770, ,109, Stevedoring Services 2,198, ,402, ,958, ,149, Ship Husbandry Services , , , , Total... 6,586, ,553, ,128, ,476,

2 OUR CUSTOMERS AND SUPPLIERS Customers Our Group s customers are primarily world-renowned and reputable container shipping operators with operations spread across many countries. During the Track Record Period, our top five customers in aggregate accounted for approximately 66.7%, 65.8% and 72.7% of our total revenue in FY2015, FY2016 and the ten months ended 31 October 2017, respectively, and our largest customer for each of FY2015, FY2016 and the ten months ended 31 October 2017 accounted for approximately S$2,471,825, S$3,104,251 and S$2,552,445, respectively, representing approximately 37.5%, 41.1% and 39.4% of the revenue of our Group, respectively. Our pricing policy takes into account various factors and some of the material factors include: (i) type of services required; (ii) prevailing market rates offered by other port logistics service providers; (iii) cost analysis taking into account potential increase in wages and fees for any third party service provider; and (iv) length of business relationships. For details, please refer to the section headed Business Customers in this document. Suppliers Our Group s suppliers are mainly providers of equipment and vehicles, including trailers, cranes and forklifts, contractors for salvage and reworking operations and the Port Operator. During the Track Record Period, fees payable to our top five suppliers in aggregate accounted for approximately 31.9%, 39.6% and 31.5% of our total cost of services rendered in FY2015, FY2016 and the ten months ended 31 October 2017, respectively. In each of FY2015, FY2016 and the ten months ended 31 October 2017, our largest supplier accounted for approximately 18.5%, 17.0% and 13.1% of our total cost of services rendered, respectively. For details, please refer to the section headed Business Suppliers in this document. OUR COMPETITIVE STRENGTHS We believe that we possess the following competitive strengths: (i) (ii) We ranked first in terms of volume in each of the land transshipment of out-of-gauge containers services market and the stevedoring of un-containerised cargoes services market as a port logistics services provider in Singapore; Our emphasis on safety and quality services has established a track record and reputation in the industry; (iii) We maintain a stable customer base and have established continuing relationships with our customers as well as with the Port Operator; (iv) We maintain a fleet of specialised equipment and vehicles; and 2

3 (v) We have an experienced and capable management team with in-depth technical background and comprehensive knowledge and experience in the industry; For details, please refer to the section headed Business Competitive strengths in this document. OUR STRATEGIES We aim to strengthen our position as logistics services provider specialising in handling of out-of-gauge containers and un-containerised cargoes in Singapore. To achieve this, we intend to focus on the following strategies: (i) Acquisition of land to secure long-term and stable storage and parking space for our equipment and vehicles and for office use; (ii) Expanding our capacity to capture attractive growth opportunities; and (iii) Continuing to attract and retain talented and experienced personnel. For details, please refer to the section headed Business Business strategies in this document. HIGHLIGHTS OF RISK FACTORS We believe that there are certain risks involved in our operations, many of which are beyond our control. These risks can be categorised into: (i) risks relating to our business; (ii) risks relating to the shipping industry in Singapore; and (iii) risks relating to the [REDACTED]. We believe the followings are some of the major risks that may have a material adverse effect on us: The Group s top five customers and the largest customer accounted for a major portion of our revenue; The operation of our Group s business requires access and permits granted by the Port Operator; We did not secure fixed long-term service contracts with our customers including our major customers; We are dependent on the business performance of our major customers; Our success significantly relies on key management and operational personnel and our ability to attract and retain additional qualified management and operational staff; and Labour shortages and increases in labour costs. 3

4 OUR SHAREHOLDING STRUCTURE Immediately following the completion of the [REDACTED] and the Capitalisation Issue (without taking into account any Shares which may be allotted and issued pursuant to the exercise of the [REDACTED] or any options to be granted under the Share Option Scheme), Alpha and Joy Luck will be interested in approximately [REDACTED]% and [REDACTED]% of the issued Shares, respectively. Each of Alpha and Joy Luck is wholly owned by Ms. Sim and Mr. Lin, respectively. KEY FINANCIAL DATA The table below sets out our combined statements of comprehensive income for the years/periods indicated: For the ten months For the year ended 31 December ended 31 October S$ S$ S$ S$ (unaudited) Revenue... 6,586,987 7,553,670 6,128,453 6,476,133 Cost of services rendered... (4,011,377) (4,108,909) (3,391,711) (3,577,263) Gross profit... 2,575,610 3,444,761 2,736,742 2,898,870 Other income... 2,280 12,392 7,016 14,700 Administrative expenses... (1,150,448) (1,144,236) (964,421) 914,126 Other operating expenses, net... (191,151) (91,708) (90,873) (1,921,830) Finance costs... (9,397) (12,332) (9,641) (19,505) Profit before income tax... 1,226,894 2,208,877 1,678,823 58,109 Income tax... (113,921) (282,620) (206,338) (276,964) Profit for the year/period and total comprehensive income for the year/period attributable to shareholders of the Company... 1,112,973 1,926,257 1,472,485 (218,855) Adjusted profit for the year/period and total comprehensive income for the year/period attributable to shareholders of the Company... 1,112,973 1,926,257 1,472,485 1,582,081 (Note) Note: Our profit for the year/period and total comprehensive income for the year/period attributable to shareholders of the Company in the event that the [REDACTED] expenses are excluded. 4

5 For more details, please refer to the section headed Financial information Results of operations in this document. The table below sets out a breakdown of the gross profit and gross profit margin of our Group for the years/periods indicated: Year ended 31 December For the ten months ended 31 October Gross profit margin % S$ Gross profit margin % S$ Gross profit margin % S$ Gross profit margin % S$ (unaudited) Gross profit and gross profit margin... 2,575, ,444, ,736, ,898, Land Transportation Services... 1,479, ,288, ,768, ,841, Stevedoring Services , ,021, , ,047, Ship Husbandry Services , , , , For FY2015, FY2016 and the ten months ended 31 October 2017, our gross profit was S$2,575,610 and S$3,444,761 and S$2,898,870 respectively, and our gross profit margin was approximately 39.1%, 45.6% and 44.8%, respectively. During the Track Record Period, the containers handled by us in our Land Transportation Services comprised 20-foot containers and 40-foot containers. As illustrated in the tables in the sub-section headed Results of operations Number of jobs/containers and average prices in the section headed Financial Information in this document, the average prices of 40-foot containers handled by us during the Track Record Period were higher than the average prices of 20-foot containers during such two financial years. The average price charged by us for handling 40-foot containers increased from approximately S$567 in FY2015 to approximately S$634 in FY2016, representing an increase of approximately 11.8%; and decreased from approximately S$621 for the ten months ended 31 October 2016 to approximately S$536 for the ten months ended 31 October 2017, representing a decrease of approximately 13.7%. Amongst all the containers handled by us in our Land Transportation Services, the proportion of 40-foot containers increased in FY2016 compared with FY2015; whereas the proportion of 20-foot containers increased for the ten months ended 31 October 2017 compared to that for the corresponding period in The proportion of 40-foot containers handled by us in our Land Transportation Services increased from approximately 57.5% in FY2015 to approximately 68.2% in FY2016; whilst the proportion of 20-foot containers handled by us in our Land Transportation Services increased from approximately 31.2% for the ten months ended 31 SFC 1st Q2(a) 5

6 October 2016 to approximately 33.0% for the ten months ended 31 October As a result, while the total number of containers handled by us and the costs of services rendered in relation to Land Transportation Services in FY2015 and FY2016 remained relatively stable, the overall revenue derived from our Land Transportation Services increased in FY2016 compared to FY2015, which was the main driver for the increase in overall gross profit recorded in FY2016. The increase in overall gross profit recorded for FY2016 was mainly due to the increase in gross profit recorded in our Land Transportation Services which in turn was due to the significant increase in revenue derived from this segment, with the cost of services rendered for this segment remaining largely stable. The increase in overall gross profit recorded for the ten months ended 31 October 2017 was mainly due to the net effect of (i) the increase in gross profit recorded in our Stevedoring Services due to complexity of jobs; and (ii) increase in the number of containers handled by our Group in the Land Transportation Services segment while the cost of services rendered for this segment remained largely stable, and (iii) offset by the decrease in gross profit recorded in our Ship Husbandry Services due to one of our ship husbandry customers went into financial difficulty in FY 2016 and cessation of engagement for our ship husbandry services from one of our customers since March The increase in gross profit margin recorded in FY2016 of approximately 6.5% compared to that recorded in FY2015 was mainly attributable to the fact that the gross profit recorded in our Land Transportation Services in FY2016 increased at a quicker rate than the increase in revenue recorded in the same segment in the same period. In FY2016, gross profit in our Land Transportation Services increased at a rate of approximately 54.7% while revenue derived from our Land Transportation Services increased at a rate of approximately 23.9%. SFC 1st Q2(a) With respect to the ten months ended 31 October 2017, the overall gross profit margin has improved by approximately 0.1% compared to that for the corresponding period in Such improvement was mainly attributable to the increase in our gross profit margin in our Stevedoring Services for the ten months ended 31 October 2017 which was driven by the increase in number of jobs, offset by the fact that the gross profit recorded in our Land Transportation Services for the ten months ended 31 October 2017 increased at a slower rate than the increase in revenue recorded in the same segment in the same period. During the period, gross profit in our Land Transportation Services increased at a rate of approximately 4.1% while revenue derived from our Land Transportation Services increased at a rate of approximately 9.0%. 6

7 The following table sets out our combined statements of financial position as at the dates indicated: As at 31 December As at 31 October SG$ SG$ SG$ Non-current assets... 3,018,940 3,730,123 4,822,802 Current assets... 2,493,366 3,918,247 3,519,445 Current liabilities ,740 1,237,832 1,885,040 Non-current liabilities , , ,246 Net assets... 4,399,557 5,925,814 5,706,961 The following table sets out a selected summary of our combined cash flow statements for the years/periods indicated: For the ten months ended For the year ended 31 December 31 October S$ S$ S$ S$ (unaudited) Net cash flows from/(used in) operating activities... 1,700,388 2,320,321 1,629, ,293 Net cash flows used in investing activities... (388,535) (544,768) (426,394) (459,920) Net cash flows used in financing activities... (650,267) (715,499) (657,759) (459,435) Net increase/(decrease) in cash and cash equivalents ,586 1,060, ,521 (661,062) Cash and cash equivalents at beginning of the year/period ,534 1,289,120 1,289,120 2,349,174 Cash and cash equivalents at end of the year/period... 1,289,120 2,349,174 1,834,641 1,688,112 7

8 KEY FINANCIAL RATIOS The following table sets forth the key financial ratios of our Group during the Track Record Period: As at 31 December As at 31 October Current ratio (1) Gearing ratio (2) % 10.8% 19.8% Debt to equity ratio (3)... Net Cash Net Cash Net Cash For the ten months ended For the year ended 31 December 31 October Return on asset ratio (4) % 25.2% 21.0% (2.6%) Adjusted return on asset ratio (8) % 25.2% 21.0% 19.0% Return on equity ratio (5) % 32.5% 26.9% (3.8%) Adjusted return on equity ratio (8) % 32.5% 26.9% 27.7% Net profit margin (6) % 25.5% 24.0% (3.4%) Adjusted net profit margin (8) % 25.5% 24.0% 24.4% Interest coverage ratio (7) Adjusted interest coverage ratio (8) Notes: 1. Current ratio is calculated by dividing current assets by current liabilities as at the respective year-end date. 2. Gearing ratio is calculated by dividing total debts being the total finance leases obligations by total equity as at the respective year-end/period-end date. 3. Debt to equity ratio is calculated by dividing net debts (being the total finance leases obligations less cash and bank balances) by total equity as at the respective year-end/period-end date. 4. Return on total assets ratio is calculated by dividing profit for the year/period by the total assets as at the respective year-end/period-end date. 5. Return on equity ratio is calculated by dividing profit for the year/period by the total equity as at the respective year-end/period-end date. 6. Net profit margin is calculated by dividing profit for the year/period by the total revenue for the corresponding year/period. 7. Interest coverage ratio is calculated by dividing profit before interest and tax by the finance cost for the corresponding year/period. 8. The adjusted financial ratio of our Group in the event that the [REDACTED] expenses are excluded. Our Group s current ratios were approximately 3.5, 3.2 and 1.9 as at 31 December 2015, 2016 and 31 October 2017, respectively. 8

9 The decrease in our current ratio from approximately 3.5 as at 31 December 2015 to approximately 3.2 as at 31 December 2016 was primarily due to increase in current liabilities. Current assets as at 31 December 2016 of S$3,918,247 increased by approximately 57.1% compared with the current assets of S$2,493,366 as at 31 December 2015, whereas current liabilities as at 31 December 2016 of S$1,237,832 increased by approximately 71.5% compared with current liabilities of S$721,740 as at 31 December The increase in current assets was primarily due to the increase in cash and bank balances and trade receivables resulted from the increase in revenue which were partially offset by a decrease in amounts of prepayments, deposits and other receivables. The increase in current liabilities was primarily due to the increase in trade payables, other payables and accruals, finance lease payables and income tax payable, as a result of the increase in revenue and corresponding increase in cost of services rendered. The decrease in our current ratio from approximately 3.2 as at 31 December 2016 to approximately 1.9 as at 31 October 2017 was primarily due to decrease in cash and bank balances which was mainly attributable to the incurring of [REDACTED] expenses of S$[REDACTED] for the ten months ended 31 October Our gearing ratio as at 31 December 2015 and 2016 was approximately 9.9% and 10.8% respectively which is stable. Our gearing ratio increased from 10.8% as at 31 December 2016 to 19.8% as at 31 October Such increase was mainly attributable to the increase in finance loan payables during the period due to purchase of more equipment. For further details, please refer to the section headed Financial information Analysis on key financial ratios in this document. RECENT DEVELOPMENT SUBSEQUENT TO THE TRACK RECORD PERIOD The business operations of our Group experienced a slowdown in the third quarter of 2017 where our average monthly revenue decreased by 28.6% from approximately S$0.7 million for the six months ended 30 June 2017 to approximately S$0.5 million for the three months ended 30 September Such decrease in average monthly revenue was mainly attributable to the decrease in revenue derived from our largest customer, Customer A, who suffered from cyber attack in or around June 2017 which caused it problems processing orders and delaying cargoes. According to Frost & Sullivan, the cyber attack has forced Customer A to shut down its IT system across multiple sites and several business units for a certain period of time, which also had an impact on its systems. Consequently, Customer A was unable to place job orders with our Group. The financial loss caused by the cyber attack is approximately USD300 million and had a negative impact on Customer A s third quarter s financial results. The impact on our Group s revenue derived from Customer A in the third quarter of 2017 was substantial, causing temporary loss in revenue in the third quarter. 9

10 As at the Latest Practicable Date, as Customer A gradually recovered from the aforementioned cyber attack, our Group has recorded an increase in the overall revenue derived from Customer A for FY2017 as compared to that for FT2016. For risks relating to business with our largest customer, please refer to the paragraph headed Risks relating to our business The Group s top five customers and the largest customer accounted for a major portion of the Group s revenue and we are dependent on these customers and their business performance in the section headed Risk factors in this document. Our Directors confirmed that, up to the date of this document, the decrease in average monthly revenue and gross profit caused by decrease in revenue from Customer A as a result of cyber attack is under control. Save as disclosed above, our Directors confirmed that there had been no material adverse change in the financial position of our Group since 31 October 2017, being the end of the Track Record Period. In addition to transshipment of out-of-gauge containers and transportation of loose cargoes / containers and handling of un-containerised cargoes, in order to strengthen our market position in Singapore and capture the business opportunities in the industry, since November 2017, our Company collaborated with Customer C which is a transportation and logistics company with operations in road, rail, sea, air and warehousing and is also one of our five largest customers FY2016 and for the ten months ended 31 October 2017, by participating in the expansion of their door-to-door transportation services between Singapore and Batam. Through such collaboration, we supply prime movers and drivers and Customer C supplies trailers and together we transport containers to and from the Jurong Port in Singapore. Customer C has indicated demand for the aforementioned service involving approximately 3,000 TEUs per month. As such, in order to ascertain the feasibility and profitability of the intended business collaboration, in April 2017, we have commenced a trial run to serve Customer C by providing the service at a fraction of quantity of the indicative demand at an agreed price. Thereafter, we assessed the potential business collaboration with Customer C. As regards the trial run conducted from April to October 2017, our Group is responsible for providing prime movers and drivers for the transportation of empty containers from Customer C s customers in Singapore to the Jurong Port which are then shipped to Batam for stuffing, which refers to loading of cargoes into empty containers. Under the arrangement, Customer C provides the chassis or trailers while our drivers deliver the containers to be rolled-on to the vessels together with the chassis or trailers. The agreed price per single trip for 20-foot and 40-foot containers for the purpose of the trial run was S$50.0 and S$60.0 respectively; and that per round trip for 20-foot and 40-foot containers was S$100.0 and S$120.0 respectively. No minimum order was set or placed by Customer C for the trial run. SFC 1 st Q3 Subsequent to the trial run, our Group continued the abovementioned collaboration with Customer C in view of (i) profitability of such collaboration; and (ii) maintaining our business relationship with Customer C, who is one of our five largest customers in FY2016 and the ten months ended 31 October

11 For risks relating to the business involved in respect of our collaboration with Customer C, please refer to the paragraph headed Risks relating to our business in the section headed Risk factors in this document. USE OF [REDACTED] The net [REDACTED] from the [REDACTED] (after deducting the estimated expenses of HK$[REDACTED] in connection with the [REDACTED]) will be approximately HK$[REDACTED] based on the [REDACTED] of HK$[REDACTED] per [REDACTED] (being the mid-point of the indicative [REDACTED] range), assuming that the [REDACTED] is not exercised. We currently intend to apply such net [REDACTED] as follows: approximately [REDACTED]% of the net [REDACTED], or approximately HK$[REDACTED], for the [acquisition and renovation of a new yard to secure long term and stable storage and parking space for our Group for parking and storage of its equipment and vehicles]; approximately [REDACTED]% of the net [REDACTED], or approximately HK$[REDACTED], for the [acquisition of vehicles and/or equipment to increase capacity and enhance our efficiency to capture growth opportunities]; approximately [REDACTED]% of the net [REDACTED], or approximately HK$[REDACTED], for the [recruitment and maintenance of salary of additional personnel to strengthen our manpower to execute our works for customer]; the balance of approximately [REDACTED]% of the net [REDACTED], or approximately HK$[REDACTED], for use as our general working capital and other general corporate purposes. For more details, please refer to the section headed Future plans and use of [REDACTED] in this document. OFFERING STATISTICS STATISTICS OF THE [REDACTED] [REDACTED] 11

12 DIVIDENDS SEHK lst Q10(ii) For FY2015 and FY2016, our Group declared dividends of S$300,000 and S$400,000 respectively; and no dividends were declared for the ten months ended 31 October Subsequent to the end of the reporting period, no interim dividends have been proposed by our Directors. Our Company currently does not have any fixed dividend policy and does not have any predetermined dividend ratio. Dividends may be paid out by way of cash or by other means that our Directors consider appropriate. Declaration and payment of any dividends would require the recommendation of our Board and will be at its discretion. NON-COMPLIANCE To the best knowledge and belief of our Directors, our Group s operation in Singapore has complied with the relevant laws and regulations in all material respects during the Track Record Period and up to the Latest Practicable Date. SEHK lst Q3(iii) NO MATERIAL ADVERSE CHANGE Save as disclosed in the paragraph headed Recent developments subsequent to the Track Record Period in this section, our Directors confirm that there has been no material adverse change in our financial or trading position or prospects since 31 October 2017, being the date of our last audited financial statements as set out in Appendix I to this document, up to the date of this document. PROFIT ESTIMATE FOR THE YEAR ENDED 31 DECEMBER 2017 Estimated combined profit attributable to shareholders of the Company for the year ended 31 December 2017 (Note 1, 2).... notless than S$54,500 (approximately HK$307,925) Notes: (1) The bases on which the above profit estimate has been prepared are summarised in Appendix III to this document. The Directors have prepared the estimated combined profit attributable to shareholders of the Company for the year ended 31 December 2017 based on the audited combined results for the ten months ended 31 October 2017 and the unaudited combined results based on management accounts of our Group for two months ended 31 December (2) The estimated combined profit attributable to shareholders of the Company is converted into HK$ at the exchange rate of S$1.00 to HK$