Company Update: Ever Glory United Holdings Ltd.
Company Update: 21 March 2024
Powering progress
- Ever Glory United Holdings Limited and its subsidiaries are primarily engaged in the provision of mechanical and electrical (M&E) engineering services.
- Ever Glory United experienced significant growth in FY23. Revenue jumped 69.7% YoY due to an increase in M&E projects and a focus on securing higher-margin contracts. This led to a substantial rise in gross profit and a significant improvement in gross profit margin to 23.1%. To maintain profitability in the face of inflation, the company is closely monitoring project costs.
- Following pandemic-related delays between FY19 and FY22, Singapore’s public housing program saw a major upswing in FY23 to address the high demand for housing. This surge in HDB Build-To-Order projects significantly contributed to the strong performance of the construction industry in FY23.
FY23 financial results.
Ever Glory reported impressive revenue growth of 69.7% YoY to S$47.48mn in FY23, compared to S$27.98mn in FY22. This surge is attributed to an increase in undertaken M&E projects and a focus on higher-margin contracts. Gross profit also saw a significant leap of S$8.06mn (approximately 279.0% YoY) from S$2.89mn in FY22 to S$10.95mn in FY23. The company’s profitability is impacted by factors like project costs and execution efficiency.
Recent acquisitons
On 7 February 2024, Ever Glory completed its first acquisition since its IPO – Fire-Guard Engineering Pte Ltd, a specialist fire protection subcontractor. This S$5.6mn acquisition, financed through internal resources and potential share issuance, complements its existing M&E services. Fire-Guard’s expertise is expected to enhance cost efficiency, expand its network, and position it for larger projects. The financial impact will be reflected in the upcoming results for the six months ending 30 June 2024.
Risks
- Business and financial performance are dependent on the state of Singapore’s M&E demand.
- Government initiatives and incentives relating to the construction industry, that may have a material adverse effect on the business and prospects.
- Revenues and profits may fluctuate with changes in ongoing tenders and orderbook.
- Inflation impact results in high material costs.
- Ever Glory United does not have long-term contracts with customers.
