PO U CTIG LIG TSSEET1 Prepared on: 11 December 2015 EINDEC CORPORATION LIMITED (Company Registration No.: 201508913H) (Incorporated in the Republic of Singapore on 2 April 2015) PLACEMENT OF [•] PLACEMENT SHARES AT S$[•] FOR EACH PLACEMENT SHARE IN EINDEC CORPORATION LIMITED, PAYABLE IN FULL ON APPLICATION Prior to making a decision to purchase the Placement Shares, you should carefully consider all the information contained in the offer document dated [•] 2015 issued by Eindec Corporation Limited in respect of the Placement (the “Offer Document”). This Product Highlights Sheet should be read in conjunction with the Offer Document. You will be subject to various risks and uncertainties, including the potential loss of your entire principal amount invested. If you are in doubt as to investing in the Placement Shares, you should consult your legal, financial, tax or other professional adviser. This Product Highlights Sheet is an important document. • It highlights the key information and risks relating to the offer of the Placeme nt Shares containe d in the Offer Document. It complements the Offer Document 1,2 . • You should not purchase the Placement Shares if you do not understand the nature of an investment in shares in a company, our business or are not comfortable with the accompanying risks. • If you wish to purchase the Placement Shares, you will need to make an application in the manner set out in the Offer Document. If you do not have a copy of the Offer Document, please contact us to ask for one. Issuer Eindec Corporation Limited Place of incorporation Singapore Details of this Placement [•] Placement Shares comprising [•] new Shares Total amount to be raised in this Placement Gross proceeds of approximately S$[•] million and net proceeds of approximately S$[•] million Placement Price S$[•] for each Placement Share Listing status of Issuer and the Securities Acceptance of applications will be conditional upon, inter alia , the issue of the Placement Shares and pe rm is si on be in g gr an te d by th e SG X-ST for th e listing and quotation of all our existing issued Shares, the Placement Shares and the Performance Shares on Catalist. The Shares are expected to be listed on [•]. Issue Manager, Sponsor and Placement Agent UOB Kay Hian Private Limited 1 This Product Highlights Sheet does not constitute or form any part of any offer for sale or subscription of, or solicitation of any offer to buy or subscribe for, any securities nor shall it or any part of it form the basis of, or be relied on in connection with, any contract or commitment whatsoever. The information in this Product Highlights Sheet is based on information found in the preliminary offer document dated 11 December 2015 issued by Eindec Corporation Limited (the “Preliminary Offer Document”), which is subject to further verification, updating, revision, amendments and completion in the final Offer Document. Any decision to subscribe for any securities must be made solely on the basis of information contained in the final Offer Document and which information may be different from that found in the Preliminary Offer Document. 2 The Preliminary Offer Document, lodged by the SGX-ST, acting as agent on behalf of the Authority on 11 December 2015, may be obtained on request, subject to availability, during office hours from UOB Kay Hian Private Limited, or accessible at the SGX-ST website: http://www.sgx.com.
(Incorporated in the Republic of Singapore on 2 April 2015)
PLACEMENT OF [•] PLACEMENT SHARES AT S$[•] FOR EACH PLACEMENTSHARE IN EINDEC CORPORATION LIMITED,
PAYABLE IN FULL ON APPLICATION
Prior to making a decision to purchase the Placement Shares, you should carefully consider all theinformation contained in the offer document dated [•] 2015 issued by Eindec Corporation Limited inrespect of the Placement (the “Offer Document”). This Product Highlights Sheet should be read inconjunction with the Offer Document. You will be subject to various risks and uncertainties, includingthe potential loss of your entire principal amount invested. If you are in doubt as to investing in thePlacement Shares, you should consult your legal, financial, tax or other professional adviser.
This Product Highlights Sheet is an important document.
• It highlights the key information and risks relating to the offer of the Placement Shares contained in
the Offer Document. It complements the Offer Document 1,2 .
• You should not purchase the Placement Shares if you do not understand the nature of an investmentin shares in a company, our business or are not comfortable with the accompanying risks.
• If you wish to purchase the Placement Shares, you will need to make an application in the manner setout in the Offer Document. If you do not have a copy of the Offer Document, please contact us to askfor one.
Issuer Eindec Corporation Limited Place ofincorporation
Singapore
Details of this
Placement
[•] Placement Shares
comprising [•] new Shares
Total amount to
be raised in thisPlacement
Gross proceeds of
approximate ly S$[• ]million and net proceeds ofapproximately S$[•] million
Placement Price S$[•] for each PlacementShare
Listing status ofIssuer and theSecurities
Acceptance of applicationswill be conditional upon,inter alia , the issue ofthe Placement Shares and
permission being granted by the SGX-ST for thelisting and quotation of allour existing issued Shares,the Placement Shares and
the Performance Shares onCatalist. The Shares areexpected to be listed on [•].
Issue Manager,Sponsor andPlacement Agent
UOB Kay Hian PrivateLimited
1 This Product Highlights Sheet does not constitute or form any part of any offer for sale or subscription of, or solicitationof any offer to buy or subscribe for, any securities nor shall it or any part of it form the basis of, or be relied on inconnection with, any contract or commitment whatsoever.
The information in this Product Highlights Sheet is based on information found in the preliminary offer document dated11 December 2015 issued by Eindec Corporation Limited (the “ Preliminary Offer Document ”), which is subjectto further verification, updating, revision, amendments and completion in the final Offer Document. Any decision tosubscribe for any securities must be made solely on the basis of information contained in the final Offer Document and
which information may be different from that found in the Preliminary Offer Document.2 The Preliminary Offer Document, lodged by the SGX-ST, acting as agent on behalf of the Authority on 11 December2015, may be obtained on request, subject to availability, during office hours from UOB Kay Hian Private Limited, oraccessible at the SGX-ST website: http://www.sgx.com.
Our Company was incorporated in Singapore on 2 April 2015 under theCompanies Act as a private limited company, under the name of “EindecCorporation Pte. Ltd.”. Our Company was converted into a public limitedcompany and renamed “Eindec Corporation Limited” in connection therewithon 10 December 2015. Our Company and our subsidiaries (the “ Group ”) area regional clean air environmental and technological solutions group engaged
in the following activities:
(a) Design, manufacture and distribution of clean room equipment
We design, manufacture and distribute a wide range of clean roomequipment such as fan filter units, air showers, clean benches, clean
booths, clean hand dryers, clean supply units and pass boxes. These cleanroom equipment are used to create a clean room environment which isessential in the manufacture and production processes of industries suchas the electronics, pharmaceutical and food processing industries. Mostof our clean room equipment are customised and tailored to cater to theunique specifications of each of our customers.
(b) Design, manufacture and distribution of heating, ventilation and airconditioning (“HVAC”) equipment
We also design, manufacture and distribute a wide range of HVACequipment such as grilles, diffusers, fire dampers and marine dampers.These HVAC equipment consist of deflection grilles and air diffusersinstalled in commercial and industrial buildings which serve to channeland regulate airflow in the environment within a building to ensureeven air distribution. Our HVAC business also includes the design,manufacture and distribution of fire dampers and marine dampers.
(c) Distribution and installation of cooling towers
Our business also includes the distribution and installation of coolingtowers which are an integral and essential feature of any water-chilledcentralised air conditioning system.
(d) Design, manufacture and distributi on of environmental andtechnological solutions products such as air purifiers
We have also ventured into the consumer air purifier market byleveraging on our technological expertise in clean room equipment. In
part icular, we completed the design and prototype of a new line of air purifiers carrying the AJB logo for dist ribution to the consumer market
in the PRC. We plan to sell our AJB brand of air purifier products tocustomers such as appointed local distributors, property developersand corporations for installation in homes and offices for consumerend users, as well as through e-commerce platforms. Once we haveestablished a presence in the consumer market, we also intend to expandour air purifier product range for the commercial and industrial markets.
We have manufacturing facilities in Malaysia and Singapore, with ourFacility in Singapore serving as our corporate headquarters and research anddevelopment centre. We distribute and supply our products to countries in theAsia-Pacific and Middle East regions and have established offices in Malaysia,Singapore and the PRC. We have been awarded the ISO 9002 certificationsince 1996.
Please refer to the sectionsentitled “Offer DocumentSummary” on pages [28]to [31] and “GeneralInformation on Our Group”on pages [92] to [121] of
The structure of our Group as at the date of the Offer Document is as follows:
EindecCorporation
Limited
EindecHoldings
100.0%
100.0%
EindecShenzhen
EindecSingapore
EindecShanghai
EindecMalaysia
100.0%100.0% 100.0%
Kyodo-Allied (Thailand) Co. Ltd. is in the process of being liquidated.
Please refer to the sectionentitled “Group Structure”on pages [64] and [65] formore information on ourgroup structure.
WHO ARE OUR DIRECTORS AND KEY EXECUTIVES?
Our Board of Directors comprise the following individuals:
(a) Zhang Wei (Non-Executive Chairman)
(b) Paul Chia (Executive Director and Chief Executive Officer)(c) See Yen Tarn (Independent Director)
(d) Lawrence Wong (Independent Director)
(e) Jeffrey Ong (Independent Director)
Our Executive Officers are Andy Tan (Group Financial Controller), Eddie Tan(Vice President (Operations and Clean Room Equipment Sales)) and Tang Sin(Vice President (Country Manager, PRC)).
Please refer to the sectionse n t i t l e d “ D i r e c t o r s ,Management and Staff –Directors” and “Directors,Management and Staff
– Executive Officers” on pages [138] to [144] of theOffer Document for moreinformation on our Directorsand Executive Officers.
WHO ARE OUR CONTROLLING SHAREHOLDERS?
Our Controlling Shareholder is Weiye, a company listed on the Main Board ofthe SGX-ST. Prior to the Placement, Weiye holds 100.0% of our Company’stotal issued share capital. Each of Zhang Wei and Chen Zhiyong are deemedto have an interest in the Shares held by Weiye by virtue of their respectiveshareholdings in Weiye by virtue of Section 7 of the Companies Act.
The respective shareholdings of each of Weiye, Zhang Wei and Chen Zhiyongimmediately before and after the Placement are set out below:
Before the Placement After the Placement
Direct Interest Deemed Interest Direct Interest Deemed Interest
Numberof Shares
% Numberof Shares
% Numberof Shares
% Numberof Shares
%
Director
Zhang Wei(1) – – 71,900,000 100.0 – – [•] [•]
ControllingShareholders(other thanDirectors)
Weiye 71,900,000 100.0 – – [•] [•] – –
Chen Zhiyong(2) – – 71,900,000 100.0 – – [•] [•]
Notes:
(1) Zhang Wei is deemed to have an interest in the Shares held by Weiye by
virtue of his 46.4% shareholding in Weiye as at the Latest PracticableDate by virtue of Section 7 of the Companies Act.
(2) Chen Zhiyong is deemed to have an interest in the Shares held by Weiye by virtue of his 20.5% shareholding in Weiye as at the Latest PracticableDate by virtue of Section 7 of the Companies Act.
Please refer to the sectionentitled “Shareholders
– Owners hip St ru ctur e”on page [58] of theOffer Document formore information on ourControlling Shareholder.
Selected items from the combined statements of financial position of our
Group(4)
Audited Unaudited
(S$’000)
As at31 December
2012
As at31 December
2013
As at31 December
2014
As at30 June
2015
Non-current assets 6,072 5,548 5,424 5,443
Current assets 10,938 10,938 11,067 12,442
Total assets 17,010 16,486 16,491 17,885
Non-current liabilities 1,211 992 703 609
Current liabilities 9,656 7,760 6,780 8,043
Total liabilities 10,867 8,752 7,483 8,652
Total equity 6,143 7,734 9,008 9,233
NAV 6,143 7,734 9,008 9,233
NAV per Share(cents) (5)
8.54 10.76 12.53 12.84
Notes:
(1) Our combined statements of comprehensive income for the Period UnderReview have been prepared on the basis that our Group had been inexistence throughout the Period Under Review.
(2) For comparative purposes, pre-Placement EPS for the Period UnderReview has been computed based on the profit for the year/period andour pre-Placement share capital of 71,900,000 Shares.
(3) For comparative purposes, post-Placement EPS for the Period UnderReview has been computed based on the profit for the year/period andour post-Placement share capital of [•] Shares.
(4) Our combined statements of financial position as at 31 December 2012,31 December 2013, 31 December 2014 and 30 June 2015 have been
prepared on the basis that our Group had been in existence on these dates.
(5) The NAV per Share as at 31 December 2012, 31 December 2013,31 December 2014 and 30 June 2015 have been computed based on our
pre-Placement share capital of 71,900,000 Shares.
Please refer to the sectionsentitled “Offer DocumentSummary – FinancialHighlights” on page [30],“Summary of Our FinancialInformation” on pages [66]to [68] and “Management’sDiscussion and Analysisof Results of Operationsand Financial Position” on
pages [69] to [89] of theOffer Document for moreinformation on our financial
Selected items from the combined statements of cash flows of our Group
The following table sets out a breakdown of our cash flows during the PeriodUnder Review:
Audited Unaudited
S$’000 FY2012 FY2013 FY2014 1H2014 1H2015
Net cash generated from/(used in) operating activities
3,005 2,228 1,716 1,446 (204)
Net cash used in investingactivities (12) (132) (1,545) (4) (731)
Net cash used in financingactivities
(1,621) (1,744) (1,664) (1,672) (55)
Net increase/(decrease) incash and cash equivalents
1,372 352 (1,493) (230) (990)
Cash and cash equivalentsat beginning of financial
period
2,879 4,255 4,605 4,605 3,095
Effect of exchange ratefluctuations on cash held
4 (2) (17) (17) 16
Cash and cash equivalentsat end of financial period
4,255 4,605 3,095 4,358 2,121
The most significant factors contributing to our financial performance overFY2014 as compared to FY2013 are as follows:
• Our revenue decreased by approximately S$0.11 million or 0.7% fromapproximately S$14.38 million in FY2013 to approximately S$14.27 millionin FY2014. This was mainly the result of a decrease in revenue from our HVACequipment segment of approximately S$0.35 million due to intense marketcompetition in Singapore, which was partially offset by an increase in revenuefrom our clean room equipment segment of approximately S$0.21 million inFY2014.
• Our cost of sales increased by approximately S$0.51 million or 5.8% fromapproximately S$8.80 million in FY2013 to approximately S$9.31 millionin FY2014. This increase was a result of higher direct materials costs fora particular clean room project undertaken by Eindec Shanghai without acorresponding increase in sales price due to intense market competition in thePRC then; as well as inflationary increases in the costs of direct materials.
• Our gross profit decreased by approximately S$0.61 million or 11.0% fromapproximately S$5.57 million in FY2013 to approximately S$4.96 million inFY2014. Our gross profit margins decreased from approximately 38.8% inFY2013 to approximately 34.8% in FY2014. This decrease was mainly due tostrong competition experienced in both our clean room equipment and HVACequipment business segments during FY2014.
• Other operating income decreased by approximately S$0.01 million or 15.6%from approximately $0.09 million in FY2013 to approximately S$0.08 millionin FY2014. This decrease was mainly due to a reduction of S$0.03 million ingovernment grant income from FY2013 to FY2014.
• Other operating expenses decreased by approximately S$0.17 million or 4.8%from approximately S$3.52 million in FY2013 to approximately S$3.35 millionin FY2014. General and administration expenses decreased by approximatelyS$0.17 million or 4.8% from approximately S$3.49 million in FY2013 toapproximately S$3.32 million in FY2014. This decrease was mainly dueto a decline of approximately S$0.06 million in professional fees and ofapproximately S$0.04 million in entertainment expenses being incurred inFY2014.
• Our finance costs decreased by approximately S$0.08 million or 58.0% fromapproximately S$0.14 million in FY2013 to approximately S$0.06 million inFY2014. This decrease was mainly due to the repayment of term loans duringFY2013.
• As a result of the foregoing, our profit before income tax decreased byapproximately S$0.38 million or 18.9% from approximately S$2.01 million inFY2013 to approximately S$1.63 million in FY2014.
The most significant factors contributing to our financial performance over 1H2015as compared to 1H2014 are as follows:
• Our revenue decreased marginally by approximately S$0.02 million or 0.3%from approximately S$6.62 million in 1H2014 to approximately S$6.60 million
in 1H2015. This was mainly due to a decrease in revenue of approximatelyS$0.47 million from our clean room equipment segment due to intense marketcompetition experienced by Eindec Shanghai in 1H2015, which was partiallyoffset by an increase in revenue of approximately S$0.27 million and S$0.17million from our HVAC equipment and other equipment segments, respectively,largely due to an increase in sales of dampers and cooling towers.
• Our cost of sales increased by approximately S$0.21 million or 5.1% fromapproximately S$4.09 million in 1H2014 to approximately S$4.30 million in1H2015. This increase was mainly due to an increase of approximately S$0.13million and S$0.11 million being incurred on direct materials and direct labourexpenses, respectively, and as a result of different product sales mix between1H2014 and 1H2015.
• Our gross profit decreased by approximately S$0.23 million or 8.9% fromapproximately S$2.53 million in 1H2014 to approximately S$2.30 million in1H2015. Our gross profit margins decreased from approximately 38.2% in1H2014 to approximately 34.9% in 1H2015. This decrease was mainly due to adecrease in the gross profit margin of our HVAC segment, from approximately36.0% in 1H2014 to approximately 31.5% in 1H2015 due to intense marketcompetition.
• Other operating income increased by approximately S$0.02 million or 95.8%from approximately S$0.02 million in 1H2014 to approximately S$0.05 millionin 1H2015. This increase was mainly due to gain on disposal of property, plant
and equipment and increased sale of scrap material.
• Other operating expenses increased by approximately S$0.21 million or 12.1%from approximately S$1.71 million in 1H2014 to approximately S$1.92 millionin 1H2015. This increase was mainly due to increases in statutory CPFcontribution, additional management staff, rental of premises, agent fees,automobile expenses and carriage charges.
• Our finance costs decreased by approximately S$0.03 million or 65.4% fromapproximately S$0.05 million in 1H2014 to approximately S$0.02 million in1H2015. This decrease was mainly due to a repayment of term loans during1H2015.
• As a result of the foregoing, our profit before income tax decreased byapproximately S$0.38 million or 47.5% from approximately S$0.79 million in1H2014 to approximately S$0.42 million in 1H2015.
The above factors are not the only factors contributing to our financialperformance in FY2012, FY2013, FY2014 and 1H2015. Please refer to theother factors set out in “Management’s Discussion and Analysis of Results ofOperations and Financial Position” on pages [69] to [89] of the Offer Document.
WHAT ARE OUR BUSINESS STRATEGIES AND FUTURE PLANS?
Our business strategies and future plans to drive the future growth andexpansion of our business are as follows:
• Establishment of a new business for environmental and technologicalsolutions products in the PRC: We intend to widen our market reachin the PRC for our AJB air purifier products. We have incorporatedEindec Shenzhen and established an office in Shenzhen to undertake thecommercialisation of AJB air purifiers in the PRC. Our office in Shenzhenalso has development capabilities. Our marketing efforts are targeted atincreasing our inroads in the PRC. In addition, we intend to expand our
product range and features for the AJB air purifiers. We plan to sell ourAJB products to customers such as appointed local distributors, propertydevelopers and corporations for installation in homes and offices forconsumer end-users, as well as through e-commerce platforms. Once wehave established a presence in the consumer market in the environmentaland technological solutions sector through our air purifiers, we intendto expand our product range to other environmental and technologicalsolutions products such as water filters, as well as for the industrialmarket by developing new products that will be focused on reducingenvironmental pollutant output at the industrial source. Subject to anyapplicable laws and regulations, we intend to tap on our application
programming interface to collect user data from our AJB air purifiers.Through the collection of such user data and through the user smartphoneapplications, we will be able to notify our customers when their productcomponents require replacement, thereby increasing our revenue throughsales of such components to these existing customers.
• Investment in the research and development of new and existingproducts: We intend to enhance our R&D efforts to develop new andexisting products, in particular, for fire and smoke dampers, fan filterunits and air purifiers. In this regard, we plan to invest in engineeringcapabilities and R&D as well as employ more engineers to enhance ourcapabilities. We may also appoint consultants to provide us with expertknowledge and advice on development of such new products. We haveformed a task team to focus on product enhancement. We may also applyfor the registration of additional suitable trademarks and patents for our
products.
• Establishment and enhancement of manufacturing capabilities: Inaddition to expanding our current manufacturing capabilities in Singaporeand Malaysia, we intend to establish manufacturing capabilities in thePRC, in particular, to manufacture our AJB air purifier products. To thisend, we have established a marketing and sales team in the PRC to focuson the sales and marketing of our AJB air purifiers.
Please refer to the sectionentitled “Prospects, BusinessStrategies and Future Plans
– Business Strategies andFuture Plans” on pages[125] to [127] of the
Offer Document for moreinformation on our strategiesand future plans.
WHAT ARE THE KEY TRENDS, UNCERTANTIES, DEMANDS, COMMITMENTS OR EVENTSWHICH ARE REASONABLY LIKELY TO HAVE A MATERIAL EFFECT ON US?
Based on the operations of our Group as at the Latest Practicable Date and barr ing unforeseen circumstances, our Directors expect our profitability to beaffected in FY2015 for the following reasons:
• revenue is anticipated to remain stable and in line with our historicalrevenue;
• cost of sales is anticipated to remain stable and in line with our historicalcost of sales; and
• operating expenses are anticipated to increase significantly in line withour establishment and expansion of a new environmental and technologicalsolutions business in the PRC and expenses incurred in connection withour listing on Catalist.
The above are not the only trends, uncertainties, demands, commitmentsor events that could affect us. Please refer to the other factors set out inthe sections entitled “Risk Factors” on pages [33] to [49], “Management’sDiscussion and Analysis of Results of Operations and Financial Positionof Our Group” on pages [69] to [89] and “Prospects, Business Strategiesand Future Plans” on pages [126] to [129] of the Offer Document.
Please refer to the sectionentitled “Prospects, BusinessStrategies and Future Plans”on pages [126] to [129] ofthe Offer Document formore information on our
bu si ne ss an d fin an ci al prospects.
WHAT ARE THE KEY RISKS WHICH HAD MATERIALLY AFFECTED ORCOULD MATERIALLY AFFECT US AND YOUR INVESTMENT IN OUR SECURITIES?
We consider the following to be the most important key risks which hadmaterially affected or could materially affect our business operations, financial
posi tion and results, and your investment in our Shares:
• We are dependent on the electronics and building industries: Wedesign and manufacture clean room equipment for the electronics industry,and HVAC equipment mainly for the electronics and building industries.Consequently, our revenue will be adversely affected should there be anyslowdown in the electronics and building industries and if we are not ableto successfully offer our products in other industries. Accordingly, weare dependent on the growth of the electronics and building industriesin Singapore, and any change or slowdown in growth of these industriesin Singapore may have an adverse impact on our business, financialcondition, results of operations and prospects.
• We may not be able to increase sales to our existing customersand attract new customers: Our growth depends on our ability tocontinue to expand our products offered to existing customers and attractnew customers. Our growth may be affected for a number of reasons,including the possibility of a reduction in the demand for our productsdue to economic recession, our customers being unable to differentiateour products from those of our competitors or we are unable to effectivelycommunicate such distinctions, or if we are unable to expand our sales toexisting customers. A substantial amount of our past revenues was derivedfrom sales to existing customers. Our costs associated with generatingrevenues from new customers are generally higher than costs associatedwith increasing revenues from existing customers. Therefore, slowingrevenue growth or declining revenues from our existing customers, evenif offset by an increase in revenues from new customers, could reduce ouroperating margins. Any failure for a prolonged period of time to continueattracting new customers or to grow our revenues from existing customerscould have a material adverse effect on our business, financial condition,
results of operations and prospects.
Please refer to the sectionentitled “Risk Factors” on
pages [33] to [49] of theOffer Document for moreinformation on risk factors.
• We may face challenges and uncertainty in the commercialisationof our new air purifier business: We have completed the design and
prototype of our own brand of air purifiers, namely the AJB brand, andintend to launch our AJB air purifiers in the PRC and subsequently expandthe marketing of our AJB air purifiers to regional countries. However,we may face challenges and uncertainty in the commercialisation of ournew air purifier business as such products may not enjoy commercialacceptance or success, which would adversely affect our business, financialcondition, results of operations and prospects.
• We may not be able to compete effectively against our competitors: We operate in a competitive industry and we expect to face more intensecompetition from existing competitors and new market entrants in thefuture. Some of these competitors may have larger business operations andgreater financial resources than our Group. Competitive factors includetechnical expertise, customer service, pricing and geographical presence.To compete successfully, we need to continually develop innovativesolutions and adopt competitive pricing in order to attract buyers for our
products. There is no assurance that we will be able to remain competitive.Should we be unable to compete successfully against our competitors, thiswill have an adverse impact on our business, financial condition, results
of operations and prospects.• We are exposed to the credit risks of our customers: We may extend
credit terms to our customers ranging from 30 days to 60 days on a case- by-case basis depending on, amongst others, their creditworthiness and thelength of the customer relationship. We have also experienced write-offsand doubtful debts. Our customers may be unable to meet their contractual
payment obligations to us, either in a timely manner or at all. In addi tion,our customers may cancel their orders. The reasons for payment delays,cancellations or defaults by our customers may include, amongst others,insolvency, bankruptcy, or insufficient financing or working capitaldue to late payments by their respective end customers. We may not beable to enforce our contractual rights to receive payment through legal
proceedings. In the event that we are not able to collect payments fromour customers, our business, financial condition, results of operations and
prospects may be adversely affected.
The above are not the only risk factors that had a material effect or couldhave a material effect on our business operations, financial position andresults, and your Shares. Refer to “Risk Factors” on pages [33] to [49] ofthe Offer Document for a discussion on other risk factors and for moreinformation on the above risk factors. Prior to making a decision to investin our Shares, you should consider all the information contained in theOffer Document.
WHAT ARE THE RIGHTS ATTACHED TO THE SECURITIES OFFERED?
As at the date of the Offer Document, our issued and paid-up share capitalwas S$9,300,001, comprising 71,900,000 shares.
We have only one (1) class of shares, and the Shares offered will have thesame rights as our other existing issued and paid-up shares, including votingrights. Shareholders will be entitled to all rights attached to their Shares in
proport ion to their shareholding, such as any cash dividends declared by ourCompany and any distribution of assets upon liquidation of our Company.There are no restrictions on the transferability of fully paid Shares, save asrequired by law or the Catalist Rules.
Please refer to “AppendixD – Description of OrdinaryShares” on pages [D-1] to[D-8] of the Offer Documentfor more information onthe Shares offered in thePlacement.
HOW WILL THE PROCEEDS OF THE OFFER BE USED?
The estimated net proceeds to be raised by our Company from the issue of thePlacement Shares (after deducting estimated expenses incurred in relation tothe Placement of approximately S$[•] million) is approximately S$[•] million.
The allocation of each principal intended use of proceeds from the issue ofthe Placement Shares and the estimated listing expenses is set out below:
Use of proceedsAmount(S$’000)
As a percentage ofgross proceeds fromthe Placement (%)
Establishment of a new business for environmental andtechnological solutions productsin the PRC
[•] [•]
Investment in the research anddevelopment of new and existing
products and establishment andenhancement of manufacturingcapabilities
[•] [•]
Working capital [•] [•]
Estimated listing expenses (1) [•] [•]
Total [•] [•]
Note:(1) [Of the total estimated listing expenses to be borne by our Company,
approximately S$[•] million will be recognised in equity and the balance of the estimated listing expenses will be recognised in profitor loss.]
Please refer to the sectionentitled “Use of Proceedsand Expenses of thePlacement” on pages [50] to[51] of the Offer Documentfor more information on ouruse of proceeds.
Our Company has not distributed any dividends since its incorporation on 2April 2015. None of our subsidiaries has declared or paid dividends for thePeriod Under Review.
We currently do not have a formal dividend policy.
The form, frequency and amount of declaration and payment of futuredividends on our Shares that our Directors may recommend or declare inrespect of any particular financial year or period will be subject to (a) thelevel of our cash and retained earnings; (b) our actual and projected financial
performance; (c) our projected levels of capi tal expenditure and expansion plans; (d) our working capi tal requirements and general financing condition;and (e) restrictions on payment of dividends imposed on us (if any), as wellas other factors deemed relevant by our Directors.
The declaration and payment of dividends will be determined at the solediscretion of our Directors, subject to the approval of our Shareholders. Therecan be no assurance that dividends will be paid in the future and the amountof dividends declared and paid by us in the past should not be taken as anindication of the dividends payable in the future.
Subject to our Articles of Association and in accordance with the CompaniesAct, our Directors may also declare an interim dividend without the approvalof our Shareholders. In making their recommendations, our Directors willconsider, inter alia , our retained earnings and expected future earnings,operations, cash flow, capital requirements and general financing condition,as well as general business conditions and other factors which our Directorsmay deem appropriate.
Please refer to the sectionsentitled “Dividend Policy”on page [54] and “RiskFactors – Risks Relatingto Investment in OurShares – We may not beable to pay dividends in thefuture” on page [49] of theOffer Document for moreinformation on our dividend
General“1H” : The six (6)-month financial period ended 30 June“AJB” : Aijiabao ( ) , being the brand name under which our Company’s
air purifiers are marketed“Authority” : The Monetary Authority of Singapore“Catalist” : The sponsor-supervised listing platform of the SGX-ST“Companies Act” : The Companies Act (Chapter 50) of Singapore, as amended, modified
or supplemented from time to time“Controlling Shareholder” : As defined in the Catalist Rules: (a) a person who has an interest of
15.0% or more of the aggregate of the nominal amount of all the votingshares in our Company (unless otherwise determined by the SGX-ST);or (b) a person who in fact exercises control over our Company
“Facilities” : Our design, fabrication and installation facilities, as set out in the sectionentitled “General Information on Our Group – Design, Fabrication andInstallation Facilities” of the Offer Document
“FY” : Financial year ended or ending 31 December, as the case may be“Independent Directors” : The independent directors of our Company as at the date of the Offer
Document, unless otherwise stated“ISO” : International Organisation for Standardisation“Latest Practicable Date” : 30 November 2015, being the latest practicable date prior to the
lodgement of the Offer Document with the SGX-ST, acting as agent on behalf of the Authori ty
“NAV” : Net asset value“Performance Shares” : The new Shares which may be allotted and issued from time to time
pursuant to the vesting of awards granted under the Eindec PerformanceShare Plan 2015, the terms of which are set out in Appendix F of theOffer Document
“Period Under Review” : The period comprising FY2012, FY2013, FY2014 and 1H2015“Placement” : The placement of the Placement Shares by the Issue Manager, Sponsor
and Placement Agent on behalf of our Company for subscription atthe Placement Price, subject to and on the terms and conditions of theOffer Document
“Placement Price” : S$[•] for each Placement Share“Placement Shares” : The [•] new Shares which are the subject of the Placement
“PRC” : The People’s Republic of China“Restructuring Exercise” : The corporate restructuring exercise undertaken in connection with thePlacement, as described in the section entitled “Restructuring Exercise”of the Offer Document
“SGX-ST” : Singapore Exchange Securities Trading Limited“Shares” : Ordinary shares in the capital of our Company“Weiye” : Weiye Holdings Limited
Name used in the OfferDocument
Name in National Registration Identity Card
“Andy Tan” : Tan Kian Kok (Chen Jianguo)“Eddie Tan” : Eddie Tan Meng Seah
“Jeffrey Ong” : Ong Shen Chieh (Wang Shengjie)“Lawrence Wong” : Wong Chee Meng, Lawrence“Paul Chia” : Chia Wei Ho
CONTACT INFORMATION
WHO CAN YOU CONTACT IF YOU HAVE ENQUIRIES RELATING TO OUR OFFER?
