Established Integrated Building Services Specialist With Growing Orderbook And Strong Presence In Singapore’s Public Sector; Trading At Attractive Valuation
Alpina is an established integrated service provider specialising in the niche sectors of
IBS, M&E engineering services and A&A works. It has a strong orderbook of S$151.0m
(as at 31 Dec 21) and Alpina continues to proactively tender for new contracts. Most of
Alpina’s customers are in Singapore’s public sector and the majority of its earnings are
recurring in nature. With its track record, there is strong potential for Alpina to
accelerate the extension of its Integrated Facilities Management (IFM) services to
develop new revenue streams by cross-selling more services and solutions. Alpina is
trading at an attractive annualised 2021 PE of 6x after listing expenses and offers a
dividend policy.
• Integrated service provider specialising in the niche sectors with established track
record. Alpina specialises in providing integrated building services (IBS), mechanical and
electrical (M&E) engineering services and alteration and addition (A&A) works with a track
record of more than 17 years. Alpina has obtained the grading of L6 for its registration
under the IBS Workhead, which is the highest grading and allows Alpina to participate in
tendering for and executing IBS projects in the public sector with no tendering limits and
project value limits. Majority of Alpina’s projects are public sector projects in Singapore.
• Recurring nature of projects with strong customer base. The majority of Alpina’s
projects (approximately 99%) are maintenance works in the public sector projects which
include maintenance and repairs of: a) air-conditioning, b) refrigeration and ventilation
works, c) communication and security systems, d) fire prevention and protection systems,
and e) plumbing and sanitary works. In summary, these projects are regular maintenance
and services projects that are recurring in nature. In addition, Alpina’s customers are good
paymasters which include Singapore Government ministries and statutory boards
governing education, environment, industrial infrastructure, housing, public libraries, sport
culture, public utilities, national securities, public safety, civil defence, border control and
public universities in Singapore.
• Target to enhance grow via new segment and acquisitions. Alpina aims to win more
contracts in the space of enhanced facility management solutions as this sector should
see better demand as more building facilities in Singapore are aging and require better
care. Also, there are rising needs for customised and integrated solutions in redeveloped
buildings. Alpina has extended its scope of services and obtained registration of the FM01
(Facilities Management) Workhead – Grade M3 in 2020. On the other hand, Alpina is on
the lookout for acquisitions (in the areas of cleaning services, landscape services, security
services and pest control services, etc) to accelerate the extension of its IFM services to
enhance its value propositions to customers and boost its revenue streams.
• Attractive PE multiple and dividend yield. Alpina is currently trading at only 6x 2021
annualised PE (annualising 1H21 earnings of S$4.1m and deducting estimated listing
expenses of S$1.2m). Alpina currently does not have a fixed dividend policy, but it intends
to distribute dividends of a minimum of 50% of its earnings for 2022 and 2023 as per
stated in its prospectus.
Near-term key catalysts include:
• Good financial results for 2H21. If Alpina delivers a good set of financial results for
2021, this will reinforce the merits of its business model and build a better track record for
the company, which could be a boost in market confidence. Annualising 1H21 earnings of
S$4.1m and deducting listing expenses of an estimated S$1.2m will result in 2021
earnings of S$7.0m, representing a 40% yoy growth from 2020 earnings of S$5.0m. To
recap, Alpina has delayed the release of its 2021 financial results from Feb 22 to around
May 22 due to a delay in the auditing process, as most of the resources have been
directed to the IPO process.
• Winning of more contracts. Alpina has a healthy orderbook of S$151m as of 21 Jan 22
and it expects approximately 35.2% of the orderbook to be recognised in 2022 and the
balance after 2022. Further winning of more contracts should improve the earnings
prospects of Alpina.
• Successful acquisition of earnings accretive synergistic businesses. Alpina intends
to leverage on its network and explore M&A opportunities with parties in complementary
businesses in Singapore or the region to strengthen its business model and/or gain
access to new markets so as to build new revenue streams.