Singapore-listed IFS Capital, which has largely been offering financing solutions to SMEs in the region, is set to make a big stride into China.

Stock price 

18 c

52-week range

17 – 21 c

Market cap

S$66 m

PE (ttm)

36.5

Dividend yield 

1.1%

P/B

0.38

Shares outstanding

376 m

1-Year return

- 6% 

Source: Bloomberg

In a novel arrangement, it said it is tieing up with Hong-Kong listed Tat Hong Equipment Service Co., Ltd. (“THES”) to offer leasing solutions to borrowers buying tower cranes, such as contractors. 

The IFS 60%-owned JV would bring together IFS Capital’s expertise in credit decisions and portfolio monitoring know-how with Tat Hong’s extensive experience in China and the tower crane service industry.

The two companies have entered into a non-binding Memorandum of Understanding to pursue opportunities offered by China's infrastructure-led economy.


Tat Hong is the first foreign-owned tower crane service provider in the PRC.

It offers consultancy, technical design, commissioning, construction, and after-sale services to construction contractors in infrastructure, energy, commercial, and residential sectors. It also engages in installing, maintaining, and leasing of construction machinery and equipment.

The company, with a fleet of over 1,000 tower cranes, is the second largest provider of tower crane services in China.

This is how the JV's leasing solutions will work:

1. Borrower (such as EPC contractors) chooses manufacturer of tower crane equipment it wants to buy from.

2. Manufacturer introduces Borrower to Financier (ie, the JV).

3. Borrower applies for financing / Financier evaluates the creditworthiness of Borrower. 

4. If credit is approved, Financier releases funds to Manufacturer.

5. Manufacturer delivers equipment.

6. Borrower makes monthly repayments.

 

RandySim 421a 01Said Randy Sim (photo), IFS Capital’s Group Chief Executive Officer:

“We are extremely glad to partner with a veteran industry player like Tat Hong which will not only allow us to grow our suite of SME financing solutions but also extend our geographical footprint into China.

"We aim to support local SMEs with responsible financing as they ride the tremendous long term growth potential of the Chinese economy. This leasing JV marks the starting point for us to explore new growth opportunities throughout China. 

“THES’s deep industry know-how and strong relationships coupled with our SME credit and supply chain expertise and technology will allow us to better serve the Chinese SMEs as they grow, domestically and internationally.”


“THES is excited to be partnering with IFS Capital in bringing tower crane financing solutions to the highly fragmented Chinese market. We believe this partnership has strong strategic value for us as we would be able to leverage IFS Capital’s lending expertise to provide new solutions to our existing business partners. Building on our well-founded relationships in the industry, we will be able to quickly lay the groundwork required for us to move forward in firm strides on this new journey,” said Sean Yau, Tat Hong’s Chief Executive Officer.


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