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800 Super Sparkles On Strong Debut & Shining Prospects
Corporate Digest | 12 August 2011
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By: Xavier Lim
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By: Ong Qiuying
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If green is the new gold, 800 Super Holdings Limited (800 Super) is definitely heading in the right direction to the golden pastures. Registering an IPO price of $0.22, 800 Super made a stunning debut on the Catalist block on 15 July, with its shares recording a 43% leap to close at $0.315 on its first day of trading. Understandably, it has now turned onlookers’ heads to its ‘green business’.

The business, a one-stop integrated environmental solutions provider in waste management, recycling, cleaning and horticultural services to both private and public sectors, also boasts a healthy financial statement, posting a remarkable compounded annual growth rate of 12.1% and 55.4% in revenue and net earnings respectively in the last three years to FY10. Year on year, its FY10 earnings jumped 52.9% on the back of 14.5% increase in revenue to $69.6 million.

Sorting out recyclable materials at 800 Super’s materials recovery facility

Quality Services & Continuous Contract Renewals
“Armed with an established track record of 20 years and strong competitive strengths, the company is well positioned as a leading player in the industry,” Chairman Lee Koh Yong told Shares Investment (Singapore) in an exclusive interview.

Commenting further on its unique competitive strengths, Lee pointed out that 800 Super’s integrated services provide its clients a one-stop solution, differentiating itself from other companies in the industry. 800 Super is also one of the four licensed public waste collectors (PWC) appointed by the National Environmental Agency (NEA) and the pioneer company to be awarded the NEA Cleaning accreditation.

As the only company in Singapore awarded with the BCA Grade ‘L6’ in MW02, 800 Super is allowed to bid for tenders for housekeeping, cleansing, desilting and conservancy contracts of any value in Singapore’s public sectors. In addition, it has mechanised operations with a wide range of waste disposal systems and cleaning equipment; with some even customised to fit various needs in its horticultural services.

“These strong accreditations ensured quality services that bring in continuous renewal of contracts with our clients,” remarked Lee. Notably, the company won a repeat contract from the Ministry of Education for the cleaning of 120 schools in early 2011, a big jump from cleaning 30 schools in 2004, representing a strong testament of the company’s abilities. Significantly, it was also awarded a public waste collection contract for the Ang Mo Kio-Toa Payoh sector worth $94.7 million by the NEA in 2005. As at 9 June 2011, 800 Super’s order book stood at $136.5 million, which will ensure a continuous revenue inflow.

Operations are mechanised to achieve greater efficiency

Riding The Green Wave
“While the management expects demand of 800 Super’s services to be directly influenced by economic and population growth, the company is also a clear beneficiary of the changing consumer lifestyles,” Lee opined.

Together with the growing environmental sentiments and recycling as a strong theme, the Singapore Green Plan 2012 is a government initiative launched in 2002, that aims to increase overall waste recycling rate from 44% to 60% by 2012. This initiative also hopes to achieve 65% and 70% overall waste recycling rate by 2020 and 2030 respectively through continuous efforts to raise public awareness and enhance the waste industry capability.

Incorporating the green movement into its business, 800 Super currently operates two materials recovery facilities with a total daily processing capacity of over 50 tonnes of recyclable materials, which sort out recyclable materials to be resold for additional income.

800 Super, holding only one out of the nine sectors in public waste collection and one in seven sectors for street cleansing in Singapore currently, can expect a large room for growth as it continues tendering for projects in the public sector. Lee even mentioned, “Should an opportunity arise even before its contract in the Ang Mo Kio-Toa Payoh sector is due, 800 Super would be happy to expand beyond one sector in public waste collection.” Besides, the government’s latest contract for public waste collection had set higher standards to step up the frequency of recyclable waste collection and increase the number of recycling bins in the neighbourhood, which will benefit PWCs.

Promising Potential
Highlighting that the company’s listing as the next phase of growth, Lee explained that it is also part of its business strategy and revealed plans focusing on organic growth in the local market as well as overseas expansion. A substantial amount of 800 Super’s IPO proceeds will be allocated to expand its materials recovery and vehicle depot capacity, as well as its existing fleet of vehicles and equipment, noting the importance of advanced technology in waste management.

While Lee expressed no hurry to expand its business as the company’s primary focus remains in the local waste management market, it is not letting up in keeping its competitive edge, exploring a vertical integration of its business with the diversification into the waste treatment and renewable energy business. “On the global arena, 800 Super is also hopeful to establish a presence in the Middle Eastern region, where there is huge untapped potential in the markets,” Lee commented. He further added that talks with potential partners in the region are still ongoing.

As more entities take up environmental ownership all over the world, waste management is also no longer just a ‘rubbish’ business but a shining profession in an industry offering plentiful opportunities. Coupled with the array of plans in its pipeline, 800 Super looks set to ride on the buoyant factors to scale greater heights.

800 Super’s fleet of vehicles and equipment

This is a co-written article of Shares Investment, which lays out the analytical ideas and thoughts of the authors, who are well versed in investments and market concepts.

800 Super Hldgs  -- -- --   
Business: Co provides waste management, cleaning and conservancy and horticultural services. [FY18 Turnover] Environmental service (96.7%), laundry (3.3%).

Insight: Feb-19, 2Q19 revenue rose 27.2% to $46m owing to ... Read More

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