F-1/A: Magnitude International Files Amended IPO Prospectus for Nasdaq Listing, Reveals Mixed Financials and Strategic Growth Plans

Sentiment:

Initial Public Offering Registration Statement Amendment 10 June 2025 6:14 PM

📋All filings for Magnitude International LTD

Magnitude International Ltd, a Singapore-based electrical installation services provider, has filed an amended F-1 registration statement for its initial public offering on the Nasdaq Capital Market, targeting a price range of US$4.00 to US$5.00 per share, while reporting strong annual revenue growth but a recent interim period decline.

Delay expectedDuring the COVID-19 pandemic, demand for services was lowered, tender processes for prospective projects were delayed, and projects on hand were delayed or suspended.The company's foreign workers were affected by COVID-19 clusters in dormitories, leading to quarantines and labor shortages, which materially and adversely affected financial condition, operating results, and cash flows.Inability to complete projects on a timely basis due to factors like manpower/material shortages, subcontractor delays, or adverse weather could lead to liquidated damages and negatively impact financial performance and reputation.

Capital raiseThe company is undertaking an initial public offering of 2,200,000 Ordinary Shares on the Nasdaq Capital Market.The anticipated initial public offering price is between US$4.00 and US$5.00 per Ordinary Share.The company expects to receive net proceeds of approximately US$5.711 million from its portion of the offering.An additional 8,804,400 Ordinary Shares are registered for potential resale by existing shareholders, from which the company will not receive any proceeds.

Worse than expectedRevenue for the six months ended October 31, 2024, decreased by 46.4% to S$7.3 million compared to S$13.6 million for the same period in 2023.Net profit after income tax for the six months ended October 31, 2024, significantly decreased to S$0.20 million from S$0.92 million for the same period in 2023.

Summary

Magnitude International Ltd is seeking to list 2,200,000 Ordinary Shares on the Nasdaq Capital Market under the symbol MAGH, with an anticipated initial public offering price between US$4.00 and US$5.00 per share.
The offering includes 1,650,000 Ordinary Shares offered by the company and 550,000 Ordinary Shares by a selling shareholder, with an additional 8,804,400 Ordinary Shares registered for potential resale by other shareholders post-IPO.
The company will not receive any proceeds from the sale of shares by the selling shareholder or resale shareholders.
Magnitude International operates primarily in Singapore through its subsidiaries Herlin Pte. Ltd. and BNL Engineering Pte. Ltd., specializing in electrical installation services for private and public sector greenfield and brownfield projects.
For the fiscal year ended April 30, 2024, revenue increased by approximately 10.7% to S$24.2 million (US$17.75 million) from S$21.9 million (US$16.06 million) in the prior year, with net profit after tax rising to S$2.01 million (US$1.47 million) from S$0.78 million (US$0.57 million).
However, for the six months ended October 31, 2024, revenue decreased by approximately 46.4% to S$7.3 million (US$5.50 million) compared to S$13.6 million (US$10.26 million) for the same period in 2023, and net profit after tax declined to S$0.20 million (US$0.15 million) from S$0.92 million (US$0.69 million).
The company's backlog of projects as of October 31, 2024, was approximately S$61.3 million (US$46.33 million), a significant increase from S$21.4 million (US$15.70 million) as of April 30, 2024.
The company intends to use the net proceeds from the offering for strategic acquisitions, joint ventures, and alliances (30%), material purchases (10%), workforce expansion (10%), relocation to a larger head office (15%), rental of a bigger dormitory for foreign workers (10%), digitalization and equipment upgrades (5%), and general working capital (balance).
Mr. Lim Say Wei, the CEO, will maintain control of over 50% of the voting power, making Magnitude International a controlled company under Nasdaq rules, allowing it to rely on certain corporate governance exemptions.
The company is also an emerging growth company and a foreign private issuer, qualifying for reduced public company reporting requirements.

Sentiment

Score: 5

Explanation: The sentiment is neutral to slightly negative. While the company demonstrates strong historical growth and clear strategic plans for expansion, the significant decline in revenue and profit during the most recent interim period (six months ended October 31, 2024) raises concerns. High customer concentration and reliance on foreign labor also present notable risks. The IPO itself is a positive step for capital, but the immediate dilution for new investors and the 'controlled company' status are factors to consider.

Positives

The company has over 12 years of established track record in providing quality, timely, and reliable electrical installation services in Singapore.
Revenue grew by 10.7% from S$21.9 million in FY2023 to S$24.2 million in FY2024.
Net profit after income tax significantly increased from S$0.78 million in FY2023 to S$2.01 million in FY2024, driven by higher gross margin projects.
The company maintains strong and stable relationships with its customers, with top five customers having an average of over five years of business relationships, and the largest customer since founding.
Strong and stable relationships with suppliers and subcontractors, with top five vendors having an average of over nine years of business relationships.
The company is committed to risk management, health and safety standards, quality assurance, and environmental impact control, holding ISO 9001:2015, ISO 45001:2018, and bizSAFE Level Star certifications.
An experienced and dedicated management team, with Mr. Lim Say Wei (CEO) having over 30 years of experience, and other senior management members having 18-26 years of industry experience.
The company aims to upgrade its Building and Construction Authority (BCA) registration to Grade L6 contractor under the ME-05 (electrical engineering) workhead in 2025, which will allow it to tender for public sector projects of unlimited contract value.
Strategic plans include expanding services to include maintenance, repair, and inspection of electrical systems, and exploring overseas expansion opportunities in emerging countries like Malaysia and Cambodia.
The company's backlog of projects significantly increased to S$61.3 million as of October 31, 2024, indicating future revenue potential.
The company has not experienced any material claims, defects, or project delays resulting in liquidated damages during FY2023 and FY2024.

Negatives

Revenue for the six months ended October 31, 2024, decreased by 46.4% to S$7.3 million compared to S$13.6 million for the same period in 2023, primarily due to fewer projects being constructed and/or completed.
Net profit after income tax for the six months ended October 31, 2024, significantly decreased to S$0.20 million from S$0.92 million for the same period in 2023, corresponding with the revenue decline.
High customer concentration, with the top five customers accounting for approximately 87.9% and 85.5% of total revenue in FY2023 and FY2024, respectively, and 72.5% for the six months ended October 31, 2024.
The largest customer alone accounted for approximately 70.4% and 52.2% of revenue in FY2023 and FY2024, respectively, and 32.5% for the six months ended October 31, 2024, posing a significant dependency risk.
All revenue is derived from competitive tendering, and contracts are non-recurring, requiring continuous successful bidding for new projects.
Over 80.0% of the workforce is made up of foreign labor, making the company highly dependent on foreign worker supply and subject to changes in Singapore's Ministry of Manpower policies and regulations, including quotas and levies.
The company's operating margin may decline due to increasing subcontracting, material, labor, and other indirect costs, which may not be fully passed on to customers.
The company is a controlled company, and Mr. Lim Say Wei will hold more than 50% of the voting power, allowing reliance on exemptions from certain Nasdaq corporate governance rules, which may afford less protection to shareholders.
As a Cayman Islands incorporated company, enforcing U.S. judgments against the company or its directors/officers may be difficult.
The company does not expect to pay dividends in the foreseeable future, meaning investors must rely on share price appreciation for returns.
New investors will experience immediate and substantial dilution of US$4.314 per Ordinary Share based on the assumed IPO price.

Risks

Failure to retain business relationships with the five largest customers or secure new customers could adversely affect the business.
Inaccurate estimation of project time and costs may lead to cost overruns or losses on projects.
All revenue is derived from competitive tendering, and contracts are not recurring in nature, leading to uncertainty in future project pipeline.
Dependence on key management personnel, particularly Mr. Lim, and project management staff, with potential adverse effects if they cannot be retained or replaced.
Inability to renew existing registrations and licenses or their cancellation/suspension could materially affect operations and financial performance.
Over 80.0% of the workforce is foreign labor, and inability to recruit/retain foreign labor or changes in related policies could materially affect operations.
Inability to complete projects on a timely basis could affect financial performance, reputation, or subject the company to claims.
Operating margin may decline due to increasing subcontracting, material, labor, and other indirect costs if not passed on to customers.
Customers may omit certain contract works by variation orders, reducing the total contract sum and potentially adversely affecting revenue.
No guarantee of receiving progress payments in full on time, or at all, which could affect liquidity.
Implementation of business strategies and future plans may not be successful.
Obligation to provide performance bonds backed by cash or other collateral/guarantees could affect liquidity and ability to secure further bank financing.
An active trading market for Ordinary Shares may not be established or continue, and the trading price may fluctuate significantly.
Failure to maintain Nasdaq listing could limit investor transactions and subject the company to additional trading restrictions.
The sale or availability for sale of substantial amounts of Ordinary Shares, including those held by Resale Shareholders, could adversely affect market price.
Extreme volatility experienced by recent IPOs with comparable public floats may affect the company's share price.
Reliance on management's judgment for the use of net proceeds from the offering, which may not produce income or increase share price.
Status as a controlled company allows reliance on exemptions from certain Nasdaq corporate governance rules, potentially affording less protection to shareholders.
Incorporation in the Cayman Islands may make it difficult to protect shareholder interests and limit ability to protect rights through U.S. courts.
Classification as a passive foreign investment company (PFIC) could result in adverse U.S. federal income tax consequences for U.S. taxpayers.
Status as a foreign private issuer exempts the company from certain U.S. domestic public company provisions, leading to less extensive and timely information.
Adoption of IFRS accounting principles, which differ from U.S. GAAP, may make financial statements less comparable to U.S. companies.
Increased costs and management time will be incurred as a U.S. public company, particularly after ceasing to be an emerging growth company.
Difficulty enforcing judgments obtained in the United States against the company, its directors, executive officers, or affiliates due to location of operations and assets outside the U.S.
Adverse material changes to the Singapore market (economic recession, pandemic, etc.) could materially affect business.
Inability to maintain and protect intellectual property or third-party infringement claims could harm the business.
Information technology systems breakdown or disruption could adversely affect business operations.
Natural disasters and other catastrophic events beyond control could adversely affect business operations and financial performance.
Current insurance coverage may not sufficiently protect against all risks, and premiums may increase.
Work in the public sector exposes the company to additional risks inherent in the government contracting environment, including heightened scrutiny and potential project termination for funding issues.
Executive officers have no prior experience in operating a U.S. public company, which could harm compliance and reputation.

Future Outlook

Magnitude International aims to become a leading integrated one-stop electrical installation services provider in Singapore, focusing on sustainable growth and long-term shareholder value. The company plans to strengthen its market position by expanding service scope to include maintenance, repair, and inspection, and intends to upgrade its BCA contractor registration to Grade L6 by the end of 2025 to undertake public sector projects of unlimited contract value. Future plans also include enhancing and expanding its workforce and facilities, relocating to a larger head office, renting a bigger dormitory for foreign workers, and digitalizing systems with ERP and HR solutions. The company is also exploring overseas expansion opportunities in emerging countries like Malaysia and Cambodia and plans to grow through strategic acquisitions, joint ventures, and/or strategic alliances, although no definitive agreements are currently in place.

Management Comments

Mr. Lim Say Wei, CEO, is responsible for overall Group management, strategic planning, expansion, customer relationships, and sourcing business opportunities, leveraging over 30 years of construction industry experience.
Mr. Sam Kai Mun, COO, oversees project management, ensuring timely, budget-compliant, and safe project execution, and assists the CEO in general operations.
Management believes their experienced team and capabilities in providing quality, timely, and reliable electrical installation services have built their reputation in Singapore's electrical engineering sector.
Management anticipates that Singapore will continue to be the principal base of business operations in the near future.
Management believes that current cash, cash flows from operating activities, and guaranteed bank loans will be sufficient to meet working capital and debt obligations for at least 12 months following the financial statements issuance date.
Management will retain broad discretion over the allocation of net proceeds from the offering.

Industry Context

The electrical engineering sector in Singapore's construction industry is competitive and relatively fragmented, with over 2,200 contractors registered under the ME05 workhead. Competition is based on market position, reputation, track record, relationships, and financial standing. The industry is highly regulated with strict safety standards. The sector's growth is tied to construction and building activities, influenced by investments in residential, commercial, and mixed-use projects, as well as general economic conditions, urbanization, and population growth in Singapore. The industry faces challenges such as a limited and costly local labor supply, leading to high reliance on foreign workers, and potential fluctuations in material and labor costs.

Comparison to Industry Standards

Magnitude International is currently a Grade L5 contractor under the ME05 (electrical engineering) workhead, which allows it to tender for public sector projects up to S$16 million. This places it among approximately 6.4% of the over 2,200 contractors registered under this workhead.
The company aims to upgrade to a Grade L6 contractor, a status held by only approximately 4.5% of ME05 contractors, which would enable it to tender for public sector projects of unlimited contract value.
The company's reliance on foreign labor (over 80% of its workforce) is consistent with the broader Singapore construction industry, which faces a limited and costly local labor supply.
The company's practice of requiring performance bonds (5.0% to 10.0% of contract sum) and retention money (5.0% to 10.0% of progress payment, up to 5.0% of contract sum) is common in the industry.
The typical defect liability period of 12 to 18 months and warranty period of two to five years for projects align with industry standards.

Management Changes

Role	Previous Person	New Person	Effective Date	Reason
Director and Chief Operating Officer	NA	Mr. Sam Kai Mun	2025-04-17	Appointment to oversee overall project management and assist CEO in general operations.
Chief Financial Officer	NA	Mr. Lo Siew Whye	2024-11-01	Appointment to manage finance and accounting functions, including financial reporting, planning, risk management, and taxation.
Assistant General Manager	NA	Mr. Sim Zhong Min	2024-10-25	Appointment to oversee day-to-day project operations, assist in tendering, planning, coordination, and compliance.
Assistant General Manager	NA	Mr. Loh Tuck Wei	2024-10-25	Appointment with similar roles and responsibilities as Mr. Sim Zhong Min.
Independent Director (Chairman of Audit Committee, Member of Compensation and Nomination Committees)	NA	Mr. Yong Thiam Fook	Upon SEC effectiveness of registration statement	Appointment to the board and committees.
Independent Director (Chairman of Nomination Committee, Member of Audit and Compensation Committees)	NA	Mr. Ho Soo Lih	Upon SEC effectiveness of registration statement	Appointment to the board and committees.
Independent Director (Chairman of Compensation Committee, Member of Nomination and Audit Committees)	NA	Mr. Sung Jin An	Upon SEC effectiveness of registration statement	Appointment to the board and committees.

Corporate Governance

Change Type	Description	Effective Date	Impact Assessment
Committee Establishment	Intention to establish an audit committee, a compensation committee, and a nomination committee under the board of directors, each operating pursuant to a charter effective upon the effectiveness of the registration statement.	Upon SEC effectiveness of registration statement	Enhances corporate oversight and aligns with public company governance standards, though exemptions for controlled companies will apply.
Controlled Company Status	Mr. Lim Say Wei will hold more than 50% of the aggregate voting power, classifying the company as a controlled company under Nasdaq rules.	Immediately after completion of this offering	Allows the company to rely on exemptions from certain corporate governance rules, including requirements for a majority independent board, independent director selection for nominees, and fully independent compensation/nomination committees. This may afford less protection to shareholders compared to non-controlled companies.
Foreign Private Issuer Status	The company will report under the Exchange Act as a non-U.S. company with foreign private issuer status.	Upon completion of this offering	Exempts the company from certain provisions applicable to U.S. domestic public companies, such as proxy solicitation rules, Regulation FD, insider trading reports (Section 16), and quarterly/current reports (Form 10-Q/8-K). This results in less extensive and timely information for investors compared to U.S. domestic issuers.
Accounting Standards	The company has adopted International Financial Reporting Standards (IFRS) and has elected to take advantage of the extended transition period under the JOBS Act for complying with new or revised accounting standards.	Ongoing	Financial statements may not be comparable to U.S. public companies using U.S. GAAP, and investors may not have access to certain information they deem important due to reduced reporting requirements.
Memorandum and Articles of Association Amendment	The company amended its memorandum of association to effect a 1:40 forward stock split and change authorized share capital to US$500,000 divided into 20,000,000,000 Ordinary Shares with a par value of US$0.000025 each.	2025-05-27	Recapitalization in anticipation of the initial public offering, affecting share structure but not ownership percentages.

Legal Proceedings

As of April 30, 2023, April 30, 2024, and October 31, 2024, the company is not party to any claim, litigation, or arbitration of material importance, and there are no such matters known to the directors to be pending or threatened that could have a material adverse effect on the business, results of operations, or financial conditions.

Related Party Transactions

Mr. Lim Say Wei, the Executive Director and indirect controlling shareholder, acquired the non-controlling interest's entire 60% equity stake in BNL Engineering Private Limited on April 5, 2023, for S$200,000.
Herlin Pte. Ltd. (a subsidiary) declared interim tax-exempt dividends to Mr. Lim of S$250,000 and S$200,000 for FY2023 and FY2024 respectively. For FY2025, dividends of S$200,000 (June 3, 2024), S$300,000 (October 30, 2024), and S$1.1 million (November 18, 2024) were declared to Mr. Lim.
Advances from a director (Mr. Lim) were S$712,503 in FY2023 and S$91,741 in FY2024, with repayments of S$386,644 and S$50,150 respectively. For the six months ended October 31, 2024, advances were S$53,403 and repayments were S$56,191.
Inter-subsidiary transactions between BNL Engineering Private Limited and Herlin Pte. Ltd. included revenue from electrical works and installation services (S$105,408 in FY2023, S$4,146,774 in FY2024, S$101,168 for 6 months ended Oct 2024), subcontracting costs (S$634,441 in FY2023, S$3,617,741 in FY2024, S$101,168 for 6 months ended Oct 2024), purchases (S$3,550 in FY2023, S$2,230 in FY2024), and rental charged (S$4,000 in FY2024, S$6,000 for 6 months ended Oct 2024).
Non-trade payables to a director (Mr. Lim) were S$14,308 as of April 30, 2023, S$55,899 as of April 30, 2024, and S$6,305 as of October 31, 2024. These amounts are unsecured, non-interest bearing, and repayable on demand.
On December 12, 2024, a director's loan of S$200,000 was capitalized by the allotment and issuance of 200,000 ordinary shares in BNL Engineering Private Limited to the director.

Stakeholder Impact

**Shareholders (Existing & New):** Existing shareholders will experience dilution from the IPO. New investors will face immediate and substantial dilution. The concentrated control by Mr. Lim may limit the influence of other shareholders on corporate matters. The lack of expected dividends means returns depend solely on share price appreciation. The potential for volatility and short selling could impact share value.
**Employees:** The company plans to expand its workforce and review remuneration packages to attract and retain talent. However, over 80% reliance on foreign labor exposes the company to risks from changes in Singapore's labor policies (e.g., quotas, levies), which could affect employment stability and costs.
**Customers:** The company aims to strengthen relationships and expand services to include maintenance, repair, and inspection, potentially offering more comprehensive solutions. However, high customer concentration means a loss of key customers could severely impact revenue and business prospects. Project delays or quality issues could also harm customer relationships.
**Suppliers & Subcontractors:** The company maintains strong relationships with its vendors. However, increasing material and subcontracting costs could put pressure on these relationships if the company cannot pass on costs. Subcontractor non-performance or violations of safety regulations could expose the company to liabilities and reputational damage.
**Creditors:** The company's ability to secure further bank financing could be affected by the need to provide performance bonds backed by cash or collateral. Liquidity risk is managed through cash flow and bank borrowings, but failure to receive timely payments from customers could impact the ability to meet obligations.

Next Steps

Completion of the initial public offering and listing of Ordinary Shares on the Nasdaq Capital Market under the symbol MAGH.
Utilize net proceeds for strategic acquisitions, joint ventures, and/or strategic alliances to expand and grow the business.
Purchase materials to support an increased number and/or scale of secured projects.
Expand the workforce both at work sites and back office to support business expansion.
Relocate to a bigger head office to provide more office area and additional storage facilities.
Rent a bigger dormitory to house foreign workers.
Digitalize systems, upgrade existing equipment, and invest in software solutions like ERP and HR systems to streamline processes and improve efficiency.
Work towards upgrading BCA registration to a Grade L6 contractor under the ME-05 (electrical engineering) workhead by the end of 2025.
Explore and pursue overseas expansion opportunities in emerging countries such as Malaysia and Cambodia.
Continue to review and assess the risk portfolio and adjust insurance practices as needed.

Key Dates

Date	Description
2012-03-23	Herlin Pte. Ltd. (operating subsidiary) was incorporated in Singapore.
2012-11-05	BNL Engineering Pte. Ltd. (operating subsidiary) was incorporated in Singapore.
2023-04-05	Mr. Lim completed the acquisition of his business partner's entire 60% equity stake of BNL Engineering Pte. Ltd., making him the sole shareholder.
2023-04-30	End of fiscal year for which audited financial statements are provided.
2023-10-31	End of six-month interim period for which unaudited financial statements are provided.
2024-04-30	End of fiscal year for which audited financial statements are provided.
2024-06-03	Herlin Pte. Ltd. declared an interim tax exempt (one-tier) dividend of S$200,000 for the financial year ending April 30, 2025.
2024-10-25	Magnitude International Ltd was incorporated in the Cayman Islands.
2024-10-30	Herlin Pte. Ltd. declared an interim tax exempt (one-tier) dividend of S$300,000 for the financial year ending April 30, 2025.
2024-10-31	End of six-month interim period for which unaudited financial statements are provided.
2024-11-18	Herlin Pte. Ltd. declared an interim tax exempt (one-tier) dividend of S$1.1 million for the financial year ending April 30, 2025.
2024-11-21	Mr. Lim transferred the initial 1 share of Magnitude International Ltd to his nominee, XJL International Ltd.
2024-12-12	Elec Power Ltd was incorporated in the BVI; Magnitude International Ltd subscribed for 1 share in Elec Power Ltd. Also, a director's loan of S$200,000 was capitalized by issuing 200,000 ordinary shares in BNL Engineering Private Limited to the director.
2024-12-27	XJL International Ltd and other entities subscribed for Ordinary Shares of Magnitude International Ltd for cash.
2025-01-10	XJL International Ltd transferred shares of Magnitude International Ltd to Ms. Cheng Sze Man Claudia and Mr. Chi Wai Ming, Raymond.
2025-02-20	XJL International Ltd transferred shares of Magnitude International Ltd to Mr. Choo Kay Chon.
2025-03-19	Mr. Lim and Magnitude International Ltd entered into a reorganization agreement, completing the reorganization where Mr. Lim transferred shares in Herlin and BNL to Elec Power Ltd.
2025-05-27	Magnitude International Ltd amended its memorandum of association to effect a 1:40 forward stock split and change authorized share capital in anticipation of the IPO. Concurrently, certain shareholders surrendered shares to the company.
2025-06-10	Date of filing of the F-1/A registration statement.

Recommendation

hold

Keywords

Electrical Installation Services, Singapore Construction, Greenfield Projects, Brownfield Projects, A&A Works, SEC F-1/A, Initial Public Offering, Nasdaq Capital Market, Electrical Engineering, Project Management, Risk Management, Corporate Governance, Foreign Private Issuer, Emerging Growth Company, Singapore Economy, Construction Industry, Workforce Management, Capital Raise, Financial Performance

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