20-F: Ten-League International Holdings Limited Files 20-F Annual Report for Fiscal Year Ended December 31, 2024

Ten-League International Holdings Limited reports its financial results and business activities for the fiscal year ended December 31, 2024, highlighting revenue streams, strategic initiatives, and risk factors.

Summary

• Ten-League International Holdings Limited, a Singapore-based turnkey project solutions provider, has filed its Form 20-F for the fiscal year ended December 31, 2024.
• The company's primary business consists of sales and rental of heavy equipment, along with engineering consultancy services.
• Ten-League operates through its wholly-owned subsidiaries, Ten-League Engineering & Technology Pte. Ltd. and Ten-League Port Engineering Solutions Pte. Ltd.
• The company supplies equipment to port, construction, civil engineering, and underground foundation industries.
• For the year ended December 31, 2024, net revenue was S$58.5 million (US$42.8 million), and net income was S$2.0 million (US$1.4 million).
• The company is exploring fully electric equipment and building charging infrastructure.
• Ten-League relies significantly on SANY as a major equipment supplier.
• The company faces competition and is dependent on key management and skilled personnel.
• The company is subject to operating risks and regulatory requirements in Singapore.
• The company is an emerging growth company and a foreign private issuer, which provides certain exemptions from U.S. securities regulations.

Sentiment

Score: 5

Explanation: The document presents a mixed sentiment. While there are positive aspects such as increased rental income and exploration of electric equipment, the overall financial performance shows a decline in revenue and net income. The document also highlights several risk factors.

Positives

• Rental income increased by S$1.2 million, or 13.4%, to S$10.5 million (US$7.7 million) for the year ended December 31, 2024.
• The company is actively exploring the market for fully electric wheel loaders, excavators, and forklifts.
• Both Ten-League (E&T) and Ten-League (PES) have been certified to have achieved bizSAFE Level 3 by the WSHC under the MOM, as a testament to our continuing commitment to health and safety.

Negatives

• Net revenue decreased by approximately S$14.3 million or 19.6% to approximately S$58.5 million (US$42.8 million) for the year ended December 31, 2024.
• Net income decreased by approximately S$5.2 million, or 73.4%, to approximately S$1.9 million (US$1.4 million) for the year ended December 31, 2024.
• Sales of heavy equipment and parts decreased by approximately S$10.7 million, or 18.9%, to approximately S$45.8 million (US$33.5 million) for the year ended December 31, 2024.
• Engineering consultancy service income decreased by approximately S$4.8 million, or 68.9%, to approximately S$2.2 million (US$1.6 million) for the year ended December 31, 2024.
• Gross profit decreased by approximately S$5.1 million or 32.5%, to approximately S$10.7 million (US$7.8 million) for the year ended December 31, 2024.
• Gross profit margin decreased by 3.5 percentage points to 18.2% for the year ended December 31, 2024.

Risks

• The company is dependent on SANY, and any disruption in the supply chain or cessation of the business relationship could have a material adverse effect.
• The company is dependent on key management and skilled personnel, and the loss of their services could materially and adversely affect the business.
• The company operates in a competitive environment and faces competition from existing and new industry players.
• The company is dependent on foreign labor and may face labor shortages or increased costs of labor for its Singapore operations.
• The company is subject to a number of operating risks, including equipment failure and employee negligence.
• The company may be unsuccessful in implementing its business strategies and future plans.
• The company is dependent on the level of activities in the construction and infrastructure, civil engineering and foundation industries.
• The company does not have long term contracts with its customers.
• The company is dependent on the timely delivery of the heavy equipment and other products which we distribute.
• The company may experience work safety-related accidents that may expose us to liability claims.
• The company's rental fleet is subject to residual value risk upon disposition.
• Climate change, climate change regulations and greenhouse effects may materially adversely impact our operations and markets.
• The company may require additional funding for our future growth and are dependent on financing to fund our purchase of equipment for our Equipment Rental Business.
• The company may be exposed to risks associated with joint ventures or strategic alliances.
• The company may be affected by any adverse impact on our reputation and goodwill.
• Adverse conditions in the global financial markets and the general economy may adversely affect our business, financial condition, results of operations and prospects.
• The company cannot assure you that our future plans will be successful.
• The company has the risk of increases in the price of spare parts and accessories or shortages of spare parts and accessories.
• The company is exposed to the risk of litigation.
• The company may need to incur additional costs in the event of disputes, claims, defects or delays.
• The company faces risks related to heightened inflation, recession, financial and credit market disruptions and other economic conditions.
• The company is subject to credit risks of our customers.
• The company is subject to regulatory requirements for our operations.
• The company requires adequate working capital for our operations.
• The company's business is affected by changes in technology.
• The company's insurance coverage may be insufficient.
• The company's equipment and products are subject to stringent international quality codes and standards and certification for quality control.
• The company is dependent on a few of our major customers.
• The company's historical growth and performance may not be indicative of our future growth and performance.
• The company's shares could be subject to significant price volatility should our earnings fail to meet the expectations of investors.
• An active trading market for our ordinary shares may not be established or, if established, may not continue and the trading price for our ordinary shares may fluctuate significantly.
• The company may not maintain the listing of our ordinary shares on the Nasdaq which could limit investors ability to make transactions in our ordinary shares and subject us to additional trading restrictions.
• The sale or availability for sale of substantial amounts of our ordinary shares could adversely affect the market price.
• Short selling may drive down the market price of our ordinary shares.
• Because our public offering price per share is substantially higher than our net tangible book value per share, you will experience immediate and substantial dilution.
• You must rely on the judgment of our management as to the uses of the net proceeds from the initial public offering, and such uses may not produce income or increase our share price.
• If securities or industry analysts do not publish research or reports about our business, or if they adversely change their recommendations regarding our ordinary shares, the market price for our ordinary shares and trading volume could decline.
• If we are classified as a passive foreign investment company, United States taxpayers who own our securities may have adverse United States federal income tax consequences.
• As a company incorporated in the Cayman Islands, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from Nasdaq corporate governance listing standards.
• You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because we are incorporated under Cayman Islands law.
• If we fail to implement and maintain an effective system of internal controls, we may be unable to accurately or timely report our results of operations or prevent fraud, and investor confidence and the market price of our ordinary shares may be materially and adversely affected.
• Shareholders of Cayman Islands exempted companies like us have no general rights under Cayman Islands law to inspect corporate records or to obtain copies of lists of shareholders of these companies.
• Certain corporate governance practices in the Cayman Islands, which is our home country, differ significantly from requirements for companies incorporated in other jurisdictions such as U.S. states.
• Economic substance legislation of the Cayman Islands may impact us or our operations.
• Certain judgments obtained against us by our shareholders may not be enforceable.
• We are an emerging growth company within the meaning of the Securities Act and may take advantage of certain reduced reporting requirements.
• We are a foreign private issuer within the meaning of the Exchange Act, and as such we are exempt from certain provisions applicable to United States domestic public companies.
• We may lose our foreign private issuer status in the future, which could result in significant additional costs and expenses to us.
• We will incur significantly increased costs and devote substantial management time as a result of the listing of our ordinary shares on the Nasdaq.
• If we fail to meet applicable listing requirements, Nasdaq may delist our shares from trading, in which case the liquidity and market price of our shares could decline.

Future Outlook

The company intends to further expand its product portfolio to include additional models of fully electric equipment, expand its engineering, procurement, construction and commissioning, or EPCC, service for deploying charging solutions in Singapore and deepen collaboration with our strategic partners and further expand and diversify our engineering solutions and options, among others.

Industry Context

The heavy equipment industry in Singapore is fragmented, consisting of multinational operators and small, independent businesses.

Comparison to Industry Standards

• The document does not provide specific comparisons to industry standards or benchmarks.
• The document does not list specific comparible companies, projects, and results.

Legal Proceedings

• In November 2023, Ten-League (E&T) received a court filing by the liquidator of one of our machinery suppliers, which has been subject to a winding-up order since November 2022 due to insolvency.
• In August 2024, the above proceeding concluded with the court ordering that the transactions for the sale of the Disputed Machineries be validated and dismissing the Plaintiffs claim for payment from Ten-League (E&T).

Related Party Transactions

• The company had related party transactions with Ten-League Corporations Pte. Ltd. and Ten-League Green Energy Pte. Ltd.

Stakeholder Impact

• The company's performance and future plans will impact shareholders, employees, customers, and suppliers.

Next Steps

• The company intends to further expand its product portfolio to include additional models of fully electric equipment.
• The company intends to expand its EPCC service for deploying charging solutions in Singapore.
• The company intends to deepen collaboration with its strategic partners and further expand and diversify its engineering solutions and options.

Key Dates

Keywords

heavy equipment, engineering consultancy, equipment rental, turnkey project solutions, SANY, Singapore, financial results, Form 20-F, electric equipment, bizSAFE