SMJ International Holdings Inc.

SMJ International Holdings Inc. IPO - What You Need to Know

Hey there! Let’s break down what’s actually going on with SMJ’s IPO in plain English:

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1. What does SMJ International do?

They’re the “Flooring Kings of Asia.” 🏢
SMJ sells premium carpets, vinyl tiles, and eco-friendly flooring to offices, hotels, schools, and stores across 20+ countries (mostly Asia, but also Brazil, UK, Australia). They’ve been around for 35 years and supply materials for government projects.

Key strengths:

• 80 flooring designs available in 400 colors, ready to ship immediately.
• Their "SMJ" brand is a household name in Singapore.

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2. Financial Snapshot: Growth or Trouble?

• 2024: S$16.6M revenue (≈$12.3M USD), profit of S$1.8M (≈$1.3M USD).
  • Note: S$452,537 (≈$335K USD) of that profit came from one-time gains (like selling assets).
• 2025: Sales inched up to S$16.8M (≈$12.5M USD), but profit plummeted 44% to S$1.0M (≈$740K USD) 📉.
  • Rising costs and a S$18,838 (≈$14K USD) investment loss hurt results.

Cash concerns:

• Paid shareholders (mostly the Ho family) S$2.8M (≈$2M USD) in dividends in 2025 – more than double their profit that year.
• Sold S$2M in investments to fund day-to-day operations.

Silver lining: Less reliant on Singapore (53% of sales vs. 60% last year).

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3. Key IPO Details

• Family control: After IPO, the Ho family (CEO + Deputy CEO) will own 86.5% of voting power 🚨. They call all major shots.
• Cash reserves: Only S$0.8M (≈$590K USD) left – about the price of a luxury SUV 🚗.
• Spending plans:
  • 35% of IPO money for inventory (to ship orders faster).
  • 30% for acquisitions (eco-materials, office furniture). The company didn’t provide specific targets or timelines.
  • 20% to hire sales/marketing teams.
  • 15% for daily operations.

Transparency issues:

• Classified as an "emerging growth company" – fewer financial disclosures required 🚩.
• No external audit of financial controls until 2030.

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4. Top Risks to Know

• Profit plunge: Last year’s 44% profit drop could become a trend.
• Cash crunch: Only S$82K generated from operations in 2025. Might need loans or sell more stock (which could dilute your shares).
• Customer concentration: One client made up 15% of 2025 sales. Lose them, lose big.
• Dividend drain: The Ho family took 2.8x the annual profit as dividends in 2025.
• Acquisition gamble: 30% of IPO cash is for buying companies, but no targets identified.
• Singapore exposure: 53% of sales still come from Singapore. A local downturn would hit hard.

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5. IPO Math: What You’re Really Paying

• Price: $4.00–$5.00 per share (2.5 million shares total).
• Valuation: ~$11.25 million at midpoint.
• Tangible assets per share: Just $0.55–$0.60 after IPO.
  • You’re paying ~7x more than the company’s "hard asset value."

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Bottom Line:

SMJ is a high-risk, high-reward bet on Asia’s construction sector:
✅ Consider if: You’re comfortable with family-controlled businesses and believe they can turn profits around.
❌ Avoid if: You prefer stable growth, transparency, or companies that reinvest profits instead of paying big dividends.

Final note: SMJ’s IPO filing lacks some details investors might expect. If you need "full visibility" under the hood, this might not be your match. Always consult a financial advisor!

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