Report to Shareholders

Dear Shareholders,

FY2012 was another milestone year for the Group as we completed the fifth year of our listing on the Exchange in February 2012. In the year under review the Group reported a 37% increase in revenue to S$99.0 million, our highest ever and very close to our milestone revenue target of S$100 million. The resulting S$8.5 million profit before tax was also the highest recorded by the Group and despite a 
much higher tax bill, the Group managed to maintained its profit after tax close to last year’s record.

The good business performance were mainly achieved in the earlier part of the year and as the prevailing recessionary global economic environment set in, the Group’s growth slowed in the last quarter. Nevertheless, I am pleased to report on behalf of the Board of Directors, that the Group’s growth strategy implemented since we were listed has borne fruit and generated continuing set of commendable results with sterling growth and consistent dividend payout throughout the past years.

Developing into an Integrated Service Provider

The primary business of Chasen when it was listed in 2007 was as a Specialist Relocation Solutions provider. It was the tail end service in the supply chain in the setting up of manufacturing facilities. As we have moved further up the supply chain, we are now able to provide Third Party Logistics and Technical & Engineering services to complement the original Specialist Relocation Solutions services. Our Group now has the capability to provide turnkey services from the construction and facilitating of a manufacturing or service capability to relocating and hooking up the sophisticated machinery and equipment used by the customer. After commencement of operations, the Group is able to continue servicing the customer with other logistics solutions including warehousing and other third party logistics and technical services such as plant maintenance support. 

Chasen is currently recognized by major multinational players employing highly sophisticated machinery and equipment in their operations as a quality global relocation solutions provider and we will strive over the next few years to establish our other complementary service capabilities into strong regional players in their respective industries. 

Our established track record and expanded service offerings earned us a wider and diversified customer pool. Our list of renowned global customers grew from clients in the electronics sectors of thin-film transistor liquid crystal display (“TFT LCD”) panel manufacturers, wafer fabrication and other semi-conductor related industries to encompass customers in the telecommunications, renewable energy, oil & gas, marine and construction sectors as well. Consequently, the Group current business model of diversified revenue source enabled us to weather cyclical industry downturns as shown by the growth of the Group over the past few years. 

In our bid to establish ourselves regionally Chasen successfully replicated our business model in both Malaysia and China, as evident in our contracts winning momentum. Notably, the Group clinched more than RMB100 million worth of relocation projects in the People’s Republic of China in the financial year under review, a breakthrough vindication of the Company’s decision to enter the Chinese market in 2004. The Group currently employs more than 1200 workers region-wide and a good portion of this workforce can be deployed for project execution out of their operating base.

Business Performance

We achieved yet another record high revenue of S$99.0 million in FY2012, a 37% year-on-year revenue growth from FY2011, and close to a five-fold increase over the revenue in the financial year of our public listing in 2007. This represents a 36.6% CAGR growth over the five years period from FY2007. Increase in the Group’s revenue growth was supported by broad-based growth across all three business segments, Specialist Relocation Solutions, Third Party Logistics and Technical & Engineering services. Specialist Relocation Solutions remained to the Group’s main revenue driver, contributing about 45% of the Group’s revenue in FY2012. Singapore continues to be the Group’s main geographical revenue base, contributing S$58.0 million or 59% of total revenue in FY2012. 

We concluded FY2012 with a net profit attributable to shareholders of S$7.3 million, achieving 30% CAGR growth from FY2007 to FY2012, representing basic earnings per ordinary share of 3.07 Singapore cents (FY2011: 3.22 Singapore cents) over the enlarged shareholdings. 

The Group continues to acquire strategic additions to our total capability and set annual growth and investment return targets to gauge the performance of each subsidiary. We are pleased to present the report card of the business performance of the various subsidiaries for the period under review as measured against the set targets. These results help management to focus its resources on those subsidiaries that require greater support and attention. 



We are also pleased to report that the Group’s efforts in business expansion had attracted international attention. In January 2012, the Group was ranked the 4th fastest growing Singapore company by International Business Times and ranked No. 1 in the Road & Rail category worldwide. This international ranking serves as encouragement for the Group to continue our emphasis on business growth.

Prospects and Outlook

Market conditions are expected to remain challenging for the year ahead resulting in lesser project tender opportunities and delays in project commencement or work in progress. The sales and marketing team will continue to seek business opportunities through sales leads in the regional market so as to build a strong project pipeline. 

The Group will still rely substantially on revenue from projects from all its business segments. Such projects require substantial financial resources to execute them successfully. Management recently established a department headed by our Executive Director to vet the viability of these projects before committing our resources to them. The department will also conduct the necessary due diligence and establish the required legal and operational management framework for each project and oversee their successful execution by the subsidiary concerned. 

The Group also has a steady recurring revenue base in its relocation and third party logistics businesses where Chasen continues to service their customers by providing on-site relocation support in case any equipment or machinery needs to be relocated to be retrofitted, refurbished or reconfigured due to change in production settings, improvement in product or production technology. 

Stiff competition may compromise margins but we will continue to devote conscientious efforts to manage our operating costs so as to remain competitive and nimble in this business environment. We will explore ways to streamline our Group structure to improve efficiency and productivity. 

We are committed to enhance shareholders’ value through continued sustainable growth. We will work on enlarging and further diversification of our revenue stream to ensure the Group’s growth through expanding customer base, market share and geographical spread. 

Investor Relations

The Group remains dedicated to improving communications with stakeholders through a series of investor friendly measures to achieve greater corporate transparency, awareness and enhanced brand equity. 

We announced our financial results well within 45 days and 60 days for our quarterly and annual results respectively. Briefings were arranged on a quarterly basis where Directors shared with investors the Group’s corporate updates, financial review and their views on market outlook. Chasen also participates actively in media interviews and supplements by mainstream media like Straits Times, Lianhe Zaobao, Business Times and online media portal like NextInsight. 

The Board updates the Group’s shareholders on an annual basis through the Annual General Meeting where robust discussions are encouraged through questions and answers during the meeting. 

In December 2011, the Group was also awarded the Certificate of Excellence for “Best Investor Relations” by a SGX Catalist Company at the IR Magazine South East Asia Conference and Awards 2011.

Corporate Citizenry

As part of its corporate citizenship philosophy, Chasen continues to exercise its social responsibility to the local community. Chasen sponsored a charity golf tournament organized by the Lions Clubs, participated in a charity golf tournament organized by one of our principal customers (M+W Singapore Pte Ltd) and donated to a children’s home that is managed by the Singapore Statutory Board Employees’ Cooperative Thrift & Loan Society. 

Appreciation

I will like to express my heartfelt gratitude and appreciation to my fellow Directors and all our employees for the breakthroughs we achieved during the year. I would also like to thank our customers and other stakeholders including business partners, associates, suppliers, service providers, professional advisors and intermediaries for their continuing confidence in Chasen’s ability to deliver the desired results. Our journey has been made pleasant by your unwavering support.


LOW WENG FATT
Managing Director and CEO