[TrueZhuo IPO Trends] Small Market Cap, Big Growth Potential: Chang Le Holdings IPO Worth Watching

Singapore's construction industry is benefiting from the drive of large-scale national infrastructure and numerous public housing (HDB) projects, and is set for rapid development in the next two years. The total value of construction contracts in 2025 and 2026 is expected to remain at S$47 to 53 billion (Singapore dollars, same below), a high level in recent years. Singapore-based builder Chang Le Holdings recently submitted a prospectus to the Hong Kong Stock Exchange, aiming to list on the Growth Enterprise Market (GEM). This small construction company boasts higher profit margins and growth potential than its peers, making it worth watching.

Chang Le Holdings is a Singapore-based main contractor for construction and renovation. Its revenue was S$200 million in 2024, with a gross profit of S$54 million; revenue was S$219 million in 2025, with a gross profit of S$55 million. The company specializes in building construction works, including building construction; repair and decoration works; and alteration and addition works. During the track record period, the company primarily acted as the main contractor and engaged in building construction, such as constructing residential houses, apartment buildings, and show flats.

The company currently holds a GB1 license issued by the Building and Construction Authority (BCA), allowing it to undertake general building works of any contract value in Singapore. Furthermore, the company is registered with the BCA under the Contractors Registration System and currently operates under the "General Building" (CW01) trade at A2 grade, "Civil Engineering" (CW02) trade at C3 grade, and "Repair and Redecoration" (CR09) trade at L3 grade.

For the fiscal year ended October 31, 2025, the company's revenue was S$22 million, a year-on-year increase of 9.1%; gross profit was S$6 million, up 3.32% year-on-year; net profit was S$1 million, a decrease of 61.9% year-on-year. The gross profit margin for the period was 25.26%, down approximately 1.4 percentage points from the same period last year.

According to a Frost & Sullivan report, the market size of Singapore's construction industry, measured by total contract value, grew from S$33.523 billion in 2019 to S$44.248 billion in 2024, representing a compound annual growth rate (CAGR) of about 5.7%. Additionally, the market size measured by certified payments grew from S$28.299 billion in 2019 to S$38.448 billion in 2024, with a CAGR of about 6.3%. The residential segment recorded a strong CAGR of approximately 11.2% during the same period.

Currently, Singapore's construction industry is in a strong growth phase, primarily driven by large-scale national projects such as Changi Airport Terminal 5, Tuas Port, multiple MRT line extensions, and numerous HDB projects. The government is mandating digitalization (e.g., BIM and CORENET X systems) and sustainable construction. This signifies a shift from the traditional labor-intensive model to a technology-intensive one.

This listing presents an opportunity for the group to raise funds for digital development. Although the local industry has a high volume of projects, contractors' profit performance shows a polarization. Constrained by material price fluctuations, a shortage of skilled labor, and stricter environmental/foreign worker policies, the net profit margins of many small and medium-sized contractors hover around only 1% - 5%. Chang Le Holdings, however, shows a higher profit recovery, stemming from its integration of high-value-added segments like renovation and maintenance. Following digital development, the group is expected to further reduce costs and benefit from competing for government projects.

The core advantage of Chang Le Holdings is its possession of the GB1 (General Builder Grade 1) license issued by Singapore's BCA, which means it can undertake general building works of any contract value, a relatively high threshold. Besides construction, the company is also involved in interior decoration, labor supply, and dormitory management. Although the group has good profit margins, its overall market share in Singapore is small, about 0.1%, facing direct competition from large conglomerates. Furthermore, the Singapore government's further tightening of foreign worker quotas will test its future labor cost control.

Currently, Singapore's construction industry is not short of orders. As a small-to-medium-sized contractor with profit margins superior to its peers, Chang Le Holdings possesses strong flexibility. If it can successfully list and utilize the funds to complete its digital transformation, its growth potential in Singapore's public and private residential markets remains vast. Chang Le Holdings' IPO warrants close attention. The company has a small market cap but significant growth potential, and the chance of a speculative rally is not low.