Ever Glory United Holdings Announces S\$17 Million Share Placement to Fund Growth and Acquisition

Key Highlights of the Announcement

• Proposed Placement of Up to 31,000,000 New Shares: Ever Glory United Holdings Limited (“Ever Glory” or the “Company”) has entered into a placement agreement to issue up to 31 million new ordinary shares at S\$0.55 per share, raising up to S\$17.05 million.
• Discounted Placement Price: The placement price represents a 7.72% discount to the previous trading day’s volume weighted average price (VWAP) of S\$0.596.
• Non-Underwritten, Institutional and Accredited Investors Only: The placement is not underwritten and will be offered to institutional and accredited investors in Singapore, without a prospectus.
• Share Dilution: The new shares represent approximately 8.92% of the current issued capital and 8.19% of the enlarged capital post-placement.
• Use of Proceeds: 50% of net proceeds (about S\$8.2 million) will be used for general working capital, and 50% for partial payment of the acquisition of Guthrie Engineering (S) Pte. Ltd.
• Impact on Financials: The placement will almost double the Company’s net tangible assets (NTA) per share from 7.01 cents to 12.12 cents but is expected to dilute earnings per share (EPS) from 3.48 cents to 2.73 cents.
• Major Shareholders Remain Unchanged: No change in control or new substantial shareholders is expected as a result of the placement.
• SGX-ST Listing Pending: The new shares will be listed on the Catalist Board of SGX-ST, pending approval.

Full Story: What Retail Investors Need to Know

Ever Glory United Holdings Limited has announced a major corporate move that could have significant implications for its share price and future direction. The Company has entered into an agreement with CGS International Securities Singapore Pte. Ltd. to place up to 31 million new shares, raising up to S\$17.05 million in new funds. This placement, priced at S\$0.55 per share, comes at a notable 7.72% discount to the stock’s last traded VWAP, potentially making it an attractive entry point for institutional and accredited investors.

Share Dilution and Structure

The placement represents roughly 8.92% of the current issued share capital and will dilute existing shareholders’ interests to some degree, with the enlarged capital base reaching approximately 378.6 million shares. Importantly, these new shares will be fully paid, freely transferable, and rank pari passu with existing shares, meaning they carry the same rights as current shares.

The Company has emphasized that shares will not be placed to directors, substantial shareholders, or related parties unless specifically approved by SGX-ST or shareholders, and no single investor is expected to become a new substantial shareholder as a result of the placement.

Strategic Use of Funds

The Company is clear in its rationale: funds raised will both strengthen the balance sheet and provide flexibility for future growth. Specifically, 50% of the approximately S\$16.39 million net proceeds (after deducting fees and expenses of S\$655,550) will be allocated for general working capital. The other half will be used to partially pay for the acquisition of Guthrie Engineering (S) Pte. Ltd., a move previously announced in April 2025. This acquisition marks a significant strategic expansion for Ever Glory, and the placement proceeds will help ensure its smooth completion.

Pending deployment, the funds may be invested in short-term instruments or deposits to maximize returns.

Financial Impact: NTA Rises, EPS Dilutes

Shareholders should note these key financial effects:

• Net Tangible Assets (NTA): The Company’s NTA is expected to rise significantly from S\$18.26 million (7.01 cents per share) to S\$35.31 million (12.12 cents per share) post-placement.
• Earnings Per Share (EPS): While NTA increases, EPS is expected to fall from 3.48 cents to 2.73 cents due to the enlarged share base, assuming net earnings of S\$8.3 million for FY2024 (down from S\$9.0 million pre-placement, likely due to placement costs and/or acquisition impact).

Shareholder Approval and Regulatory Compliance

The placement will be carried out under the existing share issue mandate approved at the April 2025 AGM, which allows the Company to issue new shares up to 100% of issued capital, with a 50% limit on non-pro-rata placements. The 31 million shares fall well within this mandate. Application for listing and quotation of the new shares on the SGX-ST Catalist Board is pending, and the Company will announce when approval is received.

Safeguards and Placement Agent’s Role

The Placement Agent, CGS International Securities Singapore Pte. Ltd., will earn a 3.5% commission on the placement and has confirmed that the shares will not be offered to directors, substantial shareholders, or related parties without proper approvals. Additionally, the Agent will ensure that there is no change in control and that placees do not use share borrowing arrangements to subscribe for the placement shares.

Major Shareholders and Interests

It is noteworthy that Sun Renwang (Non-Independent Non-Executive Chairman) and Xu Ruibing (Executive Director and CEO) each hold 37.74% of the Company’s shares pre-placement. No directors, substantial shareholders, or their associates will participate in the placement, so their interests remain unchanged.

Why This News Matters: Potential Share Price Impact

• Capital Raise and Acquisition Funding: The substantial capital raise and use of funds for an acquisition could be seen positively, signaling growth and expansion, which may support or boost the share price.
• Discounted Placement Price: The 7.72% discount may create short-term selling pressure if new placees offload shares for a quick profit, but it could also attract strategic investors, potentially supporting the share price medium-term.
• Dilutive Impact: The EPS dilution is a critical point for valuation-conscious investors and may weigh on the share price if not offset by anticipated earnings growth from the Guthrie Engineering acquisition.
• Clear Communication and Transparency: The Company has committed to detailed ongoing disclosures regarding use of funds, which should provide comfort to investors concerned about capital deployment.

Shareholders and potential investors should monitor: progress of the placement, the outcome of the Guthrie Engineering acquisition, changes to the shareholder register, and any updates regarding the use of proceeds or further capital-raising activities.

Cautionary Statement

The placement is subject to regulatory and contractual conditions, including SGX-ST approval. Shareholders are advised to exercise caution and consult their professional advisers before making any investment decisions related to Ever Glory United Holdings shares.

Disclaimer

This article is for informational purposes only and does not constitute investment advice. The information is based on the Company’s official announcement and public disclosures. Investors should conduct their own due diligence and consult their financial advisers before making any investment decisions.

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