Broker: Converging Knowledge Pte. Ltd.
Date of Report: 13 June 2025

Lum Chang Creations Limited: A Niche Leader in Singapore’s Urban Revitalisation Market Delivers Robust Growth and Strong Margins

Executive Summary

Lum Chang Creations Limited (LCC) stands out as a premier urban revitalisation specialist in Singapore, demonstrating impressive financial growth, expanding margins, and a solid order book. With a unique expertise in heritage building conservation and recognition from industry awards, LCC is strategically positioned to capitalize on the growing demand for conservation and adaptive reuse projects, underpinned by government support and sustainability initiatives.

Company Overview and Industry Positioning

LCC is one of Singapore’s few players equipped with the expertise and track record required for heritage building preservation, offering specialized risk management and technical skills. The company’s excellence has been recognized through multiple industry awards, cementing its leadership in a niche yet growing sector.

Strong Financial Performance and Margin Expansion

LCC has achieved remarkable revenue growth, driven by a surge in demand for urban revitalisation projects. The company reported sustained improvements in both gross and net profit margins, reflecting disciplined cost management and pricing power.

Key highlights:

• Gross profit margin increased from 13% in FY2022 to 21% in 6M2025.
• Net profit grew sharply from S\$0.5 million in FY2022 to S\$5.5 million in 6M2025.
• Revenue posted a compound annual growth rate (CAGR) of 105% over the review period.

Dividend Policy and Shareholder Returns

Directors intend to recommend dividends of not less than 30% of net profit after tax attributable to shareholders for FY2025 and FY2026, reflecting management’s confidence in sustained profitability and commitment to shareholder value.

Order Book and Visibility of Earnings

LCC maintains a healthy order book, with contract fulfillment timelines ranging from three months to two years. This provides visibility on forward earnings and supports management’s optimistic outlook.

Industry and Market Dynamics

The Singapore urban revitalisation specialist (URS) industry, valued between S\$650 million and S\$780 million in 2024, is expected to benefit from:

• Government policies supporting the conservation and adaptive reuse of heritage buildings.
• Growing private sector participation in construction and fit-out projects.
• Promotion of sustainability and heritage protection under national masterplans.

LCC commands an estimated market share of 15.9% to 18.3%, positioning it as a leading player in the segment.

Competitive Landscape

LCC is joined by a select group of competitors in Singapore’s URS industry, each holding relevant Building and Construction Authority (BCA) licenses. Key industry players include:

LCC distinguishes itself through its integrated capabilities and niche focus, with a track record spanning conservation, interior fit-out, and addition & alteration (A&A) works across diverse asset types.

Risk Factors and Mitigation

Investors should note the following risks and management’s responses:

• Revenue Volatility: As all revenue is secured through competitive tenders, annual earnings may fluctuate based on contract wins and completions.
• Labour and Immigration Risks: Reliance on skilled personnel and foreign workers subjects the company to regulatory and manpower policy changes.
• Cost Management: Sustaining current profit margins depends on continued control over project costs and successful project execution.
• Dilution Risk: Future capital raising to fund growth plans may result in dilution for existing shareholders unable or unwilling to participate.
• Negative Publicity: Adverse media coverage related to the group, directors, or major shareholders could impact share price.

Mitigation strategies include ongoing process improvement, workforce planning, and active monitoring of regulatory developments.

Use of Proceeds and Growth Strategy

Upon listing, Lum Chang Creations plans to allocate capital as follows:

• Expansion of core URS business in Singapore and Malaysia – S\$3 million (34.3%)
• Ventures into the high-end residential sector – S\$2 million (22.9%)
• Exploring acquisitions, investments, alliances, and joint ventures – S\$1 million (11.4%)
• General corporate working capital – S\$2 million (22.9%)
• Listing expenses – S\$1.75 million (20%)

Management remains open to reallocating proceeds in response to evolving opportunities, subject to public disclosure.

Corporate Governance and Compliance

LCC is committed to high standards of corporate governance, with audit, risk, and remuneration committees in place to oversee financial reporting, internal controls, and compliance. The company adheres to Singapore Financial Reporting Standards (International) and discloses all interested person transactions in accordance with Catalist Rules.

Financial Review: Key Metrics and Ratios

The company maintains a strong balance sheet, prudent leverage, and healthy liquidity, supporting both growth and dividend payouts.

Peer Comparison & Sector Metrics

Outlook and Strategic Prospects

The outlook for LCC remains positive, supported by:

• Continued government investment in heritage and sustainable redevelopment.
• Strong pipeline of private sector fit-out and A&A projects.
• Expansion opportunities in Singapore and Malaysia, including high-end residential and potential M&A activity.

Management’s focus on operational excellence, risk management, and value creation underpins its strategy to capture further market share and deliver sustainable returns.

Why LCC IPO Could Be the Most Exciting Catalist Listing of 2025

With a focused growth plan, a strong niche in high-end urban revitalisation, and expansion ambitions across Southeast Asia, LCC is poised to capture rising demand in a resurging property market. Backed by experienced management, a reputable sponsor, and a credible underwriter, the IPO offers early exposure to a specialist player with regional ambitions. While investor risks remain, the upside potential on debut and long-term prospects make this an IPO worth watching for both institutional and retail investors.

Conclusion

Lum Chang Creations Limited is a niche market leader in Singapore’s urban revitalisation sector, delivering strong financial results, robust margins, and a clear commitment to shareholder value. With a proven track record, a disciplined approach to growth, and a supportive industry backdrop, LCC is well-placed to capitalize on emerging opportunities in the conservation and fit-out markets.