Vicon Holdings Limited Announces Details of the Proposed Listing on the Main Board of SEHK

Global Offering of 100,000,000 Shares; Offer Price Ranges from HK$1.0 to HK$1.20 per Share

HONG KONG — Vicon Holdings Limited (“Vicon” or the “Group”), a specialist foundation contractor focusing on design-and-build foundation projects in Hong Kong private sector, today announced the details of the proposed listing of its shares (the “Listing”) on the Main Board of The Stock Exchange of Hong Kong Limited (“SEHK”).

Offering Details

The Group proposes to issue a total of 100,000,000 Shares (the “Offer Shares”), of which 90% or 90,000,000 Shares (subject to reallocation and the Over-allotment Option) will be offered to professional and institutional investors under international offering (the “International Offering”) and the remaining 10% or 10,000,000 Shares (subject to reallocation) will be offered to members of the public in Hong Kong under Hong Kong public offering (the “Hong Kong Public Offering”) (collectively the “Share Offer”). The indicative Offer Price range is between HK$1.00 and HK$1.20 per Share. Net proceeds to be received by the Group from the Global Offering are estimated to be approximately HK$73.0 million, assuming an Offer Price of HK$1.10, being the mid-point of the indicative Offer Price range. The number of the Offer Shares represents a public float of 25% of the enlarged number of Shares in issue.

The Hong Kong Public Offering commenced from 9:00 a.m. today on 12 December 2017 (Tuesday), and will end at 12:00 noon on 15 December 2017 (Friday). The final Offer Price and results of allocation are expected to be announced on 21 December 2017 (Thursday). Dealings of Shares on the Main Board of SEHK is expected to commence on 22 December 2017 (Friday) under the stock code 3878. The Shares are to be traded in board lots of 2,000 Shares.

Innovax Capital Limited is the Sole Sponsor of the Listing, while Sun International Securities Limited is the Sole Bookrunner of the Share Offer.

Investment Highlights
Experience in completing foundation projects involving complicated foundation and engineering designs
Vicon has the experience, technical skills and proven track records in carrying out foundation projects involving complicated foundation and engineering designs. The Group has completed foundation projects with significant ground-level difference and complicated underground status during the Track Record Period. Completion of these foundation projects require the experience and knowledge on geological conditions and sub-soil limitation of the relevant construction sites and the surrounding areas as well as detailed calculations of the loading capacity of the piles for the superstructure for the purpose of determining the type, the number and the length of the piles required.

Strong capability to develop alternative and cost-efficient foundation design proposals
Vicon has strong capability in developing alternative and cost-efficient foundation design proposals. As part of its business strategies, the Directors position Vicon as a design-and-build foundation contractor for target foundation projects, which enables the Group to re-develop the foundation design proposals and revamp the methods of construction that can reduce construction cost and time. With the experience and technical skills, the Group has strong capability to develop alternative, cost-efficient and technically feasible foundation design proposals apart from satisfying specific requirements of customers.

Strong in-house design capability
Vicon’s in-house design team serving design-and-build projects comprises members with strong technical background in design-and-build engineering experience and has an average of 18 years of experience in the foundation contracting industry in Hong Kong. The design team serves the design-and-build foundation projects. The capability to develop competitive foundation design proposals is one of the critical winning factors for the Group in securing foundation projects.

Stringent quality control and established management procedures
A stringent quality control system and a strong commitment to safety, occupational health and environmental management are of paramount importance in enhancing Vicon’s competitiveness. The Group has obtained OHSAS18001:2007 certification for occupation health and safety management systems, and has adopted ISO 9001 2008 in respect of its quality management system. The Group has also established environmental management systems and was awarded ISO 14001:2004 certification (environmental management system standard).

Business Strategies
Vicon strives to become a contractor with primary focus on the design-and-build foundation projects in Hong Kong private and public sectors. For that, the Group will continue its strategic focus on undertaking targeted design-and-build foundation projects as sub-contractor. The Group plans to expand its in-house design team by increasing the number of professional qualified engineers and qualified surveyors as well as the supporting staff, and upgrading the functionality and end-user permission of selected professional construction design and analytical software. Leveraging the expanded capability of the in-house design team, Vicon will continue to focus on design-and-build foundation projects in Hong Kong and Macau. The Group will continue to deploy resources to strengthen its in-house design capability and these efforts will further enhance the competitiveness of the Group in securing design-and-build foundation projects.

Furthermore, Vicon plans to develop and strengthen the role and its capability as main contractor. The role of main contractor allows the Group to have direct access to the property developers or project owners, thereby fosters and facilitates the development of long-term business relationship with quality customers. Moreover, this also enables the Group to undertake different types of construction projects by itself or sub-contracting to other approved sub-contractors, and will further enhance the Group’s business growth and sustainability in the foundation contracting industry. More resources will be placed in investment in machinery in enhancing business sustainability, enabling the Group to participate in targeted foundation projects as main contractor.

To capture the growing business opportunities in Hong Kong public sector in light of the anticipated increase in new infrastructure and building projects initiated by the Hong Kong Government, the Group plans to apply for registration on the “List of Approved Suppliers of Materials and Specialist Contractors for Public Works” of the Development Bureau. Leveraging the accumulated 38 years of experience in handling foundation projects in Hong Kong of Vicon’s executive directors and senior management team, Vicon will capture the opportunities and expand successfully in Hong Kong public sector.

Use of Net Proceeds from the Share Offer

The Group proposes to use the net proceeds from the Share Offer in the following:

Items / Percentage (%)
Financing of the issuance of surety bonds: 41.0
Purchase of various machinery for foundation business in Hong Kong private and public sectors: 21.1
Early repayment of financial lease liabilities incurred for the purchase of cranes and oscillators: 16.9
Expansion of in-house design team by recruiting professional qualified engineers and surveyors: 10.3
Purchase of additional licensed rights of selected professional construction design and analytical computer software: 0.7
Working capital and other corporate purposes: 10.0
Total: 100%