SINGAPORE (Jan 29): Terence Tea, executive chairman and managing director of Accrelist, has continued to buy up shares as the commodity and electronics firm makes plans to enter the aesthetic medical services market.
From Jan 2 to 22, Tea bought 31.1 million shares in 15 transactions at an average price of 0.6 cent apiece or a total of $188,000. His direct stake rose from 22.5% of the company, or 1.19 billion shares, to 23.1%, or 1.23 billion shares, this month. He is deemed interested in another 30 million shares, or 0.57% of the company, held by his wife Sim Aileen.
An entrepreneur who founded copper smelter Advance SCT, Tea first became involved with Accrelist in 2013 after a company he owned — SingYaSin SMC Technologies — acquired a stake in Accrelist from its controlling shareholders as well as through a placement. Tea was appointed executive chairman later that year.
Since November 2016, Tea has been steadily buying Accrelist shares on the open market. Between November 2016 and January 2018, Accrelist’s share price has increased 75%. The stock closed at 0.7 cent on Jan 24.
On Jan 23, the Catalist-listed Accrelist announced that it is acquiring a chain of aesthetic medical clinics called Refresh Laser Clinic for $4 million. It has signed sale and purchase agreements with Refresh Group and will pay $2 million in cash. The remaining $2 million will be paid through an issuance of 250 million new shares at 0.8 cent apiece, which is a 14% premium to the current share price. The new shares represent nearly 5% of Accrelist’s existing share capital and 4.5% of the company’s enlarged share capital.
Refresh Laser Clinic has four aesthetic medical clinics in Singapore, providing dermatology and skin laser services. Two of the clinics were profitable, reporting pre-tax earnings of $71,473 in the previous financial year, according to management accounts. They have combined net tangible assets of $897,266. The remaining two clinics were loss-making last year, with a total net loss of $43,680. They have net tangible assets of $352,631.
The acquisition marks Accrelist’s first foray into the medical sector, which Tea hopes will provide investors with diversified returns and reduce the group’s reliance on its existing businesses. The group plans to acquire more aesthetic clinics.
“The aesthetic medical sector is attractive to us, owing to its long-term growth potential both in Singapore and beyond our shores, especially in China. Refresh Laser Clinics is a popular front runner in this sector and has an established clientele base,” says Tea in a press statement.
Accrelist, formerly known as WE Holdings, was primarily a distributor and manufacturer of electronics products for semiconductor and electronics players such as Sharp Electronics and Powerwave Technologies. It also has a commodities trading business.
Since 2016, the company has been trying to shift its focus to “corporate accretion services” as well as education and financial technology. Corporate accretion generally involves growing a company by acquisition. In November 2016, Accrelist raised $4 million via a convertible loan from Singapore-based Rixin Zhonghe Investment to boost its corporate accretion services business. The loan has an interest payment of 8% a year that must be paid every six months by cash or converted shares, or a combination of both. Accrelist will issue 59.3 million shares to Rixin as interest payment for the year to November 2017, which will raise the number of shares in issue to 5.3 billion.
Accrelist incorporated a securities-based crowdfunding subsidiary called WE Crowdfunding in December 2016. WE Crowdfunding has yet to obtain the capital market licence from the Monetary Authority of Singapore to operate in Singapore.
In March last year, Accrelist made a deal with Hong Kong-based Windsor Technology Co. Windsor has a cross-border payment business licence with the People’s Bank of China. Accrelist says its e-payments subsidiary WE Pay will market Windsor Technology’s systems to new merchants.
On Oct 11, Accrelist said it is placing shares worth $4 million to investors Liu Song and Summit Planners Advisory in two equal tranches. Shares will be priced at 0.8 cent each. The proceeds will be used to support acquisition activities in the e-medical arena under WE Crowdfunding as well as for WE Pay’s working capital. WE Pay plans to buy point-of-sale systems to offer as part of its e-Wallet services.
These new businesses are insignificant so far. For 1HFY2018 ended September, nearly all of Accrelist’s revenue and earnings came from its stake in Jubilee Industries Holdings. Accrelist owns 64.7% of Jubilee, which produces plastic injection moulds, and therefore treats Jubilee as a subsidiary in its accounts.
