(CapitalWatch, July 15, New York) Junee Ltd., a Hong Kong-based interior design, fit-in, and maintenance company, seeks an initial public offering in New York.
The company launched operations in 1998 under the name Sannogi Holdings, and later evolved into OPS Interior Design Consultant Ltd., which became the key operating subsidiary. Serving both residential and commercial clients in Hong Kong, in the second half of 2021, the company counted 19 recurring customers, representing 70% of its total clients and more than 80% of its revenues.
In the half-year ended December 2021, Junee had more than doubled its revenue to $5.9 million. Gross profit and net loss for the same period were $941,500 and $15,300, respectively. In the full year ended June 2021, Junee generated $6.2 million in revenue on $425,000 in net income, according to the prospectus.
Like any company operating in the real estate market, Junee has felt the impact of the Covid-19 lockdowns during the fiscal year ended June 2020. As Junee said in its SEC filing, it has experienced a shortage in subcontracting workers – and may face the same challenge again should social distancing rules be imposed again.
Junee also noted that in the fiscal year 2021, it has had to respond to the shrinking market by cutting budgeting, including withholding staff bonuses, putting pressure on the pricing of the subcontractors and suppliers and targeting on projects with higher margin in order to minimize the loss in case the projects delay. Since February 2021, however, business has "resumed incrementally," and the company achieved profits.
This year, Junee has also seen some difficulties during the temporary pandemic-related lockdowns – but the market has gradually recovered and the company did not see any material impact on its business in the year ended June 2022.
Junee said it plans to use 40% of the proceeds from its offering for general working capital, as well as expand its service capacity and fund potential strategic investments and acquisitions. Its expansion strategy includes building an in-house team of electrical fit-out workers and an in-house team of repair and maintenance service workers.
Junee has filed to become publicly traded on the Nasdaq Capital Market. The terms of the deal have yet to be disclosed. Univest Securities is the underwriter on the IPO.