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A quick overview of Prime Skyline Limited

Prime Skyline Limited (PSE) has applied to raise $15 million in an IPO of its common stock, according to an F-1 registration statement.

The company provides the building envelope design, consultancy and construction services in various Asian countries.

Given PSE’s leading revenue contraction in a growing industry, I’m waiting for Prime Skyline’s IPO, although the low nominal price of the IPO may attract day traders to looking for volatility.

Expected IPO pricing date: to be announced.

What is Prime Skyline?

Prime Skyline, based in Singapore, was founded to help property developers design and build the shell parts of residential and commercial buildings.

Management is led by co-founder, president and CEO Sonny Bensily, who has been with the company since its inception in 1995 and was previously a civil engineer with WED Engineers & Constructors and New York Plastic Company Pte.

The company’s main offerings include:

  • Advice

  • Design

  • Construction

  • Provide

  • Maintenance

The company currently provides its services in Singapore, Sri Lanka, Myanmar, Philippines and Brunei and is looking to expand its operations to other Asian countries.

As of December 31, 2021, Prime Skyline has recorded an investment at fair market value of $2.2 million as of December 31, 2021 from investors including Focus Point Developments Limited.

Prime Skyline Basics

The company is seeking bidding opportunities for projects with commercial customers as well as government customers.

The building envelope industry in Singapore is relatively concentrated with only a few dominant participants.

In 2019, management said the company ranked fourth among such entrepreneurs in the region.

Sales and marketing expenses as a percentage of total revenue increased to 0.4x while revenue decreased, as shown in the numbers below:

Sales and marketing

Expenses vs income







(Source – SEC)

The sales and marketing effectiveness multiple, defined as the number of dollars of incremental new revenue generated from each dollar of sales and marketing spend, was negative (24.5x) during the last reporting period. (Source – SEC)

According to a 2022 market research report by Market Reports World, the global market for building envelope products and services was estimated at $158 billion in 2021 and is expected to reach $202.5 billion by 2028.

This represents a projected CAGR of 3.6% from 2022 to 2028.

The main drivers of this expected growth are an increase in demand for improved building envelope solutions for increased energy efficiency.

Furthermore, the Asia-Pacific region is expected to produce one of the fastest demand growth rates over the next few years.

Major competitors or other industry participants include:

  • Nam Lee Pressed Metal Pte. ltd.

  • LHL International Pte. ltd.

  • Mero Asia Pacific Pte. ltd.

  • YKK AP Singapore Pte. ltd.

Financial performance of Prime Skyline

The company’s recent financial results can be summarized as follows:

  • Contract main turnover

  • Lower gross profit and gross margin

  • Increase operating profit

  • Reduction in operating cash flow

Below are the relevant financial results from the company’s registration statement:

Total income


Total income

% deviation from before






Gross profit (loss)


Gross profit (loss)

% deviation from before






Gross margin


Gross margin





Operating profit (loss)


Operating profit (loss)

Operating margin







Net profit (net loss)


Net profit (net loss)

The net margin







Operating cash flow


Operating cash flow





(Glossary of terms)

As of December 31, 2021, Prime Skyline had $52,915 in cash and $33.6 million in total liabilities.

Free cash flow for the twelve months ended December 31, 2021 was $13.9 million, due to a large increase in accounts payable.

Prime Skyline IPO Details

Prime Skyline intends to raise $15 million in gross proceeds from an IPO of its common stock, offering 3.75 million shares at a proposed median price of $4.00 per share.

No existing shareholders have expressed interest in purchasing shares at the IPO price.

Assuming a successful IPO, the company’s enterprise value at the time of the IPO would be approximately $60.4 million, excluding the effects of underwriter over-allotment options.

The free float to outstanding shares ratio (excluding subscriber over-allotments) will be approximately 30.0%. A figure below 10% is generally considered a “low float” stock that can be subject to significant price volatility.

Management says it will use the net proceeds from the IPO as follows:

to pay start-up costs for potential projects, which will generally include project insurance costs, material costs, sub-contract fees and surveying service fees for certain start-up work to expedite our grow organically and expand our business scale by undertaking larger construction envelope projects in Singapore and other Asian countries, such as the Philippines and Sri Lanka.

for payment of cash security for performance bonds on prospective projects.

partially repay a five-year bank loan in the principal amount of S$1 million maturing in June 2025 and a five-year bridge loan with the same bank in the principal amount of S$5 million with a deadline in January 2026 .

to acquire servers, computers, software and other accessories to enhance our BIM design capabilities and upgrade our computer equipment and systems.

to reimburse our majority shareholder for an interest-free loan granted to us in order to pay the costs of this offer and the listing on Nasdaq.

for working capital and other general corporate purposes.

(Source – SEC)

The presentation by management of the company’s roadshow is not available.

Regarding ongoing legal proceedings, management said they are not aware of any significant proceedings against the company.

The sole listed bookrunner of the IPO is ViewTrade Securities.

Rating Metrics for Prime Skyline

Below is a table of relevant capitalization and valuation figures for the company:

Measure [TTM]


Market capitalization at IPO


Enterprise value


Price / Sales


EV / Turnover




Earnings per share


Operating margin


The net margin


Free float to outstanding shares


Average Proposed IPO Price Per Share


Net free cash flow


Free cash flow yield per share


Debt / EBITDA Multiple


CapEx ratio


Revenue growth rate


(Glossary of terms)

(Source – SEC)

Prime Skyline IPO Commentary

PSE seeks investment in the US public capital market to repay debt, fund corporate growth initiatives, new bidding opportunities and geographic expansion.

The company’s financials led to declining revenue, reduced gross profit and gross margin, growing operating profit but less cash flow from operations.

Free cash flow for the twelve months ended December 31, 2021 was $13.9 million, due to a large increase in accounts payable.

Sales and marketing expenses as a percentage of total revenue increased as revenue decreased; its sales and marketing effectiveness multiple was negative (24.5x) in the last reporting period.

The company currently plans to pay no dividends and intends to reinvest all future earnings in the company’s growth initiatives.

The market opportunity for the provision of building envelope construction services is quite large, but is expected to grow at a moderate CAGR of 3.6% over the next few years.

ViewTrade Securities is the sole underwriter and IPOs conducted by the company over the past 12 months have generated an average return of (66.0)% since their IPO. This is an underperformance for all major underwriters over the period.

The main risk to the company’s outlook is the rising cost of capital and the global slowdown, which can delay projects while increasing the cost of doing business.

Additionally, US investors would only own a portion of a Cayman Islands-registered company and would not directly own any interests in operating subsidiaries. The company may be subject to national restrictions on capital movements and dividends.

On the valuation side, management is asking investors to pay an EV/Revenue multiple of 2.4x for a company that generates negative revenue growth.

Given the company’s shrinking revenue in a growing industry, I’m waiting for Prime Skyline’s IPO, although the low nominal price of the IPO may attract day traders to the looking for volatility.