SMJ International Holdings Inc.

The Asia-Pacific flooring market was valued at approximately US$127.6 billion as of 2023, and is projected to grow at a compound annual growth rate of 6.0% from 2024 to 2030, driven by increasing demand for aesthetically pleasing, durable, and easy-to-maintain flooring products, as well as overall growth in the construction industry in countries like PRC, India, Indonesia, and Vietnam. The company operates in a highly competitive industry, with competition based on brand recognition, product quality, price, and innovation, and barriers to entry are not prohibitive in terms of capital investment.

The company regards Interface Singapore Pte. Ltd. as its key competitor for local business, taking into account the scale of its operations in Singapore and the competition encountered when pitching for the supply of similar products. For export business, the company faces competition from various flooring products manufacturers mainly operating in the PRC who sell directly to overseas markets and local dealers in targeted overseas markets. Competitive strengths include a wide selection of flooring products with short turnaround time, an established reputation and track record of more than 35 years, a well-recognized proprietary SMJ brand, a well-established regional supply chain with long-term relationships with third-party manufacturers in Asia (majority working with the company for over 10 years on average), and a committed and highly experienced management team with each member having more than 20 years of experience in the flooring industry.

The company generates revenue primarily through the sale and distribution of a wide range of premier flooring products such as carpet tiles, broadloom carpets, and luxury vinyl tiles under its proprietary SMJ brand in Singapore and over 20 countries mainly in Asia. Revenue is derived from wholesale bulk sales to a network of more than 260 dealers, importers, and installation companies that made at least one purchase in each of the 2025 and 2026 fiscal years, as well as direct sales to property developers, architecture and interior design firms, and owners or tenants of commercial spaces, with some customers requiring professional installation services for renovation projects in Singapore. The company does not typically enter into long-term agreements with customers, and revenue from each customer varies year-to-year based on project value and completion time.

The company specializes in carpet tiles and broadloom carpets, which use two primary yarn types—nylon (more widely used for excellent wear characteristics) and polypropylene (less durable, for lower-budget end-users)—and luxury vinyl tiles made of polyvinyl chloride that replicate natural hardwood or ceramic tile flooring. The Singapore warehouse maintains approximately 80 different designs of flooring products in up to 400 different colors. The company also supplies flooring products certified as environmentally friendly with green label certification to meet the increasing trend of projects requiring green and eco-friendly products in line with government initiatives in Singapore and Asia.

The company's sales and marketing department is organized into local sales (headed by Ms. Rena Ho) and export sales (led by Ms. Nellie Ho), with sales carried out through a network of more than 260 dealers, importers, and installation companies in Singapore and over 20 countries mainly in Asia, including Malaysia, Indonesia, Philippines, Hong Kong, PRC, Taiwan, Korea, Thailand, Vietnam, Brunei, India, Sri Lanka, United Arab Emirates, Saudi Arabia, Maldives, Brazil, Uruguay, Chile, Australia, Kuwait, and the United Kingdom. The company introduces and launches around eight to twelve new products over three to four times a year, and maintains regular contacts with architects and designers who recommend products to end-users during renovation and furnishings projects.

On December 4, 2025, the company completed its initial public offering on the NYSE American Market, selling 2,705,000 Class A Ordinary Shares at a public offering price of US$4.00 per share, receiving gross proceeds of approximately US$10.8 million before deducting underwriting discounts and other offering expenses. The company also sold its investment property to a third-party purchaser at a selling price of S$3.5 million with a carrying value of S$2.7 million, resulting in a gain on disposal of fixed assets of approximately S$0.8 million. The company had an outstanding short-term trade financing loan of approximately S$1.7 million as of March 31, 2026, and made an early repayment of S$1.1 million short-term borrowings during the year.

For the financial year ended March 31, 2026, total revenue was approximately S$17.4 million ¹, an increase of approximately S$0.6 million ² from S$16.8 million ³ in the prior year. Net loss was approximately S$0.9 million ⁴, a decrease of approximately S$1.9 million ⁵ from net income of approximately S$1.0 million ⁶ in the prior year. Gross profit margin deteriorated to approximately 34.6% ⁷ from approximately 36.1% ⁸ in the prior year, primarily due to a higher proportion of export sales which generally command lower gross profit margins and increased logistical costs.

The company intends to expand its inventory stocking program to drive business growth, rolling out similar programs to regional distributors as it expands geographic coverage, leveraging its existing warehouse of approximately 42,614 sq. ft. and inventory stocking program with suppliers in PRC and Thailand. The company intends to strengthen and expand its geographical coverage in Asia and beyond by expanding sales and marketing teams and/or seeking investments, mergers and acquisitions, joint ventures and/or strategic collaborations with local partners, citing the Asia-Pacific flooring market valued at approximately US$127.6 billion as of 2023 with a projected CAGR of 6.0% from 2024 to 2030.

The company intends to continue to broaden its products and services offerings by enhancing product design and features with emphasis on eco-friendliness and sustainability, seeing opportunity in servicing the untapped hospitality, healthcare, and residential sectors, as well as offering ancillary and complementary products such as system office furniture, blinds, and wall coverings to create new revenue streams while leveraging existing sales and distribution networks. The company also intends to search for opportunities to broaden its portfolio through investments, mergers and acquisitions, joint ventures and/or strategic collaborations with suitable partners in new and complementary businesses.

The company's overall gross profit margins deteriorated by approximately 1.5% from approximately 36.1% ⁹ for the financial year ended March 31, 2025 to approximately 34.6% ¹⁰ for the financial year ended March 31, 2026, primarily due to lower prices for goods in certain international markets outside of Singapore and increased logistical costs. The company is evaluating pricing strategies and supplier efficiencies to mitigate the impact of pricing pressure, but there is no assurance that it will be able to do so, and as the proportion of export sales continues to rise, overall gross margins will face further pressure.

The company's office, showroom, and warehouse are housed in leased premises with total rental expenses of approximately S$1.0 million ¹¹ in both FY2025 and FY2026. The lease for the office, showroom, and warehouse expires on March 31, 2027 with an option to renew for a further term of three years at revised terms to be mutually agreed. The company generally commences negotiations for a new lease about six months prior to expiry and usually signs a new lease within one month of expiry.

The company does not have a research and development department, instead leveraging the research and design team of third-party manufacturers to produce new designs and ranges of flooring products based on its ideas and concepts. The company has been introducing and launching around eight to twelve products with new designs, colors, and/or specifications over three to four times a year during the past few years. The company's senior management team works with the design team, sales and marketing team, and regular third-party manufacturers to develop new product ranges for launch.

The company received gross proceeds of approximately US$10.8 million ¹² from its IPO, before deducting underwriting discounts and other offering expenses. The company plans to use the net proceeds primarily for its inventory stocking program, strategic acquisitions and investments, strengthening and expanding sales and distribution networks, and general corporate purposes and working capital. The company has adopted the SMJ Incentive Securities Plan 2025, under which the maximum aggregate number of Class A Ordinary Shares that may be issued or transferred pursuant to all awards is fifteen percent (15%) of the total number of issued and outstanding Shares, though no awards have been granted as of the date of the report.

The company faces structural headwinds from the higher proportion of export sales, which generally command lower gross profit margins, with export sales increasing by approximately S$1.1 million ¹³ or 13.5% ¹⁴ from approximately S$8.0 million ¹⁵ for the financial year ended March 31, 2025 to approximately S$9.1 million ¹⁶ for the financial year ended March 31, 2026. The company derived approximately 51.4% ¹⁷ of its revenue from export markets in the financial year ended March 31, 2026, compared to 47.2% ¹⁸ in the prior year, and expects this proportion to continue increasing.

The company is exposed to foreign exchange risk as purchases are predominantly denominated in US$, constituting approximately 98.7% ¹⁹ and 98.9% ²⁰ of purchases for FY2025 and FY2026 respectively, while revenue is predominantly denominated in S$, constituting approximately 52.8% ²¹ and 48.2% ²² of revenue for FY2025 and FY2026 respectively. Net foreign exchange losses were S$129,593 ²³ and S$172,602 ²⁴ for FY2025 and FY2026 respectively, and the company does not currently have any formal policy for hedging against foreign exchange exposure.

The company's two most significant customers accounted for a combined 26.1% ²⁵ and 25.3% ²⁶ of revenue in FY2026 and FY2025 respectively, and the company does not typically enter into long-term agreements with these customers, creating concentration risk. The company derived 51.4% ²⁷ of revenue from export markets in FY2026, where gross profit margins are generally lower, and overall gross margin deteriorated by approximately 1.5% ²⁸ to 34.6% ²⁹ from 36.1% ³⁰ in the prior year due to lower prices in certain international markets and increased logistical costs. The company relies on a limited number of third-party flooring manufacturers in the PRC and Thailand, with its top supplier accounting for approximately 39.9% ³¹ and 48.9% ³² of total purchases in FY2026 and FY2025 respectively, and does not enter into long-term or exclusive agreements with these suppliers. The company's L3 contractor registration with the Building and Construction Authority of Singapore requires maintaining a track record of S$3 million ³³ in contract value of awarded projects over the past three years to retain the ability to tender for public sector contracts of up to S$5 million ³⁴. The company's inventory turnover period ranged from 142.6 ³⁵ to 161.8 ³⁶ days during the Track Record Period, and any mismatch between inventory acquisition and market demand could lead to cash flow shortages or slow-moving inventory.

Management emphasizes the company's established reputation and strong track record of more than 35 years in the flooring industry, highlighting its ability to maintain a consistent track record of profitability and adapt to evolving market trends. Key strategic priorities for the period ahead include expanding the inventory stocking program to drive business growth, strengthening and expanding geographical coverage in Asia and beyond, and broadening products and services offerings with emphasis on eco-friendliness and sustainability, including potential expansion into ancillary products such as system office furniture, blinds, and wall coverings. Management also intends to pursue growth through investments, mergers and acquisitions, joint ventures and/or strategic collaborations with suitable partners.