Leong Guan - From noodle manufacturer to integrated food supplier

From noodle manufacturer to integrated food supplier (SGX: LGH) - Not Rated

Leong Guan Holdings Limited is a Singapore-based food manufacturing and distribution group with over 22 years of operating history, supplying staple food products that form part of everyday consumption across the domestic foodservice and institutional landscape. 

Leong Guan produces fresh noodles and soy-based beancurd products, while also distributes a broad range of complementary food items to commercial and retail customers in Singapore and selected export markets.

Leong Guan’s portfolio is anchored in essential, affordable food categories that tend to exhibit relatively stable demand across economic cycle due to their affordability and alignment with local culinary preferences. 

Over time, Leong Guan has evolved from a single-category noodle producer into an integrated, one-stop food sourcing partner. 

It manufactures core products under its proprietary LG brand while offering trading and OEM (white-label) solutions that broaden its product range and enhance customer convenience. 

Operationally, Leong Guan serves more than 2,000 customer accounts locally and internationally, spanning hotels, restaurants, caterers, food courts, hawkers, schools and hospitals. 

It supports approximately 1,300 daily customer touchpoints through a direct doorstep delivery network across Singapore, enabled by an in-house fleet of more than 35 commercial vehicles. 

Diversified revenue streams anchored by self-manufactured products

Leong Guan operates across three business segments: self-manufactured products, trading products and OEM products. 

Self-manufactured products are produced at Leong Guan’s manufacturing facilities and delivered to customers primarily under the group’s own LG Brand, and principally comprise noodle products, soy bean-based beancurd products and wanton skins. 

Trading products are manufactured by third-party manufacturers and are marketed and sold to customers under third-party brands; they typically complement the group’s self-manufactured products and primarily comprise surimi, frozen foods and beansprouts. 

OEM products are white-label products manufactured by third-party manufacturers and are marketed and sold to customers under the group’s own LG Brand; they comprise noodle products and soy bean-based beancurd products that the group does not manufacture, and they complement the group’s self-manufactured products.

Manufacturing footprint and utilisation

Leong Guan operates a dual-site manufacturing and warehousing footprint in Singapore, supporting production of fresh noodles and soy bean-based beancurd products, as well as storage and distribution of third-party food items. 

On an average daily basis, Leong Guan manufactures approximately 30 tonnes of fresh noodle products at its Woodlands premises and approximately 6 tonnes of soy bean-based beancurd products at its Aljunied facility, reflecting the scale of its core staple categories.

Leong Guan currently operates two integrated manufacturing and warehouse facilities. 

The primary site at 7 Woodlands Link has an aggregate floor area of approximately 3,056 sqm and serves as the main production hub for fresh noodles, alongside warehousing and logistics. 

The Aljunied Factory, with an aggregate area of approximately 232 sqm, focuses on soy bean-based beancurd products, including tofu and tau kwa. 

Perishable ingredients and products are stored in cold storage facilities to maintain freshness and comply with food safety requirements, with monthly stock-take exercises supporting inventory control.

As part of its medium-term operational roadmap, Leong Guan is relocating its beancurd manufacturing activities from Aljunied to a new facility at 24 Woodlands Terrace (new Woodlands factory). 

The new facility, with an aggregate area of approximately 1,525 sqm, is expected to be completed by 1H2026.

From a capacity standpoint, the Woodlands facility has annual production capacity of approximately 19,400 tonnes (based on 22 hours per day, six days per week), while the Aljunied Factory has annual capacity of approximately 3,100 tonnes (based on 24 hours per day, seven days per week), excluding maintenance downtime. 

Over FY2022–FY2024, utilisation at Woodlands remained stable in the mid-50% range. 

In contrast, Aljunied utilisation increased from 58.9% (FY2022) to 70.1% (FY2023) and 77.7% (FY2024). 

In 3M2025, utilisation moderated to 62.2%, which management attributes to a seasonal slowdown ahead of the Hari Raya Puasa fasting period.

Operationally, Leong Guan maintains preventive maintenance schedules (quarterly or semi-annually depending on equipment), supported by an in-house maintenance team, with more complex work outsourced when required. 

Leong Guan also maintains spare parts inventory to minimise downtime, and has disclosed no major operational disruptions from equipment failure during the period under review.

Consistent revenue growth with improving profitability

Financially, Leong Guan has demonstrated steady top-line growth alongside a more pronounced improvement in profitability. 

Revenue increased by approximately 11.1% y-o-y in FY2024, reflecting higher sales volumes and stable demand across core product categories. 

More notably, profit before tax rose 42.7% and profit after tax increased 49.4% y-o-y, underscoring operating leverage as scale increased and efficiency measures took effect.

Industry outlook supported by structural demand for staple foods and gradual product-mix upgrading

Leong Guan operates in a segment supported by structural demand drivers rather than cyclical consumption trends. 

According to Reuters, Singapore remained the most expensive city to live in 2024, and Leong Guan thinks this may lead more residents to choose economical dining options such as hawker centres and coffee shops. 

As a supplier to food service operators in Singapore—particularly hawkers and coffee shops—Leong Guan continues to benefit from the resilience of this segment.

It manufactures and supplies staple foods, namely fresh noodles and soy bean-based beancurd products, which generally exhibit stable demand due to their affordability and alignment with local culinary preferences, regardless of economic conditions.

At the same time, consumer preferences continue to shift towards fresher, less processed and more health-oriented food options. 

Leong Guan is also in the process of launching newly developed low-GI noodle products and expects to begin sales in 2026.

Competitive strengths in technology, R&D, distribution reach and compliance

Leong Guan’s competitive strengths are anchored in technology-driven operations and an integrated supply chain designed to enhance productivity, quality control and cost efficiency. 

Leong Guan has invested in automation such as automated weighing and portioning systems, reducing manual intervention while improving accuracy, speed and hygiene standards. 

Enterprise systems support streamlined order capture, inventory tracking, equipment monitoring and regulatory compliance, while cold-chain infrastructure supports reliable handling of perishable products.

Leong Guan’s in-house R&D team, established in 2012, supports product innovation and customer responsiveness through new formulations and customised solutions for commercial clients. 

Over the years, Leong Guan has introduced differentiated offerings such as wholegrain noodles and ready-to-eat meals, while also developing bespoke noodle types and flavour profiles on a pre-order basis—reinforcing customer stickiness.

Leong Guan also benefits from a one-stop sourcing proposition supported by broad product breadth and extensive delivery capabilities. 

Its fleet of more than 35 commercial vehicles enables daily doorstep delivery across Singapore, strengthening reliability for Horeca customers. 

Growth strategy focused on capacity expansion, value-added products and measured overseas penetration

Looking ahead, Leong Guan plans to expand its market reach by growing its overseas customer base through export sales to distributors and brand owners. 

In support of this, it intends to obtain the necessary food import certifications and work towards higher food safety standards, and is seeking internationally recognised certifications such as FSSC 22000, including engaging consultants and carrying out preparation works for the accreditation process. 

It also has plans to broaden and diversify its product range, including a vertical expansion into value-added products tailored to customers’ preferences and lifestyles. 

Its current plan includes expanding ready-to-eat meals beyond current offerings, collaborating with nutritionists/chefs and other professionals to develop products such as low-GI food products and reduced-carbohydrate ramen, developing snack foods, and developing functional foods designed to meet gerontological or paediatric needs or certain health requirements (for example, fortified noodles and soy products). 

On capacity, the expansion of the New Woodlands Factory would allow it to produce a higher volume of goods to meet growing demand from customers. 

It may expand its capabilities and business through acquisitions, joint ventures and strategic partnerships. 

Experienced management team

Leong Guan is led by a management team with deep industry experience and long operating tenure. 

Key executives and directors collectively bring more than two decades of experience in food manufacturing, distribution and operations, supported by established supplier and customer relationships. 

Post-listing, LGH will operate under a board structure comprising executive and independent directors, aligned with Catalist governance requirements.

Incentive alignment is reinforced through the introduction of employee share option and performance share plans, which are intended to support talent retention and align management decision-making with long-term shareholder value creation. 

As a newly listed company, ongoing execution on disclosure quality, governance discipline and capital allocation will be important areas for investor monitoring.

Dividend policy

Leong Guan intends to distribute a minimum of 80% of its FY2025 net profit, followed by a minimum payout ratio of 35% of its FY2026 net profit.

There is no fixed dividend policy and any dividend will be at the Board’s discretion. 

IPO structure and use of proceeds

Leong Guan Holdings Limited did a placement on SGX Catalist comprising a combination of new shares issued by the Company and vendor shares offered by existing shareholders. 

The total gross proceeds from the placement are expected to be approximately S$4.75 million, of which S$3.75 million will be raised from the issuance of new shares by the Company, with the remaining proceeds attributable to the sale of vendor Shares accruing entirely to the selling shareholder. 

The Company will not receive any proceeds from the sale of vendor shares.

After deducting estimated listing-related expenses of approximately S$1.60 million, the net proceeds to be raised by the Company are expected to be approximately S$2.15 million. 

Intended use of IPO proceeds

Management has outlined a clear framework for the intended use of net proceeds, with allocations designed to support both near-term operational strengthening and longer-term growth optionality. 

Approximately S$700,000, representing the largest single allocation, is earmarked for the enhancement of manufacturing facilities, underscoring Leong Guan’s focus on capacity expansion, productivity improvements and operational resilience. 

These investments are intended to support higher output volumes, improve cost efficiency and accommodate future demand growth.

A further S$600,000 has been allocated towards potential acquisitions, joint ventures and strategic alliances. 

While no specific acquisition targets have been identified as at the latest practicable date, this allocation provides Leong Guan with financial flexibility to pursue inorganic growth opportunities that are complementary to its existing food manufacturing and distribution operations.

In addition, approximately S$300,000 is intended for the expansion of export markets and product range, reflecting management’s intention to gradually diversify revenue sources beyond the domestic market and to broaden its portfolio of value-added and convenience-oriented food products. 

The remaining S$549,000 of net proceeds will be used for general working capital, supporting day-to-day operational requirements, inventory management and trade receivables as the business scales.

Key Risks

Key risks include raw material price volatility, labour cost inflation, reliance on Singapore domestic demand, competitive pricing pressure, food safety and regulatory compliance, and execution risk associated with capacity expansion. 

As a Catalist-listed company, liquidity and share price volatility may also be higher than Mainboard peers. 

Management’s focus on automation, quality control and disciplined capital deployment partially mitigates these risks, though they remain inherent to the food manufacturing and distribution sector.

Valuation

Leong Guan is trading at 13.9x trailing P/E based on 19 December 2025 closing price of S$0.22. Its price-to-book ratio of 3.5x is highest among its peers.

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