Homegrown spa Healing Touch latest Singapore firm to seek US listing

SINGAPORE — Homegrown wellness and beauty group Healing Touch has lodged its draft prospectus for a US$1 million (S$1.44 million) listing in the United States, becoming the latest Singapore company seeking to go public abroad.

Healing Touch, which offers massage, facial and slimming services, registered its preliminary prospectus with the United States’ Securities and Exchange Commission in November last year. It is seeking a listing on the QB board of New York-headquartered OTC Markets.

The OTCQB is for early-stage and developing US and international companies, and is akin to the Catalist board here, Healing Touch’s founder and chief executive Joshua Lung told TODAY in an interview.

“One way to earn your minority shareholders’ trust is to go public as there are stringent requirements on corporate governance and quarterly reporting requirements. This will allow me to focus on running the business, and gives comfort and ease to shareholders that everything we do is above board,” he said.

In recent years, several Singapore companies have sought listings on overseas exchanges. Investment firm 8I Holdings listed on the Australian Securities Exchange (ASX) in December 2014, as did property crowdfunding platform CoAssets in September last year. Mainboard-listed Q&M Dental Group announced last month that it had received approval for the quotation of shares of its Chinese manufacturing unit Aidite on the new third board from China’s National Equities Exchange and Quotations Co (Neeq). The first Singaporean-founded company to list on the Neeq was outdoor advertising firm OOB Media in October 2015.

Healing Touch plans to use the proceeds from its listing to expand its brand overseas, and is targeting having 50 outlets within the region in three to four years’ time.

The company has already started plans to franchise its spas in Indonesia, with the first two outlets in Southeast Asia’s largest economy scheduled to open next year, said Mr Lung.

Beyond Indonesia, the group is also hoping to establish a footprint in Malaysia, the Philippines, Vietnam, Cambodia and Thailand, according to the prospectus.

“We plan to grow through a franchising model, which is less capital-intensive than setting up mega spas that can cost up to a quarter-million. We also generate a lot of cash through our daily operations, so we’re not planning to raise a lot of funds,” said Mr Lung.

The 50-year-old, who has been a businessman since 1996, said that costs played a part in the company’s decision to seek a listing on OTCQB instead of Singapore, with the former offering relatively lower listing and maintenance costs.

The company is only seeking to raise about US$1 million through its initial public offering (IPO), which makes listing on the local bourse less attractive.

“It doesn’t make sense to IPO in Singapore when the expenses alone are easily in the range of S$1.5 million … OTCQB gives us a lot of flexibility in this area and is extremely low-cost compared to listing on the SGX,” he said, adding that the company is investing about US$120,000 to be listed on OTCQB.

Mr Lung acknowledged that being an unfamiliar name in the US could hinder the company’s fundraising prospects, but given that Healing Touch is not looking to raise a large amount of money, “being unknown in the US is not a big problem”, he said.

Founded in 2001, Healing Touch’s first outlet was in Upper Thomson. The group has since expanded to seven spas across Singapore, and has also increased its service offerings. The company employs about 135 staff and consultants globally.

“We have plans to expand in Singapore as well through the franchise model, but due to manpower challenges and constraints, there’s a limit to how much we can grow in Singapore … I hope that in five years’ time, we can be one of the largest spa and beauty brands in Asia,” said Mr Lung.