The market could see some year end window dressing as investors position for 2017.Regional bourses in Tokyo (-0.7%) and Sydney (-0.4%) tracked lower.Technically, bottomside support for the STI is seen at 2,865 (50-dma), with immediate resistance at 2,900, followed by 2,910.
Stocks to watch:
*SingPost: Appointed Paul William Coutts as its new CEO wef 1 Jun, ending a year-long hiatus. Coutts was previously CEO of Toll Global Forwarding, one of the five divisions of logistics player Toll Group, which in turn is a unit of Japan Post.
*Vard: Fincantieri has extended the closing date for its voluntary cash offer of $0.24/share to 12 Jan, 5.30pm from 29 Dec. At last update, Fincantieri controls 55.6% of Vard.
*Mermaid Maritime: Its 33.8%-owned associate, Asia Offshore Drilling (AOD) secured a three-year contract extension for the jack-up drilling rig, AOD III in Middle East until Dec ’19. The extension comes at reduced rates but will add about US$112m to AOD’s contract backlog.
*mm2 Asia: Pre-IPO investors have completed the subscription of mandatory convertible note in UnUsUaL for a term of 2 years.
*ASL Marine: Sought consent from bondholders to extend maturity of two outstanding notes, $100m due Mar ‘17 and $50m due Oct ’18, by three years to 2020/2021. In exchange, it is offering investors a coupon step-up of 0.5% per year and redemption of 2.5% of the principal every six months, plus a subordinated charge over some mortgaged vessels.
*Wee Hur: Selling a 3,690 sqm plot of land in Brisbane, Australia to a third party for A$65.1m ($67.8m), which will reap a net disposal gain of $14.4m.*GLP: Another committed co-investor of its US Income Partners III fund has made its initial capital contribution of US$26m or 8.1% of the aggregate capital contributions to-date. Following this further syndication, GLP’s interest in the fund has been reduced to 82.2% from 90.3%.
*Artivision Technologies: Placing out 277.8m new shares to Oxley CEO Ching Chiat Kwong (246.9m) and investor Christine Poh (30.9m) at $1.62¢ each. Following the placement, Ching will become a controlling shareholder with 24.5% stake. The group also issued $4.875m 10% bonds to Oxley Dy CEO Low See Ching ($2.875m) and private investor Tee Wee Sien ($2m) and granted them 370.4m share options each with right to subscribe for a new share at 1.62¢ each. In total, the placement and bond issue will raise net proceeds of $9.3m, of which $2.875m will be used to partially redeem $4.5m bonds due on 30 Dec, while another $3m will be used to make an advance payment to an Isreali publisher. Separately, chairman Philip Soh has resigned with immediate effect.
*VGO Corp: Plans to issue 1.2b new shares at 32.5¢ apiece to Colin and Edwin Tan to allow the backdoor listing of Sky Win Management Consultancy, Malaysian conglomerate Hatten Group’s property development arm. VGO will also seek to change its name to Hatten Land and to move from the Catalist board to the Main board.
*Rex International: Its stake in Steeldrum has been lowered to 25.7% (prior: 36.9%) following its decision not to participate in a rights exercise to raise US$1.3m in capital. Steeldrum has drilling operations in Trinidad.
*ASTI: Agreed to acquire PT Cahaya Sakti for US$2m in cash, an independent power producer in Indonesia. The deal would have narrowed loss per share to 3.09¢ from 3.13¢ in FY15, on a proforma basis.
*San Teh: Commenced arbitration proceedings against Shanghai Yi Ya Investment Management to recover outstanding rentals of Rmb8.4m ($1.7m).
Friday, December 30, 2016
Thursday, December 29, 2016
SG Market (29 Dec 16)
Market will be swayed by profit-taking and window dressing although swings will be amplified by the dearth of trading volumes in the last week of the year.
Regional bourses opened weaker in Tokyo (-0.6%), Seoul (-0.4%) and Sydney (-0.4%).Technically, the STI is 2 points shy of the 2,900 resistance level, with next objective at 2,910. Bottom side support is at 2,865 (50 dma).
Stocks to watch:
*Macro: A Business Times article highlights export-oriented Singapore may not benefit from the improved global outlook in 2017. This is because of the structural shifts in key trade partners, such as onshoring in the US, and China’s shift towards being a consumer-led economy.
*REITs: Another Business Time feature cites economic and labour market uncertainties, exacerbated by e-commerce disruption poses a quandary for retail malls in 2017, with landlords likely to lower rents to fill space.
*Keppel Corp: Keppel Land China is divesting is 49.7% effective stake in Cityone Development for Rmb619m ($127m) to Tianhonglixin Real Estate. Cityone owns and develops Central Park City, Wuxi China. The group is expected to reap a net divestment gain of Rmb190m. MKE has Sell with TP of $4.57
*HPH Trust: Acquired an 80% stake in Huizhou International Container Terminals in Guangdong, China from its sponsor, Hutchison Port Holdings through its 51.64%-owned subsidiaries for US$86.3m. The terminals cover 60ha of land with three container berths.
*ComfortDelGro: Competitor Trans-Cab has joined SMRT to slash rental fees in a bid to attract more drivers and reduce costs for existing hirers, possibly triggering a price war amongst taxi operators. MKE last had a Hold and TP of $2.63.
*APTT: Lu Fang Ming, chairman of Asia Pacific Telecom, which is proposing to acquire APTT, was called before Taiwan commissioners to answer questions about funding, and how it plans to increase service level of Taiwan Broadcasting Corp (APTT’s seed asset). Lu will face more questions at a later administrative hearing.
*AIMS AMP REIT: Completed redevelopment of two buildings in Tuas, raising its value to $60.7m from $14.1m. The redeveloped property was transformed into a five-storey ramp-up warehouse, doubling GFA from 159,717 sf to 288,663 sf, with increased plot ratio of 2.07 (from 1.15)
*Spackman: Film MASTER clocked in gross box office revenue of US$25.3m in 8 days, with 3.8m tickets sold, exceeding the film’s breakeven point.*China Jishan: Disposing Shao Xing Yue Sheng Real Estate Property Development to Shanghai Jintumu Real Estate for Rmb785.8m. It intends to use the net proceeds for repayment of debt as well as working capital and expects to report a disposal gain of Rmb222.1m.
*GP Batteries: Divesting its industrial complex in Dongguan, China to a Chinese party for Rmb105m ($21.9m). The sale is expected to yield a disposal gain of $15.5m. *KLW: Disposing its property at 301 Flinders Lane, Melbourne, Australia to Mill Place Investments for A$34.2m (~$36.5m). It intends to use proceeds to fund other investment opportunities and expects to net a disposal gain of A$5.6m ($6m).
*Mencast: Sued by LQS Construction for $3.3m for an alleged balance payment related to the construction of an office building. Mencast is refuting the claim.
Regional bourses opened weaker in Tokyo (-0.6%), Seoul (-0.4%) and Sydney (-0.4%).Technically, the STI is 2 points shy of the 2,900 resistance level, with next objective at 2,910. Bottom side support is at 2,865 (50 dma).
Stocks to watch:
*Macro: A Business Times article highlights export-oriented Singapore may not benefit from the improved global outlook in 2017. This is because of the structural shifts in key trade partners, such as onshoring in the US, and China’s shift towards being a consumer-led economy.
*REITs: Another Business Time feature cites economic and labour market uncertainties, exacerbated by e-commerce disruption poses a quandary for retail malls in 2017, with landlords likely to lower rents to fill space.
*Keppel Corp: Keppel Land China is divesting is 49.7% effective stake in Cityone Development for Rmb619m ($127m) to Tianhonglixin Real Estate. Cityone owns and develops Central Park City, Wuxi China. The group is expected to reap a net divestment gain of Rmb190m. MKE has Sell with TP of $4.57
*HPH Trust: Acquired an 80% stake in Huizhou International Container Terminals in Guangdong, China from its sponsor, Hutchison Port Holdings through its 51.64%-owned subsidiaries for US$86.3m. The terminals cover 60ha of land with three container berths.
*ComfortDelGro: Competitor Trans-Cab has joined SMRT to slash rental fees in a bid to attract more drivers and reduce costs for existing hirers, possibly triggering a price war amongst taxi operators. MKE last had a Hold and TP of $2.63.
*APTT: Lu Fang Ming, chairman of Asia Pacific Telecom, which is proposing to acquire APTT, was called before Taiwan commissioners to answer questions about funding, and how it plans to increase service level of Taiwan Broadcasting Corp (APTT’s seed asset). Lu will face more questions at a later administrative hearing.
*AIMS AMP REIT: Completed redevelopment of two buildings in Tuas, raising its value to $60.7m from $14.1m. The redeveloped property was transformed into a five-storey ramp-up warehouse, doubling GFA from 159,717 sf to 288,663 sf, with increased plot ratio of 2.07 (from 1.15)
*Spackman: Film MASTER clocked in gross box office revenue of US$25.3m in 8 days, with 3.8m tickets sold, exceeding the film’s breakeven point.*China Jishan: Disposing Shao Xing Yue Sheng Real Estate Property Development to Shanghai Jintumu Real Estate for Rmb785.8m. It intends to use the net proceeds for repayment of debt as well as working capital and expects to report a disposal gain of Rmb222.1m.
*GP Batteries: Divesting its industrial complex in Dongguan, China to a Chinese party for Rmb105m ($21.9m). The sale is expected to yield a disposal gain of $15.5m. *KLW: Disposing its property at 301 Flinders Lane, Melbourne, Australia to Mill Place Investments for A$34.2m (~$36.5m). It intends to use proceeds to fund other investment opportunities and expects to net a disposal gain of A$5.6m ($6m).
*Mencast: Sued by LQS Construction for $3.3m for an alleged balance payment related to the construction of an office building. Mencast is refuting the claim.
Wednesday, December 28, 2016
SG Market (28 Dec 16)
Braced for a year-end slumber after trading volumes sank to a low not seen in years yesterday although market sentiment was perked up by a surprise jump in China's industrial profits.
Regional bourses opened mixed, with Tokyo (-0.04%) and Seoul (-0.9%) weaker, and Sydney (+1%) markedly stronger.Technically, the STI bounced off the 2,860 (50-dma) support level, with immediate resistance is at 2,900.
Stocks to watch:
*Jumbo: A Business Times feature noted that analysts are bullish the seafood restaurant operator despite the lacklustre economy, due to its appetite for expansion. Medium term growth is expected to be driven by new store openings, with Jumbo negotiating for franchise and JVs in Asian countries. MKE has Buy with $0.78 TP.
*Yanlord: Acquired prime development site on the Sino-Singapore Nanjing Eco Hi-Tech Island for Rmb7.84b via a public land auction. The 541,000 sqm GFA site will comprise residential apartments, recreational facilities, hotel, offices and tourism space. Trading at 0.6x P/B.
*Ying Li: Disclosed that China Everbright bought entire 205m shares from substantial shareholder Leap Forward at $0.138/share on Fri, raising its stake in the Chongqing-based developer to 22.92% from 14.9%. Trading at 0.5x P/B.
*SATS: Acquiring an additional 10% stake in Evergreen Shy Catering from Malaysia Airlines for RM100m, boosting its ownership to 25%. This is in line with its strategy to grow the scale of its food business. MKE has Sell with $3.76 TP.
*Cosco: 51%-owned COSCO (Dalian) Shipyard has delivered a cargo teaching practice ship of 30,000 dwt to Dalian Maritime University in Oct. *Swee Hong: Disposing its freehold property at 190A and 190C Choa Chu Kang Ave 1 to Hong Ee for $3.1m and expected to record a gain of $2.6m on the sale with 80% of the net proceeds to be used towards repayment of its creditors, while the remaining will be retained as working capital.
*Rex Int'l: Secured an extension of its exploration credit facility from Skandinaviska Enskilda Banten for two more years from Dec ’16 for its Lime Petroleum Norway unit. However, the facility has been reduced from NOK700m to NOK400m (US$46m).
Regional bourses opened mixed, with Tokyo (-0.04%) and Seoul (-0.9%) weaker, and Sydney (+1%) markedly stronger.Technically, the STI bounced off the 2,860 (50-dma) support level, with immediate resistance is at 2,900.
Stocks to watch:
*Jumbo: A Business Times feature noted that analysts are bullish the seafood restaurant operator despite the lacklustre economy, due to its appetite for expansion. Medium term growth is expected to be driven by new store openings, with Jumbo negotiating for franchise and JVs in Asian countries. MKE has Buy with $0.78 TP.
*Yanlord: Acquired prime development site on the Sino-Singapore Nanjing Eco Hi-Tech Island for Rmb7.84b via a public land auction. The 541,000 sqm GFA site will comprise residential apartments, recreational facilities, hotel, offices and tourism space. Trading at 0.6x P/B.
*Ying Li: Disclosed that China Everbright bought entire 205m shares from substantial shareholder Leap Forward at $0.138/share on Fri, raising its stake in the Chongqing-based developer to 22.92% from 14.9%. Trading at 0.5x P/B.
*SATS: Acquiring an additional 10% stake in Evergreen Shy Catering from Malaysia Airlines for RM100m, boosting its ownership to 25%. This is in line with its strategy to grow the scale of its food business. MKE has Sell with $3.76 TP.
*Cosco: 51%-owned COSCO (Dalian) Shipyard has delivered a cargo teaching practice ship of 30,000 dwt to Dalian Maritime University in Oct. *Swee Hong: Disposing its freehold property at 190A and 190C Choa Chu Kang Ave 1 to Hong Ee for $3.1m and expected to record a gain of $2.6m on the sale with 80% of the net proceeds to be used towards repayment of its creditors, while the remaining will be retained as working capital.
*Rex Int'l: Secured an extension of its exploration credit facility from Skandinaviska Enskilda Banten for two more years from Dec ’16 for its Lime Petroleum Norway unit. However, the facility has been reduced from NOK700m to NOK400m (US$46m).
Tuesday, December 27, 2016
SG Market (27 Dec 16)
Muted trading is expected to continue as investors dial back amid absence of fresh catalysts heading into the year-end holiday season.
Regional bourses opened mixed, with Tokyo (-0.04%) lower and Seoul (+0.2%) firmer.Technically, the STI has closed out the breakaway gap, with next support at 2,860 (50-dma).
Stocks to watch:
*REITs: A Business Times feature highlighted that S-REITs offer good defensive yields amid an expected increase in global volatility in 2017. MKE has Buys on CCT (TP $1.81) and Keppel REIT (TP $1.21).
*GLP: Secured a land parcel to develop logistics facilities in Greater Tokyo. The US$1.1b GLP Sagamihara will be completed in phases and ultimately provide 655,000 sqm of gross floor area across six buildings. First phase of construction will commence in 2020 following a sale-and-leaseback agreement with the seller. Project will be the largest modern logistics park in Japan when completed. Trading at 0.8x P/B.
*ST Engineering: Its AgilFence Perimeter Intrusion Detection System has met a UK standard, which is testament to its performance and capabilities as an effective protection solution. MKE last had a Hold rating and TP of $3.17.
*Sabana REIT: Adjusting the conversion price of its $80m principle amount of the 4.5% convertible sukuk due 2017 to $0.8628 from $1.0131 per unit on completion of its 42-for-100 rights issue at $0.258/unit, scheduled on 25 Jan ’17.
*Marco Polo Marine: Its auditors have raised an emphasis of matter in respect to its ability to continue as a going concern in light of the group’s debt load as well as continued losses.
*ISDN: Received in-principle approval for its proposed dual primary listing on the Main Board of the Hong Kong Stock Exchange.
*Annica: Entered conditional agreement to acquire 49% of Horizon Greentech Resources for $4.2m via shares and issue of promissory notes. Horizon is engaged in the business of extrusion and recycling of end-of-life waste tyres. Post deal, Annica’s FY15 loss per share would have narrowed to 0.18¢ from 0.40¢ on a proforma basis.
*EMAS Offshore: Entered into a final settlement agreement with Perisai relating to a US$43m put option. The proposed settlement will require EMAS to pay US$20m in cash within the next four months with an option to extend for another month, while deferring payment on the other US$23m for up to 15 years with an interest rate of 1%.
*Global Yellow Pages: Received approval from Queenstown Lakes District Council to construct 225 residential homes in New Zealand.*IHC: Postponed an EGM to replace several board members to 23 Jan from 28 Dec, after concluding that its previous announcement for the meeting had not given shareholders sufficient notice.
*Serial System: 91%-owned subsidiary entered into a JV with Besson Int’l to market, promote, sell, export and distribute semiconductor components. It will invest US$1.5m for a 51% stake in the JVCo, Newton Tech.
*Dapai Int’l: A lessee, Anhui Sanda, has terminated its rental agreement at Dapai's factory premises in Benbu City, Anhui, China.
Regional bourses opened mixed, with Tokyo (-0.04%) lower and Seoul (+0.2%) firmer.Technically, the STI has closed out the breakaway gap, with next support at 2,860 (50-dma).
Stocks to watch:
*REITs: A Business Times feature highlighted that S-REITs offer good defensive yields amid an expected increase in global volatility in 2017. MKE has Buys on CCT (TP $1.81) and Keppel REIT (TP $1.21).
*GLP: Secured a land parcel to develop logistics facilities in Greater Tokyo. The US$1.1b GLP Sagamihara will be completed in phases and ultimately provide 655,000 sqm of gross floor area across six buildings. First phase of construction will commence in 2020 following a sale-and-leaseback agreement with the seller. Project will be the largest modern logistics park in Japan when completed. Trading at 0.8x P/B.
*ST Engineering: Its AgilFence Perimeter Intrusion Detection System has met a UK standard, which is testament to its performance and capabilities as an effective protection solution. MKE last had a Hold rating and TP of $3.17.
*Sabana REIT: Adjusting the conversion price of its $80m principle amount of the 4.5% convertible sukuk due 2017 to $0.8628 from $1.0131 per unit on completion of its 42-for-100 rights issue at $0.258/unit, scheduled on 25 Jan ’17.
*Marco Polo Marine: Its auditors have raised an emphasis of matter in respect to its ability to continue as a going concern in light of the group’s debt load as well as continued losses.
*ISDN: Received in-principle approval for its proposed dual primary listing on the Main Board of the Hong Kong Stock Exchange.
*Annica: Entered conditional agreement to acquire 49% of Horizon Greentech Resources for $4.2m via shares and issue of promissory notes. Horizon is engaged in the business of extrusion and recycling of end-of-life waste tyres. Post deal, Annica’s FY15 loss per share would have narrowed to 0.18¢ from 0.40¢ on a proforma basis.
*EMAS Offshore: Entered into a final settlement agreement with Perisai relating to a US$43m put option. The proposed settlement will require EMAS to pay US$20m in cash within the next four months with an option to extend for another month, while deferring payment on the other US$23m for up to 15 years with an interest rate of 1%.
*Global Yellow Pages: Received approval from Queenstown Lakes District Council to construct 225 residential homes in New Zealand.*IHC: Postponed an EGM to replace several board members to 23 Jan from 28 Dec, after concluding that its previous announcement for the meeting had not given shareholders sufficient notice.
*Serial System: 91%-owned subsidiary entered into a JV with Besson Int’l to market, promote, sell, export and distribute semiconductor components. It will invest US$1.5m for a 51% stake in the JVCo, Newton Tech.
*Dapai Int’l: A lessee, Anhui Sanda, has terminated its rental agreement at Dapai's factory premises in Benbu City, Anhui, China.
Friday, December 23, 2016
SG Market (23 Dec 16)
Expect lacklustre trading following the pullback on Wall Street and as investors wind down positions ahead of the year-end holiday season in absence of fresh catalysts.
Regional bourses in Seoul (-0.03%) and Sydney (-0.01%) were muted in early trading, while Japanese markets are closed for public holiday. From a technical perspective, a breakdown of the 2,882 level could send the STI to the next support at 2,860 (20-dma). Topside resistance remains at 2,953.
Stocks to watch:
*Keppel Corp: Invested $26m for a 50% stake in PT Metropolitan Permata Development, which is developing 450 landed homes on a 12-ha site in Tangerang, West Jakarta. MKE has a Sell with TP of $4.57.
*SIA Engineering: Established a 49:51 JV with Moog to provide component repair services to customers in the Asia Pacific and beyond for new-generation aircraft such as the Boeing 787 and Airbus A350. MKE last had a Hold with TP of $3.70.
*ParkwayLife REIT: Divesting four nursing homes in Japan for $48.9m and expects to reap disposal gain of $5.2m. Proceeds will be used to strengthen balance sheet and seize other investment opportunities.
*Sheng Siong: Lease of its outlet at The Verge will not be renewed after 30 Apr ’17. The outlet contributed about 3.3% to its 9M16 revenue. MKE has a Sell with TP of $0.88.
*Chip Eng Seng: Acquiring a 14,730 sqm leasehold industrial property at 11 Tuas Basin Close for $6.4m from Mencast. Lease of the property will expire on 15 Mar '21, but there is an option to extend until 31 Dec '21 for $0.5m. Mencast is expected to record a net disposal loss of $0.2m or gain of $0.4m, depending on whether the lease extension is obtained.
*Spackman Entertainment: Its film, Master, opened at the #1 spot of the Korean box office, reaping gross receipts of US$2.6m, and marking the highest Dec opening in Korea. Master is expected to screen in Singapore in Jan '17.
*Pacific Radiance: Transferring its operations and assets in Mexico to a 51:49 JVCo with Navigatis, Navigatis Radiance, to improve cost efficiencies and strengthen its position in anticipation of an upturn in offshore activity in the Gulf of Mexico. Navigatis will invest up to US$40m in the JV.
*Nam Cheong: Received a letter of demand from Petra Offshore claiming for a refund of a US$8.4m deposit.*A-Smart: 80:20 JV with Pair International to sell, lease, service and maintain green technology systems manufactured by Pair in Southeast Asia.
*Ipco: Terminated the placement agreement for 265m new shares at 0.18¢/share to Woo Fong Eng. The placement would have raised $0.5m in gross proceeds.
Regional bourses in Seoul (-0.03%) and Sydney (-0.01%) were muted in early trading, while Japanese markets are closed for public holiday. From a technical perspective, a breakdown of the 2,882 level could send the STI to the next support at 2,860 (20-dma). Topside resistance remains at 2,953.
Stocks to watch:
*Keppel Corp: Invested $26m for a 50% stake in PT Metropolitan Permata Development, which is developing 450 landed homes on a 12-ha site in Tangerang, West Jakarta. MKE has a Sell with TP of $4.57.
*SIA Engineering: Established a 49:51 JV with Moog to provide component repair services to customers in the Asia Pacific and beyond for new-generation aircraft such as the Boeing 787 and Airbus A350. MKE last had a Hold with TP of $3.70.
*ParkwayLife REIT: Divesting four nursing homes in Japan for $48.9m and expects to reap disposal gain of $5.2m. Proceeds will be used to strengthen balance sheet and seize other investment opportunities.
*Sheng Siong: Lease of its outlet at The Verge will not be renewed after 30 Apr ’17. The outlet contributed about 3.3% to its 9M16 revenue. MKE has a Sell with TP of $0.88.
*Chip Eng Seng: Acquiring a 14,730 sqm leasehold industrial property at 11 Tuas Basin Close for $6.4m from Mencast. Lease of the property will expire on 15 Mar '21, but there is an option to extend until 31 Dec '21 for $0.5m. Mencast is expected to record a net disposal loss of $0.2m or gain of $0.4m, depending on whether the lease extension is obtained.
*Spackman Entertainment: Its film, Master, opened at the #1 spot of the Korean box office, reaping gross receipts of US$2.6m, and marking the highest Dec opening in Korea. Master is expected to screen in Singapore in Jan '17.
*Pacific Radiance: Transferring its operations and assets in Mexico to a 51:49 JVCo with Navigatis, Navigatis Radiance, to improve cost efficiencies and strengthen its position in anticipation of an upturn in offshore activity in the Gulf of Mexico. Navigatis will invest up to US$40m in the JV.
*Nam Cheong: Received a letter of demand from Petra Offshore claiming for a refund of a US$8.4m deposit.*A-Smart: 80:20 JV with Pair International to sell, lease, service and maintain green technology systems manufactured by Pair in Southeast Asia.
*Ipco: Terminated the placement agreement for 265m new shares at 0.18¢/share to Woo Fong Eng. The placement would have raised $0.5m in gross proceeds.
Thursday, December 22, 2016
SG Market (22 Dec 16)
Bias for the market is tilted to the downside today amid a pullback in US equities, as well as a surprise increase in US crude stockpile could weigh on the O&M sector and banks.
Regional bourses opened mixed, with Tokyo (-0.3%) treading lower, while Seoul (+0.1%) and Sydney (+0.3%) edging higher.Immediate resistance for STI remains at 2,953, while underlying support is at the 2,882 breakaway gap.
Stocks to watch:
*Keppel Corp: Awarded contract by PUB to design, build, own, and operate Singapore’s fourth desalination plant at Marina East for a concession of 25 years. The plant is expected to be operational in 2020, and will be able to treat both sea and fresh water to produce 137,000 cubic metres of fresh water per day.
*Sembcorp Industries: Secured project financing of US$309m for its Sirajganj power project in Bangladesh from the World Bank, Clifford Capital and CDC Group. The construction work on the 414MW BOO power plant has since commenced at a cost of US$412m.
*SIA Engineering: Renewed services agreement with SIA Cargo, which is expiring this year. The 3-year extension with options to renew for another five years is expected to yield revenue of up to $250m over the 8-year term.
*GMG Global: Delisting from the SGX wef 23 Dec following its takeover by Halcyon Agri. *IHC: In progress of seeking funding sources for two $50m MTNs maturing on 27 Apr ’17 and 6 Feb ’18. It expects to continue divesting non-core assets to meet their debt obligations and currently has no firm plan to extend the maturity date of both bond issuances.
*Delong: Entered into binding MOUs with minority shareholders of Delong Thailand to dispose its 55% stake in the company for $15.5m. It expects to record a $0.1m gain from the divestment.*SBI Offshore: Won a high court battle to claim $0.63m from a former executive director and CEO Tan Woo Thian, for outstanding amount from the latter’s guarantee of an advance for an acquisition, which the company did not proceed with. The sum is payable to the group by 13 Jan ’17.
*Dapai: Leasing 30,857 sqm of its factory premises at Chengbei Industrial Zone, Fujian, China to Quanzhou Dachuangyuan Tourism Supplies for two years at an annual rental of Rmb2.6m. Dachuangyuan will also purchase existing inventories at the factory at a 30% bulk discount, which amounts to a Rmb5.7m loss against carrying costs.
*Profit warning: Global Invacom
Regional bourses opened mixed, with Tokyo (-0.3%) treading lower, while Seoul (+0.1%) and Sydney (+0.3%) edging higher.Immediate resistance for STI remains at 2,953, while underlying support is at the 2,882 breakaway gap.
Stocks to watch:
*Keppel Corp: Awarded contract by PUB to design, build, own, and operate Singapore’s fourth desalination plant at Marina East for a concession of 25 years. The plant is expected to be operational in 2020, and will be able to treat both sea and fresh water to produce 137,000 cubic metres of fresh water per day.
*Sembcorp Industries: Secured project financing of US$309m for its Sirajganj power project in Bangladesh from the World Bank, Clifford Capital and CDC Group. The construction work on the 414MW BOO power plant has since commenced at a cost of US$412m.
*SIA Engineering: Renewed services agreement with SIA Cargo, which is expiring this year. The 3-year extension with options to renew for another five years is expected to yield revenue of up to $250m over the 8-year term.
*GMG Global: Delisting from the SGX wef 23 Dec following its takeover by Halcyon Agri. *IHC: In progress of seeking funding sources for two $50m MTNs maturing on 27 Apr ’17 and 6 Feb ’18. It expects to continue divesting non-core assets to meet their debt obligations and currently has no firm plan to extend the maturity date of both bond issuances.
*Delong: Entered into binding MOUs with minority shareholders of Delong Thailand to dispose its 55% stake in the company for $15.5m. It expects to record a $0.1m gain from the divestment.*SBI Offshore: Won a high court battle to claim $0.63m from a former executive director and CEO Tan Woo Thian, for outstanding amount from the latter’s guarantee of an advance for an acquisition, which the company did not proceed with. The sum is payable to the group by 13 Jan ’17.
*Dapai: Leasing 30,857 sqm of its factory premises at Chengbei Industrial Zone, Fujian, China to Quanzhou Dachuangyuan Tourism Supplies for two years at an annual rental of Rmb2.6m. Dachuangyuan will also purchase existing inventories at the factory at a 30% bulk discount, which amounts to a Rmb5.7m loss against carrying costs.
*Profit warning: Global Invacom
Wednesday, December 21, 2016
SG Market (21 Dec 16)
The Singapore could trade with a mild upside bias after the BoJ upgraded its assessment of the Japanese economy and US equity markets continued to tread new highs. But upside will be capped by fears of capital flight from Asia due to the strong dollar.
Regional bourses opened higher in Tokyo (+0.4%), Seoul (+0.5%) and Sydney (+0.5%).Immediate resistance for STI remains at 2,953, while underlying support is at the 2,882 breakaway gap.
Stocks to watch:
*ComfortDelGro: Acquiring the remaining 49% stake in ComfortDelGro Cabcharge for A$186m, valuing the Australian JV at 4.6 times 2015 EBITDA. The JV is one of the largest private bus operators in New South Wales and Victoria, and the deal is subject to Australian government’s approval. MKE has Hold on CDG with TP of $2.63.
*Cosco Corp: Disclosed that parent China Cosco Shipping Corp will be restructuring its shipyard businesses to centralise operations and management, which will affect the group. Pending the finalisation of the restructuring plans, the group is uncertain whether there will be material impact to the trading of its stock, and thereby requested for trading suspension.
*Sembcorp Industries: Group President and CEO Tan Kin Fei will be succeeded by board director Neil McGregor, who is also Head of Energy & Resources at Temasek Int’l, wef on 1 Apr ’17. Tan will remain as advisor and non-executive director until 31 May ’17.
*Ezra: 40%-owned associate EMAS Chiyoda Subsea (ECS) has initiated discussions on its financial obligations with various parties, with some of these obligations guaranteed by the group. The remaining stake in ECS is owned by Chiyoda Corp (35%), and Nippon Yusen Kabushiki Kaisha (25%).
*SIIC Environment: 75.5%-owned subsidiary, SIIC Environment (Yiyang North City) Wastewater Treatment has been awarded Phase 2 of the Yiyang North City Wastewater Treatment project, as well as a BOT upgrade project by the Housing and Urban Development Bureau in Yiyang North City, China. The project entails the construction and operation of a wastewater treatment plant with capacity of 40,000-80,000 tpd for a concessionary period of 30 years.
*Huationg Global: Secured new civil engineering projects worth a total of $87.1m, comprising earthworks, surcharging works, car park improvement, road extension and bus stop construction across Singapore. The new projects are expected to be completed in phases over the next 2-3 years. This will raise the total value of new projects in FY16 to $113.7m.
*Singapore Myanmar Investco: Received notice from JV partner Golden Infrastructure Group (GIG) alleging that the group is in breach of their JV agreement after it proposed to dispose its 97% stake in the JV Myanmar Infrastructure Group to Shining Star Int'l Holdings. GIG alleged that the group has disregarded its right of first refusal and call options on the JV Co.
*QT Vascular: Signed an agreement with Healthtrust Purchasing, which will expand its customer base for Chocolate and Glider products in the US to over 1,400 hospitals, as well as members in more than 22,600 other locations.
*Addvalue: Its Inter-Satellite Data Relay System has completed a one-year on-orbit testing with all primary objectives met. It hopes to further improve its system’s design to support space mission in a commercial satellite operation..
*Sabana REIT: Undertaking a 42:100 rights issue at $0.0258 each to raise gross proceeds of $80.2m, which will be used to partially finance its acquisition of three properties. Sponsor, Vibrant Group, Singapore Enterprises, and two individuals have undertaken to fully subscribe to the rights issue. (~12.1% of rights issue). In addition, Vibrant will subscribe up to 25.9m excess rights (~8.4% of rights issue).
*Trendlines: Signed a definitive agreement after a non-binding MOU in 8 Sep ’16 with German pharma firm B.Braun Melsungen AG to invest and incubate early-stage healthcare companies in Singapore and the region. Braun will hold a 20.74% stake in the invest co., while the group takes up the remaining 79.26% with a $2.5m investment, funded by its IPO proceeds.
Regional bourses opened higher in Tokyo (+0.4%), Seoul (+0.5%) and Sydney (+0.5%).Immediate resistance for STI remains at 2,953, while underlying support is at the 2,882 breakaway gap.
Stocks to watch:
*ComfortDelGro: Acquiring the remaining 49% stake in ComfortDelGro Cabcharge for A$186m, valuing the Australian JV at 4.6 times 2015 EBITDA. The JV is one of the largest private bus operators in New South Wales and Victoria, and the deal is subject to Australian government’s approval. MKE has Hold on CDG with TP of $2.63.
*Cosco Corp: Disclosed that parent China Cosco Shipping Corp will be restructuring its shipyard businesses to centralise operations and management, which will affect the group. Pending the finalisation of the restructuring plans, the group is uncertain whether there will be material impact to the trading of its stock, and thereby requested for trading suspension.
*Sembcorp Industries: Group President and CEO Tan Kin Fei will be succeeded by board director Neil McGregor, who is also Head of Energy & Resources at Temasek Int’l, wef on 1 Apr ’17. Tan will remain as advisor and non-executive director until 31 May ’17.
*Ezra: 40%-owned associate EMAS Chiyoda Subsea (ECS) has initiated discussions on its financial obligations with various parties, with some of these obligations guaranteed by the group. The remaining stake in ECS is owned by Chiyoda Corp (35%), and Nippon Yusen Kabushiki Kaisha (25%).
*SIIC Environment: 75.5%-owned subsidiary, SIIC Environment (Yiyang North City) Wastewater Treatment has been awarded Phase 2 of the Yiyang North City Wastewater Treatment project, as well as a BOT upgrade project by the Housing and Urban Development Bureau in Yiyang North City, China. The project entails the construction and operation of a wastewater treatment plant with capacity of 40,000-80,000 tpd for a concessionary period of 30 years.
*Huationg Global: Secured new civil engineering projects worth a total of $87.1m, comprising earthworks, surcharging works, car park improvement, road extension and bus stop construction across Singapore. The new projects are expected to be completed in phases over the next 2-3 years. This will raise the total value of new projects in FY16 to $113.7m.
*Singapore Myanmar Investco: Received notice from JV partner Golden Infrastructure Group (GIG) alleging that the group is in breach of their JV agreement after it proposed to dispose its 97% stake in the JV Myanmar Infrastructure Group to Shining Star Int'l Holdings. GIG alleged that the group has disregarded its right of first refusal and call options on the JV Co.
*QT Vascular: Signed an agreement with Healthtrust Purchasing, which will expand its customer base for Chocolate and Glider products in the US to over 1,400 hospitals, as well as members in more than 22,600 other locations.
*Addvalue: Its Inter-Satellite Data Relay System has completed a one-year on-orbit testing with all primary objectives met. It hopes to further improve its system’s design to support space mission in a commercial satellite operation..
*Sabana REIT: Undertaking a 42:100 rights issue at $0.0258 each to raise gross proceeds of $80.2m, which will be used to partially finance its acquisition of three properties. Sponsor, Vibrant Group, Singapore Enterprises, and two individuals have undertaken to fully subscribe to the rights issue. (~12.1% of rights issue). In addition, Vibrant will subscribe up to 25.9m excess rights (~8.4% of rights issue).
*Trendlines: Signed a definitive agreement after a non-binding MOU in 8 Sep ’16 with German pharma firm B.Braun Melsungen AG to invest and incubate early-stage healthcare companies in Singapore and the region. Braun will hold a 20.74% stake in the invest co., while the group takes up the remaining 79.26% with a $2.5m investment, funded by its IPO proceeds.
Tuesday, December 20, 2016
iFast
Fund distributor iFast looked to have hit a number of blips with the most recent pullout of live quote access by OCBC from its institutional trading platform.
OCBC's suspension of its trading link with iFast has thrown a spanner into iFast's plan to introduce its FSMOne platform in Singapore. FSMOne has been touted as a multi-product investment platform offering unit trusts, insurance, bonds, shares and ETFs on a single account.
Aside to offering clients a comprehensive range of investment products, the platform would also offer commissions that are lower than those of many traditional brokers. With no more real-time quotes, this means that the platform will now be unable to execute trades in the Singapore market.
The group is currently waiting for its application to become an SGX trading member to be approved before it can support share trading for the Singapore market. A decision on the application is expected to be made in 2017.
Meanwhile, the platform will continue to offer trading of Hong Kong shares as well as the distribution of unit trusts free of any sales charge, with additional rebates of between 30-40% of commissions. It will also offer accredited investors exposure to bonds for as little as $5,000, much lower than the typical $250,000 minimum offered by banks.
iFast has also had to contend with rising costs that has pressured its 3Q16 earnings, which fell 35.3% to $1.9m despite having stable revenue of $21m (+2.3%). This was largely due to start-up costs in China.
Over the longer term, iFast continues to see huge potential in China as it tries to grab market share by appealing to investors looking to both onshore and offshore investments in Hong Kong and Singapore.
The counter is currently not cheap, trading at 39.1x forward P/E. While lower than the peak attained in Aug (45.4x), the valuation is still at a substantial premium of more than 1sd above its mean of 29.4x.
There are 2 Buy and 1 Hold street ratings on the stock with consensus TP of $1.12.
OCBC's suspension of its trading link with iFast has thrown a spanner into iFast's plan to introduce its FSMOne platform in Singapore. FSMOne has been touted as a multi-product investment platform offering unit trusts, insurance, bonds, shares and ETFs on a single account.
Aside to offering clients a comprehensive range of investment products, the platform would also offer commissions that are lower than those of many traditional brokers. With no more real-time quotes, this means that the platform will now be unable to execute trades in the Singapore market.
The group is currently waiting for its application to become an SGX trading member to be approved before it can support share trading for the Singapore market. A decision on the application is expected to be made in 2017.
Meanwhile, the platform will continue to offer trading of Hong Kong shares as well as the distribution of unit trusts free of any sales charge, with additional rebates of between 30-40% of commissions. It will also offer accredited investors exposure to bonds for as little as $5,000, much lower than the typical $250,000 minimum offered by banks.
iFast has also had to contend with rising costs that has pressured its 3Q16 earnings, which fell 35.3% to $1.9m despite having stable revenue of $21m (+2.3%). This was largely due to start-up costs in China.
Over the longer term, iFast continues to see huge potential in China as it tries to grab market share by appealing to investors looking to both onshore and offshore investments in Hong Kong and Singapore.
The counter is currently not cheap, trading at 39.1x forward P/E. While lower than the peak attained in Aug (45.4x), the valuation is still at a substantial premium of more than 1sd above its mean of 29.4x.
There are 2 Buy and 1 Hold street ratings on the stock with consensus TP of $1.12.
SG Market (20 Dec 16)
Trading in the market is expected to be muted as investors await BoJ’s monetary policy decision later today amid geopolitical concerns in Turkey and Germany.
Regional bourses opened mixed, with Tokyo (-0.1%) weaker, and Seoul (+0.4%) and Sydney (+0.6%) firmer.Technically, immediate resistance for STI is at 2,953 with underlying support at the 2,882 breakaway gap.
Stocks to watch:
*ST Engineering/Penguin. Jointly awarded a design, construct and maintenance contract for three rescue vessels by the Singapore Civil Defence Force. Construction is expected to begin in mid-2017 with delivery expected in 2019. STE has clinched new shipbuilding and ship repair contracts amounting $138m in 4Q16. MKE has Hold on STE with TP of $3.70.
*Cosco Corp: Parent Cosco Shipyard Group plans to consolidate 13 shipyards and 20 more units under its shipbuilding arm, Cosco Shipping Heavy Industry. Cosco Corp’s shares were halted on Mon, pompting speculation of possible delisting in light of the restructuring.
*Hutchison Port: Announced a co-management agreement between its 100%-owned Hongkong International Terminal, and two other JVs with Cosco Shipping Ports to set up a single team to manage 16 berths owned by the entities at terminal 4-9 of Kwai Sing, Hong Kong. This is to improve allocation of resources and capacity.*mm2 Asia: CEO Melvin Ang has acquired 1.91m shares between 14 and 19 Dec at prices ranging from $0.415-0.419/share, thereby increasing his stake by 0.19% to 45.22%.
*Thakral: JV with Living Gems Lifestyle Resorts launched its Gemlife brand of retirement housing with its first two in Queensland, Australia. Both communities are expected to house 637 homes with initial occupants moving in by mid-2017. A third site is expected to be approved for development in 1Q17 and will accommodate 207 homes. Each housing unit is expected to be sold for between A$360,000-A$575,000.
*Geo Energy: Agreed to raise coal supply to Engelhart CTP Singnapore to a minimum 7m tonnes, from the 6m contracted under an initial coal offtake agreement for Feb-Dec '17. In return, the latter will double its 2017 prepayment to US$40m.
*SGX: Its Singapore kilobar gold contract has attained the shariah standard to become the world’s first shariah-compliant gold futures.
Regional bourses opened mixed, with Tokyo (-0.1%) weaker, and Seoul (+0.4%) and Sydney (+0.6%) firmer.Technically, immediate resistance for STI is at 2,953 with underlying support at the 2,882 breakaway gap.
Stocks to watch:
*ST Engineering/Penguin. Jointly awarded a design, construct and maintenance contract for three rescue vessels by the Singapore Civil Defence Force. Construction is expected to begin in mid-2017 with delivery expected in 2019. STE has clinched new shipbuilding and ship repair contracts amounting $138m in 4Q16. MKE has Hold on STE with TP of $3.70.
*Cosco Corp: Parent Cosco Shipyard Group plans to consolidate 13 shipyards and 20 more units under its shipbuilding arm, Cosco Shipping Heavy Industry. Cosco Corp’s shares were halted on Mon, pompting speculation of possible delisting in light of the restructuring.
*Hutchison Port: Announced a co-management agreement between its 100%-owned Hongkong International Terminal, and two other JVs with Cosco Shipping Ports to set up a single team to manage 16 berths owned by the entities at terminal 4-9 of Kwai Sing, Hong Kong. This is to improve allocation of resources and capacity.*mm2 Asia: CEO Melvin Ang has acquired 1.91m shares between 14 and 19 Dec at prices ranging from $0.415-0.419/share, thereby increasing his stake by 0.19% to 45.22%.
*Thakral: JV with Living Gems Lifestyle Resorts launched its Gemlife brand of retirement housing with its first two in Queensland, Australia. Both communities are expected to house 637 homes with initial occupants moving in by mid-2017. A third site is expected to be approved for development in 1Q17 and will accommodate 207 homes. Each housing unit is expected to be sold for between A$360,000-A$575,000.
*Geo Energy: Agreed to raise coal supply to Engelhart CTP Singnapore to a minimum 7m tonnes, from the 6m contracted under an initial coal offtake agreement for Feb-Dec '17. In return, the latter will double its 2017 prepayment to US$40m.
*SGX: Its Singapore kilobar gold contract has attained the shariah standard to become the world’s first shariah-compliant gold futures.
Monday, December 19, 2016
SG Market (19 Dec 16)
The market could trade range bound with a downside bias, taking cues from cautious sentiment on Wall Street last Fri.
Regional bourses opened mixed, with Tokyo (-0.2%) and Seoul (-0.1%) weaker, while Sydney (+0.6%) is trading higher.Technically, immediate resistance for STI is at the 2,953 gap, followed by the 2,960 triple-top. Underlying support for the index remains at the 2,882 breakaway gap.
Stocks to watch:
*SATS: Gateway services and food solutions SATs is a beneficiary of the newly completed Changi Airport Terminal 4, which is expected to be opened in 2H17. However, MKE has a Sell with TP of $3.76, as valuation of 23.2x FY17E P/E is expensive.
*SIA: Likely to see a more challenging 2017 as it faces a double whammy of stiff competition and rising fuel costs (2017: US$65/bbl, 2016: US$52/bbl) according to the IATA. MKE’s last call was a Hold with TP of $9.70.
*Japfa: 51%-owned subsidiary, PT Japfa Combed Indonesia’s credit rating was upgraded by Fitch to AA- from A+ with stable outlook (prior: negative).
*Innovalues: Received approval in-principle from SGX to be delisted if the proposed acquisition by Northstar Advisors via scheme of arrangement goes through.*GS Holdings: Signed a five-year agreement to lease the centralised dishwashing facility at Changi Airport to provide centralised dishwashing services for terminal 1,2,3 and 4. The agreement has an option for another five-year extension.
*Elektromotive: Received shareholder approval to sell its 55% stake in electric vehicle charging business, and to change the company’s name to Arion Entertainment Singapore.
*Yeo Hiap Seng: Coca-Cola Singapore Beverages will be outsourcing its warehouse operations to YHS, as it shuts down its Tuas plant.
*QT Vascular: Met all of FDA safety requirements, and received a full IDE approval for its Chocolate Touch drug-coated balloon. The approval will allow it to enroll up to 585 patients in 50 centres in the US for treatment, with additional patients enrolled at selected centres outside of the US. It plans to start clinical studies in US, Europe and New Zealand.
Regional bourses opened mixed, with Tokyo (-0.2%) and Seoul (-0.1%) weaker, while Sydney (+0.6%) is trading higher.Technically, immediate resistance for STI is at the 2,953 gap, followed by the 2,960 triple-top. Underlying support for the index remains at the 2,882 breakaway gap.
Stocks to watch:
*SATS: Gateway services and food solutions SATs is a beneficiary of the newly completed Changi Airport Terminal 4, which is expected to be opened in 2H17. However, MKE has a Sell with TP of $3.76, as valuation of 23.2x FY17E P/E is expensive.
*SIA: Likely to see a more challenging 2017 as it faces a double whammy of stiff competition and rising fuel costs (2017: US$65/bbl, 2016: US$52/bbl) according to the IATA. MKE’s last call was a Hold with TP of $9.70.
*Japfa: 51%-owned subsidiary, PT Japfa Combed Indonesia’s credit rating was upgraded by Fitch to AA- from A+ with stable outlook (prior: negative).
*Innovalues: Received approval in-principle from SGX to be delisted if the proposed acquisition by Northstar Advisors via scheme of arrangement goes through.*GS Holdings: Signed a five-year agreement to lease the centralised dishwashing facility at Changi Airport to provide centralised dishwashing services for terminal 1,2,3 and 4. The agreement has an option for another five-year extension.
*Elektromotive: Received shareholder approval to sell its 55% stake in electric vehicle charging business, and to change the company’s name to Arion Entertainment Singapore.
*Yeo Hiap Seng: Coca-Cola Singapore Beverages will be outsourcing its warehouse operations to YHS, as it shuts down its Tuas plant.
*QT Vascular: Met all of FDA safety requirements, and received a full IDE approval for its Chocolate Touch drug-coated balloon. The approval will allow it to enroll up to 585 patients in 50 centres in the US for treatment, with additional patients enrolled at selected centres outside of the US. It plans to start clinical studies in US, Europe and New Zealand.
Friday, December 16, 2016
Top Glove
- Maybank KE upgraded Top Glove to Hold from Sell, raised TP to RM5.30 from RM4.25, amid brightening outlook
- Top Glove earnings and revenue improved on stronger USD/MYR , mild increase in ASP, and higher sales volume
- As such, Investors in Singapore may also keep an eye on Riverstone for possible renewed interest today
- Maybank KE’s last call on Riverstone was a Hold with TP of $0.92
- Riverstone trades at consensus FY17e P/E of 15.8x against Top Glove's 17.7x
- Top Glove earnings and revenue improved on stronger USD/MYR , mild increase in ASP, and higher sales volume
- As such, Investors in Singapore may also keep an eye on Riverstone for possible renewed interest today
- Maybank KE’s last call on Riverstone was a Hold with TP of $0.92
- Riverstone trades at consensus FY17e P/E of 15.8x against Top Glove's 17.7x
SG Market (16 Dec 16)
The market might enjoy a minor bounce, backed by continued optimism on Wall Street optimism and stable oil prices.
Regional bourses opened mixed, with Tokyo (+0.7%) gaining while Seoul and Sydney were flat.Technically, STI may attempt to fill the gap at 2,953. Underlying support for the index remains at the 2,882 breakaway gap.
Stocks to watch:
*Banks: Moody’s upgraded the long-term rating of Singapore banks to “stable” as solvency pressures become manageable. However, baseline credit assessments, subordinated debt and capital instrument ratings were cut by one notch. For exposure, MKE prefers UOB (TP $18.36).
*Property: Private home sales (ex-ECs) rose 13.3% to to 860 units last month although it slid 31.4% from a 15-month high in Oct. Popular projects were Queens Peak at Dundee Road (271 units sold) and Parc Riviera at West Coast Vale (128 units).
*SIA: Group pax load factor fell 1.8ppts to 77.2% in Nov as capacity growth (+5%) outpaced traffic increase (+2.7%). Load factors deteriorated across Americas (-1.1ppts), Europe (-1ppt) and SW Pacific (-8.1ppts). Cargo load factor was flat at 66.4% as growth in carriage (+3.4%) largely matched capacity expansion (+3.3%). Subsidiary carriers Scoot (-4.5ppts to 79.1%) and SilkAir (-0.7ppts to 70.6%) also recorded lower load factors, while Tigerair improved (0.8ppt to 83.9%). MKE has Hold with TP of $9.70.
*CapitaLand: Its serviced residence unit Ascott bought the 136-unit Temple Bar Hotel in Dublin, Ireland for €55.1m to cater to rising accommodation demand from corporate and leisure travellers.
*SATS: Awarded IATA accreditation for ramp services training and will have exclusive rights to train ground handlers in 10 ASEAN countries when the programme begins in Mar ’17. Separately, it announced the use of smart watches in its technical ramp operations to streamline on-the-ground processes and enhancing communication, productivity and safety.
*Singtel: Australian unit Optus signed a five-year A$20m managed services contract with the Townsville City Council to boost its communication and IT capabilities.
*Cosco Corp: 51%-owned Cosco Shipyard deferred the delivery of a bulk carrier from 2Q17 to 2Q18 at the request of its European buyer.
*mm2 Asia: CEO Melvin Ang continues buying spree, scooping up 967,000 shares at 41.88¢ in the open market, boosting his total stake to 45.15% from 45.06%*Singapore Medical Group: Set up a 50% owned JV, SMG International Vietnam, with five individuals, to explore growth and acquisition opportunities in Singapore and ASEAN.
*Secura: Signed MOU with Custodio and Custodio Technologies (CT) to subscribe for new CT shares, representing 20% stake, for US$4.5m. CT engages in R&D of new cyber security solutions, with focus on cyber early warning technology.
*Elektromotive: The electric vehicle charging station provider is planning to acquire a 63.13% stake in South Korea-based Dream T Entertainment for $22.7m. The target is an artiste management company that has Girl's Day, MAP6, Hyun-Woo Ji and Soo-Ah Hong under its portfolio.
*Vibrant: Entered into sale and leaseback agreement with Sabana REIT for its property at 47 Changi South Ave 2 for $23m. The 10-year leaseback agreement allows Vibrant to occupy 74% of the 8,507 sqm gfa for $2.1m in the first year with rental escalation of 1% from year two onwards. It is expected to book a gain of $9.1m from the sale.
*Artivision: Divesting its digital advertisement and media solutions business arms to an undisclosed third party for $50m. It is expected to book a disposal gain of $38m, which will be used to redeem loans as well as for general working capital requirements.
Regional bourses opened mixed, with Tokyo (+0.7%) gaining while Seoul and Sydney were flat.Technically, STI may attempt to fill the gap at 2,953. Underlying support for the index remains at the 2,882 breakaway gap.
Stocks to watch:
*Banks: Moody’s upgraded the long-term rating of Singapore banks to “stable” as solvency pressures become manageable. However, baseline credit assessments, subordinated debt and capital instrument ratings were cut by one notch. For exposure, MKE prefers UOB (TP $18.36).
*Property: Private home sales (ex-ECs) rose 13.3% to to 860 units last month although it slid 31.4% from a 15-month high in Oct. Popular projects were Queens Peak at Dundee Road (271 units sold) and Parc Riviera at West Coast Vale (128 units).
*SIA: Group pax load factor fell 1.8ppts to 77.2% in Nov as capacity growth (+5%) outpaced traffic increase (+2.7%). Load factors deteriorated across Americas (-1.1ppts), Europe (-1ppt) and SW Pacific (-8.1ppts). Cargo load factor was flat at 66.4% as growth in carriage (+3.4%) largely matched capacity expansion (+3.3%). Subsidiary carriers Scoot (-4.5ppts to 79.1%) and SilkAir (-0.7ppts to 70.6%) also recorded lower load factors, while Tigerair improved (0.8ppt to 83.9%). MKE has Hold with TP of $9.70.
*CapitaLand: Its serviced residence unit Ascott bought the 136-unit Temple Bar Hotel in Dublin, Ireland for €55.1m to cater to rising accommodation demand from corporate and leisure travellers.
*SATS: Awarded IATA accreditation for ramp services training and will have exclusive rights to train ground handlers in 10 ASEAN countries when the programme begins in Mar ’17. Separately, it announced the use of smart watches in its technical ramp operations to streamline on-the-ground processes and enhancing communication, productivity and safety.
*Singtel: Australian unit Optus signed a five-year A$20m managed services contract with the Townsville City Council to boost its communication and IT capabilities.
*Cosco Corp: 51%-owned Cosco Shipyard deferred the delivery of a bulk carrier from 2Q17 to 2Q18 at the request of its European buyer.
*mm2 Asia: CEO Melvin Ang continues buying spree, scooping up 967,000 shares at 41.88¢ in the open market, boosting his total stake to 45.15% from 45.06%*Singapore Medical Group: Set up a 50% owned JV, SMG International Vietnam, with five individuals, to explore growth and acquisition opportunities in Singapore and ASEAN.
*Secura: Signed MOU with Custodio and Custodio Technologies (CT) to subscribe for new CT shares, representing 20% stake, for US$4.5m. CT engages in R&D of new cyber security solutions, with focus on cyber early warning technology.
*Elektromotive: The electric vehicle charging station provider is planning to acquire a 63.13% stake in South Korea-based Dream T Entertainment for $22.7m. The target is an artiste management company that has Girl's Day, MAP6, Hyun-Woo Ji and Soo-Ah Hong under its portfolio.
*Vibrant: Entered into sale and leaseback agreement with Sabana REIT for its property at 47 Changi South Ave 2 for $23m. The 10-year leaseback agreement allows Vibrant to occupy 74% of the 8,507 sqm gfa for $2.1m in the first year with rental escalation of 1% from year two onwards. It is expected to book a gain of $9.1m from the sale.
*Artivision: Divesting its digital advertisement and media solutions business arms to an undisclosed third party for $50m. It is expected to book a disposal gain of $38m, which will be used to redeem loans as well as for general working capital requirements.
Thursday, December 15, 2016
SG Market (15 Dec 16)
The market could come under pressure following Wall Street’s negative reaction to the Fed’s interest rate outlook, with REITs and yield stocks most at risk, while lower oil prices could spur profit-taking in oil-related counters.
Regional bourses opened mixed, with Tokyo (+0.9%) higher, and Seoul (-0.4%) and Sydney (-0.6%) weaker.Technically, immediate resistance for the STI is at the 2,960 triple-top, with underlying support at the 2,882 breakaway gap.
Stock highlights:
*Economy: Economists have pared 2016 GDP growth forecast to 1.4% (prior: 1.8%) on substantially weaker estimates for the finance & insurance and wholesale & retail sectors. Forecast for 2017 was also trimmed to 1.5% from 1.8%.
*Telcos: TPG Telecom emerged as the fourth Singapore telco, after winning the new entrant spectrum auction with an aggressive $105m bid (reserve price: $35m). TPG’s steep valuation may result in a price war, while its anticipated participation in the upcoming general auction could end with higher spectrum prices. This spells a tougher outlook for Singapore telcos. M1 (Sell, TP $1.90) is most vulnerable, followed by StarHub (Hold, TP $3.52) and Singtel (Hold, TP $3.68).
*Genting Singapore: The promotion bill to legalise casinos in Japan has been passed in the upper house. MKE opines that GENS’ recent share price rally may be premature, as the subsequent implementation bill has yet to be passed, while current valuations have overstretched fundamentals. Sell with TP of $0.73.
*SIA: Divesting its 10% stake in Tigerair Taiwan to China Airlines by 1Q17, as part of efforts to consolidate both Tigerair and Scoot under the "Scoot" brand.*ST Engineering: Jiangsu Huatong Kinetics, its 75:25 JV with China SOE Jiangsu Huatong Machinery, has been placed under voluntary liquidation. A $61m impairment charge was taken in 3Q16.
*Silverlake: Its stake in Chinese associate Global InfoTech was diluted to 11.92% from 12.43% after the latter completed the issue of 3.6m new shares at Rmb15.91 apiece to partly fund the acquisition of Shanghai RuiMin Internet Technology for up to Rmb300m. The target provides financial technology services and solutions in China.
*Ryobi Kiso: Secured new contracts worth $58m, bringing the ytd order win to $227m. Some of the contracts involve foundation and geoservices work for clients such as HDB, JTC, Changi Airport and NUS.
*Sabana REIT: Acquiring 107 Eunos Avenue 3 for $36.1m. The newly constructed light industrial property comes with an NPI guarantee of $3.1m p.a., and 24 years left on its lease.
*Viva Industrial Trust: Secured a $22m five-year term loan facility from UOB, with the borrowings secured against its 30 Pioneer Road property.
*Sunpower Group: Issued US$110m of convertible bonds due 2022 with an initial conversion price of $0.50 to CDH Fund V, to help fund the group's green investment-related businesses. The manager of the fund is CDH China Management Co., a PE firm that focuses on growth capital and middle market buyout investments in Greater China.
*Ace Achieve: 2QFY17 net profit slumped 30.2% to Rmb11.2m, due to sharp erosion in gross margin to 16.1% (-12.5ppt) from increased competition in the ICT system integration segment. Revenue of Rmb163.9m (+31.1%) was lifted by ICT system integration sales (+108.8%) but pared by contraction in its business support solutions (-17.9%) and maintenance & servicing (-76.6%) segments. Bottomline supported by government incentives of Rmb3.3m (2QFY16: nil). NAV/share at Rmb0.23.
*China Kangda Food: Sold its chicken and rabbit farm assets for Rmb5.7m and expects to book disposal gain of Rmb0.9m.
Regional bourses opened mixed, with Tokyo (+0.9%) higher, and Seoul (-0.4%) and Sydney (-0.6%) weaker.Technically, immediate resistance for the STI is at the 2,960 triple-top, with underlying support at the 2,882 breakaway gap.
Stock highlights:
*Economy: Economists have pared 2016 GDP growth forecast to 1.4% (prior: 1.8%) on substantially weaker estimates for the finance & insurance and wholesale & retail sectors. Forecast for 2017 was also trimmed to 1.5% from 1.8%.
*Telcos: TPG Telecom emerged as the fourth Singapore telco, after winning the new entrant spectrum auction with an aggressive $105m bid (reserve price: $35m). TPG’s steep valuation may result in a price war, while its anticipated participation in the upcoming general auction could end with higher spectrum prices. This spells a tougher outlook for Singapore telcos. M1 (Sell, TP $1.90) is most vulnerable, followed by StarHub (Hold, TP $3.52) and Singtel (Hold, TP $3.68).
*Genting Singapore: The promotion bill to legalise casinos in Japan has been passed in the upper house. MKE opines that GENS’ recent share price rally may be premature, as the subsequent implementation bill has yet to be passed, while current valuations have overstretched fundamentals. Sell with TP of $0.73.
*SIA: Divesting its 10% stake in Tigerair Taiwan to China Airlines by 1Q17, as part of efforts to consolidate both Tigerair and Scoot under the "Scoot" brand.*ST Engineering: Jiangsu Huatong Kinetics, its 75:25 JV with China SOE Jiangsu Huatong Machinery, has been placed under voluntary liquidation. A $61m impairment charge was taken in 3Q16.
*Silverlake: Its stake in Chinese associate Global InfoTech was diluted to 11.92% from 12.43% after the latter completed the issue of 3.6m new shares at Rmb15.91 apiece to partly fund the acquisition of Shanghai RuiMin Internet Technology for up to Rmb300m. The target provides financial technology services and solutions in China.
*Ryobi Kiso: Secured new contracts worth $58m, bringing the ytd order win to $227m. Some of the contracts involve foundation and geoservices work for clients such as HDB, JTC, Changi Airport and NUS.
*Sabana REIT: Acquiring 107 Eunos Avenue 3 for $36.1m. The newly constructed light industrial property comes with an NPI guarantee of $3.1m p.a., and 24 years left on its lease.
*Viva Industrial Trust: Secured a $22m five-year term loan facility from UOB, with the borrowings secured against its 30 Pioneer Road property.
*Sunpower Group: Issued US$110m of convertible bonds due 2022 with an initial conversion price of $0.50 to CDH Fund V, to help fund the group's green investment-related businesses. The manager of the fund is CDH China Management Co., a PE firm that focuses on growth capital and middle market buyout investments in Greater China.
*Ace Achieve: 2QFY17 net profit slumped 30.2% to Rmb11.2m, due to sharp erosion in gross margin to 16.1% (-12.5ppt) from increased competition in the ICT system integration segment. Revenue of Rmb163.9m (+31.1%) was lifted by ICT system integration sales (+108.8%) but pared by contraction in its business support solutions (-17.9%) and maintenance & servicing (-76.6%) segments. Bottomline supported by government incentives of Rmb3.3m (2QFY16: nil). NAV/share at Rmb0.23.
*China Kangda Food: Sold its chicken and rabbit farm assets for Rmb5.7m and expects to book disposal gain of Rmb0.9m.
Wednesday, December 14, 2016
SG Market (14 Dec 16)
The market could trade sideways, as positive sentiment from Wall Street could be capped by cautiousness ahead of the FOMC interest rate decision, as well as early-profit taking from oil-related counters.
Regional bourses in Tokyo (+0.2%), Seoul (+0.3%) and Sydney (+0.7%) tracked higher. Technically, immediate resistance for the STI is at the 2,960 triple-top, with underlying support at the 2,882 breakaway gap.
Stocks to watch:
*Genting Singapore: The Promotion Bill to legalise casinos in Japan has cleared an upper house committee, and voting is to take place today (the final day of the current Diet session). MKE opines that GENS’ recent share price rally may be premature, as the subsequent Implementation bill has yet to be passed, while current valuations have overstretched fundamentals. Sell with TP of SGD0.73.
*Sheng Siong: MKE downgrades to Sell from Hold with lower TP of $0.88 on a deal-changing rise in competition for prime selling space, which puts its new outlet expansion plan at risk. This is critical as new stores drive sales growth much more than old stores. Worst, with two big store closures coming up in 2017, it could be left with a shortage of new stores to pick up the slack.
*IHH Healthcare: Received license to set up 70%-owned JV, ParkwayHealth Chengdu with initial capital of Rmb300m. The hospital will provide specialised care and services such as obstetrics and gynaecology, paediatrics and orthopaedics. MKE has a Buy with TP of MYR6.52.
*Oxley: Launched Phase 1 of its maiden Batam project – Oxley Convention City. The 20,000 sqm land area mixed-use development comprises one hotel, three residential towers and 130 retail units.
*PACC Offshore: Following legal action to recover sums owing by Makamin Offshore Saudi, the latter has applied for a Saudi court order to 1) forbid POSH from substituting Makamin's charter contracts with Saudi Aramco, 2) compensate Makamin for various damages amounting to US$58.7m, and 3) prevent POSH from tendering for Aramco charter contracts for the same period of time which Makamin is prevented from doing so.
*GL: Paid £7.75m to landlord K/S Habro-Gatwick and original tenant Scottish and Newcastle to settle a rental claim and legal guarantee on a UK hotel property after the current tenant became insolvent. The amount was provided for in 3Q16.
*CMC Infocomm: Clinched three contracts worth $7.8m, for works that include installation of WiFi infrastructure and procurement and provision of required infrastructure, as well as maintenance services for telecom operators in Singapore and Thailand respectively.
*Ipco: 2QFY17 net profit plunged 46.3% to $2.1m, as revenue slid 10.9% to $13.9m on lower demand for burn-in boards from semi-conductor manufacturers, and a decrease in installations of natural gas supply equipment for new households in China. Bottom line was further dragged by a $3.7m drop in FX gain. NAV/share at $0.02.
*OEL: Received a winding up application from Oceanfront Trading over failure to pay US$0.6m. Legal proceedings will begin on 6 Jan.
Regional bourses in Tokyo (+0.2%), Seoul (+0.3%) and Sydney (+0.7%) tracked higher. Technically, immediate resistance for the STI is at the 2,960 triple-top, with underlying support at the 2,882 breakaway gap.
Stocks to watch:
*Genting Singapore: The Promotion Bill to legalise casinos in Japan has cleared an upper house committee, and voting is to take place today (the final day of the current Diet session). MKE opines that GENS’ recent share price rally may be premature, as the subsequent Implementation bill has yet to be passed, while current valuations have overstretched fundamentals. Sell with TP of SGD0.73.
*Sheng Siong: MKE downgrades to Sell from Hold with lower TP of $0.88 on a deal-changing rise in competition for prime selling space, which puts its new outlet expansion plan at risk. This is critical as new stores drive sales growth much more than old stores. Worst, with two big store closures coming up in 2017, it could be left with a shortage of new stores to pick up the slack.
*IHH Healthcare: Received license to set up 70%-owned JV, ParkwayHealth Chengdu with initial capital of Rmb300m. The hospital will provide specialised care and services such as obstetrics and gynaecology, paediatrics and orthopaedics. MKE has a Buy with TP of MYR6.52.
*Oxley: Launched Phase 1 of its maiden Batam project – Oxley Convention City. The 20,000 sqm land area mixed-use development comprises one hotel, three residential towers and 130 retail units.
*PACC Offshore: Following legal action to recover sums owing by Makamin Offshore Saudi, the latter has applied for a Saudi court order to 1) forbid POSH from substituting Makamin's charter contracts with Saudi Aramco, 2) compensate Makamin for various damages amounting to US$58.7m, and 3) prevent POSH from tendering for Aramco charter contracts for the same period of time which Makamin is prevented from doing so.
*GL: Paid £7.75m to landlord K/S Habro-Gatwick and original tenant Scottish and Newcastle to settle a rental claim and legal guarantee on a UK hotel property after the current tenant became insolvent. The amount was provided for in 3Q16.
*CMC Infocomm: Clinched three contracts worth $7.8m, for works that include installation of WiFi infrastructure and procurement and provision of required infrastructure, as well as maintenance services for telecom operators in Singapore and Thailand respectively.
*Ipco: 2QFY17 net profit plunged 46.3% to $2.1m, as revenue slid 10.9% to $13.9m on lower demand for burn-in boards from semi-conductor manufacturers, and a decrease in installations of natural gas supply equipment for new households in China. Bottom line was further dragged by a $3.7m drop in FX gain. NAV/share at $0.02.
*OEL: Received a winding up application from Oceanfront Trading over failure to pay US$0.6m. Legal proceedings will begin on 6 Jan.
Tuesday, December 13, 2016
SG Market (13 Dec 16)
The overbought market is likely to consolidate as investors await the FOMC’s rate decision tomorrow, although oil-related plays might enjoy continued interest from the latest non-OPEC output cut deal.
Regional bourses opened mixed, with Tokyo (-0.4%) and Seoul (-0.1%) weaker, and Sydney paring early losses to trade 0.1% higher.Technically, immediate resistance for the STI is at the 2,960 triple-top, with underlying support at the 2,882 breakaway gap.
Stocks to watch:
*Strategy: 2017 might be another lacklustre year, given sluggish economic growth, uncompelling index valuations, weak earnings recovery expectations and the unfavourable political outlook globally. Given such, we expect the STI to settle at ~3,000 by end-2017 (<2% upside). MKE prefers stock-picking, with top picks being CCT, KREIT, Venture, Raffles Medical, UOL, Jumbo, and Ezion.
*SIA: Received approval from the Competition Commission of Singapore on its proposed JV with Lufthansa. The wide-ranging agreement signed in Nov ’15 is aimed at expanding codeshare ties and deepening commercial cooperation in key markets in Europe, ASEAN and Australia. MKE has Hold with TP of $9.70.
*Olam: Denied charges by green groups Mighty Earth and Brainforest that its oil plam plantations are destroying forests in Gabon and failing to be transparent on where it sources its palm oil supplies. Olam maintains that it develops on highly logged and degraded secondary forests and sources from palm oil suppliers that complies with its no burn, no peat and no deforestation policy.
*Frasers Centrepoint: Its hospitality arm recently launched a 105-unit luxury services residence, North Park Place in Bangkok, Thailand. With the launch, its Thai portfolio will grow to four properties with over 850 units by 2019, while its global portfolio would have 140 properties in 80 cities and 23,400 units.
*Stamford Tyres: 2QFY17 net profit jumped 59.9% to $1.5m from a low base as well as a $1m swing to FX gain of $0.7m. Revenue was flattish at $57.7m (-0.6%) due to lower sales in South East Asian markets. Gross margin expanded to 26% (+0.7ppts) from 1) lower cost of sales, 2) contribution of value-added activities at its retail chains and truck tyre centres. Bottomline was further boosted by a decline in finance costs (-24.5%). NAV/share at $0.505.
*Imperium Crown: Mulling to divest its core investment properties in Japan, as yields on real estate assets are expected to be low. The group is also exploring new sources of revenue and growth.
*GK Goh: Selling its financial services arm GK Goh Financial Services for $12.5m, or 1x P/B to an international financial institution with an established Asian presence. The unit , which provides services on derivatives and leveraged FX, has been loss-making since 2013.
*IEV: Signed agreements with NanaMalaysia to proceed with a pilot scale production of zeolites (adsorbents and catalysts minerals) as well as a feasibility study on the commercialisation of the production of zeolites and other nano materials from rice husk. No initial investment cost was disclosed.
*Sinocloud: Will waive and forgive HK$42.1m of a HK$78.1m convertible loan to Lu Zhen Dong, pending approval by shareholders as it seeks to cut its losses from other business ventures apart from its core internet data centre business.
*Equation Summit: Looking to divest its energy management services, e-waste/recycling and the supply of construction materials business. It will make relevant disclosures where appropriate.
Regional bourses opened mixed, with Tokyo (-0.4%) and Seoul (-0.1%) weaker, and Sydney paring early losses to trade 0.1% higher.Technically, immediate resistance for the STI is at the 2,960 triple-top, with underlying support at the 2,882 breakaway gap.
Stocks to watch:
*Strategy: 2017 might be another lacklustre year, given sluggish economic growth, uncompelling index valuations, weak earnings recovery expectations and the unfavourable political outlook globally. Given such, we expect the STI to settle at ~3,000 by end-2017 (<2% upside). MKE prefers stock-picking, with top picks being CCT, KREIT, Venture, Raffles Medical, UOL, Jumbo, and Ezion.
*SIA: Received approval from the Competition Commission of Singapore on its proposed JV with Lufthansa. The wide-ranging agreement signed in Nov ’15 is aimed at expanding codeshare ties and deepening commercial cooperation in key markets in Europe, ASEAN and Australia. MKE has Hold with TP of $9.70.
*Olam: Denied charges by green groups Mighty Earth and Brainforest that its oil plam plantations are destroying forests in Gabon and failing to be transparent on where it sources its palm oil supplies. Olam maintains that it develops on highly logged and degraded secondary forests and sources from palm oil suppliers that complies with its no burn, no peat and no deforestation policy.
*Frasers Centrepoint: Its hospitality arm recently launched a 105-unit luxury services residence, North Park Place in Bangkok, Thailand. With the launch, its Thai portfolio will grow to four properties with over 850 units by 2019, while its global portfolio would have 140 properties in 80 cities and 23,400 units.
*Stamford Tyres: 2QFY17 net profit jumped 59.9% to $1.5m from a low base as well as a $1m swing to FX gain of $0.7m. Revenue was flattish at $57.7m (-0.6%) due to lower sales in South East Asian markets. Gross margin expanded to 26% (+0.7ppts) from 1) lower cost of sales, 2) contribution of value-added activities at its retail chains and truck tyre centres. Bottomline was further boosted by a decline in finance costs (-24.5%). NAV/share at $0.505.
*Imperium Crown: Mulling to divest its core investment properties in Japan, as yields on real estate assets are expected to be low. The group is also exploring new sources of revenue and growth.
*GK Goh: Selling its financial services arm GK Goh Financial Services for $12.5m, or 1x P/B to an international financial institution with an established Asian presence. The unit , which provides services on derivatives and leveraged FX, has been loss-making since 2013.
*IEV: Signed agreements with NanaMalaysia to proceed with a pilot scale production of zeolites (adsorbents and catalysts minerals) as well as a feasibility study on the commercialisation of the production of zeolites and other nano materials from rice husk. No initial investment cost was disclosed.
*Sinocloud: Will waive and forgive HK$42.1m of a HK$78.1m convertible loan to Lu Zhen Dong, pending approval by shareholders as it seeks to cut its losses from other business ventures apart from its core internet data centre business.
*Equation Summit: Looking to divest its energy management services, e-waste/recycling and the supply of construction materials business. It will make relevant disclosures where appropriate.
Monday, December 12, 2016
City Dev
City Dev is continuing to win plaudits for its success in monetising its assets into profit participation securities (PPS) even as luxury residential property prices remain soft.
Its latest PPS transaction entailed the injection of its 156-unit Nouvel 18 property for $977.6m, valuing the development at $2,750 psf. Under the structure, $102m PPS were issued to Green 18, a special-purpose vehicle owned by several high-net-worth individuals, offering 5% in annual returns plus additional upside if units are sold above $2,750 psf.
The move is seen largely as a de-risking of its balance sheet and also a way to avoid paying QC extension penalties. Thus far, the property developer has securitised $3.5b worth of properties since late 2014 and market watchers are anticipating more possible transactions in the pipeline. These include:
1) Its small and non-core industrial portfolio, comprising five properties. If divested for $350m, a foreign broker estimates it would lift RNAV value by $150m or $0.16/share.
2) Its six retail assets. The sizeable portfolio of six malls or retail units is currently valued at $2b and could potentially fetch more.
3) Legacy residential units. These include 58 units at Cliveden as well as its South Beach project, which has a gross development value of $3b.
While the weak market does indeed present its challenges, such securitisation moves could see the counter narrow the discount to its RNAV of $12.38.
The counter is currently trading at a 27% discount or more than 1sd from its 5-year P/B mean 1.16x. The street is relatively bullish on the counter with 19 Buy, 3 Hold and 1 Sell ratings and a consensus TP of $10.10.
Its latest PPS transaction entailed the injection of its 156-unit Nouvel 18 property for $977.6m, valuing the development at $2,750 psf. Under the structure, $102m PPS were issued to Green 18, a special-purpose vehicle owned by several high-net-worth individuals, offering 5% in annual returns plus additional upside if units are sold above $2,750 psf.
The move is seen largely as a de-risking of its balance sheet and also a way to avoid paying QC extension penalties. Thus far, the property developer has securitised $3.5b worth of properties since late 2014 and market watchers are anticipating more possible transactions in the pipeline. These include:
1) Its small and non-core industrial portfolio, comprising five properties. If divested for $350m, a foreign broker estimates it would lift RNAV value by $150m or $0.16/share.
2) Its six retail assets. The sizeable portfolio of six malls or retail units is currently valued at $2b and could potentially fetch more.
3) Legacy residential units. These include 58 units at Cliveden as well as its South Beach project, which has a gross development value of $3b.
While the weak market does indeed present its challenges, such securitisation moves could see the counter narrow the discount to its RNAV of $12.38.
The counter is currently trading at a 27% discount or more than 1sd from its 5-year P/B mean 1.16x. The street is relatively bullish on the counter with 19 Buy, 3 Hold and 1 Sell ratings and a consensus TP of $10.10.
SG Market (12 Dec 16)
Market sentiment could be lifted by the relentless run-up sentiment on Wall Street, as well as from the surge in oil price, although upside may be capped by an expected US rate hike this week, which will bode well for banks and S’pore export data due Fri.
Regional bourses in Tokyo (+0.7%), Seoul (+0.1%) and Sydney (+0.3%) opened firmer.Technically, the overstretched STI could face resistance at the 2,960 triple-top, with next objective at 3,040. Underlying support is at the 2,882 breakaway gap.
Stocks to watch:
*O&M: Offshore names could rally today, in tandem with a 4.7% surge in WTI crude to almost US$54/bbl), following news that non-OPEC producers have agreed to cut oil output, and that Saudi Arabia is signalling deeper cuts. MKE likes Ezion as early cycle beneficiary, with Buy call and TP of $0.42
*Keppel Corp: Recent sentiment-driven rally of 8.8% since the Nov OPEC deal may be unsustainable. The market, which views Keppel as an oil-related play, may be disappointed, as its earnings have now skewed towards property, while the O&M segment (26% of 9M16 profit) is a late cycle beneficiary. MKE has a Sell with TP of $4.57.
*GLP: Set up GLP US Income Partners III Fund to acquire a US$1.1b portfolio of industrial assets in the US. Trading at 0.85x P/B.
*CITIC Envirotech: Secured its first build-own-operate project for a 95,000 tpa hazardous waste treatment facility in Shandong, China with JV partner Shangdong Zhengtian Environmental Protection Technology. The 70:30 JV will undertake the project, which has a total investment value of Rmb240m, and is expected to be completed by end-2017. Trading at 21.5x trailing P/E.
*KrisEnergy: Noteholders have consented to extend the maturity dates of its $330m worth of bonds to 2022 and 2033 instead of 2017 and 2018. This is a pre-condition for KrisEnergy to tap up to $140m preferential offering of 93 zero coupon notes with 837 detachable warrants for every 1,000 shares held, which Keppel Corp is underwriting.
*iFAST: Its new FSMOne platform has stopped trading Singapore stocks after its appointed counterparty, OCBC Securities pulled the plug on giving it access to SGX quotes as FSMOne ran into direct competition with OCBC's retail brokerage business. iFAST is applying to be an SGX trading member next year, subject to relevant approval. Meanwhile, it might face difficulties finding a willing counterparty to execute its trades.
*Pacific Radiance: 51:49 JV, DOT Radiance has agreed to defer delivery of a vessel to a charterer to 31 Dec 2017. A long term charter contract worth US$140m had previously been secured ahead of the vessel’s delivery in 2016/17.
*Soilbuild REIT: Terminated Technics Oil & Gas’s lease of the property at 72 Loyang Way. It currently has up to five months (unutilised portion of bank guarantee received in May) to look for a new tenant for the property. *KLW: Following investigations by the CAD and an SGX reprimand, it has terminated a 2b new share put option agreement with substantial shareholder Prince Abdul Qawi (9.3% ownership).
*Dukang Distillers: Terminated the sale of residual assets at its Yichuan factory, following the decision to temporarily slow down its relocation exercise due to production requirements.
*Ziwo: Terminated its proposed diversification into Korean real estate through the acquisition of Longrunn Intel Incheon. Separately, it proposed to acquire a 37.8% stake in Beijing E-Star Electric Technology, which provides charging equipment for electronic vehicles, for $1.2m through the issuance of new shares at $0.019/share.
Regional bourses in Tokyo (+0.7%), Seoul (+0.1%) and Sydney (+0.3%) opened firmer.Technically, the overstretched STI could face resistance at the 2,960 triple-top, with next objective at 3,040. Underlying support is at the 2,882 breakaway gap.
Stocks to watch:
*O&M: Offshore names could rally today, in tandem with a 4.7% surge in WTI crude to almost US$54/bbl), following news that non-OPEC producers have agreed to cut oil output, and that Saudi Arabia is signalling deeper cuts. MKE likes Ezion as early cycle beneficiary, with Buy call and TP of $0.42
*Keppel Corp: Recent sentiment-driven rally of 8.8% since the Nov OPEC deal may be unsustainable. The market, which views Keppel as an oil-related play, may be disappointed, as its earnings have now skewed towards property, while the O&M segment (26% of 9M16 profit) is a late cycle beneficiary. MKE has a Sell with TP of $4.57.
*GLP: Set up GLP US Income Partners III Fund to acquire a US$1.1b portfolio of industrial assets in the US. Trading at 0.85x P/B.
*CITIC Envirotech: Secured its first build-own-operate project for a 95,000 tpa hazardous waste treatment facility in Shandong, China with JV partner Shangdong Zhengtian Environmental Protection Technology. The 70:30 JV will undertake the project, which has a total investment value of Rmb240m, and is expected to be completed by end-2017. Trading at 21.5x trailing P/E.
*KrisEnergy: Noteholders have consented to extend the maturity dates of its $330m worth of bonds to 2022 and 2033 instead of 2017 and 2018. This is a pre-condition for KrisEnergy to tap up to $140m preferential offering of 93 zero coupon notes with 837 detachable warrants for every 1,000 shares held, which Keppel Corp is underwriting.
*iFAST: Its new FSMOne platform has stopped trading Singapore stocks after its appointed counterparty, OCBC Securities pulled the plug on giving it access to SGX quotes as FSMOne ran into direct competition with OCBC's retail brokerage business. iFAST is applying to be an SGX trading member next year, subject to relevant approval. Meanwhile, it might face difficulties finding a willing counterparty to execute its trades.
*Pacific Radiance: 51:49 JV, DOT Radiance has agreed to defer delivery of a vessel to a charterer to 31 Dec 2017. A long term charter contract worth US$140m had previously been secured ahead of the vessel’s delivery in 2016/17.
*Soilbuild REIT: Terminated Technics Oil & Gas’s lease of the property at 72 Loyang Way. It currently has up to five months (unutilised portion of bank guarantee received in May) to look for a new tenant for the property. *KLW: Following investigations by the CAD and an SGX reprimand, it has terminated a 2b new share put option agreement with substantial shareholder Prince Abdul Qawi (9.3% ownership).
*Dukang Distillers: Terminated the sale of residual assets at its Yichuan factory, following the decision to temporarily slow down its relocation exercise due to production requirements.
*Ziwo: Terminated its proposed diversification into Korean real estate through the acquisition of Longrunn Intel Incheon. Separately, it proposed to acquire a 37.8% stake in Beijing E-Star Electric Technology, which provides charging equipment for electronic vehicles, for $1.2m through the issuance of new shares at $0.019/share.
Friday, December 9, 2016
SGX
SGX saw renewed market fervour on possible spillover effects from Trumponomics with securities turnover surged to $29.3b (+51%y/y, +49% m/m) in Nov albeit with one additional trading day versus Oct and two more compared to last year. Nonetheless, securities daily average value jumped to $1.3b (+37% y/y, +43% m/m).
During the month, there was one new Catalist listing (HC Surgical Specialists) which raised $8.1m. There were 24 new bond listings which raised $8.5b.
Derivatives trading volume also saw a substantial uptick to 16.6m contracts (+22% y/y, +43% m/m), reflecting the risk-on sentiment across Nifty 50 (+31% y/y, +16% m/m) and Nikkei 225 (+22% y/y, +52% m/m) index futures although performance was more mixed for the China A50 (-2% y/y, +53% m/m) and MSCI India (-72% y/y, +7% m/m) index futures.
Meanwhile, FX futures volume stood at 701,870 contracts (+51% y/y, +41% m/m), testament of the renewed volatility in currency markets following Trump's surprise election.
The Exchange's strongest growth engine continued to come from the commodities derivatives trading which bolted to 2.4m (+147% y/y, +101% m/m), buoyed by iron ore (+145% y/y, +111% m/m), forward freight (+34% y/y, +52% m/m), and rubber (+273% y/y, +42% m/m) derivatives.
While the strong trading flows were reflective of overseas events such as Trump's election win, there is little to indicate that such flows will continue with similar strength in the coming months.
SGX is currently trading at 22.2x forward P/E with indicative yield of 3.8%, seemingly cheaper to its closest peer, HKEx (38.4x, 2.6%). However, the latter's premium valuation is backed by stronger growth prospects arising from its closer proximity and ties to China coupled with two stock connects (Shanghai and Shenzhen).
The street has 8 Buy, 10 Hold ratings on the exchange with a consensus TP of $7.79, indicating little potential upside (>5%) from current prices.
During the month, there was one new Catalist listing (HC Surgical Specialists) which raised $8.1m. There were 24 new bond listings which raised $8.5b.
Derivatives trading volume also saw a substantial uptick to 16.6m contracts (+22% y/y, +43% m/m), reflecting the risk-on sentiment across Nifty 50 (+31% y/y, +16% m/m) and Nikkei 225 (+22% y/y, +52% m/m) index futures although performance was more mixed for the China A50 (-2% y/y, +53% m/m) and MSCI India (-72% y/y, +7% m/m) index futures.
Meanwhile, FX futures volume stood at 701,870 contracts (+51% y/y, +41% m/m), testament of the renewed volatility in currency markets following Trump's surprise election.
The Exchange's strongest growth engine continued to come from the commodities derivatives trading which bolted to 2.4m (+147% y/y, +101% m/m), buoyed by iron ore (+145% y/y, +111% m/m), forward freight (+34% y/y, +52% m/m), and rubber (+273% y/y, +42% m/m) derivatives.
While the strong trading flows were reflective of overseas events such as Trump's election win, there is little to indicate that such flows will continue with similar strength in the coming months.
SGX is currently trading at 22.2x forward P/E with indicative yield of 3.8%, seemingly cheaper to its closest peer, HKEx (38.4x, 2.6%). However, the latter's premium valuation is backed by stronger growth prospects arising from its closer proximity and ties to China coupled with two stock connects (Shanghai and Shenzhen).
The street has 8 Buy, 10 Hold ratings on the exchange with a consensus TP of $7.79, indicating little potential upside (>5%) from current prices.
SG Market (09 Dec 16)
The market is likely to trade sideways, as any positive sentiment overflowing from Wall Street and higher oil prices could be met with profit-taking amid an overbought market.
Regional bourses opened mixed, with Tokyo (+0.6%) and Sydney (+0.3%) stronger, and Seoul (-0.4%) lower.Technically, the overstretched STI could face some resistance at the 2,960 triple-top, with next objective at 3,040. Underlying support is at the 2,882 breakaway gap.
Stocks to watch:
*Property: Consultant JLL expects the recent mild recovery in private residential transactions to spill into 2017, as buyers feel that residential prices have fallen to more acceptable levels. However, expected higher interest rates will cap home demand and price upside. MKE’s top call is UOL (Buy, TP SGD7.39).
*SGX: Nov securities turnover jumped on renewed market favour to $29.3b (+51% y/y, +49% m/m), with daily average turnover value at $1.3b (+37% y/y, +43% m/m). Derivatives volume totalled 16.6m contracts (+22% y/y, +43% m/m) on stronger performance across equity index (+10% y/y, +36% m/m) and FX futures (+51% y/y, +41% m/m) volume.
*SMM: Denied that it is putting up PPL Shipyard or any other yards for sale. This came as a response from a press query, as SMM was understood to have sought valuation for one or more of PPL’s assets.
*Wilmar: South African subsidiary Wilmar Continental Edible Oils and Fats was raided as part of an industry-wide investigation by the Competition Commission.
*Sabana REIT: Entered into a put and call option agreement with LHN Group to purchase a six-storey single-user light industrial building at 72 Eunos Avenue 7 for $20m conditional upon HDB’s approval. The building has a GFA of 67,977 sf with a remaining lease of 24 years. Upon completion of the acquisition, LHN will lease back 71% of the total GFA of the building for 10 years and be appointed as the property’s manager.
*Low Keng Huat: 3QFY17 net profit plunged 74.4% y/y to $3m, as 1) gross margin normalised from 104% to 41.8% on the absence of cost writeback and 2) Other income plunged 76% to $2.5m, due to an absence of disposal gains. Revenue of $12.4m (-33.7%) was dragged by lower construction (-50%), hotel and F&B (-25.5%), and investments (-2.2%) performance, on top of zero contribution from its development business (3QFY16: $$3.2m) as it sold no residential units during the quarter. NAV/share at $0.88.
*Vibrant: 2QFY17 net profit surged 159.5% y/y to $9m on stronger associates’ contributions of $3.8m (+572.4%) from the sale of strata units at GSH Plaza. Revenue slipped 4.5% to $45m due to lower warehousing revenue, partially offset by contributions from its housing project in Jiangyin, China. Gross margin expanded to 34% (+7.4ppt) on the cost rationalisation in its freight and logistics business, as well as divestment of a loss making arm. Bottomline was further supported by FV gains of $3.4m (2QFY17: $1.6m loss), FX gains of $1.7m (2QFY17: $0.5m) as well as $1.2m in divestment gains. NAV/share at $0.63.
*Hotel Properties: Acquired an effective 73.99% stake in Boathouse Kata for 44.6m baht. In addition, it acquired 539.8m baht worth of notes issued by Boathouse. Boathouse owns a 38-unit boutique resort at Kata Beach, Phuket, Thailand.
*MMP Resources: Entered into a settlement agreement with its parent, Primeforth to commence repayment of $1m worth of fees owing to Magnum Energy from 1 Apr ’17.
Regional bourses opened mixed, with Tokyo (+0.6%) and Sydney (+0.3%) stronger, and Seoul (-0.4%) lower.Technically, the overstretched STI could face some resistance at the 2,960 triple-top, with next objective at 3,040. Underlying support is at the 2,882 breakaway gap.
Stocks to watch:
*Property: Consultant JLL expects the recent mild recovery in private residential transactions to spill into 2017, as buyers feel that residential prices have fallen to more acceptable levels. However, expected higher interest rates will cap home demand and price upside. MKE’s top call is UOL (Buy, TP SGD7.39).
*SGX: Nov securities turnover jumped on renewed market favour to $29.3b (+51% y/y, +49% m/m), with daily average turnover value at $1.3b (+37% y/y, +43% m/m). Derivatives volume totalled 16.6m contracts (+22% y/y, +43% m/m) on stronger performance across equity index (+10% y/y, +36% m/m) and FX futures (+51% y/y, +41% m/m) volume.
*SMM: Denied that it is putting up PPL Shipyard or any other yards for sale. This came as a response from a press query, as SMM was understood to have sought valuation for one or more of PPL’s assets.
*Wilmar: South African subsidiary Wilmar Continental Edible Oils and Fats was raided as part of an industry-wide investigation by the Competition Commission.
*Sabana REIT: Entered into a put and call option agreement with LHN Group to purchase a six-storey single-user light industrial building at 72 Eunos Avenue 7 for $20m conditional upon HDB’s approval. The building has a GFA of 67,977 sf with a remaining lease of 24 years. Upon completion of the acquisition, LHN will lease back 71% of the total GFA of the building for 10 years and be appointed as the property’s manager.
*Low Keng Huat: 3QFY17 net profit plunged 74.4% y/y to $3m, as 1) gross margin normalised from 104% to 41.8% on the absence of cost writeback and 2) Other income plunged 76% to $2.5m, due to an absence of disposal gains. Revenue of $12.4m (-33.7%) was dragged by lower construction (-50%), hotel and F&B (-25.5%), and investments (-2.2%) performance, on top of zero contribution from its development business (3QFY16: $$3.2m) as it sold no residential units during the quarter. NAV/share at $0.88.
*Vibrant: 2QFY17 net profit surged 159.5% y/y to $9m on stronger associates’ contributions of $3.8m (+572.4%) from the sale of strata units at GSH Plaza. Revenue slipped 4.5% to $45m due to lower warehousing revenue, partially offset by contributions from its housing project in Jiangyin, China. Gross margin expanded to 34% (+7.4ppt) on the cost rationalisation in its freight and logistics business, as well as divestment of a loss making arm. Bottomline was further supported by FV gains of $3.4m (2QFY17: $1.6m loss), FX gains of $1.7m (2QFY17: $0.5m) as well as $1.2m in divestment gains. NAV/share at $0.63.
*Hotel Properties: Acquired an effective 73.99% stake in Boathouse Kata for 44.6m baht. In addition, it acquired 539.8m baht worth of notes issued by Boathouse. Boathouse owns a 38-unit boutique resort at Kata Beach, Phuket, Thailand.
*MMP Resources: Entered into a settlement agreement with its parent, Primeforth to commence repayment of $1m worth of fees owing to Magnum Energy from 1 Apr ’17.
Thursday, December 8, 2016
SG Market (08 Dec 16)
Funds flow may continue to power the hugely overbought market with rotational play shifting to the small mid-caps. Regional bourses in Tokyo (+1.2%), Seoul (+1.2%) and Sydney (+1.1%) opened higher.Technically, the overstretched STI could face some resistance at the 2,960 triple-top, with next objective at 3,040. Underlying support is at the 2,882 breakaway gap.
Stocks to watch:
*Riverstone. MKE believes that recent share price correction due to Malaysia’s new FX repatriation policy has been overdone, as it has a limited earnings impact. Maintain Hold with TP of $0.92 (pegged to 16x FY17e P/E), as current valuation of 15x is not compelling.
*Citic Envirotech/ Sunpower: A consortium comprising the two, together with Guangdong Keying Zhiran Environmental has been awarded a Rmb3.2b PPP project consisting co-gen power and steam facilities, an industrial wastewater treatment plant, water cycling plant and other ancillary assets in Guangdong, China. Phase 1 will see an investment of Rmb2b to design and build a 40,000 m3/day industrial wastewater treatment plant and a 30,000 m3/day recycling plant, with completion by end-2017.
*Mermaid Maritime: Terminated a contract to construct a DP2 dive support and construction vessel for China Merchants Industry on mutual terms. The pre-paid installment of US$20.4m has been impaired in FY15, and no further obligations are due. Trading at 0.5x P/B.
*TTJ: 1QFY17 net profit was mostly flat at $4.1m (-1%) on revenue of $26.5m (+3.6%) due to stronger contributions from its structural steel business. However, gross margin contracted to 20.4% (-9.8ppts) due to lower margin projects executed during the period. Bottomline was supported by FX gains of $0.2m (1QFY16: $1.4m loss) as well as lower admin expenses (-9.6%). NAV/share at $0.372.
*Tianjin Zhong Xin Pharmaceutical: Obtained the certification from Zhongzhi (Beijing) Certification, indicating that the company has systems of intellectual property management which are compliant with the national standards. The certification will allow it to pursue higher standards in the management of its IP as it innovates in the Chinese medicine space.
*Foreland Fabrictech: Lodged a complaint against its former Executive Chairman with the CAD in relation to possible breach(es) of securities law or other offences.
*Asia Fashion: Proposed a placement of 35m shares at $0.11 apiece, representing a 37.5% premium to the average price on 7 Dec to four individuals to raise $3.75m for working capital. The placement shares will make up 40.94% of the enlarged share capital.
*Jason Holdings: The application for a scheme or arrangement has been granted by the Singapore High Court, and the company is expected to meet with creditors by 1 Feb ’17 to approve the scheme.
*Amplefield: To be removed from the SGX watchlist on 9 Dec in light of its proposed transfer to the Catalist board.
Stocks to watch:
*Riverstone. MKE believes that recent share price correction due to Malaysia’s new FX repatriation policy has been overdone, as it has a limited earnings impact. Maintain Hold with TP of $0.92 (pegged to 16x FY17e P/E), as current valuation of 15x is not compelling.
*Citic Envirotech/ Sunpower: A consortium comprising the two, together with Guangdong Keying Zhiran Environmental has been awarded a Rmb3.2b PPP project consisting co-gen power and steam facilities, an industrial wastewater treatment plant, water cycling plant and other ancillary assets in Guangdong, China. Phase 1 will see an investment of Rmb2b to design and build a 40,000 m3/day industrial wastewater treatment plant and a 30,000 m3/day recycling plant, with completion by end-2017.
*Mermaid Maritime: Terminated a contract to construct a DP2 dive support and construction vessel for China Merchants Industry on mutual terms. The pre-paid installment of US$20.4m has been impaired in FY15, and no further obligations are due. Trading at 0.5x P/B.
*TTJ: 1QFY17 net profit was mostly flat at $4.1m (-1%) on revenue of $26.5m (+3.6%) due to stronger contributions from its structural steel business. However, gross margin contracted to 20.4% (-9.8ppts) due to lower margin projects executed during the period. Bottomline was supported by FX gains of $0.2m (1QFY16: $1.4m loss) as well as lower admin expenses (-9.6%). NAV/share at $0.372.
*Tianjin Zhong Xin Pharmaceutical: Obtained the certification from Zhongzhi (Beijing) Certification, indicating that the company has systems of intellectual property management which are compliant with the national standards. The certification will allow it to pursue higher standards in the management of its IP as it innovates in the Chinese medicine space.
*Foreland Fabrictech: Lodged a complaint against its former Executive Chairman with the CAD in relation to possible breach(es) of securities law or other offences.
*Asia Fashion: Proposed a placement of 35m shares at $0.11 apiece, representing a 37.5% premium to the average price on 7 Dec to four individuals to raise $3.75m for working capital. The placement shares will make up 40.94% of the enlarged share capital.
*Jason Holdings: The application for a scheme or arrangement has been granted by the Singapore High Court, and the company is expected to meet with creditors by 1 Feb ’17 to approve the scheme.
*Amplefield: To be removed from the SGX watchlist on 9 Dec in light of its proposed transfer to the Catalist board.
Wednesday, December 7, 2016
SG Market (07 Dec 16)
Singapore shares are likely to consolidate gains from a grossly overbought market. The benchmark STI has surged almost uninterruptedly by 5.8% since mid-Nov and is due for a pause.
Regional bourses in Tokyo (+0.5%), Seoul (+0.3%) and Sydney (+0.5%) opened stronger.Technically, the STI just less than a point shy of the 2,950 resistance, with underlying support at the 2,882 breakaway gap.
Stocks to watch:
*Del Monte: Del Monte. 2QFY17 net profit slumped 57.8% to US$20.2m, missing street estimates, due to the absence of a US$39.4m remeasurement gain. Revenue of US$636.2m (-4.6%) was weighed by lower sales in the US (-9.3%) and Europe (-57.8%), but partially cushioned by strong performance in Asia (+20.9%). Bottomline was further impacted by a US$1.5m one-off charge arising from the closure of its North Carolina plant. NAV/share at US$0.177.
*XMH: 2QFY17 net profit collapsed 96.5% to barely breakeven $0.1m on increased expenses associated with its new factory. Revenue slipped 2.8% to $25.1m on reduced contributions from its project business, which was affected by weak market sentiment, partially offset by improved sales of its distribution business. Amid the shift in revenue mix, gross margin contracted to 21.1% (-3.1ppt). Bottom line was further crushed by lower FX gains of $0.2m (-87.6%). NAV/share at $0.622.
*Swiber: Its chairman and several directors, including the CFO were hauled for questioning by CAD and released on bail for possible breach relating to false and misleading disclosures. Trading of the troubled offshore oil and gas contractor has been suspended and the company is under judicial management.
*Spackman Entertainment: Sold the distribution rights of Master, its crime-action film to 31 countries prior to its initial box office release in Korea. The film is expected to screen on 21 Dec.
*CWG Int’l: Obtained approval from authorities to increase the plot ratio of a land site in Parramata, Sydney to 8:1 from 4:1, with a further 15% uplift to 9.2 through a design excellence bonus mechanism subject to approval. It intends to develop the land site into a residential building which is expected to be completed in 2019.
*Cordlife: Garnered a 92.79% stake in StemLife following its voluntary take-over offer at 54 sen/share.
*Viva Industrial Trust: Requested S&P to withdraw its BB+ credit rating (ie. non-investment grade speculative), after the ratings agency reaffirmed the rating with a stable outlook.
*Olam: Priced its US$175m US private placement debt at a fixed coupon of 3.9% for five years. Proceeds will be used to repay existing bank debt and general corporate purposes.
Regional bourses in Tokyo (+0.5%), Seoul (+0.3%) and Sydney (+0.5%) opened stronger.Technically, the STI just less than a point shy of the 2,950 resistance, with underlying support at the 2,882 breakaway gap.
Stocks to watch:
*Del Monte: Del Monte. 2QFY17 net profit slumped 57.8% to US$20.2m, missing street estimates, due to the absence of a US$39.4m remeasurement gain. Revenue of US$636.2m (-4.6%) was weighed by lower sales in the US (-9.3%) and Europe (-57.8%), but partially cushioned by strong performance in Asia (+20.9%). Bottomline was further impacted by a US$1.5m one-off charge arising from the closure of its North Carolina plant. NAV/share at US$0.177.
*XMH: 2QFY17 net profit collapsed 96.5% to barely breakeven $0.1m on increased expenses associated with its new factory. Revenue slipped 2.8% to $25.1m on reduced contributions from its project business, which was affected by weak market sentiment, partially offset by improved sales of its distribution business. Amid the shift in revenue mix, gross margin contracted to 21.1% (-3.1ppt). Bottom line was further crushed by lower FX gains of $0.2m (-87.6%). NAV/share at $0.622.
*Swiber: Its chairman and several directors, including the CFO were hauled for questioning by CAD and released on bail for possible breach relating to false and misleading disclosures. Trading of the troubled offshore oil and gas contractor has been suspended and the company is under judicial management.
*Spackman Entertainment: Sold the distribution rights of Master, its crime-action film to 31 countries prior to its initial box office release in Korea. The film is expected to screen on 21 Dec.
*CWG Int’l: Obtained approval from authorities to increase the plot ratio of a land site in Parramata, Sydney to 8:1 from 4:1, with a further 15% uplift to 9.2 through a design excellence bonus mechanism subject to approval. It intends to develop the land site into a residential building which is expected to be completed in 2019.
*Cordlife: Garnered a 92.79% stake in StemLife following its voluntary take-over offer at 54 sen/share.
*Viva Industrial Trust: Requested S&P to withdraw its BB+ credit rating (ie. non-investment grade speculative), after the ratings agency reaffirmed the rating with a stable outlook.
*Olam: Priced its US$175m US private placement debt at a fixed coupon of 3.9% for five years. Proceeds will be used to repay existing bank debt and general corporate purposes.
Tuesday, December 6, 2016
SG Market (06 Dec 16)
Blue chips may track overnight gains on Wall Street on funds inflow as the Trump rally continues, although upside might be capped by an overbought market.
Regional bourses in Tokyo (+1%), Seoul (+1.1%) and Sydney (+0.7%) opened firmer.Technically, the overstretched STI looks poised test the 2,950 topside resistance, while underlying support is seen at the 2,882 breakaway gap.
Stocks to watch:
*UOL: Maybank KE initiates on UOL with Buy and TP of $7.39 (27% upside), implying a 24% discount to RNAV. Risk-averse market will favour its conservative trading portfolio and strong recurring income. Downside supported by its stub value, which is currently at a 42% discount to its underlying assets. Recommend a switch from City Dev (Hold, TP: $8.90) for Singapore property exposure.
*Ascendas REIT: Proposing to acquire DSO National Laboratories buildings and DNV GL Technology Centre for $420m from sponsor Ascendas. Deal will be partially funded by issuance of new units amounting $100m. The acquisition is expected to generate 6% NPI yield in the first year, and would have been accretive to FY3/16 DPU by 0.059¢ to $0.1542 on a proforma basis.
*Super: Flat 3Q16 net profit of $7.4m (-0.1%) missed estimates. Revenue slipped 1.2% to $119.5m due to weaker contributions from food ingredients (-4.8%) but partially cushioned by stable brand consumer sales (+0.7%). Gross margin widened 2ppt to 34.6% from sales mix shift, but bottom line was weighed by 9% increase in admin expenses due to severance expenses related to the consolidation of its non-dairy creamer facilities in Singapore. Maybank KE has Hold call with TP of $1.30.
*Sabana REIT: Divesting 218 Pandan Loop to X Properties Inc for $14.8m. The property has a gfa of 50.374 sf, representing about 1.1% of its portfolio. The industrial trust expects to book a gain of $1.8m from the sale and proceeds will be used to repay borrowings, pursue acquisition opportunities and for working capital purposes.
*8Telecom: Granted a facilities-base operations licence by the IMDA. This would allow it to utilise 1.79-1.8 GHz spectrum to provide dedicated LTE network services to the public transportation, public safety, security, surveillance and other vertical industries.
*Samudera: Expects to record a net loss for 4Q16 and FY16 due to provisions for impairment of its fleet as well as bad debt for Hanjin Shipping, which filed for receivership.
*Pacific Radiance: Executive Director Mok Weng Vai was arrested by CPIB on 2 Dec, on the suspicion of an offence under Section 6(c) of the Prevention of Corruption Act (Cap. 241).*SMJ: Investing US$0.2m in 33:47:20 JVCo, PT Spektrum with Jusuf Wijaya and Gergorious Janus. Spektrum will supply and distribute carpets and other furnishing materials in Indonesia.
*YuuZoo: Launched YuuWallet, an e-wallet that enables secure payments and money transfer without credit cards. *Civmec: Incorporated ForgacsValco with JV partner Valco Group. ForgacsValco will provide repair, overhaul and testing services of valves in the oil & gas, water, mining and defence markets.
*MS Holdings: Profit warning
Regional bourses in Tokyo (+1%), Seoul (+1.1%) and Sydney (+0.7%) opened firmer.Technically, the overstretched STI looks poised test the 2,950 topside resistance, while underlying support is seen at the 2,882 breakaway gap.
Stocks to watch:
*UOL: Maybank KE initiates on UOL with Buy and TP of $7.39 (27% upside), implying a 24% discount to RNAV. Risk-averse market will favour its conservative trading portfolio and strong recurring income. Downside supported by its stub value, which is currently at a 42% discount to its underlying assets. Recommend a switch from City Dev (Hold, TP: $8.90) for Singapore property exposure.
*Ascendas REIT: Proposing to acquire DSO National Laboratories buildings and DNV GL Technology Centre for $420m from sponsor Ascendas. Deal will be partially funded by issuance of new units amounting $100m. The acquisition is expected to generate 6% NPI yield in the first year, and would have been accretive to FY3/16 DPU by 0.059¢ to $0.1542 on a proforma basis.
*Super: Flat 3Q16 net profit of $7.4m (-0.1%) missed estimates. Revenue slipped 1.2% to $119.5m due to weaker contributions from food ingredients (-4.8%) but partially cushioned by stable brand consumer sales (+0.7%). Gross margin widened 2ppt to 34.6% from sales mix shift, but bottom line was weighed by 9% increase in admin expenses due to severance expenses related to the consolidation of its non-dairy creamer facilities in Singapore. Maybank KE has Hold call with TP of $1.30.
*Sabana REIT: Divesting 218 Pandan Loop to X Properties Inc for $14.8m. The property has a gfa of 50.374 sf, representing about 1.1% of its portfolio. The industrial trust expects to book a gain of $1.8m from the sale and proceeds will be used to repay borrowings, pursue acquisition opportunities and for working capital purposes.
*8Telecom: Granted a facilities-base operations licence by the IMDA. This would allow it to utilise 1.79-1.8 GHz spectrum to provide dedicated LTE network services to the public transportation, public safety, security, surveillance and other vertical industries.
*Samudera: Expects to record a net loss for 4Q16 and FY16 due to provisions for impairment of its fleet as well as bad debt for Hanjin Shipping, which filed for receivership.
*Pacific Radiance: Executive Director Mok Weng Vai was arrested by CPIB on 2 Dec, on the suspicion of an offence under Section 6(c) of the Prevention of Corruption Act (Cap. 241).*SMJ: Investing US$0.2m in 33:47:20 JVCo, PT Spektrum with Jusuf Wijaya and Gergorious Janus. Spektrum will supply and distribute carpets and other furnishing materials in Indonesia.
*YuuZoo: Launched YuuWallet, an e-wallet that enables secure payments and money transfer without credit cards. *Civmec: Incorporated ForgacsValco with JV partner Valco Group. ForgacsValco will provide repair, overhaul and testing services of valves in the oil & gas, water, mining and defence markets.
*MS Holdings: Profit warning
Monday, December 5, 2016
SG Market (05 Dec 16)
Recent bullish sentiment may be thwarted as Wall Street retreated on profit-taking and investors mull tail risks in the eurozone after Italian PM Matteo Renzi conceded defeat in the constitutional reform referendum and will resign. For the coming week, investors will chew on the ECB meeting on Thu following the outcome of the Austrian elections and Italian referendum as well as China's trade data on Thu and consumer and producer prices on Fri.Regional bourses are pulling back, with Tokyo (-0.5%), Seoul (-0.4%) and Sydney (-0.9%) opening weaker.Technically, the STI appears overstretched with topside resistance at 2,950 and underlying support at the 2,882 breakaway gap.
Stocks to watch:
*Banks: Rallied 8-18% post-Trump’s victory, sentimentally driven by expectations of higher interest rates, and firmer oil prices. That said, MKE maintains a Negative stance on Singapore banks, as fundamental outlook of sluggish loan growth and worsening asset quality is unchanged. MKE prefers UOB (Hold, TP $18.36) for exposure.
*CapitaLand: Inked agreement to work with Chinese co-working space operator UrWork to provide co-working spaces in CapitaLand’s properties in China and Singapore. MKE has Buy on CapitaLand with TP of $4.06.
*SPH REIT: Remains interested in acquiring The Seletar Mall from sponsor but cited timing and pricing as two determining factors. Trades at 5.9% indicative yield and 1x P/B.*Nam Cheong: Received termination notice from Perdana Petroleum for one accommodation work barge order, which is expected to impact FY16 earnings. Trades at 0.34x P/B.
*Jason Holdings: Seeking High Court approval for a scheme of arrangement between the company and its creditors, as part of efforts to restructure debts and liabilities.
*USP Group: Appointed as exclusive distributor of Mercury Marine’s products in Singapore and Malaysia wef 1 Dec ’16. The agreement is for three years and with option to extend for another three years, subject to performance conditions.
*Hiap Seng/Rowsley/Enviro-Hub/Samko Timber: Will be removed from SGX Watch-list wef 5 Dec.
*Swee Hong/FJ Benjamin: Entering SGX Watch-list wef 5 Dec.
Stocks to watch:
*Banks: Rallied 8-18% post-Trump’s victory, sentimentally driven by expectations of higher interest rates, and firmer oil prices. That said, MKE maintains a Negative stance on Singapore banks, as fundamental outlook of sluggish loan growth and worsening asset quality is unchanged. MKE prefers UOB (Hold, TP $18.36) for exposure.
*CapitaLand: Inked agreement to work with Chinese co-working space operator UrWork to provide co-working spaces in CapitaLand’s properties in China and Singapore. MKE has Buy on CapitaLand with TP of $4.06.
*SPH REIT: Remains interested in acquiring The Seletar Mall from sponsor but cited timing and pricing as two determining factors. Trades at 5.9% indicative yield and 1x P/B.*Nam Cheong: Received termination notice from Perdana Petroleum for one accommodation work barge order, which is expected to impact FY16 earnings. Trades at 0.34x P/B.
*Jason Holdings: Seeking High Court approval for a scheme of arrangement between the company and its creditors, as part of efforts to restructure debts and liabilities.
*USP Group: Appointed as exclusive distributor of Mercury Marine’s products in Singapore and Malaysia wef 1 Dec ’16. The agreement is for three years and with option to extend for another three years, subject to performance conditions.
*Hiap Seng/Rowsley/Enviro-Hub/Samko Timber: Will be removed from SGX Watch-list wef 5 Dec.
*Swee Hong/FJ Benjamin: Entering SGX Watch-list wef 5 Dec.
Friday, December 2, 2016
SG Market (02 Dec 16)
Investors are likely to take some gains off the table on renewed fears of a potential political crisis in EU ahead of the Italy referendum this weekend. Regional bourses opened lower today in Tokyo (-0.5%), Seoul (-0.6%) and Sydney (-0.3%).Technically, STI appears a little stretched, with topside resistance at 2,950 and support at 2,882 breakaway gap.
Stocks to watch:
*STI: No change will be made to the constituents of the FTSE STI in its Dec quarterly review. The reserve list comprises Suntec REIT, Mapletree Commercial Trust, Keppel REIT, First Resources and Sing Post.
*GLP: Appointed JP Morgan as its financial adviser to undertake an independent strategic review to enhance shareholder value after it reportedly attracted unsolicited interest from a consortium comprising China's sovereign fund, CIC, Hopu Investment Management and Hillhouse Capital Management. GIC holds a 37% stake in GLP, while Hillhouse owns 8.2%. Hopu was part of a consortium that invested US$2.5b in GLP China in 2014. GLP trades at 0.79x P/B.
*Midas: Secured two new contracts in China worth Rmb79.8m, two in Europe totalling Rmb137.7m and one in the Middle East for Rmb14.6m. These orders are slated for delivery in 2017 and expected to contribute positively to FY17 earnings.
*Noble: Completed the disposal of Noble Americas Energy Solutions business for US$1.16b.
*Vard: Closing date of the privatisation offer from parent Fincantieri at $0.24/share will be on 29 Dec.
*Ezra: Extended the put option exercise date granted to Perisai Petroleum for sale of its 51% stake in SJR Marine to the group for US$43m to within one month from 9 Dec.
*Jasper Investments: Appointed as the project manager by main contractor Guangdong Zhuhai LuYuan Construction (GZLY) for marine transportation of aggregates and other construction materials to support the HK-Zhuhai-Macau Bridge projects. The assignment is expected to commence soon for a period of two years. The group is confident of winning more assignments from GZLY.
*Allied Technologies: Seeking approvals to transfer from Mainboard to the Catalist, as group sees difficulty in meeting the $0.20 minimum trading price requirement.
*Epicentre: Entered MOU to negotiate exclusively with hair removal and skin rejuvenation group Japan IPL Holdings on a potential cooperation, JV and/or acquisition for a two-month period.
*OKH: Disclosed that Executive Director and Deputy CEO Bon Ween Fong have been removed from Interpol Red Notice list.
*ISR Capital: ISR CEO Quah Su-Yin claimed that there is no direct or indirect link between the group and the 2013 penny stock saga, save for the fact that she is the sister of one of the co-accused persons. Shares of ISR have been suspended since 27 Nov.
*Swiber: Singapore High Court has granted Swiber an extension until 23 Mar ’17, for judicial managers to send creditors a statement of proposals and summon a creditors’ meeting.
Stocks to watch:
*STI: No change will be made to the constituents of the FTSE STI in its Dec quarterly review. The reserve list comprises Suntec REIT, Mapletree Commercial Trust, Keppel REIT, First Resources and Sing Post.
*GLP: Appointed JP Morgan as its financial adviser to undertake an independent strategic review to enhance shareholder value after it reportedly attracted unsolicited interest from a consortium comprising China's sovereign fund, CIC, Hopu Investment Management and Hillhouse Capital Management. GIC holds a 37% stake in GLP, while Hillhouse owns 8.2%. Hopu was part of a consortium that invested US$2.5b in GLP China in 2014. GLP trades at 0.79x P/B.
*Midas: Secured two new contracts in China worth Rmb79.8m, two in Europe totalling Rmb137.7m and one in the Middle East for Rmb14.6m. These orders are slated for delivery in 2017 and expected to contribute positively to FY17 earnings.
*Noble: Completed the disposal of Noble Americas Energy Solutions business for US$1.16b.
*Vard: Closing date of the privatisation offer from parent Fincantieri at $0.24/share will be on 29 Dec.
*Ezra: Extended the put option exercise date granted to Perisai Petroleum for sale of its 51% stake in SJR Marine to the group for US$43m to within one month from 9 Dec.
*Jasper Investments: Appointed as the project manager by main contractor Guangdong Zhuhai LuYuan Construction (GZLY) for marine transportation of aggregates and other construction materials to support the HK-Zhuhai-Macau Bridge projects. The assignment is expected to commence soon for a period of two years. The group is confident of winning more assignments from GZLY.
*Allied Technologies: Seeking approvals to transfer from Mainboard to the Catalist, as group sees difficulty in meeting the $0.20 minimum trading price requirement.
*Epicentre: Entered MOU to negotiate exclusively with hair removal and skin rejuvenation group Japan IPL Holdings on a potential cooperation, JV and/or acquisition for a two-month period.
*OKH: Disclosed that Executive Director and Deputy CEO Bon Ween Fong have been removed from Interpol Red Notice list.
*ISR Capital: ISR CEO Quah Su-Yin claimed that there is no direct or indirect link between the group and the 2013 penny stock saga, save for the fact that she is the sister of one of the co-accused persons. Shares of ISR have been suspended since 27 Nov.
*Swiber: Singapore High Court has granted Swiber an extension until 23 Mar ’17, for judicial managers to send creditors a statement of proposals and summon a creditors’ meeting.
Thursday, December 1, 2016
SG Market (01 Dec 16)
Sentiment is expected to get a lift from the spike in crude prices following the long awaited OPEC deal to cut production, which would remove much of the excess supply in the global market, but gains could be capped as market technicals approach overbought levels.
Regional bourses opened in the green today, led by Tokyo (+1.5%), Sydney (+0.5%) and Seoul (+0.1%).Technically, STI could head towards its next objective at 2,950, with resistance-turned-support at 2,882 (breakaway gap).
Stocks to watch:
*REITs: Following the 15% ytd slump in office rental rates, CCT's REIT manager believes rents would remain soft and only pick up by end-2017, when new supply is absorbed. MKE's top buys in the sector are CCT (TP: $1.81) and Keppel REIT (TP: $1.81).
*GLP: Selling GLP Narita to a private equity fund for ¥8.2b (US$72m), which equates to a 4.9% cap rate and 12% premium to book value. The transaction of the 51,000 sqm (549,000 sf) property in Greater Tokyo is expected to be completed by end-Dec.
*Q&M Dental: Received approval to list its China manufacturing business Qinhuangdao Aidite on China's New Third Board. This would help streamline the group's business focus and scale its dental operations. MKE last had a Buy with TP of $1.00.
*Cosco Corp: 51% owned Cosco Shipyard delivered module carrier, BIGROLL BAFFIN, to its European buyer.
*Metro: 48/52 JV with real estate private equity fund InfraRed NF China Real Estate Fund II will invest in Chinese real estate debt instruments. The group has committed to invest US$28m ($39.9m) in the JV.
*Starburst: Divesting 6 Tuas West Street for $7m. The 2,308 sqm gfa property used to be its corporate headquarters and fabrication facility. Post-transaction, the group will realise a fair value loss of $0.2m.
*Raffles United: Disposing 60% owned Taiwanese firm Ascend Bearings to minority shareholders for $1m, which is expected to result in a FY16 net loss.
*Sunmart: Buyout offer at 7¢/share (39% below last close) from Executive Chairman and CEO Sun Bingzhong. Sun and his concert parties together control 72.3% stake in the group.
Regional bourses opened in the green today, led by Tokyo (+1.5%), Sydney (+0.5%) and Seoul (+0.1%).Technically, STI could head towards its next objective at 2,950, with resistance-turned-support at 2,882 (breakaway gap).
Stocks to watch:
*REITs: Following the 15% ytd slump in office rental rates, CCT's REIT manager believes rents would remain soft and only pick up by end-2017, when new supply is absorbed. MKE's top buys in the sector are CCT (TP: $1.81) and Keppel REIT (TP: $1.81).
*GLP: Selling GLP Narita to a private equity fund for ¥8.2b (US$72m), which equates to a 4.9% cap rate and 12% premium to book value. The transaction of the 51,000 sqm (549,000 sf) property in Greater Tokyo is expected to be completed by end-Dec.
*Q&M Dental: Received approval to list its China manufacturing business Qinhuangdao Aidite on China's New Third Board. This would help streamline the group's business focus and scale its dental operations. MKE last had a Buy with TP of $1.00.
*Cosco Corp: 51% owned Cosco Shipyard delivered module carrier, BIGROLL BAFFIN, to its European buyer.
*Metro: 48/52 JV with real estate private equity fund InfraRed NF China Real Estate Fund II will invest in Chinese real estate debt instruments. The group has committed to invest US$28m ($39.9m) in the JV.
*Starburst: Divesting 6 Tuas West Street for $7m. The 2,308 sqm gfa property used to be its corporate headquarters and fabrication facility. Post-transaction, the group will realise a fair value loss of $0.2m.
*Raffles United: Disposing 60% owned Taiwanese firm Ascend Bearings to minority shareholders for $1m, which is expected to result in a FY16 net loss.
*Sunmart: Buyout offer at 7¢/share (39% below last close) from Executive Chairman and CEO Sun Bingzhong. Sun and his concert parties together control 72.3% stake in the group.
Subscribe to:
Posts (Atom)