The market could creep higher, taking cue from Wall Street’s overnight bounce on a US 4Q GDP growth upgrade and oil prices rising above US$50/bbl.
Regional bourses opened mixed, with Tokyo (+0.5%) firmer, and Seoul (-0.04%) and Sydney (-0.1%) weaker. Technically, immediate resistance for STI is still pegged at 3,200 with downside support at 3,140.
Stocks to watch:
*SGX: Reportedly held exploratory talks with overseas exchanges, including Nasdaq and CME Group on potential collaborations, a partial stake sale, or even a full merger. This comes at a time when cross-border deals between operators are drawing intense scrutiny from regulators. Separately, SGX has lodged complaints with Chinese authorities against China Fibretech CEO Wu Xin-hua for making suspicious and inflated cash transfers to customer claims without obtaining board approval.
*GLP: Provided an update on its strategic review that it remains in discussions with several parties that have submitted M&A proposals and started due diligence. However, it emphasized that all the terms of the proposals (including price) received are non-binding and there is no certainty that any definite transaction will materialise. The stock currently trades at 1.1x P/B.
*CWG: Acquired 60% stake in Suzhou Xinglun Tourism Co for Rmb197.2m, which owns the iconic Suzhou Ferris Wheel Theme Park and two plots of land with total gfa of 75,797 sqm, on which it plans to build an integrated residential-cum-retail development. The residential plot (60,797 sqm) will be developed into 202 serviced apartments and 96 luxury condos in 2019, while the retail portion (15,000 sqm) will be completed by 2021.
*Sunpower: Secured two contracts worth Rmb90.3m to supply six heat exchangers to Hengli Petrochemical (Dalian) Refining and Chemical (Rmb58m), deliverable in FY18 and a fluidized bed reactor to Jiangxi LDK Silicon Technology (Rmb32.3m), deliverable in FY17.
*Geo Energy: Negotiated with Sunrise Wealth Success to reduce the US$18m consideration for the proposed acquisition of 100% stake in Parisma Jaya Abadi coal mine (PJA) in Indonesia. Separately, two other proposed acquisitions, Blessing Capital and Cahaya Lembusuana, have lapsed due to expiry of long-stop date.
*Ezra: Received notices of demand for an aggregate US$35.3m from Seabird Penguin Offshore for its bareboat charters of vessels Lewek Toucan and Lewek Pelican. The charter contracts were terminated earlier this month following various events of defaults and breaches of agreements. Ezra has 10 business days to remit an initial sum of US$7.4m.
*ST Engineering: President-designate of ST Kinetics Lee Shiang Long will assume role as president of the subsidiary wef 1 Apr.
*Frasers Centrepoint: Proposing to issue a second tranche of $52m 4.15% fixed rate notes due 2027 under its $5b multicurrency debt issuance programme. The notes will be issued on 6 Apr and will consolidate with the $398m first tranche notes issued on 23 Feb under the same terms.
*Keppel REIT: Issuing $75m 3.275% notes due 2024 under its $1b multicurrency debt programme. The notes are expected to be issued on 6 Apr '17.
Friday, March 31, 2017
Thursday, March 30, 2017
SG Market (30 Mar 17)
Local shares may consolidate gains after hitting a 12-month high in a lively session yesterday on positive broad market momentum despite lingering uncertainty over Trump's tax plan and UK's formal Brexit move.
Regional markets opened mixed in Tokyo (-0.4%), Seoul (+0.3%) and Sydney (+0.4%).Technically, immediate resistance for STI is seen at 3,200 with downside support at 3,140.
Stocks to watch:
*GLP: Another committed co-investor of its US Income Partners III has made an initial capital contribution of US$79m, representing 24.2% of the aggregate capital contributions to the fund to-date. Following this fourth syndication, GLP’s interest in the fund has been reduced from 74.1% to 49.9%.
*TEE International: The engineering group could join the growing list of companies exiting the Singapore bourse after its CEO and controlling shareholder (58.2% stake) Phua Chian Kin disclosed he is finalising a proposal to take his company private and expects to make an announcement end of the week. Trading halt of its shares will be extended until 31 Mar. At the last closing price, TEE is valued at a relatively hefty trailing P/E of 25.5x and 0.96x P/B.
*mm2 Asia: Entered non-binding MOU with StarHub and Astro Malaysia to co-produce a single version of singing reality show, The Voice, for Malaysia and Singapore, which is estimated to cost SGD5m. The partners will collaborate on the broadcast, promotion and securing of sponsorships for the iconic show, which is scheduled to roll out in 2Q17.
*Hong Leong Asia: 40.2% owned China Yuchai has established a 50:50 JV with MTU Friedrichshafen, a wholly-owned entity of Rolls Royce Power Systems, based at Yuchai's primary manufacturing facility in Yulin, to produce MTU's Series 4000 diesel engines for the oil & gas and power generation industries in China.
*Katrina: Entered into a non-binding MOU with Ajisen China to collaborate in opening restaurants under "So Pho" brand in Hong Kong and China on terms to be negotiated.
*Nordic: Signed non-binding term sheet to exclusively negotiate on the proposed acquisition of Ensure Engineering, which provides engineering services to the marine, industrial, oil and petrochemical industries, as well as public infrastructure maintenance services. Total consideration will not exceed $18m, capping P/B valuation at 1.92x.
*Second Chance Properties: 2QFY17 net profit surged 79% from a low base to $2m, mainly lifted by a $1.1m fair value gain on financial assets. Revenue fell 9.4% to $7.6m from weaker sales in apparel, securities and lower property rental contribution. NAV/share at $0.3412
*Camsing Healthcare (former Jacks Int'l): Swung into FY17 net profit of $0.2m (FY16: $2m loss), lifted mainly by other income of $1.2m from management and license fees. Revenue rose 29% to $18.2m from improved foreign wholesale trade of its health foods and supplements to China.
*Raffles Education: Terminated a deal to buy LEI Holdings US-1, which owns and operates Santa Fe University of Art and Design in the US, as regulatory approvals are unlikely to be granted by 3 Apr.
*Imperium Crown: Received LOIs for three of its Japanese properties, namely Green Forest Kuramae, New City Apartments Kuramae, and New City Apartments Minowa, for an aggregate sale price of of ¥3.3b ($41.8m). The divestment is in line with its strategy to exit its Japan portfolio and reallocate capital to new projects in Australia and China.
*Tritech/Terratech: Tritech has undertaken to vote in favour of the proposed RTO of subsidiary Terratech at the upcoming EGM. Post-approval, Terratech will subsequently proceed with its 4-into-1 share consolidation, and proposed compliance placement of up to 33.8m new consolidated shares at $0.28 apiece.
*BlackGold Natural Resources: Signs non-binding MOU with PT PLN Batubara to further cooperation in relation to the existing supply of coal to the latter's power plants in Indonesia..
*Hotel Properties: Announced its intention to redeem the $150m 6.125% perps that are due on 4 May ’17
Regional markets opened mixed in Tokyo (-0.4%), Seoul (+0.3%) and Sydney (+0.4%).Technically, immediate resistance for STI is seen at 3,200 with downside support at 3,140.
Stocks to watch:
*GLP: Another committed co-investor of its US Income Partners III has made an initial capital contribution of US$79m, representing 24.2% of the aggregate capital contributions to the fund to-date. Following this fourth syndication, GLP’s interest in the fund has been reduced from 74.1% to 49.9%.
*TEE International: The engineering group could join the growing list of companies exiting the Singapore bourse after its CEO and controlling shareholder (58.2% stake) Phua Chian Kin disclosed he is finalising a proposal to take his company private and expects to make an announcement end of the week. Trading halt of its shares will be extended until 31 Mar. At the last closing price, TEE is valued at a relatively hefty trailing P/E of 25.5x and 0.96x P/B.
*mm2 Asia: Entered non-binding MOU with StarHub and Astro Malaysia to co-produce a single version of singing reality show, The Voice, for Malaysia and Singapore, which is estimated to cost SGD5m. The partners will collaborate on the broadcast, promotion and securing of sponsorships for the iconic show, which is scheduled to roll out in 2Q17.
*Hong Leong Asia: 40.2% owned China Yuchai has established a 50:50 JV with MTU Friedrichshafen, a wholly-owned entity of Rolls Royce Power Systems, based at Yuchai's primary manufacturing facility in Yulin, to produce MTU's Series 4000 diesel engines for the oil & gas and power generation industries in China.
*Katrina: Entered into a non-binding MOU with Ajisen China to collaborate in opening restaurants under "So Pho" brand in Hong Kong and China on terms to be negotiated.
*Nordic: Signed non-binding term sheet to exclusively negotiate on the proposed acquisition of Ensure Engineering, which provides engineering services to the marine, industrial, oil and petrochemical industries, as well as public infrastructure maintenance services. Total consideration will not exceed $18m, capping P/B valuation at 1.92x.
*Second Chance Properties: 2QFY17 net profit surged 79% from a low base to $2m, mainly lifted by a $1.1m fair value gain on financial assets. Revenue fell 9.4% to $7.6m from weaker sales in apparel, securities and lower property rental contribution. NAV/share at $0.3412
*Camsing Healthcare (former Jacks Int'l): Swung into FY17 net profit of $0.2m (FY16: $2m loss), lifted mainly by other income of $1.2m from management and license fees. Revenue rose 29% to $18.2m from improved foreign wholesale trade of its health foods and supplements to China.
*Raffles Education: Terminated a deal to buy LEI Holdings US-1, which owns and operates Santa Fe University of Art and Design in the US, as regulatory approvals are unlikely to be granted by 3 Apr.
*Imperium Crown: Received LOIs for three of its Japanese properties, namely Green Forest Kuramae, New City Apartments Kuramae, and New City Apartments Minowa, for an aggregate sale price of of ¥3.3b ($41.8m). The divestment is in line with its strategy to exit its Japan portfolio and reallocate capital to new projects in Australia and China.
*Tritech/Terratech: Tritech has undertaken to vote in favour of the proposed RTO of subsidiary Terratech at the upcoming EGM. Post-approval, Terratech will subsequently proceed with its 4-into-1 share consolidation, and proposed compliance placement of up to 33.8m new consolidated shares at $0.28 apiece.
*BlackGold Natural Resources: Signs non-binding MOU with PT PLN Batubara to further cooperation in relation to the existing supply of coal to the latter's power plants in Indonesia..
*Hotel Properties: Announced its intention to redeem the $150m 6.125% perps that are due on 4 May ’17
Wednesday, March 29, 2017
Jasper
Jasper: Has been on SGX Watch-List since 4 Mar 2015 and has recently applied to SGX for a 12-month extension to meet the criteria to exit the Watch-List, after failing to meet them on expiry on 3 Mar 2017.As at 9MFY3/17, Jasper swung into a net profit, albeit miniscule, of US$0.1m (9MFY3/16: US$0.6m loss), mainly due to a reduction in management expenses and other professional fees. NAV/share is at a negative US0.0039¢.
SG Market (29 Mar 17)
Positive sentiment could spill over following a strong rally in Wall Street, fuelled by strong consumer confidence data and higher oil prices due to an outage in Libya and Trump's latest move to roll back carbon curbs in the US.
Regional markets opened higher again in Tokyo (+0.1%), Seoul (+0.2%) and Sydney (+0.7%).STI has re-entered its uptrend channel bounded by support at 3,140 and topside resistance at 3,200.
Stocks to watch:
*Property: Top Global became the fourth property firm (after Popular, SC Global, Soilbuild) to seek delisting to avoid QC penalties. While developers CapitaLand, City Dev and Wing Tai still have a few projects facing QC deadlines, their exposure are small and are unlikely to take the privatisation route. Ho Bee could be a possible candidate due to its low free float and cheap valuation, but its projects are not subject to the QC ruling.
*Top Global: Controlling shareholder and executive chairman Oei Siu Hoa (sister of tycoon Oei Hong Leong and vice-chairman of Indonesian conglomerate Sinar Mas Group) launched a conditional cash offer at SGD0.33/share or low implied P/B of 0.38x. Oei has secured irrevocable undertakings of 77.4%, and will delist the company if she obtains >90% acceptance. The group faces QC charges for two residential projects - 130-unit E Maison (40% unsold) and 45-unit R Maison (20% unsold) in Mar '18.
*China Everbright Water: Leading a a consortium (78.4% stake) to undertake a Rmb956m Suizhou public-private partnership project, involving the financing, design, construction, operation, management an d maintenance of the landscape and greenery of both banks of the Fuhe River for a concession period of 13 years and a 10,000 m3/day industrial wastewater treatment plant in Xihe County for a concession period of 25 years.
*Trek 2000: Swung back into black with FY16 net profit of US$6.1m (FY15: US$6.6m loss) on higher revenue of US$165.7m (+11.4%) due to improved sales in both interactive consumer solutions and licensing fees. Gross margin widened from 2.7% to 11.7% on cost containment and expanded WiFi module applications. Bottom line was also lifted by reduced overall expenses (-5.2%), attributed to lower R&D (-21%) and marketing (-21.7%) costs. NAV/share at US$0.1301. Counter still remains suspended since 26 Apr 2016 due to a CAD investigation into interested party transactions.
*Interra Resources: 60% JV Goldpetrol is seeking extension with Myanma Oil and Gas Enterprise (MOGE) of the terms of the improved petroleum recovery contracts for the Chauk and Yenangyaung fields in Myanmar, which are due to to expire on 3 Apr 2017. As the agreements may be approved at a later date, MOGE is allowing the group to continue its incremental petroleum operations in both fields pending approval.
*Trendlines: Received a grant from Singapore Israel Industrial Research and Development Foundation of up to 50% of the US$400,000 required to fund the development and clinical trial for its stress urinary incontinence product. The trial, consisting of 50 women, is expected to start mid-2017.
*Wee Hur: Plans to buy an office warehouse building in Adelaide, Australia, for A$6m. The group intends to develop it into a purpose-built student accommodation to raise recurring income.
*Healthway Medical Corp: Lippo is extending the closing date for its takeover offer at 4.2¢/share to 2 May. Lippo has obtained valid acceptances of 28.04% of the maximum potential share base of the company.
*Swissco: Interim judicial managers is assessing five indicative bids, and formal bids are expected by the second week of Apr. The bids were narrowed down from 12 non-binding expressions of interest. The judicial managers have until 12 Apr to file a further report.
Regional markets opened higher again in Tokyo (+0.1%), Seoul (+0.2%) and Sydney (+0.7%).STI has re-entered its uptrend channel bounded by support at 3,140 and topside resistance at 3,200.
Stocks to watch:
*Property: Top Global became the fourth property firm (after Popular, SC Global, Soilbuild) to seek delisting to avoid QC penalties. While developers CapitaLand, City Dev and Wing Tai still have a few projects facing QC deadlines, their exposure are small and are unlikely to take the privatisation route. Ho Bee could be a possible candidate due to its low free float and cheap valuation, but its projects are not subject to the QC ruling.
*Top Global: Controlling shareholder and executive chairman Oei Siu Hoa (sister of tycoon Oei Hong Leong and vice-chairman of Indonesian conglomerate Sinar Mas Group) launched a conditional cash offer at SGD0.33/share or low implied P/B of 0.38x. Oei has secured irrevocable undertakings of 77.4%, and will delist the company if she obtains >90% acceptance. The group faces QC charges for two residential projects - 130-unit E Maison (40% unsold) and 45-unit R Maison (20% unsold) in Mar '18.
*China Everbright Water: Leading a a consortium (78.4% stake) to undertake a Rmb956m Suizhou public-private partnership project, involving the financing, design, construction, operation, management an d maintenance of the landscape and greenery of both banks of the Fuhe River for a concession period of 13 years and a 10,000 m3/day industrial wastewater treatment plant in Xihe County for a concession period of 25 years.
*Trek 2000: Swung back into black with FY16 net profit of US$6.1m (FY15: US$6.6m loss) on higher revenue of US$165.7m (+11.4%) due to improved sales in both interactive consumer solutions and licensing fees. Gross margin widened from 2.7% to 11.7% on cost containment and expanded WiFi module applications. Bottom line was also lifted by reduced overall expenses (-5.2%), attributed to lower R&D (-21%) and marketing (-21.7%) costs. NAV/share at US$0.1301. Counter still remains suspended since 26 Apr 2016 due to a CAD investigation into interested party transactions.
*Interra Resources: 60% JV Goldpetrol is seeking extension with Myanma Oil and Gas Enterprise (MOGE) of the terms of the improved petroleum recovery contracts for the Chauk and Yenangyaung fields in Myanmar, which are due to to expire on 3 Apr 2017. As the agreements may be approved at a later date, MOGE is allowing the group to continue its incremental petroleum operations in both fields pending approval.
*Trendlines: Received a grant from Singapore Israel Industrial Research and Development Foundation of up to 50% of the US$400,000 required to fund the development and clinical trial for its stress urinary incontinence product. The trial, consisting of 50 women, is expected to start mid-2017.
*Wee Hur: Plans to buy an office warehouse building in Adelaide, Australia, for A$6m. The group intends to develop it into a purpose-built student accommodation to raise recurring income.
*Healthway Medical Corp: Lippo is extending the closing date for its takeover offer at 4.2¢/share to 2 May. Lippo has obtained valid acceptances of 28.04% of the maximum potential share base of the company.
*Swissco: Interim judicial managers is assessing five indicative bids, and formal bids are expected by the second week of Apr. The bids were narrowed down from 12 non-binding expressions of interest. The judicial managers have until 12 Apr to file a further report.
Tuesday, March 28, 2017
SG Market (28 Mar 17)
Market sentiment will likely be weighed by UK's formal notice of Brexit tomorrow, as well as the lack of details for the upcoming US tax bill.
Regional markets opened higher in Tokyo (+0.9%), Seoul (+0.4%) and Sydney (+0.8%).From chart perspective, the next level of support for the STI is at 3,100, after breaking below the last support-turned-resistance level at 3,140.
Stocks to watch:
*SingPost: Granted the renewal of its postal license for another 20 years wef 1 Apr 2017 as the group strives to differentiate itself amid the competitive logistics industry. MKE last had a Hold with TP of $1.34.
*CapitaLand: Looking to significantly increase its $2.1b multi-sector real estate presence in Vietnam, with plans to acquire more sites this year for residential development that can yield 2,000- 2,500 units. The group remains open to investment opportunities in offices, serviced residences and integrated developments. Separately, it has signed a third-party contract to manage SingPost's upcoming mall at the new SingPost Centre, thereby increasing its network to 20 shopping malls with a combined GFA of 14.2m sf. MKE last had a Hold with TP of $3.66.
*Ezion: Acquiring the remaining 50% stakes in two JVs for $5m from Swissco, its JV partner currently under judicial management. Additionally, Ezion will purchase three vessels from Swissco for US$61.9m, attached with charter contracts, receivables and charter payment guarantees. Post-transactions, pro forma FY16 NAV/share will edge up 0.3% to US$0.636, while loss per share will narrow from US$0.023 to US$0.014.
*Top Glove: Investing RM4.2m to set up a 70:30 JV with Japan-based Fimatec, to manufacture rubber reinforcing agents in a bid to lower glove production costs and improve quality.
*RHT Health Trust: In response to recent price movements and newswire article purporting that controlling unitholder Fortis Healthcare is considering a buyout, Fortis informed the trustee-manager that it is constantly evaluating various restructuring options for all its assets and investments, and will not comment on speculative positions.
*Sysma Holdings: Clinched a $4.8m contract to build a two-storey detached residential unit at Chestnut Drive. The contract commences in Apr for 20 months.
*Neo Group: 55% owned Thong Siek has secured exclusive rights to negotiate the proposed acquisition of Park Food Manufacturing. The exclusive period will run until 30 Sep '17.
*BlackGold Natural Resources: Completed its first coal delivery to Indonesian state-owned company PT Semen Padang. The US$12.6m purchase order is expected to be completed within the next 10 months.
*Compact Metal: Trading in the shares will not be suspended from 3 Apr, as the group is still awaiting the final outcome of the SGX appeal for time extension to satisfy the requirements to exit the Watch-List.
Regional markets opened higher in Tokyo (+0.9%), Seoul (+0.4%) and Sydney (+0.8%).From chart perspective, the next level of support for the STI is at 3,100, after breaking below the last support-turned-resistance level at 3,140.
Stocks to watch:
*SingPost: Granted the renewal of its postal license for another 20 years wef 1 Apr 2017 as the group strives to differentiate itself amid the competitive logistics industry. MKE last had a Hold with TP of $1.34.
*CapitaLand: Looking to significantly increase its $2.1b multi-sector real estate presence in Vietnam, with plans to acquire more sites this year for residential development that can yield 2,000- 2,500 units. The group remains open to investment opportunities in offices, serviced residences and integrated developments. Separately, it has signed a third-party contract to manage SingPost's upcoming mall at the new SingPost Centre, thereby increasing its network to 20 shopping malls with a combined GFA of 14.2m sf. MKE last had a Hold with TP of $3.66.
*Ezion: Acquiring the remaining 50% stakes in two JVs for $5m from Swissco, its JV partner currently under judicial management. Additionally, Ezion will purchase three vessels from Swissco for US$61.9m, attached with charter contracts, receivables and charter payment guarantees. Post-transactions, pro forma FY16 NAV/share will edge up 0.3% to US$0.636, while loss per share will narrow from US$0.023 to US$0.014.
*Top Glove: Investing RM4.2m to set up a 70:30 JV with Japan-based Fimatec, to manufacture rubber reinforcing agents in a bid to lower glove production costs and improve quality.
*RHT Health Trust: In response to recent price movements and newswire article purporting that controlling unitholder Fortis Healthcare is considering a buyout, Fortis informed the trustee-manager that it is constantly evaluating various restructuring options for all its assets and investments, and will not comment on speculative positions.
*Sysma Holdings: Clinched a $4.8m contract to build a two-storey detached residential unit at Chestnut Drive. The contract commences in Apr for 20 months.
*Neo Group: 55% owned Thong Siek has secured exclusive rights to negotiate the proposed acquisition of Park Food Manufacturing. The exclusive period will run until 30 Sep '17.
*BlackGold Natural Resources: Completed its first coal delivery to Indonesian state-owned company PT Semen Padang. The US$12.6m purchase order is expected to be completed within the next 10 months.
*Compact Metal: Trading in the shares will not be suspended from 3 Apr, as the group is still awaiting the final outcome of the SGX appeal for time extension to satisfy the requirements to exit the Watch-List.
Monday, March 27, 2017
SG Market (27 Mar 17)
The cancellation of President Trump's healthcare bill last Fri could test the market this week as investors fret over the implications for his tax reforms and infrastructural agenda. Also on traders' radar would be the UK's formal trigger of Brexit on Wed and a meeting of OPEC and non-OPEC members to review instead of recommend the extension of output cuts by another six months, which could put a drag on oil prices.
Regional markets opened lower in Tokyo (-1.1%), Seoul (-0.3%) and Sydney (-0.5%).Technically, the STI is skirting the lower edge of its 3,140-3,200 uptrend channel.
Stocks to watch:
*Economy: Industrial production jumped 12.6% (Jan: +2.2%) in Feb and exceeded expectations for a 10.8% growth, led by the uptick in electronics output (+39.8%), following the surge in demand of tech products and shipments to China last month.
*Singtel: Launched a real-time mobile remittance service to Indonesia with 35% owned Telkomsel. Subscribers can now send money to PT Pos Indonesia's 4,500 cash-out points across Indonesia via remittance service Weselpos Instan. MKE last had a Hold with TP of $3.70.
*Singpost: Commencing trial for the prototype electric three-wheeler to boost mail delivery efficiency. Developed by research platform TUMCREATE, the customised vehicle will serve as a test bed for concepts which will guide Singpost's application of electric vehicle technology for postal operations and e-commerce logistics.
*StarHub: Key management changes last week show pressure in the industry, in reaction to the entry of the fourth telecom provider, TPG. Notably, former CEO of Integrated Health Information Systems, Chong Yoke Sin, is the new chief of the enterprise business group and will spearhead StarHub's push into healthcare enterprise business, while Chief Commercial Officer Kevin Lim is expected to retire by end 2017.
*Yangzijiang: Subscribed for 30% equity in Jiangsu Nantong Yanhai Emerging Industrial Investment Fund, which has a share capital of Rmb300m. The new associate primarily invests in the industrial sector, as well as venture and equity investment in private SMEs in emerging industries such as new materials, energy conservation and environmental protection, advanced manufacturing technology, health care and innovative consumption business. The fund has an operating term of seven years.
*Pan-United: 4Q16 net profit rose 28% to $4.5m, although revenue fell 10% to $176.8m, mainly from the drop of ready-mix-concrete prices in Singapore. Bottom line was aided by a 14% drop in finance cost and a 58% increase in associates’ contributions. Final DPS of 2.75¢ maintained, bringing full year payout to 3.75¢ (FY15: 3.8¢). NAV/share at $0.489.
*IEV: 49% associate IEV Malaysia was awarded a contract to provide corrosion inhibiting spray-on thermoplastic coating services for an established O&G operator. The contract is expected to contribute positively to current year earnings.
*Singapore O&G: Proposed 1-into-2 share split in a bid to increase market liquidity and broaden the shareholder base.
*Croesus Retail Trust: Entered loan facility with Sumitomo Mitsui Trust Bank for a 4-year term loan of ¥3b at a fixed rate of 1.65667%, intended to fund AEI works as well as for working capital.
*Secura: Substantial shareholder Wee Ee Chao disposed 1.3m shares at $0.17095 each via the open market, paring his stake down from 6.043% to 5.726%.
*Blackgold Natural Resources: Proposed placement of 35.9m new shares (4.6% share capital) to placement agent SAC Capital at $0.09 apiece. Net proceeds of $3.2m are intended for working capital (85%) and preliminary and ancillary expenses for the development of two 300MW mine-mouth power plant in Riau.
*Arion: Terminated the share purchase agreement of Dream T Entertainment, due to unforeseen circumstances in South Korea and difficulties in fulfilling some precedent conditions. Nevertheless, the group remains keen on the competitive media entertainment business in South Korea and will revisit the opportunity in future.
Regional markets opened lower in Tokyo (-1.1%), Seoul (-0.3%) and Sydney (-0.5%).Technically, the STI is skirting the lower edge of its 3,140-3,200 uptrend channel.
Stocks to watch:
*Economy: Industrial production jumped 12.6% (Jan: +2.2%) in Feb and exceeded expectations for a 10.8% growth, led by the uptick in electronics output (+39.8%), following the surge in demand of tech products and shipments to China last month.
*Singtel: Launched a real-time mobile remittance service to Indonesia with 35% owned Telkomsel. Subscribers can now send money to PT Pos Indonesia's 4,500 cash-out points across Indonesia via remittance service Weselpos Instan. MKE last had a Hold with TP of $3.70.
*Singpost: Commencing trial for the prototype electric three-wheeler to boost mail delivery efficiency. Developed by research platform TUMCREATE, the customised vehicle will serve as a test bed for concepts which will guide Singpost's application of electric vehicle technology for postal operations and e-commerce logistics.
*StarHub: Key management changes last week show pressure in the industry, in reaction to the entry of the fourth telecom provider, TPG. Notably, former CEO of Integrated Health Information Systems, Chong Yoke Sin, is the new chief of the enterprise business group and will spearhead StarHub's push into healthcare enterprise business, while Chief Commercial Officer Kevin Lim is expected to retire by end 2017.
*Yangzijiang: Subscribed for 30% equity in Jiangsu Nantong Yanhai Emerging Industrial Investment Fund, which has a share capital of Rmb300m. The new associate primarily invests in the industrial sector, as well as venture and equity investment in private SMEs in emerging industries such as new materials, energy conservation and environmental protection, advanced manufacturing technology, health care and innovative consumption business. The fund has an operating term of seven years.
*Pan-United: 4Q16 net profit rose 28% to $4.5m, although revenue fell 10% to $176.8m, mainly from the drop of ready-mix-concrete prices in Singapore. Bottom line was aided by a 14% drop in finance cost and a 58% increase in associates’ contributions. Final DPS of 2.75¢ maintained, bringing full year payout to 3.75¢ (FY15: 3.8¢). NAV/share at $0.489.
*IEV: 49% associate IEV Malaysia was awarded a contract to provide corrosion inhibiting spray-on thermoplastic coating services for an established O&G operator. The contract is expected to contribute positively to current year earnings.
*Singapore O&G: Proposed 1-into-2 share split in a bid to increase market liquidity and broaden the shareholder base.
*Croesus Retail Trust: Entered loan facility with Sumitomo Mitsui Trust Bank for a 4-year term loan of ¥3b at a fixed rate of 1.65667%, intended to fund AEI works as well as for working capital.
*Secura: Substantial shareholder Wee Ee Chao disposed 1.3m shares at $0.17095 each via the open market, paring his stake down from 6.043% to 5.726%.
*Blackgold Natural Resources: Proposed placement of 35.9m new shares (4.6% share capital) to placement agent SAC Capital at $0.09 apiece. Net proceeds of $3.2m are intended for working capital (85%) and preliminary and ancillary expenses for the development of two 300MW mine-mouth power plant in Riau.
*Arion: Terminated the share purchase agreement of Dream T Entertainment, due to unforeseen circumstances in South Korea and difficulties in fulfilling some precedent conditions. Nevertheless, the group remains keen on the competitive media entertainment business in South Korea and will revisit the opportunity in future.
Friday, March 24, 2017
SG Market (24 Mar 17)
The market could retreat today, taking cue from Wall Street weakness after the push-back of Healthcare bill vote cast doubts on the fate of other pro-growth policies.
Regional markets opened mostly positive in Seoul (+0.2%) and Sydney (+1%), although slightly lower in Tokyo (-0.05%).Technically, downside support in the near-term for the STI is at 3,090, with upper-bound resistance at 3,140.
Stocks to watch:
*Keppel Corp: Wholly-owned Keppel Land signed a MOU with Vietnam's State Capital Investment Corp to collaborate on investment opportunities in Vietnam. The group currently has about 20 mixed projects in Vietnam and the deal is expected to deepen its presence in the market. MKE last had a Sell with TP of $4.57.
*Wee Hur: Secured a $22.8m contract from PUB to build a six-storey office block and redevelop existing WaterHub Building at 80 & 82 Toh Guan Road East. The project will commence on 31 Mar, and is targeted to complete within 15 months.
*Healthway Medical: Struck deal for revised convertible notes of $70m to be issued to PE firm Gateway Partners. The 1st tranche of $10m will be issued by 25 Mar, while the remaining $60m is subject to shareholders' approval on 21 Apr. The notes carry no coupon and are redeemable five years later, plus a cash redemption premium upon maturity or default, translating to a 6% IRR for Gateway.
*Auric Pacific: Privatisation offer by Stephen Riady and CEO Andy Adhiwana have reached 95.8% acceptances. The offer will close on 7 Apr.
*MMP Resources: Announced that its ski resort partnership in Niseko, Hokkaido, Japan, has made $46,454 profit in Feb, and estimates that it could hit a projected ROI above 30% for the season ending 25 Mar ’17.
*3Cnergy: Undertaking a renounceable non-underwritten 1-for-3 rights issue at $0.067 apiece, which will be attached with two warrants with an exercise price of $0.10 each for each rights share subscribed. Maximum net proceeds of $25.4m are intended for the phase 1 development of a plot of land in Nusajaya, Malaysia into a mixed-used development.
*Mapletree Industrial Trust: Issued $100m 3.16% fixed rate notes due 2024, under the $1b multicurrency medium term note programme.
*Cosco Corp: 51% owned Cosco Shipyard delivered a module carrier, Bigroll Beaufort, measuring 173m length, 42m breadth, and 12m depth, to its European buyer.
Regional markets opened mostly positive in Seoul (+0.2%) and Sydney (+1%), although slightly lower in Tokyo (-0.05%).Technically, downside support in the near-term for the STI is at 3,090, with upper-bound resistance at 3,140.
Stocks to watch:
*Keppel Corp: Wholly-owned Keppel Land signed a MOU with Vietnam's State Capital Investment Corp to collaborate on investment opportunities in Vietnam. The group currently has about 20 mixed projects in Vietnam and the deal is expected to deepen its presence in the market. MKE last had a Sell with TP of $4.57.
*Wee Hur: Secured a $22.8m contract from PUB to build a six-storey office block and redevelop existing WaterHub Building at 80 & 82 Toh Guan Road East. The project will commence on 31 Mar, and is targeted to complete within 15 months.
*Healthway Medical: Struck deal for revised convertible notes of $70m to be issued to PE firm Gateway Partners. The 1st tranche of $10m will be issued by 25 Mar, while the remaining $60m is subject to shareholders' approval on 21 Apr. The notes carry no coupon and are redeemable five years later, plus a cash redemption premium upon maturity or default, translating to a 6% IRR for Gateway.
*Auric Pacific: Privatisation offer by Stephen Riady and CEO Andy Adhiwana have reached 95.8% acceptances. The offer will close on 7 Apr.
*MMP Resources: Announced that its ski resort partnership in Niseko, Hokkaido, Japan, has made $46,454 profit in Feb, and estimates that it could hit a projected ROI above 30% for the season ending 25 Mar ’17.
*3Cnergy: Undertaking a renounceable non-underwritten 1-for-3 rights issue at $0.067 apiece, which will be attached with two warrants with an exercise price of $0.10 each for each rights share subscribed. Maximum net proceeds of $25.4m are intended for the phase 1 development of a plot of land in Nusajaya, Malaysia into a mixed-used development.
*Mapletree Industrial Trust: Issued $100m 3.16% fixed rate notes due 2024, under the $1b multicurrency medium term note programme.
*Cosco Corp: 51% owned Cosco Shipyard delivered a module carrier, Bigroll Beaufort, measuring 173m length, 42m breadth, and 12m depth, to its European buyer.
Thursday, March 23, 2017
SG Market (23 Mar 17)
The market could lose further ground as the US Congress heads for a key healthcare vote that is seen as a proxy to President Trump's ability to keep his big promises to business.
Regional markets opened slightly higher in Tokyo (+0.03%), Seoul (+0.2%), and Sydney (+0.1%).Notably, STI has broken below the lower bound of its 2-month uptrend channel at 3,140, with the next near-term support at 3,090.
Stocks to watch:
*ST Engineering: Awarded a contract by MINDEF for the production and supply of the Next Generation Armoured Fighting Vehicle (AFV) for an undisclosed amount. The AFV will replace the ageing Ultra M113 fleet, which has been in service since early-70s. SAF currently has ~1,000 M113A2s, some of which have been replaced by the Bionix IFV. Delivery of the new AFVs will begin in 2019. MKE last had a Hold with TP of $3.17.
*YuuZoo: Acquired an exclusive option to buy Cinram Europe, a European logistics and distribution company with five distribution centres totalling 1m sf, from US-based 46 State Street via issue of 7.5m shares ($0.9m based on last closing price). The deal is subject to due diligence and expires on 30 Jun '17. Cinram recorded FY16 revenue and EBITDA of $261m and $7.4m respectively.
*Kingboard Copper: Appointed Religare Capital Markets Corporate Finance to act as the financial adviser for its voluntary unconditional privatisation offer of $0.40 each. The offer circular is expected to be sent out within 14 days from 20 Mar.
*Loyz Energy: Disclosed that it does not have any business and financial dealings with Ezra. However, it highlighted that Ezra's CEO, Lionel Lee, is a substantial shareholder with a 9.9% stake, and is the corporate guarantor for loans totalling US$22.6m.
*AIMS AMP REIT: Issued $50m 3.6% fixed rate notes due 2022.
Regional markets opened slightly higher in Tokyo (+0.03%), Seoul (+0.2%), and Sydney (+0.1%).Notably, STI has broken below the lower bound of its 2-month uptrend channel at 3,140, with the next near-term support at 3,090.
Stocks to watch:
*ST Engineering: Awarded a contract by MINDEF for the production and supply of the Next Generation Armoured Fighting Vehicle (AFV) for an undisclosed amount. The AFV will replace the ageing Ultra M113 fleet, which has been in service since early-70s. SAF currently has ~1,000 M113A2s, some of which have been replaced by the Bionix IFV. Delivery of the new AFVs will begin in 2019. MKE last had a Hold with TP of $3.17.
*YuuZoo: Acquired an exclusive option to buy Cinram Europe, a European logistics and distribution company with five distribution centres totalling 1m sf, from US-based 46 State Street via issue of 7.5m shares ($0.9m based on last closing price). The deal is subject to due diligence and expires on 30 Jun '17. Cinram recorded FY16 revenue and EBITDA of $261m and $7.4m respectively.
*Kingboard Copper: Appointed Religare Capital Markets Corporate Finance to act as the financial adviser for its voluntary unconditional privatisation offer of $0.40 each. The offer circular is expected to be sent out within 14 days from 20 Mar.
*Loyz Energy: Disclosed that it does not have any business and financial dealings with Ezra. However, it highlighted that Ezra's CEO, Lionel Lee, is a substantial shareholder with a 9.9% stake, and is the corporate guarantor for loans totalling US$22.6m.
*AIMS AMP REIT: Issued $50m 3.6% fixed rate notes due 2022.
Wednesday, March 22, 2017
SG Market (22 Mar 17)
The market could extend its pullback after Wall Street suffered its steepest drop this year on waning risk appetite and worries over President Trump's policy execution amid expensive valuations.
Regional markets in Tokyo (-1.6%), Seoul (-0.5%), and Sydney (-1.3%) opened lower.Technically, momentum indicators are exhibiting signs of weakness, and the STI could ease toward the lower bound of its uptrend channel at 3,140.
Stocks to watch:
*Keppel Corp: BlackRock sold 10.9m Keppel shares on 17 Mar at average price of $6.87, paring its deemed interest to 4.63% from 5.23%, thereby ceasing to be a substantial shareholder.
*Triyards: Disclosed that parent Ezra and sister company Emas Chiyoda Subsea, which have both filed for bankruptcy, owes it a combined US$3m in intercompany receivables and payables. Together with Ezra, the group has also guaranteed up to US$38.5m of joint bank facilities, which are liable in the event of a default.
*Libra: Secured contracts of $22.4m, which include the air-conditioning, electrical installation, as well as addition and alteration works.
*Neo Group: Subscribing for 416,327 new shares or 51% of enlarged share capital of Hi-Q Plastic Industries, a privately owned plastic and plastic product manufacturer, for RM1.6m, valuing Hi-Q at 13.2x FY15 trailing P/E.
*Rickmers Maritime: Senior lender HSH Nordbank has given the trust until 15 Apr to present a plan to restructure its debt. Rickmers is trying to restructure its $100m unsecured MTN maturing May ’17 and US$270.8m of secured bank debt. HSH may consider a material forgiveness of the debt if certain preconditions are in place.
*Auric Pacific: Valid acceptances for the privatisation offer at $1.65/share by Stephen Riady and CEO Andy Adhiwana has reached 94.04%. The company will be delisted after the close of the offer on 7 Apr.
*QT Vascular: Secured $10m of capital commitment from GEM Global Yield Fund, which can be drawn down over a 30-month term in exchange for shares. QT can opt for an additional $10m under the same terms within the next six month.
*KS Energy: Extending the maturity date of its $45m 6% convertible bonds due 2016 from 21 Mar ’17 to 21 Jun ’17.
*First Ship Lease Trust: Auditor Moore Stephens has flagged going concern issues in light of the trust’s FY16 net loss of US$31m as well as its current liabilities exceeding its current asset by US$179.4m.
Regional markets in Tokyo (-1.6%), Seoul (-0.5%), and Sydney (-1.3%) opened lower.Technically, momentum indicators are exhibiting signs of weakness, and the STI could ease toward the lower bound of its uptrend channel at 3,140.
Stocks to watch:
*Keppel Corp: BlackRock sold 10.9m Keppel shares on 17 Mar at average price of $6.87, paring its deemed interest to 4.63% from 5.23%, thereby ceasing to be a substantial shareholder.
*Triyards: Disclosed that parent Ezra and sister company Emas Chiyoda Subsea, which have both filed for bankruptcy, owes it a combined US$3m in intercompany receivables and payables. Together with Ezra, the group has also guaranteed up to US$38.5m of joint bank facilities, which are liable in the event of a default.
*Libra: Secured contracts of $22.4m, which include the air-conditioning, electrical installation, as well as addition and alteration works.
*Neo Group: Subscribing for 416,327 new shares or 51% of enlarged share capital of Hi-Q Plastic Industries, a privately owned plastic and plastic product manufacturer, for RM1.6m, valuing Hi-Q at 13.2x FY15 trailing P/E.
*Rickmers Maritime: Senior lender HSH Nordbank has given the trust until 15 Apr to present a plan to restructure its debt. Rickmers is trying to restructure its $100m unsecured MTN maturing May ’17 and US$270.8m of secured bank debt. HSH may consider a material forgiveness of the debt if certain preconditions are in place.
*Auric Pacific: Valid acceptances for the privatisation offer at $1.65/share by Stephen Riady and CEO Andy Adhiwana has reached 94.04%. The company will be delisted after the close of the offer on 7 Apr.
*QT Vascular: Secured $10m of capital commitment from GEM Global Yield Fund, which can be drawn down over a 30-month term in exchange for shares. QT can opt for an additional $10m under the same terms within the next six month.
*KS Energy: Extending the maturity date of its $45m 6% convertible bonds due 2016 from 21 Mar ’17 to 21 Jun ’17.
*First Ship Lease Trust: Auditor Moore Stephens has flagged going concern issues in light of the trust’s FY16 net loss of US$31m as well as its current liabilities exceeding its current asset by US$179.4m.
Tuesday, March 21, 2017
SG Market (21 Mar 17)
The market could continue to retrace as Ezra’s Chapter 11 filing, Triyard's trading halt and Nam Cheong financial troubles reignite worries about more bankruptcies in the O&M sector and banks' bad loans.
Regional bourses opened mixed, with Tokyo (-0.6%) and Sydney (-0.2%) trading lower, and Seoul (+0.3%) higher.Technically, the STI is still remains range-bound within its uptrend channel with upside resistance at 3,200 and support at 3,140.
Stocks to watch:
*Keppel Corp: Entered heads of agreement with Borr Drilling, which will make a down-payment of US$275m and take over five jackup rigs totalling US$1.1b currently under construction for Transocean, as well as undertake the remaining instalments. MKE has Sell with TP of $4.57. Separately, the group has named Chris Ong acting CEO of Keppel Offshore to replace Chow Yew Yuen wef Apr 1.
*SIA: May incur a financial provision of $111.8m in FY18 after the European Commission slapped a €776m administrative fine on it and several other carriers for colluding in an air cargo cartel more than 10 years ago. MKE has Hold with TP of $9.70.
*SGX: Given 24 months to improve its recovery processes and systems in the wake of a major trading disruption last year and will contribute $1.5m to co-fund the costs that may be incurred by brokerage firms to implement these measures.
*OCBC: Hong Kong subsidiary Wing Hang has agreed to sell its 33.33% stake in Hong Kong Life Insurance for HK$2.4b, and will book an estimated gain of HK$2.1b, based on the HK Life NAV of HKD793m at end FY16. MKE has Sell with TP of SGD8.05.
*GLP: Acquired the remaining 50% interest in GLP-MC Tianjin Logistics Property Development from JV partner for Rmb35.1m, or 1x P/B. The transaction was funded via internal resources.*Jumbo: Entered into a 51:49 JV with Beijing Hualian Group to open its first JUMBO seafood restaurant in Beijing, China. The restaurant is targeted to be operational by 3Q17 and will be its fourth in China. MKE last had Hold with TP of $0.78.
*EMAS Offshore: Disclosed that it might be negatively impacted by parent Ezra’s Chapter 11 filing. As at 30 Nov, EMAS has US$566m loans owing to banks, of which US$242m/US$193m are fully/jointly guaranteed or secured by Ezra. Aside, EMAS also has US$177m of charter-party agreements that are either fully or jointly guaranteed by Ezra. In turn, EMAS owes US$170m to Ezra, of which US$125m was subject to deferred payment over a period of three years.
*mm2 Asia: Lodged the preliminary offer document for the proposed spin-off and listing of event management company, UnUsUaL Group.
*UnUsUaL: Reported 9M16 net profit of $3.8m (+40.4%) although revenue slipped 28.1% to $16m after SG50 celebrations in 9M15. Earnings were supported by expansion in gross margin to 37.6% (+10.1ppts) as it utilised internal resources for more of its projects instead of outsourcing. Intends to use proceeds from its IPO to expand its operations both locally and regionally as well as expand its access to event and concert venues.
*KSH Holdings: Clinched a $145.7m contract to construct a research building comprising 16 floors and a basement for NUS. The project will lift its order book to over $360m, and is expected to begin in Apr '17, and be completed within two years.
*Perennial Real Estate: Filed appeals against the High Court’s decision to dismiss the winding up application of three associated companies. The associates are Capital Investment Holdings, Capitol Retail Management, and Capital Hotel Management.
*C&G Environmental: Declared a special DPS of $0.103 after it received remaining payments for the sale of its main operating subsidiary C&G Enviromental Protection Thailand to New Sky Energy Thailand in a Rmb500m (received remaining Rmb320.1m) deal, as well as all other entities to Ahead Auto for HK$600m (received remaining HK$344.7m)..
*Civmec: MOU with ASC Shipbuilding to jointly bid for the construction of 12 offshore patrol vessels for the Royal Australian Navy. If tender is successful, a 50:50 JV will be set up.
*Cosco Corp: 51% owned Cosco Shipyard delivered an oil tanker (Babylon) to its Singaporean buyer.
*Sincap: Received a letter for demand claiming the payment of Rmb6.8m from Shangdong Luneng Taishan Mining.
*IEV: Received a patent in China for its self-cleaning apparatus for prevention of marine growth.
Regional bourses opened mixed, with Tokyo (-0.6%) and Sydney (-0.2%) trading lower, and Seoul (+0.3%) higher.Technically, the STI is still remains range-bound within its uptrend channel with upside resistance at 3,200 and support at 3,140.
Stocks to watch:
*Keppel Corp: Entered heads of agreement with Borr Drilling, which will make a down-payment of US$275m and take over five jackup rigs totalling US$1.1b currently under construction for Transocean, as well as undertake the remaining instalments. MKE has Sell with TP of $4.57. Separately, the group has named Chris Ong acting CEO of Keppel Offshore to replace Chow Yew Yuen wef Apr 1.
*SIA: May incur a financial provision of $111.8m in FY18 after the European Commission slapped a €776m administrative fine on it and several other carriers for colluding in an air cargo cartel more than 10 years ago. MKE has Hold with TP of $9.70.
*SGX: Given 24 months to improve its recovery processes and systems in the wake of a major trading disruption last year and will contribute $1.5m to co-fund the costs that may be incurred by brokerage firms to implement these measures.
*OCBC: Hong Kong subsidiary Wing Hang has agreed to sell its 33.33% stake in Hong Kong Life Insurance for HK$2.4b, and will book an estimated gain of HK$2.1b, based on the HK Life NAV of HKD793m at end FY16. MKE has Sell with TP of SGD8.05.
*GLP: Acquired the remaining 50% interest in GLP-MC Tianjin Logistics Property Development from JV partner for Rmb35.1m, or 1x P/B. The transaction was funded via internal resources.*Jumbo: Entered into a 51:49 JV with Beijing Hualian Group to open its first JUMBO seafood restaurant in Beijing, China. The restaurant is targeted to be operational by 3Q17 and will be its fourth in China. MKE last had Hold with TP of $0.78.
*EMAS Offshore: Disclosed that it might be negatively impacted by parent Ezra’s Chapter 11 filing. As at 30 Nov, EMAS has US$566m loans owing to banks, of which US$242m/US$193m are fully/jointly guaranteed or secured by Ezra. Aside, EMAS also has US$177m of charter-party agreements that are either fully or jointly guaranteed by Ezra. In turn, EMAS owes US$170m to Ezra, of which US$125m was subject to deferred payment over a period of three years.
*mm2 Asia: Lodged the preliminary offer document for the proposed spin-off and listing of event management company, UnUsUaL Group.
*UnUsUaL: Reported 9M16 net profit of $3.8m (+40.4%) although revenue slipped 28.1% to $16m after SG50 celebrations in 9M15. Earnings were supported by expansion in gross margin to 37.6% (+10.1ppts) as it utilised internal resources for more of its projects instead of outsourcing. Intends to use proceeds from its IPO to expand its operations both locally and regionally as well as expand its access to event and concert venues.
*KSH Holdings: Clinched a $145.7m contract to construct a research building comprising 16 floors and a basement for NUS. The project will lift its order book to over $360m, and is expected to begin in Apr '17, and be completed within two years.
*Perennial Real Estate: Filed appeals against the High Court’s decision to dismiss the winding up application of three associated companies. The associates are Capital Investment Holdings, Capitol Retail Management, and Capital Hotel Management.
*C&G Environmental: Declared a special DPS of $0.103 after it received remaining payments for the sale of its main operating subsidiary C&G Enviromental Protection Thailand to New Sky Energy Thailand in a Rmb500m (received remaining Rmb320.1m) deal, as well as all other entities to Ahead Auto for HK$600m (received remaining HK$344.7m)..
*Civmec: MOU with ASC Shipbuilding to jointly bid for the construction of 12 offshore patrol vessels for the Royal Australian Navy. If tender is successful, a 50:50 JV will be set up.
*Cosco Corp: 51% owned Cosco Shipyard delivered an oil tanker (Babylon) to its Singaporean buyer.
*Sincap: Received a letter for demand claiming the payment of Rmb6.8m from Shangdong Luneng Taishan Mining.
*IEV: Received a patent in China for its self-cleaning apparatus for prevention of marine growth.
Monday, March 20, 2017
SG Market (20 Mar 17)
The market could react negatively to renewed fears of rising US protectionist rhetoric, after G20 finance ministers dropped the decade-long tradition of endorsing free trade at the key summit in Germany over the weekend. Regional markets opened lower in Seoul (-0.4%) and Sydney (-0.3%). Japan is closed for public holiday.Technically, the STI sees downside support within the uptrend channel at 3,140, with resistance at 3,200.
Stocks to watch:
*Banks: Key lenders DBS and OCBC could be weighed by further loan provisions/ write-downs from latest O&G casualties Ezra and Nam Cheong, due to the prolonged slump in the industry. Ezra has filed for US Chapter 11 bankruptcy over the weekend, while auditors of Nam Cheong cast on the group's ability to continue as a going concern.
*M1: Controlling shareholders Axiata Group (28.5%), Keppel T&T (19.2%) and SPH (13.4%) have appointed Morgan Stanley as the financial adviser for a strategic review. Based on a control premium of 15-20%, MKE believes that the market could price M1 at $2.12-$2.22 per share. MKE last had a Sell rating on the counter with TP of $1.85.
*Keppel Corp: Raised its stake in Saigon Centre in Ho Chi Minh City, Vietnam, for $53.5m. The integrated development sits on a two-hectare prime site in CBD and is currently undergoing development works for Phase Two, which is expected for completion in end-2017.
*SATS: Divesting a 51% and 4% stake in SATS HK and Asia Airfreight Terminal (AAT) for HK$76.5m ($13.8m) and HK$100m ($18.1m), respectively, to Hong Kong Airlines (HKA). The new partnership will be able to tap on HKA's large base load to improve utilisation of ramp and cargo services.
*Keppel T&T: Divesting a 10% stake in Asia Airfreight Terminal to Hong Kong Airlines for HK$250m ($45.1m), and expects to recognise a divestment gain of $19m upon completion.
*Ezra: Requested for trading suspension after it filed for reorganization under Chapter 11 of the US bankruptcy code, to facilitate the financial restructuring of the group.
*Kimly: Draws strong support for its IPO of 173.8m new shares at $0.25, with subscription being 8.3x subscribed. Trading for the coffee shop operator will commence today at 9am.
*Auric Pacific: The $1.65/share unconditional offer by Silver Creek Capital has attained valid acceptances of 90.15%. Hence, trading in the stock has been suspended and the closing date for the offer will be extended to 7 Apr, 5.30pm.
*CNMC: Proposed acquisition of its third mining asset in Malaysia for RM2.5m. KelGold Mining has exploration rights for iron ore, gold and/or other minerals in an area of 1,550 hectares in Kelantan till 2019, and is in the midst of renewing its rights in an area of 870 hectares. Upon production, CNMC will provide a tribute payment of 2.5% gross on the sale of gold extracted, on top of the prevailing 10% royalty fee and additional tribute payment of 6% to government body Yayasan Kelantan Darulnaim.
*CWG: Launched a US$20m fund (with a US$24m ceiling) to invest in the group's overseas real estate development projects in Australia and the US. It currently manages eight funds with AUM of US$100m. *Rex: 85.2% owned unit has commenced drilling for new exploration well Karamah#1, located in Block 50 Oman.
*EMAS Offshore: Served charter termination notices for Lewek Toucan and Lewek Pelican, following various events of default and breaches of the charter agreements.
*Regal: MOU with Sarawak-based Twin Revenue to jointly collaborate and venture into development projects, land investments and/or other projects.
Stocks to watch:
*Banks: Key lenders DBS and OCBC could be weighed by further loan provisions/ write-downs from latest O&G casualties Ezra and Nam Cheong, due to the prolonged slump in the industry. Ezra has filed for US Chapter 11 bankruptcy over the weekend, while auditors of Nam Cheong cast on the group's ability to continue as a going concern.
*M1: Controlling shareholders Axiata Group (28.5%), Keppel T&T (19.2%) and SPH (13.4%) have appointed Morgan Stanley as the financial adviser for a strategic review. Based on a control premium of 15-20%, MKE believes that the market could price M1 at $2.12-$2.22 per share. MKE last had a Sell rating on the counter with TP of $1.85.
*Keppel Corp: Raised its stake in Saigon Centre in Ho Chi Minh City, Vietnam, for $53.5m. The integrated development sits on a two-hectare prime site in CBD and is currently undergoing development works for Phase Two, which is expected for completion in end-2017.
*SATS: Divesting a 51% and 4% stake in SATS HK and Asia Airfreight Terminal (AAT) for HK$76.5m ($13.8m) and HK$100m ($18.1m), respectively, to Hong Kong Airlines (HKA). The new partnership will be able to tap on HKA's large base load to improve utilisation of ramp and cargo services.
*Keppel T&T: Divesting a 10% stake in Asia Airfreight Terminal to Hong Kong Airlines for HK$250m ($45.1m), and expects to recognise a divestment gain of $19m upon completion.
*Ezra: Requested for trading suspension after it filed for reorganization under Chapter 11 of the US bankruptcy code, to facilitate the financial restructuring of the group.
*Kimly: Draws strong support for its IPO of 173.8m new shares at $0.25, with subscription being 8.3x subscribed. Trading for the coffee shop operator will commence today at 9am.
*Auric Pacific: The $1.65/share unconditional offer by Silver Creek Capital has attained valid acceptances of 90.15%. Hence, trading in the stock has been suspended and the closing date for the offer will be extended to 7 Apr, 5.30pm.
*CNMC: Proposed acquisition of its third mining asset in Malaysia for RM2.5m. KelGold Mining has exploration rights for iron ore, gold and/or other minerals in an area of 1,550 hectares in Kelantan till 2019, and is in the midst of renewing its rights in an area of 870 hectares. Upon production, CNMC will provide a tribute payment of 2.5% gross on the sale of gold extracted, on top of the prevailing 10% royalty fee and additional tribute payment of 6% to government body Yayasan Kelantan Darulnaim.
*CWG: Launched a US$20m fund (with a US$24m ceiling) to invest in the group's overseas real estate development projects in Australia and the US. It currently manages eight funds with AUM of US$100m. *Rex: 85.2% owned unit has commenced drilling for new exploration well Karamah#1, located in Block 50 Oman.
*EMAS Offshore: Served charter termination notices for Lewek Toucan and Lewek Pelican, following various events of default and breaches of the charter agreements.
*Regal: MOU with Sarawak-based Twin Revenue to jointly collaborate and venture into development projects, land investments and/or other projects.
Friday, March 17, 2017
M1
(Bloomberg) -- M1 Ltd.’s owners are exploring optionsincluding a sale of Singapore’s smallest mobile operator as thecity state gears up for a new entrant into the wireless market,according to people with knowledge of the matter. Keppel Corp., Axiata Group Bhd. and Singapore PressHoldings Ltd. are working with an adviser to conduct a strategicreview of their combined 61 percent interest in M1, the peoplesaid, asking not to be identified because the discussions areconfidential. The carrier, which offers fixed-line and mobileservices to more than 2 million customers, has a $1.3 billionmarket value. The potential sale of Singapore’s third-largest carriercomes as the city state prepares for the roll-out of a fourthmobile operator with TPG Telecom Ltd. slated to begin wirelessservices in 2018. The regulator has said it wants to introducemore competition in the city state to bring down phone bills andimprove services. Temasek Holdings Pte has studied ways for Keppel, aportfolio company, to divest non-core assets including its stakein M1, as part of a regular review of investments, peoplefamiliar with the matter said in January last year. Executivesat the state investment company had also discussed thepossibility of Keppel paring its stake in office landlord KeppelREIT. Malaysian wireless carrier Axiata has a 29 percent stake inM1, while Keppel has a 19 percent holding and Singapore Pressowns 13 percent, according to data compiled by Bloomberg. Arepresentative for Axiata didn’t immediately respond to an emailseeking comment. Representatives for M1, Keppel and SingaporePress didn’t immediately respond to Bloomberg queries. Plans to sell Singaporean telecom stakes have made littleprogress. Shareholders in the second-largest operator StarhubLtd. were weighing a sale in July, with Qatar’s Ooredoo QSCseeking to sell its indirect stake in the carrier, peoplefamiliar with the matter said at the time. The city state’s current telecom operators includingSingapore Telecommunications Ltd. and StarHub are likely to seeaverage revenue per user decline by as much as 16 percent in thenext five years, according to OCBC. TPG Telecom may gain mobilerevenue market share of about 6 percent by 2021, the researchfirm said Friday.
M1 is now trading at 7.3x EV/Trailing EBITDA, compared to Starhub at 8.15x and Singtel at 15.4x.
M1 is now trading at 7.3x EV/Trailing EBITDA, compared to Starhub at 8.15x and Singtel at 15.4x.
SG Market (17 Mar 17)
The market is likely to pare some gains as the oil price rally fizzled out but the STI remains firmly within the uptrend channel bounded between by 3,140 and 3,200.
Regional markets opened mixed in Tokyo (-0.5%), Seoul (+0.1%) and Sydney (+0.3%).Currently, the index is sitting atop the 61.8% fibonacci retracement of the Apr '15 - Jan '16 decline at 3,160.
Stocks to watch:
*Economy: Singapore's non-oil domestic exports jumped 21.5% in Feb, beating the 12.5% estimate and surpassing growth in the preceding months (Jan '17: +8.6%, Dec '16: +9.1%, Nov '16: +15.6%), spurred by increases in both electronic (+17.2%) and non-electronic shipments (+23.3%).\
*Genting HK: Sank into FY16 net loss of US$502.3m from US$2.11b profit a year ago, mainly due to the absence of accounting gain from partial sale and reclassification of ex-associate Norwegian Cruise Lines. While revenue jumped 47.4% to US$1.02bm on full contribution of Crystal Cruises (acquired in May '15) and the launch of Dream Cruises' Genting Dream in Oct '16, expenses surged 57.8% on the consolidation of expenses from the new business and start-up costs arising from shipyard operations and newbuilding activities. Declared final DPS of US$0.01 (FY15: nil).
*CapitaLand: Reportedly in exclusive talks with BlackRock to acquire Asia Square Tower 2. Price tag for the 784,000 sf office building is said to be more than $2,700 psf, which is higher than the $2,704 psf that Qatar Investment Authority paid for Asia Square Tower 1 last year.
*Sembcorp Industries: Raised its stake in its India renewable energy business, Sembcorp Green Infra, from 68.7% to 70.4% after subscribing in a rights issue, including the 31.3% share not taken up by its partner IDFC PE Fund III. Gross proceeds of 1.25b rupees ($26.5m) will be used to fund its growth in the sector.
*Delfi: Divesting the entire 50% stake in PT Ceres Meiji Indotama to Meiji and Meiji Seika for US$8.3m. Estimated disposal gain of US$4.9m is intended to strengthen its financial position.
*Auric Pacific: Voluntary offer of $1.65/share has turned unconditional after the Riady group obtained valid acceptances of 90.15%. Note that there will not be a compulsory acquisition for the remaining shares not tendered, after the closing date on 7 Apr.
*IHC: Mandatory unconditional offer at $0.106/share from OUE has been extended to 13 Apr.
*Rex Int’l: An independent qualified person’s report unveiled that the Edvard Grieg South (Rolvsnes) discovery attributed to 87.84% owned Lime Petroleum Norway, has 3.1m stock tank barrels per bscf of 1C contingent resources of oil as well as natural gas.
*KS Energy: Awarded a US$4.8m contract for its 80.1% owned KS Discoverer 7 land drilling rig in Indonesia, with work commencing from 2Q17 onwards for nine months.
*Singapore eDevelopment: 53% owned dietary supplement network marketing platform, iGalen Int’l, achieved 1,500 sales orders worth $1m across its network of 4,400 distributors in the first 30 days of operations.
*Khong Guan: Turned around to 1HFY17 net profit of $0.1m (1HFY16: $0.5m loss) due to the absence of a $1.1m fair value loss. Revenue slipped 1.7% to $28.7m on weak contribution in wheat flour and trading in other consumer products (-6.5%), although partially mitigated by gains from its investing trading arm (+239.1%) on disposal of short-term investments. NAV/share at $2.36.
Regional markets opened mixed in Tokyo (-0.5%), Seoul (+0.1%) and Sydney (+0.3%).Currently, the index is sitting atop the 61.8% fibonacci retracement of the Apr '15 - Jan '16 decline at 3,160.
Stocks to watch:
*Economy: Singapore's non-oil domestic exports jumped 21.5% in Feb, beating the 12.5% estimate and surpassing growth in the preceding months (Jan '17: +8.6%, Dec '16: +9.1%, Nov '16: +15.6%), spurred by increases in both electronic (+17.2%) and non-electronic shipments (+23.3%).\
*Genting HK: Sank into FY16 net loss of US$502.3m from US$2.11b profit a year ago, mainly due to the absence of accounting gain from partial sale and reclassification of ex-associate Norwegian Cruise Lines. While revenue jumped 47.4% to US$1.02bm on full contribution of Crystal Cruises (acquired in May '15) and the launch of Dream Cruises' Genting Dream in Oct '16, expenses surged 57.8% on the consolidation of expenses from the new business and start-up costs arising from shipyard operations and newbuilding activities. Declared final DPS of US$0.01 (FY15: nil).
*CapitaLand: Reportedly in exclusive talks with BlackRock to acquire Asia Square Tower 2. Price tag for the 784,000 sf office building is said to be more than $2,700 psf, which is higher than the $2,704 psf that Qatar Investment Authority paid for Asia Square Tower 1 last year.
*Sembcorp Industries: Raised its stake in its India renewable energy business, Sembcorp Green Infra, from 68.7% to 70.4% after subscribing in a rights issue, including the 31.3% share not taken up by its partner IDFC PE Fund III. Gross proceeds of 1.25b rupees ($26.5m) will be used to fund its growth in the sector.
*Delfi: Divesting the entire 50% stake in PT Ceres Meiji Indotama to Meiji and Meiji Seika for US$8.3m. Estimated disposal gain of US$4.9m is intended to strengthen its financial position.
*Auric Pacific: Voluntary offer of $1.65/share has turned unconditional after the Riady group obtained valid acceptances of 90.15%. Note that there will not be a compulsory acquisition for the remaining shares not tendered, after the closing date on 7 Apr.
*IHC: Mandatory unconditional offer at $0.106/share from OUE has been extended to 13 Apr.
*Rex Int’l: An independent qualified person’s report unveiled that the Edvard Grieg South (Rolvsnes) discovery attributed to 87.84% owned Lime Petroleum Norway, has 3.1m stock tank barrels per bscf of 1C contingent resources of oil as well as natural gas.
*KS Energy: Awarded a US$4.8m contract for its 80.1% owned KS Discoverer 7 land drilling rig in Indonesia, with work commencing from 2Q17 onwards for nine months.
*Singapore eDevelopment: 53% owned dietary supplement network marketing platform, iGalen Int’l, achieved 1,500 sales orders worth $1m across its network of 4,400 distributors in the first 30 days of operations.
*Khong Guan: Turned around to 1HFY17 net profit of $0.1m (1HFY16: $0.5m loss) due to the absence of a $1.1m fair value loss. Revenue slipped 1.7% to $28.7m on weak contribution in wheat flour and trading in other consumer products (-6.5%), although partially mitigated by gains from its investing trading arm (+239.1%) on disposal of short-term investments. NAV/share at $2.36.
Thursday, March 16, 2017
SG Market (16 Mar 17)
Expect positive sentiment to spill over to the Singapore market after Fed raised its benchmark rate as expected and on a rebound in oil prices as well as strength in the underlying domestic economy.
Regional bourses opened mostly higher in Tokyo (-0.2%), Seoul (+1%) and Sydney (+0.4%).Topside resistance for the STI is seen at 3,150, with downside support at 3,120.
Stocks to watch:
*Economy: Economists have raised Singapore's 2017 GDP growth estimate to 2.3% (previous: 1.5%), nearer MKE's 2.5% forecast. This was spurred by anticipated improvement in the manufacturing (est: +4.5%, previous: +1.5%) and finance & insurance (est: +2%, previous: +1.8%) sectors.
*SIA: Feb group pax load factor improved 2.4ppts to 80.7%, as passenger traffic growth (+4.1%) outpaced capacity expansion (+0.9%). Load factors rose on promotions across East Asia (+3.5ppts), Americas (+5.6ppts), Europe (+5ppts) and Mid-East/Africa (+6.7ppts), with the exception of SW Pacific (-3.3ppts). Subsidiary carriers’ load factors were mixed with Tigerair (+1.4ppts to 83%) climbing, while Silkair (-0.9ppts to 73.1%) and Scoot (-1.7ppts to 85.1%) slipped. Cargo load factor rose 2.4ppts to 61.4% as capacity contraction (-5.9%) overshadowed decline in carriage (-2.1%). MKE last had a Hold with TP of $9.70.
*Noble: Proposed 10-into-1 share consolidation in a bid to reduce volatility and improve liquidity by narrowing the bid/ask spread, and concurrently soften the impact of speculative orders on the stock.
*Soilbuild Construction: Awarded $149.4m contract by the HDB to build a high rise multi-user food factory at Bedok North Avenue 4. The contract would raise its contract order book to $562.2m. Construction is expected to commence in 1Q17 and will take about 32 months to complete.
*HMI: Received strong interest for its 11-for 200 rights issue, with 145.7% subscription rate. This will raise gross proceeds of $18.5m which will be used to increase its ownership stake in Mahkota Medical Centre and Regency Specialist Hospital to 100% (prior: 48.9% and 60.8% respectively).
*Sarine Tech: Commenced operations at its new 55,000 sf facility in Surat, India, consolidating all of its Surat-based activities for the Indian diamond market under one roof.
*HL Global: Extended the long stop date for proposed disposal of LKN Investment by one month to 15 Apr.
Regional bourses opened mostly higher in Tokyo (-0.2%), Seoul (+1%) and Sydney (+0.4%).Topside resistance for the STI is seen at 3,150, with downside support at 3,120.
Stocks to watch:
*Economy: Economists have raised Singapore's 2017 GDP growth estimate to 2.3% (previous: 1.5%), nearer MKE's 2.5% forecast. This was spurred by anticipated improvement in the manufacturing (est: +4.5%, previous: +1.5%) and finance & insurance (est: +2%, previous: +1.8%) sectors.
*SIA: Feb group pax load factor improved 2.4ppts to 80.7%, as passenger traffic growth (+4.1%) outpaced capacity expansion (+0.9%). Load factors rose on promotions across East Asia (+3.5ppts), Americas (+5.6ppts), Europe (+5ppts) and Mid-East/Africa (+6.7ppts), with the exception of SW Pacific (-3.3ppts). Subsidiary carriers’ load factors were mixed with Tigerair (+1.4ppts to 83%) climbing, while Silkair (-0.9ppts to 73.1%) and Scoot (-1.7ppts to 85.1%) slipped. Cargo load factor rose 2.4ppts to 61.4% as capacity contraction (-5.9%) overshadowed decline in carriage (-2.1%). MKE last had a Hold with TP of $9.70.
*Noble: Proposed 10-into-1 share consolidation in a bid to reduce volatility and improve liquidity by narrowing the bid/ask spread, and concurrently soften the impact of speculative orders on the stock.
*Soilbuild Construction: Awarded $149.4m contract by the HDB to build a high rise multi-user food factory at Bedok North Avenue 4. The contract would raise its contract order book to $562.2m. Construction is expected to commence in 1Q17 and will take about 32 months to complete.
*HMI: Received strong interest for its 11-for 200 rights issue, with 145.7% subscription rate. This will raise gross proceeds of $18.5m which will be used to increase its ownership stake in Mahkota Medical Centre and Regency Specialist Hospital to 100% (prior: 48.9% and 60.8% respectively).
*Sarine Tech: Commenced operations at its new 55,000 sf facility in Surat, India, consolidating all of its Surat-based activities for the Indian diamond market under one roof.
*HL Global: Extended the long stop date for proposed disposal of LKN Investment by one month to 15 Apr.
Wednesday, March 15, 2017
SG Market (15 Mar 17)
Investors are expected to take a cautious stance ahead of an expected Fed rate increase and possibility of further hikes later this year, with banks slated to be potential beneficiaries, but oil-related counters will likely to be dragged by the overnight slump in crude oil prices.
Regional bourses opened lower in Tokyo (-0.4%), Seoul (-0.1%) and Sydney (-0.4%).Technically, STI is expected to range bound between 3,120 and 3,150.
Stocks to watch:
*Centurion: Received a 9-month lease extension for its 8,600-bed Westlite Tuas dormitory, which constitutes 25% of its total bed capacity in Singapore, wef 29 Apr ’17. MKE last had a Hold with TP of $0.41.
*Sunright: 1HFY17 net profit grew 31% to $2.4m, as revenue rose 9% to $70.1m, stemming from increased contribution from burn-in, testing and electronic manufacturing services. Margins were augmented by reduced raw materials and consumables used. NAV/share at $0.582.
*Vibrant: 3QFY17 net profit slumped 85.2% to $1.3m, dragged by lower associate income of $0.4m (-85%) due to reduced takings from Plaza Ventures and Figtree. Revenue of $53.5m (+23.6%) was supported contribution from the government resettlement housing development projects in Jiangyin, China, but partially offset by a dip in freight and logistics sales following the disposal of the loss-making ISO tanks business. Gross margin expanded to 28.9% (+1.3ppts), while bottom line was weighed by a fair value loss of $0.8m (3QFY17: $7.3m gain) and lower FX gain of $0.4m (-87%). NAV/share at $0.623.
*Ipco: 3QFY17 net profit fell 12% to $5.3m on a 18% drop in revenue to $12.2m, due to lower demand for burn-in boards by semiconductor manufacturers, as well as a decline in natural gas piping installations to new households in China. NAV/share at $0.02.
*Spackman: Acquiring Korean movie equipment rental firm Frame Pictures for KRW900m (US$0.8m) and 1.63% of share capital in 24.53%-owned Spackman Media Group. This will narrow pro forma FY16 LPS to US$0.37¢ from US0.56¢.
*Atlantic Navigation: Awarded a one-year charter contract for its lift boat worth US$44m, attached with two one-year extension options. The vessl is expected to be deployed in early-May after the completion of retrofitting work.
*Regal Int'l: Entered into a project management cum construction agreement with an independent third party, for the development and construction of 20 units of terrace houses and eight units of spektra plus terrace houses in Kota Samarahan, Sarawak, Malaysia. The third party is the 1.44ha land owner and developer of the project.
*KrisEnergy: Appoints Kelvin Tang, VP of Legal and President of its Cambodian operations as COO wef today and promoted Sally Ting to General Counsel. Meanwhile, founding executive directors Richard Lorentz (director of business development) and Chris Gibson-Robinson (director of E&P) will step down from the board on Apr 24 and become advisers to the CEO, a post that remains vacant.
*Swiber: Unable to pay the upcoming coupon for its CNY450m 7.75% fixed rate notes due on Mar 20. Company is under judicial management and remains suspended.
Regional bourses opened lower in Tokyo (-0.4%), Seoul (-0.1%) and Sydney (-0.4%).Technically, STI is expected to range bound between 3,120 and 3,150.
Stocks to watch:
*Centurion: Received a 9-month lease extension for its 8,600-bed Westlite Tuas dormitory, which constitutes 25% of its total bed capacity in Singapore, wef 29 Apr ’17. MKE last had a Hold with TP of $0.41.
*Sunright: 1HFY17 net profit grew 31% to $2.4m, as revenue rose 9% to $70.1m, stemming from increased contribution from burn-in, testing and electronic manufacturing services. Margins were augmented by reduced raw materials and consumables used. NAV/share at $0.582.
*Vibrant: 3QFY17 net profit slumped 85.2% to $1.3m, dragged by lower associate income of $0.4m (-85%) due to reduced takings from Plaza Ventures and Figtree. Revenue of $53.5m (+23.6%) was supported contribution from the government resettlement housing development projects in Jiangyin, China, but partially offset by a dip in freight and logistics sales following the disposal of the loss-making ISO tanks business. Gross margin expanded to 28.9% (+1.3ppts), while bottom line was weighed by a fair value loss of $0.8m (3QFY17: $7.3m gain) and lower FX gain of $0.4m (-87%). NAV/share at $0.623.
*Ipco: 3QFY17 net profit fell 12% to $5.3m on a 18% drop in revenue to $12.2m, due to lower demand for burn-in boards by semiconductor manufacturers, as well as a decline in natural gas piping installations to new households in China. NAV/share at $0.02.
*Spackman: Acquiring Korean movie equipment rental firm Frame Pictures for KRW900m (US$0.8m) and 1.63% of share capital in 24.53%-owned Spackman Media Group. This will narrow pro forma FY16 LPS to US$0.37¢ from US0.56¢.
*Atlantic Navigation: Awarded a one-year charter contract for its lift boat worth US$44m, attached with two one-year extension options. The vessl is expected to be deployed in early-May after the completion of retrofitting work.
*Regal Int'l: Entered into a project management cum construction agreement with an independent third party, for the development and construction of 20 units of terrace houses and eight units of spektra plus terrace houses in Kota Samarahan, Sarawak, Malaysia. The third party is the 1.44ha land owner and developer of the project.
*KrisEnergy: Appoints Kelvin Tang, VP of Legal and President of its Cambodian operations as COO wef today and promoted Sally Ting to General Counsel. Meanwhile, founding executive directors Richard Lorentz (director of business development) and Chris Gibson-Robinson (director of E&P) will step down from the board on Apr 24 and become advisers to the CEO, a post that remains vacant.
*Swiber: Unable to pay the upcoming coupon for its CNY450m 7.75% fixed rate notes due on Mar 20. Company is under judicial management and remains suspended.
Tuesday, March 14, 2017
SG Market (14 Mar 17)
The market will likely trade within a tight range over the course of the 2-day FOMC meeting as investors await signals of future rate hikes for the year.
Regional bourses opened mixed in Tokyo (-0.06%), Seoul (+0.4%) and Sydney (-0.04%).Uptrend in the STI remains intact with immediate resistance at 3,150 and downside support at 3,120 although a bearish divergence appears to be forming between the index and 14-day RSI.
Stocks to watch:
*SGX: Relaxed renounceable rights issue cap to 100% of share capital, up from 50% previously, to help companies raise funds expediently for expansion or working capital needs in response to the emergence of disruptive forces and economic restructuring.
*Industrial REITs: Canada's two largest pension funds, Canada Pension Plan Investment Board and Ivanhoé Cambridge, have committed an aggregate US$300m for a 48% stake in LOGOS (Singapre/Indonesia), a real estate logistics operator, to invest in warehouses in Singapore and Indonesia.
*mm2: Presented a slate of eight films to be released this year at Hong Kong FILMART 2017, with productions from Hong Kong, China, Taiwan, Malaysia and Singapore.
*IREIT: Requested for S&P to withdraw its BB long-term corporate rating with stable outlook, following revised regulations that REITs will adopt a single-tier aggregate leverage limit of 45% without the requirement of a credit rating.
*Healthway Medical: No doctors reportedly turned up for work at seven of its family clinics on Monday because certain anchor doctors are on medical leave and no locum doctors could be found to relieve them. HMC has failed to pay salaries of its doctors and senior management amounting to $3.9m last month and has until the end of the month to make good on total obligations worth $10.7m. As at end 2016, its cash balance stood at $2.4m.
*Neo Group: Entered agreement with vendors for an exclusive right to negotiate the proposed acquisition of Lavish Dine Catering, as well as 80% of La Bonnie Pastries.
*China Star Food: Granted operating license from Lonyan City Food, Drug Supervision & Administrationa Bureau for its new manufacturing plant in Liancheng, China. The new factory will have a production capacity of 30,000 tonnes, exceeding the combined capacity of its two existing plants. The group intends to shift all production operations to the new plant, with commencement of production in Apr ’17.
*Asiatravel.com: Partnering M Lhuillier Financial Services to let consumers enquire, book and pay for its domestic and global travel products at the latter’s 2,000 stores across Philippines.*Trek 2000: Divesting 19% stake in Racer Technology to Willy Koh Kee Joo for $3m. The deal is expected to net a disposal loss of US$0.7m, while sales proceeds will be used for investment opportunities.
*Asiaphos: Entered into a letter of intent with Mianyang Aostar to sell an aggregate of 150,000 tonnes of phosphate rocks in FY17. Separately, the group struck a framework agreement with Sichuan Lomon Phosphorus Chemical until 31 Dec '17 to 1) purchase 120,000 tonnes of phosphates with a minimum 25% P2O5 content at Rmb270/tonne, and 2) sell 120,000 tonnes with a minimum 30% P2O5 content at Rmb355/tonne.
Regional bourses opened mixed in Tokyo (-0.06%), Seoul (+0.4%) and Sydney (-0.04%).Uptrend in the STI remains intact with immediate resistance at 3,150 and downside support at 3,120 although a bearish divergence appears to be forming between the index and 14-day RSI.
Stocks to watch:
*SGX: Relaxed renounceable rights issue cap to 100% of share capital, up from 50% previously, to help companies raise funds expediently for expansion or working capital needs in response to the emergence of disruptive forces and economic restructuring.
*Industrial REITs: Canada's two largest pension funds, Canada Pension Plan Investment Board and Ivanhoé Cambridge, have committed an aggregate US$300m for a 48% stake in LOGOS (Singapre/Indonesia), a real estate logistics operator, to invest in warehouses in Singapore and Indonesia.
*mm2: Presented a slate of eight films to be released this year at Hong Kong FILMART 2017, with productions from Hong Kong, China, Taiwan, Malaysia and Singapore.
*IREIT: Requested for S&P to withdraw its BB long-term corporate rating with stable outlook, following revised regulations that REITs will adopt a single-tier aggregate leverage limit of 45% without the requirement of a credit rating.
*Healthway Medical: No doctors reportedly turned up for work at seven of its family clinics on Monday because certain anchor doctors are on medical leave and no locum doctors could be found to relieve them. HMC has failed to pay salaries of its doctors and senior management amounting to $3.9m last month and has until the end of the month to make good on total obligations worth $10.7m. As at end 2016, its cash balance stood at $2.4m.
*Neo Group: Entered agreement with vendors for an exclusive right to negotiate the proposed acquisition of Lavish Dine Catering, as well as 80% of La Bonnie Pastries.
*China Star Food: Granted operating license from Lonyan City Food, Drug Supervision & Administrationa Bureau for its new manufacturing plant in Liancheng, China. The new factory will have a production capacity of 30,000 tonnes, exceeding the combined capacity of its two existing plants. The group intends to shift all production operations to the new plant, with commencement of production in Apr ’17.
*Asiatravel.com: Partnering M Lhuillier Financial Services to let consumers enquire, book and pay for its domestic and global travel products at the latter’s 2,000 stores across Philippines.*Trek 2000: Divesting 19% stake in Racer Technology to Willy Koh Kee Joo for $3m. The deal is expected to net a disposal loss of US$0.7m, while sales proceeds will be used for investment opportunities.
*Asiaphos: Entered into a letter of intent with Mianyang Aostar to sell an aggregate of 150,000 tonnes of phosphate rocks in FY17. Separately, the group struck a framework agreement with Sichuan Lomon Phosphorus Chemical until 31 Dec '17 to 1) purchase 120,000 tonnes of phosphates with a minimum 25% P2O5 content at Rmb270/tonne, and 2) sell 120,000 tonnes with a minimum 30% P2O5 content at Rmb355/tonne.
Monday, March 13, 2017
Kimly Group (IPO)
One of the leaders of Singapore's heartland food culture, Kimly Group is tapping onto capital markets to raise funds for business expansion. If successful, it will be the first traditional coffee shop operator to list on the SGX.
Kimly is issuing 173.8m new shares at $0.25 apiece, of which 3.8m will be for public subscription, while 170m are for placement. Post‐issue, chairman and founder Lim Hee Liat will hold a 42.4% stake (prior: 49.94%).
Kimly's business centres around two main divisions namely, outlet management (coffee shop and food courts) and food retail. Under outlet management, Kimly manages and operates a portfolio of 56 coffee shops, three industrial canteens and five food courts across Singapore. Each outlet has an average of 8‐12 food stalls, with average seating capacities of 150‐250. The 500 food stalls within its coffee shop portfolio has managed to attain a 98% occupancy rate, due to the operator's special attention to details, such as the location and environment of the outlets.
Kimly's food retail division operates and manages 121 food stalls across Singapore, comprising stalls selling dim sum (43 stalls), mixed vegetable rice (36 stalls) and "Zi Char" (29 stalls). In its most recent FY16 results, net profit grew 6.9% to $24m on revenue of $172.2m (+10.4%), led by growth across both outlet management (+10.7%) and food retail (+10.1%). This was due to new outlets and stalls that commenced operations during the year. Gross margin remained relatively stable at 21.6% (FY15: 21.5%).
The group is looking to raise net proceeds of about $40.4m which it intends to use for:
1. General business expansion (75% of net proceeds) So far, its financial performance has been underpinned by establishing new food outlets and stalls. It intends to continue doing so, while at the same time refurbishing and renovating existing outlets to enhance the dining experience for its customers. It typically conducts refurbishment for every outlet once every 10 years.
2) Upgrading of its central kitchen (12% of net proceeds) To cater to its expanding food stalls portfolio, it intends to acquire new equipment and machinery, as well as expand its Central Kitchen.
3) Development of IT systems (5%). With the advancement of mobile and digital payment systems, it believes that the implementation of a cashless electronic payment system will be timely. In addition, the increase in demand for online food delivery services could present another growth frontier for the group.
Based on its proforma FY16 earnings and its 50% dividend payout policy, the IPO would value Kimly at 12x FY16 P/E and 4.2% dividend yield versus peers such as Jumbo (28.5x, 2.5%) and Japan Foods (19.8x, 4.4%).
Kimly is issuing 173.8m new shares at $0.25 apiece, of which 3.8m will be for public subscription, while 170m are for placement. Post‐issue, chairman and founder Lim Hee Liat will hold a 42.4% stake (prior: 49.94%).
Kimly's business centres around two main divisions namely, outlet management (coffee shop and food courts) and food retail. Under outlet management, Kimly manages and operates a portfolio of 56 coffee shops, three industrial canteens and five food courts across Singapore. Each outlet has an average of 8‐12 food stalls, with average seating capacities of 150‐250. The 500 food stalls within its coffee shop portfolio has managed to attain a 98% occupancy rate, due to the operator's special attention to details, such as the location and environment of the outlets.
Kimly's food retail division operates and manages 121 food stalls across Singapore, comprising stalls selling dim sum (43 stalls), mixed vegetable rice (36 stalls) and "Zi Char" (29 stalls). In its most recent FY16 results, net profit grew 6.9% to $24m on revenue of $172.2m (+10.4%), led by growth across both outlet management (+10.7%) and food retail (+10.1%). This was due to new outlets and stalls that commenced operations during the year. Gross margin remained relatively stable at 21.6% (FY15: 21.5%).
The group is looking to raise net proceeds of about $40.4m which it intends to use for:
1. General business expansion (75% of net proceeds) So far, its financial performance has been underpinned by establishing new food outlets and stalls. It intends to continue doing so, while at the same time refurbishing and renovating existing outlets to enhance the dining experience for its customers. It typically conducts refurbishment for every outlet once every 10 years.
2) Upgrading of its central kitchen (12% of net proceeds) To cater to its expanding food stalls portfolio, it intends to acquire new equipment and machinery, as well as expand its Central Kitchen.
3) Development of IT systems (5%). With the advancement of mobile and digital payment systems, it believes that the implementation of a cashless electronic payment system will be timely. In addition, the increase in demand for online food delivery services could present another growth frontier for the group.
Based on its proforma FY16 earnings and its 50% dividend payout policy, the IPO would value Kimly at 12x FY16 P/E and 4.2% dividend yield versus peers such as Jumbo (28.5x, 2.5%) and Japan Foods (19.8x, 4.4%).
SG Market (13 Mar 17)
The local market could retract some of last week's gains, ahead of the probable rate hike this week following the strong US jobs report last Fri.
Regional bourses are mixed today in Tokyo (-0.4%), Seoul (+0.5%) and Sydney (-0.5%).The STI remains within the top end of its uptrend channel between 3,020 and 3,175.
Stocks to watch:
*SingPost: Credit ratings agency S&P has maintained its BBB+ with stable outlook credit rating on SingPost, citing expectations that the group will consolidate its operations in the logistics and express delivery markets in Asia-Pacific and the US in the next six to 12 months. MKE last had a Hold with TP of $1.34.
*OUE: Divested its 40% stake in the proposed integrated resort project in Incheon, Korea for US$22.9m ($32.3m).
*China Everbright Water: Won a bid for Hubei Suizhou High-tech Industrial Park Piaoshui and Fuhe River Basin Integrated Water Environment Restoration PPP Project. Group will own 78.4% in the project which will require a total investment of ~Rmb956m.
*Ezra: 75.3% owned EMAS Offshore terminated a bareboat charter contract for the Lewek Champion with the vessel owner, Hai Jiang 1401, with immediate effect. As guarantor of the contract, Ezra received a demand from Hai Jiang for a payment of US$194.5m, or 51% of Ezra's net assets, to be made within 15 days within termination.
*Vibrant/Figtree: Acquired a 50-years leasehold, 76,553 sqm plot of industrial land in Changsha High Tech Industrial park, Jiangsu, China for Rmb24.1m. The land will be developed into built-to-order industrial factories with the parties holding effective stakes of 48/32% respectively.
*Stamford Tyres: 3QFY17 net profit surged 154.6% to $2.3m from a low base, boosted by declines in finance costs (-16.4%) and FX losses (-71%). Revenue inched up 0.4% to $59.7m, while gross margin improved to 25.8% (+0.6ppts) on 1) lower cost of sales and 2) contribution from value-added activities at its retail chain and truck tyre centres. NAV/share at $0.514.
*CSE Global: Won two deepwater offshore projects valued at US$30 ($42m) for integrated control systems, to be executed in the Gulf of Mexico from 1Q17 to 4Q18.*Triyards: Secured US$20.6m worth of contracts for the fabrication of two passenger ferries.
*Jackspeed: Proposed issue of 50.2m new shares (20% share capital) at $0.11385 apiece to individual investor Chua Keng Woon. Net proceeds of $5.7m are intended for working capital.
*Healthway Medical: In a cashflow crunch after a proposed issue of notes did not receive SGX approval; group updated that fresh funds of $10.7m are required by 31 Mar for operations to continue.
*Saizen REIT: Updated that the proposed RTO transaction with Sime Darby Property will not be able to complete by the long-stop date on 31 Mar, and will therefore not proceed with the deal.
Regional bourses are mixed today in Tokyo (-0.4%), Seoul (+0.5%) and Sydney (-0.5%).The STI remains within the top end of its uptrend channel between 3,020 and 3,175.
Stocks to watch:
*SingPost: Credit ratings agency S&P has maintained its BBB+ with stable outlook credit rating on SingPost, citing expectations that the group will consolidate its operations in the logistics and express delivery markets in Asia-Pacific and the US in the next six to 12 months. MKE last had a Hold with TP of $1.34.
*OUE: Divested its 40% stake in the proposed integrated resort project in Incheon, Korea for US$22.9m ($32.3m).
*China Everbright Water: Won a bid for Hubei Suizhou High-tech Industrial Park Piaoshui and Fuhe River Basin Integrated Water Environment Restoration PPP Project. Group will own 78.4% in the project which will require a total investment of ~Rmb956m.
*Ezra: 75.3% owned EMAS Offshore terminated a bareboat charter contract for the Lewek Champion with the vessel owner, Hai Jiang 1401, with immediate effect. As guarantor of the contract, Ezra received a demand from Hai Jiang for a payment of US$194.5m, or 51% of Ezra's net assets, to be made within 15 days within termination.
*Vibrant/Figtree: Acquired a 50-years leasehold, 76,553 sqm plot of industrial land in Changsha High Tech Industrial park, Jiangsu, China for Rmb24.1m. The land will be developed into built-to-order industrial factories with the parties holding effective stakes of 48/32% respectively.
*Stamford Tyres: 3QFY17 net profit surged 154.6% to $2.3m from a low base, boosted by declines in finance costs (-16.4%) and FX losses (-71%). Revenue inched up 0.4% to $59.7m, while gross margin improved to 25.8% (+0.6ppts) on 1) lower cost of sales and 2) contribution from value-added activities at its retail chain and truck tyre centres. NAV/share at $0.514.
*CSE Global: Won two deepwater offshore projects valued at US$30 ($42m) for integrated control systems, to be executed in the Gulf of Mexico from 1Q17 to 4Q18.*Triyards: Secured US$20.6m worth of contracts for the fabrication of two passenger ferries.
*Jackspeed: Proposed issue of 50.2m new shares (20% share capital) at $0.11385 apiece to individual investor Chua Keng Woon. Net proceeds of $5.7m are intended for working capital.
*Healthway Medical: In a cashflow crunch after a proposed issue of notes did not receive SGX approval; group updated that fresh funds of $10.7m are required by 31 Mar for operations to continue.
*Saizen REIT: Updated that the proposed RTO transaction with Sime Darby Property will not be able to complete by the long-stop date on 31 Mar, and will therefore not proceed with the deal.
Friday, March 10, 2017
SG Market (10 Mar 17)
The market could adopt a cautious stance ahead of the US jobs report tonight, and sentiment could be further dampened after crude oil extended losses below the key US$50/bbl level.
Regional bourses are mixed today in Tokyo (+0.7%), Seoul (-0.2%) and Sydney (+0.3%).The STI is at the lower-bound of its uptrend channel between 3,120 and 3,175, and a break below that could see the index move lower towards the next support at 3,095.
Stocks to watch:
*O&M: Rigbuilders Keppel Corp and Sembcorp Marine could continue to see profit-taking as share prices may have run ahead of fundamentals, in the absence of new contract wins or an end of the impairment cycle. To recap, both counters strongly outperformed YTD following several street ratings upgrade on the back of improved sentiment in the oil market.
*Neo Group: Entered into an exclusive dealing agreement to acquire Asia Farm F&B, a manufacturer of fruit cordials and syrups, juices, sauces, puddings and jellies.
*Zico: Commenced business for its asset management business as a registered fund management company, targeting high net worth and family office clients focused on the Asean region.
*Axcelasia: Acquiring Malaysia-based business and corporate governance consultancy firm, Audex Governance, for RM2.9m. The acquisition will allow it to tap on Audex’s base of customers and facilitate cross-selling of services. Audex currently has RM2.1m worth of contracts.
*Sysma: 1HFY17 net profit surged 857.5% from a low base to $4.8m, mainly boosted by write-backs on provision of $3.6m. However, revenue slumped 40.4% to $40.5m on reduced contribution from property development (-84.6%), although partially offset by increased sales in construction (+23.4%). Gross margin expanded to 19.8% (1HFY16: 5.9%), in line with the shift in business mix. NAV/share at $0.182.
*Blackgold: Proposed placement of 39.5m new shares (5% share capital) at $0.0901 each to private investor and consultant to the company, Johanes Budisutrisno Kotjo. Net proceeds of $3.5m will be used for working capital.
*Natural Cool: Received letter of demand from former Chief Corporate Officer Ng Quek Peng, seeking $2.5m for alleged wrongful termination of his service.
Regional bourses are mixed today in Tokyo (+0.7%), Seoul (-0.2%) and Sydney (+0.3%).The STI is at the lower-bound of its uptrend channel between 3,120 and 3,175, and a break below that could see the index move lower towards the next support at 3,095.
Stocks to watch:
*O&M: Rigbuilders Keppel Corp and Sembcorp Marine could continue to see profit-taking as share prices may have run ahead of fundamentals, in the absence of new contract wins or an end of the impairment cycle. To recap, both counters strongly outperformed YTD following several street ratings upgrade on the back of improved sentiment in the oil market.
*Neo Group: Entered into an exclusive dealing agreement to acquire Asia Farm F&B, a manufacturer of fruit cordials and syrups, juices, sauces, puddings and jellies.
*Zico: Commenced business for its asset management business as a registered fund management company, targeting high net worth and family office clients focused on the Asean region.
*Axcelasia: Acquiring Malaysia-based business and corporate governance consultancy firm, Audex Governance, for RM2.9m. The acquisition will allow it to tap on Audex’s base of customers and facilitate cross-selling of services. Audex currently has RM2.1m worth of contracts.
*Sysma: 1HFY17 net profit surged 857.5% from a low base to $4.8m, mainly boosted by write-backs on provision of $3.6m. However, revenue slumped 40.4% to $40.5m on reduced contribution from property development (-84.6%), although partially offset by increased sales in construction (+23.4%). Gross margin expanded to 19.8% (1HFY16: 5.9%), in line with the shift in business mix. NAV/share at $0.182.
*Blackgold: Proposed placement of 39.5m new shares (5% share capital) at $0.0901 each to private investor and consultant to the company, Johanes Budisutrisno Kotjo. Net proceeds of $3.5m will be used for working capital.
*Natural Cool: Received letter of demand from former Chief Corporate Officer Ng Quek Peng, seeking $2.5m for alleged wrongful termination of his service.
Thursday, March 9, 2017
SG Market (09 Mar 17)
The local market could be weighed by the overnight drop in oil prices, which came on the back of a ninth straight weekly rise in US crude inventories.
Regional bourses are seeing tepid early trading in Tokyo (+0.3%), Seoul (+0.1%) and Sydney (flat).The STI remains bounded within its uptrend channel between 3,120 and 3,175.
Stocks to watch:
*Strategy: The privatisation theme is back into the spotlight following the wave of recent M&A on attractive valuations. Cash-rich firms include Sunningdale Tech, Fu Yu, UMS, Venture and PEC, while undervalued asset plays include PACC Offshore, Bukit Sembawang, GuocoLand, GL and Ho Bee.
*GLP: Updated that it signed 69,000 sqm of new leases in China and Japan over the past three months.
*Silverlake Axis: Exploring the possible acquisition of private entities linked to its chairman, Goh Peng Ooi. This comes after a short selling report alleged that the private entities had engaged in transactions with Silverlake to inflate the latter’s results.
*Spindex: Independent directors have received a letter from Hong Wei (the privatization party led by controlling shareholder and chairman Tan Chang Chai), stating that any offer from Northstar can no longer be considered valid as it will not be able to turn unconditional, given Hong Wei has already secured 50.30% ownership. Further, it stated that Rule 9.2 of the Takeover Code is no longer applicable and objects to Spindex granting due diligence access to a rival firm.
*Nordic Group: 4Q16 net profit jumped 15% to $3.8m, bringing FY16 earnings to $12.8m (+21%). Quarter revenue fell 10% to $18.9m, dragged by both maintenance (-24%) and project services (-3%) segments, but bottom line was shored by $1m FX gain. Higher final DPS of 0.731¢ brings full year payout to 1.2682¢ (FY15: 1.05¢). NAV/share at $0.17.
*TTJ: 2QFY17 net profit dived 43.1% to $3.1m, on a 30% slump in revenue to $20m from weak contribution in both structural steel and dormitory businesses. Gross margin contracted 0.4ppts to 26.2% on a dip in dormitory margin, but was partially mitigated by better profitability for structural steel projects. Bottom line was dragged by lower FX gains of $8,000 (2QFY17: $0.6m). NAV/share at $0.364.
*LHN: Touted that its efforts to expand its space optimization and real estate management expertise into the China market was endorsed by Minister of State for National Development Koh Poh Koon.
*Regal: 55% owned Million Sunray entered into a MOU with ASX-listed iBosses, to explore collaboration in developing an Islamic Entrepreneurship program in Malaysia.
Regional bourses are seeing tepid early trading in Tokyo (+0.3%), Seoul (+0.1%) and Sydney (flat).The STI remains bounded within its uptrend channel between 3,120 and 3,175.
Stocks to watch:
*Strategy: The privatisation theme is back into the spotlight following the wave of recent M&A on attractive valuations. Cash-rich firms include Sunningdale Tech, Fu Yu, UMS, Venture and PEC, while undervalued asset plays include PACC Offshore, Bukit Sembawang, GuocoLand, GL and Ho Bee.
*GLP: Updated that it signed 69,000 sqm of new leases in China and Japan over the past three months.
*Silverlake Axis: Exploring the possible acquisition of private entities linked to its chairman, Goh Peng Ooi. This comes after a short selling report alleged that the private entities had engaged in transactions with Silverlake to inflate the latter’s results.
*Spindex: Independent directors have received a letter from Hong Wei (the privatization party led by controlling shareholder and chairman Tan Chang Chai), stating that any offer from Northstar can no longer be considered valid as it will not be able to turn unconditional, given Hong Wei has already secured 50.30% ownership. Further, it stated that Rule 9.2 of the Takeover Code is no longer applicable and objects to Spindex granting due diligence access to a rival firm.
*Nordic Group: 4Q16 net profit jumped 15% to $3.8m, bringing FY16 earnings to $12.8m (+21%). Quarter revenue fell 10% to $18.9m, dragged by both maintenance (-24%) and project services (-3%) segments, but bottom line was shored by $1m FX gain. Higher final DPS of 0.731¢ brings full year payout to 1.2682¢ (FY15: 1.05¢). NAV/share at $0.17.
*TTJ: 2QFY17 net profit dived 43.1% to $3.1m, on a 30% slump in revenue to $20m from weak contribution in both structural steel and dormitory businesses. Gross margin contracted 0.4ppts to 26.2% on a dip in dormitory margin, but was partially mitigated by better profitability for structural steel projects. Bottom line was dragged by lower FX gains of $8,000 (2QFY17: $0.6m). NAV/share at $0.364.
*LHN: Touted that its efforts to expand its space optimization and real estate management expertise into the China market was endorsed by Minister of State for National Development Koh Poh Koon.
*Regal: 55% owned Million Sunray entered into a MOU with ASX-listed iBosses, to explore collaboration in developing an Islamic Entrepreneurship program in Malaysia.
Wednesday, March 8, 2017
SG Market (08 Mar 17)
A weak session would likely ensue on heightened worries of geopolitical tensions in North Asia and the region.
Regional bourses opened largely flat in Tokyo (-0.1%), Seoul (+0.2%) and Sydney (-0.1%).The STI still remains in consolidation within its uptrend channel between 3,110 and 3,170.
Stocks to watch:
*SGX: Feb securities turnover surged to $28.2b (+17% y/y, +35% m/m) over 20 trading days (Jan '17: 20 days, Feb '16: 19 days), with average daily value of $1.41b (+11% y/y, +35% m/m). The derivatives segment was mixed with total volume of 12.5m contracts (-10% y/y, +7% m/m) as trading in equity indexes slowed 14% y/y (+4% m/m), but partly mitigated by increased trading in FX futures of 7% y/y (+1% m/m). Commodities derivatives trading volume surged to 1.49m (+28% y/y, +26% m/m).
*Yanlord: S&P raises Yanlord's outlook to positive from stable, although reaffirming BB- long-term corporate rating. This is on the back of significantly improved financial leverage position, as well as expectations that Yanlord can sustain robust sales and solid margins.
*mm2 Asia: Updated that the group will lodge its preliminary offer document for the spin-off listing of events-management company UnUsUaL, after obtaining approval at the EGM to be held on 20 Mar.
*Vard: Parent Fincantieri has reiterated that the $0.24/share privatisation offer is final and it will not be revising the offer price. Closing date for the offer is on 10 Mar.
*XMH: 3QFY17 net profit slid 23.2% to $0.8m, on lower revenue of $19.5m (-27.5%), impacted by weak contribution from project business, although partially offset by improved sales in distribution. A shift in sales mix and intense competition resulted in a drop in gross margin to 24.1% (-2ppts). Bottom line was partially supported by a disposal gain of $1.1m and net FX gain of $1.4m (3QFY16: $0.4m gain). NAV/share at $0.613.
*Sarine: Management updated that the Asia Pacific diamond market has continued its steady recovery at the start of 2017 following upbeat trade shows in Hong Kong. Positive feedback towards Sarine Profile was also strong.
*IEV: Discussing with various stakeholders for a potential fund raising exercise, to support R&D efforts in advanced nano materials from rice husk and global commercialisation of its newly patented marine growth prevention solution.
*UPP: Paper manufacturer UPP secured investment from high profile individuals via a proposed placement of 40m new shares at $0.25 apiece. Investors include Mohamed Nazir Bin Abdul Razak (CIMB Chairman), John Vlasto, Hsieh Fu Hua (UOB Chairman) and Chan Chia Lin (ex-Executive Director of Fullerton Fund Management). Net proceeds of $9.9m are intended to reduce debt.
*Anchor Resources: Received approval-in-principle from Terengganu State Authority for the renewal of mining leases for its Lubuk Mandi Mine. The group will provide further updates upon the issuance of a formal renewal.
*Swiber: Judicial managers have filed for an extension until Jul to submit a proposal to creditors.
Regional bourses opened largely flat in Tokyo (-0.1%), Seoul (+0.2%) and Sydney (-0.1%).The STI still remains in consolidation within its uptrend channel between 3,110 and 3,170.
Stocks to watch:
*SGX: Feb securities turnover surged to $28.2b (+17% y/y, +35% m/m) over 20 trading days (Jan '17: 20 days, Feb '16: 19 days), with average daily value of $1.41b (+11% y/y, +35% m/m). The derivatives segment was mixed with total volume of 12.5m contracts (-10% y/y, +7% m/m) as trading in equity indexes slowed 14% y/y (+4% m/m), but partly mitigated by increased trading in FX futures of 7% y/y (+1% m/m). Commodities derivatives trading volume surged to 1.49m (+28% y/y, +26% m/m).
*Yanlord: S&P raises Yanlord's outlook to positive from stable, although reaffirming BB- long-term corporate rating. This is on the back of significantly improved financial leverage position, as well as expectations that Yanlord can sustain robust sales and solid margins.
*mm2 Asia: Updated that the group will lodge its preliminary offer document for the spin-off listing of events-management company UnUsUaL, after obtaining approval at the EGM to be held on 20 Mar.
*Vard: Parent Fincantieri has reiterated that the $0.24/share privatisation offer is final and it will not be revising the offer price. Closing date for the offer is on 10 Mar.
*XMH: 3QFY17 net profit slid 23.2% to $0.8m, on lower revenue of $19.5m (-27.5%), impacted by weak contribution from project business, although partially offset by improved sales in distribution. A shift in sales mix and intense competition resulted in a drop in gross margin to 24.1% (-2ppts). Bottom line was partially supported by a disposal gain of $1.1m and net FX gain of $1.4m (3QFY16: $0.4m gain). NAV/share at $0.613.
*Sarine: Management updated that the Asia Pacific diamond market has continued its steady recovery at the start of 2017 following upbeat trade shows in Hong Kong. Positive feedback towards Sarine Profile was also strong.
*IEV: Discussing with various stakeholders for a potential fund raising exercise, to support R&D efforts in advanced nano materials from rice husk and global commercialisation of its newly patented marine growth prevention solution.
*UPP: Paper manufacturer UPP secured investment from high profile individuals via a proposed placement of 40m new shares at $0.25 apiece. Investors include Mohamed Nazir Bin Abdul Razak (CIMB Chairman), John Vlasto, Hsieh Fu Hua (UOB Chairman) and Chan Chia Lin (ex-Executive Director of Fullerton Fund Management). Net proceeds of $9.9m are intended to reduce debt.
*Anchor Resources: Received approval-in-principle from Terengganu State Authority for the renewal of mining leases for its Lubuk Mandi Mine. The group will provide further updates upon the issuance of a formal renewal.
*Swiber: Judicial managers have filed for an extension until Jul to submit a proposal to creditors.
Tuesday, March 7, 2017
SG Market (07 Mar 17)
Continued profit taking is likely to occur ahead of the jobs report this Fri and Fed meeting next week on increased fears of a Mar rate hike, coupled with rising geopolitical tensions in the region.
Regional bourses opened mostly flattish in Tokyo (-0.2%), Seoul (+0.1%) and Sydney (unch).The STI still remains in consolidation within its uptrend channel between 3,110 and 3,170.
Stocks to watch:
*Ascott REIT: Proposed renounceable fully underwritten 29-for-100 rights issue at $0.919 apiece to raise net proceeds of $437.6m, used to finance the acquisition of Ascott Orchard Singapore and two serviced residence properties in Germany. Post-acquisitions, pro forma FY16 DPU (including rights issue) is expected to increase 2.2% to 7.43¢, implying a 6.4% yield. The REIT will go ex on 10 Mar.
*SingPost: Marcelo Wesseler, chief of the eCommerce division that has been a drag to the group, has resigned. He will be replaced in the interim by Paul Demirdjian, President and CEO of Jagged Peak. MKE last warned of a looming impairment risk due to structural issues and has a Hold on the company with TP of $1.34.
*SGX: Two new indexes launched by FTSE Russell will now track consumer goods and services firms. Constituents of the FTSE ST Consumer Goods & Services Index comprise companies within the GICS sector and within the FTSE ST All-Share Index, while the FTSE ST Consumer Goods & Services Liquid 20 Index comprises 20 of the most liquid stocks in the sector.
*Noble: Disclosed that an issue of US$750m 8.75% notes due 2022 has been fully placed out. The commodity trader's liquidity has improved over the past two years and management expects capital constraints on businesses to moderate in 2017. Last traded at 0.53x P/B.
*China Everbright Water: Recently secured three waste water treatment upgrading projects, involving a total investment of about Rmb210m in Shandong and Liaoning.
*Lian Beng: Clinched its biggest ever construction contract worth $435m, awarded by the HDB, to build a high-rise multi-user industrial complex in the Defu South area. Construction will begin in 2Q17 and is slated for completion in 2Q20. The contract win will bolster its order book to $644m.
*Vard: Secured a NOK48m four-year framework agreement to provide ship maintenance and corrective maintenance to five Coast Guard vessels of the Norwegian Defence Logistics Organisation.
*Ezra: A civil action has been lodged in US by VT Halter Marine, against Ezra's 40% owned EMAS Chiyoda Subsea.
*YuuZoo: To launch its new platform YuuVillage with its Indian franchisee, iComp Digital Media in India. The platform will offer social networking services and access to products from the private and government sector.
*Libra: Received arbitration proceedings from a sub-contractor seeking $5.7m for alleged breaches in a sub-sub contract agreement for an air-conditioning and mechanical ventilation system.
Regional bourses opened mostly flattish in Tokyo (-0.2%), Seoul (+0.1%) and Sydney (unch).The STI still remains in consolidation within its uptrend channel between 3,110 and 3,170.
Stocks to watch:
*Ascott REIT: Proposed renounceable fully underwritten 29-for-100 rights issue at $0.919 apiece to raise net proceeds of $437.6m, used to finance the acquisition of Ascott Orchard Singapore and two serviced residence properties in Germany. Post-acquisitions, pro forma FY16 DPU (including rights issue) is expected to increase 2.2% to 7.43¢, implying a 6.4% yield. The REIT will go ex on 10 Mar.
*SingPost: Marcelo Wesseler, chief of the eCommerce division that has been a drag to the group, has resigned. He will be replaced in the interim by Paul Demirdjian, President and CEO of Jagged Peak. MKE last warned of a looming impairment risk due to structural issues and has a Hold on the company with TP of $1.34.
*SGX: Two new indexes launched by FTSE Russell will now track consumer goods and services firms. Constituents of the FTSE ST Consumer Goods & Services Index comprise companies within the GICS sector and within the FTSE ST All-Share Index, while the FTSE ST Consumer Goods & Services Liquid 20 Index comprises 20 of the most liquid stocks in the sector.
*Noble: Disclosed that an issue of US$750m 8.75% notes due 2022 has been fully placed out. The commodity trader's liquidity has improved over the past two years and management expects capital constraints on businesses to moderate in 2017. Last traded at 0.53x P/B.
*China Everbright Water: Recently secured three waste water treatment upgrading projects, involving a total investment of about Rmb210m in Shandong and Liaoning.
*Lian Beng: Clinched its biggest ever construction contract worth $435m, awarded by the HDB, to build a high-rise multi-user industrial complex in the Defu South area. Construction will begin in 2Q17 and is slated for completion in 2Q20. The contract win will bolster its order book to $644m.
*Vard: Secured a NOK48m four-year framework agreement to provide ship maintenance and corrective maintenance to five Coast Guard vessels of the Norwegian Defence Logistics Organisation.
*Ezra: A civil action has been lodged in US by VT Halter Marine, against Ezra's 40% owned EMAS Chiyoda Subsea.
*YuuZoo: To launch its new platform YuuVillage with its Indian franchisee, iComp Digital Media in India. The platform will offer social networking services and access to products from the private and government sector.
*Libra: Received arbitration proceedings from a sub-contractor seeking $5.7m for alleged breaches in a sub-sub contract agreement for an air-conditioning and mechanical ventilation system.
Monday, March 6, 2017
SG Market (06 Mar 17)
The market could soften on the back of lowered China 2017 GDP growth target of 6.5% (2016: +6.7%), alongside profit taking ahead of an impending Fed rate hike next week.
Regional bourses mostly slipped in early trading in Tokyo (-0.3%), Seoul (-0.4%) and Sydney (+0.1%).Technically, the STI remains within its uptrend channel between 3,105 and 3,165.
Stocks to watch:
*UOL: Acquiring Hilton Melbourne South Wharf for A$230m. The 396-room hotel has gfa of 30,688m, and a tenure of 99-years ending Jul 2108. MKE last had a Buy with TP of $7.68.
*Mapletree Industrial Trust: Secured development for its third built-to-suit data centre for $60m. Following expected completion in 2H18, the 242,000 sf gfa data centre will be fully leased out for an initial term of more than 10 years, with staggered rental escalations. REIT is trading at 6.8% indicative yield and 1.2x P/B.
*SPH/ mm2 Asia: SPH and mm2 will acquire 7.5% and 15%, respectively, in broadcasting platform Rings.TV for $1.1m and $2.3m. Both parties will have a one-year call option to increase their stakes, with SPH up to 10%, and mm2 up to 20%.*mm2 Asia: The proposed spin-off of UnUsUaL has been approved in-principle by SGX.
*Spackman Entertainment: Two-month MOU with photography veteran Kim Jun-young, to purchase movie/ drama equipment lessor, Frame Pictures.*Soilbuild Construction: Awarded contract to redevelop three warehouses for rice storage in Singapore. This raises its order book to $412.8m. Management acknowledges a tough construction industry, but will strive to secure more projects.
*Kingboard Copper: Parent Kingboard Laminates is proposing to privatize the company at $0.40/share, 17.5% above the last traded price. To recap, the parent failed previously to take the company private in 2009, priced either at $0.21/cash or 0.374 new shares in HK-listed Kingboard Laminates for each Kingboard Copper share.
*Sunpower: Completed a convertible bonds issue of US$110m to China's alternative asset management fund CDH Investments.
*Ezra: 75.3% owned EMAS Offshore will be suspended from trading on the Oslo Bors after it failed to release its FY16 financials before the deadline. In conjunction, EMAS will seek voluntary suspension from SGX until publication of the results.
*Cosco Corp: 51% owned subsidiary Cosco Shipyard delivered a FPSO vessel of 55,942 dwt to its European buyer.
*Asiaphos: Received approval from Sichuan Land Department to renew mining right for Mine 1, now effective to 28 Feb '18.
*Asian Micro Holdings: Acquired a 14,475 sqm plot of land at Pulau Pinang, Malaysia for RM2.75m ($0.9m), for potential redevelopment works.
*Oceanus: Due to urban planning purposes, the Gulei Zhen People’s Government will compulsorily acquire 13 abalone farms owned by Oceanus for Rmb182.5m ($38m). Net proceeds will be for debt repayment and working capital.
Regional bourses mostly slipped in early trading in Tokyo (-0.3%), Seoul (-0.4%) and Sydney (+0.1%).Technically, the STI remains within its uptrend channel between 3,105 and 3,165.
Stocks to watch:
*UOL: Acquiring Hilton Melbourne South Wharf for A$230m. The 396-room hotel has gfa of 30,688m, and a tenure of 99-years ending Jul 2108. MKE last had a Buy with TP of $7.68.
*Mapletree Industrial Trust: Secured development for its third built-to-suit data centre for $60m. Following expected completion in 2H18, the 242,000 sf gfa data centre will be fully leased out for an initial term of more than 10 years, with staggered rental escalations. REIT is trading at 6.8% indicative yield and 1.2x P/B.
*SPH/ mm2 Asia: SPH and mm2 will acquire 7.5% and 15%, respectively, in broadcasting platform Rings.TV for $1.1m and $2.3m. Both parties will have a one-year call option to increase their stakes, with SPH up to 10%, and mm2 up to 20%.*mm2 Asia: The proposed spin-off of UnUsUaL has been approved in-principle by SGX.
*Spackman Entertainment: Two-month MOU with photography veteran Kim Jun-young, to purchase movie/ drama equipment lessor, Frame Pictures.*Soilbuild Construction: Awarded contract to redevelop three warehouses for rice storage in Singapore. This raises its order book to $412.8m. Management acknowledges a tough construction industry, but will strive to secure more projects.
*Kingboard Copper: Parent Kingboard Laminates is proposing to privatize the company at $0.40/share, 17.5% above the last traded price. To recap, the parent failed previously to take the company private in 2009, priced either at $0.21/cash or 0.374 new shares in HK-listed Kingboard Laminates for each Kingboard Copper share.
*Sunpower: Completed a convertible bonds issue of US$110m to China's alternative asset management fund CDH Investments.
*Ezra: 75.3% owned EMAS Offshore will be suspended from trading on the Oslo Bors after it failed to release its FY16 financials before the deadline. In conjunction, EMAS will seek voluntary suspension from SGX until publication of the results.
*Cosco Corp: 51% owned subsidiary Cosco Shipyard delivered a FPSO vessel of 55,942 dwt to its European buyer.
*Asiaphos: Received approval from Sichuan Land Department to renew mining right for Mine 1, now effective to 28 Feb '18.
*Asian Micro Holdings: Acquired a 14,475 sqm plot of land at Pulau Pinang, Malaysia for RM2.75m ($0.9m), for potential redevelopment works.
*Oceanus: Due to urban planning purposes, the Gulei Zhen People’s Government will compulsorily acquire 13 abalone farms owned by Oceanus for Rmb182.5m ($38m). Net proceeds will be for debt repayment and working capital.
Friday, March 3, 2017
SG Market (03 Mar 17)
The market could take a a much needed breather from its heady rally since the start of the year following the long overdue pullback on Wall Street and a potential US rate hike later this month.
Singapore manufacturing activity expanded for the sixth straight month in Feb, albeit at a slightly weaker pace . PMI came in at 50.9, down from Jan's reading of 51.0 due to slower rate of factory output, new orders, new exports and lower imports.Regional bourses slipped in early trading in Tokyo (-0.03%), Seoul (-0.7%) and Sydney (-0.1%).Technically, the STI remains within its uptrend channel between 3,100 and 3,155.
Stocks to watch:
*Dairy Farm: FY16 results beat expectations with underlying net profit of US$460m (+7%), underpinned by improved operating margin in the food division and at IKEA (HK, Taiwan, Indonesia). Despite soft consumer spending and pricing pressure in most markets, revenue inched up 1% to US$11.2b. Bottom line was further supported by strong associate contributions from restaurant division Maxim's and supermarket chain Yonghui. Raised final DPS to US$0.145 (4Q15: US$0.135), bringing full-year payout to US$0.21 (FY15: US$0.20).
*Hongkong Land: FY16 underlying net profit of US$847.8m (-6%) came in below expectations, despite chalking higher revenue of US$1.99b (+3.2%) from positive rental reversions in the HK commercial portfolio and increased occupancy in both HK and SG assets. However, net operating costs jumped 9.1%, while JV/associate income tumbled 16.7% due to lower development profits from Singapore residential properties. Expects stable performance in FY17, underpinned by the commercial property segment. Maintained final DPS US$0.13, bringing FY16 payout to US$0.19 (unch). NAV/share at US$13.30.
*Frasers Hospitality Trust: Master lessee of Kobe Retail Mall, TCC Group, plans to commit up to ¥4.25b for AEI at the mall. As a backdrop, an existing agreement provides TCC all economic benefits and losses, for yet-to-be stabilised malls owned by FHT. This arrangement will cease when the malls turn positive on net operating income, and FHT will make a lump sum payment to TCC for enhancement works upon termination.
*Vard: Secured construction project for a pelagic trawler for Research Fishing Company for NOK350m, with delivery scheduled in 3Q18.*AEM: Received purchase orders for delivery in FY17, lifting order book from $95.7m to $130m. The management is confident of fulfilling $70m of the orders in 1H17.
*Cosco Corp: 51% owned Cosco Shipyard Group secured a contract for three 1,750 TEU container vessels at an undisclosed price. The vessels are scheduled for delivery between 4Q19 and 2Q20.
*Courage Marine: Entered MOU to purchase a tea products exchange business, Fenghui, which is developing a block chain technology global trading platform.
*Spackman: Acquiring an additional 3.27% stake in Spackman Media Group for US$3m ($4.2m), lifting its stake to 27.8%. Funding will be via an issue of 26.2m new shares (6.56% share capital) at $0.161 each. Separately, Spackman proposed a placement of 38.1m (9.55% share capital) new shares to agent UOB Kay Hian at $0.161 apiece. Net proceeds of $5.95m are intended for working capital and new business investments and acquisitions.
Singapore manufacturing activity expanded for the sixth straight month in Feb, albeit at a slightly weaker pace . PMI came in at 50.9, down from Jan's reading of 51.0 due to slower rate of factory output, new orders, new exports and lower imports.Regional bourses slipped in early trading in Tokyo (-0.03%), Seoul (-0.7%) and Sydney (-0.1%).Technically, the STI remains within its uptrend channel between 3,100 and 3,155.
Stocks to watch:
*Dairy Farm: FY16 results beat expectations with underlying net profit of US$460m (+7%), underpinned by improved operating margin in the food division and at IKEA (HK, Taiwan, Indonesia). Despite soft consumer spending and pricing pressure in most markets, revenue inched up 1% to US$11.2b. Bottom line was further supported by strong associate contributions from restaurant division Maxim's and supermarket chain Yonghui. Raised final DPS to US$0.145 (4Q15: US$0.135), bringing full-year payout to US$0.21 (FY15: US$0.20).
*Hongkong Land: FY16 underlying net profit of US$847.8m (-6%) came in below expectations, despite chalking higher revenue of US$1.99b (+3.2%) from positive rental reversions in the HK commercial portfolio and increased occupancy in both HK and SG assets. However, net operating costs jumped 9.1%, while JV/associate income tumbled 16.7% due to lower development profits from Singapore residential properties. Expects stable performance in FY17, underpinned by the commercial property segment. Maintained final DPS US$0.13, bringing FY16 payout to US$0.19 (unch). NAV/share at US$13.30.
*Frasers Hospitality Trust: Master lessee of Kobe Retail Mall, TCC Group, plans to commit up to ¥4.25b for AEI at the mall. As a backdrop, an existing agreement provides TCC all economic benefits and losses, for yet-to-be stabilised malls owned by FHT. This arrangement will cease when the malls turn positive on net operating income, and FHT will make a lump sum payment to TCC for enhancement works upon termination.
*Vard: Secured construction project for a pelagic trawler for Research Fishing Company for NOK350m, with delivery scheduled in 3Q18.*AEM: Received purchase orders for delivery in FY17, lifting order book from $95.7m to $130m. The management is confident of fulfilling $70m of the orders in 1H17.
*Cosco Corp: 51% owned Cosco Shipyard Group secured a contract for three 1,750 TEU container vessels at an undisclosed price. The vessels are scheduled for delivery between 4Q19 and 2Q20.
*Courage Marine: Entered MOU to purchase a tea products exchange business, Fenghui, which is developing a block chain technology global trading platform.
*Spackman: Acquiring an additional 3.27% stake in Spackman Media Group for US$3m ($4.2m), lifting its stake to 27.8%. Funding will be via an issue of 26.2m new shares (6.56% share capital) at $0.161 each. Separately, Spackman proposed a placement of 38.1m (9.55% share capital) new shares to agent UOB Kay Hian at $0.161 apiece. Net proceeds of $5.95m are intended for working capital and new business investments and acquisitions.
Thursday, March 2, 2017
SG Market (02 Mar 17)
Singapore market could get another shot in the arm from positive spillover sentiment from Wall Street, with banks and O&M firms likely to be beneficiaries of fresh fund flows.
Regional bourses opened higher in Tokyo (+1.1%), Seoul (+0.9%) and Sydney (+1.1%).Technically, the STI remains within its uptrend channel between 3,100 and 3,155.
Stocks to watch:
*Japfa: FY16 core net profit jumped 48% to US$130.2m, but still below estimate. Revenue grew 9% to US$3.03b on improvement in all segments; animal protein (+8.5), dairy (+9.7%) and consumer food (+9.7%). Operating margin rose 2.5ppts to 10.3% mainly from higher breeding margin due to increased poultry prices and lower feed costs. First and final DPS raised to 1¢ (0.5¢).
*Citic Envirotech: FY16 net profit doubled to $99.3m on stronger revenue of $544.6m (+62.1%), buoyed by its engineering division (+155.9%). However, gross margin dipped 0.5ppt to 39.1% on a shift in sales mix, while bottom line was boosted by a turnaround in associate contribution to $6.8m (FY15: $0.03m loss). Final DPS raised to 0.75¢ (4Q15: 0.36¢), plus special DPS of 0.25¢ declared, bringing full-year payout to 1¢ (FY15: 0.36¢). Trading at 17.8x P/E and 0.58x P/B.
*Q&M: FY16 net profit of $28.3m (+148%) came in within expectations, lifted by a $21.3m disposal gain from Aidite spinoff. For the quarter, revenue rose 25% to $154.9m on the back of increased contribution from existing and new dental outlets, as well as higher equipment/supplies distribution and manufacturing businesses. Excluding one-off items, core pretax margin improved to 12.9% (+1.7ppts). Expansion plans remain on track. Final DPS was raised to 0.7¢, bringing FY16 payout to 1.12¢ (FY15: 0.84¢). MKE last had a Buy with TP of $1.00.
*World Precision: 4Q16 net profit jumped 38.8% to Rmb30.1m, bringing full year net profit to Rmb0.8m (FY15 net loss: Rmb10.8m). Quarter revenue rose 29.3% to Rmb723.1m, from a 26.5% increase in conventional stamping machines sales and a 69.4% surge in high tonnage stamping machines sales. Gross margin fell 10.9ppt to 19.7%. Bottom line jump was from a 22.8% reduction in other expenses on lower bad debt allowances, as well as from a halving of financial expenses on lower loan balances. NAV/share at Rmb2.56.
*Dutech: 4Q16 net profit fell 5.4% to Rmb20.8m, bringing FY16 net profit to Rmb126.1m (+6.9%), above estimate. Revenue jumped 34.6% to Rmb444.4m, as high security segment (+23.2%) was driven by increased ATM safes sold, while business solutions (+185%) grew from the consolidation of Krauth and Metric. Gross margin fell 1.2ppt to 24.1% from increased steel price, as well as a shift in sales mix. Bottom line drop was driven by the consolidation of Krauth and Metric’s expenses, as well as a 304% surge in finance expenses from increased borrowings. NAV/share at Rmb2.3164.
*Acesian Partners: Swung to FY16 net loss of $2.2m (FY15 net profit: $2.6m). Revenue grew 35.9% to $46.8m, mainly from the manufacturing and engineering segments from higher sales to new customers and certified project works. However, gross margin fell 6.4% to 16.1% amid a dispute regarding Terminal 4 works, while bottom line was further weighed by goodwill impairment ($1m) and bad debt allowance ($0.6m). NAV/share at 3.36¢.
*Cosco Corp: 51% owned Cosco Shipyard secured an order from a European buyer to build one offshore heavy lift vessel at an undisclosed contract value.
Regional bourses opened higher in Tokyo (+1.1%), Seoul (+0.9%) and Sydney (+1.1%).Technically, the STI remains within its uptrend channel between 3,100 and 3,155.
Stocks to watch:
*Japfa: FY16 core net profit jumped 48% to US$130.2m, but still below estimate. Revenue grew 9% to US$3.03b on improvement in all segments; animal protein (+8.5), dairy (+9.7%) and consumer food (+9.7%). Operating margin rose 2.5ppts to 10.3% mainly from higher breeding margin due to increased poultry prices and lower feed costs. First and final DPS raised to 1¢ (0.5¢).
*Citic Envirotech: FY16 net profit doubled to $99.3m on stronger revenue of $544.6m (+62.1%), buoyed by its engineering division (+155.9%). However, gross margin dipped 0.5ppt to 39.1% on a shift in sales mix, while bottom line was boosted by a turnaround in associate contribution to $6.8m (FY15: $0.03m loss). Final DPS raised to 0.75¢ (4Q15: 0.36¢), plus special DPS of 0.25¢ declared, bringing full-year payout to 1¢ (FY15: 0.36¢). Trading at 17.8x P/E and 0.58x P/B.
*Q&M: FY16 net profit of $28.3m (+148%) came in within expectations, lifted by a $21.3m disposal gain from Aidite spinoff. For the quarter, revenue rose 25% to $154.9m on the back of increased contribution from existing and new dental outlets, as well as higher equipment/supplies distribution and manufacturing businesses. Excluding one-off items, core pretax margin improved to 12.9% (+1.7ppts). Expansion plans remain on track. Final DPS was raised to 0.7¢, bringing FY16 payout to 1.12¢ (FY15: 0.84¢). MKE last had a Buy with TP of $1.00.
*World Precision: 4Q16 net profit jumped 38.8% to Rmb30.1m, bringing full year net profit to Rmb0.8m (FY15 net loss: Rmb10.8m). Quarter revenue rose 29.3% to Rmb723.1m, from a 26.5% increase in conventional stamping machines sales and a 69.4% surge in high tonnage stamping machines sales. Gross margin fell 10.9ppt to 19.7%. Bottom line jump was from a 22.8% reduction in other expenses on lower bad debt allowances, as well as from a halving of financial expenses on lower loan balances. NAV/share at Rmb2.56.
*Dutech: 4Q16 net profit fell 5.4% to Rmb20.8m, bringing FY16 net profit to Rmb126.1m (+6.9%), above estimate. Revenue jumped 34.6% to Rmb444.4m, as high security segment (+23.2%) was driven by increased ATM safes sold, while business solutions (+185%) grew from the consolidation of Krauth and Metric. Gross margin fell 1.2ppt to 24.1% from increased steel price, as well as a shift in sales mix. Bottom line drop was driven by the consolidation of Krauth and Metric’s expenses, as well as a 304% surge in finance expenses from increased borrowings. NAV/share at Rmb2.3164.
*Acesian Partners: Swung to FY16 net loss of $2.2m (FY15 net profit: $2.6m). Revenue grew 35.9% to $46.8m, mainly from the manufacturing and engineering segments from higher sales to new customers and certified project works. However, gross margin fell 6.4% to 16.1% amid a dispute regarding Terminal 4 works, while bottom line was further weighed by goodwill impairment ($1m) and bad debt allowance ($0.6m). NAV/share at 3.36¢.
*Cosco Corp: 51% owned Cosco Shipyard secured an order from a European buyer to build one offshore heavy lift vessel at an undisclosed contract value.
Wednesday, March 1, 2017
SG Market (01 Mar 17)
The market could enter a corrective phase with a lot of expectations built into Trump's address to Congress and rising prospects of a Fed rate hike this month. Regional bourses opened higher in Tokyo (+1.2%) and Sydney (-0.2%). Korea market is closed for Independence Day.Technical picture is deteriorating with STI just breaching the downside of its upward trending channel, with next support at 3,088.
Stocks to watch:
*Yangzijiang: 4Q16 net profit surged to Rmb607.8m (4Q15: Rmb41.5m), taking FY16 earnings to Rmb1.75b (-29%), meeting street estimates. Quarter revenue jumped 76% to Rmb5.51b, boosted by its trading business, which contributed Rmb1.05b (4Q15: nil), as well as nine vessels delivered (4Q15: six). Gross margin contracted 3.7ppts to 26% owing to thin trading margin but bottom line was lifted by higher net investment income of Rmb344m generated by its investment segment as well as recognition of forfeited deposits of Rmb226m and the reduced net impairments. Order book stood at US$4.3b at end-2016, comprising 85 vessels, which will keep it busy till 2019. First and final DPS cut to 4¢ (FY15: 4.5¢). Trades at 0.76x P/B.
*Vard: 4Q16 net loss shrank 19% to NOK67m, which helped to narrow FY16 loss to NOK163m (FY15: NOK603m) versus street forecast of NOK147m loss. For the quarter, revenue slumped 35% to NOK2.15b due to reduced activity at its shipyards from low order intake in 2015. But EBITDA rose to NOK67m (4Q15: NOK35m) from positive contribution of certain projects. Order book reduced to NOK12.65b (3Q16: NOK14.08b). Trades at 0.84x P/B.
*UMS: 4Q16 net profit tanked 40% to $5.9m, eroding FY16 earnings to $22.6m (-34%), but still slightly above estimates. Revenue surged 56% to $34.2m on sales of semiconductor integrated systems (+155%), but mitigated by weaker sales in semiconductor components (-2%). However, gross margin collapsed to 45.7% (-30.1ppt) on the shift in sales mix, while bottom line was also hurt by higher staff expenses (+18%) and one-offs totalling $2.6m. Maintained its final and special DPS of 3¢, bringing FY16 payout to 6¢ (unch). NAV/share at $0.4416.
*Super Group: 4Q16 net profit was muted at $15.5m (-1%), dragging FY16 earnings to $44.3m (-6%), below street forecast. Revenue for the quarter rose 9% to $154.3m, as growth in food ingredient sales (+27%) outpaced branded consumer segment (+1%). However, the shift in sales mix and higher raw material costs led to lower gross margin of 35% (-4ppt). Bottom line was dragged by write-offs for inventory and fixed assets of $1.9m, but mitigated by a positive FX swing of $2m and tax incentives. No final DPS was declared in 4Q16 (4Q15: 1.2¢), resulting in a FY16 payout of 1¢ (FY15: 2.2¢).
*Wheelock: 4Q16 net loss deteriorated to $16.4m (4Q15: $0.9m loss), bringing FY16 earnings to $58.4m (+44.7%) missed. Quarter revenue jumped to $224.3m (+107%) on higher development property sales, but the segment led to a sharply lower gross margin of 8.5% (-13.5ppt). Bottom line was further hit by a massive fair value loss on investment property of $53.4m and lower associate contribution (-55%), but was partially offset by a $8.2m write-back of impairment on development property and $9.4m tax credit. Maintained first and final DPS of 6¢. NAV/share at $2.50..
*Hong Fok: FY16 net profit tumbled 56% to $73m, dragged mainly by the absence of a disposal gain (FY15: $81.9m). Revenue slipped 3% to $58.4m on lower rental income from leasing of investment properties and property management income, but was partially offset by higher rental income from the residential units of Concourse Skyline. Maintained first and final DPS of 1¢. NAV/share at $2.24.
*Indofood Agri: 4Q16 core net profit spiked 331% to Rp417.3b, bringing FY16 earnings to Rp467.6b (+72.6%), above consensus estimate of Rp302b. Revenue rose to Rp4.26t (+12.9%) on stronger sales from both plantations (+9.2%) and edible oil products (+14.5%), thanks to higher ASPs for both segments, and increased sales volume for the latter. This lifted gross margin to 33.3% (+9.9ppt). An unknown quantum of DPS will be declared subsequently (FY15: 0.5¢). NAV/share at $0.912.
*Yanlord: 4Q16 earnings jumped 26% to Rmb1.55b, taking FY16 earnings to Rmb2.7b (+84%), significantly above estimates. For the quarter, revenue slipped 3% to Rmb9.9b on lower ASP per sqm sold, but partly offset by a higher gfa delivered. Due to a shift in mix towards projects with relatively lower development costs, gross margin significantly expanded to 42.5% (+17.2ppts), while bottom line was further bolstered by a turnaround in JV income of Rmb17.5m (4Q15: Rmb73.6m loss) and associate income of Rmb1.1m (4Q15: nil). Raised first and final DPS to 4.35¢ (FY15: 1.52¢). NAV/share at Rmb10.84.
*Centurion: 4Q16 net profit tanked 61% to $2.9m, bringing FY16 net profit to $28.7m (-16%) missing street estimates. This was despite stronger operational results, as the lion’s share of profits was attributable to minorities. For the quarter, revenue rose 23% to $34.8m, boosted by a 26% increase in the accommodation business. The business saw better performance at Singapore worker dormitories, as well as student accommodation assets in UK, Singapore and Australia. Bottom line was impacted by a $3.1m fair value loss on investment properties. Final DPS of 1¢ maintained, bringing full year DPS to 2¢ (FY15: 1.5¢).
*Food Empire: Swung to 4Q16 net profit of US$2.9m (4Q16: US$3.2m net loss), bringing FY16 net profit to US$14.5m (FY15: US$0.2m), in line with the single broker estimate on the street. Quarter revenue jumped 11.4% to US$70m, hoisted by Russia (+12.2%), Indochina (+28.7%), other markets (+41.1%), and notably Ukraine (+8.5%). Gross margin improved 0.4ppt to 37.8%. Bottom line was also shored by a steep 90.9% narrowing of FX loss to US$0.6m. First and final DPS of 0.6¢ (FY15: nil). NAV/share at US$0.2883.
*Sunpower: FY16 net profit spiked 81.7% to Rmb145.7m, on a 13.3% growth in revenue to Rmb1.63b, attributed to increased contributions from both EPC integrated solutions and environmental equipment manufacturing. Gross margin inched higher to 25.1% (+2.8ppts), while bottom line was lifted by higher government grant received and a reversal of impairment. First and final DPS of 0.12¢ maintained.
*Sino Grandness: Booked 4Q16 net loss of Rmb106m (4Q15: Rmb104.5m loss), bringing FY16 earnings to Rmb578.2m (FY15: Rmb206.7m profit). Quarterly revenue tumbled 36% to Rmb548.9m, amid weaker overseas (-44%) and domestic (-21.3%) canned products sales, as well as drop in beverage (-37%) turnover. Gross margin was stable at 42.4%. Bottom line was hit by ballooning distribution costs (+51%) admin expenses (+81%), and Rmb11.9m FX loss, but cushion by a sharp reduction in finance costs (-96.7%) and a Rmb15.4m tax credit. No dividends was declared in FY16 (FY15: Rmb0.018). NAV/share at Rmb3.568..
*Straco: 4Q16 net profit was down 1.9% to $6.1m, bringing full year net profit to $46.4m (-5.2%). Quarter revenue dropped 2.5% to $23.2m, from lower contributions from Underwater World Xiamen, partially offset by higher revenue from Shanghai Ocean Aquarium, Lixing Cable Car and the Singapore Flyer. Overall, visitors fell 2.6% to 915,000 in the quarter. Raised first and final DPS to 2.5¢, although there was no special DPS (FY15 payout: 2.5¢). NAV/share at 28.19¢.
*Midas: FY16 net profit surged 76.3% to Rmb100.8m, while revenue fell 1.8ppt to Rmb1.49b, from lower aluminium alloy extruded products contributions of Rmb1.3b (-13.8%), partially offset by Rmb182m of aluminium alloy stretched plates sales (new division). Gross margin rose 2.8ppt to 29.7%. Bottom line was lifted by a 72% increase in other income from government subsidies, as well as from operating leverage. NAV/share at Rmb2.35.
*Mermaid Maritime: Swung to FY16 net profit of US$17.2m (FY15: US$232.6m net loss), amid the absence of US$163.3m of impairment losses. Revenue fell 45% to US$185.2m on lower utilization and lower rates at subsea business. Bottom line was also lifted by US$11.5m share of profit from associates (FY15: US$50.4m loss), largely from the absence of impairment at Asia Offshore Drilling. NAV/share at US$0.24.
*Yeo Hiap Seng: 4Q16 net profit fell 27.4% to $10.3m, bringing full year net profit to $29m (-21.4%). Quarter revenue fell 4.3% to $91.5m, while gross margin fell 3.8ppt to 36.2% due to higher raw material costs. Although the company enjoyed $16.9m gains (incl. property & FX), this was largely negated by rising admin expenses (+116%). First and final DPS of 2¢ maintained. NAV/share at $1.1759.
*Yongnam: FY16 net loss dived deeper to $31.6m (FY15: $3.3m loss), despite revenue rising 19.2% to $321.4m, as higher contributions from structural steelworks (+21.7%) and mechanical engineering (+5.5x) businesses were pared by specialist civil engineering division (-23%) due to the tailing down of Downtown Line 2 and 3 projects. FY16 swung to a gross loss of $13.8m (FY15: $19.7m profit), undermined by project cost overrun and variation order issues. Bottom line was also hurt by higher taxes (+270%). NAV/share dropped 33% to $0.6294.
*Hong Leong Asia: FY16 net loss worsened 17.3% to $71.3m, as the profits from diesel engine unit (Yuchai) and building materials unit (BMU) were not able to offset losses in consumer products unit (Xinfei). Revenue fell 8.8% to $3.7b, as Yuchai (-5.6%) and Xinfei (-12.8%) were affected by slower economic growth in China, while BMU (-20.2%) saw competition intensify in Singapore and Malaysia. First and final DPS of 1¢ (FY15 payout: 2¢). NAV/share at $1.8679.
*China Sunsine: 4Q16 net profit jumped 46% to Rmb66.3m, bringing FY16 net profit to Rmb221.7m (+14%). Quarter revenue grew 22% to Rmb553.4m, from increased orders, particularly from tire makers, as competitors’ production were forced to cease by some local governments (e.g. Tianjin, Henan) due to smog “red alert”. Gross margin increased 3.7ppt to 27.2% from economies of scale. Bottom line also benefitted from scale as opex rose at a slower clip. First and final DPS, as well as special DPS of 1¢ and 0.5¢ respectively, were maintained..
*GSH: Swung to a 4Q16 net loss of $3.3m (4Q15: $6.6m profit), dragging FY16 into the red with losses of $3.6m (FY15: $16.4m profit). Quarterly revenue plunged 70% to $17.7m amid as phase 1 property sales at GSH Plaza completed in 2015, with phase 2 slated to launch in 1Q17. While gross margin widened 16ppt to 51%, bottom line was hurt by a doubling in admin expense on new regulated wage structure in Malaysia, and a $4.3m adverse swing in fair value of investment property. NAV/share at $0.1765.
*Figtree: 4Q16 net profit tanked dropped 30.6% to $2m, bringing full year net profit to $10.2m (-18.7%). Quarter revenue halved to $14.6m (-53.6%) from a high base, as various major projects were completed last year. However, gross margin jumped 37.9ppt to 50.2% from cost savings. However, bottom line was dragged by a 117% increase in admin costs from the marketing costs for 303 La Trobe in Melbourne, as well as a $2.45m allowance for doubtful debts. Shaved first and final DPS to 1.25¢ (FY15: 1.6¢). NAV/share at 15.36¢.
*Golden Energy and Resources: Turned around to a FY16 net profit of US$21.8m (FY15: US$9.4m loss) on firmer revenue of US$393.3m (+9.3%), mainly driven by coal mining division (+9.7%) on higher sales volume and a 17.6% y/y increase in average selling price in 4Q16. Gross margin expanded 5.6ppt to 36.6%, as direct costs remained stable. Bottom line was further boosted by lower freight and amortisation costs, absence of US$5.2m FX loss, as well as higher other income (+121%). NAV/share surged 43.7% to US$0.1265.
*Abundance International: FY16 headline net loss narrowed to US$0.8m (FY15: US$6.1m loss). Revenue of US$109.9m (FY15: US$7.6m) was mainly from the new chemical trading business, which achieved segmental profit of US$0.7m. NAV/share at US2.93¢.
*Uni-Asia: Sank to a 4Q16 net loss of US$13.6m (4Q15: US$5,000 profit), on US$8.6m of fixed assets impairment and a $3.5m provision for onerous contract, thereby pulling FY16 into a net loss of US$14.2m (FY15: US$2.7m profit). Quarterly revenue edged up to US$21.8m (+4%) as growth in charter (+13%) and hotel (+33%) income, offset lower fee income (-69%) and investment returns (-53%). Operating margin excluding the two one-offs collapsed to 3.5% (-12.5ppt) Slashed first and final DPS to 3¢ (FY15: 6.25¢). NAV/share at US$2.68.
*Wong Fong Industries: FY16 net profit fell 36.3% to $3.6m, while revenue fell 9.6% to $70.2m from lower equipment sales amid a challenging environment, offset by higher contributions from projects and training. However, bottom line was affected by negative operating leverage as expenses stayed stubborn. Final DPS of 0.3¢ announced (FY15: nil). NAV/share at 18.76¢.
*Ezra: 40% owned Emas Chiyoda Subsea filed for bankruptcy protection after receiving several arbitration claims. Parent corporate guarantor, Ezra, is currently undergoing efforts to consolidate its funding requirements, failing which, it would be faced with a going concern issue. Trades at 0.17x P/B.
*Tiong Seng: Awarded $113.8m construction contract at Alexandra View, which comprises design, construction and maintenance of a block of residential flats, two basement carpark, and amenities.
Stocks to watch:
*Yangzijiang: 4Q16 net profit surged to Rmb607.8m (4Q15: Rmb41.5m), taking FY16 earnings to Rmb1.75b (-29%), meeting street estimates. Quarter revenue jumped 76% to Rmb5.51b, boosted by its trading business, which contributed Rmb1.05b (4Q15: nil), as well as nine vessels delivered (4Q15: six). Gross margin contracted 3.7ppts to 26% owing to thin trading margin but bottom line was lifted by higher net investment income of Rmb344m generated by its investment segment as well as recognition of forfeited deposits of Rmb226m and the reduced net impairments. Order book stood at US$4.3b at end-2016, comprising 85 vessels, which will keep it busy till 2019. First and final DPS cut to 4¢ (FY15: 4.5¢). Trades at 0.76x P/B.
*Vard: 4Q16 net loss shrank 19% to NOK67m, which helped to narrow FY16 loss to NOK163m (FY15: NOK603m) versus street forecast of NOK147m loss. For the quarter, revenue slumped 35% to NOK2.15b due to reduced activity at its shipyards from low order intake in 2015. But EBITDA rose to NOK67m (4Q15: NOK35m) from positive contribution of certain projects. Order book reduced to NOK12.65b (3Q16: NOK14.08b). Trades at 0.84x P/B.
*UMS: 4Q16 net profit tanked 40% to $5.9m, eroding FY16 earnings to $22.6m (-34%), but still slightly above estimates. Revenue surged 56% to $34.2m on sales of semiconductor integrated systems (+155%), but mitigated by weaker sales in semiconductor components (-2%). However, gross margin collapsed to 45.7% (-30.1ppt) on the shift in sales mix, while bottom line was also hurt by higher staff expenses (+18%) and one-offs totalling $2.6m. Maintained its final and special DPS of 3¢, bringing FY16 payout to 6¢ (unch). NAV/share at $0.4416.
*Super Group: 4Q16 net profit was muted at $15.5m (-1%), dragging FY16 earnings to $44.3m (-6%), below street forecast. Revenue for the quarter rose 9% to $154.3m, as growth in food ingredient sales (+27%) outpaced branded consumer segment (+1%). However, the shift in sales mix and higher raw material costs led to lower gross margin of 35% (-4ppt). Bottom line was dragged by write-offs for inventory and fixed assets of $1.9m, but mitigated by a positive FX swing of $2m and tax incentives. No final DPS was declared in 4Q16 (4Q15: 1.2¢), resulting in a FY16 payout of 1¢ (FY15: 2.2¢).
*Wheelock: 4Q16 net loss deteriorated to $16.4m (4Q15: $0.9m loss), bringing FY16 earnings to $58.4m (+44.7%) missed. Quarter revenue jumped to $224.3m (+107%) on higher development property sales, but the segment led to a sharply lower gross margin of 8.5% (-13.5ppt). Bottom line was further hit by a massive fair value loss on investment property of $53.4m and lower associate contribution (-55%), but was partially offset by a $8.2m write-back of impairment on development property and $9.4m tax credit. Maintained first and final DPS of 6¢. NAV/share at $2.50..
*Hong Fok: FY16 net profit tumbled 56% to $73m, dragged mainly by the absence of a disposal gain (FY15: $81.9m). Revenue slipped 3% to $58.4m on lower rental income from leasing of investment properties and property management income, but was partially offset by higher rental income from the residential units of Concourse Skyline. Maintained first and final DPS of 1¢. NAV/share at $2.24.
*Indofood Agri: 4Q16 core net profit spiked 331% to Rp417.3b, bringing FY16 earnings to Rp467.6b (+72.6%), above consensus estimate of Rp302b. Revenue rose to Rp4.26t (+12.9%) on stronger sales from both plantations (+9.2%) and edible oil products (+14.5%), thanks to higher ASPs for both segments, and increased sales volume for the latter. This lifted gross margin to 33.3% (+9.9ppt). An unknown quantum of DPS will be declared subsequently (FY15: 0.5¢). NAV/share at $0.912.
*Yanlord: 4Q16 earnings jumped 26% to Rmb1.55b, taking FY16 earnings to Rmb2.7b (+84%), significantly above estimates. For the quarter, revenue slipped 3% to Rmb9.9b on lower ASP per sqm sold, but partly offset by a higher gfa delivered. Due to a shift in mix towards projects with relatively lower development costs, gross margin significantly expanded to 42.5% (+17.2ppts), while bottom line was further bolstered by a turnaround in JV income of Rmb17.5m (4Q15: Rmb73.6m loss) and associate income of Rmb1.1m (4Q15: nil). Raised first and final DPS to 4.35¢ (FY15: 1.52¢). NAV/share at Rmb10.84.
*Centurion: 4Q16 net profit tanked 61% to $2.9m, bringing FY16 net profit to $28.7m (-16%) missing street estimates. This was despite stronger operational results, as the lion’s share of profits was attributable to minorities. For the quarter, revenue rose 23% to $34.8m, boosted by a 26% increase in the accommodation business. The business saw better performance at Singapore worker dormitories, as well as student accommodation assets in UK, Singapore and Australia. Bottom line was impacted by a $3.1m fair value loss on investment properties. Final DPS of 1¢ maintained, bringing full year DPS to 2¢ (FY15: 1.5¢).
*Food Empire: Swung to 4Q16 net profit of US$2.9m (4Q16: US$3.2m net loss), bringing FY16 net profit to US$14.5m (FY15: US$0.2m), in line with the single broker estimate on the street. Quarter revenue jumped 11.4% to US$70m, hoisted by Russia (+12.2%), Indochina (+28.7%), other markets (+41.1%), and notably Ukraine (+8.5%). Gross margin improved 0.4ppt to 37.8%. Bottom line was also shored by a steep 90.9% narrowing of FX loss to US$0.6m. First and final DPS of 0.6¢ (FY15: nil). NAV/share at US$0.2883.
*Sunpower: FY16 net profit spiked 81.7% to Rmb145.7m, on a 13.3% growth in revenue to Rmb1.63b, attributed to increased contributions from both EPC integrated solutions and environmental equipment manufacturing. Gross margin inched higher to 25.1% (+2.8ppts), while bottom line was lifted by higher government grant received and a reversal of impairment. First and final DPS of 0.12¢ maintained.
*Sino Grandness: Booked 4Q16 net loss of Rmb106m (4Q15: Rmb104.5m loss), bringing FY16 earnings to Rmb578.2m (FY15: Rmb206.7m profit). Quarterly revenue tumbled 36% to Rmb548.9m, amid weaker overseas (-44%) and domestic (-21.3%) canned products sales, as well as drop in beverage (-37%) turnover. Gross margin was stable at 42.4%. Bottom line was hit by ballooning distribution costs (+51%) admin expenses (+81%), and Rmb11.9m FX loss, but cushion by a sharp reduction in finance costs (-96.7%) and a Rmb15.4m tax credit. No dividends was declared in FY16 (FY15: Rmb0.018). NAV/share at Rmb3.568..
*Straco: 4Q16 net profit was down 1.9% to $6.1m, bringing full year net profit to $46.4m (-5.2%). Quarter revenue dropped 2.5% to $23.2m, from lower contributions from Underwater World Xiamen, partially offset by higher revenue from Shanghai Ocean Aquarium, Lixing Cable Car and the Singapore Flyer. Overall, visitors fell 2.6% to 915,000 in the quarter. Raised first and final DPS to 2.5¢, although there was no special DPS (FY15 payout: 2.5¢). NAV/share at 28.19¢.
*Midas: FY16 net profit surged 76.3% to Rmb100.8m, while revenue fell 1.8ppt to Rmb1.49b, from lower aluminium alloy extruded products contributions of Rmb1.3b (-13.8%), partially offset by Rmb182m of aluminium alloy stretched plates sales (new division). Gross margin rose 2.8ppt to 29.7%. Bottom line was lifted by a 72% increase in other income from government subsidies, as well as from operating leverage. NAV/share at Rmb2.35.
*Mermaid Maritime: Swung to FY16 net profit of US$17.2m (FY15: US$232.6m net loss), amid the absence of US$163.3m of impairment losses. Revenue fell 45% to US$185.2m on lower utilization and lower rates at subsea business. Bottom line was also lifted by US$11.5m share of profit from associates (FY15: US$50.4m loss), largely from the absence of impairment at Asia Offshore Drilling. NAV/share at US$0.24.
*Yeo Hiap Seng: 4Q16 net profit fell 27.4% to $10.3m, bringing full year net profit to $29m (-21.4%). Quarter revenue fell 4.3% to $91.5m, while gross margin fell 3.8ppt to 36.2% due to higher raw material costs. Although the company enjoyed $16.9m gains (incl. property & FX), this was largely negated by rising admin expenses (+116%). First and final DPS of 2¢ maintained. NAV/share at $1.1759.
*Yongnam: FY16 net loss dived deeper to $31.6m (FY15: $3.3m loss), despite revenue rising 19.2% to $321.4m, as higher contributions from structural steelworks (+21.7%) and mechanical engineering (+5.5x) businesses were pared by specialist civil engineering division (-23%) due to the tailing down of Downtown Line 2 and 3 projects. FY16 swung to a gross loss of $13.8m (FY15: $19.7m profit), undermined by project cost overrun and variation order issues. Bottom line was also hurt by higher taxes (+270%). NAV/share dropped 33% to $0.6294.
*Hong Leong Asia: FY16 net loss worsened 17.3% to $71.3m, as the profits from diesel engine unit (Yuchai) and building materials unit (BMU) were not able to offset losses in consumer products unit (Xinfei). Revenue fell 8.8% to $3.7b, as Yuchai (-5.6%) and Xinfei (-12.8%) were affected by slower economic growth in China, while BMU (-20.2%) saw competition intensify in Singapore and Malaysia. First and final DPS of 1¢ (FY15 payout: 2¢). NAV/share at $1.8679.
*China Sunsine: 4Q16 net profit jumped 46% to Rmb66.3m, bringing FY16 net profit to Rmb221.7m (+14%). Quarter revenue grew 22% to Rmb553.4m, from increased orders, particularly from tire makers, as competitors’ production were forced to cease by some local governments (e.g. Tianjin, Henan) due to smog “red alert”. Gross margin increased 3.7ppt to 27.2% from economies of scale. Bottom line also benefitted from scale as opex rose at a slower clip. First and final DPS, as well as special DPS of 1¢ and 0.5¢ respectively, were maintained..
*GSH: Swung to a 4Q16 net loss of $3.3m (4Q15: $6.6m profit), dragging FY16 into the red with losses of $3.6m (FY15: $16.4m profit). Quarterly revenue plunged 70% to $17.7m amid as phase 1 property sales at GSH Plaza completed in 2015, with phase 2 slated to launch in 1Q17. While gross margin widened 16ppt to 51%, bottom line was hurt by a doubling in admin expense on new regulated wage structure in Malaysia, and a $4.3m adverse swing in fair value of investment property. NAV/share at $0.1765.
*Figtree: 4Q16 net profit tanked dropped 30.6% to $2m, bringing full year net profit to $10.2m (-18.7%). Quarter revenue halved to $14.6m (-53.6%) from a high base, as various major projects were completed last year. However, gross margin jumped 37.9ppt to 50.2% from cost savings. However, bottom line was dragged by a 117% increase in admin costs from the marketing costs for 303 La Trobe in Melbourne, as well as a $2.45m allowance for doubtful debts. Shaved first and final DPS to 1.25¢ (FY15: 1.6¢). NAV/share at 15.36¢.
*Golden Energy and Resources: Turned around to a FY16 net profit of US$21.8m (FY15: US$9.4m loss) on firmer revenue of US$393.3m (+9.3%), mainly driven by coal mining division (+9.7%) on higher sales volume and a 17.6% y/y increase in average selling price in 4Q16. Gross margin expanded 5.6ppt to 36.6%, as direct costs remained stable. Bottom line was further boosted by lower freight and amortisation costs, absence of US$5.2m FX loss, as well as higher other income (+121%). NAV/share surged 43.7% to US$0.1265.
*Abundance International: FY16 headline net loss narrowed to US$0.8m (FY15: US$6.1m loss). Revenue of US$109.9m (FY15: US$7.6m) was mainly from the new chemical trading business, which achieved segmental profit of US$0.7m. NAV/share at US2.93¢.
*Uni-Asia: Sank to a 4Q16 net loss of US$13.6m (4Q15: US$5,000 profit), on US$8.6m of fixed assets impairment and a $3.5m provision for onerous contract, thereby pulling FY16 into a net loss of US$14.2m (FY15: US$2.7m profit). Quarterly revenue edged up to US$21.8m (+4%) as growth in charter (+13%) and hotel (+33%) income, offset lower fee income (-69%) and investment returns (-53%). Operating margin excluding the two one-offs collapsed to 3.5% (-12.5ppt) Slashed first and final DPS to 3¢ (FY15: 6.25¢). NAV/share at US$2.68.
*Wong Fong Industries: FY16 net profit fell 36.3% to $3.6m, while revenue fell 9.6% to $70.2m from lower equipment sales amid a challenging environment, offset by higher contributions from projects and training. However, bottom line was affected by negative operating leverage as expenses stayed stubborn. Final DPS of 0.3¢ announced (FY15: nil). NAV/share at 18.76¢.
*Ezra: 40% owned Emas Chiyoda Subsea filed for bankruptcy protection after receiving several arbitration claims. Parent corporate guarantor, Ezra, is currently undergoing efforts to consolidate its funding requirements, failing which, it would be faced with a going concern issue. Trades at 0.17x P/B.
*Tiong Seng: Awarded $113.8m construction contract at Alexandra View, which comprises design, construction and maintenance of a block of residential flats, two basement carpark, and amenities.
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