Friday, September 29, 2017

SG Market (29 Sep 17)

- Market is still showing no clear direction although downside could be supported by end 3Q window dressing and improving technicals.
- Technically, overhead resistance for the STI lies at 3,275 (50-dma), while downside at 3,210 is supported by rising Stochastics and a positive MACD crossover.

- 70:30 JV submitted the top bid of $1.62b for the 2-ha Beach Road commercial site, beating four other contenders, with all offers above the trigger price of $1.138b.
- The price tag translates to a faily aggressive $1,706 psf ppr and is almost 60% higher than the $1,068 psf ppr paid by a City Dev led consortium for the adjacent South Beach site back in 2007.
- This reflects renewed confidence among developers in Singapore's office market in the next 4-5 years when the new development is expected to be ready in 2022.
- MKE believes the $2.4b mixed-use project with maximum permissible gfa of 950,592 sf, of which 70% must be for office, will be profitable and estimates a attributable surplus of $0.06/share for the group.
- Buy maintained with TP of $2.75.

- 50:50 JV with Kheng Leong (owned by controlling Wee family), has won the tender for 36-unit Nanak Mansions in a $201.1m en bloc deal, or $1,429 psf ppr.
- The 109,629 sf freehold site has a gross plot ratio of 1.4, which could yield gfa of 143,482 sf or ~200 units.
- Inclusive of development charges the purchase price works out to $1.429 psf ppr, which is comparable to the $1,409 psf fetched by nearby The Albracca in a collective sale in Jul this year.
- With estimated breakeven cost of $1,900 psf, the new development couldl reap slim margins unless home prices rebound .
- Last traded at a 26% discount to RNAV of $11.03/share.

- Formed a 15-year regional general insurance distribution partnership with US-listed Chubb, covering five key markets: Singapore, HK, Taiwan, Indonesia and China.
- The US$350m business deal will be progressively rolled out from early-2018 and will have minimal impact of less than 1% on group earnings.
- Last traded at 1.15x P/B.

- Acquiring NZI Centre at 1 Fanshawe Street in Auckland, New Zealand, for NZ$63m.
- The five-storey commercial office building has a net lettable area of 9,446 sqm and is fully leased to IAG New Zealand, the largest insurer in the country.
- The CBD property has a leasehold tenure until 31 Dec '36 and is perpetually renewable for 20 years.
- Last traded at 15.6x trailing P/E.

*Koh Brothers Eco Eng
- Its 35:65 JVCo with Penta-Ocean Construction clinched a $520m contract related to the Deep Tunnel Sewerage System Phase 2 project.
- The contract is targeted to complete in Jun '23, and will lift its order book to $878.9m.

*COSCO Shipping
- 51% owned subsidiary COSCO Shipyard secured a contract with a European buyer for four 82,000 tonnes bulk carriers for an undisclosed amount.
- The contract contains two options to build another four similar units.
- The four initial bulk carriers are scheduled for delivery between 3Q19 and 2H20.

*Imperium Crown
- Divesting two mixed development properties in Tokyo, namely Green Forest Itabashi (building area: 4,074 sqm) and Hatchobori Place (2,924 sqm) for $38.2m.
- Group is expected to record a disposal loss of $6.75m.

- Responded to SGX trading query that the group is in early stages of exploratory discussions for potential divestment of assets.
- Group will make further announcement upon any material development.

*Soilbuild Construction
- Bolstered the equity of its procurement arm by $8.5m.
- The additional investment will allow the arm to meet requirements for an A1 grading by the BCA, which would allow it to tender for public construction projects of unlimited contract sum.

*Aspen Group
- To revoke the proposed acquisition of two freehold land sites in Bandar Baru 18, Semenyih, Malaysia, for RM10m.
- The turnaround was due to the inability to obtain regulatory approval to increase maximum selling price and unit density for the existing affordable housing development plan.
- Separately, the group is acquiring an adjacent land measuring 22,954 sqm from the same vendor, KL-listed Tropicana Corp, for RM66.7m.
- The new land has been approved for development of two blocks of residential properties comprising SOHO and serviced apartments, and 16 retail shop lots.
- Estimated gross development value is RM500m.

Thursday, September 28, 2017

SG Market (28 Sep 17)

- Positive spillover from the overnight jump in US on a sweeping Trump tax plan could drive the market higher, with banks and property counters to benefit from the reflation trade.
- Technically, the STI could test its 50-dma at 3,275, with near-term support at 3,210.

- Awarded several contracts by Jemena Northern Gas Pipeline at the Phillip Creek Compressor Station in Northern Territory, Australia for an undisclosed sum.
- The scope of work includes camp setup, site civil, structural steel fabrication and installation works and will be completed in Aug 2018.
- This project will lift its order book to $640m.
- Last traded at 34.9x trailing P/E.

*Geo Energy
- Received strong demand for its US$300m 8% 5-year notes.
- The offering saw an oversubscription in excess of 3x with a total order book over US$1.2b.
- Proceeds will be used to redeem the outstanding $100m 7.0% medium term notes, full repayment of advances received from Engelhart Commodities Trading, potential acquisitions of coal mining assets and general working capital.

*KLW Holdings
- Entered agreement with PT Karya Bintang Utara (affiliate of PT Codefin) to set up 65:35 JV, PT Ambertree Development Jakarta, with total initial capital of US$21.8m.
- JVCo will be acquiring a prime land in South Jakarta for Rp285b from an affiliate of PT Codefin, to develop a mixed used residential development with retail and commercial components.

- Signed MOU with Pahtama Group, one of Myanmar's largest and fastest growing distribution companies in fast moving consumer goods, to incorporate a 60:40 JV in Myanmar.
- The proposed JVCo will provide marketing services in the retail and consumer goods industries in Myanmar.
- Trades at 14.6x trailing P/E.

*Ocean Sky
- Proposed disposal of a parcel of freehold land in Phnom Penh, Cambodia, for US$22m.
- Post-sale, the group expects to record a pretax gain of US$9.2m, with net proceeds used for future JVs and working capital.
- Notably, the sale price will bring the group into a net cash position of US$26.8m ($36.4m), or $0.112/share.
- This compares to the group's market cap of $19.5m based on the last close of $0.06/share.

*CapitaLand Commercial Trust (CCT)
- Credit ratings downgraded by Moody's to Baa2 from A3 with stable outlook.
- CCT's financial profile is expected to weaken following CCT's debt-funded $2.1b acquisition of Asia Square Tower 2, and during the four-year redevelopment of Golden Shoe car park.
- Trading at 5.3% yield and 0.93x P/B.

*Cheung Woh Tech
- Expected to report 2QFY18 loss due to damages suffered from Typhoon Sato, as well as the failure of its baseplates to meet customer's specifications.
- Slated to release results on or before 13 Oct.

*ST Engineering
- JV between ST Marine (40%) and Tuas Power (60%) has been selected to design, build, own and operate a seawater desalination plant in Jurong Island for a concession period of 25 years commencing 2020.
- The plant is expected to have a design capacity of 137,000 cubic metres/day.
- Last traded at 21.7x forward P/E.

*Roxy Pacific
- Refuted media reports that it had demolished much of the historic facade of The Hensley in Sydney, Australia without the approval of authorities.
- Mentioned that works currently being carried out on site are in accordance with development approval.
- Termed the "high-handed" developer who smashed down protected 1912 Edwardian facade by Australian media source Domain, the report cited Roxy could face maximum fines of A$5m.
- Trades at 15.2x trailing P/E and 1.23x P/B.

*Raffles Education
- Proposed placement of up to 95m new shares at $0.30 apiece to placement agent RHB Securities.
- Estimated gross proceeds of $28.5m will be used for debt repayment (70-80%) and general working capital (20-30%).

*Mary Chia
- Offeror Suki Sushi has received valid acceptances that take its ownership to 90.1%.
- Amid the loss of minimum public float, the offeror has no intention of maintaining the listing of the group.
- The cash offer remains open until 6 Oct '17.

Wednesday, September 27, 2017

SG Market (27 Sep 17)

- Expect lacklustre market activity amid simmering geopolitical uncertainty with some bargain hunting in oil-related and property counters.
- Aug manufacturing output beat forecast to soar 19.1% (est: +16%) for the 13th straight month of growth, sustained by the booming electronics demand. MKE expects the economy to strengthen significantly this quarter, pencilling GDP growth of 3.8% (2Q17: 2.9%).
- Technically, underlying support for STI is at 3,190, with immediate resistance at 3,235 (20-dma).

- Freehold prime development Jervois Gardens received an enbloc tender of $72m from SC Global.
- The price translates to ~$1,373 psf ppr for the 34,038 sf site with plot ratio of 1.4.
- MKE is positive on property developers. UOL (Buy, TP: $9.43) and City Dev (Buy, TP: $12.05) are its top large-cap picks, while GuocoLand (Buy, TP: $2.75) offers compelling relative value.

*Oil & Gas
- Global oil trader Trafigura sees an end of persistently weak oil prices, with demand picking up and a supply crunch in the offing.
- The third largest independent trader foresees a shortage of crude supply by 2019, due to overwhelming demand from India.
- Beneficiaries include rigbuilders Sembcorp Marine, Keppel Corp and other oil-related counters.

- INR/USD futures achieved a daily volume record of 108,417 contracts with notional value of US$3.34b on 22 Sep.
- Recent volume growth has expanded its market share to more than 40%.
- The exchange also recorded the highest daily volume of 25,857 contracts for USD/CNH futures, valued at US$2.59b.
- Last traded at 21.5x forward P/E.

*Mapletree Industrial Trust (MINT)
- Expanding its investment mandate to include overseas data centres.
- The strategy change builds on MIT's track record in building data centres in Singapore and extends its foothold in the fast growing segment.
- The trust currently has 4 data centres in Singapore, of which one is under development. Last traded at 6.4% yield and 1.3x P/B.

*Pacific Star Development
- Signed an MOU to partner Indonesia's PT Kukuh Mandiri to jointly develop mixed-used high rise developments on 10ha of sea-front land in Pantai India Kapuk 2, Jakarta, Indonesia.
- The waterfront township project will comprise residential, commercial, hospitality, education, healthcare and recreational components.
- A successful JV will mark its entry into the Indonesian real estate market as part of its ASEAN expansion strategy.

*Mandarin Oriental
- Updated that none of the proposals received for the sale of The Excelsior, Hong Kong, has not met its expectations.
- The group is continuing to review all options, including a redevelopment of the 848-room hotel into a 684,000 sf commercial building.
- Without the sale, the group will not be unlocking the US$3.84b valuation tagged to the hotel, which exceeds its US$3.51b market cap.
- Last traded at a 9.7% discount to its adjusted NAV/share of US$3.10 but above book value of US$0.93. With the re-rating catalyst no longer forthcoming, we are removing the counter from Market Insight Value basket.

*Boustead Projects
- Directed by SCDF to remove external cladding on walls of its leasehold property at 10 Tukang Innovation Drive, after it was found that the cladding did not meet fire safety requirements.

- Granted an option to acquire a freehold corner shophouse at 22 and 22A Lorong Mambong, with land area of 2,350 sf, for $16.2m.
- Option expires on 9 Oct '17.

Tuesday, September 26, 2017

SG Market (26 Sep 17)

- Sentiment continue to be weighed by the latest verbal flare-up between US and North Korea but oil-linked counters could be spurred by the overnight spike in crude prices following a Turkish threat to block Kurdish oil exports and market expectations that OPEC output cuts could be extended.
- Technically, underlying support for STI is at 3,190, with near-term overhead resistance at 3,235 (20-dma).

*TTJ Holdings
- FY17 net profit tumbled 58% to $10.9m, on the back of a 39% slump in revenue to $82.9m.
- The revenue fall came amid broad-based declines across structural steel (-35%) and dormitory (-67%) businesses.
- Gross margin narrowed to 24.6% (-4.3ppt) on a shift in revenue mix.
- Order book stood at $152m, providing visibility till FY21.
- First and final DPS slashed to 0.7¢ (FY16: 1.7¢).
- NAV/share at $0.3756.

*Ascendas REIT
- Acquired an office property at 100 Wickham Street on the fringe of CBD in Brisbane, Australia for A$89.9m.
- The 14-storey freehold building has net lettable area of 13,131 sqm and weighted average lease-to-expiry of 4.8 years, with annual rental escalation of 3-4%.
- Key tenants include the State of Queensland (Department of Health) and three data centre operators.
- NPI yield for the first year is 7.1%, above AREIT's current 6.2% distribution yield.
- MKE maintains Buy and TP of $2.90.

*Hi-P Int'l
- Upgraded guidance for a higher y/y revenue and profit (previous: similar) in 3Q17 due to better-than-expected sales and improving operational efficiency.
- The group is a beneficiary of iPhone sales.
- Last traded at 11.7x forward P/E.

- One of its portfolio companies, Fidmi Medical, has received a $2m investment from German healthcare giant B. Braun.
- The investment will be used to complete clinical trials and prepare for the market entry of its low-profile enteral feeding device (nutrition through a tube).
- Trades at 0.72x P/B

*Koh Brothers Eco Engineering
- Awarded a $225.4m contract by LTA for construction of the Circle Line 6 MRT project.
- The 4km line comprises three stations that will close the loop for the Circle Line by connecting Harbourfront and Marina Bay stations.
- Work scope involves civil, structural, architectural, electrical & mechanical and system works for the tunnels and other structures from the planned Prince Edward Station to the existing Marina Bay Station.
- Work will commence by end-2017 and is expected to be completed by 2025.
- The contract will lift its order book to $696.9m.
- Last traded at 7x trailing P/E.

*Mermaid Maritime
- Its Middle East JV has secured a US$96m contract extension for offshore inspection, repair and maintenance services with a national oil & gas company, following its initial five-year contract.
- Trading at 11.8x forward P/E.

*Frasers Commercial Trust
- Moody's has affirmed FCOT's Baa2 credit ratings but downgraded its outlook from stable to negative.
- The change in outlook is to reflect the weakening of its financial profile, given the anticipated increase in vacancy rates following Hewlett Packard Enterprise Singapore's intention to vacate over 90% of its space upon lease expiry on 30 Sep and 30 Nov.
- Last traded at 6.9% yield and 0.92x P/B.

*Starland Holdings
- Proposed $158m RTO deal to acquire fintech and social trading firm, Ayondo, placement of 134.9m new shares and disposal of Starland Axis and Starland Commercial Trading have all lapsed and are terminated following the non-fulfilment of conditions.
- Expenses of $2.5m have been incurred by the group in connection with the proposed acquisition, of which $1m will be recovered from Ayondo.

*Engro Corp
- 98.57% owned R&P invested US$1.13m in a 60:40 JV with Omni-Plus System.
- The JVCo will manufacture and distribute thermoplastic compounds to serve the automotive industry in the Asia ex-China market.

*Plato Capital
- Entered into term sheets with KL-listed AirAsia, Everbright Financial Investment and Oxley Capital to set up a JV to establish a low-cost airline in China to be known as AirAsia (China).
- No financial details were disclosed, with any formalisation to be made before 25 Sep 2018.

Monday, September 25, 2017

SG Market (25 Sep 17)

- With the war of words between US and North Korea receding into the background, investors' attention will turn towards Aug inflation and industrial production data to have a better gauge on how the Singapore economy has fared, as well as details of the US tax plan this week.
- Technically, underlying support for STI is at 3,190 with overhead resistance at 3,275.

- FY7/17 net profit surged 6.7x to $9.2m (FY17/16: $1.4m), boosted by operational leverage.
- Revenue grew 14% to $147.9m on stronger demand for burn-in, testing and electronic manufacturing services, particularly from automotive customers.
- Pretax margin expanded 3.7ppt to 10.7%.
- The group expects to perform satisfactorily this year given the global growth in the semiconductor industry.
- First and final DPS raised to 0.3¢ (FY7/16: 0.2¢).
- Trades at 8x P/E and 0.95x P/B.

- Sold 5,100 acres of farmland assets in California, US, to Farmland Partners for US$110m.
- Olam will continue to operate the edible nuts orchards for 25-years, with an undisclosed portion of derived revenue paid to Farmland.
- Last traded at 14.9x forward P/E.

*Frasers Commercial Trust (FCOT)
- Major tenant Hewlett-Packard Enterprise (HPE) has served notice that it intends to vacate 178,843 sf space at Alexandra Technopark (ATP) when the leases expire on 30 Sep and 30 Nov.
- The space to be vacated by HPE constitutes 17.1% of the total net lettable area of ATP and 6.6% o FCOT's gross rental income.
- To-date, FCOT has secured commitment for 24,000 sf (13.4%) of the space that will be vacated. ATP is currently undergoing a $45m asset enhancement initiative, which will be completed by mid-2018.
- The group is still in discussions with another tenant HP Singapore, which currently occupies 304,920 sf of space under leases expiring in Nov 2017.
- Trades at 6.9% 3QFY17 annualised yield and 0.92x P/B.

*CapitaLand Commercial Trust (CCT)
- Long-term corporate rating downgraded by S&P from A- to BBB+, due to increased leverage arising from its proposed debt-funded acquisition of Asia Square Tower 2.
- Trades at 5.4% 2Q17 annualised yield and 0.9x P/B.

*Hatten Land
- Raising up to US$20m from Haitong Int'l Financial Products via a 7% convertible loan to accelerate its property development business in Melaka, Malaysia.
- The lender can convert the loan into new shares at any time during the two-year tenure at $0.35 per share.
- Trades at 3.8x forward P/E and 3.7x P/B.

*Chew's Group
- Updated that controlling shareholders are still in negotiations with third parties for a possible transaction.
- Last traded at 1.9x trailing P/E and 1x P/B.

*New Silkroutes
- Disposed its entire 28.41% stake in New Silkroutes Asset Management for $0.8m.

Friday, September 22, 2017

SG Market (22 Sep 17)

- In absence of fresh market catalyst, sentiment is likely to remain subdued as investors stay wary of Fed's hawkish move to tighten monetary policy.
- Technically, the next support for STI lies at 3,190, while overhead resistance at 3,275.

*CapitaLand Commercial Trust
- Acquiring Grade-A office building Asia Square Tower 2 in Marina Bay for $2.09b ($2,689 psf).
- The property has NLA of 778,719 sf, with 97% being offices and 3% in retail space, and has committed occupancy of 88.7%. Average lease-to-expiry is 3.4 years.
- Initial property yield expected to be 3.6%, higher than the divested One George Street (3.2%) and Wilkie Edge (3.4%).
- This will be funded via a fully underwritten 166-for-1,000 renounceable rights issue at $1.363 apiece to raise $690m, bank borrowings of $1.12b and $340m proceeds from recent divestments.
- Pro-forma 1H17 DPU would be diluted 4.23¢ (-7.2%), translating to an annualised yield of 5.13% (-0.25ppt).
- But, Maybank KE sees potential upside from occupancy and reiterates its Buy call with TP of $1.81.

*Tat Hong
- Disclosed that it has been approached by certain parties for a potential share transaction.
- The group has appointed Rippledot Capital Advisers on the approaches.
- Loss-making crane specialist trades at 0.53x P/B

*Darco Water
- Under the facilitation of IE Singapore, group is partnering InfraCo Asia Development on four municipal water treatment projects in Vietnam.
- These 50-year concession projects will be on a design, build, own, and operate model, and involve investment of around $50m.
- The projects target to provide up to 62,000 cubic metres of water, benefitting 0.5m of Vietnamese.
- First project with 15,000 cubic metres capacity will kick off in 4Q17, while remaining three will commence in 2018.

*Sino Grandness
- Collaborating with Wechat Food to distribute its own-branded Garden Fresh beverage products using automatic vending machines across China, which ride on Wechat Food's cloud platform.

*Shanghai Turbo
- Regained control of its Changzhou, China factory premises after five months when riot police evicted a group of trespassers.
- Operations has since resumed with management taking stock of production machinery and inventory.

*Del Monte Pacific
- Divesting its Sager Creek business, which produces specialty vegetables to McCall Farms for US$55m.
- Group intends to channel resources towards its core business.

*Neo Group
- Entered into exclusive agreement with potential vendors to acquire stakes in ER Marketing (ERM) and Ever Rich (ER).
- The exclusivity runs till 31 Aug '18.
- ERM mainly imports and exports food products such as raw condiments, fruits, and vegetables, for wholesale and retail businessses.
- ER mainly owns and operates warehouses and cold rooms for storage of food products.

*ASL Marine
- On track to meet a mandatory partial principal redemption of $1.25m worth of outstanding notes.
- Outstanding amount of its notes programme will still be a mammoth $48.75m.

Thursday, September 21, 2017

SG Market (21 Sep 17)

- Banking and oil-linked stocks may recover some lost ground after the Fed kept alive a Dec rate hike and planned to gradually unwind its US$4.5t balance sheet from next month, while crude pushed above US$50 a barrel ahead of Fri's OPEC meeting.
- Technically, the STI is hovering just under its 3.220 support with next level at 3,190 and overhead resistance at 3,275.

*Sysma Holdings
- FY7/17 net profit surged 392% to $8.3m on a $4.2m write-back of loss provision and lower effective tax rate.
- However, revenue slid 23% to $97.2m mainly as property development projects (-56% to $32m) were substantially sold, but was cushioned by higher contribution from construction projects (+21% to $65.2m).
- Gross margin expanded 11.3ppt to 18.4%.
- Proposed first and final DPS of 0.5¢ (FY16: nil).
- NAV/share rose 19.5% to $0.1954.

- 51% owned EH Property and Investments has been approached in connection with a potential sale of its entire interest in F2S1 Investment Pte Ltd.
- F2S1 owns PoMo, a shopping mall cum office building in Selegie Road, with 65 years lease left.
- No definitive agreement has been signed yet.

*OCBC/Great Eastern
- 87.8% owned Great Eastern is exploring a 30% stake sale of its Malaysian operations for as much as US$1b against a Jun 2018 deadline to comply with Bank Negara rule that capped foreign ownership of local insurance companies at 70%.
- Last year, GE Malaysia contributed ~6% to OCBC's pretax profit.
- Assuming GE fetches the touted sale price, OCBC could net a potential $943m gain on sale (22% of FY17E earnings est), and improve BVPS by $0.19 to $9.24.
- OCBC trades at 1.24x P/B.

*Genting Singapore
- Established a Tokyo branch office to develop and manage leisure and hospitality businesses, possibly in support of its bid for a gaming license in Japan.
- Trading at 10.1x forward EV/EBITDA, underpinned by improved operating conditions.
- MKE has a Buy with TP of $1.35.

*ABR Holdings
- Associate ABR CCH Land acquired a 1,180 sqm land plot at 155 Seksyen 88A, Kuala Lumpur for RM3.56m.
- The tenure of the 99-year leasehold land will expire on 3 Feb 2069.
- ABR CCH has appointed its 51% controlling shareholder, Cheng Chin Heng, to provide property consultancy services for a fee of RM0.13m.

Wednesday, September 20, 2017

SG Market (20 Sep 17)

- Investors will likely stay cautious as the Fed opened a 2-day policy meeting that might seek to taper its monetary stimulus.
- Technically, the bearish engulfing candlestick formed yesterday suggests the STI could lean towards its support at 3,190. Overhead resistance is at 3,275, near its 50-dma.

*Keppel Corp
- Acquiring a prime 83,000 sf site along Jalan Jeneral Sudirman (next to International Financial Centre) in Jakarta's CBD for Rp586b ($59.5m).
- Plans to develop a high-rise tower of ~390,000 sf gfa that could yield 400 luxury apartments on the plot at estimated development cost of $170m.
- Last traded at 14.1x forward P/E.

*ASTI Holdings
- Signed non-binding term sheet with China Fortune-Tech Capital for the proposed disposal of its key subsidiaries, which designs, builds, and markets semiconductor manufacturing equipment.
- While negotiation is ongoing, management guided an indicative price range of $105-110m (1.67-1.8x P/B), surpassing group's market cap of $54.5m.
- The potential buyer is an investment platform, with a focus on the semiconductor industry, and has more than Rmb3b of funds under management.
- At $0.08/share, loss-making ASTI is valued at 0.88x P/B.

*ST Engineering
- New venture capital arm made it first investment, taking a US$5.8m minority stake in California-based cyber security provider Janus Technologies.
- This is part of the group's strategic push into cyber security, robotics, autonomous technology and data analytics.
- Trades at 21.9x forward P/E, near upper range of 13-24x historical range and offers 4.2% dividend yield.

- Received regulatory approval for the expansion of its Shantou City cogeneration public-private-partnership plant project in Guangdong, China.
- Capacity of the current 25MW electricity generator with centralised steam boilers will be upgraded to 100MW.
- The Shantou project is expected to replace the existing 270 small coal-fired boilers that serve the electricity demands of 132 companies to be relocated in the region.

*JEP Holdings
- Entered 50:50 JV in China with Kun Shan Hang Fu Investment with both committing to a total initial capital of Rmb30m.
- The JVCo will provide precision machining and engineering services for the aerospace industry.

*Yanlord/Perennial/United Engineers
- The mandatory conditional takeover offer for United Engineers at $2.60/share by the Yanlord-led consortium has closed.
- Following the lapse of the offer, the consortium's stake in UE will remain at 33.44% and acceptances amounting to 1.36% will be returned as the 50% condition was not met.

- Appointed Credit Suisse as its financial adviser for its proposed $1.9b acquisition of healthcare firm Sasteria from controlling shareholder Peter Lim.
- Sasteria owns and operates the 190-bed Thomson Medical Centre and has a 51.93% stake in KLSE-listed TMC Life Sciences, which it intends to raise to 70.4% prior to the deal completion.
- Separately, Rowsley appointed Tan Wee Tuck (nephew of Peter Lim) as its new CEO and interim CFO to lead the group's portfolio of real estate business.
- Tan previously held executive positions at CNBC Asia Pacific, NBC Universal and GE Healthcare.
- The loss-making group currently trades at 1.55x P/B.

*Spackman Entertainment
- Acquiring a 10% stake in NSY Group, which owns Nunsongyee, a Korean dessert cafe chain in Singapore, for $0.14m (5x P/B).
- The dessert chain has seven branches across Singapore, and is profitable in FY16/17.

Tuesday, September 19, 2017

SG Market (19 Sep 17)

- Investors will be looking for potential catalysts from PM Lee's official visit to China today through to Thu (21 Sep), well-timed before the twice-a-decade CCP Congress meeting to be held on 18 Oct.
- Technically, the STI looks poised break above its mmediate resistance at 3,245 (20-dma), with the next upside objective at 3,275 (50-dma). Underlying support is at 3,190.

- Owners of former HUDC estate Braddell View plan to hop onto the en-bloc bandwagon.
- The sprawling 918-unit development sits on 1.124m sf of land with a 2.1 plot ratio, and is reportedly seeking a $2b asking price.
- If successful, the sale could trump Pine Grove's $1.65b en bloc bid, potentially making it the largest collective sale since Farrer Court's $1.34b deal in '07.

*Sembcorp Marine
- Signed LOI with Texas-based SeaOne Caribbean to design and construct at least two large compressed gas liquid carriers, for an estimated cost of US$500m each.
- The 366m 2bcf neo-panamax carriers will incorporate SMM's proprietary ship component inputs and will be deployed for SeaOne's Caribbean Fuels Supply Project.
- This could mark the start of a pick-up in non-drilling solutions contract wins after securing a meagre $270m of orders ytd.
- Trades at a hefty 41.8x forward P/E.

- Launched SGX Iron Ore Futures Indices, a suite of inverse and leveraged indices based on the SGX TSI Iron Ore China Index Futures.
- This comprises two total return indices that offer both long and short exposure to the seaborne iron ore market.
- Last traded at 21.7x forward P/E.

- Disclosed that recently-acquired Jurassic World: The Exhibition has just surpassed its one-millionth visitor, after operating for 12 months in Australia and US.
- Trades at 17x forward P/E.

*Aoxin Q&M
- Entered into definitive agreement to acquire Shenyang Qingaomei Oral Restoration Technology for Rmb16.9m (16.9x FY16 P/E) by end-2017.
- Separately, the group is also acquiring Zhuanghe City Chengguan Street Jiadawei Dental Clinic for Rmb8.4m (13.5x FY16 P/E) by end-2017.

- Secured two projects worth more than Rmb500m to build and operate a power plant in Shanxi and to supply equipment to a petrochemical complex in Zhoushan, China>
cogeneration facility in the Xinjiang Circular Economy Demonstration Park in Shanxi Province, China, with investment sum of Rmb490m.
- The first project will involve the phased construction of two 90tph boilers and one 9MW electricity generator, one 150 tph boiler and one 18MW electricity generator, as well as steam distribution pipelines, in the Xinjiang Circular Economy Demonstration Park, Shanxi province, with investment cost of Rmb490m.
- The second contract, worth Rmb53m contract, is to supply heat exchangers and coolers for Zhejiang Petrochemical's refinery and chemical integration project.

*TEE Land
- Entered six call options to buy 2,236.1 sqm of freehold land at Seraya Crescent for $25.7m.
- The group plans to build a block of residential apartments, with the deal expected to complete by Jan '18.
- Last traded at 0.53x P/B.

*Spackman Entertainment
- Newly acquired unit Frame Pictures has secured a 320m won (US$0.28m) contract to supply camera systems and equipment for Netflix's first Korean original drama series, Love Alarm.
- According to its CEO, Frame Pictures has a strong pipeline of projects for 2H17.
- Trades at 9x forward P/E.

*The Trendlines Group
- Signed MOU with China-based Haier Group to explore ways for collaboration in developing new technologies, solutions and products, deal flow, and investments.
- This is aimed at supporting Trendlines' portfolio companies in China, and Haier's entrepreneurs in Israel.
- At end-2016, Haier has 1,333 venture capital investments totalling US$1.8b.

*Soilbuild REIT
- Called upon an insurance guarantee of $5.1m from its tenant, NK Ingredients, for rental arrears amounting to $3.4m.
- The remaining $1.7m of the insurance guarantee to be claimed is equivalent to four months of rent.
- Assuming the lease was terminated on 1 Jan '17, pro forma 1H17 DPU would contract 10.6% to 2.64¢.

*IPC Corp
- Entered non-binding agreement with Xinyuan Real Estate to acquire a 51% stake in Beijing iJourney Technology Development (BiTD) for an indicative US$5.1m.
- Funding for the intended acquisition will be via new IPC shares at $0.40 apiece.
- BiTD is an artificial intelligence business that focuses on R&D and marketing of robots which serve the needs of families.
- The group also entered a separate non-binding agreement for the proposed disposal of Grand nest HOTEL zhuhai to Xinyuan for Rmb200m.

Monday, September 18, 2017

SG Maket (18 Sep 17)

- Investors are likely to switch focus to the 2-day FOMC meeting starting tomorrow for a gauge of US interest rate path.
- Technically, the STI has breached its 3,220 support and looks to test the next level at 3,190. Overhead resistance remains at 3,275.

- Singapore non-oil exports jumped 17% in Aug (Jul: +8.5%), expanding for the fourth straight month and exceeding the 11.8% growth estimate.
- Electronics shipments surged 21.7% (Jul: +15.3%), boosted by ICs (+36.8%), while non-electronic exports (+15%) was lifted by petrochemicals (+31.9%).
- Top five markets were China (+43.2%), EU (+23%), HK (+41.9%), US (+3.9%) and Malaysia (+12.4%).

*Low Keng Huat
- 2QFY17 net profit plummeted to $0.5m (2QFY16: $43.1m) in absence of $48.4m gain from sale of Duxton Hotel Saigon last year.
- Revenue jumped 59% to $13.6m on increased development sales, but partly offset by lower hotel bookings.
- Gross margin contracted 7.1ppt to 15% on a shift in sales mix.
- Bottom line was buttressed by a turnaround in JV contributions to $0.8m (2QFY16: $0.9m loss), mainly due to sale of office units at AXA Tower.

- Recorded higher group passenger load factor of 80.9% (+1.2ppt) in Aug, as traffic (+5.1%) outpaced capacity growth (+3.5%).
- Cargo load factor also crept 2.9ppt higher to 63.4%.
- Parent load factor was supported by improvement across routes to Americas (+1.1ppt), Europe (+3.1ppt), and East Asia (+1.6ppt), but South West Pacific (-4.6ppt), West Asia and Africa (-0.2ppt) deteriorated.
- Load factors also improved at SilkAir (+4.8ppt to 75.8%) and Scoot (+3.6ppt to 84.8%).
- Trades at 25.5x forward P/E and 0.9x P/B.

*Mandarin Oriental
- Confirmed it has received proposals from potential buyers for its 848-room The Excelsior in Hong Kong, touted to be ~HK$30b, or 36% above the hotel group's current market cap.
- This implies that its other 29 hotels and 8 service residences could come for free.
- At US$2.56, counter trades at a 17% discount to its adjusted NAV/share of US$3.10 but above book value of US$0.93.

*SIIC Environment
- 60% owned Ranhill Water Hong Kong was awarded the Hefei Circular Economy Demonstration Park Water Treatment Plant Transformation project.
- The project has a design capacity of 30,000 tpd and a concessionary period of 19 years.
- Tariff is set at Rmb6.43/ton for the first six months from the commencement of operations and will be reviewed going forward.
- Trading at 12.8x forward P/E.

*Lian Beng
- Secured a $162m contract for the proposed development of residential project Martin Modern.
- The contract is expected to commence this month and be completed within 32 months.
- This lifted its order book to $699m.
- Last traded at 5.8x trailing P/E and 0.53x P/B.

- 50% owned RH Guillemard is acquiring two freehold sites at 12 & 14 Guillemard Lane for $22.5m.
- The sites have a total land area of 12,138 sf with plot ratio of 2.8, and zoned for residential development.
- Last traded at 15.5x trailing P/E and 1.26x P/B.

*Heatec Jietong
- Secured three new contracts worth a total of $4m for its heat exchanger business.
- The contracts are expected to contribute positively to FY17 results.

- Lost bid to operate the upcoming Thomson East Coast Line from 2019 to 2028 to SMRT.
- 74.6% owned SBS Transit currently runs the North-East, Downtown lines and Sengkang-Ponggol LRT, while its bigger rival operates the older North-South, East-West and Circle lines as well as Bukit Panjang LRT.
- This award will relegate SBS Transit to a minor rail player with 20% market share.
- Separately, media reports that 2,000 taxi drivers, representing 5.4% of its drivers, have expressed interest in joining private car operator Grab.
- To retain its drivers, CDG has offered rental rebates of $3,600 over six months but this is much lower than Grab's montly rebates of $1,500-1,688 monthly over a similar period.
- Maybank KE last had a Hold with TP of $2.25.

*Nam Cheong
- Disposing a non-core freehold property at 146B Paya Lebar Road with gfa of 545 sqm for $4.5m.
- Counter remains suspended since 21 Jul '17.

*GKE Corp
- Updated that discussions between the potential investor and substantial shareholders on a possible deal are still on-going.
- The group has not received any formal proposal at this point and will provide more updates upon material developments.

Friday, September 15, 2017

SG Market (15 Sep 17)

- Investors may face more market jitters after North Korea fired another missile over Japan, further ratcheting up geopolitical tensions and sending the greenback lower against safe haven assets.
- Technically, the STI is sitting right on the 3,220, support. If this is broken, the next level would be 3,190. Overhead resistance remains at 3,275.

- Owners of 660-unit Pine Grove in Holland Road area are planning to launch Singapore's largest enbloc sale with an asking price of $1.65b.
- If it succeeds, it will beat the previous record of $1.34b set by the 618-unit Farrer Court's collective sale back in 2007.
- The 893,227 sf former HUDC estate has a 2.1 plot ratio (existing: 1.56) and can accommodate up to 2,000 new homes.
- So far ths year, there has been nine collective sales worth $3.5b with another six deals totalling $2.7b put up for tender.

*Keppel Corp
- Confirmed media reports that it is looking to list a US commercial REIT on SGX, with an initial portfolio of 11 office assets injected by a fund managed by KBS Capital Advisors.
- Listing applications have been submitted and are currently under review and details and terms of the IPO are still being finalszed.
- Trading at 13.8x forward P/E.

*Mermaid Maritime
- Awarded a long-term cable survey contract in the Middle East worth US$7m.
- The contract will commence in 3Q17 and last for 21 months.
- Last traded at 11.6x forward P/E and 0.38x P/B.

- Agtech-portfolio company EdenShield raised US$2m from strategic and financial investors.
- Funds raised will be used to accelerate sales and expand farming operations.

*HLH Group
- Terminated the proposed issue of $16m 5% convertible bonds due 2020 to Bridge Roots Capital, due to the non-performance of certain conditions.
- The group is considering the disposal of investment properties and other financing options to support its property development division.

*Keppel T&T
- Invested US$10m for a 24.1% stake in a US-based start-up that is engaged in developing water-cooled data centres.
- Trades at 15.8x forward P/E and 1.1x P/B.

*Silverlake Axis
- Disclosed intention to sell up to 19.2m shares in 9.25% owned Global InfoTech within a six-month period from 13 Oct.
- This is to comply with Chinese securities regulation that substantial shareholders of publicly listed companies state their intentions regarding disposal of shares,
- Trades at 19.6x forward P/E.

*Tuan Sing
- Received regulatory approval for the asset enhancement initiative of Hyatt Centre and development of one of two vacant land plots in Perth, Australia.
- The 2.5-ha site comprises the 367-room Hyatt Regency hotel, the adjoining office/retail Hyatt Centre and two vacant plots.
- The AEI will offer 20,000 sqm of retail space upon completion in 2019.
- Last traded at 16.4x trailing P/E and 0.45x P/B.

- Secured a contract with Colomno Dockyard for the design of a cable lay vessel for Kokusai Cable Ship Co in Japan for an undisclosed sum.
- Construction will be done at Vard's Colombo Dockyard in Sri Lanka with expected delivery in 2019.
- Trading at 0.75x P/B.

*KTL Global
- Proposed allotment and issue of 26.1m new shares (10.8% of share capital) to Executive Chairman and controlling shareholder, Tan Tock Han, at 3.825¢ each.
- The new share subscription is to set off a $1m debt owed by the company to Tan.

*Global Yellow Pages
- Acquiring a 21.85-ha vacant plot of land in Papakura, New Zealand for NZ$38m.
- It intends to develop the land and subdivide it for sale as well as explore developing part of the land into residential and commercial units.

- Signed a three-year agreement to use Vinculum's Vin eRetail for multi-channel retailing.
- The platform will enable it to tap on a global network of merchants, brands, suppliers and marketplaces.

*China Kangda
- Entered into a framework agreement with undisclosed vendors to acquire a target company that is engaged in retail pharmaceutical business and owns pharmacies in Qingdao, China for about Rmb30m.

Thursday, September 14, 2017

SG Market (14 Sep 17)

- Market is consolidating within a narrow trading range but oil-linked plays could see some rotational interest after an IEA report showed global oil market could be returning to balance with inventories nearing a five-year average.
- Technically, the immediate support for the STI remains at 3,220, with overhead resistance at 3,275.

- Maybank KE is initiating coverage on Singapore telcos with a Negative view, putting a Sell on Starhub (TP: $2.17) and M1 (TP: $1.59), and a Hold on SingTel (TP: $3.83).
- The house believes that the sector has not fully priced in the impending entry of new competition into the market.
- Its baseline assumption of competition and new smartphone launches leading to higher retention costs, partly through recontracting, and modest ARPU pressure results in soft FY18/FY19 core profit expectations.

*Vibrant Group
- 1QFY7/18 net profit soared to $122.6m (1QFY17: $0.4m), mainly lifted by $123.9m of negative goodwill arising from the acquisition Blackgold Int'l in Jul '17.
- Revenue surged 89% to $86.8m following the acquisition, but gross margin was compressed to 19.6% (-13.2ppt) as Blackgold commanded thinner margin of 6.3%.
- Bottom line was eroded by higher other expense of $6.5m (+236%) due to unfavourable FX movements.
- NAV/share at $0.7728.

- Defaulting on the redemption and upcoming coupon payment for its Rmb450m 7.75% notes, part of its $1b multicurrency debt programme.
- Trading in the stock is currently suspended.

*Mapletree Logistics Trust
- Proposed a non-renounceable 10-for-1 preferential offering at $1.145 apiece and private placement at $1.175 each to raise $640m to part-finance the acquisition of Mapletree Logistics Hub Tsing Yi in Hong Kong and repay debt.
- Last traded at 1QFY18 annualised yield of 6.3%.

- Invested US$150m in animal feedmills and poultry farms in Nigeria to boost its agribusiness in Africa.
- These include bird and fish feedmills to support annual production of 8b eggs and 100m kg of poultry and a hatchery to produce 1.6m day-old chicks per week.
- Last traded at 14.8x forward P/E.

*OLS Enterprise
- Acquiring BSDCN, an investment holding company, for $6m or 4.18x P/B, to be paid in two tranches.
- BSDCN holds a 9.98% interest in Korean-based Pine Asia Asset Management, which has AUM of US$3.5b and an ascribed valuation of US$44.3m.
- The deal its part of its strategic expansion into asset management, following the 51% stake acquisition of Advance Capital Partners Asset Management.
- Post acquisition pro forma FY3/17 NTA/share will fall to -0.12¢ from 0.13¢, while loss per share will widen to 0.117¢ from 0.113¢.

Wednesday, September 13, 2017

SG Market (13 Sep 17)

- The market could creep higher on improving sentiment in Asia as fears over North Korea and US hurricanes ebbed, and positive overspill from Wall Street after Treasury Sec Steven Mnuchin hinted of a tax overhaul by the end of the year.
- Technology plays are likely to stay in focus with the launch of iPhone X.
- Technically, immediate support for the STI lies at 3,220, with overhead resistance at 3,275.

- Jul retail sales nudged up 1.8% (est: 2.1%, prior: 1.9%) in Jun as higher spending at petrol stations, medical goods and department stores was eroded by weakness in F&B and furniture/household equipment.

*Keppel DC REIT
- Acquiring a data centre in Dublin, Ireland, for €66.0m.
- The 999-year leasehold property has 25,200 sf of space and commenced operations in 2013.
- Post-deal, pro forma FY16 DPU is expected to rise 6% to 6.51¢, translating to 5% yield.

- Proposed spin-off of its Australian pork business and Australian properties (grain storage facility, feedmill, warehouse) on ASX.
- It intends to retain a controlling interest in the Australian Listco, which generated revenue of $398m and net profit of $36.7m in 2016, and accounted for 17% of Australia's pork production.
- In connection to the listing, the group expects to receive A$52m repayment of unsecured loans extended to the Australian Listco.
- Trades at 7x trailing P/E.

*Aspen Group
- JV partner and IKEA franchisee Ikano has commenced construction of the 4th Malaysian IKEA store in Aspen Vision City, Penang.
- The IKEA store will be the anchor tenant for the group's 245-acre mixed development Aspen Vision City, with a 1m sf regional integrated shopping centre.
- Ikano is expected to invest RM600m to develop the 433,000 sf IKEA store, slated to open in 1Q19.

- Secured a Rmb276m rail engineering contract for the second phase of the Beijing Metro's Changing Line.
- The contract is scheduled for completion by 31 Dec '20.
- This brings its order book to about Rmb2.8b.
- It is also in the midst of evaluating a potential consultancy contract for a metro rail project in Bangladesh.

*United Engineers
- Market watchers believe that the Yanlord-led consortium cash offer of $2.60 apiece could lapse after the second extension of its offer to 19 Sep from 12 Sep.
- Consortium will have to attain a remaining 15.2% stake in the company to cross the 50% threshold for the offer to become unconditional.
- Notably, Oxley and its chairman Ching Chiat Kwong have accumulated a 14.86% stake at prices between $2.67 and $2.74.

*SUTL Enterprise
- Signed a MOU with Hainan Cruise & Yacht Association to be its strategic partner in the development and expansion of Hainan's yachting, cruising and maritime industry.
- The group will see provide advisory services in marina development and management to improve the hardware and software on Hainan Island, including hosting hosting international yachting events and regattas at the island.
- It will also assist in establishing the framework for training local personnel with the relevant skillsets and service aptitude.
- Counter trades at 16.9x forward P/E.

*Heeton/KSH/Ryobi Kiso
- 50:25:25 JV acquired the Dry Bar, an iconic entertainment venue in Manchester, UK.
- The consortium intends to convert the upper floors of the 4-storey terraced buildingwith gfa of 20,713 sf, into a hotel which will be managed by Heeton's hospitality division.
- No financial details were disclosed.

*Asia-Pacific Strategic Investments
- Proposed partial-underwritten 2-for-1 rights issue at 0.3¢ each.
- Shareholders who subscribe for two rights share will be issued a warrant with exercise price of 0.3¢.
- Maximum subscription proceeds of $42.7m is intended to fund the group's proposed new business into real estate development.

Tuesday, September 12, 2017

SG Market (12 Sep 17)

- Market could rebound from oversold position after US stocks rallied to record close on easing of geopolitical tensions and less severe-than-expected impact from Hurricane Irma, but upside will be capped by lack of fresh catalysts.
- Technically, immediate support for the STI lies at 3,220, with overhead resistance at 3,275.

- Business sentiment among local companies remained upbeat although the outlook is easing for the final quarter of the year.
- The SCCB's Business Optimism Index slipped to +2.6ppt in 4Q17, down from +3.58ppt for the previous quarter.
- The manufacturing services and wholesale sectors emerged as the most optimistic sectors. But construction firms remained pessimistic, owing to the prolonged downturn in both private and public building activities.

*Stamford Tyres
- 1QFY18 net profit grew 24% to $1.9m, on higher revenue of $58.9m (+1.8%) due to improved sales in Australia.
- Gross margin improved to 26.7% (+1.3ppt) mainly from value-added activities at its retail chain and truck tyre centres.
- Bottom line was partially pared by FX loss of $0.4m (1QFY17: $0.2m gain) and higher operating lease rental (+21%), but mitigated by stronger JV contribution (+1.3%) and lower tax (-13.3%).
- Trades at 9.4x trailing P/E.

*Frasers Centrepoint
- Marks its first foray into the UK market the acquisition of four business parks for £686m ($1.2b) and conditional agreement to acquire another business park.
- The four freehold properties (Winnersh Triangle in Reading, Chineham Park in Basingstoke, Watchmoor Park in Camberly, Hillington Park in Glasgow) have a total built area of 4.9m sf and are underpinned long term leases with WALE of 5.9 years to a diversified base of >400 tenants.
- Post-acquisition, the group will have $4.2b of assets (16% of total portfolio) in Europe.
- Pro forma FY16 EPS is expected to jump 7.3% to 15.37¢.

*Sembcorp Marine
- Secured hull carry over works worth US$145m from Tupi for the FPSO P-68 Tupi Project.
- Ytd new orders amounted to less than US$200m.
- Trading at 40.4x forward P/E and 1.3x P/B.

*CITIC Envirotech
- Investing Rmb365m for a 51% stake in two hazardous waste treatment facilities in Huizhou City, Guangdong, China.
- The first plant (Lixing EP) currently has a design capacity of 72,000 tpa and will be expanded to 149,000 tpa, while the second plant (Huilv EP) has a treatment capacity of 12,500 tpa.
- Funding will be via proceeds from its US$750m multicurrency perpetual securities and bank financing.
- Trades at 16.1x forward P/E.

*Golden Agri
- Divesting 36,874 sqm of office units in Sinarmas MSIG Tower, Jakarta to 48.4% owned associate of sister company Sinarmas Land for Rp1.41b (US$107.5m).
- The deal is expected to result in US$15m gain and is part of the group's plans to relocate backroom services out of the CBD.
- Last traded at 18.6x forward P/E.

- Secured a contract of an undisclosed sum, to design and construct one expedition cruise vessel for Coral Expeditions of Australia.
- Delivery from its Vietnamese shipyard is slated for 1Q19.
- Last traded at 0.75x P/B.

- Awarded US$16.1m in restitution for an engineering and procurement contract entered with SEPCOIII Electric Power Construction in Aug '09.
- Contract was for the development, design and manufacture of certain desalination units in Salalah, Oman.
- Trades at 0.62x P/B.

*Sarine Tech
- Its Sarine Profile digital diamond report will be rolled out across China by Soo Kee, under the Love & Co brand.
- The brand aims to establish 550 points-of-sale in China and Hong Kong by the end of its 5th year of operation.
- Trading at 16.2x forward P/E.

*Darco Water
- Part of consortium which includes Q2 A/S (Denmark) and PT Fitama Putra Mandiri, that secured a landfill gas recovery and conversion project in Semarang, Central Java, Indonesia.
- The contract involves a total investment of DKK21.5m ($4.7m) and is expected to be handed over in 4Q18. Profits will be shared equally among the three partners.
- Last traded at 8x trailing P/E and 1.1x P/B.

- Received approval for a new capital markets services licence to conduct corporate finance advisory services in Malaysia.
- The new licence is subject to certain procedural conditions by 8 Dec.

- Acquiring Asia Vets Holdings for $9.75m, to be satisfied by cash (70%) and new shares (30%).
- Of the new shares, 24% of which will be issued at $0.25 each, while pricing for the remaining 6% will be determined at a later date.
- The deal is subject to completion of a restructuring, including the transfer of veterinary assets and business from The Animal Ark Group into the target.

*United Engineers
- Closing date for the buyout offer from Perennial and Yanlord has been extended from 12 Sep '17 to 19 Sep '17.
- As at 11 Sep, the offerors received undertaking for 34.79% stake in UE.

Monday, September 11, 2017

SG Market (11 Sep 17)

- Markets are off to a nervous start to the week amid mounting geopolitical tensions on the Korean peninsula and destruction wrought by hurricanes in US.
- But tech plays are likely to come into focus with the anticipated launch of the iPhone 8. Preferred plays in the tech space include Venture, UMS, AEM and Micro-Mechanics.
- Technically, immediate support for the STI lies at 3,220, with overhead resistance at 3,275.

*BRC Asia/HG Metal
- Conditional cash offer from Esteel Enterprise at $0.925 apiece (7.6% above its last close), valuing the steel mesh manufacturer at 44x trailing P/E.
- This follows the 43.77% stake purchase by Esteel from several substantial shareholders.
- Additionally, another major shareholder HG Metal has accepted the $39m offer for its 22.62% stake, subject to shareholders' approval.

*CWG International
- Successfully bid for land use rights of a land parcel at Zhangjiagang, Suzhou City in Jiangsu, China, for an undisclosed price.
- The 36,829 sqm site is designated for residential development and has a plot ratio of 1.8, giving a gross floor area of 66,292 sqm.
- The acquisition will enable the group to sustain its scale and presence in China but any development is not expected to complete before 2019.

*TEE Int'l/Advancer Global
- Forms strategic alliance to pursue new business opportunities to provide comprehensive solutions to customers.
- The collaboration will explore opportunities for joint tenders in contracts which require both mechanical and electrical engineering works and facility management services.
- Additionally, the partnership will jointly invest in facilities management projects in the Asia Pac region.

*Sysma Holdings
- Secured a $7.3m contract for the construction of a two-storey detached dwelling house with swimming pool at Tanglin Hill.
- The contract shall commence in Sep '17 and run for 18 months.
- Trades at 6.4x historical P/E and 0.8x P/B.

- Acquiring Chelle Medical, a medical device contract manufacturer based in the International Trade Zone in the Seychelles, for US$5m, representing 2.5x P/NTA.

*ASL Marine
- A fire incident occurred at its Batam shipyard, on board a tanker that was being repaired at the dry dock.
- The incident resulted in the loss of five lives and one injury, which are employees of ASL Marine's subcontractor.
- Work on the vessel has been suspended pending investigation.

Friday, September 8, 2017

SG Market (08 Sep 17)

- Shares are likely to drift in directionless trading after the ECB left interest rates unchanged and pushed back the decision on winding down its bond-buying programme to next month.
- Technically, immediate support for the STI lies at 3,220, with overhead resistance at 3,275.

- 84-unit Changi Green is joining the red-hot enbloc scene with an offer price of $196m or $700 psf ppr.
- The 200,093 sf freehold site at the junction of Upper Changi Road and Jalan Mariam has a plot ratio of 1.4.
- Public tender closes on 16 Oct.
- Ytd, 7 residential collective sales and 6 private deals have been completed, totalling $3.56b with another 6 projects being put up for tender worth $2.7b. When redeveloped, these will yield some 10,300 new homes.

- China-based HNA Group has made a formal general offer at $2.33/share after fulfilling all pre-conditions.
- The controlling Loi family has given the offeror an irrevocable undertaking for 65.13% of the shares.
- The offer price will not be revised and values the logistics group at a 18x forward P/E and 1.4x P/B.

- Securities turnover value jumped to $25.9b in Aug (+26% y/y, +2% m/m), with daily average of $1.2b (+26% y/y, -3% m/m).
- Total derivatives volume rose to 15.9m contracts (+15% y/y, +12% m/m), with FTSE China A50 index futures the largest volume contributor at 6.1m contracts (+2% y/y, +10% m/m).
- Trades at 21.6x forward P/E vs HKEx's 36.4x.

- Further extended the repayment deadline for its US$2b revolving credit facility to by another 3 months 15 Jan '18.
- The credit line is crucial for its day-to-day operations and will facilitate the ongoing sale process of its global oil liquids business.
- Trades at 0.23x P/B.

*Boustead Projects
- Plans to divest land and buildings at 25 Changi North Rise for $10.5m, which is expected to result in disposal gain of $6m.
- The property has remaining 20 years' lease with JTC and was developed under a design-build-and-lease arrangement with anchor tenant, UMS.
- The proceeds will be redeployed for future growth of the group.
- Last traded at 7.6x forward P/E.

*Ho Bee Land
- Its 20:60:20 JV with Yanlord and Shanghai Youyou acquired a 41,800 sqm prime residential site at Tang Jia Wan, Zhuhai, China.
- The site was acquired by Yanlord, back in Jun '17 for Rmb836m.
- Ho Bee trades at 43% discount to RNAV of $4.23 and 0.54x P/B.

- Awarded a three-year lease by Singapore Land Authority to operate a student hostel at 362 Holland Road, with option to extend for another three years.
- The property comprises two blocks of one-storey buildings with an gfa of 583.4sqm, which is able to accommodate up to 60 students.
- Trades at 11.7x forward P/E.

- Awarded a $3.6m contract by the National Parks Board for civil and structural engineering consultancy services for three years till Sep '20.

*Anchor Resources
- Concession agreement at Bukit Panji will be terminated by the State Economic Development Corporation of Terengganu, Malaysia.
- The termination was due to a re-zoning of certain areas of the land at the gold mine to a palace security zone.
- The termination will not have a material financial impact as minimal capex was incurred at the mine.
- The gold miner is currently focusing on gold mining and production at the Lubuk Mandi Mine.
- Last traded at 2.2x P/B.

*mm2 Asia
- UnUsUaL founders Leslie Ong and Johnny Ong, each purchased $5m worth of shares from mm2' Chairman, Melvin Ang, at $0.485 apiece.
- The transaction will cut Ang's stake from 39.88% to 38.11%.
- Trades at 21.5x forward P/E.

*Spackman Entertainment
- Signed partnership agreement with Korean TV drama producer, Mongjakso to co-develop and co-produce two TV dramas.
- One of the two dramas with working title "The Game" will be starred by So Ji Sub, and is expected to debut in 2018.
- Trades at 8.4x forward P/E.

- Prices of Indonesian live broiler birds in Aug rose to Rp17,781 (+9% y/y, +6.7% m/m), while day-old chicks climbed to Rp4,574 (-8.5% y/y, +2% m/m).
- The relatively stronger pricing environment came on the back of improved supply dynamics after the government-mandated parent stock culling programme was completed in Jul.
- Trades at 9.1x forward P/E.

*Loyz Energy
- Proposed conditional JV with Arctos Investments, to conduct investment, trading, fund management and market making for commodities.
- The group will contribute $1m to the JV, while Arctos will provide its network, team of investment and trading professionals and risk management expertise.
- It will also issue new shares to Arctos amounting to $1m, at a price yet to be determined.
- Subsequently, the JV intends to apply for a fund management licence.

*Pacific Radiance
- Updated that group has commenced discussions with its lenders to restructure its borrowings.
- Last traded at 0.16x P/B.

Thursday, September 7, 2017

SG Market (07 Sep 17)

- Risk aversion is expected to dog market sentiment even as President Trump struck a deal to extend the US debt ceiling, while traders await the ECB's decision today on whether to wind down asset purchases next year.
- Technically, immediate support for the STI lies at 3,220, with overhead resistance at 3,275.

- Private sector economists have maintained their 2017 GDP forecast at 2.5%, buoyed by a trade-driven manufacturing sector but the expansion is uneven across the economy as the outlook for the domestic construction, accommodation and food services sectors remain challenging.

*mm2 Asia
- Signing a MOU with Shenzhen-listed Shanghai New Culture Media Group and 9i Film & Television Media to co-invest $25m and co-produce five films and multiple online films over the next three years.
- The milestone development will spearhead the group's movie pipeline for the China audiences in North Asia and Southeast Asia.
- Alibaba-backed Dongfang Jiaying Television Cinema Media Co and Taiwan-listed Bossdom Digiinnovation have expressed interest in participating in the collaboration.

*CITIC Envirotech
- Invested Rmb378m for a 60% stake in CITIC Environment (Qingyuan) Technology Development, which supplies industrial water, steam, and electricity, and provides wastewater treatment and recycling services to a textile industrial park in Qingyuan City, Guangdong, China.
- CITIC Qingyuan will undertake phase 2 of the project to expand its capacity to meet increasing demand from the industrial park.
- The acquisition is in line with the group's efforts to work with industrial parks.
- Last traded at 15.6x forward P/E.

*Hotel Properties
- Set up 70:30 JV with its managing director and substantial shareholder, Ong Beng Seng to acquire a plot of land in Republic of Palau for US$8.5m.
- The acquisition is intended for future development of a luxury hotel in the island country located in the western Pacific Ocean.

*Heeton/Ryobi Kiso/KSH/ Lian Beng
- Commenced work for the first phase of a new regeneration scheme at Bridge Street in Leeds, UK.
- This will create a sustainable urban destination on the 2.45-acre site.
- Core development for the first phase will be a new 192-room hotel to be operated by hotel chain, Hampton by Hilton, with an expected opening date in 2019.
- The second phase could involve the launch of new residential properties.

*Hong Leong Asia
- 40.2% owned diesel engine unit China Yuchai disclosed that 748 buses powered by its engines are being utilised for the 13th National Games in China, which is presently held in the city of Tianjin.
- Further, 100 new energy buses equipped with Yuchai's YC6J diesel-electric hybrid system have been delivered to Wuzhou Zhenbao Bus.
- Separately, the group will be selling its plastic container manufacturing arm, Rex Plastics Malaysia, for RM10.8m and expects to reap a gain of RM1.5m.

*Mermaid Maritime
- Awarded three subsea contracts in South-east Asia and Middle East for a combined value of US$12m.

- Disclosed that a liquidity crunch has resulted in a potential going concern issue for the rigbuilder as lenders demand overdue loan installments totalling $1.09m.
- If talks fail, the lenders could call for the entire outstanding loan of $6.9m, which might trigger a cross default on the rest of its loans by other financial institutions.
- Appointed a financial advisor to come up with a debt restructuring plan for its various stakeholders and has converted its trading halt to a suspension.

- Warned of 1QFY18 net loss due to negative FX translation effects.
- Results slated to be released on or before 14 Sep.

*MMP Resources
- Proposed issue of 1) $0.75m 12.5% convertible bonds due 2021 and 2) 59.9m new shares at 0.36¢ each to Maiora Asset Management.
- Bulk of the $0.8m raised will be used for investment (80%), while the remaining will be for working capital.
- Post-placement and post-conversion share capital will be enlarged by 4.9%.

Wednesday, September 6, 2017

SG Market (06 Sep 17)

- Sentiment could be weighed by the continuing geopolitical fallout from North Korea's latest nuclear test, US policy uncertainty and lack of fresh leads.
- Technically, the STI is trading below its 20 and 50-dmas, suggesting near term weakness, with immediate support at 3,220 and overhead resistance at 3,275.

- First integrated development in Indonesia, The Stature Jakarta (50% owned), is on track for completion by end 2020 at total development cost of $220m.
- Jointly developed with local developer Credo Group, The Stature will spans a total floor area of 55,500 sqm and comprise a luxurious 94-unit residential tower (Stature Residences), a 24-sorey premium serviced residence tower (Ascott Menteng), a 20-storey office building (Stature Tower) and lifestyle retail units.
- Separately, the group is acquiring a 192-unit serviced residence, Ascott Sudirman Jakarta, for $74.3m through wholly owned Ascott's global serviced residence fund with Qatar Investment Authority. Slated to open in 2018, it is Ascott's sixth serviced residence in Jakarta.
- In addition, Ascott has secured a contract to manage the 230-unit Citadines Canggu Bali that is scheduled to open in 2020.
- CapitaLand trades at a 28% discount to its RNAV/share of $5.25 and 0.9x P/B.

- Launching augmented reality smart glasses in its ramp handling operations to reduce baggage and cargo loading times.
- The smart glasses could improve efficiency by 25%, thereby shortening waiting and transit times for passengers and airfreight.
- The new technology is expected to be implemented within the next six to nine months.
- Trades at 21.6x forward P/E with 3.6% dividend yield.

- 65% owned BM Mobility has signed a dealership agreement to sell electric scooters from HK-listed Yadea Group to commercial users in Malaysia.
- Targeted commercial users include food delivery companies and third-party logistics service providers.

*Yamada Green
- Requested for trading suspension after fire in a truck destroyed certain financial documents and IT/computer hardware being transported.
- Consequently, the group applied for a time extension to release its FY17 results and hold its AGM.
- The shiitake mushroom farmer had earlier flagged a loss for 4QFY17 and FY17, blaming unfavourable factors such as bad weather, rising labour costs and slowdown in China's economy.
- This is not the first time S-chip companies reported such incidents. In one case, the truck transporting financial files went missing and in another case, the finance department mysteriously caught fire.

- 50:50 JV with KL-listed Three-A Resources acquired Three-A (Qinhuangdao) Food Industries for Rmb5m.
- Last traded at 13.3x forward P/E.

*Emerging Towns & Cities
- Proposed acquisition of an additional 17% stake in Uni Global Power for US$11.9m or 2.2x P/B.
- Funding will be via an issue of 179.2m new shares (18.6% share capital) at $0.09 each.
- Uni Global Power owns 70% in GL, which in turn owns the US$400m Golden City project in Myanmar.
- The deal will lift its ownership stake in Uni Global Power from 70% to 87%.

- Accepted a $11.6m offer from JTC to surrender its property lease at 44 Sungei Kadut Street 1, which expires on 31 Mar '25.
- With a land area of 35,281 sqm, the property is being used for the group's wood-related manufacturing operations, and it will be leased back to the group until 31 Dec '20.
- The deal is expected to result in a gain of $4.78m, which includes relocation compensation of $2.88m.

Tuesday, September 5, 2017

SG Market (05 Sep 17)

- Heightened geopolitical tensions over North Korea are expected to cast a pall on risk appetite as market participants await by the sidelines ahead of ECB meeting on Thu.
- Technically, the STI has been knocked back after failing to penetrate its 20 and 50-dmas at 3,277, with immediate support now standing at 3,220, followed by 3,190.

- Singapore's factory activity rose for the 12th straight month in Aug with the PMI climbing to 51.8 (Jul: 51), its highest reading since Nov 2014, as the electronics cluster surged to 53.2 (Jul: 52.2) for its best showing in seven years.
- Almost all indicators shows signs of improvement. New orders, exports, factory output and inventory all expanded at a faster pace, while manufacturing employment contracted at a slower rate.
- The brighter data mirrored that of several regional economies, including Taiwan, Vietnam, China, India, Indonesia and Malaysia.

- Won in-principle approval to provide banking services in India through a wholly owned subsidiary.
- This will allow it to expand its operations and footprint in India, which could potentially become the next growth catalyst.
- The group is currently the 5th largest foreign bank in India by assets but returns are not yet meaningful.
- MKE has a Hold with TP of $21.50.

*EMAS Offshore/Baker Technology
- Baker Technology and private equity firm Point Hope has entered into a binding term sheet with Emas Offshore (EOL) to aid in the latter's debt restructuring.
- Baker Tech and Point Hope could potentially invest US$50m in EOL to substantially deleverage its balance sheet and enable it to continue as a going concern.
- The deal involves a scheme of arrangement and issue of new shares that will result in the two potential investors holding a majority stake in EOL.
- The term sheet may be terminated if the restructuring is not underway by 30 Oct.

*Citic Envirotech
- Secured a Rmb315m hazardous waste treatment project in Binzhou City, Shandong, China.
- The project involves the construction of a 60,000 tpa waste treatment facility, comprising an incineration plant, a physical-chemical treatment plant and a landfill.
- Works are expected to be completed within 12 months.
- Last traded at 16x forward P/E.

*Manufacturing Integration Tech
- Secured $5.5m of new orders for its semiconductor equipment and contract equipment manufacturing services business.
- The orders are slated to be fulfilled by end-2017.

- Secured its first tenant for the newly completed industrial redevelopment at 8 Tuas Avenue 20.
- The tenant is from the aerospace sector and has committed to a 10-year lease with rent escalation during the term.

*ComfortDelGro (CDG)
- Asia private car hailing operator Grab has launched an aggressive campaign to woo CDG's cabbies, offering a rental discount of over 40% to those willing to defect to any taxi company using its platform.
- The salvo came a week after CDG announced a potential tie-up with Uber.
- This is expected to intensify competition in its declining Singapore taxi business, which contributes c.22% of its EBIT.
- MKE has a Hold with TP of $2.25.

*Cache Logistics Trust
- Undertaking an underwritten and renounceable 18-for-100 rights issue at $0.632/unit.
- Gross proceeds of $102.7m is intended to pare debt, with aggregate leverage expected to be lowered from 43.4% to 35.5%.
- Pro forma FY16 DPU will be diluted to 6.882¢ from 7.725¢ from the 18% increase in unit base.

*Spackman Entertainment
- Wholly-owned subsidiary Zip Cinema will be producing its next major film titled "Sovereign Default", a Korean financial crisis thriller.
- The production will have an estimated budget of 9.7b won (US$8.6m).
- Filming is slated to commence in end-2017 or early-2018, with the premier targeted in 2H18.

*Fragrance Group
- Acquired the 141-room Lyndene Hotel in Lancashire, UK, for £5.3m.
- Trades at 1.03x P/B.