Friday, November 17, 2017

SG Market (17 Nov 17)

- The market could recoup some losses after a 5-day losing streak as Wall Street cheered the House passage of Trump's tax cut bill.
- Technically, underlying support for the STI lies at 3,320 with upside resistance at 3,390.

- MKE stays Positive on the property sector even after its strong 30% ytd rally. We believe the sector is in the early stages of a recovery and recent share-price weakness on the back of profit-taking should be an opportunity to raise exposure.
- Three things to watch for the next potential leg up are 1) RNAV upgrades from accretive land deals; 2) lower home vacancies; and 3) a recovery in residential rents, with tailwinds stemming from accelerated enbloc demolitions.
- Top picks are UOL (TP: $9.85), City Dev (TP: $13.80) and GuocoLand (TP: $2.90).

*Genting Hong Kong
- Disposing 5m Norwegian Cruise Line shares via a secondary public offering.
- The sale would raise US$270.1m and result in a US$57.4m gain.
- Upon completion of deal, the group's stake in NCL would be reduced to 5.64% from 7.83%.
- Last traded at 0.45x P/B

- Entered three-year management and license agreements with Beijing New Hope Hospital (BNH) to provide management services for the Singapore Cancer Centre clinic at Beijing Parkway Jingshun Hospital and other oncology medical services set up by BNH in China.
- Management fee will be 4% of the clinic's EBITDA.
- License fee will be 1.5% of clinic's net revenue.
- Trades at 28.8x forward P/E.

*Pollux Properties
- Completed the acquisition of Pollux Alpha Investment (PAI) from Pollux Holdings for $145m.
- To recap, PAI is a property investment company, which owns several commercial and residential properties located in prime locations in Singapore, including the iconic MacDonald House in Orchard Road.
- The acquisition would enable the group to expand its investment portfolio and have a greater financial capacity to seek opportunities in Singapore and the region.
- Last traded at 0.49x P/B.

*Hatten Land
- Acquired two land parcels in Klebang, Melaka, for a combined RM108.6m
- The two integrated projects is near to new township developments, and will expand the group's land asset portfolio to seven integrated mixed-use developments and a retail mail.
- Acquisition will be funded via an issue of 140.16m shares at $0.25 each (29% premium to last close).
- Post-completion, pro forma NTA/share will increase to RM0.2213 from RM0.165.
- Trades at 7.7x forward P/E.

*Spackman Entertainment
- Invested KRW250m ($309,000) for a 20% stake in The Makers Studio, a South Korean film production company.
- The start-up firm was set up by three Korean entertainment industry veterans and has plans to produce and release four films in 2018-2020.

*Nam Cheong
- Application by key subsidiaries to restructure their debts under a scheme of arrangement has been granted by High Court of Malaysia.
- The group has been ordered to convene a meeting between Nam Cheong Dockyard and Nam Cheong Int'l and their respective creditors to consider and approve the scheme of arrangement within 90 days from 15 Nov 2017.
- The shipbuilder has suspended trading since 21 Jul 2017.

*HL Global
- Agreed with Natural Apex to extend the current long-stop date for the disposal of LKN Investment from 16 Nov to 23 Nov.
- Trades at 76.9x trailing P/E.

*Raffles Education
- Oei Hong Leong and Oei Hong Leong Art Museum have withdrawn their requisition notice to oust the group's founder, chairman and chief executive Chew Hua Seng.
- The loss-making group is trading at 0.59x P/B.

- Proposed a renounceable non-underwritten 3-for-1 rights issue at $0.05 each, attached with two detachable warrants with exercise price of $0.05 apiece.
- Maximum proceeds from the rights of $51.3m will be used to repay debt of $22.6m and for working capital purposes.

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