Wednesday, April 4, 2018

SG Market (04 Apr 18)

- Stocks could advance after Wall Street recovered from a technology-induced drubbing but upside could be capped as traders await China's response to the release of US tariff list on US$50b of Chinese imports, announced after market close.
- Technically, the STI sees downside support at 3,390, with topside resistance at 3,440.

*Yoma Strategic
- International Finance Corporation (IFC), with the support of Canadian government, will be joining Norwegian state-owned fund, Norfund, and the group as investment partners.
- An investment of US$28m via equity and debt funding will enable Yoma Micro Power (YMP) to generate and distribute electricity using solar-based micro power plants and mini-grids to power telecom towers in rural Myanmar and off-grid communities.
- Post investment, Yoma Strategic will hold 35%, while Norfund and IFC will own 30% each in YMP, with the remaining 5% held by Alakesh Chetia, an experienced professional in the power infrastructure sector who is leading the initiative
- Trades at 39.1x forward P/E.

*Ntegrator Intl
- Secured two contracts worth $17.3m from a regional service provider for a nationwide project.
- The contracts involves the supply, installation and maintenance services for fibre cable and overground boxes.
- Projects are slated to commence this month and scheduled to complete in 18 months.
- Order book currently stands at $102.4m.
- Trades at 0.63x P/B.

*Jiutian Chemical
- The independent auditor has highlighted the group's ability to continue as a going concern.
- Questions arise on the group's ability to generate sufficient operational cash flows to meet current and future obligations, the ability for continuing financial support from principal supplier Anhua and its associate Anyang Jiulong, as well as the availability of credit facilities over the next 12 months.
- Pertaining to the issue, the group has clarified that it is sourcing for new customers and is in talks with major customers to seek higher sales volume and prices for its products.
- Further, group cited it has obtained financial support from Anhua and Anyang Jiulong and is seeking productivity efficiency to reduce its cost of production.
- Trades at 7.9x trailing P/E.

*Silverlake Axis
- Sold 2.1m Global Infotech (GIT) shares for Rmb24.1m (Rm14.7m) or Rmb11.23 each.
- To recap, the group intended to monetise up to 19.2m GIT shares after it ceased to be an associate.
- The transaction is estimated to book a net disposal loss of Rm4.29m.
- Trades at 15.4x forward P/E.

- The company and its chairman Thomas Zilliacus have been notified by the Commercial Affairs Department of an investigation into a potential offence under the Securities and Futures Act.
- The company has been ordered to provide access to documents and information in FY13-16 for the the investigation.
- Counter has been suspended and last traded at 1.1x trailing P/E.

*Keppel Corp
- Terminated a service agreement to manage a Chinese shipyard for Titan Petrochemicals, which held back its investment in the yard due to the O&M downturn.
- Both parties have will explore potential future collaboration when market conditions improve.
- Trades at 14.4x forward P/E.

*Ascendas REIT
- Divesting 30 Old Toh Tuck Road for $24m to Soon Bee Huat Trading, with proceeds to be recycled to fund investments, repay debt, extend loans to subsidiaries as well as for general corporate and working capital needs.
- Trades at an indicative 6.3% yield and 1.27x P/B.
- MKE has a Buy with TP of $3.05.

- Forming a 60:40 JV with Equine Sanctuary to provide design and consultancy services, and construction oversight of a racecourse and racetrack in Ho Chi Minh City, Vietnam.
- The racecourse and racetrack will sit on 300 ha of land and be part of the Sing-Viet City project, which includes 16,000 residential units as well as an integrated gaming resort.
- Trades at 0.61x P/B.

*Allied Technologies
- Signed an agreement to acquire a 51% stake in Asia Box Office (ABO) for $30m.
- ABO operates an e-commerce ticketing solutions platform for venue and event organisers in Southeast Asia and Greater China.
- An independent valuation commissioned by the company suggests a fair market value of between $57m and $62m for the entity.
- The target has net tangible assets of $265,000 as at 30 Jun '17.
- Trades at 10x trailing P/E.

- Executive chairman Chen Wei Ping has tendered his resignation, effective 2 Apr '18.
- The departure came after SGX raised concerns over the suitabilty and integrity required for his role following the group's recent discovery of unauthorised loans and corporate guarantees, as well as undisclosed lawsuits.
- Counter remains suspended.

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