Wednesday, June 6, 2018

SG Market (06 Jun 18)

- The broader market remains sluggish even as a tech rally on Wall Street lifted local blue chips against a backdrop of trade tensions.
- Technically, the grossly oversold STI could reclaim more lost ground with near-term resistance at 3,510 (near 50-dma), while underlying support remains at 3,424 level (200-dma).

*Keppel Corp
- Secured a $50m contract from FueLNG (50:50 JV with Shell) to build Southeast Asia's first LNG bunkering vessel.
- The 7.500m3 vessel is scheduled to be completed in 3Q20 and will support the growth of clean fuel newbuild solutions along the gas value chain.
- FueLNG will receive a grant of up to $3m as part of the Maritime and Port Authority of Singapore's LNG Bunkering Pilot Programme.
- Ytd, the group has won over $600m of new orders, comprising a semi-submersible rig, 2 dredgers and 2 bunker vessels. Order book as of Mar '18 stood at $4.3b.
- Trades at 12.2x forward P/E.

*Kim Heng Offshore
- Clinched marine & horizontal directional drilling contract at Tuas South Boulevard to support a submarine cable maintenance & installation provider.
- Work will commence from Sep '18.
- Trades at 0.85x P/B.

*APAC Realty
- Acquiring a commercial property at 450 Lorong 6 Toa Payoh from HC Home for $72.8m.
- The 4,121 sqm gfa property will have retail space, auditorium and three levels of office space and provide improved training areas for ERA's agents.
- Excess space and retail areas will be leased to third parties to offset operating costs of the property.
- Trades at 10.8x P/E and offers indicative yield of 2.2%.

*Allied Technologies
- Entered into a binding MOU with Seow See Keong and Leow Ai Li, Amy to acquire 51% stake in Activpass Holdings subject to further negotiations and fulfilment of certain conditions precedents.
- The parties will finalise the terms within two months and complete the deal within three months from the MOU.
- Activpass operates a suite of software solutions that combines a cloud-based intelligent customer engagement system, a business management platform and consumer mobile marketplace app for the fitness, wellness and beauty services industries.
- This is part of the group's efforts to diversify its business and provide additional revenue stream in technology solutions, which has strong growth potential, especially in the e-commerce sector.
- Trades at 13.9x trailing P/E.

*Alliance Mineral
- Updated that it commenced operations at Bald Hill on 14 Mar '18 and tantalum pre-concentrate recoveries are exceeding initial expectations.
- Completed two shipments of lithium concentrate to Burwill in May.
- Next shipment is anticipated in Jun or early Jul but date and quantity are still to be determined.
- Intends to make more regular shipments to Burwill once production plants have reached steady state production.
- Trades at 6.5x P/B.

- Partnering Sun Entertainment to organise Hacken Lee's 30th anniversary concert in eight cities across China.
- Performances will be in Chengdu, Dongguan, Wuhan, Nanning, Foshan, Shanghai, Shenzhen, Guangzhou, Singapore and KL from Sep 2018 to Nov 2019.
- The concert will feature centrestage production in all venues with expected seating capacity per venue in excess of 10,000
- Trades at 51.1x trailing P/E

- Disposing vacant (since Oct '17) Ubi Techpark property at 20 Ubi Crescent to Sapphire Star US$2.19m.
- The 3-storey strata terrace factory (~836 sqm) was originally used as training facility.
- Net proceeds of US$1.14m is over book value of US$1.05m as at Aug '16 and will be used to fund the group's restructuring programme.
- Separately, the group is also disposing non-listed preference shares of insurance company IC Cell Ezra at a premium of US$0.1m.

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