Tuesday, October 4, 2011
DMX
DMX: Implements Vision CEP as network convergence show case for Jiangsu Broadcasting (JSCN) which is China's largest and world's 2nd largest cable TV network operator with 14m subscribers. This network allows JSCN to deliver real-time, N-screen personalized selection of content and services to its subscribers. Vision CEP is a platform which allows TV and mobile operators to simultaneously adapt and share content across television, Internet and mobile phones.
Lee Metals
Lee Metals: Sells remaining 15% stake in 2 companies to their majority shareholder, a Mr Fajar Suhendra for $17.3m. The two companies PT Indoferro and PT Indocoke were incorporated to operate a blast furnace and coking plant for the production of steel products. Co is of the view both the furnace and plant are taking considerably longer than planned and will be in the best interests of co to divest. Book value of the investments was approx $14.6m.
PEC
PEC: Signed a $45m contract with JGC Corporation (JGC) to provide steel structure erection, piping and electrical & instrumentation works for a refinery in Sg for an oil major. This bring co's order book to over $300m. PEC now trades at 5.8x current P/E with Rotary at 6.2x.
With the recent fire at Pulau Bukom, PEC and Rotary may have opportunity to secure contracts with Shell, both having secured previous contracts from the oil major before.
With the recent fire at Pulau Bukom, PEC and Rotary may have opportunity to secure contracts with Shell, both having secured previous contracts from the oil major before.
Courage Marine
Courage Marine: Sells a vessel MV Zorina for US$5.2m. MV Zorina is a handymax vessel with capacity of approx 48k dwt. It was acquired by co in 2008 at purchase cost of approx US$16m with current NAV of US$8.3m. Co expects to record a loss of approx US$3.3m on disposal.
The willingness to sell the vessel at a loss might have been influenced by recent poor results where it posted a 2nd consecutive qtrly loss as of 30 June 2011. Both the Japanese disaster and over-supply of vessels have contributed to low freight rates affecting co’s profitability and increases in bunker prices also affected co’s ability to accept these orders.
The willingness to sell the vessel at a loss might have been influenced by recent poor results where it posted a 2nd consecutive qtrly loss as of 30 June 2011. Both the Japanese disaster and over-supply of vessels have contributed to low freight rates affecting co’s profitability and increases in bunker prices also affected co’s ability to accept these orders.
Eu Yan Sang
Eu Yan Sang: Signs non-binding term sheet with HL Bank for proposed issue by co for principal $25m of notes due 2016 and 22m warrants each with the right to subscribe for 1 share each at a yet undetermined exercise price but at minimum of $0.86 (16.9% premium to last done). The notes will bear interest of 3% p.a for the 1st 3 yrs and thereafter at 4.5% with a redeemable option to noteholders after the 3rd yr.
Co intends to use net proceeds of $10m to fund business expansions in China and within the region, another $10m for commercial real estate related to co’s operations and the remainder funds for working capital. Co trades at 12.0x fwd P/E with unanimous Buy calls from 3 houses.
Co intends to use net proceeds of $10m to fund business expansions in China and within the region, another $10m for commercial real estate related to co’s operations and the remainder funds for working capital. Co trades at 12.0x fwd P/E with unanimous Buy calls from 3 houses.
Stamford Land
Stamford Land: Signs non-binding MOU for the sale and leaseback for three of its hotel properties: the Stamford Plaza Melbourne, Stamford Grand Adelaide and Stamford Plaza Sydney Airport hotels to an undisclosed purchaser. The net book value of the 3 hotels as at 30 June 2011 is A$148.7m ($188.8m). The indicative sale consideration of A$316m ($401.3m) exceeds the net book value by A$167.3m. Co has highlighted strategic initiatives for capital recycling which do not exclude sale and lease-back of its assets or injection into REITs. Stamford Land has 8 hotels under its portfolio, 7 of which are in Australia and 1 in New Zealand.
In 2008, co had rejected an initial offer for A$850m for all 8 hotels but highlighted that it would focus on investing in property dev and returning surplus funds then. Co now trades at 0.8x P/B
In 2008, co had rejected an initial offer for A$850m for all 8 hotels but highlighted that it would focus on investing in property dev and returning surplus funds then. Co now trades at 0.8x P/B
Ascendas REIT
Ascendas REIT: Announced its maiden acquisition in Beijing, a business park property for Rmb300m (S$62m) for the property. Mgt earlier in Feb announced the forward purchase of a business park property in Shanghai for Rmb588m and this latest acquisition is in line with strategy to expand in gateway cities in China with focus on the business and science park segment.
The property is currently 100% occupied with Baidu and Raisecom Technology as major tenants. Detusche tips acquisition to be yield accretive and estimates NPI yield of 8% vs its Shanghai ppty at 8.8%) which contributes 0.02c/unit accretion to pro-forma FY11 DPU assuming 60:40 equity:debt structure. Portfolio passing rent of Rmb3.20 psm/day is below current mkt rent of Rmb3.60 psm/day which should lift NPI yield to the mid-8% level as leases revert to market.
AREIT's gearing is estimated to increase from the current 28.7% to 35.6% after this acquisition and other capital commitments, which is still conservative vs. peers. Deutsche maintains Buy with $2.30 TP, while SCB has ‘In-Line’ Call with $2.14 TP.
The property is currently 100% occupied with Baidu and Raisecom Technology as major tenants. Detusche tips acquisition to be yield accretive and estimates NPI yield of 8% vs its Shanghai ppty at 8.8%) which contributes 0.02c/unit accretion to pro-forma FY11 DPU assuming 60:40 equity:debt structure. Portfolio passing rent of Rmb3.20 psm/day is below current mkt rent of Rmb3.60 psm/day which should lift NPI yield to the mid-8% level as leases revert to market.
AREIT's gearing is estimated to increase from the current 28.7% to 35.6% after this acquisition and other capital commitments, which is still conservative vs. peers. Deutsche maintains Buy with $2.30 TP, while SCB has ‘In-Line’ Call with $2.14 TP.
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