MARKET OVERVIEW
-The market could be off to a muted start following the fallout from the G-7 meeting, and ahead of a busy week dominated by the historic Trump-Kim summit and Fed, ECB and BOJ policy meetings.
- Technically, the STI is likely to trade within a broad band bounded by 3,510 (near 50-dma) and 3,428 level (200-dma).
POSITIVE NEWS
*HRnetGroup
- Acquiring 51% stake in REForce (Shanghai) HR Management Consulting Co, which will operate executive search business in Shanghai, Beijing, Guangzhou and Suzhou, with remaining 49% held by a team of owner managers.
- REForce specialises in mid-senior level recruitment in sales & marketing, operations, R&D, HR, finance and legal positions; and consumer, new energy automotive, financial services, industrial and TMT sectors.
- The JV is expected to commerce operations in 3Q18, upon obtaining the relevant licences and business transfer procedures.
- With a staff strength of 68, the acquisition raising the group's headcount to 187 in China and 865 in Asia. The addition of Suzhou is its 4th city of operation in China and the 12th city in Asia.
- Trades at 16.8x forward P/E
*Addvalue
- Commenced the delivery of an in-house developed high-end proprietary software define radio (SDR) communication module for advanced communications industries.
- Expects a repeat order of the SDR module from the same government agency before the closing out the current order.
- The total value of the supply contract is ~$1m, and the entire order is expected to be fulfilled in the current financial year.
- The group also expects orders from other sectors, both commercial and non-commercial, as it starts marketing the product worldwide.
- In addition, it has in its pipeline a variety of projects and services not related to the Inter-Satellite Data Relay System totalling US$12m earmarked for delivery by FY19.
*Lum Chang
- Awarded $147.5m contract for construction of JTC's new industrial development at Woodlands North Coast.
- The industrial development has a site area and gfa of 29,900 sqm and 43,900 sqm respectively.
- Contract involves the construction of a new 9-storey light industrial building with one basement car park and two roof floors, and a covered walkway to Republic Polytechnic.
- Work is scheduled to begin in mid-Jun' 18 with a contract period of 22 months.
- This deal brings total outstanding construction order book yet to be recognized to $740m.
- Trades at 0.57x P/B.
NEUTRAL NEWS
*Frasers Property
- The group's hospitality arm opens its second property in Tianjin.
- An additional 16 properties and 3,400 rooms will bring China portfolio to 32 properties over the next few years.
- This will see it enlarging its footprint in cities such as Chengdu, Nanjing, Shanghai and Wuhan, as well as opening in new cities such as Nanchang and Haikou.
- Trades at 0.78x P/B
*Secura
- Disposing its freehold rental properties with a gross land area of 1,784 sqm in Malaysia to Perfect Plastic for RM7m.
- As at end-Mar'18, the aggregate book value of the properties was $2.42m and hence, the loss on disposal of its assets would be $75,000.
- Net proceeds from the proposed disposal will be placed in short-term deposits and/or used for the group's working capital purposes.
- Trades at 0.73x P/B
*Nico Steel
- Entered a non-binding MOU to acquire 20% stake in Jiangsu Kaixinfenxiang Green Finance Co for Rmb15m
- Kaixinfenxiang is the first provincial-level green finance operation platform in Jiangsu province, with a focus to boost green industries in China, including intelligent transportation, education, medical care and pharmaceutics, culture and travel, infrastructure and mega data.
- The group intends to use this initial acquisition as a stepping stone to exploring more opportunities in the finance business sector.
- Trades at 16.3x trailing P/E
*Sinarmas Land
- Entered into strategic collaboration with Fuzhou-based real estate company, Rong Qiao Group.
- This is expected to open up opportunities for both parties to enter into strategic alliances through M&As, land auction or joint operations and development of real estate and related projects both within and outside of China.
- Specific terms and structure of partnership will depend on individual projects where a binding agreement will be entered into.
- Trades at 0.68x P/B
*Arion Entertainment
- Proposing to consolidate 10 shares to one, subject to approval of shareholders at EGM.
- The board believes that share consolidation will reduce volatility of share price and increase market interest and appeal of the group.
- Trades at 2.3x P/B.
NEGATIVE NEWS
*MS Holdings
- Warned of a net loss for FY18 results due to challenging business conditions and competitiveness in crane rental markets.
Monday, June 11, 2018
Friday, June 8, 2018
SG Market (08 Jun 18)
MARKET OVERVIEW
- Market is likely to remain choppy as trade issues are likely to dominate ahead of contentious G-7 meeting but better China headlines.
- Tech and bank counters may come under pressure after US semicap equipment makers took a hit and 10Y Treasury yield tumbled 9bps to 2.89%.
- Technically, the STI could face some weakness with immediate resistance seen at 3,510 (near 50-dma) and underlying support at 3,428 (200-dma).
POSITIVE NEWS
*Sunpower Group
- Secured two manufacturing & services contracts worth Rmb95.5m from Shandong NHU, a repeat customer, for the world's largest amino acid project.
- The group will start the supply of equipment in 2H18 and expects completion of delivery in early 2019 with positive impact on its FY18/19 performance.
- This is in addition to its existing record order book of Rmb2b as at end Mar.
- Trades at 7.4x forward P/E.
*Sembcorp Industries
- Sembcorp and Ascendas-Singbridge JV has formalised its 58:48 partnership with state government of Andhra Pradesh to co-master develop the 684-ha Amaravati Capital City Start-up Area in India.
- The development company Amaravati Development Partners (ADP) has signed a concession and development agreement with Andhra Pradesh government for development rights, licences and required authorisations for the development of the startup area.
- The startup area lies within the 20sq km Seed Development Area of Amaravati City and will be developed in phases over 15-20 years.
- Trades at 14.5x forward P/E.
*Addvalue Technologies
- Entered into an airtime service agreement global satellite company to provide enhanced data gathering services for its clients.
- In partnership with Inmarsat, the group is contracted to provide the customer with the inter-satellite data relay system (IDRS) airtime service until at least 2026.
- This is a follow-up from earlier major contract to design and supply IDRS terminals for the customer's multi-LEO satellite constellation, with delivery scheduled to commence in 2018.
- Both contracts are estimated to yield recurring annual revenues exceeding US$40m when fully deployed.
- Trades at 6x P/B
*Low Keng Huat
- Acquiring 67 Cairnhill Road and two adjacent plots for $100m, translating to $1,804 psf ppr.
- The 19,800 sf freehold site is adjacent to Cairnhill Mansion, which the group acquired in a $362m en bloc deal in Feb '18.
- Subject to approval from the strata title board, the group intends to redevelop the site and the Cairnhill Mansion plot into a 200-unit high-rise condo. The other option is to develop the property into a 55-unit project.
- Trades at 0.74x P/B.
NEUTRAL NEWS
*Sembcorp Marine
- Acquiring intellectual property (IP) rights of Norway's Sevan Marine ASA for US$28m.
- The group will further undertake to take over some of Sevan Marine's existing service contracts and engineering services to some contract partners.
- The litigation between SCM Group and Sevan Marine in the US Courts over the infringement of IP rights of SCM Group will be terminated subject to completion.
- Trades at 1.8x P/B
*Declout
- Divesting 40% stake in PT Max Interactives Technologies (MIT) to PT Recapital Advisors for US$0.1m.
- Post-disposal, the group will own 60% of MIT.
- MIT has a net tangible liability value of $0.09m, and no valuation was carried out for the deal.
- Trades at 0.62x P/B.
NEGATIVE NEWS
*Manufacturing Integration Tech
- Entered into 2nd deed of undertaking with China FortuneTech Capital (CFTC) to extend exclusivity period for 1 more month to 7 Jul '18.
- To recap, the group had entered into a non-binding term sheets to dispose its semicon business to CFTC.
- Trades at 12.6x trailing P/E.
- Market is likely to remain choppy as trade issues are likely to dominate ahead of contentious G-7 meeting but better China headlines.
- Tech and bank counters may come under pressure after US semicap equipment makers took a hit and 10Y Treasury yield tumbled 9bps to 2.89%.
- Technically, the STI could face some weakness with immediate resistance seen at 3,510 (near 50-dma) and underlying support at 3,428 (200-dma).
POSITIVE NEWS
*Sunpower Group
- Secured two manufacturing & services contracts worth Rmb95.5m from Shandong NHU, a repeat customer, for the world's largest amino acid project.
- The group will start the supply of equipment in 2H18 and expects completion of delivery in early 2019 with positive impact on its FY18/19 performance.
- This is in addition to its existing record order book of Rmb2b as at end Mar.
- Trades at 7.4x forward P/E.
*Sembcorp Industries
- Sembcorp and Ascendas-Singbridge JV has formalised its 58:48 partnership with state government of Andhra Pradesh to co-master develop the 684-ha Amaravati Capital City Start-up Area in India.
- The development company Amaravati Development Partners (ADP) has signed a concession and development agreement with Andhra Pradesh government for development rights, licences and required authorisations for the development of the startup area.
- The startup area lies within the 20sq km Seed Development Area of Amaravati City and will be developed in phases over 15-20 years.
- Trades at 14.5x forward P/E.
*Addvalue Technologies
- Entered into an airtime service agreement global satellite company to provide enhanced data gathering services for its clients.
- In partnership with Inmarsat, the group is contracted to provide the customer with the inter-satellite data relay system (IDRS) airtime service until at least 2026.
- This is a follow-up from earlier major contract to design and supply IDRS terminals for the customer's multi-LEO satellite constellation, with delivery scheduled to commence in 2018.
- Both contracts are estimated to yield recurring annual revenues exceeding US$40m when fully deployed.
- Trades at 6x P/B
*Low Keng Huat
- Acquiring 67 Cairnhill Road and two adjacent plots for $100m, translating to $1,804 psf ppr.
- The 19,800 sf freehold site is adjacent to Cairnhill Mansion, which the group acquired in a $362m en bloc deal in Feb '18.
- Subject to approval from the strata title board, the group intends to redevelop the site and the Cairnhill Mansion plot into a 200-unit high-rise condo. The other option is to develop the property into a 55-unit project.
- Trades at 0.74x P/B.
NEUTRAL NEWS
*Sembcorp Marine
- Acquiring intellectual property (IP) rights of Norway's Sevan Marine ASA for US$28m.
- The group will further undertake to take over some of Sevan Marine's existing service contracts and engineering services to some contract partners.
- The litigation between SCM Group and Sevan Marine in the US Courts over the infringement of IP rights of SCM Group will be terminated subject to completion.
- Trades at 1.8x P/B
*Declout
- Divesting 40% stake in PT Max Interactives Technologies (MIT) to PT Recapital Advisors for US$0.1m.
- Post-disposal, the group will own 60% of MIT.
- MIT has a net tangible liability value of $0.09m, and no valuation was carried out for the deal.
- Trades at 0.62x P/B.
NEGATIVE NEWS
*Manufacturing Integration Tech
- Entered into 2nd deed of undertaking with China FortuneTech Capital (CFTC) to extend exclusivity period for 1 more month to 7 Jul '18.
- To recap, the group had entered into a non-binding term sheets to dispose its semicon business to CFTC.
- Trades at 12.6x trailing P/E.
Thursday, June 7, 2018
SG Market (07 Jun 18)
MARKET OVERVIEW
- The market could flip higher after Wall Street extended its rally on stronger economic data and trade war jitters took a back seat but upside gains could be tempered by news that Malaysia would review the planned SGX-Bursa Malaysia stock trading link.
- Technically, the STI appears to be struggling with no clear directional moves. Immediate resistance is at 3,510 (near 50-dma), while underlying support lies at 3,424 level (200-dma).
CORPORATE RESULTS
*TTJ Holdings
- 3QFY18 net profit climbed 27% to $3.1m, bringing 9MFY18 earnings to $7.5m (-22%).
- Revenue for the quarter jumped 71% to $28.7m on higher takings from its structural steel business.
- However, gross margin shrank 5.4ppt to 21.9% due to lower margin projects completed.
- Bottom line was impacted by absence of a $1.1m credit write-back recorded last year by Technics Steel.
- Trades at 13.4x trailing P/E.
POSITIVE NEWS
*ComfortDelGro
- In the clearest sign of a turnaround in its cab business since the emergence of private hire cars five years ago, taxi bookings rose nearly 9% last month, the biggest jump since Sep '14.
- This follows Uber's exit from Southeast Asia and the pullback of Grab's rider promotions and driver incentives as well as a recent tender for the supply of 500 more taxis after it bought 200 new cabs in May, its first purchase in 18 months.
- Trades at 17.6x P/E and 4.2% yield.
- MKE has a Buy with TP of $2.65.
*Alliance Mineral
- Recorded 108% and 43% increases in lithium and tantalum ore reserves at its Bald Hill mine in Western Australia.
- The reserve upgrade reflects improvements in pit design and processing efficiencies yield and now support a mine life of 9 years at the current processing rate of 1.2m tpa.
- The increase in reserves and extension of mine life will pave the way for scaled up production.
- With strong market demand and economics of increased throughput rates, the JV partners are actively reviewing options for significant expansion in processing capacity and concentrate production.
- Trades at 5.9x P/B
NEUTRAL NEWS
*Asian Pay TV
- Disclosed that 13,000 units held by restricted investors have been sold in the open market.
- Net proceeds from sale will be returned in proportion to their respective unitholders.
- Trades at 14.6% indicative yield and 0.55x P/B.
NEGATIVE NEWS
*Ezion
- Updated that there was an incident involving JV liftboat Teras Lyzain the South China Sea on 5 Jun.
- The vessel was being dead towed from Vung Tau, Vietnam to Taichung, Taiwan when it developed a sudden list to the stern and subsequently capsized.
- Till now, Teras Lyza is still floating upside down and towing tug Teras Eden is standby on location to look out for any potential pollution.
- The liftboat is fully insured anf the group does not expect any material impact on its FY18 results.
- Trades at 0.65x P/B
*Del Monte Pacific
- Decided to defer the secondary listing of a 21% stake in Del Monte Philippines on the Philippine Stock Exchange due to volatile market conditions.
- Trades at 0.54x P/B.
- The market could flip higher after Wall Street extended its rally on stronger economic data and trade war jitters took a back seat but upside gains could be tempered by news that Malaysia would review the planned SGX-Bursa Malaysia stock trading link.
- Technically, the STI appears to be struggling with no clear directional moves. Immediate resistance is at 3,510 (near 50-dma), while underlying support lies at 3,424 level (200-dma).
CORPORATE RESULTS
*TTJ Holdings
- 3QFY18 net profit climbed 27% to $3.1m, bringing 9MFY18 earnings to $7.5m (-22%).
- Revenue for the quarter jumped 71% to $28.7m on higher takings from its structural steel business.
- However, gross margin shrank 5.4ppt to 21.9% due to lower margin projects completed.
- Bottom line was impacted by absence of a $1.1m credit write-back recorded last year by Technics Steel.
- Trades at 13.4x trailing P/E.
POSITIVE NEWS
*ComfortDelGro
- In the clearest sign of a turnaround in its cab business since the emergence of private hire cars five years ago, taxi bookings rose nearly 9% last month, the biggest jump since Sep '14.
- This follows Uber's exit from Southeast Asia and the pullback of Grab's rider promotions and driver incentives as well as a recent tender for the supply of 500 more taxis after it bought 200 new cabs in May, its first purchase in 18 months.
- Trades at 17.6x P/E and 4.2% yield.
- MKE has a Buy with TP of $2.65.
*Alliance Mineral
- Recorded 108% and 43% increases in lithium and tantalum ore reserves at its Bald Hill mine in Western Australia.
- The reserve upgrade reflects improvements in pit design and processing efficiencies yield and now support a mine life of 9 years at the current processing rate of 1.2m tpa.
- The increase in reserves and extension of mine life will pave the way for scaled up production.
- With strong market demand and economics of increased throughput rates, the JV partners are actively reviewing options for significant expansion in processing capacity and concentrate production.
- Trades at 5.9x P/B
NEUTRAL NEWS
*Asian Pay TV
- Disclosed that 13,000 units held by restricted investors have been sold in the open market.
- Net proceeds from sale will be returned in proportion to their respective unitholders.
- Trades at 14.6% indicative yield and 0.55x P/B.
NEGATIVE NEWS
*Ezion
- Updated that there was an incident involving JV liftboat Teras Lyzain the South China Sea on 5 Jun.
- The vessel was being dead towed from Vung Tau, Vietnam to Taichung, Taiwan when it developed a sudden list to the stern and subsequently capsized.
- Till now, Teras Lyza is still floating upside down and towing tug Teras Eden is standby on location to look out for any potential pollution.
- The liftboat is fully insured anf the group does not expect any material impact on its FY18 results.
- Trades at 0.65x P/B
*Del Monte Pacific
- Decided to defer the secondary listing of a 21% stake in Del Monte Philippines on the Philippine Stock Exchange due to volatile market conditions.
- Trades at 0.54x P/B.
Wednesday, June 6, 2018
SG Market (06 Jun 18)
MARKET OVERVIEW
- 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).
POSITIVE NEWS
*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.
NEUTRAL NEWS
*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.
*UnUsUal
- 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
*Ezra
- 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.
- 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).
POSITIVE NEWS
*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.
NEUTRAL NEWS
*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.
*UnUsUal
- 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
*Ezra
- 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.
Tuesday, June 5, 2018
SG Market (05 Jun 18)
MARKET OVERVIEW
- The market is set for a mixed start after pacing a global rally as investors shrugged off the breakdown in trade relations between US and Europe/China to drive tech stocks higher.
- Oil-related counters may come under pressure as crude fell below US$66/bbl after an OPEC stressed the need to ensure supplies can meet growing demand, adding to speculation the cartel will phase out its production cuts.
- Technically, the STI is rebounding from deeply oversold levels with topside resistance at 3,510 (near 50-dma). Key support is at 3,424 level (200-dma).
MACRO WATCH
Economy
- May PMI dipped 0.2ppt m/m to 52.7 (est: 53.0) but remained in expansionary mode for the 21st straight month.
- The latest reading was attributed to slower growth in factory output, new orders, new exports, inventory and employment.
- The electronics PMI edged up 0.1ppt to 52.3, which is into its 22th consecutive month of growth, backed by pick-up in new orders, exports and factory output.
POSITIVE NEWS
*Oxley Holdings
- Its 40% owned, 1,052-unit residential project, Affinity at Serangoon has sold 112 out of 300 units launched over the weekend at an average selling price of $1,575 psf.
- 80% of buyers were Singaporeans while remaining 20% were PRs and foreigners.
- The group and consortium partners Lian Beng (20%), KSH associate (20%) and Super Group's Teo Family (20%) acquired the former Serangoon Ville site in a collective sale for $499m or $835 psf ppr in Jul '17.
- Trades at 37% discount to RNAV.
*Yangzijiang
- Secured new orders for nine new vessels in May, including two 82,000dwt dry bulkers, two 208,000dwt dry bulkers and five 12,000-TEU containerships for US$578m
- In Apr and May, the shipbuilder delivered 18 vessels, comprising large containerships and dry bulkers.
- To-date, the group has outstanding order book of US$4.1b for 115 vessels, which will keep the its yards busy until 2020.
- Trades at 9x forward P/E and 0.73x P/B.
*SIA
- Launching non-stop services to Newark in Oct, and Los Angeles soon, using its new A350-900ULR aircraft, marking the resumption of its non-stop Singapore-New York flight since 2013.
- The Newark service will offer 67 business class and 94 premium economy seats, and cover over 15,000km, with a flight time of just under 19 hours, making it the world's longest non-stop flight.
- With seven of the ultra long range planes due for delivery by Mar '19, the airline plans to operate similar services to other US destiations.
- Trades at 0.95x P/B.
*AP Oil
- Awarded $8.7m contract to Ping Tan Construction for the construction of office building at 18 Pioneer Sector 1, Jurong, slated to be completed by 2Q19.
- The group will also be inviting tenders for tank and piping installation and jetty construction, in preparation for trading and manufacturing volume expansion amid stronger business and volume growth.
-Trades at 13.9x trailing P/E.
NEUTRAL NEWS
*Perennial Real Estate
- Acquiring additional 14.7% stake in Xi'an Perennial Cheng Tou East Real Estate Co for Rmb90m, raising its interest to 65.7%.
- Xi'an Perennial East is developing Plot 5 of Xi'an North HSR Integrated Development, on which is Perennial's second HSR healthcare integrated mixed-use development.
- The plot will comprise mainly medical/healthcare, facilities, hotel and retail, complemented by medical-related amenities when completed by 2020.
- The transaction will be funded via combination of internal cash and bank borrowings.
- Trades at 0.51x P/B
*C&G Environmental
- Acquiring Indonesian coal assets of Param Mitra Coal Resources (RMCR) in $400m reverse takeover deal.
- PMCR is in the business of coal mining, logistics and trading of thermal coal sourced from various coal mines in Indonesia.
- It has mining rights over concession areas covering 7,243 ha with an estimated coal resources and coal reserves of 746m tonnes and 544m tonnes, respectively.
- The group will consolidate 100 shares into one consolidated share prior to the completion of the proposed transaction and issue 488.9m new consolidated shares at $0.8182 apiece to PMCR.
NEGATIVE NEWS
*Asian Pay TV Trust
- Despite several notices, a limited number of Restricted Persons (PRC investors) continue to own APTT units.
- As such, APTT units owned by PRC investors will be sold on-market by broker-dealer.
- To recap, investors from People's Republic of China are not allowed to invest in cable television industry under Taiwan regulation.
- Trades at 0.51x P/B and 15.7% indicative yield.
- The market is set for a mixed start after pacing a global rally as investors shrugged off the breakdown in trade relations between US and Europe/China to drive tech stocks higher.
- Oil-related counters may come under pressure as crude fell below US$66/bbl after an OPEC stressed the need to ensure supplies can meet growing demand, adding to speculation the cartel will phase out its production cuts.
- Technically, the STI is rebounding from deeply oversold levels with topside resistance at 3,510 (near 50-dma). Key support is at 3,424 level (200-dma).
MACRO WATCH
Economy
- May PMI dipped 0.2ppt m/m to 52.7 (est: 53.0) but remained in expansionary mode for the 21st straight month.
- The latest reading was attributed to slower growth in factory output, new orders, new exports, inventory and employment.
- The electronics PMI edged up 0.1ppt to 52.3, which is into its 22th consecutive month of growth, backed by pick-up in new orders, exports and factory output.
POSITIVE NEWS
*Oxley Holdings
- Its 40% owned, 1,052-unit residential project, Affinity at Serangoon has sold 112 out of 300 units launched over the weekend at an average selling price of $1,575 psf.
- 80% of buyers were Singaporeans while remaining 20% were PRs and foreigners.
- The group and consortium partners Lian Beng (20%), KSH associate (20%) and Super Group's Teo Family (20%) acquired the former Serangoon Ville site in a collective sale for $499m or $835 psf ppr in Jul '17.
- Trades at 37% discount to RNAV.
*Yangzijiang
- Secured new orders for nine new vessels in May, including two 82,000dwt dry bulkers, two 208,000dwt dry bulkers and five 12,000-TEU containerships for US$578m
- In Apr and May, the shipbuilder delivered 18 vessels, comprising large containerships and dry bulkers.
- To-date, the group has outstanding order book of US$4.1b for 115 vessels, which will keep the its yards busy until 2020.
- Trades at 9x forward P/E and 0.73x P/B.
*SIA
- Launching non-stop services to Newark in Oct, and Los Angeles soon, using its new A350-900ULR aircraft, marking the resumption of its non-stop Singapore-New York flight since 2013.
- The Newark service will offer 67 business class and 94 premium economy seats, and cover over 15,000km, with a flight time of just under 19 hours, making it the world's longest non-stop flight.
- With seven of the ultra long range planes due for delivery by Mar '19, the airline plans to operate similar services to other US destiations.
- Trades at 0.95x P/B.
*AP Oil
- Awarded $8.7m contract to Ping Tan Construction for the construction of office building at 18 Pioneer Sector 1, Jurong, slated to be completed by 2Q19.
- The group will also be inviting tenders for tank and piping installation and jetty construction, in preparation for trading and manufacturing volume expansion amid stronger business and volume growth.
-Trades at 13.9x trailing P/E.
NEUTRAL NEWS
*Perennial Real Estate
- Acquiring additional 14.7% stake in Xi'an Perennial Cheng Tou East Real Estate Co for Rmb90m, raising its interest to 65.7%.
- Xi'an Perennial East is developing Plot 5 of Xi'an North HSR Integrated Development, on which is Perennial's second HSR healthcare integrated mixed-use development.
- The plot will comprise mainly medical/healthcare, facilities, hotel and retail, complemented by medical-related amenities when completed by 2020.
- The transaction will be funded via combination of internal cash and bank borrowings.
- Trades at 0.51x P/B
*C&G Environmental
- Acquiring Indonesian coal assets of Param Mitra Coal Resources (RMCR) in $400m reverse takeover deal.
- PMCR is in the business of coal mining, logistics and trading of thermal coal sourced from various coal mines in Indonesia.
- It has mining rights over concession areas covering 7,243 ha with an estimated coal resources and coal reserves of 746m tonnes and 544m tonnes, respectively.
- The group will consolidate 100 shares into one consolidated share prior to the completion of the proposed transaction and issue 488.9m new consolidated shares at $0.8182 apiece to PMCR.
NEGATIVE NEWS
*Asian Pay TV Trust
- Despite several notices, a limited number of Restricted Persons (PRC investors) continue to own APTT units.
- As such, APTT units owned by PRC investors will be sold on-market by broker-dealer.
- To recap, investors from People's Republic of China are not allowed to invest in cable television industry under Taiwan regulation.
- Trades at 0.51x P/B and 15.7% indicative yield.
Monday, June 4, 2018
SG Market (04 Jun 18)
MARKET OVERVIEW
- Market sentiment is expected to remain fragile as trade war concerns may cast a shadow on risk appetite with US heading for a showdown at a G-7 summit and China warning that it will withdraw its trade commitments if US goes ahead with tariffs.
- Technically, the grossly oversold STI could find support near the 200-dma at 3,423, with next line of denfence at 3,340. Immediate resistance lies at 3,510.
POSITIVE NEWS
*Perennial Real Estate
- Perennial International Health and Medical Hub in Chengdu, China, has commenced operations, with 90% committed occupancy.
- The one-stop medical, healthcare and retail integrated projects part of the Chengdu East HSR Integrated Development and spans over 280,000 sqm with more than half anchored by seven local and international medical tenants.
- To-date, all medical tenants have begun operations, except for Gleneagles Parkway Hospital which is anticipated to open in 2H18.
- Trades at 0.5x P/B.
*Centurion
- Acquiring a 127-bed student hostel in Manchester city centre for £18.7m, which will enlarge its UK accommodation portfolio to nine assets when completed in Jul '18.
- The property is a newly refurbished, 6-storey freehold building comprising studio and 1-bedroom apartments and two floors of commercial facilities.
- MKE estimates that this asset could raise its EPS by 2% and 4% in FY18 and FY19 respectively.
- Trades at 11.7x forward P/E and 0.85x P/B
NEUTRAL NEWS
*China Jinjiang
- Acquiring a 95% stake in PT Indo Green Power (IGP), which has secured a 30-year concession to build, own and operate a 1.000 tpa waste-to-energy (WTE) facility in Palembang, Indonesia.
- IGP will be paid a tipping fee for providing waste treatment services and an electricity tariff payable by the local authority for electricity generated.
- The total investment for the Palembang project is estimated at US$120m, which will be funded through internal resources, bank borrowings and future equity or debt fund raising.
- The acquisition marks another major step in the group's overseas expansion and will strengthen its footprint in the Southeast Asian WTE market.
- Trades at 5x P/E and 0.64x P/B.
*JEP Holdings
- Appointed Andy Luong as its Acting CEO to lead the company through its next phase of innovation to spur growth.
- Its new 200,000 sf SMART factory at Seletar Aerospace Park, which was equipped with new robotics and automation technologies will allow the group to stay competitive as well as broaden its range of product and service offerings.
- Going forward, it will also focus on growing the aerospace business as the global manufacturing market is expected to achieve a 5-year CAGR of 65.8% to reach US$2.82b revenue by 2020.
- Trades at 1.5x P/B
*Interra Resources
- Commenced drilling development of well CHK 1208 in the Chauk Oil field in Myanmar.
- CHK 1208 will be the fourth well to by drilled by Goldpetrol, the group's JV entity, in Myanmar in 2018.
- The group estimates that results of the drilling should be available within approximately six weeks.
- Trades at 1x P/B.
*Mindchamps
- Formed a 50:50 JV MindChamps-First Capital PreSchool China Capital Management (MFCPCCM) in the Cayman Islands.
- MFCPCCM is intended to be the general partner of the China PreSchool Fund, which will be funded through its internal resources.
- Trades at 22x forward P/E.
- Market sentiment is expected to remain fragile as trade war concerns may cast a shadow on risk appetite with US heading for a showdown at a G-7 summit and China warning that it will withdraw its trade commitments if US goes ahead with tariffs.
- Technically, the grossly oversold STI could find support near the 200-dma at 3,423, with next line of denfence at 3,340. Immediate resistance lies at 3,510.
POSITIVE NEWS
*Perennial Real Estate
- Perennial International Health and Medical Hub in Chengdu, China, has commenced operations, with 90% committed occupancy.
- The one-stop medical, healthcare and retail integrated projects part of the Chengdu East HSR Integrated Development and spans over 280,000 sqm with more than half anchored by seven local and international medical tenants.
- To-date, all medical tenants have begun operations, except for Gleneagles Parkway Hospital which is anticipated to open in 2H18.
- Trades at 0.5x P/B.
*Centurion
- Acquiring a 127-bed student hostel in Manchester city centre for £18.7m, which will enlarge its UK accommodation portfolio to nine assets when completed in Jul '18.
- The property is a newly refurbished, 6-storey freehold building comprising studio and 1-bedroom apartments and two floors of commercial facilities.
- MKE estimates that this asset could raise its EPS by 2% and 4% in FY18 and FY19 respectively.
- Trades at 11.7x forward P/E and 0.85x P/B
NEUTRAL NEWS
*China Jinjiang
- Acquiring a 95% stake in PT Indo Green Power (IGP), which has secured a 30-year concession to build, own and operate a 1.000 tpa waste-to-energy (WTE) facility in Palembang, Indonesia.
- IGP will be paid a tipping fee for providing waste treatment services and an electricity tariff payable by the local authority for electricity generated.
- The total investment for the Palembang project is estimated at US$120m, which will be funded through internal resources, bank borrowings and future equity or debt fund raising.
- The acquisition marks another major step in the group's overseas expansion and will strengthen its footprint in the Southeast Asian WTE market.
- Trades at 5x P/E and 0.64x P/B.
*JEP Holdings
- Appointed Andy Luong as its Acting CEO to lead the company through its next phase of innovation to spur growth.
- Its new 200,000 sf SMART factory at Seletar Aerospace Park, which was equipped with new robotics and automation technologies will allow the group to stay competitive as well as broaden its range of product and service offerings.
- Going forward, it will also focus on growing the aerospace business as the global manufacturing market is expected to achieve a 5-year CAGR of 65.8% to reach US$2.82b revenue by 2020.
- Trades at 1.5x P/B
*Interra Resources
- Commenced drilling development of well CHK 1208 in the Chauk Oil field in Myanmar.
- CHK 1208 will be the fourth well to by drilled by Goldpetrol, the group's JV entity, in Myanmar in 2018.
- The group estimates that results of the drilling should be available within approximately six weeks.
- Trades at 1x P/B.
*Mindchamps
- Formed a 50:50 JV MindChamps-First Capital PreSchool China Capital Management (MFCPCCM) in the Cayman Islands.
- MFCPCCM is intended to be the general partner of the China PreSchool Fund, which will be funded through its internal resources.
- Trades at 22x forward P/E.
Friday, June 1, 2018
SG Market (01 Jun 18)
MARKET OVERVIEW
- Expect another volatile session on Wall Street selldown after US imposed stiff tariffs on steel and aluminium imports from key allies, sparking trade war fears.
- Technically, the STI exhibited an engulfing long black candle and is in danger of breaking below its 200-dma support level at 3,422, which could signal a continuation of the downtrend in the near term.
POSITIVE NEWS
*Sembcorp Industries
- Acquired UK Power Reserve (UKPR), Britain's largest flexible distributed energy generator for £216m ($385m).
- UKPR owns and operates 533MW of projects across 32 locations in England and Wales, with another 480MW under development.
- The deal is in line with the group's strategy to position its energy portfolio towards developed markets, grow its merchant energy capabilities and support a renewable future to meet the needs of a fast-moving energy market.
- It will also give the group a wider foothold in UK's energy sector and transform its business from a centralised utilities provider to an integrated energy platform spanning gas, heat and power.
- Trades at 15.5x forward P/E and 0.88x P/B
*Sunpower
- Secured a Rmb105.2m manufacturing and services contract from Xinjiang Xinte Crystalline Silicon High-tech, a reputable polysilicon player.
- This brought total contract value from Xinjiang Xinte to Rmb185.2m within a month.
- The group will supply raw material towers and cold-hydraulic heat exchangers to Xinjiang Xinte's high-purity polysilicon plant upgrading project.
- The equipment will be delivered in 2018 and will have a positive impact on the group's FY18 results.
- Contract win adds to the existing record order book of Rmb2b as at end-Mar.
- Trades at 8.7x trailing P/E.
NEUTRAL NEWS
*ST Engineering
- Marine arm has formed 40:60 JV with Tuas Power to operate and maintain Singapore's fifth desalination plant in Jurong Island for a concession period of 25 years from 2020.
- Separately, it has set up a 40:60 EPC consortium for the preliminary design work for the plant.
- Trades at 17.9x forward P/E
*Chemical Industries
- Inked a MOU to form a 50:50 JV with Malaysia-based May Chemical for the storage, distribution and trading of chemicals.
- May Chemical is one of the largest independent traders/distributors of industrial and commercial chemicals in Malaysia (by volume and range), with its own logistics assets for distribution.
- The chemical trader has been in a long-term relationship with the group for more than 30 years.
- The JV setup is expected to be completed within 3 months.
- Trades at 8.4x trailing P/E.
*Perennial Real Estate
- Acquiring Sanctuary City for US$15.6 ($21m).
- Sanctuary City has entered 60:40 JV with Indonesia-based PT Cipta Harmoni Lestari to develop a residential project in Sentul City, Bogor, Indonesia.
- The 246,982 sqm land parcel will be developed into >1,700 residential units, including landed houses and condos, with a total GFA of at least 147,000 sqm.
- Sentul City is a large-scale master-planned township with 'back-to-nature' concept and numerous amenities to attract middle-to high-income residents working in Jakarta.
- Total development cost is over Rp1.6t ($153.4m) and the project would diversify the group's current portfolio, which is mainly in China and Singapore.
- Trades at 0.51x P/B.
*The Trendlines
- Partnering Brazil-based investment group Sirius VC for co-investing opportunities.
- Sirius VC will co-invest a minimum of $0.05m for each portfolio company identified by the group.
- The venture capitalist also provides clinical field trials, commercial opportunities and additional funding for the start-ups.
- Trades at 9.3x trailing P/E and 0.61x P/B.
*Singapore eDevelopment
- US subsidiary Global BioLife has developed a low glycemic index (GI), naturally modified sugar Laetose.
- The group has established a JV with Quality Ingredients to refine the invention and to create mass production process.
- The patent-pending alternative sugar has lesser calories counts and almost 50% lower GI than regular sugar and also assists in mitigating inflammatory responses.
- The group aims to license Laetose to a major company with the ability to infuse the product into multiple global products.
- Trades at 1.1x P/B.
- Expect another volatile session on Wall Street selldown after US imposed stiff tariffs on steel and aluminium imports from key allies, sparking trade war fears.
- Technically, the STI exhibited an engulfing long black candle and is in danger of breaking below its 200-dma support level at 3,422, which could signal a continuation of the downtrend in the near term.
POSITIVE NEWS
*Sembcorp Industries
- Acquired UK Power Reserve (UKPR), Britain's largest flexible distributed energy generator for £216m ($385m).
- UKPR owns and operates 533MW of projects across 32 locations in England and Wales, with another 480MW under development.
- The deal is in line with the group's strategy to position its energy portfolio towards developed markets, grow its merchant energy capabilities and support a renewable future to meet the needs of a fast-moving energy market.
- It will also give the group a wider foothold in UK's energy sector and transform its business from a centralised utilities provider to an integrated energy platform spanning gas, heat and power.
- Trades at 15.5x forward P/E and 0.88x P/B
*Sunpower
- Secured a Rmb105.2m manufacturing and services contract from Xinjiang Xinte Crystalline Silicon High-tech, a reputable polysilicon player.
- This brought total contract value from Xinjiang Xinte to Rmb185.2m within a month.
- The group will supply raw material towers and cold-hydraulic heat exchangers to Xinjiang Xinte's high-purity polysilicon plant upgrading project.
- The equipment will be delivered in 2018 and will have a positive impact on the group's FY18 results.
- Contract win adds to the existing record order book of Rmb2b as at end-Mar.
- Trades at 8.7x trailing P/E.
NEUTRAL NEWS
*ST Engineering
- Marine arm has formed 40:60 JV with Tuas Power to operate and maintain Singapore's fifth desalination plant in Jurong Island for a concession period of 25 years from 2020.
- Separately, it has set up a 40:60 EPC consortium for the preliminary design work for the plant.
- Trades at 17.9x forward P/E
*Chemical Industries
- Inked a MOU to form a 50:50 JV with Malaysia-based May Chemical for the storage, distribution and trading of chemicals.
- May Chemical is one of the largest independent traders/distributors of industrial and commercial chemicals in Malaysia (by volume and range), with its own logistics assets for distribution.
- The chemical trader has been in a long-term relationship with the group for more than 30 years.
- The JV setup is expected to be completed within 3 months.
- Trades at 8.4x trailing P/E.
*Perennial Real Estate
- Acquiring Sanctuary City for US$15.6 ($21m).
- Sanctuary City has entered 60:40 JV with Indonesia-based PT Cipta Harmoni Lestari to develop a residential project in Sentul City, Bogor, Indonesia.
- The 246,982 sqm land parcel will be developed into >1,700 residential units, including landed houses and condos, with a total GFA of at least 147,000 sqm.
- Sentul City is a large-scale master-planned township with 'back-to-nature' concept and numerous amenities to attract middle-to high-income residents working in Jakarta.
- Total development cost is over Rp1.6t ($153.4m) and the project would diversify the group's current portfolio, which is mainly in China and Singapore.
- Trades at 0.51x P/B.
*The Trendlines
- Partnering Brazil-based investment group Sirius VC for co-investing opportunities.
- Sirius VC will co-invest a minimum of $0.05m for each portfolio company identified by the group.
- The venture capitalist also provides clinical field trials, commercial opportunities and additional funding for the start-ups.
- Trades at 9.3x trailing P/E and 0.61x P/B.
*Singapore eDevelopment
- US subsidiary Global BioLife has developed a low glycemic index (GI), naturally modified sugar Laetose.
- The group has established a JV with Quality Ingredients to refine the invention and to create mass production process.
- The patent-pending alternative sugar has lesser calories counts and almost 50% lower GI than regular sugar and also assists in mitigating inflammatory responses.
- The group aims to license Laetose to a major company with the ability to infuse the product into multiple global products.
- Trades at 1.1x P/B.
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