Monday, March 23, 2015


Q&M: Issued a $60m MTN, at a 4.4% interest due Mar 2018. Maybank-KE opines that this is timely, as interest rates are rising. It was understood that Q&M managed to secure an attractive rate due to the overwhelming demand of the MTN.

Q&M has net cash of $3.5m. Including proceeds of $14.1m from its property sale in Jurong and netting off $10m for its remaining payment for Aoxin and Qinghuangdao, its net cash should increase to $7.6m.

Maybank-KE opines that there could be a major acquisition with the proceeds. At the moment, Q&M has only one proposed acquisition worth $6m, with a first-year profit guarantee of $0.6m.

Although MTN interest could cut FY15-17E EPS by 9-15%, the house maintains forecasts, assuming contributions from future acquisitions will cushion its financing costs.

The house maintains Buy on Q&M with TP of $0.71.

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