Friday, December 8, 2017

SG Market (08 Dec 17)

- Market could stay soft on profit-taking and lack of fresh impetus ahead of a key US jobs report.
- Technically, the STI is struggling near 3,390 with next level of support at 3,340, while short term resistance is re-calibrated at 3,420.

*Stamford Tyres
- 2QFY18 net profit grew 10.4% to $1.6m, on higher revenue of $59m (+2.3%) due to improved sales in Australia and SE Asia markets.
- Gross margin held steady at 26.1% (2QFY17: 26%).
- Bottom line was partially pared by FX loss of $0.5m (2QFY17: $0.7m gain) and higher operating lease rental (+21.4%), but mitigated by stronger JV contribution of $0.8m (+82.7%) and lower tax (-24.5%).
- Last traded at 9.1x trailing P/E.

*Halcyon Agri
- Acquiring four Indonesian crumb rubber factories in West Kalimantan for $105.3m.
- The factories produce various grades of Standard Indonesian Rubber and have an annual capacity of 132,000 tonnes.
- The deal will raise Halcyon's total processing capacity to 1.55m tonnes p.a, propelling it to be the largest crumb rubber producer and exporter in Indonesia.
- Trades at 5.5x trailing P/E.

*CSC Holdings
- Secured foundation contracts for Kim Chuan Depot Extension and Keppel MRT station and its associated tunnels, on Circle Line 6.
- The new projects are slated to be completed by early-2019 and mid-2019, respectively.
- This brought aggregate value of transport infrastructure contracts secured to more than $70m, since the start of FY3/18.
- Loss-making and trades at 0.46x P/B.

- Discussions between controlling shareholder Bevrian and an undisclosed third party, involving a possible share transaction has fallen through.
- Trades at 16.2x trailing P/E and 0.98x P/B.

- Partnering EBD in a $10m training and tech programme to upskill staff and develop technology-enablers.
- The innovation push will focus on data analytics, digital marketing, digital product management.
- MKE last had a Hold rating and TP $3.75.

*Noble Group
- Plans to sell Noble Americas ethanol unit to Mercuria for US$20m.
- This will result in a book loss of US$60.3m and reduce pro forma 9M17 NAV/share to US$0.75 from US$0.80.
- Valuations are meaningless as the group is loss-making and book cost of assets appear inflated.

*Straits Trading
- Acquiring an 11-storey office building at 45 St Georges Terrace, Perth, Australia, for A$54.2m ($55.7m).
- The property in Perth CBD is well-positioned to benefit from the rejuvenation of the city centre.
- Last traded at 15.1x trailing P/E and 0.68x P/B.

- Completed the divestment of 23 Woodlands Terrace for $17.7m or 2.8% above its book value as at 31 Dec.
- Offers 6.9% indicative yield and trades at 0.9x P/B.

*Geo Energy
- Lifted moratorium on 117m consideration shares (8.8% share capital) owned by International Resources Investment, which was previously issued in relation to the acquisition of Fortune Coal Resources.
- The move is to enable the vendor to collateralise the shares for other investments and businesses.
- Initial moratorium period was supposed to run until 23 Jun '20.
- Trades at 4.7x forward P/E.

- Acquiring an industrial strata unit located at Tradehub 21 for $1.5m.
- The double-storey terrace factory has a built-in area of 2,927sf and will used as its corporate office, following the sale of 5 Second Chin Bee Road.
- Trades at 15.3x trailing P/E.

*Neo Group
- 51%-owned Gourmetz has expanded into canteen operation, on top of food catering for the childcare and elderly care market.
- Trades at 23.7x forward P/E.

*Hoe Leong
- Granted moratorium to halt any creditor action against the group and its relevant subsidiaries, with the effect till 31 Jul '18 and 31 Jan '18 respectively. (

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