Monday, March 26, 2018

SG Market (26 Mar 18)

- The market could face more risk aversion this week after Wall Street took another beating last Fri over prospects of a US trade war with China as both sides prepare lists of products as possible targets.
- With IT and electronics products high up on the US list, this could lead to overhang in the technology sector, including suppliers in the supply chain.
- Technically, the STI sees its next support at 3,370 (200MA), with overhead resistance at 3,430.

*Dairy Farm
- Proposed injection of Rustan Supercenters for 12.15% of PSE-listed retailer Robinson Retail Holdings (RRHI) in a US$346m asset swap and acquiring another another 6.1% from RRHI's controlling shareholder, Gokongwei family, for US$174m, giving it a total stake of 18.25%.
- RRHI has revenue of PHP115b, 5.2x higher than Rustan, in 2017.
- Trades at 19.7x forward P/E and dividend yield of 2.7%.

*Hiap Seng Engineering
- Clinched two contracts totalling $53m.
- The first contract was awarded by new customer Vopak Terminals Singapore, involving the provision of EPC and commissioning works for four new storage tanks at Vopak Sebarok Terminal.
- Second contract was secured from Singapore Refining Co. to undertake mechanical and piping works for the Catalytic Reforming Unit Revamp Project.
- Trades at 0.71x P/B.

*Far East Group
- Proposed disposal of its regional headquarters at 112 Lavender Street in Singapore for $27m.
- The deal will result in a significant net gain of $22m, compared to its current market cap of $8.7m.
- Net proceeds of $26.2m will be utilised for working capital, business expansion and future investment opportunities.
- Pro forma NAV/share will spike from $0.193 to $0.3965 if deal completes.

- Uber has reportedly agreed to sell its South-east Asian ride-hailing business to rival Grab.
- This could derail CD's proposed JV with Uber to buy a 50% stake in Uber's Singapore car rental operations and leveraging on its cab-booking app.
- Trades at 16.4x forward P/E and 5% yield.

*Noble Group
- Clarified to SGX that the resignation of non-executive director and chairman emeritus Richard Elman was due to amicable differences of opinion with the board of directors, and some of the group's creditors.

- Independent auditor Ernst & Young highlighted uncertainties over the availability and timing of the award of new contracts, which may cast significant doubt on the group's ability to continue as a going concern.
- The auditor's opinion for FY17 financial statements remains unqualified.
- Trades at 1.35x P/B.

*Profit warnings
- Gaylin Holdings
- Transit-Mixed Concrete

- Subscribing for a 60% stake in Jiangsu Yangzi Zhuoneng Industrial, a China-based trader of metal, paper and plastics products for an undisclosed sum.
- The group expects the new entity to provide additional revenue stream and help reduce dependency on the import and export of steel products by third parties for its shipbuilding activities.
- Trades at 9.85x forward P/E.

*Viva Industrial Trust / ESR-REIT
- Updated that both industrial landlords are still in discussions over a possible merger.

- Set up a 70:30 JVco, Pura Indah Berkat Venture, with PT. Pura Indah Berkat to develop and operate Toast Box chain of outlets in Indonesia.
- The first outlet under the JV is slated to open in central Jakarta in 2018.
- Currently, the JV partner manages the Toast Box outlet at Soekarno-Hatta International Airport Terminal 3.
- Trades at 25.3x forward P/E.

*Santak Holdings
- Acquiring a freehold property with land area of 47,469.24 sf and built-up area of 32,093.79 sf in Nusajaya Tech Park, Malaysia, for RM11.48m.
- The property will be used for manufacturing of precision machined components, as the group intends to relocate its current factory operations from Singapore to the property to restructure its cost base.
- Funding will be from internal cash resources.

*Transcorp Holdings
- Proposed acquisition of a 10% stake in Motor Megamall for $1.5m.
- Motor Megamall provides an agency platform for owners and purchasers of vehicles to obtain financing from financial institutions or hire purchase companies via an online matching platform.
- Pro forma FY10/17 loss per share is expected to lower from 2.23¢ to 1.99¢.
- Trades at 0.49x P/B.

No comments:

Post a Comment