Thursday, March 29, 2018

SG Market (29 Mar 18)

- The SG market could edge lower, dampened again by the continued downdraft of tech companies on Wall Street overnight.
- Technically, the STI has broken its psychological support at 3,400 and sees the next downside support at 3,370 (200MA). Topside resistance at 3,440.

- 4Q17 loss deepened to US$969m (4Q16: US$66.6m loss), dragged by a significant US$896.9m impairment loss on its vessel fleet due to depressed market conditions from the industry oversupply.
- This brought FY17 net loss to US$1.02b (FY16: US$33.6m loss), in line with earlier profit warning.
- For the quarter, revenue slumped 38.5% to US$44.7m from 1) delays in re-deployment of liftboats due to working capital constraints, 2) lower utilisation rate of jack-up rigs and OSVs, and 3) reduced charter rates.
- Accordingly, gross margin contracted 4.6ppt to 7.5%.
- Bottom line was dragged by the absence of FX gain and impairment loss at associates/ JVs.
- Counter remains suspended.

- Selling the 300-year lease at No. 1 Dublin Landings in Ireland for €164.2m, of which Oxley will be entitled to 77.53%.
- Deal completion is expected to be in Apr '18, and the proceeds will improve the group's cash flow.
- The group is also seeking expressions of interest from potential purchasers of No. 2 Dublin Landings, which has entered a 20-year lease agreement with WeWork Companies.
- Trades at 1.64x P/B.

*Soilbuild Business Space REIT
- Received rental for the period 11 Jan '18 to 26 Mar '18 from NK Ingredients, a tenant which the REIT has an on-going legal dispute.
- The REIT also received a top up in security deposit from the tenant.
- Offers an indicative 8.6% yield and trades at 1.01x P/B.

*United Food
- Guided for a 4Q17 and FY17 loss, although significantly lower than the two respective periods.
- Slated to release results no later than 1 Apr.
- Last traded at 0.72x P/B.

- Completed the $12m acquisition for a 51%-stake in a Malaysia-based tourism and retail-related business, YC Capital, from the group's CEO and executive chairman Chu Sau Ben.
- To recap, the acquisition is satisfied via 93.75m new shares issued at $0.128 each, which lifted Chu Sau Ben's stake from 50% to 71.977%.
- Trades at 11.1x trailing P/E.

*Wee Hur
- Received irrevocable undertakings from GSC Holdings and four individual shareholders to vote in favour for the proposed disposal of a land plot at 62-80 Ann Street and 71-97 Turbot Street in Brisbane for A$79m ($81.2m).
- The undertaking shareholders collectively hold a total of 51.99% interest in the group.
- Trades at 11.6x trailing P/E and 0.61x P/B.

*BH Global
- Entered into a strategic partnership with Horangi Cyber Security to offer cyber security advice, products, and services.
- Trades at 0.5x P/B.

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