Friday, June 29, 2018

SG Market (29 Jun 18)

- The market could claw back some gains on quarter-end window dressing as trade headlines quietened down but there is still a lot of uncertainty over how the trade disputes would ultimately pan out.
- Oil-linked counters could find some support after crude pushed above USD73 a barrel, extending a recent rally that has largely been driven by supply dynamics.
- Technically, upside for the STI is capped by former support-turned-resistance of 3,280, while underlying support remains at 3,200.

*Del Monte Pacific
- 4QFY18 net profit soared 322% to US$12.3m, boosted by one-off gain from purchase of discounted DMFI loans. Excluding one-off items, the group would have incurred a net loss of US$2.1m.
- This brought FY4/18 loss to US$18.2m (FY17: US$24.4m profit) and core profit to US%12m (-73.6%).
- Revenue for the last quarter declined 8.5% to US$499m, as higher sales in Philippines was offset by decreased exports of processed pineapple and lower US sales.
Gross margin narrowed 5.9ppt to 17.4, depressed by weaker pineapple juice concentrate pricing.
- With significantly reduced inventory in its US operations, operating cash flow improved to US$217.5m (+41.8%), thereby lowering its net gearing to 2.3x from 2.9x in 2017.
- Divestiture of Sager Creek and closure of US plants would lead to better margins and stronger cash flow in FY19. As such, management has guided for FY19 to be profitable.
- Trades at 0.5x P/B

*Second Chance
- 3QFY18 net profit tumbled 61.6% to $2.1m, bringing 9MFY18 earnings to $6.2m (-27.5%).
- 9MFY18 revenue fell 7.5% to $22.6m on lower takings from apparel (-22.5%), gold (-3.4%), properties (-11.6%), partially offset by higher contributions from securities (+7.3%) businesses.
- Gross margin shrank 1.9ppt 50.1% due to changes in sales mix.
- Bottom line was dragged by a $1.8m swing to fair value loss on financial assets.
- Trades at 0.7x P/B.

*Koh Brothers
- Sold 96% of the upscale Nonhyeon I'PARK, its first 45% JV development project in South Korea, within three months of its launch.
- The freehold project is strategically located along the main commercial belt in prime Gangnam district, Seoul.
- The mixed-use development will comprise 346 upscale residential units and retail space.
- Work has commenced in 2Q18 and is expected to be completed in 2020.
- Trades at 0.4x P/B.

*Hotung Investment
- LCY Technology, an investee company, was listed on the Taiwan Stock Exchange.
- The group has invested in the copper foil supplier since May-17
- Management expects LCY's revenue to gain momentum from upward demanding the automotive and 5G network industry.
- Trades at 8.6% dividend yield and 0.6x P/B.

- Signed a major contract with Inmarsat to provide its Inter-Satellite Data Relay System (IDRS) for satellite operators to better conduct their commercial and research operations with small, near earth orbit satellites.
- With IDRS on-board, this will significantly improve the operational efficiency of their multi-satellite low orbit earth constellation and broaden the capability that they will be able to offer their users.
- The group is working to ensure its successful delivery, while it pursues other IDRS projects and further grow its customer base with some of these projects already in an advanced stage of discussion.
- Trades at 4.8x P/B

- Associated company, Clearbridge BioMedics, secured commitments of $6.6m in funding ahead of its potential listing.
- The funds will be used for business expansion, technology development, talent recruitment and expenses relating to the potential listing.
- Trades at 2.9x P/B.

*TEE Land
- Entered option agreement to acquire a 3,928.8 sqm freehold plot of land at 338-364 Upper East Coast Road for $60m.
- The group plans to build a residential development on the site, pending due diligence expected to be completed by Nov-18.
- The acquisition will be funded by internal funds and bank borrowings.
- Trades at 0.55x P/B.

*Accordia Golf Trust
- Received notification from the Japanese Ministry of Land, Infrastructure, Transport & Tourism regarding the government's infrastructure project.
- The project consist of building flood prevention embankments along the riverbank of the Arakawa River located in the surrounding area of the Northern Country Club Nishikigahara Gold Course, one of the golf courses in AGT's portfolio (3.1% of total appraised portfolio value).
- AGT may not be able to obtain renewal of its River Occupancy Permission to operate the golf course should construction work commence.
- Trades at 7.1% dividend yield and 0.69x P/B.

Thursday, June 28, 2018

SG Market (28 Jun 18)

- Market is likely to hang in the balance as traders assessed the confusing messages out of the White House on trade and possible crackdown on Chinese investments in US tech companies.
- But oil-linked counters could see a resurgence as crude rallied past USD72 a barrel as US stockpiles fell.
- Technically, the STI could head towards the crucial support level at 3,200, while upside will be capped by former support-turned-resistance of 3,280.

- Its first project in 2018, The Verandah Residences, has achieved 100% sales of the within three months since its official launch on 7 Apr.
- All 170 units were sold at an ASP of $1,795 psf, booking in a revenue of $248.8m for the entire project.
- To recap, the 89,620 sf freehold site in Pasir Panjang was acquired for $121m, or $964 psf ppr in Jul 2017.
- Trades at 1.3x P/B.
- MKE has a Buy with TP of $0.56.

- Acquiring AsiaPac Distribution for $20m, of which $8m is payable upfront, with another $12m of earn-out payments based on AsiaPac's net profits up to FY6/19.
- AsiaPac is a provider of IT devices and services to enterprise and public sector customer in Singapore.
- It also has expertise in enterprise solutions, system integration and cloud related services.
- The proposed acquisition will fast track the group's entry into the ICT segment, enhancing its proposition as an integrated corporate ICT solution provider.
- Offers an indicative dividend yield of 7.1%.

*Y Ventures
- Signed distributor agreement with Beast Kingdom Co as the exclusive online distributor for Disney products in Southeast Asia for three years.
- The tie-up with major Disney licensee in Asia adds line of official Disney products to the group's portfolio of brands.
- It also has the right to retail Beast Kingdom's products on its online webstores and marketplaces in Southeast Asia.
- Range of products available on its online stores include official Disney, Pixar, Marvel and Star Wars merchandise.
- Trades at 25.1x forward P/E.

*Mapletree Industrial Trust
- Concludes acquisition of 7 Tai Seng Drive for $68m.
- The 7-storey property will be upgraded into a high-spec building, expected to be completed in 2H19.
- Upon completion, the property will be fully leased to an established ICT company for an initial term of 25 years with annual rental escalations.
- Total cost of acquisition and upgrading works is expected to be $95m.
- Post-acquisition, the trust's portfolio will comprise 86 industrial properties in Singapore and 14 data centres in US.
- Trades at 6.2% yield and 1.3x P/B.

- Entered into a 30-70 JV agreement with Ge Ying.
- The JVco will operate BreadTalk brand of bakeries in Chongqing, China and potentially expand across the south-western market like Yunnan and Guiyang provinces.
- Under the agreement, the group retains the right to appoint exclusive partners to operate the BreadTalk brand in major transportation hubs.
- Trades at 33.6x forward P/E.

- Inked a MOU for a $400m reverse takeover of investment holding company MacroCap Asia Capital (owns Thai property developer Asia ThaiYuan) and Chinese hotel manager Gloria Int'l.
- The group would pay $375m for MacroCap and $25m for Gloria by issuing 1.74b new shares at $0.23 each.
- Separately, the group has scrapped a proposed renounceable rights issue and replaced it with a conditional placement agreement to issue up to 79.7m new shares (33.3% of enlarged capital) at $0.12 each, representing a premium of 145% above last close.
- Counter is loss making.

- Trade creditors agreed to set-off aggregate trade payables of $3.1m in exchange for 196.7m new shares at $0.016 each, a 60% premium above last close.
- The new shares represent approximately 1.2% of the group's enlarged share capital.
- Trades at 0.55x P/B.

*Ipco Int'l
- Expects to report a net loss for FY18, mainly due to the impairment of intangible assets and FX translation effect.
- It is in the process of preparing and finalising its FY4/18 results, which will be released on or before 30 Jun.
- Trades at 0.12x P/B.

Wednesday, June 27, 2018

SG Market (27 Jun 18)

- The grossly oversold market may take a breather as US stocks rebounded from the worst selloff since early Apr in tandem with the rally in oil price past US$70 a barrel following reports the US is pressing allies to halt all imports of Iranian crude, which took some attention from the uncertainty over Trump's trade policy.
- Meanwhile, hard hit tech shares bounced back after Trump signalled he may rely on the Committee on Foreign Investment rather than blanket Chinese investment restrictions to protect US technology.
- Technically, the STI is just touching its former support-turned-resistance of 3,280, with short term objective at 3,340. Underlying support is at 3,200.

- Acquiring Chongqing Zhonghua Real Estate Co (CQZRE) 32-ha prime mixed-use site in Chongqing for Rmb5.7b ($459m)
- CQZRE oqns a 32-ha prime mixed-use site in Chongqing, China, which comprises two greenfield that can yield 1,900 residential units and a shopping mall with a combined gfa of 335,000 sqm (excluding car park) when fully developed by 2022; as well as brownfield sites with 223 homes and 100,000 sqm of office.
- The proposed new Xinpaifang mall will complement its 230,000-sqm Raffles City Chongqing mall and double its retail network in the city.
- Looking ahead, the group had over 8,000 residential units valued at Rmb15.1b as at Mar '18, which had been sold but not yet handed over. About 70% of this value is expected to be recognised by the end of this year.
- Trades at 0.71x P/B

- Secured $38.4m worth of new contracts from all its three business divisions, including a US$9.3m ($12.6m) project to provide move-in and related logistics services for the setting up of production lines for a large automobile product manufacturing plant in the US.
- These projects will be funded through bank borrowings and internal financial resources.
- The latest order wins and not counting those smaller projects and recurring revenue from monthly maintenance and services are expected to boost the group's FY19 results.
- Trades at 4.6x trailing P/E

*Soilbuild Construction
- Secured a $3.8m construction contract for structural building and related infrastructural work of a distribution centre in Dagon Seikkan Township, Myanmar.
- The project is expected to begin in Jun '18 and completed in 1Q19.
- Trades at 1.2x P/B.

- Gives the nod for go-ahead for companies with dual share structures to seek a listing on its main board with immediate effect, joining global exchanges in Europe, US and HK to offer investors such choice.
- With rules and safeguards in place, the exchange will enable enable founder-entrepreneurs to raise funds, while retaining the ability to execute long-term strategy.
- This move is in line with the group's strategy of attracting new economy stocks, including promising start-ups and tech firms that have shares with different voting rights to raise funds and list in Singapore.
- Trades at 20.5x forward P/E and dividend yield of 3.9%.
- MKE has a Buy with TP of $8.79.

- Acquired 378.9m shares (19% stake) in India-based Shree Renuka Sugars (SRS) from public shareholders at Rs16.29 each.
- Post acquisition, the group will hold 58% interest in SRS.
- Trades at 12.2x trailing P/E.

- Sold a 5% stake in RecruitFirst (HK) to a key employee for HKD341,807, reducing its stake to 70% from 75%.
- This is in line with management's push to turn employees into co-owners for stronger alignment of interest and motivation towards better performance.
- Trades at 17.3x forward P/E.

*Clearbridge Health
- Partners with Australian-based health information company, Genome.One.
- Under the partnership, Clearbridge clinicians will refer patients in Singapore and Hong Kong to Genome.One's GoExplore personal health genomics programme.
- Trades at 2.9x P/B.

*New Silkroutes
- Entered into separate MOU to acquire 60% stakes in six companies owned by different individuals for $11.7m, subject to adjustments after due diligence.
- These targets mainly provides medical/healthcare services in general practitioner and aesthetic clinics.
- The move is in line with management's focus to expand its healthcare division to reinforce its earnings base and strengthen its operations and financial position.
- Trades at 0.84x P/B.

*Lian Beng
- Acquiring 60% interest in United Tec Construction (UTC) for $180,000.
- UTC is principally engaged in general construction business specialising in the design for manufacturing and assembly construction.
- The deal is expected to have positive impact on the group's NTA/share and EPS for the current FY5/19.
- Trades at 4.8x forward P/E.

Tuesday, June 26, 2018

SG Market (26 Jun 18)

- The market looks set to extend its 9-month low as the threat of US trade and investment restrictions against China and key partners jolted sentiment and triggered a global selloff.
- Tech stocks may continue to come under pressure amid mixed signals that US will impose export controls and block Chinese investments in US technology companies.
- Technically, the STI may head towards the crucial support area at 3,200, while upside will be capped by former support-turned-resistance at 3,280.

*Stamford Tyres
- 4QFY18 net profit plunged 78.1% to $0.6m, dragging FY4/18 earnings to $5.2m (-36%).
- For the full year, revenue rose 2.8% to $242.4m, mainly attributable to new sales in North Asia.
- Gross margin narrowed to 25% (-1.2ppt)on higher cost of sales in tyres and higher wheel production cost.
- Bottom line was further eroded by higher operating expenses (+4.7%) and lower JV contribution of $1.6m (-17.6%).
- First and final DPS was halved to 1¢ (-0.5¢).
- Trades at 15x trailing P/E.

- Clinched NOK5b ($840m) contract to build three all-weather, arctic coast guard vessels for the the Norwegian Defence Materiel Agency.
- Due to national security interests, the tender was restricted to Norwegian yards only.
- Deliveries of the three vessels are scheduled from Vard Langsten in 1Q22, 1Q23 and 1Q24, with the hulls built at Vard Tulcea in Romania.
- The group is subject of an exit offer by Italy's Fincantieri, which taken control of a 83.5% stake and pending an EGM to approve its proposed delisting.
- Trades at 0.87x P/B

- 50:50 JVCo with Tong Eng Group has entered into an agreement to sell 117 Clarence Street in Sydney for A$153m to an Australian-based trust.
- The JVCo had acquired the 14-storey freehold commercial building in Feb '16 for A$81m.
- Sale of the building is expected to contribute positively to the group's FY18 results.
- Trades at 1.3x P/B.

*Cache Logistics Trust
- Proposed acquisition by ARA Asset Management of all of CWT's shares in REIT and property managers of Cache.
- CWT currently owns 40% of ARA-CWT Trust Management (Cache) and 60% of Cache Property Management.
- Following the acquisitions, the right of first refusal granted by CWT to Cache will lapse.
- The move comes on the back of a portfolio rebalancing and growth strategy embarked by Cache in tandem with ARA's expanding presence in the region.
- Trades at annualised yield of 8.1% and 1.06x P/B

- Acquired 51% stake in PT Lumbung Padi Indonesia (PT LPI) from Farma Int'l for Rp25.5b.
- PT LPI engages in rice milling and trading (export and import).
- Trades at 12.4x forward P/E.

- Insurer denies the group's claim for cost of repairs and loss of profit arising from breakdown of the Singapore Flyer on 25 Jan '18.
- The group is currently obtaining advice from its insurance broker and its legal advisers on the correct interpretation and application of the insurance policy.
- No accrual of other income in relation to the progress of insurance claim was previously reported.
- Trades at 15.2x trailing P/E.

*China Kunda
- Proposed to diversify into manufacturing and distribution of furniture and other related activities, subject to shareholder approval.
- Furniture business will design, provide consultancy and manufacture furniture and fittings of cabinets, appliances, surfaces, woodwares, decorative products, etc.
- The group believes that it can leverage on its existing technologies in in-mould decoration and plastic components to apply to the new business.
- The counter is loss making.

- Entering into a JVCo with MUI Int'l and an individual for the ownership and global distribution of Trizashield and a suite of concrete corrosion solutions.
- Trizashield is a corrosion-under-insulation protection system for barrier and galvanic protection of high and cyclic temperature insulated piping systems in process plants and installations.
- The group will have 51.9% stake, while MUI Int'l and the individual will have 40.9% and 7.3% respectively.
- The counter is loss-making.

Monday, June 25, 2018

SG Market (25 Jun 18)

- Trade issues could continue to dog the market as President Trump mull fresh tariffs against European cars and new measure to restrict Chinese investments but some reprieve may come from PBOC's reserve requirement cut to free up USD100b in liquidity before US tariffs take effect next week.
- Technically, the STI is heavily oversold with immediate support at 3,280, while resistance lies at 3,340.

**Sembcorp Industries
- Secured a 50MW project from the HDB and the EDB to build, own, operate and maintain grid-tied rooftop solar systems across 848 HDB blocks and 27 government sites in Singapore.
- Construction will begin in 3Q18, and is targeted to be completed by 2Q20.
- This deal makes Sembcorp a major solar player in Singapore with combined solar energy portfolio of 104MW across more than 1,500 sites.
- Trades at 13.2x forward P/E.

*CITIC Envirotech
- Awarded a Rmb2.5b EPC ecological restoration project in Meigu County, Sichuan province, China.
- The group will undertake the design and construction of essential housing and infrastructure including water supply, wastewater treatment, garbage disposal and other auxiliary facilities in 11 newly designated residential areas for 2,000ha of land across 36 townships.
- Work will commence in 4Q18 and is expected to be completed by Dec 2020.
- The project will contribute positively to the group's FY18-20 revenue.
- Trades at 9.5x forward P/E

*RH Petrogas
- Awarded new 20-year contract terms for both the Kepala Burung and the Salawati Kepala Burung Production Sharing Contracts (PSC) upon the expiry of their current terms in 2020.
- The new PSCs are based on the gross split model implemented by the Indonesian Government in 2017 to replace the cost recovery regime in existing PSCs.
- It currently holds a majority 60% participating interest in and operates the Basin PSC and holds a non-operated 33.2142% participating interest in the adjacent Island PSC.
- The two PSCs produce ~3,940 boepd net to the group's participating interests.
- Trades at 3.7x trailing P/E

*Noble Group
- Proposed sale of a Kamsarmax dry bulk carrier vessel, Ocean Ambition to Fairmyl Shipping for US$23.415m.
- Built in 2014, the 81,616 dwt vessel is employed to service external customers as well as the group's internal freight requirements.
- The one-off disposal gain would amount to US$0.7m based on the carrying value of the vessel of US$22.72m as at Mar'18.
- Part of the proceeds will be used to pay down the amounts owed under the relevant facility.
- The sale will not significantly impact the operations of its freight business as it intends to charter back the vessel on a time charter basis.

*Advancer Global
- Proposed subscription by Japan-listed Fullcast Holdings of 65m new shares at $0.34 each or 11.5% premium to last close.
- This represents 25.2% of the enlarged shares and proceeds will be used for business expansion and working capital purposes.
- Separately, both parties have agreed to discuss a potential JV to provide foreign labour staffing and employment in Japan.
- The proposed JV will be well-positioned to address the current labour shortage issue in Japan.
- Trades at 18x trailing P/E.

*OUE Lippo Healthare
- 50:50 JVCo with China Merchant Group (CMLHM) has entered into a framework agreement with China Changjiang National Shipping Group and Shanghai Changjiang Shipping to incorporate a new JV.
- The new 51:49 JV will manage the operations of Shanghai Changjiang Hospital in Pudong, currently operated by Shanghai Changjiang.
- Trades at 2.2x P/B.

*Singapore Kitchen
- Submitted application to SEHK for the proposed dual listing on GEM, subject to approval from HKEx, shareholders and SGX.
- Trades at 1.3x trailing P/B.

- 80% owned Acropower extended its MOU with HL Plus to 31 Jul '18.
- This relates to a project to build, own and operate an organic waste-to-energy plant on the future poultry farm site of Chew's Agriculture at Neo Tiew Road, off Lim Chu Kang.
- Trades at 2.5x P/B.

Thursday, June 21, 2018

SG Market (21 Jun 18)

- Sentiment will continue to be weighed by US-China trade spat although some investors view the tariff threats are just a negotiating tactic.
- Tech stocks may get a reprieve after Nasdaq surged to a record high, while oil-related plays could come into focus as crude climbed ahead of an OPEC meeting this Fri.
- From a chart perspective, the oversold STI could extend its technical rebound but upside could be capped by former support-turned-resistance at 3,340, while immediate support lies at 3,280.

*Noble Group
- Reached agreement with dissident shareholder Goldilocks over its proposed US$3.5b financial restructuring plan.
- Under the revised deal, existing shareholders will be granted a 20% stake in New Noble, up from 15% previously,while senior creditors will get 70% and management 10%.
- Goldilocks currently holds a 8.1% stake and will be entitled to nominate a director to to the board.
- Both parties will drop all claims and legal proceedings against each other on a no-fault basis but Noble will have to pay Goldilocks up to US$5m for legal costs and expenses incurred.
- Separately, Pinpoint Asset Management and Value Partners, holders of irs perpetual securities, has withdrawn their lawsuits against the company.
- This will pave the way for its debt restructuring, which still requires approval from shareholders and senior creditors, of which 85% back the deal.
- Meanwhile, the group will form a strategic partnership with Goldilocks' parent Abu Dhabi Financial Group to explore opportunities in the Mid-East.

- Entered into a 60:40 consortium agreement with Global Maritime And Port Services to undertake operation of Pulau Punggol Aggregate Terminal (PPAT).
- The consortium has been awarded a 3-year license to operate the PPAT via letter of acceptance issued by the BCA.
- Trades at 0.52x P/B.

*Compact Metal
- Acquiring a majority interest in a partially completed cement plant with 5,000 tpd production capacity in Mozambique for US$30m.
- Construction of the cement plant began in 2012 but completion has been delayed due to lack of funds.
- Proposed acquisition will be funded via third party financing or borrowings.
- This will enable the group to expand its cement business and quickly establish a foothold in Africa.
- Trades at 1.2x P/B.

*Accordia Golf Trust
- Updated that there is no material damage to its assets or casualty reported at the golf courses in greater Osaka region and other areas in Japan following the recent earthquake.
- Trades at 7.3% DPS yield and 0.67x P/B.

*Interra Resources
- JV entity, Goldpetrol has completed development well CHK 1206 in the Chauk oil field in Myanmar.
- The group has a 60% interest in the improved petroleum Recovery contract of the Chauk field and also owns 60% of Goldpetrol which is the operator of the field.
- CHK 1206 was drilled using Goldpetrol's ZJ 450 rig, thus drilling costs were relatively low. Share of the cost of drilling was funded from existing funds on hand.
- The primary objective is to accelerate production from the targeted oil reservoirs in this block.
- Trades at 0.77x P/B.

Wednesday, June 20, 2018

SG Market (20 Jun 18)

- Heightened US-China trade tensions and rising interest rates will continue to dampen risk appetite although market is still sceptical that this spat will develop into a full-blown trade war. The negative sentiment also weakened commodities markets from steel to soybeans.
- Technically, the STI could stage a technical rebound though the bearish trend looks set to persist in the near-term with immediate support at 3,280 and resistance at 3,340.

*Genting S'pore
- Japan's Lower House has passed the much-awaited casino Bill, which would pave the way for the setting up of integrated resorts in up to three cities across the country.
- This could create the world's second largest gaming market after Macau, with projected revenue of US$16b and has attracted a slew of leading casino giants raring to place their bets on Japan's 5m gambling addicts and 30m foreign tourists.
- The bill will now go before the Upper Chamber for debate in the current Diet session.
- Trades at forward EV/EBITDA of 9.5x.
- MKE has a Buy with TP of SGD1.47.

*iX Biopharma
- Australian regulatory authority has approved its WAFESIL (formerly PheoniX) treatment.
- The proprietary drug, which treats male erectile dysfunction is the group's first pharmaceutical product utilising WaferiX to receive approval and registration.
- WAFESIL will be supplied to the market via wholesaler and pharmacy channels.
- To-date, the group has successfully obtained 15 product listings on the Australian Register of Therapeutic Goods with 8 and 7 listings for domestic and export sales respectively.
- Trades at 4.1x P/B.

- Portfolio company Arcuro Medical has received FDA clearance for its SuperBall meniscus repair system.
- Arcuro was recently granted a patent in the US and is currently awaiting patent results from China, Israel, and Europe.
- The FDA clearance and patent will allow the company to commence clinical evaluation phase immediately.
- Trades at 0.55x P/B.

*Tiong Seng
- Awarded $28.9m contract from 42%-owned JV to construct a 80-unit condominium at former Sloane Court hotel site, including temporary showflat and sales gallery.
- The proposed development comprises 12 storey and 3-storey residential blocks with basement car park, swimming pool, sky terrace and communal facilities.
- Trades at 5.5 trailing P/E.

*Boustead Projects
- Completed the sale of 25 Changi North Rise at original sale price of $10.5m.
- Based on the NAV of $4.5m, the disposal gain is estimated to be $6m.
- Trades at 1.0x P/B

*ParkwayLife REIT
- Updated that eight properties in Osaka (out of 46 in Japan) were structurally unaffected by the recent earthquake.
- There is no disruption to its operations.
- Trades at an annualised 1Q yield of 4.9% and 1.5x P/B.

*ST Engineering
- Completed set-up of 49% JVCo Jet-Talk alongside SatixFy UK Ltd, with a capital injection of US$10m.
- Through Jet-Talk, the group seeks to enhance its global access to emerging high growth commercial aviation connectivity market.
- Trades at 19x forward P/E.

- Korean star Bae Donna, who is represented by the group's 41.3% associate company, will be featured as the lead actress in Netflix's KINGDOM.
- The six-episode drama is slated to air on Netflix in Dec '18.
- Trades at 7.4x forward P/E.

- Presenting "WALKING WITH DINOSAURS - The Arena Spectacular" in an Asia Tour, comprising 117 shows across 11 cities.
- The tour is expected to commence in 2H19.
- Trades at 52x trailing P/E

- Mutually ceased the acquisition of 50% stake in PT Bintan Lagoon Resort with seller.
- Deposit of $4.1m has been refunded.
- Trades at 28.2x trailing P/E.

*Addvalue Tech
- Terminated the placement agreement with KGI Securities for issue of up to 250m new shares at $0.04 apiece.
- Separately, the group is working with a couple of strategic investors for alternative funding arrangements, including such investors taking up of a significant stake in the group.
- Trades at 4.7x P/B.

- Granted a 6-month lifeline by High Court to stave off creditors and work out a survival plan.
- The debt-laden water project firm is seeking $200m in rescue financing and in talks for possible sale of its loss-making $1.3b Tuaspring Integrated Water & Power Project.
- Shares remain suspended.

Tuesday, June 19, 2018

SG Market (19 Jun 18)

- The market could face further pressure amid escalating US-China trade tensions with latest news that US President Trump has threatened to hit China with new tariffs on USD200b of Chinese imports.
- Meanwhile, oil rose as some producers mull a smaller output boost ahead of OPEC meeting later this week..
- Technically, the STI is grossly oversold but appears entrenched in a downtrend after breaking below its 200-dm at at 3,340 and could head towards the next support at 3,280.

*Lian Beng
- Awarded $95.8m contract by Tripartite Developers to build a condominium at Flora Drive.
- The development comprise nine 8-storey residential blocks, clubhouse with one basement car park, swimming pool and tennis court.
- Construction is expected to commence in Jul '18, for a period of 33 months, and contribute positively to FY5/19 results.
- This will lift its order book to $1.02b.
- Trades at 5.1x forward P/E and 0.47x P/B.

*Addvalue Technologies
- Entered into a new distribution contract with Zhongyou Century (Beijing) Technology to supply satellite communication terminals for small fishing fleets operating in China regional seas.
- Total contract value is worth at least US$1m, if terminals are fully delivered within FY3/19.
- The new contract supersedes the 3-year collaboration entered in Apr '16 to supply > 5,000 units of satellite terminals, which was later found to be inadequate for the needs.
- Trades at 5.2x P/B.

- Secured a $37.7m contract from Oxley Holdings for a 160-unit condominium project, The Verandah Residences, at Pasir Panjang.
- Work includes the construction of four blocks of 5-storey apartments, three 2-storey strata landed houses, and a basement car park, clubhouse, swimming pool and communal facilities.
- Construction is expected to commence in Jul for a period of 28 months.
- Net cash position of $54.9m is substantially higher than current market cap of $38.1m.
- Trades at 0.75x P/B.

*Kingsmen Creatives
- Secured $29m worth of contracts from F1 Singapore Grand Prix.
- Deals involve fabrication and construction of circuit-wide grandstand seats, paddock club, corporate suites at pit straight and hospitality facility at Turn 23 over a 4-year period, and paddock kitchen over a 2-year period.
- Works will commence from 2018 and are expected to contribute positively from FY18 to FY21.
- Trades at 11.4x trailing P/E.

- May '18 passenger load factor (PLF) climbed 2.6ppt to 79.6% as pax traffic (+9.6%) overtook capacity expansion (+6.1%), with all regions except Europe showing an increase.
- But cargo load factor dropped 3.9ppt to 62.6% as air freight loads (-3.3%) weakened against capacity addition (+2.7%).
- Trades at 0.93x P/B.

*Ascendas Hospitality Trust
- Updated that there is no physical damage to its existing property - Hotel Sunroute Osaka Namba as well as the three hotels that it is acquiring in Osaka following yesterday's earthquake.
- Trades at 7.6% yield and 0.84x P/B

*Allied Tech
- Proposed placement of 420m new shares (31% of existing share base) at $0.06 apiece to four high net-worth investors.
- Net proceeds of $25.16m will be used for potential acquisitions to further expand and strengthen its service offerings in its new e-commerce segment, including centralised customer relationship management, loyalty program and electronic payment.
- In the longer-term, the group also aims to integrate various sub-segments of its business such as online ticketing and online corporate travel solutions.
- Based on the enlarged share capital, the stock trades at 20.4x trailing P/E and 0.78x P/B.

*No Signboard
- Acquiring remaining 20% stake in Danish Breweries for $0.4m via 10 monthly instalments.
- Upon completion, the group intends to expand its distribution (currently 300 outlets) of Danish Breweries' signature brand Draft Denmark beer in Singapore.
- Separately, the group has inked a franchise agreement to develop and operate Little Sheep restaurants in Singapore.
- Little Sheep is a well-known hot pot restaurant in China, with 280 outlets (270 franchised) in China, US, Canada and Japan.
-The group intends to open the first outlet by early 2019, while targeting to open at least one outlet per year over the next five years.
- Trades at 9.2x trailing P/E.

- Added two additional "JJ Lin Sanctuary World Tour" shows as the existing two shows were completely sold out.
- Trades at 52x trailing P/E.

- Acquiring Ban Joo Pawnshop for $3.3m or at 1x P/B.
- Ban Joo operates a licensed pawn broking business at Tanjong Pagar Plaza and posted a FY17 net profit of $0.2m.
- The acquisition is in line with the group's expansion strategy.
- Trades at 8x trailing P/E.

Monday, June 18, 2018

SG Market (18 Jun 18)

- Brace for escalating trade war worries after President Trump approved 25% tariffs on USD50b of Chinese imports, sparking tit-for-tat retaliation from China.
- Oil-related counters could come under pressure ahead of this week's OPEC summit as Saudi Arabia and Russia may consider raising output by 1.5m bpd.
- Technically, the STI is approaching key support at 3,340 after sinking beneath the 200-dma at 3,430 last week.

*Keppel Corp
- Divesting its 100% interest in Keppel Township Development (Shenyang) (KTDS) to Shenyang SUNAC Xinxing Enterprise for Rmb980m ($205m).
- KTDS owns and is currently developing a residential township project in Shenbei New District, Shenyang City, China.
- The divestment is expected to reap a disposal gain of $43m and raise its pro forma NAV/share by 3¢ to $6.34..
- It is also in line with Keppel Land's strategy to recycle assets to seek higher returns and re-balance its portfolio to focus on selected high-growth cities in China.
- Trades at 11.5x forward P/E

Ascendas Hospitality Trust
- Acquiring three Osaka hotels in Japan for ¥10.3b ($126.1m), or 2.9% discount to the latest valuation.
- The deal will be fully funded by debt and is expected to be DPS accretive. On a pro forma basis, FY3/18 DPS would have increased by 4.3% to 6.11¢.
- The acquisition of 168-room Hotel WBF Kitasemba West and 168-room Hotel WBF Kitasemba East are expected to be completed by Sep '18, while the acquisition of 182-room Hotel WBF Honmachi is expected to be completed by Jan '19.
- Trades at 8.1% yield and 0.84x P/B.

- Granted a licence extension to continue the listing and trading of SGX Nifty contracts beyond Aug'18, as part of ongoing arbitration proceedings.
- The Nifty products will continue to list for at least two successive contract month maturation beyond the arbitration's completion date.
- But SGX is not allowed to launch or list any new India equity derivatives product until a final decision is made. The hearings on evidence are expected to commence in early 2019.
- Trades at 20.3x forward P/E.
- MKE has a Buy with TP of $8.79.

*Ho Bee Land
- Acquired Frasia Properties (FPS), which owns a freehold property known as Ropemaker Place in London for £650m ($1.16b).
- The 602,000 sf Grade A office tower is located near Liverpool Street Station and has a weighted average lease term of 10.5 years with annual rental income of £30.57m ($55m), translating to a net yield of 4.68%.
- This will provide the group with a steady and sustainable recurrent income stream, thus enabling it to weather the Brexit uncertainty over the next 2-3 years.
- The acquisition will increase its total investment in London to $2.4b, representing 41% of the group's investment portfolio.
- Trades at 0.52x P/B.
- MKE as a Buy with TP of $3.30.

*Noble Group
- Proposed sale of a Kamsarmax dry bulk carrier vessel to Aeolian Spirit Shipping for US$23.79m.
- The vessel currently operates as part of the group's freight business, which it has decided to monetise, subject to favourable market conditions.
- The vessel has been mortgaged to a financial institution and part of the proceeds will be used to pay down the amounts owed under the relevant facility.
- The one-off gain on the disposal would amount to US$0.03m based on the carrying value of the vessel as at Mar '18.

*Sembcorp Industries
- Completed the acquisition of a 40MW grid-tied solar power project, which is under construction in Singapore.
- Total investment including acquisition and future investment is estimated to be $55m.
- Trades at 14.8x forward P/E.

- A 2x50MW coal-fired power plant in Indonesia designed by 80%-owned subsidiary Shandong Yangguang Engineering Design Institute has been successfully connected to the local grid.
- This marks the 35th power plant Yangguang has provided design services in Indonesia.
- Trades at 7.9x forward P/E.

*Mapletree Industrial Trust
- Exercised option to purchase 7 Tai Seng Drive for $68m.
- JTC Corp has granted its in-principle approval for the transaction subject to compliance with the stipulated conditions.
- The proposed acquisition is expected to be completed by Jun '18.
- Trades at 6.1% yield and 1.3x P/B.

Thursday, June 14, 2018

SG Market (14 Jun 18)

- Expect a rocky session after a slightly more hawkish Fed raised its lending rate by 25bps amid stronger economy and inflation and signalled a faster pace of hikes this year, while the ECB could begin the process to end QE today.
- Trade tensions could also rear its ugly head as US President Trump prepares to impose stiff tariffs on Chinese imports as soon as Fri or next week, which is likely to prompt retaliation from Beijing.
- Technically, the STI has broken beneath the crucial 200-dma at 3,430 and could head toward the next support at 3,340.

- Freehold 60-unit Park House, located along Orchard Boulevard, has been sold to HK-listed Shun Tak Holdings in a public tender for $375.5m, or 22% above the reserve price.
- With a site area of 46,084 sf and plot ratio of 2.8, the sale price translates to a record $2,910 psf ppr, well above the previous peak of $2,526 achieved by Hampton Court in 2013.
- This would imply an estimated selling price of at least $4,000 psf and reinforces developer confidence in the high-end market.
- The latest transaction shows there is no letting up of the collective sale fever that started in May last year.
- Ytd, the 31 residential enbloc sales, with total transaction value of $9.67b, has already surpassed the 28 deals worth $8.25b closed for the whole of 2017.
- Bukit Sembawang (Buy, TP: $8.55), GuocoLand (Buy, TP: $3.00) and City Dev (Buy, TP: $14.20) offer the highest exposure to the high end market.

*Keppel Corp
- Delivered another jack-up rig to Borr Drilling safely, on time without cost overrun.
- This marks the second order delivered to Borr (out of the five rigs previous built for Transocean), with another eight on order.
- Trades at 11.6x forward P/E.

- Inked an exclusive franchise agreement with US-based franchisor Cajun Global to develop 80 "Texas Chickens" restaurants in Indonesia over 10 years from 2018 to 2027.
- Territories include parts of West Java, Jakarta, Banten, Lampung, South Sumatra and Bengkulu.
- The business expansion is part of the group's growth strategy to increase presence in key markets in Asia, in addition to its existing Texas Chicken franchise in Malaysia (47 restaurants since 2013).
- Trades at 0.44x P/B.

*Tritech Group
- Awarded a $4.6m contract by the Changi Airport Group to provide soil investigation services for Terminal 5 building.
- The work will commence in Jun and will be completed in Apr 2020 (22 months). There is no defects liability period.
- Trades at 0.6x P/B

*China Everbright Water
- Acquiring national grade-A, Xuzhou Municipal Engineering Design Institute (one of the high-tech enterprises set up in Jiangsu) for Rmb82m.
- The institute mainly engages in the survey, mapping, design and consultation of infrastructure projects, as well as the consultation of project costs and management.
- The acquisition will complement and further improves the group's efficiency of its engineering design works as it seeks to reduce the relevant costs.
- With this new platform, CEW will also be able to undertake design projects relating to niche water services sector to create a new source of profit growth.
- Trades at 9.8x forward P/E

*Manulife US REIT
- Preferential offering was oversubscribed with valid acceptances and excess of provisional allotments of 182.9m and 47.8m new units respectively, raising gross proceeds of US$197.2m.
- To recap, the US office REIT held a 22-for-100 preferential offer at US$0.865 per unit.
- Offers DPU yield of 6.7% and 1.1x P/B.

- 50.01% subsidiary, vCargo Cloud (VCC) signed a MOU with Kenya's National Chamber of Commerce and Industry (KNCCI) to roll out blockchain-based electronic certificates of origin (eCO).
- The instant verification of eCOs will significantly improve transparency, security and efficiency in authenticating trade documents.
- As the technology partner, VCC will tailor its platform specifically for KNCCI members to cater to their local business needs in achieving borderless commerce.
- VCC also intends to use Kenya as a springboard to launch its solution regionally to other East African countries i.e Burundi, Djibouti, Kenya, Rwanda and Uganda.
- Trades at 0.62x P/B

Wednesday, June 13, 2018

SG Market (13 Jun 18)

- The market is likely to remain lacklustre as as investors turn their attention to major central bank meetings this week after shrugging off Tue's Trump-Kim summit, while trade tensions continue to simmer in the background with US going to put out a list of China imports subject to 25% tariffs on Fri.
- While the Fed widely expected to raise its key interest rate by 25bps, market is more interested in the guidance if it would hike three or four times this year.
- Meanwhile, ECB meeting this Thu could touch on QE exit , while BoJ policy decision on Fri could continue to be supportive.
- Technically, the STI is testing its 200-dma at 3,430, with next support level at 3,340. Immediate resistance remains at 3,510 (near 50-dma).

- According to real estate portal SRX property, resale prices of non-landed private property rose 1.2% m/m and 10.8% y/y in May, with the largest increase recorded in the outside of central region (+1.8% m/m).
- Resale prices have risen more than 1% every month since the start of the year, suggesting a revival of buying interest across all market segments.
- The strong upswing was attributed to the spillover effects from the en bloc sale fever, which saw several collective deals in the core central and outside central regions.
- Resale volume of 1,550 units was 0.6% lower than Apr but 25.5% higher than the transactions in May '17.
- Resale prices could see further upside in the coming months, largely driven by the higher new launch prices from pricier land acquisitions.

*Sembcorp Marine
- Won first polar expedition cruise ship design contract from Brodosplit Shipyard for an undisclosed sum.
- The 128m ship, with a capacity of 200 passengers and 116 crew members, will be constructed by the Croatian yard for Quark Expeditions, which specialises in purpose-built expedition vessels to Arctic and Antarctic, with completion slated to be 3Q20.
- News wires reported that Quark Expeditions awarded Brodosplit the polar cruiseship contract for US$130m.
- Trades at 1.8x P/B.

- Secured a Rmb44.6m manufacturing and services contract rom Oriental Energy, a repeat customer.
- Delivery of equipment is expected to be completed by early 2019, which will have a positive impact on the group's FY18 performance.
- Trades at 7.4x forward P/E.

*Ley Choon
- Secured contracts worth $5.3m for infrastructure works relating to installation and maintenance of pipelines.
- Trades at 25.4x trailing P/E.

*CITIC Envirotech
- Secured two industrial hazardous waste treatment projects in Xinjiang Province, with a total investment amount of Rmb680m.
- The project will commence immediately and is targeted to be completed by end 2019.
- Trades at 9.5x forward P/E

*Darco Water
- 60%-owned subsidiary was awarded 3 contracts totalling Rmb107.6m ($22.5m) in China.
- Works are expected to be completed within 24 months and will have a positive impact on FY18 results.
- Trades at 42x trailing P/E.

*Ramba Energy
- Obtained approval for the farm-out of a 15% participating interest in the Lemang production sharing contract (PSC) to Mandala Energy Lemang.
- The participating interests of Hexindo, Mandala and Eastwin Global Investment in Lemang PSC following the completion are 16%, 50% and 34% respectively.
- Trades at 1.2x P/B

*Addvalue Tech
- Spinoff of Addvalue Solutions (AVS) will be conducted via a distribution-in-specie of at least 10% of AVS shares to shareholders.
- Proposed spinoff and listing on the Catalist board will only be carried out if the valuation of AVS is at least $70m.
- Trades at and 5.8x P/B.

*Raffles Education
- Proposed acquisition of six adjacent units in a commercial property in Suzhou, China, for Rmb6.6m ($1.4m).
- The units have a combined GFA of 553.91 sqm with lease expiry in Dec 2066.
- This will enable the group to expand Gelin Nursery School of Suzhou National New & Hi-tech Industrial Development Zone, which is located in the building.
- Post-transaction, FY17 pro-forma loss per share is expected to narrow to $0.16 (from $0.19).
- Trades at 0.34x P/B.

*Keong Hong
- Appealed to Ministry of Manpower (MOM) to lift the 2-year debarment in relation to the recruitment of new foreign workers.
- MOM responded that it will shorten the debarment term to 6 months and allow the group to recruit new foreign workers after 24 Nov '18.
- To recap, the group was penalised by MOM in May for housing its foreign workers in overcrowded, dirty and unsafe conditions.
- Trades at 0.65x P/B.

- Placed under SGX watch-list due to failure to meet financial entry criteria (recorded pretax losses for 3 consecutive financial years with average daily market cap of <$40m).

Tuesday, June 12, 2018

SG Market (12 Jun 18)

- The market is likely to keep a close watch on the outcome of the historic Trump-Kim summit this morning where a breakthrough deal could spark risk-off sentiment.
- Meanwhile, investors are also gearing up for major policy decisions by three central banks later this week, with the Fed widely expected to tighten and ECB providing guidance on QE exit.
- Technically, the STI continues to be bounded within the 3,510 (near 50-dma) and 3,428 (200-dma) trading range but that could be tested by the outcome of the US-North Korea denuclearisation talks.

*Hutchison Port
- Latest filing shows that PSA picked up 53.4m units at average price of US$.297 in the open market, raising its stake to 11.3% from 10.7%. This follows a recent selldown in its share price to an all-time low of US$0.27.
- Trades at indicative yield of 9%.

- Officially opened its Thai plant Mansfield (Thailand) Co Ltd.
- Mansfield is a manufacturer of precision metal components, commercial tool and die stamping primarily based in the China.
- The plant is the group's first production plant in SE Asia and is expected to generate synergies with office automation clients, especially Japanese companies, which have relocated production from China to SE Asia.
- Slated to commence production in 2H18 and contribute to FY19 performance.
- Trades at 10.8x trailing P/E.

- Received an in-principle approval for its exit from SGX Watch-List with effect from 13 Jun 2018.

*Imperium Crown
- Incorporated wholly-owned subsidiary, Fei County Yin Sheng Real Estate to spearhead the group's property development and investment in China.
- As its maiden project, Yin Sheng will undertake the development of the two land plots previously acquired in Wonder Stone Park, a tourist destination in Feixian County, Linyi City, Shandong province.
- Going forward, the group will review the property market to identify future potential opportunities.
- Trades at 0.8x P/B.

- Order for Sale from the Strata Titles Board has been granted for the collective sale of Kismis View.
- The 43-unit property with 90,863 sf site and 1.4 plot ratio was acquired by a 60:40 JV between Roxy and the family of Tong Eng Group for $102.8m or $941 psf ppr in Jan '18.
- The group has also obtained the in-principal approval form the Singapore Land Authority to issue a fresh 99 years lease for the development project.
- Trades at 1.3x P/B.

- Received an appeal from AEM Suzhou (ASZ) against the verdict passed by Suzhou court on two legal cases in favour of the group.
- To recap, the group has divested its plating business and entire interest in ASZ to Yunyi Electric for $1.4m and formed a new non-plating subsidiary AEM Microtronics Suzhou (AMSZ).
- In Aug '17, the group had received two notices of suits from ASZ claiming Rmb1m for non-payment of property, plant and equipment transferred from ASZ to AMSZ and Rmb2.7m in salaries and purchases, which ASZ made on behalf of AMSZ.
- The board believes that the claims are without merit and will contest the appeal vigorously.
- The stock was sold down 6.8% yesterday and trades at 8.9x forward P/E.

- Received notice of default from trustee for failure to pay the 6% coupon on its $500m perps last month.
- Trustee can institute proceedings to wind up Hyflux to be wound up if it gets the mandate of perp holders to do so.
- The group is still protected by a 30-day moratorium on creditors' claims since 22 May.
- The shares remain suspended from trading.

Monday, June 11, 2018

SG Market (11 Jun 18)

-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).

- 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

- 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.

*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

- 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.

*MS Holdings
- Warned of a net loss for FY18 results due to challenging business conditions and competitiveness in crane rental markets.

Friday, June 8, 2018

SG Market (08 Jun 18)

- 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).

*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.

*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

- 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.

*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)

- 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).

*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.

- 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

*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.

- 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)

- 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).

*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.

*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.

- 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

- 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)

- 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).

- 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.

*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.

- 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.

- 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.

*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.

*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 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.

*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.

- 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

*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.

- 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)

- 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.

*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

- 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.

*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.