-The market looked set for a nervous start as trade conflict returned to the fore after US President Trump expanded his tariff threats on all US$500b of Chinese imports and accused both China and EU of currency manipulation.
- Technically, the STI could face some resistance at 3,300 with next upside objective at 3,340, while underlying support remains at 3,190-3,200.
- Dismal 2Q18 net loss of $55.6m (2Q17: $5.1m profit) blew estimates out of the water due to lower work volume and loss on sale of a semi-submersible rig.
- Revenue surged 151% to $1.63b, boosted by delivery of two Borr Drilling jack-ups and sale of West Rigel semi-submersible but excluding these rig sales, revenue would have sunk 12% to $572m.
- Dived into operating loss of $52.6m, reversing from $25.2m profit in 2Q17 as weak volumes in rigs & floaters and offshore platforms was unable to cover overheads and the yard took a $27m hit from the US$500m sale of West Rigel.
- Despite securing $254m of new contracts, its net order book (excluding Sete Basil drillships) shrank 9.6% q/q to $4.15b.
- While global E&P spending is picking up, order flow recovery is slow, competition is intense and margins are compressed.
- No interim dividend declared (1H17: 1¢).
- Trades at 1.75x P/B.
- Bagged two contracts with a combined value of $70m.
- In Brazil, Keppel Fels Brasil won a contract from Modec to fabricate and integrate topside module for FPSO Carioca MV30.
- In Singapore, Keppel Shipyard will convert a LNG carrier to a floating storage and re-gasification u for a leading global operator of oil and gas production vessels.
- Trades at 13x forward P/E
- Its electronics division secured $764m worth of contracts in 2Q18, mainly for smart city solutions in mobility, satellite communications, IoT, public safety & security and cybersecurity, as well as defence solutions.
- These projects will be completed progressively till 2026.
- Trades at 18.2x forward P/E.
- Proposed disposal of 35 Tuas View Crescent to Beni Warehousing for $18.6m
- The sale price of the 16,000 vacant property, with 30-year lease till Dec 2029, represents a 140% premium to its book value of $7.7m.
- Net proceeds will be to used to pay a special dividend, repay bank borrowings and/or strengthen its working capital.
- Trades at 9.5x trailing P/E.
- Entered into a 60:30:10 JV agreement with Nanjing Qixia and Nanjing Dajian to form a JVco known as Nanjing ComfortDelGro Qixia Driver Training Co (CDG Qixia).
- CDG Qixia will operate an initial fleet of 35 vehicles in Nanjing.
- Trades at 15.9x forward P/E.
*Chip Eng Seng
- Entered into an agreement with Navis Capital to acquire 70% of White Lodge Group Services for $13.3m.
- White Lodge operates a chain of pre-school centres in Singapore (7) and Malaysia (2).
- The deal gives the group with a ready platform to expand its footprint in the pre-school education segment and is expected to be completed in 3Q18.
- Trades at 13.6x P/B.
*China Everbright Water
- Signed a supplementary agreement with Ji'nan Urban and Rural Water Authority of Shandong Province to invest and construct Ji'nan Waste Water Treatment Project (Plant 1 & 2) Expansion, with total investment of Rmb1.043b.
- The project will expand the designed capacity of both plants by 200,000 m3.
- Upon completion of expansion work, the daily treatment capacity of Plant 1 will increase from 350,000 m3 to 450,000 m3, while that for Plant 2 will increase from 200,000 m3 to 300,000 m3.
- Trades at 9.3x forward P/E
- Courage Investment
- Soon Lian