MARKET OVERVIEW
- The market may take a pause as traders stay on the sidelines ahead of the 3Q GDP growth estimate and MAS policy meeting this Fri amid the absence of upside catalysts.
- Technically, the STI has broken clear of its short term downward trend and above its 3,275 resistance and appears headed for the next upside objective at 3,320.
CORPORATE RESULTS
*SPH REIT
- 4QFY17 DPU inched up 0.7% to 1.42¢, bringing FY17 DPU to 5.53¢ (+0.5%), at the lower end of consensus forecast.
- Quarter's gross revenue grew 1.3% on positive rental reversion from Paragon and The Clementi Mall, while NPI s bumped up 3.9% due to lower expenses.
- Tenant sales at Paragon rose 2.1% with steady footfall, while that for The Clementi Mall fell 5.8% as visitor traffic slowed 0.3%.
- Its two properties continued to enjoy full occupancy despite mounting competition from shifting shopping trends.
- Trades at 5.5% yield and 1.06x P/B.
POSITIVE NEWS
*City Dev
- Announced a possible cash offer of 552.5p (21% premium to last close) for remaining 34.8% stake in UK-listed hotel arm Millennium & Corpthorne Hotels (M&C)
- This values the global hotel group at £1.79b or fairly attractive 12x EV/EBITDA and 0.67x P/B.
- While CDL intends to maintain M&C's current business model, MKE believes the asset-rich company offers potential to unlock value in in the medium term.
- MKE maintains Buy with TP of $13.60.
*Boustead Projects
- Secured three contracts totalling $56m, comprising the design and building of an industrial management complex ($27m) and two other contracts ($29m) for additions & alternations and fit outs for repeated customers.
- Order book backlog lifted to $217m.
- Management stated its intention to grow further in the waste management sector.
- Last traded at 16.3x trailing P/E.
*Willas-Array
- Guided for a significant increase in 1H17 net profit stemming from:
1) Higher demand for energy saving and automotive applications
2) Improved gross profit margin on a shift in sales mix
3) FX gain arising from the appreciation of the yuan
NEGATIVE NEWS
*Jason Marine
- Expects to incur a net loss in 1HFY18 due to softer demand caused by depressed oil prices and intense market competition.
NEUTRAL NEWS
*GLP
- Received SGX approval-in-principle for the proposed privatisation at $3.38/share via a scheme of arrangement.
- Full details of the scheme, including the IFA opinion, will be sent to shareholders by 1 Dec '17.
- If successful, GLP intends to complete the scheme on or before 14 Apr '18.
*SGX
- Launched four thematic indices with FactSet to support growing investor demand to track technology, cybersecurity, robotics and healthcare industries within the region and globally.
- Separately, it reported Sep securities turnover of $21.8b (+5% y/y, -16% m/m), with daily average of $1.1b (+11% y/y, -8% m/m).
- Total derivatives volume expanded to 16m contracts (+19% y/y, +1% m/m), while commodities derivatives volume totalled 1.7m contracts (+44% YoY, -11% MoM).
- There was one mainboard listing raising $58.2m and 164 new bond listings, raising $67.4b.
- Last traded at 24.1x trailing P/E.
*Viva Industrial Trust
- Declined the right of first refusal to acquire an industrial building in Ang Mo Kio for $300m.
- The REIT manager cited that the acquisition would require a major equity fund raising exercise and would not be DPU accretive to unitholders.
*Nam Cheong
- Filed a scheme of arrangement and 6-month moratorium with the High Court to restructure its debts, which will be heard on 12 Oct.
- Intends to convene a meeting with scheme creditors within three months.
- Trading in counter has been suspended since 21 Jul.
*Samko Timber
- Proposed to dispose two land parcels in Tangerang, West Java in Indonesia for Rp70b ($7m).
- The plots totalling 53,200 sqm is currently being utilised for the operation of one of its factory engaged in the production plywood and other wood products.
- The sale is in line with its strategy to streamline its operations and is expected to result in a disposal gain of $3.4m.
*OEL
- Terminated the non-binding term sheet for the RTO of Maxz Universal Development Group.
- Maxz manages resorts and its assets include Movenpick Heritage Hotel Sentosa.
Tuesday, October 10, 2017
Monday, October 9, 2017
SG Market (09 Oct 17)
MARKET OVERVIEW
- Attention will likely turn towards Fri's 3Q GDP growth estimates, which could hit a 3-year high of >5%, China's manufacturing and services PMI readings, a slew of US data, FOMC meeting minutes as well as start of US corporate earnings season.
- Technically, the STI has broken clear of its short term downward trend and above its 3,275 resistance and appears headed for the next upside objective at 3,320.
POSITIVE NEWS
*Sembcorp Marine (SMM)
- Singed agreements to sell nine Pacific Class 400 drilling rigs to Borr Drilling for US$1.3b ($1.77b) plus a market-based fee.
- The rigs include all six rigs from previously-terminated contracts, and will be delivered over a 14-month period from 4Q17 to 1Q19.
- While the transaction will result in a loss of $15m, it will significantly improve SMM's liquidity position.
- Last traded at 45.7x forward P/E.
*Keppel Corp
- Acquiring a 50% stake in the proposed manager of Keppel-KBS US REIT, for US$27.5m.
- The move is in line with its plans to carry out an IPO for its portfolio of US commercial assets on SGX, comprising 11 office assets, with a mandate to invest in a diversified portfolio of income-producing assets in the US.
- Last traded at 14.8x forward P/E and 1x P/B.
*SIA Engineering
- Collaborating with Air India Engineering Services to provide MRO services in India.
- Last traded at 20.9x forward P/E.
NEUTRAL NEWS
*KOP
- Proposed placement of 221.6m new shares (25% share capital) to prominent investor Sam Goi at 5¢ each.
- Net proceeds of $11m earmarked for business development.
*Sen Yue
- Completed disposal of property at 16 Tuas Avenue 20 to JTC for $3.1m.
- The disposal will result in a disposal gain of $1.6m.
- Last traded at 14.9x trailing P/E.
*AA Group
- Entered into a conditional agreement to dispose loss-making subsidiary, Toko Construction, for $1m.
- The divestment is undertaken as part of a restructuring and will result in a disposal gain of $1m, to be used for working capital.
- Attention will likely turn towards Fri's 3Q GDP growth estimates, which could hit a 3-year high of >5%, China's manufacturing and services PMI readings, a slew of US data, FOMC meeting minutes as well as start of US corporate earnings season.
- Technically, the STI has broken clear of its short term downward trend and above its 3,275 resistance and appears headed for the next upside objective at 3,320.
POSITIVE NEWS
*Sembcorp Marine (SMM)
- Singed agreements to sell nine Pacific Class 400 drilling rigs to Borr Drilling for US$1.3b ($1.77b) plus a market-based fee.
- The rigs include all six rigs from previously-terminated contracts, and will be delivered over a 14-month period from 4Q17 to 1Q19.
- While the transaction will result in a loss of $15m, it will significantly improve SMM's liquidity position.
- Last traded at 45.7x forward P/E.
*Keppel Corp
- Acquiring a 50% stake in the proposed manager of Keppel-KBS US REIT, for US$27.5m.
- The move is in line with its plans to carry out an IPO for its portfolio of US commercial assets on SGX, comprising 11 office assets, with a mandate to invest in a diversified portfolio of income-producing assets in the US.
- Last traded at 14.8x forward P/E and 1x P/B.
*SIA Engineering
- Collaborating with Air India Engineering Services to provide MRO services in India.
- Last traded at 20.9x forward P/E.
NEUTRAL NEWS
*KOP
- Proposed placement of 221.6m new shares (25% share capital) to prominent investor Sam Goi at 5¢ each.
- Net proceeds of $11m earmarked for business development.
*Sen Yue
- Completed disposal of property at 16 Tuas Avenue 20 to JTC for $3.1m.
- The disposal will result in a disposal gain of $1.6m.
- Last traded at 14.9x trailing P/E.
*AA Group
- Entered into a conditional agreement to dispose loss-making subsidiary, Toko Construction, for $1m.
- The divestment is undertaken as part of a restructuring and will result in a disposal gain of $1m, to be used for working capital.
Friday, October 6, 2017
SG Market (06 Oct 17)
MARKET OVERVIEW
- The market could chalk up further upside gains on growing confidence after IMF chief Christine Lagarde siad that the long-awaited global economic recovery is taking hold and urged policy makers to seize the opportunity to create a more inclusive economy and broader, lasting prosperity.
- Technically, the STI is likely to break out of its tight 3,230-3,265 range bounded by the 20 and 50-day moving averages.
ECONOMIC WATCH
- MKE estimates flash 3Q GDP to be near 4%, with strong manufacturing (+20%) leading a broadening recovery in the services sector.
- Full-year GDP growth could well exceed the government's 2-3% and MKE's 3% forecasts, with 8M17 core inflation creeping higher to 1.5%.
- This could prompt the MAS to normalize and tighten its neutral stance at its upcoming semi-annual policy meeting this month.
SECTOR WATCH
*Property
- Normanton Park has been sold en bloc to Chinese firm Kingsford Huray Development for $830.1m or 4% above its reserve price.
- Inclusive of development charges, this works out to a land price of $969 psf ppr for the 667,368 sf site, which can yield a total gfa of 1.4m sf accommodating 1,200 new homes.
- This is the 12th residential collective sale sealed this year, reflecting the mad scramble among land-hungry developers.
- Top picks are UOL (TP: $9.43), GuocoLand (TP: $2.75) and City Dev (TP: $12.05).
POSITIVE NEWS
*Soilbuild Construction
- Awarded a contract from Soilbuild Group to erect a 7-storey single-user general industrial factory development for $50.4m.
- Works expected to be completed by 3Q19 and will lift order book to $574.2m.
NEUTRAL NEWS
*Croesus Retail Trust
- Scheme of arrangement to take the Japanese mall landlord private at $1.17/unit has been sanctioned by the Court.
- Last day of trading will be on 10 Oct, with expected payment to unitholders will be no later than 26 Oct. Counter will be delisted on 27 Oct.
*Yongnam
- Enlists CIMB Securities to place out 47.5m new shares representing 10% of its existing share capital at $0.255 apiece or 5.6% discount to the last close,
- Net proceeds of $11.9m will be used to for general working capital purposes.
- The steel engineering group is loss-making and trades at 0.44x P/B.
*ABR Holdings
- Acquiring a second land plot, adjacent to its previous purchase, in Kuala Lumpur, Malaysia, for RM4.95m.
- The 99 year-leasehold site has an area of 1,533.5 sqm.
- Last traded at 35.81x trailing P/E.
*United Food
- Proposed acquisition of 80% stake in each of Hebei Xingrun Shengwu Keji Gufen, Chengde Purun Shengwu Zhiyao and Benchmark Trade, for Rmb120m ($24.5m) or 25% below independent valuation.
- The three firms are involved in the development, manufacture and sale of animal feed and related products in China.
- The move will help the group expand and strengthen its foothold in the agribusiness and food industry in China.
- The pig farmer and pork processor has been loss-making for the past two years.
*Oceanus
- Signs MOU with Temasek Polytechnic to collaborate on training and R&D, relating to aquaculture and biomedical sciences.
- The market could chalk up further upside gains on growing confidence after IMF chief Christine Lagarde siad that the long-awaited global economic recovery is taking hold and urged policy makers to seize the opportunity to create a more inclusive economy and broader, lasting prosperity.
- Technically, the STI is likely to break out of its tight 3,230-3,265 range bounded by the 20 and 50-day moving averages.
ECONOMIC WATCH
- MKE estimates flash 3Q GDP to be near 4%, with strong manufacturing (+20%) leading a broadening recovery in the services sector.
- Full-year GDP growth could well exceed the government's 2-3% and MKE's 3% forecasts, with 8M17 core inflation creeping higher to 1.5%.
- This could prompt the MAS to normalize and tighten its neutral stance at its upcoming semi-annual policy meeting this month.
SECTOR WATCH
*Property
- Normanton Park has been sold en bloc to Chinese firm Kingsford Huray Development for $830.1m or 4% above its reserve price.
- Inclusive of development charges, this works out to a land price of $969 psf ppr for the 667,368 sf site, which can yield a total gfa of 1.4m sf accommodating 1,200 new homes.
- This is the 12th residential collective sale sealed this year, reflecting the mad scramble among land-hungry developers.
- Top picks are UOL (TP: $9.43), GuocoLand (TP: $2.75) and City Dev (TP: $12.05).
POSITIVE NEWS
*Soilbuild Construction
- Awarded a contract from Soilbuild Group to erect a 7-storey single-user general industrial factory development for $50.4m.
- Works expected to be completed by 3Q19 and will lift order book to $574.2m.
NEUTRAL NEWS
*Croesus Retail Trust
- Scheme of arrangement to take the Japanese mall landlord private at $1.17/unit has been sanctioned by the Court.
- Last day of trading will be on 10 Oct, with expected payment to unitholders will be no later than 26 Oct. Counter will be delisted on 27 Oct.
*Yongnam
- Enlists CIMB Securities to place out 47.5m new shares representing 10% of its existing share capital at $0.255 apiece or 5.6% discount to the last close,
- Net proceeds of $11.9m will be used to for general working capital purposes.
- The steel engineering group is loss-making and trades at 0.44x P/B.
*ABR Holdings
- Acquiring a second land plot, adjacent to its previous purchase, in Kuala Lumpur, Malaysia, for RM4.95m.
- The 99 year-leasehold site has an area of 1,533.5 sqm.
- Last traded at 35.81x trailing P/E.
*United Food
- Proposed acquisition of 80% stake in each of Hebei Xingrun Shengwu Keji Gufen, Chengde Purun Shengwu Zhiyao and Benchmark Trade, for Rmb120m ($24.5m) or 25% below independent valuation.
- The three firms are involved in the development, manufacture and sale of animal feed and related products in China.
- The move will help the group expand and strengthen its foothold in the agribusiness and food industry in China.
- The pig farmer and pork processor has been loss-making for the past two years.
*Oceanus
- Signs MOU with Temasek Polytechnic to collaborate on training and R&D, relating to aquaculture and biomedical sciences.
Thursday, October 5, 2017
SG Market (05 Oct 17)
MARKET OVERVIEW
- Range-bound trading could persist despite records highs achieved in the US market, as investors position away from sectors facing headwinds such as telecoms and transport.
- Technically, the STI sees support at 3,190 with topside resistance capped at 3,270.
SECTOR WATCH
*O&M
- Global offshore rig rental appears to be recovering, led by oil firms' growing demand for harsh-environment exploration.
- Market watchers opine that the nascent pick-up for harsh-environment rigs, particularly for North Sea drilling, could lead to higher day rates as soon as 2018, and translate into increased capex spending by oil majors.
- Notable firms that build harsh-environment rigs include Sembcorp Marine (47.2x forward P/E, 1.43x P/B), Keppel Corp (14.5x, 1x P/B) and Vard (0.75x P/B).
POSITIVE NEWS
*Keppel Corp
- Secured a major FPSO conversion contract from SBM Offshore for an undisclosed sum.
- Following conversion from a Very Large Crude Carrier, the FPSO will be subsequently deployed to the Liza field in offshore Guyana in South America.
- Last traded at 14.5x forward P/E and 1x P/B.
*United Global
- Proposed 40:60 JV with Japan-based M-TechX to manufacture oil absorbing nano-fibre materials for various industrial and commercial industries in Japan, Indonesia and Singapore.
- The JVCo will leverage on United Global's extensive distribution channels across 30 countries for the super-absorbent nano-fibres produced by M-TechX, which owns the proprietary technology for mass production of nano-fibres.
- United Global will provide US$4m interest-free loan to the JVCo for working capital.
- Trades at 12x trailing P/E.
*Addvalue Tech
- Two days following a share price spike, group announced a new partnership to offer its maritime product and data solutions bundle for deep-sea fishing vessels.
- Addvalue and the undisclosed partner hope to capture a market size of at least 500 vessels for a two-month trial for its communication product from Nov '17, followed by a commercial rollout.
NEGATIVE NEWS
*SIA Engineering
- Share price plunged as much as 9% yesterday after JPMorgan reportedly sold its entire stake of 38.9m shares (3.5% share capital) at the low end of its marketed $3.11-3.30 range.
- Based on the last closing price of $3.20, counter is valued at 21x forward P/E, still above its 10-year historical average of 18x.
NEUTRAL NEWS
*Adventus
- JV set up with Panthera, a holding company representing two Vietnamese locals, to invest in real estate projects in Ho Chi Minh, Hanoi and Da Nang.
- The first development project is located in the CBD of Da Nang and sited on a land plot of 1,562.7 sqm, which will be developed into a hotel with retail component.
- Trades at 4x trailing P/E.
*UnUsUaL
- In response to a SGX trading query following a 10.2% surge in share price, group cited it was looking to finalise a certain corporate exercise.
- Range-bound trading could persist despite records highs achieved in the US market, as investors position away from sectors facing headwinds such as telecoms and transport.
- Technically, the STI sees support at 3,190 with topside resistance capped at 3,270.
SECTOR WATCH
*O&M
- Global offshore rig rental appears to be recovering, led by oil firms' growing demand for harsh-environment exploration.
- Market watchers opine that the nascent pick-up for harsh-environment rigs, particularly for North Sea drilling, could lead to higher day rates as soon as 2018, and translate into increased capex spending by oil majors.
- Notable firms that build harsh-environment rigs include Sembcorp Marine (47.2x forward P/E, 1.43x P/B), Keppel Corp (14.5x, 1x P/B) and Vard (0.75x P/B).
POSITIVE NEWS
*Keppel Corp
- Secured a major FPSO conversion contract from SBM Offshore for an undisclosed sum.
- Following conversion from a Very Large Crude Carrier, the FPSO will be subsequently deployed to the Liza field in offshore Guyana in South America.
- Last traded at 14.5x forward P/E and 1x P/B.
*United Global
- Proposed 40:60 JV with Japan-based M-TechX to manufacture oil absorbing nano-fibre materials for various industrial and commercial industries in Japan, Indonesia and Singapore.
- The JVCo will leverage on United Global's extensive distribution channels across 30 countries for the super-absorbent nano-fibres produced by M-TechX, which owns the proprietary technology for mass production of nano-fibres.
- United Global will provide US$4m interest-free loan to the JVCo for working capital.
- Trades at 12x trailing P/E.
*Addvalue Tech
- Two days following a share price spike, group announced a new partnership to offer its maritime product and data solutions bundle for deep-sea fishing vessels.
- Addvalue and the undisclosed partner hope to capture a market size of at least 500 vessels for a two-month trial for its communication product from Nov '17, followed by a commercial rollout.
NEGATIVE NEWS
*SIA Engineering
- Share price plunged as much as 9% yesterday after JPMorgan reportedly sold its entire stake of 38.9m shares (3.5% share capital) at the low end of its marketed $3.11-3.30 range.
- Based on the last closing price of $3.20, counter is valued at 21x forward P/E, still above its 10-year historical average of 18x.
NEUTRAL NEWS
*Adventus
- JV set up with Panthera, a holding company representing two Vietnamese locals, to invest in real estate projects in Ho Chi Minh, Hanoi and Da Nang.
- The first development project is located in the CBD of Da Nang and sited on a land plot of 1,562.7 sqm, which will be developed into a hotel with retail component.
- Trades at 4x trailing P/E.
*UnUsUaL
- In response to a SGX trading query following a 10.2% surge in share price, group cited it was looking to finalise a certain corporate exercise.
Wednesday, October 4, 2017
SG Market (04 Oct 17)
MARKET OVERVIEW
- Market is still not showing any clear direction although the STI appears to have broken out of its downtrend channel formed since Jul.
- Investors may position in MKE's preferred picks ahead of the 3Q results season, such as UOB (TP: $26.40), UOL (TP: $9.43), GuocoLand (TP: $2.75), CapitaLand Commercial Trust (TP: $1.81), Ascendas REIT (TP: $2.90), Genting Singapore (TP: $1.35).
- Technically, immediate topside for the STI is capped at 3,270 with support at 3,190.
POSITIVE NEWS
*UOL
- Entered into a 70:30 JV with Singland Homes, a subsidiary of 49.8% owned UIC, to explore business opportunities and take advantage of the upturn in home prices.
- Trading at 26% discount to RNAV/share of $11.03.
*SIA Engineering
- Entered into 51:49 JV with US-based Moog Inc to provide maintenance, repair and overhaul services for Moog-manufactured flight control systems fitted on new generation aircraft, including B787 and A350.
- The JVCo intends to market its component repair services to customers in Asia Pacific and beyond.
- With this addition, SIAEC will have 26 JVs across nine countries with leading OEMs and other strategic partners.
- Last traded at 22.6x forward P/E.
*Singapore O&G (SOG)
- Signed a three-year commercial collaboration with KL Fertility & Gynaecology Centre (KLFGC), a subsidiary of Australian-based Monash IVF Group.
- The three-year service agreement will enable KLFGC to provide Assisted Reproductive Technology (ART) services such as in-vitro fertilisation and intracytoplasmic sperm Injection procedures to SOG's patients in Singapore.
- Trades at forward P/E of 24.5x.
NEGATIVE NEWS
*Sembcorp Marine
- Terminated three rig contracts costing a total of US$625m with Mexican oil driller Oro Negro.
- Delivery of the jack-up rigs have been deferred since 2015.
- Last traded at 46.3x forward P/E.
*Genting HK
- Proposed a voluntary delisting from the SGX to consolidate the trading of its shares on HKSE.
- This is in line with the group's plans to focus its efforts in North Asia and reduce admin and compliance costs.
- Arrangements will be made for shareholders to transfer their shares to its primary listing on HKSE.
- The cruise ship operator is loss-making and trades at 0.44x P/B.
NEUTRAL NEWS
*GuocoLand
- 70:30 JV with parent Guoco Group has been awarded the land tender for the 21,027 sqm plot of land at Beach Road for $1.62b or $1,706 psf ppr.
- The mixed-development will consist of office, retail and residential elements.
- MKE maintains Buy with RNAV-based TP of $2.75.
*800 Super
- Acquiring Iwash Laundry from Fairly Jewellers and three individuals for $5m (2.97x P/B).
- Iwash is in the business of laundry and dry cleaning laundries and owns a leasehold property with gfa of 2,600 sqm at 80 Senoko Drive.
- Acquisition is part of its strategy to venture into alternative growth areas and opportunities.
- Trades at 13.1x forward P/E.
*Addvalue Technologies
- In response to the SGX trading query, the group replied that it is not aware of specific factors that can explain its recent unusual share price surge.
- But it shared a disclosure made in Apr '17 that it remains keen on working towards a spinoff and listing of its subsidiary, Addvalue Solutions, which handles the Inter-satellite Data Relay System (IDRS) airtime business.
- Further, the group disclosed that it is in talks with various parties on possible corporate exercises and transactions, including its IDRS-related business.
*Samurai 2K
- Developed two new ranges of two-component aerosol spray-on paint for the automotive industry.
- The products aim to reduce the chances of health hazards associated with regular aerosol spray-on paints.
- It will also participate at the upcoming Specialty Equipment Market Association Show in Las Vegas, US to showcase the new range of products.
*Top Global
- Acquiring a 6,103 sf NLA freehold strata-titled office unit at Tong Building for $24.9m.
*Cache Logistics Trust
- 18-for-100 rights issue at $0.63 apiece has been subscribed by 1.87x.
- The $102.7m rights proceeds will be used to pare debt, with aggregate leverage expected to be lowered from 43.4% to 35.5%.
- Pro forma FY16 DPU will be diluted to 6.882¢ from 7.725¢ from the 18% increase in unit base.
- Market is still not showing any clear direction although the STI appears to have broken out of its downtrend channel formed since Jul.
- Investors may position in MKE's preferred picks ahead of the 3Q results season, such as UOB (TP: $26.40), UOL (TP: $9.43), GuocoLand (TP: $2.75), CapitaLand Commercial Trust (TP: $1.81), Ascendas REIT (TP: $2.90), Genting Singapore (TP: $1.35).
- Technically, immediate topside for the STI is capped at 3,270 with support at 3,190.
POSITIVE NEWS
*UOL
- Entered into a 70:30 JV with Singland Homes, a subsidiary of 49.8% owned UIC, to explore business opportunities and take advantage of the upturn in home prices.
- Trading at 26% discount to RNAV/share of $11.03.
*SIA Engineering
- Entered into 51:49 JV with US-based Moog Inc to provide maintenance, repair and overhaul services for Moog-manufactured flight control systems fitted on new generation aircraft, including B787 and A350.
- The JVCo intends to market its component repair services to customers in Asia Pacific and beyond.
- With this addition, SIAEC will have 26 JVs across nine countries with leading OEMs and other strategic partners.
- Last traded at 22.6x forward P/E.
*Singapore O&G (SOG)
- Signed a three-year commercial collaboration with KL Fertility & Gynaecology Centre (KLFGC), a subsidiary of Australian-based Monash IVF Group.
- The three-year service agreement will enable KLFGC to provide Assisted Reproductive Technology (ART) services such as in-vitro fertilisation and intracytoplasmic sperm Injection procedures to SOG's patients in Singapore.
- Trades at forward P/E of 24.5x.
NEGATIVE NEWS
*Sembcorp Marine
- Terminated three rig contracts costing a total of US$625m with Mexican oil driller Oro Negro.
- Delivery of the jack-up rigs have been deferred since 2015.
- Last traded at 46.3x forward P/E.
*Genting HK
- Proposed a voluntary delisting from the SGX to consolidate the trading of its shares on HKSE.
- This is in line with the group's plans to focus its efforts in North Asia and reduce admin and compliance costs.
- Arrangements will be made for shareholders to transfer their shares to its primary listing on HKSE.
- The cruise ship operator is loss-making and trades at 0.44x P/B.
NEUTRAL NEWS
*GuocoLand
- 70:30 JV with parent Guoco Group has been awarded the land tender for the 21,027 sqm plot of land at Beach Road for $1.62b or $1,706 psf ppr.
- The mixed-development will consist of office, retail and residential elements.
- MKE maintains Buy with RNAV-based TP of $2.75.
*800 Super
- Acquiring Iwash Laundry from Fairly Jewellers and three individuals for $5m (2.97x P/B).
- Iwash is in the business of laundry and dry cleaning laundries and owns a leasehold property with gfa of 2,600 sqm at 80 Senoko Drive.
- Acquisition is part of its strategy to venture into alternative growth areas and opportunities.
- Trades at 13.1x forward P/E.
*Addvalue Technologies
- In response to the SGX trading query, the group replied that it is not aware of specific factors that can explain its recent unusual share price surge.
- But it shared a disclosure made in Apr '17 that it remains keen on working towards a spinoff and listing of its subsidiary, Addvalue Solutions, which handles the Inter-satellite Data Relay System (IDRS) airtime business.
- Further, the group disclosed that it is in talks with various parties on possible corporate exercises and transactions, including its IDRS-related business.
*Samurai 2K
- Developed two new ranges of two-component aerosol spray-on paint for the automotive industry.
- The products aim to reduce the chances of health hazards associated with regular aerosol spray-on paints.
- It will also participate at the upcoming Specialty Equipment Market Association Show in Las Vegas, US to showcase the new range of products.
*Top Global
- Acquiring a 6,103 sf NLA freehold strata-titled office unit at Tong Building for $24.9m.
*Cache Logistics Trust
- 18-for-100 rights issue at $0.63 apiece has been subscribed by 1.87x.
- The $102.7m rights proceeds will be used to pare debt, with aggregate leverage expected to be lowered from 43.4% to 35.5%.
- Pro forma FY16 DPU will be diluted to 6.882¢ from 7.725¢ from the 18% increase in unit base.
Tuesday, October 3, 2017
SG Market (03 Oct 17)
MARKET OVERVIEW
- Market is off to a good start in 3Q with positive momentum supported by a robust showing in Sep factory activity. Focus will be on banks, property and technology counters.
- However, oil-related firms could see some minor profit-taking after recent outperformance, as the stronger greenback weighs on crude prices.
- The STI has broken out of its downtrend channel and looks to test the 50-dma at 3,270, underpinned by rising momentum indicators. Downside support at 3,190.
ECONOMIC WATCH
- Manufacturing continued to expand in Sep, with the PMI hitting a new high of 52.0 (Aug: 51.8) for the 13th straight month
- This came on the back of strong performance in the electronics sector, which posted its highest reading of 53.6 (+0.4ppt MoM) since Jul '10.
- The latest data should push 3Q17 GDP growth to 3.8% and lift full year forecast above 3%.
POSITIVE NEWS
*UOB
- Received licence from the State Bank of Vietnam to establish a foreign owned subsidiary bank in Vietnam.
- UOB (BUY, TP $26.40) remains as MKE's preferred pick for its better pricing discipline and sensitivity to re-pricing intervals.
- Last traded at 1.22x P/B.
NEUTRAL NEWS
*Ezion
- Completed second informal meeting to update holders of $425m Series 3-8 notes and $150m 7% perpetual securities on its refinancing proposals.
- - The group has met with several interested funds and strategic investors. A strategic investor is keen to work with the group but would like to see the refinancing of lenders and MTN completed first.
- It is awaiting final approval for a 6-year refinancing deal that include additional working capital line of up to US$100m.
- Currently, it is actively engaging noteholders and has appointed SIAS to lead an informal steering committee for security holders.
- The group is looking to complete refinancing discussions with lenders before Nov 2017.
*CWT
- Independent financial advisor Ernst & Young Corporate Finance are of the view that the $2.33/share offer price from HNA Group is fair and reasonable.
- Accordingly, shareholders are advised to accept the offer.
- Closing date for the offer is on 2 Nov 2017.
*Roxy-Pacific
- Acquiring freehold residential sites at Guillemard Lane for $33.5m.
- The sites have a total land area of 14,030 sf with an existing gross plot ratio of 2.8.
- Together with earlier acquisitions, its combined site at Guillemard Lane (2, 6, 12 and 14) now encompasses 25,601 sf.
- Last traded at 15.6x trailing P/E and 1.27x P/B.
*Rotary Engineering
- Proposed exit offer of $0.46/share by Orochem (64.7% owned by controlling China family, 34.3% by Oman Investment Fund) to delist its shares from SGX.
- The offeror has received irrevocable undertaking to accept the offer and vote in favour of the delisting resolution from several shareholders representing 60.63% of share capital.
- The exit price is at 21% premium over the last traded price prior to day of trading halt and 62% premium to its NAV/share.
- Orochem does not intend to revise the exit offer price.
*SUTL Enterprise
- Fulfilment of conditions under the 60:40 JV agreement with UEM Land has been extended to 31 Dec 2017.
- To recap, the agreement is for the development of an existing marina in Puteri Harbour into a private yacht club.
- Last traded at 16.6x forward P/E.
*Aspial
- Entered into a 70:30 JV with Silver Bullion to retail and trade previous metals.
- No further financial details were disclosed.
- Last traded at 1.53x P/B.
*YuuZoo
- Expanded its board and senior management team with an addition of two board members and five top management members.
- The move is to strengthen corporate governance and to establish Yuuzoo's business, technology, distribution and partnership platforms.
- Yuuzoo is also in a midst of searching for a new CEO.
*Jaya
- Terminated the proposed acquisition via RTO of Heduru Moni.
- An extension of time has not been given by SGX to comply with listing rules, and the group will need to provide an exit offer no later than 1 Nov.
- Currently trading above its NAV/share of 2.78¢.
*Changjiang Fertilizer
- To acquire a 2.23 ha plot of vacant land in Johor, Malaysia for RM12m (3.9m).
- It intends to develop the land into fourteen units of 2.5-storey detached light industrial units with total saleable floor area of 147,830 sf.
- Acquisition is part of its strategy to expand into real estate development.
*USP
- Expanding its existing HQ located on 16A Joo Koon Circle to the adjacent plot on a land area of 3,672 sqm.
- The new 20-year lease from JTC will require a committed investment of at least $5m on fixed assets.
- Market is off to a good start in 3Q with positive momentum supported by a robust showing in Sep factory activity. Focus will be on banks, property and technology counters.
- However, oil-related firms could see some minor profit-taking after recent outperformance, as the stronger greenback weighs on crude prices.
- The STI has broken out of its downtrend channel and looks to test the 50-dma at 3,270, underpinned by rising momentum indicators. Downside support at 3,190.
ECONOMIC WATCH
- Manufacturing continued to expand in Sep, with the PMI hitting a new high of 52.0 (Aug: 51.8) for the 13th straight month
- This came on the back of strong performance in the electronics sector, which posted its highest reading of 53.6 (+0.4ppt MoM) since Jul '10.
- The latest data should push 3Q17 GDP growth to 3.8% and lift full year forecast above 3%.
POSITIVE NEWS
*UOB
- Received licence from the State Bank of Vietnam to establish a foreign owned subsidiary bank in Vietnam.
- UOB (BUY, TP $26.40) remains as MKE's preferred pick for its better pricing discipline and sensitivity to re-pricing intervals.
- Last traded at 1.22x P/B.
NEUTRAL NEWS
*Ezion
- Completed second informal meeting to update holders of $425m Series 3-8 notes and $150m 7% perpetual securities on its refinancing proposals.
- - The group has met with several interested funds and strategic investors. A strategic investor is keen to work with the group but would like to see the refinancing of lenders and MTN completed first.
- It is awaiting final approval for a 6-year refinancing deal that include additional working capital line of up to US$100m.
- Currently, it is actively engaging noteholders and has appointed SIAS to lead an informal steering committee for security holders.
- The group is looking to complete refinancing discussions with lenders before Nov 2017.
*CWT
- Independent financial advisor Ernst & Young Corporate Finance are of the view that the $2.33/share offer price from HNA Group is fair and reasonable.
- Accordingly, shareholders are advised to accept the offer.
- Closing date for the offer is on 2 Nov 2017.
*Roxy-Pacific
- Acquiring freehold residential sites at Guillemard Lane for $33.5m.
- The sites have a total land area of 14,030 sf with an existing gross plot ratio of 2.8.
- Together with earlier acquisitions, its combined site at Guillemard Lane (2, 6, 12 and 14) now encompasses 25,601 sf.
- Last traded at 15.6x trailing P/E and 1.27x P/B.
*Rotary Engineering
- Proposed exit offer of $0.46/share by Orochem (64.7% owned by controlling China family, 34.3% by Oman Investment Fund) to delist its shares from SGX.
- The offeror has received irrevocable undertaking to accept the offer and vote in favour of the delisting resolution from several shareholders representing 60.63% of share capital.
- The exit price is at 21% premium over the last traded price prior to day of trading halt and 62% premium to its NAV/share.
- Orochem does not intend to revise the exit offer price.
*SUTL Enterprise
- Fulfilment of conditions under the 60:40 JV agreement with UEM Land has been extended to 31 Dec 2017.
- To recap, the agreement is for the development of an existing marina in Puteri Harbour into a private yacht club.
- Last traded at 16.6x forward P/E.
*Aspial
- Entered into a 70:30 JV with Silver Bullion to retail and trade previous metals.
- No further financial details were disclosed.
- Last traded at 1.53x P/B.
*YuuZoo
- Expanded its board and senior management team with an addition of two board members and five top management members.
- The move is to strengthen corporate governance and to establish Yuuzoo's business, technology, distribution and partnership platforms.
- Yuuzoo is also in a midst of searching for a new CEO.
*Jaya
- Terminated the proposed acquisition via RTO of Heduru Moni.
- An extension of time has not been given by SGX to comply with listing rules, and the group will need to provide an exit offer no later than 1 Nov.
- Currently trading above its NAV/share of 2.78¢.
*Changjiang Fertilizer
- To acquire a 2.23 ha plot of vacant land in Johor, Malaysia for RM12m (3.9m).
- It intends to develop the land into fourteen units of 2.5-storey detached light industrial units with total saleable floor area of 147,830 sf.
- Acquisition is part of its strategy to expand into real estate development.
*USP
- Expanding its existing HQ located on 16A Joo Koon Circle to the adjacent plot on a land area of 3,672 sqm.
- The new 20-year lease from JTC will require a committed investment of at least $5m on fixed assets.
Monday, October 2, 2017
SG Market (02 Oct 17)
MARKET OVERVIEW
- No major news flow to drive the market this week apart from URA 3Q flash estimates, which might show a rebound in home prices for the first time in four years.
- Momentum indicators are improving but the STI needs to move above 3,250 to break out of its downtrend channel.
POSITIVE NEWS
*GLP
- Acquiring leading European logistics platform Gazeley, which owns logistics facilities across four countries in Europe totalling 32m sf of gross leasable area, for US$2.8b.
- These are located in UK (57%), Germany (25%)< France (14%) and Netherlands (4%). 17m sf of its existing assets are leased, while 16m is in the development pipeline.
- The acquisition will be funded via cash, existing credit facilities and new debt. This is no need for additional equity funding.
- GLP intends to syndicate its stake in the target portfolio as part of its long-term strategy of growing its fund management platform.
- Post-acquisition, pro forma FY17 EPS is expected to rise 0.7% to US$0.1643.
- The transaction will not affect the timeline of its privatisation offer via scheme of arrangement at $3.38/share.
*Sunpower
- Proposed to acquire a minimum 70% stake in Xintai Zhengda Thermoelectric, which provides steam and heat to industrial enterprises and residents, as well as supply electricity to local grid in Xintai City, Shandong, China.
- Consideration amount is pending an independent valuation report, and will be updated in due course.
- The target has been ordered by local government to relocate to Xintai Economic Development Zone.
- There will be relocation compensation from the government, and the new facilities will be constructed in phases, mainly comprising a 130t/h biomass boiler and three units of 130t/h coal-fired boilers, with electricity generators and steam distribution pipelines.
- Last traded at 15.5x trailing P/E.
*China Star Food
- Commenced operations at its Zilaohu factory in Fujian, China.
- Production at the 30,000-tonne capacity factory is in time to capture peak season demand.
NEGATIVE NEWS
*Yamada Green
- External auditor BDO has filed a report with Ministry of Finance, pointing to inconsistencies in the group's financial records, which may involve fraud or dishonesty.
- The group is seeking legal advice on the matter but has drawn attention to a formal notice issued by MoF China and China Securities Regulatory Commission suspending BDO China from undertaking securities-related work in May this year.
- Latest setback follows a mysterious fire that destroyed a vehicle transporting key financial documents relating to its FY17 and FY18 accounts.
- Counter has been suspended since 31 Aug.
NEUTRAL NEWS
*Frasers Centrepoint (FCL)
- Acquired 6.1m shares in Thai-listed TICON Industrial Connection via the open-market at an average price of Bt15.88 each.
- The Bt97.2m ($3.95m) acquisition lifted FCL's stake in TICON to 40.95% from 40.61%.
- Last traded at 12.3x forward P/E.
*Straits Trading
- Acquired a 98.5% stake in the distribution of a freehold 6-storey rental residential apartment in Tokyo, Japan for ¥448m ($5.4m).
- The building comprises 96 apartments with an occupancy rate of 99% as at 31 Aug.
- Last traded at 17.1x forward P/E and 0.7x P/B.
*ST Engineering
- Injected US$10.5m into its 50% owned Keystone Holdings to expand its aircraft leasing business.
- This would bring its total investment into Keystone to US$20m.
- Last traded at 21.4x forward P/E.
*Noble Group
- Completed the disposal of its North American gas and power business after Mercuria Energy made with final US$185m payment.
- Sale of its global oil liquids business is in progress and is expected to be completed by year end.
- Last traded at 0.23x P/B.
*Ziwo Holdings
- Proposed a renounceable non-underwritten 2-for-1 rights issue of warrants at $0.0033 each.
- Each warrant is exercisable within a 3-year period for a new share at $0.01.
- This translates to $0.0133 for each new share, or a 39.5% discount to its last close at $0.022.
*Yoma
- Deadline for the RTO of SHC Capital for its tourism assets has been further extended to 31 Dec.
*Hanwell
- Acquiring a 5-storey building in Osaka, Japan, for ¥575m ($6.9m), or a 6.8% discount to its market valuation on 1 Aug.
- The property has total floor area of 427.78 sqm, which will be used for the group's foray into Japan for its food business.
- Last traded at 15.5x trailing P/E and 0.6x P/B.
*Shinvest
- Disposing its leasehold property at 2 Kwong Min Road to Tong Tar Transport Service for $4.4m.
- The deal is expected to net a gain of $3m.
*Loreno Bio-Chem
- Attempting its third RTO with a new deal to acquire Knit Textile and Apparel for $26.4m, via the issue of 2.64b shares at $0.01 apiece.
- Knit Textile is a contract manufacturer of clothing in Malaysia and Cambodia.
- The group is in the process of expanding upstream into knitting, dyeing, printing and finishing of fabric.
- No major news flow to drive the market this week apart from URA 3Q flash estimates, which might show a rebound in home prices for the first time in four years.
- Momentum indicators are improving but the STI needs to move above 3,250 to break out of its downtrend channel.
POSITIVE NEWS
*GLP
- Acquiring leading European logistics platform Gazeley, which owns logistics facilities across four countries in Europe totalling 32m sf of gross leasable area, for US$2.8b.
- These are located in UK (57%), Germany (25%)< France (14%) and Netherlands (4%). 17m sf of its existing assets are leased, while 16m is in the development pipeline.
- The acquisition will be funded via cash, existing credit facilities and new debt. This is no need for additional equity funding.
- GLP intends to syndicate its stake in the target portfolio as part of its long-term strategy of growing its fund management platform.
- Post-acquisition, pro forma FY17 EPS is expected to rise 0.7% to US$0.1643.
- The transaction will not affect the timeline of its privatisation offer via scheme of arrangement at $3.38/share.
*Sunpower
- Proposed to acquire a minimum 70% stake in Xintai Zhengda Thermoelectric, which provides steam and heat to industrial enterprises and residents, as well as supply electricity to local grid in Xintai City, Shandong, China.
- Consideration amount is pending an independent valuation report, and will be updated in due course.
- The target has been ordered by local government to relocate to Xintai Economic Development Zone.
- There will be relocation compensation from the government, and the new facilities will be constructed in phases, mainly comprising a 130t/h biomass boiler and three units of 130t/h coal-fired boilers, with electricity generators and steam distribution pipelines.
- Last traded at 15.5x trailing P/E.
*China Star Food
- Commenced operations at its Zilaohu factory in Fujian, China.
- Production at the 30,000-tonne capacity factory is in time to capture peak season demand.
NEGATIVE NEWS
*Yamada Green
- External auditor BDO has filed a report with Ministry of Finance, pointing to inconsistencies in the group's financial records, which may involve fraud or dishonesty.
- The group is seeking legal advice on the matter but has drawn attention to a formal notice issued by MoF China and China Securities Regulatory Commission suspending BDO China from undertaking securities-related work in May this year.
- Latest setback follows a mysterious fire that destroyed a vehicle transporting key financial documents relating to its FY17 and FY18 accounts.
- Counter has been suspended since 31 Aug.
NEUTRAL NEWS
*Frasers Centrepoint (FCL)
- Acquired 6.1m shares in Thai-listed TICON Industrial Connection via the open-market at an average price of Bt15.88 each.
- The Bt97.2m ($3.95m) acquisition lifted FCL's stake in TICON to 40.95% from 40.61%.
- Last traded at 12.3x forward P/E.
*Straits Trading
- Acquired a 98.5% stake in the distribution of a freehold 6-storey rental residential apartment in Tokyo, Japan for ¥448m ($5.4m).
- The building comprises 96 apartments with an occupancy rate of 99% as at 31 Aug.
- Last traded at 17.1x forward P/E and 0.7x P/B.
*ST Engineering
- Injected US$10.5m into its 50% owned Keystone Holdings to expand its aircraft leasing business.
- This would bring its total investment into Keystone to US$20m.
- Last traded at 21.4x forward P/E.
*Noble Group
- Completed the disposal of its North American gas and power business after Mercuria Energy made with final US$185m payment.
- Sale of its global oil liquids business is in progress and is expected to be completed by year end.
- Last traded at 0.23x P/B.
*Ziwo Holdings
- Proposed a renounceable non-underwritten 2-for-1 rights issue of warrants at $0.0033 each.
- Each warrant is exercisable within a 3-year period for a new share at $0.01.
- This translates to $0.0133 for each new share, or a 39.5% discount to its last close at $0.022.
*Yoma
- Deadline for the RTO of SHC Capital for its tourism assets has been further extended to 31 Dec.
*Hanwell
- Acquiring a 5-storey building in Osaka, Japan, for ¥575m ($6.9m), or a 6.8% discount to its market valuation on 1 Aug.
- The property has total floor area of 427.78 sqm, which will be used for the group's foray into Japan for its food business.
- Last traded at 15.5x trailing P/E and 0.6x P/B.
*Shinvest
- Disposing its leasehold property at 2 Kwong Min Road to Tong Tar Transport Service for $4.4m.
- The deal is expected to net a gain of $3m.
*Loreno Bio-Chem
- Attempting its third RTO with a new deal to acquire Knit Textile and Apparel for $26.4m, via the issue of 2.64b shares at $0.01 apiece.
- Knit Textile is a contract manufacturer of clothing in Malaysia and Cambodia.
- The group is in the process of expanding upstream into knitting, dyeing, printing and finishing of fabric.
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