23 October 2014

KL-SG High Speed Rail Project - 7 Stops to be Confirmed - October 2014


SINGAPORE - The high-speed rail (HSR) project connecting Singapore and Kuala Lumpur will have seven stops in Malaysia, namely Kuala Lumpur, Putrajaya, Seremban, Ayer Keroh, Muar, Batu Pahat, and Nusajaya.
While several of the proposed stations had been announced earlier, the location of the stations were confirmed on Wednesday by Malaysia's Land Public Transport Commission chairman, Syed Hamid Albar.
- See more at: http://www.straitstimes.com/news/singapore/transport/story/singapore-kuala-lumpur-high-speed-rail-have-seven-stops-malaysia-2014#xtor=CS1-10


My Notes

Previously Malaysia Transport Minister announced that there were 5 stops in between KL and SG, namely Putrajaya, Seremban, Kuala Lumpur, Batu Pahat and Nusajaya apart from another terminal located at Singapore (most probably at Jurong lake district as announced by Singapore prime minister LHL). Some of us quite surprised that Muar and Malacca (Ayer Keroh) were not in the list. 

With this latest announcement, I believe that it is a moral boost or rather a doubt? to investors in Malaysia as there were ongoing changes in Malaysia government decision. No doubt, we could  confirm that the terminals are confirmed (which is KL and Singapore), but we still cannot come into conclusion or making investment decision until the final decision and execution plan are confirmed.

To me, it is not wise for an investor not to do a detailed homework before making any investment, otherwise it will be concluded as "speculation" purely based on guts and feels (more emotional) which may result in a more dangerous situation that you cannot control of it. 

It is better to wait for the final decisions to be made, just like what has been proposed by both governments on the so called RTS (rapid transit sytem) to be linked to Bukit Chagar, Johor Bahru with the terminal at Republic Polytechnic, Singapore (via Thompson MRT line) which is expected to be the major catalyst to Johor Bahru (Zone A of Iskandar Malaysia) property market.

21 October 2014

Keppel Land 3Q2014 Report Summary - October 2014





Recycling of Assets Lifts Profits
  • Net profit dropped marginally by 3.3% y-o-y at $308 million on lower contribution from property trading
  • Contributions from property investment and fund management rose, accounting for a higher share of 34.4% and 15.8% of net profit respectively
  • Net tangible asset per share rose to $4.59, 10.6% higher compared with $4.15 as at end-September last year
  • Net debt/equity ratio improved to 0.37x
The Group recorded net profit of $308 million for the first nine months of 2014, down marginally by 3.3% year-on-year (y-o-y). As part of its continuing efforts to recycle capital, Keppel Land divested Equity Plaza and received a net gain of $59.5 million. The gain from the sale of Equity Plaza and a share of Keppel REIT’s gain from the divestment of its 92.8% stake in Prudential Tower was partly offset by a loss of $20.3 million arising from the dilution of interest in Keppel REIT and higher tax expense. Net profit would have been higher by 7% if not for a tax write-back of $30.7 million in the same period in 2013.

Profit from property trading fell by 34.6% y-o-y to $135.9 million on lower contributions from Singapore and China projects as well as an absence of tax write-back. Profit from property investment rose by 1.2% y-o-y to $92.5 million due to increased contribution from Marina Bay Financial Centre Tower 3 (MBFC Tower 3) and share of Keppel REIT’s gain from divestment of Prudential Tower. Property investment’s share of net profit rose to 34.4% compared with 29% for the same period last year.

Earnings from fund management grew by 14.6% y-o-y to $42.5 million as a result of higher fee income from Keppel REIT and improved performance from Alpha Investment Partners (Alpha). Fund management made up a larger share of net profit at 15.8% of net profit compared with 11.8% in the same period last year.

Net tangible asset per share rose to $4.59 as at end-September 2014, up by 10.6% from $4.15 as at end-
September 2013. PB ratio is about 0.70x with annualized ROE is around 6%.




Details can be found here.

Triyards Financial Year ended 31 August 2014 Report Summary - October 2014



RESULT SUMMARY:

The company recorded US$27m net profit attributable to shareholders (drop 15% y/y) on the back of total revenue of US$269m (drop 2% y/y). This translated to net profit margin of about 9.9% (drop 1.5%).

FY2014 EPS was 9.04 US cents compared to 11.71 US cents for FY2013. NTA was 57.37 US cents for FY2014 compared to 49.90 US cents. ROE was around 17% which to me still not too bad, although the ROE was lesser when comparing to previous year.

Trailing PE of Triyard is now around S$0.675 / 9.04 US cents or about 6.0x. Trailing PB ratio is 0.94. The company proposed 1.0 SG cents final dividend, which translated to be around 1.5% final dividend yield.


REVIEW OF PERFORMANCE:

Revenue 

Group’s revenue decreased by US$6.5 million (2%) to US$269 million for FY14 when compared to the corresponding financial year (“FY13”). The decrease was mainly attributable to lower revenue recognised from two self-elevating units (“SEUs”) of BH450 series. Both units were at the peak of the construction progress in FY13 which resulted in recognition of higher revenue. As at 31 August 2014, the first unit was fully completed and  he second unit was in its sea trial stage.

This decrease was partially offset by higher revenue recognised from two SEUs of BH335 series which have progressed into advanced stage of construction during the second half of FY14. Typically, lower revenue is recognised when a vessel is at its early stage of construction where significant amount of time is consumed for  esign, planning and engineering and at its final stages of completion where substantial amount of time is spent on testing, commissioning and sea trial activities, as compared to a vessel at mid stage of its construction where significant amount of fabrication, construction and installation activities takes place.


Gross profit

Group’s gross profit increased from US$49.7 million in FY13 to US$51.9 million in FY14, mainly due to different product mix, as well as higher gross profit margin derived from offshore/industrial fabrication and ship repair activities.



Cash flows

The Group recorded net cash inflow in operating activities of US$7.7 million in FY14, mainly due to lower
inventories, increase in trade and other payables. These were partially offset by increase in trade receivables and increase in other receivables and other current assets.

Net cash used in investing activities was US$13.6 million and US$6.9 million in FY14 and 4Q14 respectively, spent mainly for the purchase of operating equipment and upgrade of the facilities at one of the yards in Vietnam.

Net cash generated from financing activities was US$13.1 million in FY14, as a result of net loan drawdowns to finance the working capital for the projects. Net cash used in financing activities for loan repayment was US$5.3 million in 4Q14.

Management Comment on the Outlook


With the rise of new players in Asia, especially from China, entering into the space TRIYARDS is in, the Group expects the next 12 months to be more competitive and challenging. Demand for liftboats in Asia is expected to remain buoyant, especially with increasing acceptance of their use. The demand for medium to large sized offshore support vessels should stay relatively healthy although recently it was noted decrease in oil prices as a result of slowdown in capital expenditure in Oil & Gas sector.




19 October 2014

Crude Oil rebound from Two Year Low - Oct 2014

This is just to record that crude oil rebounded from its two year low of USD80 to current USD82++. Frankly speaking, I do not really know the real reasons behind but the main idea was that the supply is more than demand currently. Few points here:
  • Shale oil from US hit record production thanks to the latest technology that can extract the oil out from rocks which could not be done previously.
  • Increase in USD helped lower down the crude oil price as it is normally negative correlated with USD movement.
  • Rumor saying that US was trying to revenge Russia which is one of the major exporters in Oil and Gas sector. 
It shows that if we invest in commodities like investment, we could not foresee the price trend or the long term profitability of the counters. We have to also keep track the commodities market that affected by various factors - wars, politics, economy, technology etc. It may make us more difficult in forecasting the future free cash flow of the companies in commodities sector. 

So it is always good to learn more about the factors that affecting the price movement of commodities before we invest in it.  
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