29 January 2014

Stock Market Summary - 28 Jan 2014

Asia Enterprises - Net Profit Rises 124% to S$3.7 Million in FY2013 with bottom line growth lifted by improvement in gross profit margin . Balance sheet remains sound with cash of S$47.7 million and zero borrowings . Group recommends final dividend of 0.5 cents per share, representing payout of 46% of net profit. Current NAV stood at 32.09 cents (S$109.7 m).

Eu Yan Sang - Half Year Revenue increased 15% but gross profit margin dropped to 50% mainly due to product sales mix, higher production costs and higher cost of purchases. In term of PBT, the group saw a 13% decrease in 2Q, largely due to higher interest expenses incurred as a result of the S$75 million fixed rate notes issued during FY13.

SP Corporation - The Group recorded revenue of $152.6 million in FY2013 as compared to $173.3 million in FY2012. Commodities Trading Unit reported lower revenue in FY2013 of $115.5 million as compared to $127.6 million in FY2012 mainly due to lower trading in coal and metals.  Earnings for FY2013 remained comparable to FY2012 as a result of lower finance charges and manpower costs.       Tyre & Auto Products Unit’s revenue of $37.0 million in FY2013 was 12% lower than the $41.9   million in FY2012 due to lower activities in both the export and domestic markets.  Correspondingly,   the Unit reported lower earnings. Geotechnical & Soil Investigation Unit did not generate any revenue in FY2013 following the scaling   down of the Singapore operation since FY2012.  Loss after tax had been reduced significantly. NAV stood at 12.68 cents with EPS 0.68 cents, translated to ROBE 5.67%.

IPC Corporation - Group sales increased to S$46.939 million for the year ended 31 December 2013  when compared to S$17.065   million recorded for the same period of the previous year.   The increase in sales revenue was mainly derived from the following condominium projects and business hotels in   Japan:  i) completed apartment units available for sale from the Oppama and Oiso projects since Q2 and December 2013,   respectively;  ii) the fifth business hotel – nest HOTEL kumamoto and sixth business hotel – nest HOTEL sapporo odori, where   completion of the purchase was in Q4 FY2012;  iii) the seventh business hotel, nest HOTEL sapporo ekimae, where completion of the purchase was on 1  st  May   2013;  iv) the eighth business nest HOTEL naha, Okinawa, where completion of the purchase was on 1  st  July 2013; and  v) the ninth business hotel, Osaka hotel, where completion of the purchase was on  11  th  October 2013.  Correspondingly, gross profit has increased by 72.6% to S$13.384 million as compared to S$7.754 million of the   previous year.  The Group’s other gains of S$19.820 million were mainly attributed to gains of S$11.831 million from the revaluation   of investment property in Japan and unrealised foreign exchange gains of S$7.597 million resulting from the   weakening of exchange rate of Japanese Yen against Singapore dollars on the Group’s Japanese Yen loans.  The gross profit of S$13.384 million coupled with other gains and other income have resulted in Group profit before   tax of S$22.872 million and an after-tax profit of S$18.765 million for the year ended 31 December 2013. NAV stood at 21.57 cents with EPS 2.14 cents, translated to ROBE of about 11%.

Hisaka - The Group’s revenue decreased 13.3% from S$4.9million in 1QFY13 to S$4.3 million in 1QFY14.  The decrease was mainly attributable to weak business conditions in  the global manufacturing sector which resulted in a decrease in   demand for the Group’s products and services. In line with the decrease in revenue, the Group’s Marketing and Distribution costs and Administrative expenses decreased 8.9% and 8.5% respectively in 1QFY14 to $580,000 and $973,000 respectively. The Group’s finance income increased from S$39,000  in 1QFY13 to S$58,000 in 1QFY14 mainly due to additional   placement of fixed deposits in 1QFY14. NAV stood at 25.21 cents with 1Q EPS -0.17 cents

Creative Technology - Net sales for the first half year of FY2014 decreased by 33% compared to the same period in FY2013.  Revenue in the second quarter of FY2013 included a one time US$20.0 million licensing income.  Excluding the US$20.0 million licensing income, revenue was US$45.6 million and US$81.3 million for the second quarter and first half year of FY2013, and  comparing to the same periods in FY2014, revenue in the second quarter and first half year of FY2014 was lower by 17% and 16%, respectively, due to the uncertain and difficult market conditions which continued to affect the sales of the Group’s products. The higher gross profit margin in the second quarter and first half year of FY2014 was in line with the sales mix. The write-down for inventory obsolescence in the second quarter and first half year of FY2014 was for certain existing products following the introduction of new product models. NAV stood at U$2.10 with 1H EPS -0.15 US Cents

SMRT - SMRT Corporation Ltd (“SMRT”)  reported a 44.1% decline in PATMI to  $14.2 million for 3QFY14. Fare business continues to suffer losses and incurred a $9.0 million operating loss from a $7.4 million operating profit  in 3QFY13  as fare revenue growth was insufficient to cover rising operating costs.  The cumulative fare deficit  resulted in  Rail (Train and LRT) operations suffering its first ever quarterly loss of $0.2 million. The Non-fare business however maintained growth with a 6.1% increase in profit to $27.3 million driven mostly by higher rental and advertising profits. Operating expenses rose  10.6% to $283.8 million mainly on higher staff and depreciation expenses.  Staff costs rose  21.4% to $119.6 million due to increased Train and Bus headcount, and impact of the wage revision exercise in 4QFY13. Depreciation rose 10.2% to $45.8 million due to capitalization of operating assets taken over from  Land Transport Authority (LTA) in 1QFY14 and a newer taxi fleet. R&M incurred was $27.4 million. Electricity and diesel costs declined 5.2% to $38.8 million due to favorable electricity contract entered earlier in FY14 which offset higher diesel price and higher energy consumption. Other operating expenses rose 6.7% to $54.8 million due mainly to higher expenses associated with  costs  for schemes introduced by LTA (including travel discounts) to incentivise commuters to shift their travel times away from morning peak hours. Total assets declined 11.5% to $2.0 billion as at 31 December 2013 with cash balance of $127.8 million following payment for the 17 trains and operating assets taken over from LTA. The Group ended the quarter with cash balance of $127.8 million, $45.5 million lower from $173.3 million as at start of quarter. Operating cash inflow declined to $50.0 million from $59.5 million in line with lower profitability and higher interest paid. Investing cash outflow rose to $89.6 million compared  to  $74.6 million with further business investments. The Group’s total borrowings stood at $628.5 million, representing a net gearing of 64%. NTA stood at 50.8 cents with 9M EPS 3.0 cents, translated to annualized ROE of 8.3%.

Fragrance - Property development sector contributed $468.41 million for FY2013 which is 30.3% higher   than $359.54 million for FY2012. This was mainly due to the revenue contribution from Parc Rosewood, a joint venture residential condominium project which was fully sold. Newly launched projects such as  Novena Regency and  Urban Vista (50% JV project)  have also contributed revenue during this period. Other projects that contributed revenue include Parc Elegance, Suites @ Bukit Timah, Le Regal, Wak Hassan, Icon @Pasir Panjang and Suites @ Paya Lebar. Rental income from our investment properties located  at Hoe Chiang Road and Alexandra Road has also contributed to the increase in revenue during this period. Hotel sector contributed $60.62 million to the total consolidated turnover. This represents an increase of $0.47 million from the $60.15 million in FY2012. Hotel room revenue for FY2013 increased by $0.7 million, or 1.3% over FY 2012. This was mainly due to higher revenue contribution of $1.4 million from Fragrance Hotel-Ruby post asset enhancement works. The increase was partially offset by lower revenue of $0.1 million recognised from Fragrance Hotel – Elegance due to cessation of tenancy agreement and lower revenue of   $0.6 million recognised from the remaining hotels. The Group’s AOR remained relatively stable at 90.8% in FY2013 and FY2012 with slight decrease in RevPAR of $93.9 in FY2013 as compared to $95.1 in FY2012. Other operating income increased by $75.83 million from $26.91 million in FY2012 to   $102.74 million in FY2013. This was mainly due to fair value gain on our investment properties located at Hoe Chiang road and Alexandra road. NAV stood at 18 cents with EPS 3.1 cents.




Understanding Corporate Action - Stock Split / Consolidation / Rights Issues / Bonus shares

It is quite common for a listed company to perform a corporate action to fulfill certain requirements set by themselves or their creditors. The ability to perform corporate action is also part of the reasons why a company want to be get listed in stock exchange. Let us examine several corporate action here:
  1. Rights Issues / Private Placement - If the company which have a big project and would require a certain amount of capital outlay, they could actually raise up the capital through rights issues / private placement. It means that they would raise up the fund through expanding number of total outstanding shares and hence would dilute the EPS in near term. It is quite common in Oil & Gas sector, as some of the companies would raise up the fund easier to grab the opportunities out there. It is understood that majority of the rigs are in the end of its cycle and it's time for companies to build the new rigs with safer and more efficient capabilities. If the issue price is above book price, the balance between issue price and book price would be recorded under Shares Premium in Shareholder Equity and could not be distributed out as dividend to shareholders under the accounting standard. 
  2. Stock Split - Some companies would like to see their shares price in certain price range. Once the company performed well and the share price surged to a record high, a few company would propose to a stock split and it would certainly increase the number of outstanding shares as well as decrease the EPS and shares price. However this corporate action would not dilute anything. It just give an illusion that the shareholders would enjoy more number of outstanding shares they own, while the value of their holdings is still the same.
  3. Bonus Shares - Similar to stock split, a Bonus Shares means that the corporate issues out new shares from the retain earnings. The number of outstanding shares would increase and EPS would be decreased but the value of shareholdings is unchanged.
  4. Consolidation - As contrast to Stock Split, the company would consolidate the outstanding shares to a small amount main duly to the effort to increase the share prices. It sometime is performed by penny stocks so that the share price could be increased to above 10 cents to attract investors who prefer a higher price range. Other than that, it is not an unusual move after companies which raise up rights issue to also propose a stock consolidation. 
Among all the corporate action mentioned above, the only one that would dilute EPS is Rights Issues / Private Placement. So, we should put more efforts in examining the effect of EPS after the proposal of company. It is not a good idea if the purpose is to repay debts, but it maybe a good idea if it is used for expanding the business such as for working capital purpose or grabbing more business opportunities out there. 

27 January 2014

Singapore Stock Market Daily Summary - 27 Jan 2014

Chosen: reported 24% increase in latest half year revenue to S$61M and recorded net profit of S$2.4M compared to losses in previous period. The management said while demand for the Singapore operation’s motor products, commercial equipment and medical devices are increasing, demand for data media storage products are expected to remain relatively weak in the second half of FY 2014. The Malaysia operation’s transportation machinery products will continue to grow. The Ayutthaya operation in Thailand will continue to develop its communication product business. Renovation of the Chonburi plant is completed. However, its commencement of operation may be delayed due to the current political unrest. Automotive, printing and imaging and retail solution products will continue to contribute to revenue for the China operations.

Marco Polo Marine: Near doubling of revenue in Q1FY2014 to S$30.1 million underpinned by strong performance from chartering of OSVs. Ship Chartering Division more than tripled and Ship Building & Repair Division improved by 21.6% in revenue over the same period last financial year. Improved operational performance with gross profit increased by 56.5% to S$9.2 million and profit from operations up by 43.0% to S$6.1 million in Q1FY2014 vis-à-vis Q1FY2013. Notwithstanding the payment of the tax exempt one-tier special interim dividend of SGD1.4 cents per ordinary share in Q1FY2014, NAV per share maintained at 47.5 Singapore cents as at 31 December 2013, comparable to 47.8 Singapore cents as at 30 September 2013. Group continues to pursue investment opportunities with impetus driven by draw-down of S$50 million in October 2013 from the recently established S$300 million multicurrency Medium Term Note programme

OSIM: have achieved 5 years of record profit. It expect its improvement in productivity and growth in
profitability will continue to be driven for a number of years by market leadership, continuous innovation and productive execution. Record PBT $129 million +12% , Q4 PBT $34 million +10% .Record PAT $102 million +17% , Q4 PAT $28 million +22%. Record Sales $648 million +8% , Q4 Sales $179 million +16%. Final dividend of 2 cents per share. Cash & Cash Equivalents and Fixed Income Investments as at 31 Dec 2013 were S$299 million. The diluted FY EPS was 13.58c, which implies about PE 17X - 18X.




26 January 2014

Iskandar Malaysia News - Jan 2014

Three new nodes for Iskandar will further boost development of region

JOHOR BARU: The Federal Government has agreed to the creation of three more new nodes in Iskandar Malaysia – which now has only one – Medini in Nusajaya.
Sources told StarBiz, Prime Minister Datuk Seri Najib Tun Razak has approved the creation of the additional nodes, which are expected to be announced this year.
The three nodes are likely to be located in the Eastern Gate Development Zone, the Western Gate Development Zone and Senai-Kulai growth corridor.

Singapore Stock Market Weekly Summary - Year 2014 Week #4

STI index experienced a downtrend and dipped to 3,075.99  in Week #4, causing Year-To-Date performance of -2.89%. China Manufacturing Index was the main root cause as the index fell below 50 point, indicating a weaker performance on manufacturing sector. Dow Jones Index dipped by nearly 2% and closed at below 16,000 point which may make things worse.

Some of the S-REITs announced quarterly report on this week, as we would see some REIT managers still manage it well, although we saw a weaker consensus view on property & construction sector this year, as US. FED decided to start reducing number of bond purchases in near future, depending on U.S. economy especially unemployment data.

My personal opinion is that, there maybe more opportunities for us to grab good quality counters at better price. What we should do now in the market is be patient and wait for better opportunities to come. So far, some counters still experience a positive YTD performance such as Sarin Technology, Osim etc. It implies that as long as we would select right counters at right time, we could still performance better than overall market.

Below is news of some of the counters:

Asecendas REIT: 3Q13 distributabble income rose 4.9% y/y to $85.1m but DPU slipped 2.2% to 3.54¢. Gross revenue grew 6.4% to $154.4m, lifting NPI 3.7% higher to $108.6m on positive rental reversions of 9.7% across all segments of its portfolio. Occupancy dipped to 89.7% from 90.1% in preceding quarter due to addition of new sapce following AEI completions at 1 Changi Business Park Ave 1 and Techplace II. Aggregate leverage stood at 30.1% with average debt maturity of 3.2 years. NAV/share was $1.98 as at Dec ’13.

*First REIT: 4Q13 distributable income jumped 26.2% y/y to $14m and lifted DPU to a record 1.97¢, taking FY13 DPU to 7.52¢, up 14.3% (excluding divestment gains) of an Adam Road property). Gross revenue and NPI surged 48.2% and 41.6% respectively on contribution from two newly acquired hospitals in Bali and Simatupang. Gearing ratio stood at 32.3% with no financing needs till 2016. NAV/share was 96.64¢ as at Dc ’13

Guocoleisure: 2QFY14 net profit rose 12.3% y/y to US$13.7m on a 7.3% increase in revenue to US$106.7m, which was generated by improved room rates and land disposal by its hotel and property segments respectively. But volatility in the gaming sector and reduction in Bass Strait oil and gas oil and gas royalties (-18.8%) due to lower oil prices and production tempered its overall performance. NAV/share climbed to US$0.90 from US$0.839 in Jun ’13

OUE: Launched OUE Commercial REIT on SGX Main Board, offering 208m units (151.8m placement, 56.3m public) at $0.80 each, which translates to forecast DPU yields of 6.8% for 2014 abd 5.89% for 2015 and a 24% discount to NAV. IPO portfolio comprises OUE Bayfront and Lippo Plaza (Shanghai) with total valuation of $1.6b. Offer closes 12 pm on 23 Jan and trading will commence 2pm on 27 Jan.

Osim: Raised stake in TWG Tea to 70% from 53.7%, after TWG undertook a rights issue to raise $25m. Investment expected to be earnings accretive for the group this financial yr. TWG has ~27 stores as at end' 13 spread across S’pore, Hong Kong, Indonesia, Dubai, London, and plans to launch ~20 tea boutiques and shops in Asia and Mid-East this year

M1: 4Q13 results broadly in line with net profit up 7.1% y/y to $40.5m but revenue slumped 14.9% to $278.6m owing to a 46.3% drop in handset sales. The 6.6% growth in service revenue to $207m was driven by postpaid and fixed customer base and higher data usage. Non-voice services contributed 43.4% (+5.4 ppt) of service revenue. EBITDA margin slid to 38.2% vs 41.6% in 4Q12 and 37.7% in 3Q13 amid higher staff costs. Mobile customer base stayed at 2.11m but fibre customers saw an 8,000 addition to 85,000 in 4Q. For FY13, M1 rang in net profit of $160m (+9.4%) on revenue of $1b (-6.4%). Final DPS of 7.1¢ + special DPS of another 7.1¢ will take its full year payout to 21¢.

Keppel REIT: 4Q13 distributable income gained 5.9% y/y to $54.9m, while DPU was flat at 1.97¢, giving an annualized yield of 6.6%. Both revenue and NPI rose 13% and 16.4% to $47.5 and $37.4m respectively due to better performance from Ocean Financial Centre and additional income from newly acquired 8 Exhibition Street in Melbourne. Associates also saw higher contributions from MBFC Phase 1 and One Raffles Quay. Portfolio attained occupancy of 99.8% with weighted lease to expiry of 6.5 years. Aggregate leverage stood at 42.1% with all-in interest rate of 2.15% and average maturity of 3.6 years. End Dec ’13 NAV was $1.40 vs $1.32 in FY12

Mapletree Logistics Trust: 3QFY14 distributable income climbed 7.7% y/y to $45m along with the 7% rise in DPU to 1.84¢ (including 0.025¢ from the partial distribution of a divestment gain from 30 Woodlands Loop). Gross revenue inched up 0.9% to $78.1m, while NPI stayed relatively flat at $67.4m as positive rental reversions from its S’pore and HK properties and contributions from two new acquisitions were negated by a weaker JPY from its Japan portfolio and higher expenses associated with conversions of its single user buildings into multi-tenanted ones and higher property taxes in S’pore. Occupancy slipped slightly to 98.4% from 98.7% in 2QFY14 with weighted lease to expiry of 4.8 years. Aggreate leverage maintained at 33.9% with average term of debt at 3.4 years and effective cost of 1.9%. End 2013 NAV was $0.93 per unit

K-Green: FY13 net profit dipped 4% to $14.2m, while revenue declined 12% to $67.1m due to the absence of construction sales and lower operations and maintenance income arising from the lower output of its waste-to-energy and NEWater plants. Excluding the impact of the flue gas treatment upgrade, which was completed in 2012, results for FY13 would have been 2% weaker. DPU of 7.82¢ maintained, which continued to eat into its NAV/unit of $0.95.

Centurion: Officially launched Westlite Johor Technology Park, its fifth dormitory in Malaysia, with a capacity of 5,800 beds. Centurion established its first worker accommodation in Tebrau, Johor, in 2011 with an initial bed capacity of 2,500, which has now grown to 14,400 beds. Two more facilities are currently undergoing development in Tampoi and Senai. Group plans to expand its dormitory bed capacity in Johor to more than 25,000 beds by 2015.

SATS: 3Q13 operating data show number of flights handled growing 10.2% y/y to 34,920, unit services +6.6% and cargo throughput +1.9%. Passenger handled rose 4.8% to 11.25m on stronger traffic from budget carriers. Gross and unit meals produced however declined 8% and 5.7% respectively due to loss of Qantas' flights to Europe following the relocation of its base to DubaiSATS: 3Q13 operating data show number of flights handled growing 10.2% y/y to 34,920, unit services +6.6% and cargo throughput +1.9%. Passenger handled rose 4.8% to 11.25m on stronger traffic from budget carriers. Gross and unit meals produced however declined 8% and 5.7% respectively due to loss of Qantas' flights to Europe following the relocation of its base to Dubai

Mapletree Industrial Trust: 3QFY14 distributable income of $42.2m (+12% y/y) and DPU of 2.51¢ (+8.2%) continued its uptrend since 1QFY11 as gross revenue (+9.3%) and NPI (+12%) benefiDespite the slight cheertted from better average passing rental rate of $1.73 (+7.5% y/y, +1.8% q/q) and positive rental reversions achieved across all property segments, higher occupancies in its flatted factories and lower utilities expenses. But portfolio occupancy dipped to 92.5% upon completion of K&S Corporate HQ with weighted average lease expiry of 2.5 years. Aggregate leverage remained at 36.3% with average debt tenor of 2.8 years. End Dec NAV/unit stood at $1.11.

CMT: 4Q13 DPU up 15% y/y to 2.72¢, bringing FY13 DPU to 10.27¢ (+9%), implying a 5.7% yield. NPI expanded 11% y/y to $125.5m, driven by positive rent reversions and continued high occupancy rate of 98.5%. For FY13, tenants’ sales psf increased 2.5% and shopper traffic grew 3.1% y/y. End ’13 aggregate leverage stood at 35.3% with NAV/unit of $1.74.

Ascott Residence Trust: 4Q13 distributable income rose 15% y/y to $26.3m but DPU dropped 34% to 1.33¢. Excluding the dilutive effect from its rights issue in Dec ’13, DPU would have been 2% lower at 1.96¢. Revenue grew 11% to $83.9m due to additional contributions from properties acquired in Nov ’12 and Jun ’13 and stronger performance from Belgium and France. But RevPAU dipped 7% to $129/day amid weakness in Philippines and Japan (arising from depreciation of JPY) and lower room rates from its newly acquired China properties. Aggregate leverage improved to 34% from 41.1% in Sep and average debt maturity extended to 4.2 years. NAV/unit of $1.37 was supported by a revaluation surplus of $74.1m

Frasers Centrepoint Trust: 1QFY14 distributable income gained 4.3% y/y to $20.6m, leading to a 4.2% rise in DPU to 2.5¢. Both revenue and NPI rose 5% and 4.4% to $40m and $28.3m respectively, due mainly to improved performance from Causeway Point. Portfolio occupancy stood at 96.7%, -1.7 ppt from preceding quarter, while leverage was a comfortable 29.7%. End '13 NAV/unit was unchanged q/q at $1.77.

Cache Logistics: 4Q13 distributable income of $16.6m (+9.6% y/y, +0.6% q/q) and DPU of of 2.126¢ (-0.8% y/y, +0.5% q/q) delivered FY13 DPU of 8.644¢ (+3.3%). Gross revenue and NPI grew 8.2% and 7.1% y/y to $20.7m and $19.6m on built-in rental escalation and contributions from Precise Two, acquired in Apr ‘13. Portfolio occupancy was maintained at 100% with weighted lease to expiy of 3.1 years and very low renewal risk for 2014. Aggregate leverage remained at a conservative 29.1% with all-in financing cost of 3.48% and average debt maturity of 1.9 years. Inclusive of a $6.7m revaluation gain, NAV/unit ended at $0.98.

Jaya: Turned in 2QFY14 net profit of US$7.6m (-24% y/y) on revenue of US$29.6m (-24%) but excluding vessel sales, charter revenue would have been 31% higher from improved fleet utilization of 83% vs 80% a year ago and higher charter rates. Stripping out one-time charges and gains from vessel sales, bottomline was 16% stronger than previous year. Future revenue stream is backed by a robust chartering order book of US$327m (+82%). Higher interim DPS of 1¢ declared.

Keppel T&T: FY13 net profit rose 13.9% to $63.2m on the back of the 17.6% growth in revenue to $161.7m with higher sales coming from both data centre and logistics operations. But the gain in operating profit, whuc surged 32% to $33.3m was largely derived from the data centre division as its China logistics operations reported lower earnings due to start-up and implementation costs of newly developed projects. Final DPS of 3.5¢ is maintained

Keppel Land: Acquired 3ha residential site in West Jakarta for Rp400.8b ($42m) to develop a high-rise condo with >1,200 units and 60 ancillary shophouses. First phase, which targets the mid-income segment, is expected to be launched in 1Q15.

Courts Asia: First and largest 170,000 sf Big-Box Megastore in Bekasi, Indonesia, is expected to be completed in Jun and open ahead of schedule by Sep ’14. Meanwhile, the group has seen a successful start for its second Big-Box Megastore (66,000 sf) in Subang Jaya, Malaysia, which opened this month.

Stamford Land: Lodged an application to redevelop its Sir Stamford Circular Quay hotel in Sydney into a 19-storey residential and commercial building. With a GFA of 14,835 sqm, the proposed building will comprise 104 residential apartments and 1,331 sqm of retail and commercial space

Kim Heng: Based on the total invitation size of 174m shares (171m placement, 3m public), the IPO is 5.8x subscribed. Among its new investors allotted placement shares include Havenport Asset Management (16m) and Chew Thiam Keng (9m), CEO of Ezion Holdings. Trading will commence at 9am on 22 Jan

First Resources: reported FY13 production numbers in line with estimates. FFB nucleus grew 6.5% YoY. FFB plasma decline was compensated by a jump in external FFB purchases. Total FFB processed was recorded up 13.1% YoY. CPO production reached 588,792 t (+12% YoY), in line with estimates (100% of FY13E).
In terms of productivity, in 2013, FR recorded lower yield (FFB yield and CPO yield at 18.7 and 4.3 tons/ha), contributed by the dilutive effect from higher percentage of young trees and the lower yielding newly acquired plantations. Mgt expects yield to return to 20- 22 tonnes/ha level in 2014 following the recovery of tree stress

Keppel Land: Turned in FY13 and 4Q13 net profits of $885.9m (+6%) and $567.3m (+8% y/y) on record revenues of $1.5b (+6%) and $505.7m (+7%). Excluding fair value gains of $331.1m (-11%), FY13 and 4Q13 earnings of $583.7m (+22%) and $265.1m thrashed street estimates. This was driven by mainly by its China projects (8 Park Avenue, The Botanica The Springdale), property investments (MBFC Tower 3, Keppel REIT) and sale of stakes in Jakarta Garden City and Hotel Sedona Manado, which yielded divestment gains of $151.8m. Overseas profits rose 64% to $141.1m and contributed 33% to the core bottomline. End ’13 NAV climbed 13% to $4.52. Final DPS of 13¢ (+1¢) declared.

Mapletree Commercial Trust: 3QFY14 distributable income jumped 24.2% y/y to $38.7m, while DPU rose 11.9% to 1.865¢. NPI swelled 24.9% to $49.4m, in tandem with gross revenue growth of 22.4% to $68.4m. VivoCity maintained its robust operating performance, while PSA Building delivered strong earnings growth. Mapletree Anson, acquired in Feb '13, also contributed an additional income stream. Overall portfolio occupancy improved to 98.7% with weighted average lease to expiry of 2.2 years. Aggregate leverage remained stable at 40.8% with average term maturity of 2.7 years at an average cost of 2.18%. End Dec NAV stood at $1.07.

CapitaCommercial Trust: Delivered gross revenue of $386.9m (+3%) in FY13, driven by improved performance from most properties, notably Six Battery Road, Raffles City Singapore, HSBC and full year contribution from Twenty Anson. Accordingly, distributable income rose to $234.2m (+2.5%), and DPU edged up to 8.14¢ (+1.2%), implying a yield of 5.5%. Portfolio occupancy climbed to 98.7% (+1.5ppt) from a year ago. CCT ended Dec ’13 with aggregate leverage of 29.3% and NAV per unit of $1.71.

Frasers Commercial Trust: 1QFY14 distributable income surged 33% y/y to $13.7m driving DPU up 30% to 2.05¢, aided by lower interest costs arising from capital management initiatives and conversion of Series A CPPUs. Gross revenue dipped 3% to $28.8m and NPI declined 4% to $22.1m on the back of a weaker AUD and slightly lower occupancy for Central Park, which offset by the improved performances of S'pore properties. Average portfolio occupancy rate slid marginally to 97.1% with weighted average lease to expiry of 4.4 years. Aggregate leverage stayed at 37.9% with effective interest cost of 2.7%. End Dec NAV was $1.54.


Soilbuild REIT: Posted DPU of 1.51¢ for 4Q13, exceeding its IPO forecast by 3.4%. From listing date (16 Aug ’13) to end ’13, actual DPU amounts to 2.27¢, implying an annualized yield of 7.8%. For the quarter, the REIT delivered net property income of $13.7m, supported by new take up and lease renewals. As at end ’13, portfolio occupancy stood at ~100%, aggregate leverage was 29.3%, and NAV per unit was $0.80.

Global Logistic Properties: Signed nine new leases totalling 180,000 sqm across multiple locations in Japan, of which six are first-time customers. These are to third-party logistics providers or wholesale distributors catering to domestic consumption. Four of the facilities are under its 50% owned GLP Japan Development Venture, and have reached 82% occupancy.

Aspial: Acquired 28,255 sf freehold site in downtown Melbourne for A$42.3m ($47.6m) and plans to redevelop into the city's tallest building at 312m with >1m GFA of residential and commercial space.

Cordlife/Asia Medic: Cordlife has launched a lawsuit against AsiaMedic’s JV, Cryoviva Singapore for breaches including use of Cordlife’s proprietary information and intellectual property without its knowledge and consent. The application has been fixed for hearing on 24 Jan ’14.

Keppel Corp: FY13 and 4Q13 results missed estimates with core net profit of $1.41b (-26%) and $332m (+9%) on revenue of $12.4b (-11%) and $3.6b (+20%) respectively. While the O&M and property segments performed well, further large provisions in infrastructure were a drag on bottomline. For 4Q13, the O&M segment reported a sharp 35% q/q jump in revenue to $2.1b, as more jackup projects reached recognition milestones. O&M operating margin slipped 2.3 ppt q/q to a still healthy 14.2% due to fewer rig deliveries and change in revenue mix. End Dec order book was $14.2b, with visibility till 2019. Infrastructure incurred a $11m loss from large provisioning charges of ~$150-200m arising from cost overruns and other costs at its Doha and Manchester EPC projects. Property earnings were about flat. Final DPS of 30¢ brings FY13 payout to 49.5¢ (inclusive of Keppel REIT distribution-in-specie).

Tiger Airways: Turned in a 3QFY14 net loss of $118.5m reversing from $2m net profit in same period last year, quadrupling 9MFY14 net loss to $127.5m. Bottom-line was dragged largely by exceptional charges of $88.3m, including a $30.3m loss on the planned disposal of Tigerair Philippines and an $58m impairment on associates. Operating performance was also hit by industry overcapacity which led to lower yield and load factors. Tigerair S’pore came under pressure with revenue declining 3% to $168m and reported an operating loss of $170m vs $27m profit a year ago.

Suntec REIT: 4Q13 distributable income climbed 11% y/y to $58.2m alongside a 10.1% increase in DPU to 2.56¢ (including 0.175¢ from capital distribution support), taking FY13 DPU to 9.33¢. NPI surged 62.9% to $49.8m after gross revenue jumped 30.2% to $71.6m, boosted by the opening of Suntec City Mall (Phase 1) and Suntec Singapore following renovation works. Office portfolio occupancy was stable at 99.6% and retail portfolio at 97.3% with weighted lease to expiry of 2.4 years. Aggregate leverage stood at 38% with an average financing cost of 2.5%. End 2013 NAV was $2.13 per unit.

Mapletree Greater China Commercial Trust: 3QFY14 distributable income exceeded IPO forecast by 16.6% to $40.6m with DPU of 1.518¢. Gross revenue came 9.9% above estimates to $65.7m while NPI beat by 13.2% to $53.8m, on the back of better than expected rental uplift for both Festival Walk in Hong Kong (+20%) and Gateway Plaza in Beijing (+78%), new committed leases, as well as lower operating expenses. Overall portfolio occupancy dipped 1.1 ppts to 97.9% with weighted average lease expiry of 2.6 years. Aggregate leverage of 40.5% with debt maturity of 3.2 years at 2.0% cost of debt. End Dec NAV was $0.94.

Ezra: its subsea services division has been awarded projects worth a total of ~US$80m, including options. The scope of these projects cover a large spectrum of subsea work, including the decommissioning and towage of an FPSO in Asia and the deployment of an inspection, maintenance and repair vessel in the Americas. Work for a majority of the contracts is expected to commence by 1H14. The group’s subsea orderbook stands at more than US$1.4b, and is currently tendering for ~US$9b in projects worldwide.



25 January 2014

Some thought after US market plunged by almost 2% in a day - 25 Jan 2014

The Dow Jones industrial average dropped back below the 16,000 mark, plunging 318.24 points, or 2%, to 15,879.11 last night. To me, it is something as what expected by majority investors as US. FED meeting is coming soon next week, and some investors would rather perform a profit taking when uncertainty of QE tapering arises.

In Malaysia market, we have seen a weak support level at 1,800 point, where this is a psychological support level for most investors. For Singapore market, now its in 3,000 - 3,100 range, which I think 3,000 maybe a better support level for now.

We should not forget that last year performance for US and Malaysia was tremendous, as S&P Index, Dow Jones Industrial and KLCI reached record high while Singapore was affected by labor tightening policy as well as property cooling measurement. Once the de-leveraging process has started, we could start to feel the pain of it in short term.

As hot money would flow back to US market due to US$ strengthening (expected increased interest rate), emerging market could seen a slow down of FDI compared to few years ago as those "smart monies" try to leverage on low interest rate to gain access to high growing region. Now, we have seen that currencies in SEA region depreciating against US$. RM was recorded as low as RM3.34 to US$1.00 few days back and this trend could continue if Bank Negara do not take in any action to prevent it.

In Singapore, the number of residential property deals (both private and HDB) have dropped significantly in latest quarter report, supporting the fact the cooling measurement taken by the government is taking its effect now. What made it worse is that, number of new launches was in the slowest pace since few years back, suggesting that property developers also try to avoid the slow down of the sales while focusing on certain niche market, such as retirement property with about 60 years lease period compared to normal 99 years lease period. Capitaland is now at the range of S$2.80 and we may see a drop again if market sentiment getting worse later.

As we could see more companies to report their latest quarter report or 2013 full year performance soon within a month (majority of companies report their FY2013 report next month), so we may see that the stronger financial performance companies may perform better than its peers in long run. I'm personally think that Singapore STI may not able to achieve record high this year, given the macro environment, but we would still able to find some hidden gems and hopefully could perform better than STI index by employing cautiously optimistic strategy.

Be patience and wait for more buying opportunity to come, and for those investors who bought at higher level, do not be panic and try to re-adjust your strategy by not putting short term money in the market as I think it maybe a tougher year compared to 2 years back.

23 January 2014

Singapore Stock Market Summary - 23 Jan 2014

Tigerair - posted a loss after tax of $118.5m in 3QFY14, after recording exceptional charges of $88.3m, comprising a $30.3m million loss on planned disposal of Tigerair Philippines and an impairment of associates of $58.0 million. The Group’s 3QFY14 earnings were weighed down by share of loss of associates which
amounted to $23.1m

Soybuild Business Space Trust - Distribution per Unit for 4Q FY2013 (1 October 2013 to 31 December 2013) at SGD 1.510 cents – 3.4% above the Forecast(1). Portfolio Gross Revenue and Net Property Income for 4Q FY 2013 outperformed the Forecast(1) by 0.9% and 2.1% respectively. 100% of debt hedged. Average all-in interest cost of 3.12% as at 31 December 2013. Conservative gearing at 29.3% as at 31 December 2013 provides debt headroom for future acquisitions. Healthy interest cover ratio of 5.5 times.Portfolio occupancy rate increased from 99.8% to 99.9% during 4Q 2013 due to expansion by an existing tenant in Eightrium. 17% of portfolio NLA due for renewal in FY2014. Portfolio market value as at 31 December 2013 is S$935 million(2).

Suntec REIT - Distribution income of S$211.2 million and DPU of 9.328 cents inclusive of capital distribution of S$19 million. Capital Management: Established US$1.5 billion EMTN Programme, Raised S$1.3 billion financing facilities, Average all.in financing cost of 2.66%. Suntec City AEI - Opening of Suntec City mall (Phase 1) and Suntec Singapore. Acquired 177.199 Pacific Highway, North Sydney. Assets under management increased to S$8.6 billion*

Capitamalls Malaysia REIT - Distribution Per Unit  ―4Q 2013: 2.24 sen (4Q 2012: 2.11 sen), up 6.2% y-o-y  ―FY 2013: 8.85 sen (FY 2012: 8.44 sen), up 4.9% y-o-y. Net Property Income  ―4Q 2013: RM54.8 mil (4Q 2012: RM49.5 mil), up 10.8% y-o-y  ―FY 2013: RM208.6 mil (FY 2012: RM196.0 mil), up 6.4% y-o-y. Completion of East Coast Mall’s Phase 1 asset enhancement works. Final Income Distribution of 4.50 sen per unit for the period 1   July 2013 to 31 December 2013. Revaluation of Portfolio from RM3.04 billion to RM3.08 billion

Keppel Corp - 4Q 2013 Net Profit increased 9% to S$332 million, compared to 4Q 2012’s S$305 million. FY 2013 Net Profit decreased 26% to S$1,412 million,  compared to FY 2012’s S$1,914 million.   (NB: FY 2012 Net Profit included recognition of sale of units at Reflections at  Keppel Bay and higher gains from disposals of equity investments.) FY 2013 Earnings per Share was 78.2 cents, down 27% from FY 2012’s 106.8 cents. Return on Equity was 14.9%. FY 2013 Economic Value Added decreased from
S$1,375 million to S$939 million. Cash inflow was S$642 million. Net gearing was 0.11x. Total distribution of 49.5 cents per share (Interim cash dividend of 10.0 cents per share, Interim dividend in specie of Keppel REIT units equivalent to 9.5 cents per share, Proposed final cash dividend of 30.0 cents per share)




First REIT - FY2013 RESULT SUMMARY (Updated 23 Jan 2014)

FIRST REIT released its full year report on 17 Jan 2014. The result highlight is shown as below:

Source: Company

Source: Company

The Annualized DPU cents based on 4Q2013 and S$1.04 closing price on 16 Jan 2014 was 7.52%. To me, this is a good result especially when comparing it with its peer - Parkway REIT.

In term of annualized DPU annual growth, it is about 14.3%.

Source: Company
DPU trend is quite resilient, as you could see that the quarterly DPU rose from 1.6c in 2007 to 1.97c in 2013, which translated into a CAGR of 3%, in line with group's long term target of rental increment. So, if you look at long term target, the potential return is about 10.5% (7.5% current yield + 3.0% annualized DPU growth).

Source: Company

Source: Company, powered by ShareInvestor Station
As you can see from the graph above, First REIT performed better compared to STI Index and FTSE REITs index. The 68.94% translated into about 7% CAGR in stock price.

Question now, would I like to buy First REIT at this level? I would prefer to check again if there is any better choice in the stock market. However, I would recommend you to accumulate it when financial crisis arrives.

Growth Prospects, Source: Company
As the company is holding its 100% dividend payout policy, any future growth would be funded by several ways:

  • Dividend Reinvestment Scheme - Shareholders who wish to invest in long run could opt for this scheme to enjoy no commission charges when subscribing to new shares while the company could make use of the fund to invest in new properties.
  • Debt borrowings - Such as Medium Term Notes (MTN), Bonds and Secured Term Notes. This is the better way to acquire assets during low interest rate environment. However, the management have to access the optimal debt level from time to time to avoid cash flow problems later on. The management has a long term gearing target of not exceeding 30%.  
  • Right Issues / Private Placement / Perpetual - It may dilute the EPS in short term but could produce different result in long run depending on how the company could acquire a good profit generating assets. 

22 January 2014

ROE vs ROA

ROE (Return on Equities)

The formula of ROE can be described as Net Profit distributable to Shareholders divided by Total Shareholders Fund. My favorite breakdown of ROE formula is shown as below:

ROE =  Net Profit Margin x Asset Turnover x Equity Multiplier

In summary, ROE is a measurement of management on generating profit based on current shareholders fund. Some of the enterprises could boost up their performance via certain examples:

1. Increase Sales - By having more A&P activities and more distribution channels, the products could be reached to end clients in faster and broader ways. However, the net profit margin could be lowered down as operating expenses is increased.

2. Increase Operating Efficiency - By managing fixed costs (such as CAPEX) and variable costs (e.g. working capital & overhead costs etc), the total assets can be managed in optimal way. You may compare the Asset Turnover Ratio, Cash Conversion Cycle days with peers to find out how efficient the company can work at. I personally prefer those companies with good capital management, which means that they could have better bargaining power with clients / suppliers and it could reduce the risk of bad debts / inventory write off.

3. Achieve optimal corporate finance structure - In modern finance theory, a company could improve the ROE by obtaining optimal debt / equity ratio. Such practice is very common in REIT / Business REIT management as normally those companies would apply about 30% Debt / Equity ratio. A good corporate finance practice could increase ROE as well as reduce the default risk after accessing free cash flow.

ROA (Return on Assets)

ROA in general means Net Profit attributable to Shareholders divided by Total Assets.

The main difference of ROE & ROA is that ROA is ROE without Equity Multiplier. Some investors would like to compare ROA among peers while some prefer to compare ROE among peers. To me, I am ok with both measurement, and slightly adjust it with comparing ROE and debt ratio among peers. This would provide me a clearer picture of how a company perform against the peers.

In personal, I would prefer a company with ROA 10% and above and ROE 15% and above. While ROE/ROA may not be a good indicator for future earning growth, it definitely shows how a company could generate profits from the current assets / equities. Some companies may dilute EPS by issuing private placements or right issues for future earning growth. It will be resulted in lower EPS in near term but probably higher EPS in future (we have to do more homework to determine the impact of private placement / right issues). For example, Ezion try to get as much as oil & gas projects as it could by issuing both debt & equities placement. In this case, it can grow as fast as it could, but it also bring to another issue: how do Ezion reduce the working capital requirement later after the growth reaches its peak later.

Nonetheless, I think ROE & ROA is just part of the business assessment. We should look at business prospective such as the financial strength, relationship with suppliers & customers and competition against other ecosystem etc.

Singapore Stock Market Update - 22 Jan 2014

Keong Hong / Master Contract Services - A 99-year leasehold site along East Coast Road housing the former Joo Chiat police station is believed to have drawn a new record bid for a Government Land Sales (GLS) hotel site, the Business Times daily reported. A consortium comprising Master Contract Services and Keong Hong Construction placed the highest offer out of eight bidders of S$352.8 million ($275.95 million) or S$1,326.11 per square foot per plot ratio (psf ppr) in the tender that closed on Tuesday.
(http://link.reuters.com/wuz26v)






21 January 2014

Singapore Stock Market Summary - 20 Jan 2014

Keppel REIT: 4Q13 distributable income gained 5.9% y/y to $54.9 Million, while DPU was flat at 1.97¢, giving an annualized yield of 6.6%. Both revenue and NPI rose 13% and 16.4% to $47.5 and $37.4 Million  respectively due to better performance from Ocean Financial Centre and additional income from newly acquired 8 Exhibition Street in Melbourne. Associates also saw higher contributions from MBFC Phase 1 and One Raffles Quay. Portfolio attained occupancy of 99.8% with weighted lease to expiry of 6.5 years. Aggregate leverage stood at 42.1% with all-in interest rate of 2.15% and average maturity of 3.6 years. End Dec ’13 NAV was $1.40 vs $1.32 in FY12

Mapletree Logistics Trust: 3QFY14 distributable income climbed 7.7% y/y to $45m along with the 7% rise in DPU to 1.84¢ (including 0.025¢ from the partial distribution of a divestment gain from 30 Woodlands Loop). Gross revenue inched up 0.9% to $78.1m, while NPI stayed relatively flat at $67.4m as positive rental reversions from its S’pore and HK properties and contributions from two new acquisitions were negated by a weaker JPY from its Japan portfolio and higher expenses associated with conversions of its single user buildings into multi-tenanted ones and higher property taxes in S’pore. Occupancy slipped slightly to 98.4% from 98.7% in 2QFY14 with weighted lease to expiry of 4.8 years. Aggreate leverage maintained at 33.9% with average term of debt at 3.4 years and effective cost of 1.9%. End 2013 NAV was $0.93 per unit

K-Green: FY13 net profit dipped 4% to $14.2m, while revenue declined 12% to $67.1m due to the absence of construction sales and lower operations and maintenance income arising from the lower output of its waste-to-energy and NEWater plants. Excluding the impact of the flue gas treatment upgrade, which was completed in 2012, results for FY13 would have been 2% weaker. DPU of 7.82¢ maintained, which continued to eat into its NAV/unit of $0.95.

AusGroup: Awarded a A$21m scaffolding contract for maintenance services at BHP Billiton’s Worsley Alumina refinery in Western Australia. Work will begin in Feb ’14 and will last two years with a one-year option. This takes the group’s order book to A$235.5m.

Ley Choon: Bagged a $7m PUB contract to undertake watermain repairs and other works for network services (East division).

Sysma: Secured a $6.2m contract to erect a two-storey bungalow at Cassia Drive, marking its first win for 2014 and taking its order book to $50m. Construction is expected to take 17 months starting from Feb ’14

Interra: Completed development well YNG 3264 in the Yenangyaung oilfield in Myanmar where it has a 60% working interest. YNG 3264 is yielding oil at a stabilized 175 bpd, the best oil producing well in the Yenangyaung field. Meanwhile, it has commenced drilling on development wells CHK 1178 and 1179 in the Chauk oilfield (also 60% interest) in Myanmar and expects results to be available in about six weeks

SATS: 3Q13 operating data show number of flights handled growing 10.2% y/y to 34,920, unit services +6.6% and cargo throughput +1.9%. Passenger handled rose 4.8% to 11.25m on stronger traffic from budget carriers. Gross and unit meals produced however declined 8% and 5.7% respectively due to loss of Qantas' flights to Europe following the relocation of its base to DubaiSATS: 3Q13 operating data show number of flights handled growing 10.2% y/y to 34,920, unit services +6.6% and cargo throughput +1.9%. Passenger handled rose 4.8% to 11.25m on stronger traffic from budget carriers. Gross and unit meals produced however declined 8% and 5.7% respectively due to loss of Qantas' flights to Europe following the relocation of its base to Dubai

Centurion: Officially launched Westlite Johor Technology Park, its fifth dormitory in Malaysia, with a capacity of 5,800 beds. Centurion established its first worker accommodation in Tebrau, Johor, in 2011 with an initial bed capacity of 2,500, which has now grown to 14,400 beds. Two more facilities are currently undergoing development in Tampoi and Senai. Group plans to expand its dormitory bed capacity in Johor to more than 25,000 beds by 2015.

20 January 2014

Singapore Stock Market Summary - 17 Jan 2014

Ascendas REIT: 3Q13 distributabble income rose 4.9% y/y to $85.1 Million but DPU slipped 2.2% to 3.54¢. Gross revenue grew 6.4% to $154.4m, lifting NPI 3.7% higher to $108.6 Million on positive rental reversions of 9.7% across all segments of its portfolio. Occupancy dipped to 89.7% from 90.1% in preceding quarter due to addition of new space following AEI completions at 1 Changi Business Park Ave 1 and TechPlace II. Aggregate leverage stood at 30.1% with average debt maturity of 3.2 years. NAV/share was $1.98 as at Dec ’13.

First REIT: 4Q13 distributable income jumped 26.2% y/y to $14 Million and lifted DPU to a record 1.97¢, taking FY13 DPU to 7.52¢, up 14.3% (excluding divestment gains) of an Adam Road property). Gross revenue and NPI surged 48.2% and 41.6% respectively on contribution from two newly acquired hospitals in Bali and Simatupang. Gearing ratio stood at 32.3% with no financing needs till 2016. NAV/share was 96.64¢ as at Dc ’13

Guocoleisure: 2QFY14 net profit rose 12.3% y/y to US$13.7m on a 7.3% increase in revenue to US$106.7 Million, which was generated by improved room rates and land disposal by its hotel and property segments respectively. But volatility in the gaming sector and reduction in Bass Strait oil and gas oil and gas royalties (-18.8%) due to lower oil prices and production tempered its overall performance. NAV/share climbed to US$0.90 from US$0.839 in Jun ’13

OUE: Launched OUE Commercial REIT on SGX Main Board, offering 208 Million units (151.8 Million placement, 56.3 Million public) at $0.80 each, which translates to forecast DPU yields of 6.8% for 2014 abd 5.89% for 2015 and a 24% discount to NAV. IPO portfolio comprises OUE Bayfront and Lippo Plaza (Shanghai) with total valuation of $1.6b. Offer closes 12 pm on 23 Jan and trading will commence 2pm on 27 Jan.

Aspial: All 281 units at The Hillford, S’pore’s first retirement resort in Upper Bukit Timah have been snapped up within first day of launch at an average price of $1,100 psf.

Osim: Raised stake in TWG Tea to 70% from 53.7%, after TWG undertook a rights issue to raise $25m. Investment expected to be earnings accretive for the group this financial yr. TWG has ~27 stores as at end' 13 spread across S’pore, Hong Kong, Indonesia, Dubai, London, and plans to launch ~20 tea boutiques and shops in Asia and Mid-East this year

Advanced Holdings: Entered into MOU to acquire BD Crane and Engineering from its three owners to expand its existing engineering and design capabilities in the crane business. The terms of the proposed acquisition are subject to a definitive sales and purchase agreement, yet to be signed

Armarda: Expects to report a loss for 3QFY14, mainly attributed to low sales and higher expenses

Tritech: Terminated agreement for the proposed acquisition of Moya Asia, citing non-fulfillment of certain conditions

Wheelock: its mass market project in Ang Mo Kio Ave 2, the 698-unit, 99-year lease The Panorama, saw a more subdued response compared to the strong reception for The Hilldford at Upper Bukit Timah, a mixed development marketed as a “retirement resort”. Just half of the 120 units released for sale at The Panorama were booked yesterday at the first day of launch. Prices ranged from $650K to almost $2.4M
Sugar Prices: Fell to a 3 1/2-year low as strong production globally, adding to a global glut of sugar. Brazil is crushing more cane than it did the same time last year, while output in Thailand, the second-biggest exporter of the sweetener, has also been robust. Depending on how Wilmar has hedged its exposure in sugar prices, the current excess capacity might put a dampener on their sugar operations.

18 January 2014

Singapore Stock Market Week #3 2014 Summary

Singapore stock market improved slightly to have YTD return of -0.63% compared to -0.74% a week ago. Below is part of the news happened for this week:

Tiger Airways: Traffic for Tigerair S'pore climbed 13.1% y/y in Dec ’13 along with a 27.9% expansion in capacity, dragging passenger load factor down by 10.2 ppt to 78.3%. Tigerair Mandala carried 180,000 passengers (+154%) on an improved load factor of 71.6% (+5.2 ppt), while Tigerair Philippines (recently sold to Cebu Pacific) achieved a load factor of 80% (+11.5 ppt) from 129,000 passengers.

SIA: Fined CHF1.69m by the Swiss Competition Commission along with 10 other airlines for price collusion of the air freight market between 2000 and 2005. SIA Cardo is disputing its involvement in the price cartel but will make a $2.4 Million provision in its FY14 results

Mapletree Logistics Trust: Acquiring its 4th industrial property at Johor Technology Park in Iskandar Malaysia for RM88.5 Million (S$34.3 Million). Comprising seven blocks of industrial warehouses and one office block with a total GFA of 63,750 sqm, the property is well connected to Senai Airport, Tuas Second Link and Port of Tanjong Pelepas and is currently leased to LCTH Corp on a 12-year triple-net lease expiring in May 2020. The acquisition is expected to generate an initial NPI yield of 8.4%

ST Engineering: Its electronics arm has secured $593m worth of contracts in 4Q13 for intelligent transportation ($124m), satellite communications and broadband communications ($116m), and advanced electronics and information communications technologies ($353m) solutions

Unionmet: FY13 net loss widened to US$3.2m from a $0.2m loss the previous year due to an absence of US$2.3m land compensation as well as a property impairment loss of US$1.4m from Guangxi Intai Technology Co. Revenue grew 29% to US$38.2m. But gross margin remained thin and was unable to cover its operating overheads. Group plans to diversify into property development and oil blending businesses in S’pore and China. To fund the new initiatives, Unionmet is proposing a renounceable non-underwritten 1-for-2 rights issue @ 7.5¢ each.

Hafary: Disposing its wholly-owned Hafary China, this holds a 45% equity interest in a loss-making tile manufacturing facility in China, for Rmb5m. The proposed sale will net a $1m gain for the group.

Asia Power: Asia New Energy has revised the minimum acceptance condition of its cash offer @ $0.16 to no less than 80% of the total voting rights of shares and extended the offer period by another 14 days till 5.30pm on 28 Jan. The offeror has stated its intention to exercise its rights of compulsory acquisition for all the shares of the company should it attain >90% acceptance level.

Iskandar Malaysia: The Straits Times notes the lack of clarity on Msia’s new property curbs introduced last Oct have left many unhappy. Developers and buyers alike are still struggling to understand how the new rules affect them. Recall, from this year, real property gains tax for foreign buyers has been lifted to 30% on property sold within the first five years of ownership. After that, they pay 5% on gains. Also, the min price of properties that can be purchased by foreigners was raised from RM500,000 to RM1 m per unit.
But there is a lack of clarity on the cut-off period involved and which projects are affected. These will impact the developers’ decisions, such as whether to build larger units in their projects, and could delay the project launches. Nevertheless, developers like Rowsley do not expect the new curbs to affect Vantage Bay. Mgt is confident that the project, a $2.2b integrated development in the Johor Baru city centre comprising twin-tower condominiums, will draw genuine buyers aiming to hold the properties for at least five years.
Separately, news that the Johor govt will soon announce three more nodes in Iskandar which will enjoy such tax breaks is raising hopes among some developers. One node is expected to be located in each of the three economic flagships in the Eastern Gate Development Zone, the Western Gate Development Zone and Senai-Kulai growth corridor. Iskandar currently has only one node - Medini in the Nusajaya flagship. A node refers to an area dedicated to certain activities or development, and allows projects there to enjoy certain privileges and benefits. The new nodes are expected to accelerate the progress and development of Iskandar, and underscore Johor's aim of becoming an international metropolis by 2025

LionGold: Ghana gold mining subsidiary Owere Mines, in which 77% owned Signature Metals has a 70% interest, has finalized its tailings purchase agreement with B&C Gold to procure and process 1m tonnes of gold bearing waste tailings (bearing a minimum gold grade of 2g/tonne) over three years and two months as part of an environmental clean-up. Delivery of the first parcel of tailings is expectd to commence in Jan ’14 with processing to begin in Mar ’14.

ISR Capital: Formed strategic alliance with PropNex Realty to launch the Infiniti Real Estate Strategies Fund catering specifically to accredited investors. Amid the slew of property cooling measures curtailing property purchases, the fund will enable investors to diversify their investment portfolios co-invest in future land bids and new developments in S’pore and the region

Next-Gen: Venturing into the mobile content space through its acquisition of a 75% stake in Star Chariot from C Media, one of China’s leading mobile content delivery distributors, for $27.6m. Purchase will be funded via new share issue of $19.8m and transfer of a convertible note worth $7.8m.

Duty Free Int’l: Reported 3Q13 core net profit of RM17.2m (+1.5%) and revenue at RM153.8m (+16%). The better top-line was mainly due to the increase in revenue from trading of duty free goods and non-dutiable merchandise segment.

Lian Beng: 1HFY14 net profit slid 13.2% y/y to $16.7m while revenue climbed 40% to $328.1m on the back of higher revenue recognized from the construction segment (68% of revenue) and property development segments (12% of revenue). Bottomline was weighed down by less dividend income, and increased distribution expenses, bottom as well as share of associates’ losses of $2.6m, mainly arising from selling and marketing expenses from the sale of Newest, KAP Residences and Eco-tech@Sunview. As at 30 Nov 2013, the Lian Beng had $1b of orderbook. Management had also guided that it will only receive revenue of its fully sold out, 55%-owned industrial development project, M Space, upon obtaining TOP in 3Q14. NAV as at 30 Nov 2013 was 51.13¢, and currently trades close to 1.1x P/B

United Envirotech: Entered an agreement with Guangan Municipal Government and West Guangan Jean City Investment Management (WGIM) to provide 3 BOT water projects, which include industrial water supply, wastewater treatment and wastewater recycling to West Guangan Jeans and Textile Commerce and Technology Park in Sichuan, China. Under the agreement, UEL will form a 90:10 JV with WGIM to undertake the abovementioned projects in several phases. Phase 1 will see a capacity of 20,000 m3/day for each of the projects, with long term capacity being 150,000 m3/day, 100,000 m3/day, and 80,000 m3/day respectively for wastewater treatment, industrial water supply and wastewater recycling respectively.
Phase 1 is expected to cost ~Rmb160m ($33m) will start immediately and is expected to be completed by 31 Aug 2014

WE Holdings: Proposes a renounceable non-underwritten rights cum warrants issue, on the basis of 1 rights share (issue price 1.5¢) and 1 free warrant (exercise price 3¢) for every 2 existing shares.
The net proceeds to be raised, estimated between $12.7m and $39.4m, will be used for the following:
i) up to $15m to partially fund the proposed US$20m Dragon Cement Acquisition,
ii) up to $10m to fund the expansion of the group’s coal business, and
iii) any remaining balance for working capital
There is no min amount which must be raised from this corporate action, hence if the group is unable to raise sufficient funds for the Dragon Cement acquisition, the group will source for alternative sources of funding, including but not limited to bank borrowings

SPH 1QFY14 results were broadly in-line with net profit at $88.8m (-7%y/y, -10% q/q) and revenue at $328.5m (+2%y/y, +6% q/q). Ebitda margins inched slightly higher to 42.7%, indicating better cost management. Recurring earnings rose 2.2% to $116.9m, attributable to higher contribution from the exhibitions, radio and online classifieds businesses, partially offset by reduced earnings from the Newspaper and Magazine business and increased finance costs arising from additional borrowings undertaken on the establishment of SPH REIT. Revenue for Newspaper and Magazine business came in at $255.9m (-2.9%), as advertisement and circulation revenue declined by 2.8% and 4.7% respectively. Meanwhile, revenue for the Property segment rose 5.4% to $50.8m on the back of higher rental income from Paragon and The Clementi Mall. Operating revenue from the Group’s other businesses surged 110% to $21.8m, led by the exhibitions business, on back of new shows and certain shows being held on different dates during the period. The Group’s radio and online classifieds businesses further contributed to the revenue growth. Going forward, management guides that the near-term global and domestic economic outlook remains modest with persisting uncertainties. Against the backdrop of an evolving media landscape and changing consumer behaviour, the group will continue to evaluate and pursue new growth opportunities whilst striving to revitalise its core media business. Overall, we note that given the modest Singapore GDP growth outlook and the general muted outlook on Singapore’s property market, most market watchers do not see any clear catalysts for SPH’s core media business in short term, and are likely to retain their Neutral rating on the counter.

UOL: Emerged as the top bidder for a 216,113 sf residential site in Upper Paya Lebar Road, with a bid of $392m, or $648 psf ppr. The tender was hotly contested, drawing seven bids, with the healthy interest due to the site’s proximity to Bartley MRT station, and likely riding on the successful take-up of nearby projects. UOL plans to build a 17-storey condominium with 800 units on the site. Breakeven prices could be between $1,050 and $1,100 psf, placing selling prices at between $1,300 and $1,400 psf

ISDN: Taking a 89% stake in PT Tomuan, which has a power purchase agreement to build-own-operate an 8MW mini-hydropower plant in Sumatra, Indonesia, for US$1.5m. The US$12m project will be the gorup’s 7th mini-hydropower plant in Indonesia, totaling 50MW of installed base capacity

MTQ: Has agreed to purchase 100% of Binder Group for A$19.3m, which implies deal valuations of 3.1x P/B and 10.2x FYJun13 P/E. Binder specializes in pipe support and pipe suspension solutions for the oil and gas sector and operates a manufacturing facility in Perth. It also holds a 50% stake in an Indonesia company that runs another manufacturing facility in Jakarta. MTQ views the acquisition as an opportunity to increase the scope and sale of its core oilfield operations, by expanding the services and products offered, and enhancing the group’s effort in expanding into the growing Indonesian market.

KrisEnergy: Awarded a EPCIC contract for production and processing facilities at the  Nong Yao oil development in block G11/48 in the the Gulf of Thailand to Nippon Steel and Sumikin Engineering. The intial phase of the Nong Yao field will have a production capacity of up to 15,000 bpd with first oil expected in 1H15. The group holds a 25% working interest in G11/48, which covers 6,791 sq km over the southern end of the Pattani Basin and northwest margin of the Malay Basin

Miyoshi Precision: 1QFY14 net profit of $4.9m contrasted with loss of $0.7m a year earlier, despite revenue slumping 48.3% y/y to $28.1m. Weakness in topline was mainly due to slowdown in consumer electronic orders and reclassification of Giken Sakata and iNovuus into associates. Bottomline was lifted up by $5.8m gain from the sale of property at No.7 Second Chin Bee Road

Singapore Medical Group: Signed a non-binding MOU with Ciputra Group to establish an eye clinic in Jakarta, Indonesia. The Ciputra SMG Eye Clinic will be located in Ciputra Medical Centre at the Ciputra World Jakarta 1 shopping mall.

Ezra: Received a letter of intent with a contract value of up to ~US$94m over a five-year period to provide a service rig to be used by a Southeast Asian based national oil company to support its oil & gas activities. The rig is expected to be deployed in SE Asian waters by 1Q16

OEL: Acquiring two property investment companies S’pore Service Residence and Expat Residences for $53.9m via $10m in cash and issue of $43.9m convertible bonds. The combined portfolio of properties held under the two companies  include 27 SOHO units and one retail unit located at North Bridge Road and seven condo units at Dakota Crescent. As at FYMar13, both target companies had a combined net asset of $42m and were just about breakeven. Post acquisition, OEL’s proforma FY12 NTA will rise from 4.42¢ to 10.93¢ and EPS from -4.38¢ to 0.11¢

OEL entered into a heads of agreement to acquire two property investment companies in S’pore from a vendor linked to Heng Fai Enterprises, which is helmed by high profile deal maker Chan Heng Fai. The consideration of $53.9m will be satisfied by payment of $10m in cash, and the issue of $43.9m of secured convertible bonds.
The names of the target companies, Singapore Service Residence and Expat Residences, suggest exposure to the hospitality segment. The combined portfolio of properties held include 27 SOHO units and one retail unit located at North Bridge Road, with aggregate area of 28,733 sf and 7 residential units at Dakota Crescent condo with aggregate area of 12,852 sf.
As at FYMar13, both target cos had a combined net asset of $42m and were just about breakeven.
Based on proforma FY12 numbers, OEL estimates that post-acquisition, its NTA will rise from 4.42¢ to 10.93¢, and EPS to rise from -4.38¢ to 0.11¢.
Following the disposal of its core distribution business, OEL mgt believes the company should diversify into a stable and profitable business with steady cash flow within the steadily growing property market in Singapore

Global Logistic Properties: Developing GLP Yachiyo, a 72,000 sqm facility in Greater Tokyo, which is expected to be completed in Oct ’15 at a development cost of US$106m. Project is the 9th development under GLP Japan Development Venture, a 50/50 JV with Canada Pension Plan Investment Board. For FY14, the group has initiated new developments totaling 430,000 sqm with a combined development cost of US$665m).

Sarin: Launched Galaxy Ultra diamond inclusion scanning service at its service centres in Surat, India and Tel-Aviv, Israel. The service will be rolled out to other service centres as its Galaxy Ultra systems are delivered to customers later in 2014

City Dev: Appointed Grant Kelly as the new CEO. Kelly, who will assume duties from next month, last headed the Asia-Pacific real estate at private equity fund Apollo Global Management. Chariman Kwek Leng Beng believes Kelly’s experience managing hotel assets will help City Dev diversify, and be useful in running the firm’s Millennium & Copthorne Hotels arm.

Aspial: Its retirement resort, the 281-unit The Hillford at Upper Bukit Timah, will open for booking today. Prices for the 60-year leasehold project range from $388,000 for a 398 sf one-bedder to $648,000 for a 653 sf two bedroom dual-key unit.

Hour Glass: will offer buyers a 40-mth interest-free instalment plan – the longest seen in the retail industry. The promotion will span between 1 Jan and 28 Feb for all brands. Mgt notes the results so far have been “positive”


IOI Prop - Biggest Market Cap Developer Company in Malaysia

Mr. Lee, Malaysia Chinese tycoon  has passed over his leader position to his younger son to lead IOI Properties, which was listed recently. The good news is that, IOI Properties has taken over UEM Sunrise, a so called GLC that has load of land banks especially in Iskandar Malaysia which over RM10 Billion market cap (although the size is not as big as Capitaland, but I would still have to congratulate the success story it created so far).

The younger Mr Lee had a target of around RM 2 - 3 Billion billings target for next couple of years, which may translate to around RM 1 Billion net profit. The reason why it could have such as high net profit margin compared to SP Setia or Mah Sing was that the land banks actually was acquired since long time ago for oil palm plantation. And since demographic changes, the group converted to residential purpose and hence enjoy a better and higher profit margin compared to palm oil business.

To me, this is part of the ways to get rich, as they could add value to the land banks and bring benefits to more people. I believe Malaysia is now like Singapore 20 to 30 years ago, that they would try to upgrade themselves to a service hub such as Islamic Finance Hub and regional logistic hub.

Nonetheless, I believe that there is a long way to go for Malaysia to be a better country. I sincerely hope the government could attract more foreign direct investment to bring more job opportunities to the residents here. If Malaysia could be a 1st world country few years later, I believe it could attract talents working in oversea to come back to their homeland, sooner or later.

14 January 2014

Singapore Stock Market Summary - 14 Jan 2014

14 January 2014

The Straits Times Index (STI) ended -11.74 points lower or -0.37% to 3123.75, taking the year-to-date performance to -1.30%. Total Volume was 2,746M shares with total value S$991.2M. Losers outperformed gainers with 234 to 169.

Miyoshi:  reported S$28M revenue with net profit of S$5M in 2014Q1 report. The company mentioned that "Despite that the global economy has started to show initial signs of stability, the general business environment remains fluid and any  significant risks could undermine this recovery. We expect demand will continue to be soft in the next quarter. With regard of the business strategy, we strive to enhance the competitiveness and to leverage on new opportunities and tackle any challenges that may come our way. Following the dilution of the shareholding in the previous principal subsidiary, Giken Sakata (S) Limited, in October 2013, the Group will no longer consolidate its performance and the drop in turnover will fully be reflected in the next quarter, as compared with the corresponding quarter last year"

Singapore Press Holdings Limited (SPH):  reported its results for the first quarter ended 30 November 2013 (1Q 2014). Group recurring earnings for 1Q 2014 rose by $2.5 million (2.2%) to $116.9 million compared to the corresponding quarter last year (1Q 2013). This was attributable to higher contribution from the exhibitions, radio and online classifieds businesses, partially offset by reduced earnings from the Newspaper and Magazine business and increased finance costs arising from additional borrowings undertaken on the establishment of SPH REIT. Net profit attributable to shareholders of $88.8 million was $6.3 million (6.6%) lower compared to 1Q 2013. This was net of SPH REIT’s profits attributable to non-controlling interests.

Revenue for the Group’s Newspaper and Magazine business of $255.9 million was $7.6 million  (2.9%) lower compared to 1Q 2013, as advertisement and   circulation revenue declined by $5.8 million (2.8%) and $2.3 million (4.7%) respectively.

Revenue for the Property segment rose by $2.6 million (5.4%) to $50.8 million on the back of higher rental income from Paragon and The Clementi Mall.

Operating revenue from the Group’s other businesses at $21.8 million was   $11.4 million higher than 1Q 2013.  The increase came mainly from the exhibitions business due to new shows and certain shows being held on   different dates in the comparative period. The Group’s radio and online classifieds businesses further contributed to the revenue growth.

Total operating costs  rose 1.4% against 1Q 2013 to $215.1 million, mainly attributable to higher staff costs and finance costs which were partially offset by a reduction in materials, production and distribution costs and lower business promotion expenses.

Investment income  at $5.1  million was $2.1 million (67.6%) higher than the same period last year.

On the outlook for  FY2014, Mr Alan Chan, Chief Executive Officer of SPH commented: "The near-term global and domestic economic outlook remains modest with persisting uncertainties. Against the backdrop of  an  evolving media landscape and  changing  consumer behavior  the Group continues to evaluate and pursue new growth opportunities whilst striving to revitalize its core media business.”

Mapletree Logistic Trust News - 13 Jan 2014

Mapletree Logistics Trust (MLT) announced to acquire an industrial site located at Johor Technology Park in Zone E of Iskandar Malaysia. To me, it seems as a positive sign to show a move for Singapore REIT to venture in Iskandar Malaysia. 

As there are many factories operated in Senai (basically is more of Electric & Electronic companies such as Flextronics etc. A quick fact for Zone E, it would take about 20 - 30 mins to reach TUAS Second Link via Second Link High way (with a toll located at Lima Kedai & near to Second Link Custom). 

As for as I know, some chocolate factories (e.g. Herseys) have announced their intention to move to Zone E. It will definitely help to create job opportunities in Zone E, and hopefully we could benefit from it. 

Below are the news I extracted:

Mapletree Logistics Trust (MLT): Proposed to acquire an industrial site located at Johor Technology Park in Zone E of Iskandar Malaysia for RM88.5m (S$34.3m), below an average market valuation of RM93.2m. This marks its fourth asset in Iskandar, in line with its focus to scale up presence in Malaysia and to support its customers’ growing demand.

The site comprises seven blocks of single and double-storey industrial warehouses and one office block with a total gfa of 63,750 sqm, well connected to Senai Airport, Tuas Second Link and Port of Tanjung Pelepas, a key transhipment port in the region.


The property is currently leased to a subsidiary of LCTH Corporation Bhd on a 12-year triple-net lease expiring in May 2020, which has sub-leased the property to its customer, a subsidiary of Flextronics International Ltd.
At the purchase consideration, the DPU-accretive acquisition is expected to generate an initial NPI yield of 8.4%, above MLT's implied Malaysia portfolio yield of 7.1%. Subjected to approval, the acquisition will be funded by debt, taking MLT's aggregate leverage ratio to 34.9% (from 34.4%), and expected to be complete by 3QFY14.

ST Engineering: Its electronics arm has secured $593m worth of contracts in 4Q13 for intelligent transportation ($124m), satellite communications and broadband communications ($116m), and advanced electronics and information communications technologies ($353m) solutions


12 January 2014

Singapore Stock Market 2014 Week #2 - Short Summary

Week 2 (11/1/2014)

YTD STI performance improved to -0.74% from -1.14% a week ago. Since beginning of the year, the STI performance was still in red, partly due to the global economy outlook ( US market profit taking after last year's great return record). With many economists issued a negative view on QE tapering, more and more hot monies are now flowing back to US from emerging markets. Several research houses released their predict on STI performance this year, ranging from 3,400 to 3,600.  

For China, new IPO listings in China market would attract eye ball of certain investors. 

In US, US market continued its downtrend after reaching a record high end of Year 2013. So far the market sentiment is still remain stronger, as more and more investors are looking good in US economy recovery story. The question now lies on whether the US investors are focusing on QE tapering impact or improvement in US economy. 

To my personal opinion, I believe that this year performance could be merely better than last year flat performance, but you may need to work harder to find out hidden gems that I believe is under unfavorable sectors (e.g. REIT / Property / Construction etc). Of course to most of the investors, it may look silly because you may risk losing paper money if you invest in those sectors, however I believe that once the toughest time has passed, you may enjoy a better result compared to others. However, it must be based on how much homework you have done and hold on to the counters even if it may drop further due to unfavorable condition.  

Some of the corporate news for past 1 week:
  1. Tiger Airways -  Confirmed that it is currently negotiating a proposed transaction involving 40% associate Tigerair Philippines.
  2. OUE - Received eligibility-to-list letter from SGX for its proposed IPO of OUE Commercial Trust, which comprises of OUE Bayfront.
  3. OCBC - emerged as front runner in the potential takeover of Wing Heng Bank listed in Hong Kong.
  4. Ausgroup - proposed placement of up to 20% of total outstanding shares to raise about S$15.2M net proceeds to support its working capital requirement and future bonding requirement. The price rose to near to 30C from 17C in just a week time.
  5. Sound Global - Exit offer of S$0.70 has now became unconditional.
  6. Otto Marine - Agreed to sell 7 vessels at US$10 M.
  7. See Hup Seng - Completed S$42.4M acquisition of Hetat Group via S$31.8M cash and issue of 42.5M shares @ S$0.2493.
  8. Property Sectors - residential prices registered broad-based declines in the fourth quarter of 2013. Some research houses forecast a 10-15% decline in residential property price over the next three years before stabilized. My personal view is that some property investors may still benefited from declining price as they could enjoy a better rental yield while interest rate yet to increase.
  9. Sarin Technology - Launched a new software to sharpen its accuracy of polished diamond modeling, in-process polishing control and user-friendliness.
  10. GLP - has leased 106,000 sqm to new customers in Brazil and 110,000 sqm across China, of which seven are first-time customers.
  11. Midas - secured another 2 contracts worth RMB1.1B.
  12. Kreuz - received approval from SGX for its application for delisting.
  13. ST Engineering - won $446M of orders.
  14. RH Energy - entered an exchange of land rights arrangement with the Langfang Investment & Cooperation Bureau as a result of rezoning the current 24,400 sqm site into non-industrial use by the local authority. The bureau will compensate Ruihua the land use rights for a 28,875 sqm piece of land in Langfang plus cash of Rmb34.8m, mainly for rebuilding a new manufacturing facility, and RMB5.3M for estimated loss during the relocation process
  15. Ezra - 1QFYAug14 revenue +22% y/y to US$339.8m, net profit -6% to US$6.3m, due to a dip in gross margins, absence of a disposal gain of US$3.8m from a year ago, and higher minority interests. EMAS AMC, the subsea services division, remained the main revenue contributor boosted by increase in project activities and addition of pipelay installation assets during 4QFY13. Order book remains strong at above US$2b with the offshore support services division utilization of ~90%
  16. Triyards - 1QFY14 net profit rose 13% y/y to US$7.3m, while revenue soared 69% to US$90.1m on contributions from three self elevating units, which are in advanced stages of construction. But gross margin slid from 21% to 14% due to different mix of projects at respective completion stage. Separately, it announced two new refurbishment and outfitting contracts for two cruise ships with total value of $7.5m
  17. SPH REIT- In maiden results for period between 24 Jul (listing date) to 30 Nov ‘13, distributable income amounted to $46.5m (3.2% y/y) , giving a DPU of 1.86¢, which is 2.2% above forecast. Gross revenue came to $70.4m (+2.4%), while net property income was up 1.8% to $51.4m, supported by strong rental reversions from Paragon and steady performance from The Clementi Mall. As at end Nov, it registered a gearing of 26.7% with no refinancing requirement till 2016 and NAV of $0.90
  18. Hiap Hoe - Executed the letter of intent of proposed development of Starwood's hotels on two of its recently-acquired sites in Victoria, Australia.
  19. Mermaid Maritime - has ordered two newbuild tender rigs and one dive support vessel for an aggregate sum of US$436m, from China Merchants Industry. Delivery of the vessels is expected to take place between 1Q16 and 3Q16. The move reflects Mermaid’s commitment to expand and modernize its fleet to enhance its offshore oil and gas support services, as well as to achieve greater economies of scale. Mermaid currently owns 2 tender rigs, and 7 owned and 2 chartered subsea support vessels.
  20. OUE Commercial REIT: Lodged its preliminary prospectus and will start book building next Monday. OUE Commercial Reit is selling 433m units at $0.80 each, offering a yield of 6.8%. Distributions will be made to unitholders on a semi-annual basis. Five cornerstone investors are taking up more than half of the offering (225m units). This includes:
    1) A Malaysian asset management company owned by RHB Investment Bank Berhad (1.4%), 2) Yang Dehe, a seafood restaurateur in Guangdong, China, who heads the Hai Run Group of companies (2.9%). 3 & 4) Gordon Tang and his wife, Chen Huaidan, both members of the board of SGX-listed SingHaiyi Group (3.6% stake each) 5) Investment holding company Summit SPV, wholly owned by Tong Jinquan, China’s 35th richest man according to Forbes magazine.
    The OUE Commercial REIT will feature office building OUE Bayfront in Singapore and the Lippo Plaza Property in Shanghai, both contributing to the IPO portfolio value of $1,623.6m and total GFA of 105,296.1 sqm.
    CIMB, OCBC and Standard Chartered are the joint global co-ordinators on the IPO, as well as joint bookrunners with Citigroup, JPMorgan and RHB
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