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”

1 comment:

  1. eToro is the ultimate forex trading platform for rookie and established traders.


Related Posts Plugin for WordPress, Blogger...

View All My Posts Here