22 February 2015

Ezion - FY14 Result - Feb 2015

According to latest result released by Ezion this month, it had achieved net profit of US$223M on the back of revenue of US$380M, which includes one time off net profit of US$30M plus from disposal gain of marine assets to Aus Group which is one of the associate companies. This is translated to EPS of about S$0.184 or trailing PE of about 6.5 times.

Based on research reports released by different stock broking firms, the result could be better if not the delay of some of the service rig projects. According to the forecast, the revenue could double up once 37 of the fleets could be fully utilized on or after year 2016. The core net profit is about US$177M, so if it could be doubled up in 3 years up, the net profit could be about US$354M or EPS US$0.22. I believe that the share price of Ezion could move up gradually once the current crude oil crisis can be ended latest by second half of the year or next year.

Some may think that Ezion would face a price cut in charter rate as the crude oil price dropped to US$60 from US$110 and above last year. However, we still do not have any concrete information from this yet, and we may find out more from next quarterly report, as some of the service rigs to be re-contract this year. 

Some experts are expecting a drop of crude oil to US$20 before moving up later as OPEC countries are fighting against US oil producers as the oil storage hit record high recently. It is now about US$50/barrel for US oil and US$60/barrel for international oil.

Nonetheless, Ezion is investing mainly liftboat / service rigs business in Asia / Europe / Africa zone, where it is relatively new and full of opportunities as compared to Mexico / US zone. Hopefully with a better crude oil price next year, the PE valuation can be increased later as well.


05 February 2015

Singpost - Transformation in Progress - Feb 2015

Singpost released latest quarterly report yesterday, with 9m15 revenue of S$670.9m and underlying net profit of S$116.1m reported. It is translated to 17.4% net profit margin.

For segment breakdown, conventional business - Mail & Digital services segment recorded a slight increase of 2.5% to S$377m with operating margin stood at 28.4% while logistic segment had a stellar performance with the increase of 13.5% in revenue to S$329m with 5.0% operating margin. Retail and eCommerce increased 5% in revenue to S$68m with 10% operating margin. Nonetheless, we saw that eCommerce segment registered a more than 40% growth in revenue compared corresponding last year to S$19.3m.

Moving forward, the group is focusing on productivity and managing costs in the mail business as well as to expand group's regional eCommerce logistics business and network. For property wise, the group is looking to develop retail space in Singapore Post Center as well as to construct a eCommerce logistic hub to support the growing eCommerce business in the region.

The group is proposing 1.25 cents dividend as per usual. The expected PE of the group is about 30 times based on current price of S$2.03.

GLP Quarterly Report Summary - Feb 2015

Below is the summary of the financial report after the webcast reporting of GLP today:

  • The company will continue to bring values to investors via three pronged growth strategy - development of the industrial properties, fund management and operations of the logistic facilities
  • For development of industrial properties, the group is targeting of US$8bn total development completion in next 3 years and expecting US$1bn revaluation gains from this. The value creation margin is about 25%. Apart from it, the group receives development fees from development funds and promote income from reaching IRR hurdles in fund management platform
  • Fund management platform is expected to grow 99% compound annually from US$ 2.6 bn in year 2012 to US$ 20.4bn in year 2015, with additional US$ 8.1bn from US alone in FY2015. Fund fees expected to grow significantly over the years. GLP expected to complete fund syndication to pare down stake to 10% (from 55%) by 3Q15
  • For China market, GLP reduced its forecast for FY2015 development completion to US$1 bn from US1.1 bn due mainly to the delays in completion permitting process. Nonetheless, it's expecting a US$1.4 bn Total development completion in FY16
  • For Japan market, GLP continues its strategy of recycling capital from stabilized assets in Japan into development, as capitalization rate in Japan market is in the downtrend. The group is setting target of US$980 Mn for Development Completion in FY16
  • For Brazil market, GLP forecasts a moderated economic growth, with interest rates continuing to trend upwards. Companies are shifting from owning to leasing warehouses to improve supply chain efficiency
  • The group achieved Net Profit of US$381 Mn on the back of revenue of US$541 Mn. Changes in fair value of investment properties is US$358Mn. Annualized EPS and NAV are 9.84 US cents and US$1.82 each. Estimated ROE is about 5.5%. Current Market Cap of GLP is now S$11.85 Bn
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