Corporate News - Swiber, Jade, ST Engineering, Wee Hur, China Essence Group,

Posted On Thursday, February 14, 2008 at at 10:31 AM by Finance Analysis  

Swiber Holdings and Principia Recherche & Development SA announced the formation of a joint venture to undertake the supply and sale of studies, design of offshore and marine facilities, as well as related services in the offshore and marine industry in South East Asia. The proposed joint venture company will be 51% owned by Principia, and 49% owned by Swiber’s wholly-owned subsidiary, Kreuz International Pte Ltd. Principia, a subsidiary of AREVA within AREVA TA Business Unit, is specialised in scientific engineering and studies and in the design, manufacture and sale of related software applications in the worldwide marine and offshore business. “Our strategic view is to offer to our customers a larger range of services from conceptual and FEED stage up to detailed design supported by our more than 25 years’ experience in the marine industry combined with the well established know-how of Swiber.” said Benoit de Moulliac, the CEO of Principia.



Jade Technologies Holdings is selling its wholly owned, loss-making subsidiary Jade Precision Engineering (JPE). The company has entered into a sale and purchase agreement with United Pacific Industries (UPI) for the disposal of JPE. The proposed disposal is expected to be completed on Feb 24, with final settlement on March 8. Upon completion, JPE will become a wholly owned subsidiary of UPI. JPE, with annual sales of $35 million in 2007, manufactures stamped, etched and plated leadframes for the semiconductor industry. JPE has been loss-making since 2001. As at Sept 29, 2007, JPE had accumulated losses of $21 million. The estimated total consideration is $6 million, which will be paid to Jade in the form of new UPI shares up to a maximum limit of 43 million new UPI shares (7.8% of existing issued shares or 7.2% of enlarged share capital), with the balance in cash.

ST Engineering said its US shipyard, VT Halter Marine, has secured a new contract to design and build two platform supply vessels (PSVs), which are used to support exploration and offshore production of energy. The contract is valued at between US$45 million and US$55 million and construction is scheduled to begin in the second quarter of 2008, with delivery in 2010. The contract was awarded by L&M Botruc Rental Inc, which operates one of the largest fleets of offshore marine transportation vessels in the Gulf, said ST Engg. L&M is also one of the largest privately held supply boat companies and the sixth-largest boat company on the Gulf Coast, it said. The vessels will be used to carry supplies, deck cargo and drilling fluids in supporting offshore operations.

Wee Hur Holdings, a building contractor in Singapore with a range of construction projects, has won two new contracts worth a total $146.5 million. The group announced yesterday that its wholly owned subsidiary, Wee Hur Construction Pte Ltd, has been awarded two projects for a residential development and a commercial development worth $99.9 million and $46.6 million respectively. The first contract, awarded by a subsidiary of the Ho Bee Group, is for a residential development located in the prime Newton Road area. The second contract, awarded by Ascendas (Tuas) Pte Ltd, is the Phase 1 construction of a commercial building at Changi Business Park. The two projects represent an approximately 61% increase over Wee Hur's order book as disclosed in its IPO prospectus.

China Essence Group yesterday reported an 85% yoy rise in net profit to 100.8 million yuan (S$19.9 million) for its third quarter ended Dec 31, 2007. Revenue for the three months almost doubled from 166 million yuan to 330.3 million yuan. The third-quarter results brought nine-month net profit to 174.7 million yuan, up 69%. Revenue climbed 63% to 588.8 million yuan. The group saw a rise in sales volume for its potato starch products, as well as a hike in average selling prices, which was helped by rising consumer prices and China's implementation of anti-dumping regulations on potato starch producers from the European Union since February 2007. Earnings per share for the nine months climbed to 0.45 yuan from 0.27 yuan. Overall gross profit margins dipped from 47.4% to 45.6% because of an increase in the cost of potatoes.

Source: CIMB-GK Securities Pte Ltd

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IPO News - YongMao Holdings Limited

Posted On at at 9:13 AM by Finance Analysis  

Yongmao Holdings Limited, a designer and manufacturer of a wide range of towercranes and towercrane components and accessories in the People's Republic of China ("PRC"), launched its initial public offering ("IPO") today, in conjunction with its proposed listing on the Mainboard of the Singapore Exchange Securities Trading Limited ("SGX-ST").

Yongmao offers a wide range of towercranes and towercrane components and accessories under its own brands -"YONGMAO" and "SUNCRANE". To date, the Company has developed approximately 50 models and sub-models of towercranes. Used mainly in construction sites, infrastructure projects and in the shipbuilding industry, Yongmao's towercranes are sold mainly to construction equipment distributors and equipment rental companies in overseas markets and to construction companies and equipment rental companies in the PRC.

Yongmao's towercranes are sold and exported by Yongmao and/or its customers to many countries in America such as the United States and Panama, Africa such as Zambia and South Africa, Middle East such as UAE, Saudi Arabia and Bahrain, Europe such as Belgium, UK and Ukraine and Asia such as Hong Kong, Macau, Singapore, Indonesia, Thailand, South Korea and India.

Yongmao's invitation comprises 111,550,000 new shares ("New Shares") at $0.35 per share, of which 3,800,000 are offer shares and 107,750,000 are placement shares. The invitation representing approximately 25.1% of the Company's enlarged share capital of 443,750,000 shares, is being launched at a historical price-to-earnings ratio of approximately 9.9 times, calculated based on its historical net earnings for FY2007 and a pre-invitation share capital of 332,200,000 shares.

The Company is expected to raise net proceeds of approximately S$35.4 million from the issue of the New Shares, of which approximately S$31.6 million will be used for the construction of a new manufacturing facility and for the acquisition of plant and machinery. The remaining proceeds will be used for working capital purposes.

CIMB-GK Securities Pte. Ltd. is the issue manager, underwriter and placement agent for this IPO. The IPO will open from 1 February 2008 to 19 February 2008, 12.00 noon. Trading on the SGX-ST is expected to commence on 21 February 2008.

Attractive Industry Prospects Globally

Yongmao believes that in the short term, the industry will be facing a shortage in capacity to meet the demand and technical requirements for towercranes of the higher-class tonnage that Yongmao manufactures. Accordingly, it is expected that the supply of towercranes will remain tight in the next few years.

Focused Growth Strategy

Going forward, Yongmao intends to expand its production capacity to meet the increasing demand. A new manufacturing facility is currently under construction and is expected to be completed by about the end of 2008. This new facility, if fully equipped, is expected to have approximately double the capacity of the existing manufacturing facility in terms of production capacity for towercranes.

Source: Remisiers Research
Prospectors: Click Here


Conclusion by Extraordinary Profits:

Unlike the usual small cap china companies, Yongmao has the advantages of having a strong parent company in Tat Hong, and a business that has high barriers of entry.

Because of that, I believe that Yongmao should trade at the higher end of valuations for typical small cap stocks.

Yongmao should trade at a Fair Value of $0.68 or 10x PE only.
Probability of getting allotted for the IPO - LOW

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Corporate News - KSH, NOL

Posted On Wednesday, February 13, 2008 at at 9:18 AM by Finance Analysis  

KSH Holdings Ltd – Wins S$53.5m contract; Recommend Buy at TP S$0.72

The Group secured a S$53.5m contract from Eurochem for the construction of a 13-storey business park building at International Business Park, bringing its order books to S$505m that will take the Group through to FY11.

We have raised our earnings forecast by 9% for FY09 for the recent contract win from Eurochem Corporation Pte Ltd (“Eurochem”) worth S$53.5m. We believe KSH has the capacity to clinch another $150~250m projects.

We value KSH using sum-of-the-parts valuation method, valuing its property developments and construction business, at 7x blended FY08/09F construction earnings. At this level, price target works out to $0.72, providing an upside of 57%. We reiterate BUY.

NOL – net profit up 44% to US$523 million

Neptune Orient Lines (NOL) today reported net profit for full year 2007 of US$523 million, 44% higher than previous year, owing to improved liner volumes and freight rates in selected key trades. For the fourth quarter of 2007, the company registered net profit of US$196 million, up 292% on yoy basis.

The revenue for the year was up 12% to a record US$8.16 billion while the fourth quarter’s revenue up 22% to US$2.42 billion on qoq basis.

Source: WestComb Securities

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Market News - Budget 2008

Posted On Tuesday, February 12, 2008 at at 5:05 PM by Finance Analysis  

Implications for the stock market

No cheer from the budget. Unlike 2007, we do not expect the budget to have any impact on the stockmarket, given the remote possibility of a corporate tax cut. The upcoming budget is likely to be pro-individual, given ongoing concerns of rising inflation and the fact that pro-business measures had been employed over the past few years.

Focus will be on the 4Q and final GDP growth rate for 2007, as well as its forecast for 2008, to be released this Thursday. With the deteriorating growth environment, there’s downside bias to our current growth forecasts of 6.5% for 2008, vs 7.5% for 2007 (preliminary estimate).

Budget has no impact on the stock market in previous years, except for 2007

We tracked the performance of the stock market for pre and post budget rallies. 2007 was the only year where there’s evidence of a pre-budget rally (+3.5%) and post budget rise (+1.5%) in the STI index, spurred by the cut in corporate tax rate and rise in employer CPF’s contribution which was positive for the property market.

Prior to 2007, the budget failed to inspire the market, while and in the bear years of 2001 to 2003, the stockmarket slided after the budget.

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Source: Extraordinary Profits

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Performance of STI VS other Stocks

Posted On Sunday, February 10, 2008 at at 2:08 PM by Finance Analysis  

For the past one month STI has drop from 3461pts to a 2931pts, a fall of -15%. However I have heard from people that they are still stuck with their paper lost and are unwilling to sell their stock away. I can only place 15 stocks on the chart below. For the full table, click on read more below .

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Source: STI Stocks Info

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