AIO Finance Analysis

Closing date of application: 10 March 2008
Commencement of trading: 12 March 2008

Established in the 2003, Li Heng Chemical Fibre is principally engaged in the manufacture and sale of high-end nylon yarn products under their brand names "Liyuan" and "Liheng" in the PRC.

Their two production facilities in Changle City, Fujian Province, PRC, are strategically located amongst clusters of textile and garment manufacturing industries, which are their main customers, and related supporting service industries.Their revenue and profit have been registering 91.2% and 93.3% growth respectively over the past 3 years.


Financial figuresIntended IPO price: $0.80
No. of shares available for public offer: 10m
No. of shares available for placement offer: 390m
Total post invitation share capital: 1,700m
Dividend policy: No fixed policy.

Conclusion:
Based on its numbers, Li Heng is comparable to the leading SGX textile stocks such as Shina Sky, Fibrechem, and Sinotech Fibre, instead of the smaller companies such as C&G and Foreland.Li Heng should trade at a Fair Value of $1.30 or 12x PE only.

Probability of getting allotted for the IPO - FAIR
(Prospectus here...)
(Click here to Read More...)
Source: Extraordinary Profits

Closing date of application: 10 March 2008
Commencement of trading: 12 March 2008

Established in the 1967, Roxy-Pacific holdings is a Singapore-based specialty property and hospitality group.

Key Competitive Strengths:
They have been developing properties since 1967, and having experienced several cycles in the property market, have an established track record and reputation.
They are one of the more active developers in the Eastern area of Singapore, with an in-depth familiarity and a land bank of 30,422 sqm for 8 prospective developments there.

Key Risk Factor:
The risk of the Singapore Property Market bull run coming to a halt in the near term.

Financial figures
Intended IPO price: $0.30
No. of shares available for public offer: 7m
No. of shares available for placement offer: 126m
Total post invitation share capital: 636.56m
Dividend policy: No fixed policy.


Conclusion:
Based on its numbers, Roxy-Pacific is comparable smaller property developers which only focus on the Singapore property market such as Eastern Holdings, Sing Holdings, which typically trade at 10-12x PE. As such, Roxy-Pacific should trade at a Fair Value of $0.30 (IPO price) or 12x PE only.

Probability of getting allotted for the IPO - FAIR
(Prospectus here...)
(Click here to Read More...)
Source: Extraordinary Profits

Investors were spooked by a media report that a planned bailout of US bond insurer Ambac Financial was running into snags, dealers said. Ambac and other major bond insurers have been hard hit in the financial turmoil stemming from the US housing slump and related credit squeeze. "Investor fears of a US recession have strengthened. There is even a growing view that the US economy has already entered into a recession," said Ryohei Muramatsu of Commerzbank in Tokyo.

Markets expect the Fed to cut its federal funds rate at a March 18 meeting. The central bank has already slashed borrowing costs by 2.25 percentage points since September in a bid to shore up flagging economic growth.

Asian stocks plunged Monday with Tokyo ending down almost 4.5 percent, battered by a slumping dollar and fears that the US economy is slipping into recession, dealers said.

Investors dumped shares after heavy losses on stock markets in the United States and Europe last week following signs that the fallout from the US credit crisis was far from over.

Hong Kong was down 3.1 percent in late trade, Seoul gave up 2.3 percent as Singapore and Sydney both shed about 3.0 percent.

"Wall Street's plunge amid a raft of bad news hit sentiment in a big way... raising fears about the possibility of the market slipping into a downward spiral again," said Kim Min-Sung, analyst at Bookook Securities in Seoul. Tokyo was the hardest hit, with the Nikkei-225 tumbling 4.49 percent to end below the key 13,000 points level for the first time in over a month.

The results were "a reminder to investors that subprime woes have not gone away," CIMB-GK Research analyst Song Seng Wun wrote in a note to clients from Singapore. "The mortgage meltdown and credit crisis are likely to have a substantial negative impact on the US as well as global economic growth in the coming months," Song added.

Source: Yahoo! News

China's top energy firm PetroChina is considering building a multi-billion-dollar refinery in Singapore, a local newspaper reported, allowing it to escape Beijing's fuel price controls.

Building a new 400,000 to 500,000 barrel per day (bpd) plant could cost more than $10 billion, according to recent cost estimates for similar size projects, but would fit PetroChina's ambition to become a leading fuel trader in Asia.

"It is currently doing a feasibility study and doing due diligence on this...and so far the feedback has been positive," The Business Times quoted an unnamed source as saying. Two PetroChina officials reached by Reuters said they could not confirm the report, but downplayed its significance.

"The idea was to process PetroChina's equity oil overseas and supply refined fuels to China," said the official.

The Business Times cited another source who said the new refinery would be at least 400,000 to 500,000 barrels per day.

A refinery in Singapore would also give PetroChina more flexibility and power to influence benchmark Asian oil prices, advancing its effort to become a top trader.
Several years ago PetroChina bought a 35 percent stake in Singapore's $500 million Universal Terminal, Asia's largest commercial oil storage terminal, which was completed last November.

"Given PetroChina's business profile, it makes sense for them to have an oil refinery in a global pricing hub like Singapore," the newspaper quoted the second source as saying.

Source: Reuters

Tha latest news in the almost never-ending series on "inflationary" price increases includes new adjusted pump prices from Caltex for all three classes of petrol. Regular 95 now costs S$2.046 per litre, Regular 98 at S$2.12 and Premium 98 at S$2.286 per litre. As Singaporeans may know by now, there is a worldwide commodities "boom" which had led to prices of everything from steel, oil, pork and flour rising quite a bit. This has inadvertently resulted in an inflation rate of 6.6% which was recently reported in the news. Yet, when I recently passed by a car road show at Suntec City atrium (open area near Carrefour), there were scores of people literally lining up to purchase cars !

Anyhow, let me break down the numbers according to BT and comment on them. According to the article, if you spend S$50K on a car with a 70% loan at 3% p.a interest for 7 years, then you will end up paying close to S$130K after 10 years. The breakdown is as follows:-

Cost of Car including COE - S$50K
Car Loan (70% of purchase price at 3% p.a. for 7 years) - S$7,350
Insurance (S$1,500 per year for 10 years) - S$15K
Road Tax (S$500 per yearfor 10 years) - S$5K
Parking Charges for Home and Office (S$250 per month x 12 x 10 years) - S$30K ERP Charges (S$3 per day x 240 working days x 10 years) - S$7.2K
Petrol Costs (S$200 per month x 12 x 10 years) - S$12K
Maintenance and Repairs (S$300 per annum x 10 years) - S$3K

The rest of the assumptions are for fines and accidents, which I assume one should and would not incur unless one was driving recklesly, or drink driving ! The BT article totals up the figures to give an approximate S$132,550, which boils down to about S$1,105 per month. If you take into account the "additional" potential extra costs, the cost per month is about S$1,360. Thus, for a person who takes home about S$3K (median income level per individual), this makes owning a car very challenging indeed !

To end off, all I can say is that if one forgoes a car, he can hope to achieve financial freedom sooner. But the material comforts and convenience of a car cannot be under-stated, and those who seek this or who require a car because of an infirmed member of the family or young children should ensure they work out the numbers as I had, to see if they have sufficient funds to sustain a car. As I always say, it's easy to own a car, but darn hard to maintain one !

Banks such as DBS Group, Oversea-Chinese Banking Corp and United Overseas Bank may be in focus after a record loss at insurer AIG exacerbated fears of more write-downs in the financial sector.

Stocks and factors to watch:

Goldman Sachs has cut the target price of conglomerate SembCorp Industries' shares to S$4.60 from S$5.70 but kept its "neutral" call, citing weak earnings in its utilities division and lack of positive catalysts.

SembCorp Industries posted a 42 percent rise in fourth-quarter profit on demand for utilities and rig building, and said it was eyeing acquisitions for growth.

Oversea-Chinese Banking said it has withdrawn its offer for commodities and property firm Straits Trading

MapleTree Logistics Trust said it has agreed to buy a warehouse for S$26.5 million ($19 million).

Swiber Holdings said its fourth-quarter net profit jumped more than five times to $20.2 million.

Source: Reuters