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Simons Trading Research

Author: simonsg   |   Latest post: Wed, 17 Aug 2022, 10:12 AM

 

Uni Asia Group - Full Steam Ahead; Finding Strength in Diversity

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  • Uni-Asia Group is an alternative investment company that focuses on two key businesses, namely Shipping and Property. The Group specialises in creating growth opportunities and providing integrated services relating to such alternative investments.
  • By having a diversified portfolio of counter cyclical asset holdings, Uni-Asia Group is less susceptible to the downside risk of a particular segment and more resilient in the long run.

Uni-Asia Group - Background

  • Listed on the SGX-mainboard in Aug 2007, Uni-Asia Group (SGX:CHJ) is an alternative investment company specialising in creating alternative investment opportunities. Given its extensive know-how and network, the Group’s alternative investment targets are mainly in cargo ships and properties.
  • To improve investment returns, Uni-Asia Group also provides integrated services for the invested assets, including acting as operator for commercial maritime vessels and invested real estate, which comprises commercial and residential properties.
  • Uni-Asia Group’s maritime investment assets are primarily wholly-owned ships contributing recurring charter income and operating cashflows. On the other hand, property investment assets are primarily developed and sold for capital returns and investing/operating cashflows. Property investment assets are continually being recycled.
  • These two asset classes highly complement each other and help to achieve sustainable recurring income and cashflows. This enables Uni-Asia Group to gradually reduce its borrowings over the years as part of the Group’s deleveraging strategy.

Beneficiary of Dry Bulk Rally

  • Charter income surged 46% y-o-y to its 10 wholly-owned dry bulk carriers are progressively due for renewal in 2H21-1H22.

On Track for V-shape Recovery

  • Without the drag from deals and new business opportunities such as property projects in Japan to further expand its income stream.

Still Trading at Below Book Value

  • Based on consensus estimates, Uni-Asia Group is expected to post net at ~5x FY22E P/E and 0.64x P/B with dividend yield of 3% (including interim dividend of S$0.02).
  • Key risk includes correction in dry bulk freight market amid concerns on supply/demand imbalance and China’s economic slowdown.

Source: Maybank Kim Eng Research - 1 Nov 2021

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Labels: Uni-Asia Grp

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Chart Stock Name Last Change Volume 
Uni-Asia Grp 1.11 0.00 (0.00%) 67,700 

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