Towards Financial Freedom
DBSV S'pore Wired Daily 29 November 2013
Today's Focus
Nam Cheong - Potential early beneficiary of renewed strength in OSV market. Maintain BUY with TP revised
up to S$0.42
Nam Cheong is a potential early beneficiary of renewed strength in offshore support vessel (OSV) market. Earnings execution is above estimates YTD in FY13; FY13/14 EPS estimates revised up by 6-8%. We are expecting healthy 2-year earnings CAGR of 22%, with further upside if FY15 built-to-stock programme is bigger than expected. Maintain BUY with TP revised up to S$0.42 (Prev S$ 0.36) as we roll over valuations to FY14 earnings. Nam Cheong remains one of our top picks in the O&M sector.
Centurion announced that it is the successful bidder for the RMIT Village and an adjoining car park building in Melbourne, Australia, for a total purchase consideration of A$60m. RMIT Village is located on the northern edge of Melbourne's Central Business District, also close to RMIT University and the University of Melbourne. This is a 4,000 sqm freehold land parcel comprising 229 apartments with a current capacity of approximately 456 beds. As this student accommodation facility is affiliated to RMIT University, this property benefits from the university's reservations for its students at the start of each academic year. Typically, RMIT University reservations account for 70% of the total occupied beds annually. For the past three years, occupancy at RMIT Village has been close to 100%. This acquisition is in line with Centurion's diversification strategy and expected to be earnings accretive
upon completion in early 2014. The proposed acquisition will be funded through proceeds from S$50m MTN issued on 10 Oct 2013 and bank borrowings.
Swissco Holdings has secured charter contracts worth an aggregate of S$27.0m for its new vessels. The contracts secured are for a minimum 12-months charter contract for new 60-meters AHTS to be deployed in the Middle East and 27-months charter contract for another new 60-meters AHTS to be deployed in North East Australia. This reiterates healthy demand for offshore support vessels. The Group continues to focus on vessel expansion and fleet renewal program.
Oxley Holdings said its wholly owned subsidiary, Oxley Ruby Sdn Bhd, will develop a 15.28-acre freehold land in Malaysia's state of Selangor. Oxley Ruby was granted the rights to develop the land after it inked a joint venture agreement with the landowner, Peninsular Teamwork Sdn Bhd. The agreement provides for Oxley Ruby to have sole and absolute discretion to develop the land in any manner it deems appropriate, and at
its own cost.
Pteris Global released more details of its reverse takeover (RTO) by passenger boarding bridge manufacturer Tianda Group. It will acquire the remaining 30% of Tianda from Shenzhen TGM, the management company of Tianda, for $41.3m, or RMB208.4m. This is in addition to the 70% of Tianda to be acquired from China International Marine Containers (Hong Kong) for $96.3m, announced in July after a conditional sales-and-purchase agreement was made. Like its purchase of the previous stake in Tianda, Pteris will issue new shares to satisfy the deal, after the proposed consolidation of five shares, at 13 cents each, into one. Post-consolidation,
shares will be issued at 65 cents apiece.
China Aviation Oil, the largest physical jet fuel trader in the Asia Pacific region, has expanded its operations in Europe with the establishment of a wholly owned subsidiary, China Aviation Oil (Europe) Limited (CAO Europe), in the United Kingdom. The expansion into new market broadens aviation marketing opportunities and creates synergies for enhanced trading activities.
Singapore's home prices fell at a faster pace in October, dropping 1.2% from the previous month as evidence builds that the government's efforts to cool the property market are working. The Singapore Residential Price Index fell to 159.1 points last month after declining a revised 0.9% in September. The measure tracking prices in the central region decreased 1.4% in October. Meanwhile, URA data earlier this month showed Singapore's home sales fell 19% m-o-m and 48% yo- y in October to 1,009 units.
Despite the slowdown in new private home sales, demand for land remains strong, with two adjacent plots at Upper Serangoon View garnering eight bids each. The top bid for both sites was put up by Kingsford Development, at $522.43 psf ppr, which translates into $258.8m for Parcel A and $201.6m for Parcel B. Parcel A has a land area of 165,125 sq ft and is located next to Rio Vista condo, while Plot B has a land area of 128,644 sq ft. Kingsford Development beat the second highest bids for Parcel A and Parcel B by 16% and 12.7% respectively.
Li Ka-shing said his companies have slowed land purchases in Hong Kong and China as prices have escalated to a high level. "Land prices in Hong Kong are high, and already showing signs of an unhealthy situation," Li said, according to a statement from Cheung Kong Holdings Ltd. Li added that "Land prices in China have surged, and we're unable to win auctions for land." His comments underline concerns that governments in China and in the city are struggling to tame an asset bubble fuelled by cheap credit.
Source: DBSV
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