DBS Equity Research: Wired Daily 29 Mar 2016

kiasutrader

Publish date: Tue, 29 Mar 2016, 10:06 AM

Possible 4th telco entry - Consistel versus MyRepublic

Consistel has announced that it wants to build 4.5G network at capex of US$1bn and has roped in OCBC bank as its financial advisor. We see return on investment (ROI) of less than 10% for Consistel versus possible 25% ROI for MyRepublic. Consistel also lacks deploying heterogeneous network which is a key focus area for Smart Nation project. We believe that MyRepublic has much better chances than Consistel of entering as 4th telco if at all.

Mermaid Maritimeannounced that its Qatari business unit has been awarded an additional subsea cable installation and related diving services assignment from an existing customer, a global cable manufacturing, installation and commissioning company. The work scope has an estimated value of US$10m and is scheduled for completion within 3 months. Commencement date will be in April 2016.

Innopac Holdingshas entered into a Memorandum of Understanding (MOU) with Rubic Prize to reduce the acquisition consideration of the 81.8% stake in Extera. Innopac had in December 2013 acquired a 81.8% equity interest in Extera from Rubic for a total consideration of S$17.1m, which was settled with S$7.2m in cash and the issuance of 300m new shares at an issue price of S$0.033.

Extera's only asset was its 90% equity interest in a Chinese joint-venture company engage in the CNG business. At the time of the acquisition, Extera's net identifiable assets was S$3.4m and a goodwill of S$13.7m was recognised. The JV has ceased its CNG business in 2015 and Innopac had fully impaired the S$13.7m goodwill in FY 2015. The MOU proposes and contemplates that Rubic will adjust and reduce the consideration by:

1) transferring its 18.2% equity interest in Extera to Innopac; and

2) returning the consideration shares to Innopac.

Terratech Groupproposes to place up to 74m new shares at S$0.0405 per share. The placement price represents a discount of approximately 9.8% to the last volume weighted average price. The gross proceed of S$2.997m will be used to explore investments, acquisitions, strategic alliance and/or joint ventures and for general working capital purposes.

Nordic Group has recently clinched several contracts with a total value of approximately S$36.5m. The contracts are secured with repeated customers - comprising of multinational companies (MNCs) and oil majors in marine, oil & gas and petrochemical industries.

Secura Group has entered into an MOU to acquire two providers of cyber security solutions services. Secura believes that it will be able to achieve synergies within the Group from the proposed acquisition.

In property news, Amara Holdings is understood to have picked up a freehold bungalow at 31 Newton Road for S$18.8m or S$1,256 per square foot on land area of 14,966 sq ft. The group owns another property, 29 Newton Road, which also has a freehold bungalow on site; its land area is 15,332 sq ft. Amara could amalgamate the two sites for a larger plot of 30,298 sq ft. Assuming a 1.4 plot ratio, the combined site could be redeveloped into an apartment project of 42,417 sq ft - large enough for a project of about 55 units assuming an average unit size of about 753 sq ft.

Source: DBS

Mermaid Maritime (DU4)Nordic (MR7)Secura (43B)Amara (A34)

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