SMRT - Bumps ahead
SMRT says the operating environment is expected to be difficult for the next 12 months. It thinks its taxi operations will remain challenging. Also, its bus operations are expected to sustain operating losses for FY2009 because of high diesel prices, and being affected would be affected by the government implementing the more stringent quality of service standards.
But for the next quarter, the transport operator says it expects higher revenue from its train and bus operations as compared to Q2 due mainly to ridership growth.
It also expects to complete the acquisition of a 49% stake in Shenzhen Zona Transportation Group Co. Ltd by Q4 2009.
It declared an interim dividend of 1.75 cents.
Q2 revenue rose 15% to S$227 mln as more people took SMRT trains and buses, it received higher rental and advertising revenue, and it sold more diesel to taxi hirers.
Net profit rose 8% to S$42.6 mln due mainly to higher operating profits partially offset by higher income tax expenses.
It generated S$20.7 mln in cash from operations compared to the S$22.1 mln the previous year.
Analysts surveyed by Reuters have on average an OUTPERFORM call on the stock with a price target of S$2.00, compared to its last traded price of S$1.54.
~ Jin San’s take ~
SMRT says it is expected to finish acquiring 49% of Shenzhen Zona Transportation Group Co. Ltd by Q4 2009. This could be an important event in SMRT’s history. SMRT says Shenzhen Zona is profitable and has high growth potential.
Like the other SGX-listed company, Midas Holdings, which is supplying the demand from China’s infrastructure sector, SMRT can hedge against its exposure to the Singapore transportation market by doing well in China.
After all, Singapore is too small and competitive.
As always, please see your licensed financial advisor before making any investment decisions.
But for the next quarter, the transport operator says it expects higher revenue from its train and bus operations as compared to Q2 due mainly to ridership growth.
It also expects to complete the acquisition of a 49% stake in Shenzhen Zona Transportation Group Co. Ltd by Q4 2009.
It declared an interim dividend of 1.75 cents.
Q2 revenue rose 15% to S$227 mln as more people took SMRT trains and buses, it received higher rental and advertising revenue, and it sold more diesel to taxi hirers.
Net profit rose 8% to S$42.6 mln due mainly to higher operating profits partially offset by higher income tax expenses.
It generated S$20.7 mln in cash from operations compared to the S$22.1 mln the previous year.
Analysts surveyed by Reuters have on average an OUTPERFORM call on the stock with a price target of S$2.00, compared to its last traded price of S$1.54.
~ Jin San’s take ~
SMRT says it is expected to finish acquiring 49% of Shenzhen Zona Transportation Group Co. Ltd by Q4 2009. This could be an important event in SMRT’s history. SMRT says Shenzhen Zona is profitable and has high growth potential.
Like the other SGX-listed company, Midas Holdings, which is supplying the demand from China’s infrastructure sector, SMRT can hedge against its exposure to the Singapore transportation market by doing well in China.
After all, Singapore is too small and competitive.
As always, please see your licensed financial advisor before making any investment decisions.
Qian Hu - negative free cash flow?
Qian Hu released its Q3 2008 results today.
It expects its revenue and profit to continue to increase in Q4 2008. The increased revenue should come from its ornamental fish operations, improvement in its accessories export business, coupled with the positive contributions from its overseas operations in Malaysia, Thailand and China.
Q3 revenue rose 4% to S$23.6 mln as sales of its ornamental fish increased and it exported more accessories. Its plastics business also registered an increase in revenue, although the increase in the price of raw materials eroded its profit margin. Its net profit went up 21% to S$1.5 mln.
It generated S$3.2 mln in cash from operations compared to the S$2.8 mln it gained the previous year.
Analysts surveyed by Reuters have on average a HOLD call on the stock with a price target of S$0.13, compared to its last traded price of S$0.10.
~ Jin San’s take ~
Qian Hu is ranked number 1 on the Business Times Corporate Transparency Index, and with good reason - its reports are usually detailed and give explanations for its actions. But starting in FY2007, its free cash flow turned negative and this trend is apparent in its Q3 report as well.
According to its cash flow statement, it gained S$2.23 in cash from operations, but it spent S$1.1 mln on property, plant and equipment, and another S$1.8 mln on brooder stocks. Put together, the capital expenditure comes up to S$2.9 mln, more than what its cash from operations can cover.
Although this is more a sign of a company with ambition that believes in investing in itself, and the margin is not that wide, investors might want to take note of this.
As always, please see your licensed financial advisor before making any investment decisions.
It expects its revenue and profit to continue to increase in Q4 2008. The increased revenue should come from its ornamental fish operations, improvement in its accessories export business, coupled with the positive contributions from its overseas operations in Malaysia, Thailand and China.
Q3 revenue rose 4% to S$23.6 mln as sales of its ornamental fish increased and it exported more accessories. Its plastics business also registered an increase in revenue, although the increase in the price of raw materials eroded its profit margin. Its net profit went up 21% to S$1.5 mln.
It generated S$3.2 mln in cash from operations compared to the S$2.8 mln it gained the previous year.
Analysts surveyed by Reuters have on average a HOLD call on the stock with a price target of S$0.13, compared to its last traded price of S$0.10.
~ Jin San’s take ~
Qian Hu is ranked number 1 on the Business Times Corporate Transparency Index, and with good reason - its reports are usually detailed and give explanations for its actions. But starting in FY2007, its free cash flow turned negative and this trend is apparent in its Q3 report as well.
According to its cash flow statement, it gained S$2.23 in cash from operations, but it spent S$1.1 mln on property, plant and equipment, and another S$1.8 mln on brooder stocks. Put together, the capital expenditure comes up to S$2.9 mln, more than what its cash from operations can cover.
Although this is more a sign of a company with ambition that believes in investing in itself, and the margin is not that wide, investors might want to take note of this.
As always, please see your licensed financial advisor before making any investment decisions.
BH Global Marine - to be undone by the BDI?
BH Global Marine says it is cautiously optimistic of its business prospects in the current year and expects the demand for its products and services to remain stable. It also expects consolidation within the industry as credit tightening by banks will adversely affect the smaller competitors.
Q3 turnover went down 6% to S$22.7 mln as it sold less marine electrical equipment. But Q3 2007 in comparison was an exceptional quarter as BH Global Marine pushed forward some projects from Q4 2007.
Its overall gross profit margin increased from 38% in Q3 2007 to 41% in Q3 2008. This was mainly due to the weaker US dollar in Q3 2008. Net profit rose 3% to S$5.1 mln.
It generated S$6.7 mln in cash from operations compared to the S$5.3 mln it burnt the previous year. It could have been higher if not for the rise in inventory costs to S$3.2 mln from S$1.8 mln the previous year.
This stock is not covered by Reuters. It was last traded at S$0.16.
~ Jin San’s take ~
Although BH Global Marine says it expects demand for its products to continue, the global downturn is taking its toll on the shipping industry. The Baltic Dry Index plunged 10.7% cent on the day, to 1,615 pts on 15 October, its lowest level since February 2003. With the slowdown in shipping activity, we wonder if BH Global Marine will still see a constant level of demand for its products.
As always, please see your licensed financial advisor before making any investment decisions.
Q3 turnover went down 6% to S$22.7 mln as it sold less marine electrical equipment. But Q3 2007 in comparison was an exceptional quarter as BH Global Marine pushed forward some projects from Q4 2007.
Its overall gross profit margin increased from 38% in Q3 2007 to 41% in Q3 2008. This was mainly due to the weaker US dollar in Q3 2008. Net profit rose 3% to S$5.1 mln.
It generated S$6.7 mln in cash from operations compared to the S$5.3 mln it burnt the previous year. It could have been higher if not for the rise in inventory costs to S$3.2 mln from S$1.8 mln the previous year.
This stock is not covered by Reuters. It was last traded at S$0.16.
~ Jin San’s take ~
Although BH Global Marine says it expects demand for its products to continue, the global downturn is taking its toll on the shipping industry. The Baltic Dry Index plunged 10.7% cent on the day, to 1,615 pts on 15 October, its lowest level since February 2003. With the slowdown in shipping activity, we wonder if BH Global Marine will still see a constant level of demand for its products.
As always, please see your licensed financial advisor before making any investment decisions.
SGX - Signs MOU with Bahrain Stock Exchange
SGX has signed an MOU with Bahrain Stock Exchange to foster a closer relationship and develop channels of information exchange between the two markets.
The Bahrain Stock Exchange officially started operating in June 1989. Its financial instruments listed include ordinary and preferred shares, bonds/Islamic Sukuk, and mutual funds. The exchange is regulated by The Central Bank of Bahrain.
There are 52 companies listed on the exchange, 42 mutual funds, and 14 bonds/Islamic Sukuk traded on the exchange. Its market cap is about US$30 bln.
The exchange’s trading session is from 9.30 a.m. to 12:30 noon, including a pre-opening period of 15 minutes starting from 9:15 a.m. Clearing and settlement of transactions is made within two working days (T+2).
Analysts surveyed by Reuters have on average a HOLD call on the stock with a price target of S$7.55, compared to its last traded price of S$5.85.
~ Jin San’s take ~
From setting up a representative office in Beijing to holding a roadshow in Europe, SGX has been very keen to attract more foreign listings in Singapore. This MOU with the Bahrain Stock Exchange can be seen as a stepping stone to SGX’s exposure to investors and companies in a region that is less affected by the global financial crisis.
According to Kuwait’s Global Investment House, the Bahrain Stock Exchange still offers the best value in the Gulf Cooperation Council (GCC). Despite the global financial crisis causing a decline in the gulf markets, Global said Bahrain’s economy has been posting healthy double digit growth rates in the past five years.
But in Singapore, where we’re currently in a recession, SGX cannot escape the extremely bearish market. And with its stock priced at S$5.85 (it was trading above S$15 this time last year), it is set to tumble further. Its current P/E of 13 is still a bit expensive for a value investor. Well, till the next bull run, then.
As always, please see your licensed financial advisor before making any investment decisions.
The Bahrain Stock Exchange officially started operating in June 1989. Its financial instruments listed include ordinary and preferred shares, bonds/Islamic Sukuk, and mutual funds. The exchange is regulated by The Central Bank of Bahrain.
There are 52 companies listed on the exchange, 42 mutual funds, and 14 bonds/Islamic Sukuk traded on the exchange. Its market cap is about US$30 bln.
The exchange’s trading session is from 9.30 a.m. to 12:30 noon, including a pre-opening period of 15 minutes starting from 9:15 a.m. Clearing and settlement of transactions is made within two working days (T+2).
Analysts surveyed by Reuters have on average a HOLD call on the stock with a price target of S$7.55, compared to its last traded price of S$5.85.
~ Jin San’s take ~
From setting up a representative office in Beijing to holding a roadshow in Europe, SGX has been very keen to attract more foreign listings in Singapore. This MOU with the Bahrain Stock Exchange can be seen as a stepping stone to SGX’s exposure to investors and companies in a region that is less affected by the global financial crisis.
According to Kuwait’s Global Investment House, the Bahrain Stock Exchange still offers the best value in the Gulf Cooperation Council (GCC). Despite the global financial crisis causing a decline in the gulf markets, Global said Bahrain’s economy has been posting healthy double digit growth rates in the past five years.
But in Singapore, where we’re currently in a recession, SGX cannot escape the extremely bearish market. And with its stock priced at S$5.85 (it was trading above S$15 this time last year), it is set to tumble further. Its current P/E of 13 is still a bit expensive for a value investor. Well, till the next bull run, then.
As always, please see your licensed financial advisor before making any investment decisions.
Nearly-bankrupt FerroChina appoints financial advisors
FerroChina has appointed Ernst & Young Solutions LLP as its financial adviser to its restructuring.
The steel-maker said yesterday it was unable to pay RMB 706 mln in working capital and loans due to the economic crisis. It has also temporarily stopped its manufacturing activities and suspended its shares from trading.
Analysts surveyed by Reuters have on average a HOLD call on the stock with a price target of RMB 4.06, compared to its last traded price of S$0.55.
~ Jin San’s take ~
Analysts have predictably downgraded FerroChina’s stock. OCBC Investment Research has suspended coverage on FerroChina and DBS-Vickers has a SELL call at a price target of S$0.545.
There is little investors can do – they cannot sell their stocks as trading has been suspended. They can only hope that management’s talks with lenders and potential investors turn out well.
As always, please see your licensed financial advisor before making any investment decisions.
The steel-maker said yesterday it was unable to pay RMB 706 mln in working capital and loans due to the economic crisis. It has also temporarily stopped its manufacturing activities and suspended its shares from trading.
Analysts surveyed by Reuters have on average a HOLD call on the stock with a price target of RMB 4.06, compared to its last traded price of S$0.55.
~ Jin San’s take ~
Analysts have predictably downgraded FerroChina’s stock. OCBC Investment Research has suspended coverage on FerroChina and DBS-Vickers has a SELL call at a price target of S$0.545.
There is little investors can do – they cannot sell their stocks as trading has been suspended. They can only hope that management’s talks with lenders and potential investors turn out well.
As always, please see your licensed financial advisor before making any investment decisions.
Thakral - Kartar Singh opposes removal as director
Kartar Singh, chairman of Thakral, has written a letter to shareholders to oppose the resolution by the two Hong Leong subsidiaries to remove him as director of Thakral Corp.
Venture Delta Ltd and Grace Star, the two subsidiaries of Hong Leong Asia, claim they are concerned about the age of Kartar Singh as he is 74 years old and whether he is able to continue with his role as executive director and chairman. According to Section 153 of the Companies Act, the retirement age for company directors is 70.
Kartar Singh replied in a letter to shareholders that he is able to continue on. He points to his experience of having been through many boom and bust cycles.
Singh believes the group’s consumer electronics business can be profitable again, but the return on capital from the distribution business alone is not sufficient and may not be justifiable.
He believes there are new opportunities in Pan Asian property – the majority of the board had voted to change Thakral’s core business in May. He ended his letter by assuring the shareholders that he has the energy, drive and will to continue as director and chairman of Thakral.
Thakral’s Extraordinary General Meeting will be held on 15 October and shareholders will decide whether Kartar Singh Thakral will stay on the board.
This stock is not covered by Reuters. It was last traded at S$0.04.
~ Jin San’s take ~
Hong Leong had attempted a takeover of Thakral in 2006, but it fell through. With this attempt to remove Kartar Singh from the board, it is most likely seeking to appoint an insider, or a few insiders, in Thakral’s board to speed up the turnaround of the ailing business.
In the event Singh leaves, it is not certain whether the other two members of the Thakral family will stay on as well.
On Hong Leong’s end, its company culture is not very predisposed to revealing its intentions clearly. We are looking to 15 October to provide an ending to this rather dramatic event.
As always, please see your licensed financial advisor before making any investment decisions.
ArchivesVenture Delta Ltd and Grace Star, the two subsidiaries of Hong Leong Asia, claim they are concerned about the age of Kartar Singh as he is 74 years old and whether he is able to continue with his role as executive director and chairman. According to Section 153 of the Companies Act, the retirement age for company directors is 70.
Kartar Singh replied in a letter to shareholders that he is able to continue on. He points to his experience of having been through many boom and bust cycles.
Singh believes the group’s consumer electronics business can be profitable again, but the return on capital from the distribution business alone is not sufficient and may not be justifiable.
He believes there are new opportunities in Pan Asian property – the majority of the board had voted to change Thakral’s core business in May. He ended his letter by assuring the shareholders that he has the energy, drive and will to continue as director and chairman of Thakral.
Thakral’s Extraordinary General Meeting will be held on 15 October and shareholders will decide whether Kartar Singh Thakral will stay on the board.
This stock is not covered by Reuters. It was last traded at S$0.04.
~ Jin San’s take ~
Hong Leong had attempted a takeover of Thakral in 2006, but it fell through. With this attempt to remove Kartar Singh from the board, it is most likely seeking to appoint an insider, or a few insiders, in Thakral’s board to speed up the turnaround of the ailing business.
In the event Singh leaves, it is not certain whether the other two members of the Thakral family will stay on as well.
On Hong Leong’s end, its company culture is not very predisposed to revealing its intentions clearly. We are looking to 15 October to provide an ending to this rather dramatic event.
As always, please see your licensed financial advisor before making any investment decisions.
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