STI 3,284.99
55.94 SGX MSCI FUTURES 368.30
SGD/USD 1.3544
0.0010
RM/SGD 2.8066
5.4 HANG SENG 23,516.56
0.0034
1,458.75 KLCI 1,695.83
SGD/AUD 1.0056
0.0028
16.47 NIKKEI 19,737.64
SGD/£ 2.0794
0.0128
638.95 SHANGHAI 3,507.19
OIL US$ 57.23
219.93 ALLORD 5,469.53 111.89
0.38
GOLD US$ 1,153.80
1.20
T HU R SDAY JU LY 9, 2 0 1 5 | 1 87
w w w . t h e e d g e m a rke t s . c o m
Fourth telco player will eat
into M1’s and StarHub’s
revenue share: DBS Vickers
BY JEFFREY TA N SINGAPORE (July 8): Incumbent telco players M1 and StarHub may see their revenue eroded by 10% and 4% respectively, following the entry of a proposed fourth telco
player in Singapore, according to DBS Vickers Securities.
The research house maintained its “buy” call for M1,
with an unchanged price target of $3.60.
In a note today, DBS Vickers analyst Sachin Mittal
wrote that “negatives are priced in for M1” already and he
favoured the stock for its 6.1% yield.
Meanwhile, he said, the new telco player may prove
“too optimistic” in aiming to gain a 7% revenue share by
Singapore shares end in losses amid
rout in Asian markets
SINGAPORE (July 8): Singapore shares sank into the red,
as mainland Chinese and Hong Kong markets led a rout
among Asian bourses.
A trading suspension among several of China’s listed
companies failed to stem losses, as investors disposed
of their shareholdings in other companies that continued trading. Meanwhile, adding to market woes was
the prospect of Greece’s exit from the eurozone after
European leaders set a Sunday deadline for it to accept
a rescue package.
The Straits Times Index slumped 1.67% to 3,284.99.
Some 1.82 billion shares worth $1.61 billion changed
hands, compared with 1.19 billion shares worth $989
million yesterday.
Market breadth was negative, with 426 decliners compared with 73 gainers.
Singapore Telecommunications, DBS Group Holdings, Global Logistic Properties, CapitaLand and Ove
Properties, CapitaLand and Oversea-Chinese Bankin
Banking Co
Corp were among the most active
stocks in the market in terms of value traded.
Among top decliners, QT Vascular plummeted 36.3%
to 11.6 cents. The company, which provides solutions for
the minimally invasive treatment of complex vascular
diseases, intends to appeal the US federal district court’s
decision to award damages of US$20.03 million ($27.12
million) to AngioScore, Inc and order CEO Dr Eitan Konstantino to disgorge the benefits he had received arising
from an alleged breach of fiduciary duty.
Asiatic Group (Holdings) plunged 11.5% to 2.3 cents.
The external auditors for the company, which provides engineering management services, have cast
“significant doubt” on the group’s ability to continue
as a going concern, highlighting its “negative working
capital position”.
Yoma Strategic Holdings slipped 2.3% to 42.5 cents.
2022. He cited past examples of other telco players —
Malaysia’s U Mobile and France’s Illiad.
U Mobile has captured only 6% to 7% revenue share
after six years, while Illiad achieved 15% subscriber share
in three years, largely owing to mandated roaming, which
allows it to invest in the most profitable areas only.
Furthermore, he said, Singapore is a post-paid-dominated market with upfront handset subsidies, multi-product bundling and two-year contracts.
He added that existing telco players may have two years
to adjust their offerings and cost structure.
M1 gained 1.24% to close at $3.26 today, while StarHub ended flat at $3.98.
The Myanmar-focused diversified business group announced that its wholly-owned subsidiary, Yoma Strategic Investments, together with LCT Investment Holdings and First Myanmar Investment Co, had mutually
terminated a joint-venture agreement in relation to the
building and operation of a steel mesh product manufacturing plant in Yangon. The group guided that this
is not expected to have a material impact on its profit
and net tangible assets per share for the financial year
ending March 31, 2016.
Bucking the market weakness, Singapore Post rose
0.8% to $1.905. The mail, logistics and ecommerce solutions provider and Alibaba Group have announced three
initiatives to strengthen cooperation and build a leading
e-commerce logistics platform to service Asia-Pacific
Asia-Pacifi
fic and
beyond. Alibaba Group will also purchase 107.6 million
new ordinary shares amounting to 5% of the existing share
capital of SingPost for $187.1 million. — By Ben
Benny T
Tan
E
Ezra
JV signs six-year agreement with
Saudi Aramco for offshore projects
SGX Market movers
Daily top 20 active stocks
LIFEBRANDZ
EZRA R
SIIC ENVIRONMENT
QT VASCULAR
GOLDEN AGRI-RES
NOBLE
WE
APAC STRATEGIC
GENTING SING
YUUZOO
IHC
SINGTEL
DIGILAND INTL
GLOBAL LOGISTIC
DEBAO PROPERTY
EZRA
JIUTIAN CHEMICAL
NOL
LERENO BIO-CHEM
HPH TRUST USD
TURNOVER
(‘000)
CHANGE
(S$)
CHANGE
(%)
CLOSING
(S$)
HIGH
(S$)
LOW
(S$)
85,780
74,211
67,421
63,500
54,641
48,579
47,220
41,921
38,621
37,782
37,071
36,391
34,430
32,470
29,688
25,693
25,129
24,482
24,143
23,529
-0.002
-0.012
-0.008
-0.066
-0.010
-0.020
-0.001
0.001
-0.025
-0.025
UNCH
0.010
-0.001
-0.030
-0.006
-0.007
-0.004
-0.005
UNCH
-0.015
-25.00
-20.00
-4.91
-36.26
-2.50
-2.80
-20.00
2.78
-2.76
-10.00
UNCH
0.23
-50.00
-1.20
-8.11
-4.27
-8.16
-0.54
UNCH
-2.34
0.006
0.048
0.155
0.116
0.390
0.695
0.004
0.037
0.880
0.225
0.300
4.330
0.001
2.480
0.068
0.157
0.045
0.925
0.003
0.625
0.009
0.060
0.165
0.138
0.405
0.730
0.005
0.038
0.905
0.255
0.305
4.380
0.002
2.510
0.076
0.165
0.050
0.940
0.004
0.640
0.006
0.045
0.154
0.113
0.385
0.690
0.004
0.034
0.875
0.220
0.300
4.310
0.001
2.440
0.065
0.156
0.043
0.890
0.003
0.615
Top gainers and losers (ranked by S$)
UP
HYFLUX 6% CPS
JARDINE C&C
JARDINE C&C R1
SINGTEL 10
JARDINE C&C R
HAW PAR
TA
PTERISGLOBAL
SAKAE
UIC
M1
SILVERLAKE AXIS
ACMA
REGAL INTL
SP CORP
SINGINDEXFUND
COURTS ASIA
YONGNAM HLDG 1
MONEYMAX FIN
KOYO INTL
CLOSE
(S$)
CHANGE
(S$)
106.750
30.050
3.710
4.360
3.800
8.900
0.290
0.595
0.550
3.370
3.260
0.915
0.680
0.320
0.990
2.170
0.405
0.410
0.255
0.325
0.200
0.170
0.130
0.050
0.050
0.040
0.040
0.040
0.040
0.040
0.040
0.035
0.030
0.025
0.025
0.020
0.020
0.015
0.015
0.015
DOWN
DBXT CHINA50 US$
JMH USD
DBXT MSASEXJP US$
GLD US$
DBXT MSCHINA US$
JSH USD
DBXT VIETNAM US$
LYXOR CHINAH US$
DBXT CSI300 US$
LYXOR EUROPE US$
PRUDENTIAL USD
UOB
SHANGRI-LA HKD
HONGKONGLAND USD
DBXT STGLDV US$
DBS
DBXT S&PSHORT US$
FORTUNE REIT HKD
LYXOR KOREA US$
$
GREAT EASTERN
UP
CLOSE
(S$)
DOWN
CHANGE
(%)
CSC
EQUATION
TA
PAN ASIAN
ZIWO
SAMKO TIMBER
REGAL INTL
SAKAE
PNE MICRON
PTERISGLOBAL
MONEYMAX FIN
XPRESS
ORIENTAL
COURTS ASIA
SUNMOONFOOD
KOYO INTL
ACMA
AP OIL
MARCOPOLO MARINE
SILVERLAKE AXIS
0.043
0.007
0.290
0.090
0.047
0.120
0.320
0.550
0.043
0.595
0.255
0.020
0.100
0.405
0.042
0.325
0.680
0.240
0.245
0.915
22.86
16.67
16.00
15.39
11.91
9.09
8.48
7.84
7.50
7.21
6.25
5.26
5.26
5.20
5.00
4.84
4.62
4.35
4.26
3.98
DIGILAND INTL
LH
JADASON
ISR CAPITAL
QT VASCULAR
EUROPTRONIC
HENGXIN TECH
LIFEBRANDZ
TPV TECH
BLUESKYPOWER
COURAGE MARINE
AEM
WE
M DEVELOPMENT
EZRA R
P99
EZRA R1
MENCAST
C&G ENV PROTECT
MDR
Singapore’s highly regarded
business & investment
weekly since 2002
Digital replica available on:
http://subscribe.theedgesingapore.com
CHANGE
(S$)
31.240
53.100
34.080
110.480
13.160
30.550
26.460
15.560
10.000
13.890
23.350
22.930
10.100
7.700
30.290
20.650
21.610
7.460
4.690
23.960
-3.250
-2.350
-1.920
-1.400
-0.950
-0.900
-0.900
-0.840
-0.750
-0.470
-0.450
-0.450
-0.400
-0.380
-0.340
-0.330
-0.280
-0.280
-0.280
0.280
-0.270
0.270
T gainers
Top
i
and
d llosers (ranked by percentage)
by
u
o
y
o
t
t
h
g
u
o
r
b
s
i
y
p
o
c
l
a
t
This digi
SINGAPORE (July 8): Ezra Holdings announced that its
subsea services division, EMAS AMC, had signed a sixyear agreement with state oil company Saudi Aramco,
with options to extend for another six years.
Under the agreement, EMAS AMC and Larsen & Toubro
Hydrocarbon Engineering will execute offshore projects
with Saudi Aramco that include project management, engineering, procurement, fabrication, transportation and
installation works of offshore facilities such as platforms,
pipelines and submarine cables.
“This long-term agreement is the embodiment of our
working relationship with LTHE and Saudi Aramco, and
is aligned with our subsea strategy of focusing our capabilities and expertise where tendering activities remain
robust,” said Lionel Lee, Ezra’s group CEO and MD.
Ezra closed 4.3% lower at 15.7 cents today. — By P C Lee
CLOSE
(S$)
CLOSE
(S$)
CHANGE
(%)
0.001
0.002
0.016
0.014
0.116
0.010
0.305
0.006
0.215
0.059
0.605
0.350
0.004
0.004
0.048
0.080
0.047
0.295
0.177
0.005
-50.00
-50.00
-42.86
-41.67
-36.26
-28.57
-27.38
-25.00
-24.56
-23.38
-22.44
-22.22
-20.00
-20.00
-20.00
-20.00
-18.97
-18.06
-17.67
-16.67
STI 3,284.99
55.94 SGX MSCI FUTURES 368.30
SGD/USD 1.3544
0.0010
RM/SGD 2.8066
5.4 HANG SENG 23,516.56
0.0034
1,458.75 KLCI 1,695.83
SGD/AUD 1.0056
0.0028
16.47 NIKKEI 19,737.64
SGD/£ 2.0794
0.0128
638.95 SHANGHAI 3,507.19
OIL US$ 57.23
0.38
219.93 ALLORD 5,469.53 111.89
GOLD US$ 1,153.80
1.20
T HU R SDAY JU LY 9, 2 0 1 5 | 1 87
w w w . t h e e d g e m a rke t s . c o m
Fourth telco player will eat
into M1’s and StarHub’s
revenue share: DBS Vickers
BY JEFFREY TA N SINGAPORE (July 8): Incumbent telco players M1 and StarHub may see their revenue eroded by 10% and 4% respectively, following the entry of a proposed fourth telco
player in Singapore, according to DBS Vickers Securities.
The research house maintained its “buy” call for M1,
with an unchanged price target of $3.60.
In a note today, DBS Vickers analyst Sachin Mittal
wrote that “negatives are priced in for M1” already and he
favoured the stock for its 6.1% yield.
Meanwhile, he said, the new telco player may prove
“too optimistic” in aiming to gain a 7% revenue share by
Singapore shares end in losses amid
rout in Asian markets
SINGAPORE (July 8): Singapore shares sank into the red,
as mainland Chinese and Hong Kong markets led a rout
among Asian bourses.
A trading suspension among several of China’s listed
companies failed to stem losses, as investors disposed
of their shareholdings in other companies that continued trading. Meanwhile, adding to market woes was
the prospect of Greece’s exit from the eurozone after
European leaders set a Sunday deadline for it to accept
a rescue package.
The Straits Times Index slumped 1.67% to 3,284.99.
Some 1.82 billion shares worth $1.61 billion changed
hands, compared with 1.19 billion shares worth $989
million yesterday.
Market breadth was negative, with 426 decliners compared with 73 gainers.
Singapore Telecommunications, DBS Group Holdings, Global Logistic Properties, CapitaLand and Oversea-Chinese Banking Corp were among the most active
stocks in the market in terms of value traded.
Among top decliners, QT Vascular plummeted 36.3%
to 11.6 cents. The company, which provides solutions for
the minimally invasive treatment of complex vascular
diseases, intends to appeal the US federal district court’s
decision to award damages of US$20.03 million ($27.12
million) to AngioScore, Inc and order CEO Dr Eitan Konstantino to disgorge the benefits he had received arising
from an alleged breach of fiduciary duty.
Asiatic Group (Holdings) plunged 11.5% to 2.3 cents.
The external auditors for the company, which provides engineering management services, have cast
“significant doubt” on the group’s ability to continue
as a going concern, highlighting its “negative working
capital position”.
Yoma Strategic Holdings slipped 2.3% to 42.5 cents.
2022. He cited past examples of other telco players —
Malaysia’s U Mobile and France’s Illiad.
U Mobile has captured only 6% to 7% revenue share
after six years, while Illiad achieved 15% subscriber share
in three years, largely owing to mandated roaming, which
allows it to invest in the most profitable areas only.
Furthermore, he said, Singapore is a post-paid-dominated market with upfront handset subsidies, multi-product bundling and two-year contracts.
He added that existing telco players may have two years
to adjust their offerings and cost structure.
M1 gained 1.24% to close at $3.26 today, while StarHub ended flat at $3.98.
The Myanmar-focused diversified business group announced that its wholly-owned subsidiary, Yoma Strategic Investments, together with LCT Investment Holdings and First Myanmar Investment Co, had mutually
terminated a joint-venture agreement in relation to the
building and operation of a steel mesh product manufacturing plant in Yangon. The group guided that this
is not expected to have a material impact on its profit
and net tangible assets per share for the financial year
ending March 31, 2016.
Bucking the market weakness, Singapore Post rose
0.8% to $1.905. The mail, logistics and ecommerce solutions provider and Alibaba Group have announced three
initiatives to strengthen cooperation and build a leading
e-commerce logistics platform to service Asia-Pacific and
beyond. Alibaba Group will also purchase 107.6 million
new ordinary shares amounting to 5% of the existing share
capital of SingPost for $187.1 million. — By Benny Tan
Ezra JV signs six-year agreement with
Saudi Aramco for offshore projects
SINGAPORE (July 8): Ezra Holdings announced that its
subsea services division, EMAS AMC, had signed a sixyear agreement with state oil company Saudi Aramco,
with options to extend for another six years.
Under the agreement, EMAS AMC and Larsen & Toubro
Hydrocarbon Engineering will execute offshore projects
with Saudi Aramco that include project management, engineering, procurement, fabrication, transportation and
installation works of offshore facilities such as platforms,
pipelines and submarine cables.
“This long-term agreement is the embodiment of our
working relationship with LTHE and Saudi Aramco, and
is aligned with our subsea strategy of focusing our capabilities and expertise where tendering activities remain
robust,” said Lionel Lee, Ezra’s group CEO and MD.
Ezra closed 4.3% lower at 15.7 cents today. — By P C Lee
SGX Market movers
Daily top 20 active stocks
LIFEBRANDZ
EZRA R
SIIC ENVIRONMENT
QT VASCULAR
GOLDEN AGRI-RES
NOBLE
WE
APAC STRATEGIC
GENTING SING
YUUZOO
IHC
SINGTEL
DIGILAND INTL
GLOBAL LOGISTIC
DEBAO PROPERTY
EZRA
JIUTIAN CHEMICAL
NOL
LERENO BIO-CHEM
HPH TRUST USD
TURNOVER
(‘000)
CHANGE
(S$)
CHANGE
(%)
CLOSING
(S$)
HIGH
(S$)
LOW
(S$)
85,780
74,211
67,421
63,500
54,641
48,579
47,220
41,921
38,621
37,782
37,071
36,391
34,430
32,470
29,688
25,693
25,129
24,482
24,143
23,529
-0.002
-0.012
-0.008
-0.066
-0.010
-0.020
-0.001
0.001
-0.025
-0.025
UNCH
0.010
-0.001
-0.030
-0.006
-0.007
-0.004
-0.005
UNCH
-0.015
-25.00
-20.00
-4.91
-36.26
-2.50
-2.80
-20.00
2.78
-2.76
-10.00
UNCH
0.23
-50.00
-1.20
-8.11
-4.27
-8.16
-0.54
UNCH
-2.34
0.006
0.048
0.155
0.116
0.390
0.695
0.004
0.037
0.880
0.225
0.300
4.330
0.001
2.480
0.068
0.157
0.045
0.925
0.003
0.625
0.009
0.060
0.165
0.138
0.405
0.730
0.005
0.038
0.905
0.255
0.305
4.380
0.002
2.510
0.076
0.165
0.050
0.940
0.004
0.640
0.006
0.045
0.154
0.113
0.385
0.690
0.004
0.034
0.875
0.220
0.300
4.310
0.001
2.440
0.065
0.156
0.043
0.890
0.003
0.615
Top gainers and losers (ranked by S$)
UP
HYFLUX 6% CPS
JARDINE C&C
JARDINE C&C R1
SINGTEL 10
JARDINE C&C R
HAW PAR
TA
PTERISGLOBAL
SAKAE
UIC
M1
SILVERLAKE AXIS
ACMA
REGAL INTL
SP CORP
SINGINDEXFUND
COURTS ASIA
YONGNAM HLDG 1
MONEYMAX FIN
KOYO INTL
CLOSE
(S$)
CHANGE
(S$)
106.750
30.050
3.710
4.360
3.800
8.900
0.290
0.595
0.550
3.370
3.260
0.915
0.680
0.320
0.990
2.170
0.405
0.410
0.255
0.325
0.200
0.170
0.130
0.050
0.050
0.040
0.040
0.040
0.040
0.040
0.040
0.035
0.030
0.025
0.025
0.020
0.020
0.015
0.015
0.015
DOWN
DBXT CHINA50 US$
JMH USD
DBXT MSASEXJP US$
GLD US$
DBXT MSCHINA US$
JSH USD
DBXT VIETNAM US$
LYXOR CHINAH US$
DBXT CSI300 US$
LYXOR EUROPE US$
PRUDENTIAL USD
UOB
SHANGRI-LA HKD
HONGKONGLAND USD
DBXT STGLDV US$
DBS
DBXT S&PSHORT US$
FORTUNE REIT HKD
LYXOR KOREA US$
GREAT EASTERN
CHANGE
(S$)
31.240
53.100
34.080
110.480
13.160
30.550
26.460
15.560
10.000
13.890
23.350
22.930
10.100
7.700
30.290
20.650
21.610
7.460
4.690
23.960
-3.250
-2.350
-1.920
-1.400
-0.950
-0.900
-0.900
-0.840
-0.750
-0.470
-0.450
-0.450
-0.400
-0.380
-0.340
-0.330
-0.280
-0.280
-0.280
-0.270
Top gainers and losers (ranked by percentage)
UP
CSC
EQUATION
TA
PAN ASIAN
ZIWO
SAMKO TIMBER
REGAL INTL
SAKAE
PNE MICRON
PTERISGLOBAL
MONEYMAX FIN
XPRESS
ORIENTAL
COURTS ASIA
SUNMOONFOOD
KOYO INTL
ACMA
AP OIL
MARCOPOLO MARINE
SILVERLAKE AXIS
CLOSE
(S$)
CHANGE
(%)
0.043
0.007
0.290
0.090
0.047
0.120
0.320
0.550
0.043
0.595
0.255
0.020
0.100
0.405
0.042
0.325
0.680
0.240
0.245
0.915
22.86
16.67
16.00
15.39
11.91
9.09
8.48
7.84
7.50
7.21
6.25
5.26
5.26
5.20
5.00
4.84
4.62
4.35
4.26
3.98
DOWN
DIGILAND INTL
LH
JADASON
ISR CAPITAL
QT VASCULAR
EUROPTRONIC
HENGXIN TECH
LIFEBRANDZ
TPV TECH
BLUESKYPOWER
COURAGE MARINE
AEM
WE
M DEVELOPMENT
EZRA R
P99
EZRA R1
MENCAST
C&G ENV PROTECT
MDR
Singapore’s highly regarded
business & investment
weekly since 2002
Digital replica available on:
http://subscribe.theedgesingapore.com
CLOSE
(S$)
CLOSE
(S$)
CHANGE
(%)
0.001
0.002
0.016
0.014
0.116
0.010
0.305
0.006
0.215
0.059
0.605
0.350
0.004
0.004
0.048
0.080
0.047
0.295
0.177
0.005
-50.00
-50.00
-42.86
-41.67
-36.26
-28.57
-27.38
-25.00
-24.56
-23.38
-22.44
-22.22
-20.00
-20.00
-20.00
-20.00
-18.97
-18.06
-17.67
-16.67
T HU R SDAY JU LY 9, 2 0 1 5 • TH EEDGE M ORN I N G B RI EF I N G
4 ST O C KS W I T H M O M E N T U M
www.theedgemarkets.com
This column is an analysis done by The Edge Singapore on the fundamentals of stocks with momentum that were picked up using proprietary algorithm by Anticipatory
Analytics Sdn Bhd and that first appeared at www.theedgemarkets.com. Please exercise your own judgment or seek professional advice for your specific investment
needs. We are not responsible for your investment decisions. Our shareholders, directors and employees may have positions in any of the stocks mentioned.
STATS CHIPPAC
STATS CHIPPAC
Shares of STATS ChipPAC were the only
highlight of activity on the Singapore Exchange during a bearish day of trading
across Asia.
The heightened activity on STATS ChipPAC centres on a general offer by JCET-SC
(Singapore), a consortium of China-based
investors, to acquire all the remaining shares
held in the semiconductor services firm by
Singapore Technologies Semiconductors,
after purchasing just over 2.2 million shares
from the latter on June 26.
Singapore Technologies Semiconductors, a wholly-owned company of Temasek
Holdings, and its concert parties in Temasek,
collectively own another 1.844 billion shares
in STATS ChipPAC. Those shares account for
about 83.7% of the share capital of STATS
ChipPAC.
A dealings disclosure announcement by
the financial advisers of JCET-SC (Singapore) states that the offer price for the rest
of the shares held by Temasek will remain
at 46.577 cents each, or a discount of 8.7%
to its last traded price of 51 cents, prior to
the announcement on June 26.
STATS CHIPPAC
T HU
(ALL FIGURES IN USD MIL)
But the general offer by JCET-SC (Singapore) also contains a back-out clause if it
decides not to proceed with acquiring the
outstanding 1.844 billion shares held by
Singapore Technologies Semiconductors.
Should that happen, JCET-SC (Singapore)
can exercise a put option within 14 business
days after an announcement that its general
offer has lapsed. The put option will require
Singapore Technologies Semiconductors to
buy back the initial 2.2 million shares, known
as the “Pre-Acquisition Shares”, acquired by
JCET-SC (Singapore) on June 26. Prior to the general offer by JCET-SC (Singapore), STATS ChipPAC had proposed in
three separate announcements since last
December to implement a capital reduction
of its stake in Taiwan-based subsidiaries,
followed by a distribution of the proceeds
to its shareholders.
JCET-SC (Singapore) has clarified that
the right to receive the distribution of
about US$15 million ($20.3 million) in
cash arising from the capital reduction
will remain with Singapore Technologies
Semiconductors.
Valuation score*
0.90
0.40
Fundamental score**
TTM P/E (x)
TTM PEG (x)
0.94
P/NAV (x)
TTM Dividend yield (%)
1,134.14
Market capitalisation ($ mil)
Shares outstanding (ex-treasury) mil 2,202.22
1.02
Beta
0.42-0.75
12-month price range ($)
*Valuation score - Composite measure of historical return & valuation
**Fundamental score - Composite measure of balance sheet strength
& profitability
Note: A score of 3.0 is the best to have and 0.0 is the worst to have
Income Statement
Turnover
EBITDA
Depreciation
EBIT
Associates
Interest income
Interest expense
Extraordinary gain/(loss)
Pre-tax profit
Net profit - owners of company
Balance sheet
Fixed assets - PPE
Biological assets
Intangibles & goodwill
Cash and equivalents
Total current assets
ST borrowings
Total current liabilities
Total assets
Shareholders' fund
Long term borrowings
STATS CHIPPAC
RATIOS
DPS ($)
Net asset per share ($)
ROE (%)
Turnover growth (%)
Net profit growth (%)
Net margin (%)
ROA (%)
Current ratio (x)
Gearing (%)
Interest cover (x)
FY11
FY12
FY13
FY2015Q1
25/12/2011
30/12/2012
29/12/2013
29/3/2015
1,706.5
363.5
292.2
71.3
(1.0)
1.9
59.8
12.4
(2.5)
1,701.5
383.3
286.4
96.9
(0.7)
1.5
59.8
37.9
16.6
1,598.5
338.9
302.5
36.4
1.3
54.5
(16.8)
(47.5)
371.1
84.4
78.5
5.9
0.4
14.3
(8.0)
(2.1)
1,123.1
442.8
194.8
583.6
20.0
336.4
1,827.3
938.1
790.3
1,243.0
417.8
210.2
603.7
50.7
384.4
1,883.9
970.8
792.6
1,431.2
416.6
171.2
514.9
37.9
460.9
1,916.8
917.4
874.3
1,595.7
415.3
195.4
534.5
224.4
566.8
1,989.0
890.4
944.5
FY11
FY12
25/12/2011
30/12/2012
29/12/2013
FY13 ROLLING 12-MTH
0.43
(0.26)
1.71
(0.15)
(0.14)
1.73
65.61
6.08
0.44
1.74
(0.29)
0.97
0.89
1.57
65.22
6.41
0.42
(5.03)
(6.05)
(2.97)
(2.50)
1.12
80.77
6.22
0.40
(0.89)
2.17
(0.51)
(0.41)
0.94
109.33
6.79
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China heads for
the panic room
BY B ERNA RD AW
SINGAPORE (July 8): When authorities
say “there is no need to panic”, you should
take it with a pinch of salt and be a little
panicky. However, when they warn of
panic sentiment, it may be a good idea
to take them seriously.
Ironically, Beijing’s latest bid to calm
the market had the opposite effect. It is
quite clear there is a massive deleveraging
process underway now, and the fact that
close to 50% (Bloomberg calculations) of
A-shares had suspended trading did not
help sentiment. The concerted action
taken by the Chinese regulator and the
financial sector did not stem the stampede. This tells me two things: Either
what they have done so far is still quite
inadequate or the emotive tone in the
current stock slump is too overwhelming
to listen to reason. I believe it’s a combination of the two.
The panic is spreading and the authorities appear to be grasping at straws to hold
back the tide. We have seen the state asset
administrator urging state-owned com-
panies to buy their own stocks to stabilise
share prices and pleading with them not
to sell during this massive selloff.
Despite the strong downward momentum, Goldman Sachs actually remains
bullish about Chinese stocks. Before you
dismiss them as a basket case, note that
their bullish outlook is premised on a
12-month horizon, which is probably
considered long term. They expect the
CSI 300 index to rebound 27% over the
next 12 months. Currently, the CSI 300 is
down by around 30% from its June 8 peak.
In the longer term, Chinese equities
are still on an uptrend. But in the short
term, the trend is down and we have seen
every rally over the last three weeks being immediately sold into. Traders are
using any bounces as a chance to cut
their exposure. Volatility has increased
to dramatic levels. Retail investors are
naturally very nervous about the whole
thing and emotions are likely to get the
best of them. This means any rallies in
the market should be short-lived, which
suggests downside risks over the short to
medium term.
SPH REIT kept at
‘hold’, with price target
of $1.07 by CIMB
At best, we may see a stabilisation as
the policy intervention and private-sector
support filter through the stock market.
There are concerns over the potential
social fallout if individual investors lose
their savings or fall into debt from margin
trading. We see a very small likelihood of
that happening, as equities only account
for about 20% of household financial
wealth. A big chunk (54%) still resides
in bank deposits.
Meanwhile, risk aversion was evident
across Asian markets amid contagion
worries over the Chinese stock rout. It
feels like they are now having way more
impact on regional mood than a week
or so earlier. Part of the reason is that
the Chinese authorities are increasingly
worried. The ongoing Greece crisis was
also a drag on sentiment. The Nikkei fell
2.6% and closed below 20,000 for the first
time in nearly two months. The ASX 200
dropped 1.8%, as global commodities
took a hit. We continue to look for headlines out of Greece.
Bernard Aw is a market strategist at IG
SINGAPORE (July 8): CIMB has maintained
its “hold” call and price target of $1.07 on SPH
REIT, following its 3QFY2015 earnings announcement, which met expectations.
The REIT, which owns prime Orchard Road mall
Paragon as well as neighbourhood shopping centre Clementi Mall, reported on July 7 a distribution
per unit of 1.35 cents.
During the quarter, net property income improved 4.3% y-o-y to $34.1 million, on higher rental
income from Paragon and Clementi Mall. Occupancy dropped to 99.8%, owing to an office lease
termination at Paragon, while NPI margin rose two
percentage points to 76.8% on lower utility bills.
Year to date, despite a challenging retail environment, the REIT was able to revise its rental
rates by 9.2% for 17% of its portfolio by net lettable area. Furthermore, shopper traffic was stable
and tenants were able to increase their sales, albeit marginally.
SPH REIT trades at around 5.2% FY2015 yield,
which is just a shade lower than the 5.6% peer
average.
Possible re-rating can be kicked off if and when
Seletar Mall, 70%-owned by parent company Singapore Press Holdings, is injected into it. “The mall has
been in operation for about half a year at near-full
occupancy, and we see healthy shopper traffic in
our recent visit,” states CIMB. — By Chan Chao Peh
IN BRIEF
QT Vascular to appeal against
verdict to award AngioScore
US$20 mil in damages
SINGAPORE (July 8): QT Vascular announced
that the US federal district court had awarded
damages of US$20.03 million ($27.12 million)
to AngioScore, Inc and further ordered the
company’s CEO, Dr Eitan Konstantino, to
disgorge the benefits he had received arising from an alleged breach of fiduciary duty.
The benefits include money he had received for assigning his intellectual property
rights to Chocolate PTA balloon catheter,
royalties on past and future sales of Chocolate PTA, and all of his shares and options
in the company.
QT Vascular and its CEO were told by their
US counsel that they have multiple grounds
for appeal, and that the decision of the single
judge in a federal district court in Northern
California “contains numerous legal errors”.
AngioScore, an angioplasty company,
initiated patent infringement proceedings
on June 29, 2012 against QT Vascular’s subsidiaries, TriReme Medical, LLC and Quattro Vascular, and Konstantino in connection
with the Chocolate PTA.
On June 27, 2014, AngioScore added claims alleging that Konstantino had
breached his fiduciary duties to AngioScore
by developing the Chocolate PTA and that
TriReme Medical and Quattro Vascular aided and abetted the alleged breach.
QT Vascular said the trial court’s decision
“does not have any adverse impact on the
defendants’ defences” related to the patent
claim, which is scheduled for trial in September, and will not have a material effect
on the financial position or profitability of
the company.
QT Vascular closed 36.3% lower at 11.6
cents today. — By P C Lee
Alibaba raises stake in SingPost
to 14.51% with $187.1 mil
share acquisition
SINGAPORE (July 8): Singapore Post and Alibaba Group have announced several initiatives to strengthen cooperation and build
a leading e-commerce logistics platform to
service Asia-Pacific and beyond.
Alibaba Group will purchase 107.6 million new ordinary shares amounting to 5%
of the existing share capital of SingPost for
$187.1 million.
Upon completion, Alibaba’s deemed interest on a fully diluted basis in SingPost will
rise from 10.23% to 14.51%.
Alibaba Group acquired its initial stake in
SingPost in 2014. Its acquisition of additional equity in SingPost is subject to approval
from the Infocomm Development Authority of
Singapore (IDA) and SingPost’s shareholders.
In the second initiative, Alibaba will invest
up to $92 million in Quantium Solutions International for a 34% stake in the company.
QSI is a wholly-owned subsidiary of
SingPost that provides leading end-to-end
e-commerce logistics and fulfilment services
across Asia-Pacific.
SingPost will hold the remaining 66%
of the equity of QSI. QSI will reorganise its
business and become the joint-venture vehicle of SingPost and Alibaba Group.
In addition, QSI will also become a platform for both parties to strengthen their collaboration and realise synergies across their
businesses.
SingPost closed 0.8% higher at $1.905 today. — By P C Lee SingPost raised to ‘add’ by CIMB
following additional commitment
from Alibaba
SINGAPORE (July 8): CIMB has upgraded
SingPost to “add” from “hold” and revised
its price target to $2.07 from $2.05, following Alibaba’s additional investment in the
company and the formation of a joint venture to further expand e-commerce logistics
activities in the region.
“Though earnings growth may only accelerate in the medium term, investors are paid to
wait with a 3.7% yield,” writes analyst Jessalynn
Chen in a July 8 note, referring to the dividend
commitment of seven cents a year from 6.25
cents that was announced on May 29.
Earlier in the day, SingPost announced
that China’s e-commerce giant, Alibaba,
already a strategic investor in the company since May last year with a $312.5 million
punt, is committing even more.
The two companies are formalising a
joint-venture agreement, via SingPost’s subsidiary, Quantium Solutions International.
Alibaba will pay $91.7 million for a 34% stake,
with SingPost retaining the remaining 66%.
SingPost will also issue 107.6 million new
shares at $1.74 each to Alibaba.
In all, SingPost will gain net proceeds of
$183.6 million, and will use the fresh capital
to fund expansion in e-commerce logistics
in the region. Alibaba, meanwhile, will see its
stake in SingPost raised to 14.51% from 10.23%
— if regulators give the go-ahead for the deal.
When Alibaba first invested in SingPost by
taking new shares, there were concerns that
the dividend-seekers’ favourite would have its
earnings per share diluted by more than 10%.
Chen now sees SingPost’s EPS lowered by
11% for FY2016 to FY2018, because of the dilution from a bigger share base as well as loss of
earnings from the reduced stake in Quantium
Solutions International.
However, she sees “upside” from possible
M&A deals and SingPost will also likely gain
from a higher growth rate because of the collaboration with Alibaba. — By Chan Chao Peh
Ezion kept at ‘overweight’ by
JP Morgan, with $1.85 price target
SINGAPORE (July 8): JP Morgan is maintaining its recommendation that investors shy
away from the oil services sector in Asean,
as soft energy prices continue to weigh down
on the once-booming sector.
“We see range-bound oil prices continuing
to exert pressure on controlling costs, impacting asset owners as well as rig builders,” writes
Ajay Mirchandani in a July 7 note.
However, he singles out Ezion Holdings as
the only stock within this space to go “overweight”. Mirchandani, who has a price target of
$1.85 on the stock, likes the company’s ability to
lower charter rates for its fleet of liftboats while
maintaining high utilisation rate of its assets.
In addition, the company is still on a growth
trajectory, with its current fleet of 22 vessels
seen to increase to 37 by end-2016. This will
help to further lift the company’s earnings.
While Ezion has a lower earnings risk profile,
thanks to its contracts in the bag and thus visibility in its cash flow, the market’s valuation of
the company has been similar to, or even lower than, the valuations of other asset owners.
Furthermore, the company’s share price,
relative to other companies such as Keppel
Corp and SembMarine, has not outperformed
the sector. The company is trading at a compelling 4.5 times FY2016 earnings and 0.8 times
price to book, and has a return on equity of 18%.
Ezion now pays a paltry dividend of 0.1
cent a share. This might change in the medium term as capital expenditure requirement
reduces down the road, states Mirchandani.
Ezion ended 4% lower at 97 cents today. —
By Chan Chao Peh
SMRT breakdown could result in
$50 mil fine, says Maybank Kim Eng
SINGAPORE (July 8): Singapore’s largest MRT
breakdown in 27 years could result in a fine
of as much as $50 million for operator SMRT
Corp, according to Maybank Kim Eng analyst
Derrick Heng in a July 8 note.
The three-hour-long evening peak-hour
disruption of service on the North-South and
East-West Lines, on July 7, affected some
250,000 commuters.
In a July 8 press conference co-chaired
with regulator Land Transport Authority,
SMRT CEO Desmond Kuek apologised for
the breakdown.
Prime Minister Lee Hsien Loong, in a
Facebook post later in the evening, said he
was “very concerned” about the breakdown,
although trains ran without hitches today.
Heng notes that in Feb 17, 2014, Parliament passed a bill to increase the maximum
fine for every rail disruption to 10% of an
operator’s annual fare revenue for the rail
line affected.
The previous maximum penalty was $1
million, for two major disruptions in December 2011. There were another four incidents,
between October 2013 and May 2014, which
led to a total fine of $1.6 million.
For now, pending further investigations
and actions by the regulators, Heng is maintaining his “hold” call and price target of
$1.57 on SMRT, pegged at 20 times FY2016
earnings.
SMRT shares closed the day four cents
lower, at $1.505. — By Chan Chao Peh
XXX
T HU R SDAY JU LY 9, 2 0 1 5 • TH EEDGE M ORN I N G B RI EF I N G
6 WORLD BUSINESS
China market rout jeopardises
US$25b in buyout deals
Firms have been pursuing to abandon US in search of higher valuations at home
BY Y E XI E
SHANGHAI: The stock market rout
in Shanghai and Shenzhen is threatening to derail a record US$25 billion
(RM95.25 billion) in buyouts that
Chinese companies have been pursuing to abandon US exchanges in
search of higher valuations at home.
Shares of at least 23 US-listed
Chinese targets, including Qihoo
360 Technology Co, have tumbled
this week to the point that they’re
Taxi hailing
app Didi Kuaidi
raises US$2b
BEIJING: China’s top taxi hailing app
Didi Kuaidi announced yesterday it
raised US$2 billion (RM7.62 billion)
in two weeks, after reports said US
rival Uber planned to invest US$1.1
billion in the country this year.
Didi Kuaidi, which is backed by
technology giants Alibaba and Tencent and calls itself the world’s largest one-stop mobile-based transport network, said its fundraising
attracted “tremendous interest”
from global investors. It is looking
to raise “a further few hundred million dollars” from new investors in
the coming month, it added.
“The fact that global investors are
eager to participate in this fundraising round shows their confidence in
the development of our company,”
Cheng Wei, chief executive officer
and chairman of the company, said
in a statement.
The popularity of private car
booking enterprises such as Didi
Kuaidi and San Francisco-based
Uber has soared in China, where traditional taxis are criticised for poor
service with rude drivers who routinely ignore customers on the street.
For now the Chinese firm dominates the market, but the two are
locked in a fierce battle for customers, offering both riders and drivers
subsidies and discounts that are
costing the companies vast sums.
Uber, which launched operations
in China last year, said in a message to investors last month that it
planned to invest seven billion yuan
(RM4.28 billion) in China, the Financial Times reported previously.
Uber riders were making almost one million trips per day with
business doubling in the previous
month, its CEO Travis Kalanick said,
adding the company plans to add
50 cities into its operational network, from the current 11. But Didi
Kuaidi’s Cheng was confident that
the company’s “clear competitive
advantages” built “through its integrated platform, technology and
team” would see it win out. — AFP
trading at an average of 22% below
their buyout offers, according to
data compiled by Bloomberg, indicating investors are becoming more
sceptical the deals will go through.
The discount has increased from an
average 8.1% when the proposals
were announced.
Back in the mainland, the rout
continues. The Shanghai Stock Exchange Composite Index slumped as
much as 8.2% yesterday, extending a
three-week decline that’s wiped out
more than US$3 trillion in market
value and prompted China to suspend initial public offerings. Less
than a month ago, the index had
surged 151% over a one-year period
to its highest since 2008, ushering in
a stampede of companies seeking
to return to Chinese exchanges in
search of higher valuations.
“Timing and valuations are no
longer favourable for companies to go
private,” said Henry Guo, an analyst
at Summit Research Partners. “The
correction reflects the concern that
some of the deals won’t go through.”
Qihoo’s American depository
receipts slumped 7.1% on Tuesday to US$58.63, compared with
the US$77 a share that a management-led buyout group said they’d
offer in a non-bidding US$8.4 billion bid that was the biggest this
year. Qihoo chief financial officer
Alex Xu declined to comment on
the prospects of the buyout getting
scrapped or revised. — Bloomberg
Rescue making matters worse
BY KYOUNG WHA K I M , K ANA
NISHIZAWA & Y U KO TAK EO
Shanghai Composite Index
SHANGHAI: What’s a Chinese company worth? That’s always been a
difficult question in a country where
individual investors drive more than
80% of trades on local stock exchanges. Now, though, finding the answer
has become harder than ever. Between unprecedented government
intervention to prop up the US$6.5
trillion (RM24.76 trillion) equity market and trading suspensions in more
than 1,300 companies, analysts can
no longer rely on share prices as an
indicator of corporate value in China.
This comes less than two years
after China’s ruling Communist
Party vowed to give market forces
a bigger role in the economy. While
the stock market rescue mission is
designed to stem a rout that erased
US$3.2 trillion in three weeks, it
may end up making matters worse.
Traders rushed to sell whatever they
could yesterday and foreign investors extended a record three-day
exodus as the Shanghai Composite
Index sank 3.9% in early trading.
“The market has failed,” said Hao
Hong, a China strategist at Bocom
International Holdings Co in Hong
Kong. “It’s distorted because we
keep changing the rules as we play
the game.”
As the Shanghai Composite’s
record-breaking boom goes bust,
President Xi Jinping’s government
is deploying the heavy hand of
the state in an attempt to prevent
falling stock prices from eroding
5,500
One year
5,000
4,500
4,000
3,500
3,000
2,500
2,000
Jul
2014
Oct
2014
Jan
2015
Apr
2015
Jul
2015
Source: Yahoo Finance
confidence in his leadership.
Chinese authorities have suspended initial public offerings, restricted bearish bets via stock-index
futures, encouraged financial firms
to buy shares and ordered state-run
companies to maintain holdings in
listed units. And Chinese exchanges
have allowed at least 1,323 companies to halt trading in their shares.
Said Tsutomu Yamada, a market
analyst at Kabu.com Securities Co
in Tokyo, “It shows how much of a
fake market it is. Those who want to
sell will keep wanting to sell. When
they start trading again, just think
of how much selling there’ll be.”
The government’s market meddling is pushing historical price relationships to extreme levels. China’s
CSI 300 Index futures fell to a record
discount versus the underlying eq-
uity gauge in late trading on Tuesday. It’s a sign that derivatives traders view share prices as artificially
high after the trading suspensions
and state efforts to prop them up,
according to Jasper Lawler, a London-based analyst at CMC Markets.
The distortions may be spilling
over into Hong Kong’s market as
investors sell holdings as a way to
hedge positions on the mainland,
said Tony Chu, a Hong Kong-based
money manager at RS Investment
Management Co. Price gaps between dual-listed shares in Shanghai
and Hong Kong, where international
investors dominate trading, are the
widest since 2009. “The major problem is that government intervention
is clearly doing more negative than
good,” Chu said. “There’s really panic
out there.” — Bloomberg
State-owned firms ordered not to cut shareholdings
SHANGHAI: China ordered stateowned firms not to cut holdings in
their listed companies, the latest of
a series of measures taken to stem
a stock market rout.
The State-owned Assets Supervision and Administration Commission also promised to support
companies under its management
to raise their holdings to maintain
stable share prices, according to a
statement on its website.
Yesterday’s move came as the
Shanghai Composite Index fell to
a three-month low amid the biggest stock market rout since 1992.
Attempts to stem declines have included Chinese companies halting
trading in their shares.
The measures follow stock purchases by state-directed funds and
an interest rate cut by the central
bank in recent weeks.
The Shanghai Composite Index
slid 3.9% to 3,582.50 at the 11.30am
break, after plunging as much as
8.2% in the morning. — Bloomberg
IN BRIEF
Aussie banks warned on
interest rate benchmarks
SYDNEY: Australia’s corporate
watchdog outlined details yesterday of its investigation into
possible manipulations of interbank lending as it warned banks
to be mindful of how they set
interest rate benchmarks. The
Australian Securities and Investments Commission, which
is examining trading practices
from 2007 to 2013 in interbank
lending, said it was investigating
possible misconduct relating to
trading to move a benchmark
rate so that a bank benefits, for
instance through the increase
in value of a derivative position,
and inappropriate handling of
client orders or positions such
as deliberately triggering stoploss orders. — AFP
Funds target commodities
after slump in equities
BEIJING: Chinese hedge funds
have been big short sellers of
locally traded commodities, including iron ore, steel and rubber, after redeploying cash from
tumbling equity markets where
authorities have slapped curbs
on trading, fund managers and
traders said. The Chinese equity market rout appears to be the
chief factor driving the sell-off in
commodities. There had been
forced liquidation on China’s
commodities markets due to
margin calls tied to stock market
exposure, and some short sellers
taking advantage of a flight of international investors from local
markets, they said. — Reuters
Employees, execs to buy
three brokerages’ shares
SHANGHAI: Three Chinese brokerages said some of their executives and employees plan to
buy shares in their own firms, in
an attempt to provide support
amid a frenetic investor sell-off
on the country’s bourses. CITIC Securities, Haitong Securities and Central China Securities, whose shares have been
roiled in a rout that has seen
Chinese equities fall around
30% from their mid-June peak,
announced the plans yesterday.
Shanghai-listed shares in CITIC Securities, China’s largest
brokerage by assets, are down
25% since mid-June while Haitong Securities’ Shanghai-listed
shares have fallen by about 28%
over the same period. — Reuters
‘Taiwan orders checks on
exposure to China markets’
TAIPEI: Taiwan’s financial regulator has ordered domestic
financial institutions to detail
their exposure to China’s stock
market, people familiar with
the matter said yesterday, after huge losses in both China
and Taiwan bourses. The Financial Supervisory Commission
(FSC) is asking banks, insurance companies and brokerages in Taiwan to detail the profit
and losses of their investments
in listed companies in China,
three sources said. Wu Kueimao, chief secretary for the FSC,
said he was unaware of the matter when asked. — Reuters