Duty Free Intl

I think this could be a good piece of news for Duty Free Intl.

Quote:  Malaysia' veteran leader Mahathir wins shock election victory An alliance of opposition parties spearheaded by Mahathir Mohamad won Malaysia's general election on Thursday, setting the veteran strongman on course for a return to the Prime Minister's Office he occupied for 22 years.


 He will become the oldest elected leader in the world at 92 years old. Few had expected Mahathir to prevail against a coalition that has long relied on the support of the country's ethnic-Malay majority. (Cnbc.com)


 Duty Free International Limited, an investment holding company, trades in duty free merchandise under the Zon brand in Malaysia. The company wholesales, distributes, and retails duty free and non-dutiable merchandise, including imported duty free beverages, tobacco products, chocolates and confectionary products, perfumes, cosmetics, and souvenirs. It operates duty-free retail outlets/complexes and trading outlets located at various locations in airports, seaports, ferry terminals, border towns, and tourist destinations. Duty Free International Limited is also involved in the development of resorts; property investment and management activities; cultivation of oil palms; and sale of fresh oil palm fruit bunches. The company was founded in 1978 and is based in Singapore. Duty Free International Limited is a subsidiary of Atlan Holdings Bhd.


The share price has been falling off from the high of 44 cents to a low of 22 cents on 29 Mar 2018.Down 50%. Which is deemed as overly done. The selling down may be due to the pending court case for tax related matter. I think the total amount for the tax is about RM41m.For actual details pls refer to Sgx/company announcement . Looking through the announcement even if they have to include this tax amount their current cash-on-hand would be easily able to cover this tax amount. They have RM276.4m as reported on 9 mth financial results.


Looking through the Balance Sheets items: For one can notice the Current Assets has a total value of RM518.859 versus their Total Liabilities of RM107.513m. A Net Net position value of 4.83 times.

Their cash flow generation has been pretty healthy The average dividend for past years is about 1.8 cents . Which is giving a yield of 8.18% base on current price of 22 cents. As at to date the dividend being payout is 1.85 cents for first nine months . I think the company would be able to continue in paying out the dividend.. I am vested on this counter and would wait patiently wait for the announcement to be made known in the near future. Not a call to sell or buy. Pls do your own due diligence. (Trade/invest bas on your own decision)

HrNetGroup

HrNetGroup - just released its 1Q 2018 result, Net profit increase 45.5% from 11.2m to 16.3m. This is rather outstanding. Total Revenue increase 12.3% from 95.3m to 107m. Gross profit increase 11.3% from 32.7m to 36.4m. The Net profit was boosted by an increased of 43.5% of 6m from other income.

REVIEW OF GROUP’S PERFORMANCE

 Net profit after tax (“NPAT”) increased by 33.5% (S$4.3m) arising from growth in:

 a. Revenue by 12.2% (S$11.6m) and gross profit by 11.3% (S$3.7m):

 i. Flexible staffing: Continued business momentum, particularly in Singapore. Revenue grew by 12.8% (S$9.5m) and gross profit by 15.1% (S$1.7m).


 ii. Professional recruitment: Stellar performance in North Asia, particularly Hong Kong and Mainland China. Revenue grew by 9.9% (S$2.1m) and gross profit by 9.8% (S$2.0m).

b. Other income by S$2.0m mainly due to S$0.8m gain on revaluation of marketable securities, S$0.6m increase in interest income and S$0.5m increase in Singapore government subsidies received.


Offset by other employee benefit expenses that rose by 11.7% (S$2.0m) mainly due to S$1.2m increase in profit-sharing incentives and bonuses that was in tandem with the increase in pre-tax profits, and S$0.6m in share-based payment expenses arising from the 123GROW Plan implemented in June 2017.


 REVIEW OF GROUP’S FINANCIAL POSITION


 The Group’s current assets increased S$15.7m from S$373.2m to S$388.9m, mainly due to:

 a. a net increase in cash and cash equivalents amounting to S$3.0m which was a consequence of S$12.9m cash generated from operating activities, S$8.1m deployed in investing activities (mainly in the purchase of quoted marketable securities), and S$1.4m dividends paid out mainly to non-controlling shareholders;

 b. increase in trade receivables amounting to S$3.4m;

 c. increase in other receivable and prepayments amounting to S$0.9m; and

 d. increase in marketable securities amounting to S$8.4m. The Group’s liabilities decreased by S$1.3m from S$54.7m to S$53.4m mainly due to:


 a. the reduction of other payables and accruals by S$2.9m mainly due to the return of restricted cash to a client for outsourced payroll services; offset by

 b. the increase in income tax payable by S$1.6m.


This is a Net Net Position company whereby its total current assets of 388.9m is greater than its total liabilities of 53.4m..

NAV of 32.9 cents.
EPS of 1.6 cents for 1 Q .
Assuming a full year EPS of 6 cents . PE of 11 x is seems quite under value for the current price of 76 cents.


I think average PE of 16 x should be achievable at 96 cents.

Not a call to buy or sell.
Please do your own due diligence.

Kepcorp

Kepcorp -The current price of $8.03 has broken down its 20 days moving average at $8.05 level. This is rather bearish!

 I think it may likely to see it's price price going down to retest the 50 days moving average at about $7.89.

With oil price closing lower below $70 , I think we may see further selling down pressure.

Quote :

Oil prices pared losses on Tuesday after President Donald Trumpannounced that the United States will withdraw from the 2015 Iran nuclear deal.

U.S. West Texas Intermediate crude oil settled down $1.67 a barrel, or 2.4 percent at $69.06, well off a 4.38 percent decline earlier in the day. The settlement was delayed by nearly an hour due to extremely high trading volume. The contract rose as high as $70.84 on Monday and ended the session above $70 a barrel for the first time since November 2014.

International benchmark Brent crudefell 47 cents , or 0.6 percent, to $75.71, also paring back an earlier decline of 4 percent. Brent touched $76.34 on Monday, its best level since Nov. 27, 2014.(cnbc.com)

 KepCorp - Looking through their financial results for the past 5 years , we can notice that the Total revenue has been declining substantially from 13,282.979m in 2013 to 6,185.668 in 2017.

 I think it is still quite far away for them to grow and increase their total revenue to hit the 10B value. Similarly , the Total net income has also been decreasing from 1,884.798m in 2013 to 301.668m in 2017.

 Diluted EPS has also been going downhill from 0.504 in 2013 to 0.231 in 2017.

 Dividend is almost below half of what has been declared in 2013 of 0.48 versus 0.22 in 2017.


 Diluted EPS of 0.231 , PE is about 35.2 times. I think it is still quite a little bit high as compare to its usual PE of about 13-15 times.

Looking at the latest 1st quarter result which was being released on 

Singapore, 19 April 2018 – Keppel Corporation Limited (Keppel) reported a net profit of S$337 million for the first three months of 2018, 34% higher than the S$252 million net profit for 1Q 2017, bolstered by higher contributions from the Property Division. 

The Group achieved revenue of S$1,470 million for 1Q 2018, which was an improvement of S$222 million or 18% over 1Q 2017. The increase was underpinned by higher revenues achieved by the Property and Infrastructure divisions, which mitigated the impact of lower work volume in the Offshore & Marine Division.

I think the total net profit has also factored in the divestment gain of 289m from the property division.

I think without this divestment gain, net profit may be about the same level as in 1st quarter 2017.

So my observation is that, it may still take quite sometimes for the company to achieve the same level of  net profit as in year 2013.

The current price of $8.15 seems to be trading at a premium level as compare to its NAV of $6.311.

On a positive note , the total order book has generally increased to 4.3B as per the table below:

Another piece of good news is that they have been able to secure a first newbuild drilling rig order in 3 years.

Not a call to buy or sell.

Please do your own due diligence.

Also the company had just made announcement of a CIVIL ACTION BY EIG FUNDS.

The Company wishes to update its shareholders that KOM has been served with an amended complaint that includes an additional cause of action against KOM for allegedly aiding and abetting the fraud committed by Petroleo Brasileiro SA and Sete Brasil Participacoes SA against EIG and seeks to recover US$221 million in purported investment losses as well as punitive damages. The Company is of the view that the additional cause of action is similarly without merit and the Company will continue to vigorously defend itself. The Company will provide further updates as appropriate.

quote : http://infopub.sgx.com/FileOpen/KCL%20-%20Update%20on%20EIG%20Lawsuit.2%20May%202018.ashx?App=Announcement&FileID=502868

Keppel Corporation Limited, an investment holding company, engages in the offshore and marine, property, infrastructure, and investments businesses in Singapore and internationally. The company constructs, fabricates, and repairs offshore production facilities and drilling rigs, power barges, specialized vessels, and other offshore production facilities; researches and develops deepwater engineering works; engineers, constructs, and fabricates platforms for the oil and gas sector; undertakes shipyard works and other general business activities; and procures equipment and materials for the construction of offshore production facilities. It is also involved in the trading and installation of hardware, industrial, marine, and building related products, as well as the provision of leasing services; sourcing, fabricating, and supply of steel components; ship repairing, shipbuilding, and conversion activities; marine contracting and ship owning business; painting, blasting, and process and sale of slag; property investment, management, and development activities; fund management; golf and hotel ownership and operation; development of marina lifestyle and residential properties; trading of construction materials; development of district heating and cooling systems; electricity generation and supply, and general wholesale trade businesses; purchase and sale of gaseous fuels; and trading of communication systems and accessories. In addition, the company offers jacking systems, and heavy-lift equipment and related services; project management and procurement, towage, financial, real estate investment trust management, logistics and supply chain, warehousing and distribution, data center facilities management, travel agency, and metal fabrication services; housing services for marine workers; and technical consultancy for ship design and engineering works, as well as solid waste treatment solutions. Keppel Corporation Limited was incorporated in 1968 and is based in Singapore.

Riverstone

Riverstone’s revenue rises 2.0% to RM209.8 million on the back of higher glove orders for 1QFY2018

  Despite the impact from foreign exchange rate volatility which led to declining average selling prices, improved cost controls and operational capabilities mitigated the decline in net profit to RM31.1 million.
Gross profit margin is maintaining at a healthy rate of 22%.

  Underpinned by robust positive operating cash flow generation of RM43.5 million, the Group’s balance sheet continues to strengthen as net cash position improved to RM111.6 million  Maintains growth trajectory as strong demand propels Phase 5 of the Group’s expansion plans where total annual production capacity will increase 18.4% to 9.0 billion pieces of gloves by end-FY2018

 Overall Net profit is down 7.6% with RM31.1m ,and diluted EPS of RM 4.19 cents. EPS is about 1.42 cents (S).

 Let's say whole year eps of 5.68 cents(s). Current price at 98.5 cents , PE of 17.34 times I think is trading at full value .

theintelligentinvestor

Reply to clim : Yeah, the initial question from sporeshare is which counter has good earnings power

theintelligentinvestor

Reply : Don't take this as detailed analysis, just my 2c.

1) ROE > 20% for the past 5 years
2) CAGR 2013-17 - Revenue 23%, Earnings 22, Equity 18%. Healthcare glove expected to grow at 8-12% in the next 3 years.
3) Debt - CR 3, Debt/Eq 4%
4) Smallest among the 5 glove manufactures, but their EBIT is clearly superior, ie 2-4x of the other 4, Hartalega, Top Glove, Kossan & Supermax.
5) Lastly, as compared to the others in the list. Riverstone product has a bigger global market than the other that are more local or within regional.

Riverstone manufactures and distributes cleanroom and healthcare gloves under the RS brand in Malaysia. It also produces cleanroom finger cots, packaging bags, face masks, and wipers; and other consumables, such as hair nets, static dissipative shoes, safety booties, shoe covers, ESD rubber bands, sticky mats and rollers, swab-polyester and microfibers, antistatic gloves, static dissipative shoes, cleanroom coveralls, and cleanroom papers. In addition, the company trades in latex products; and distributes cleanroom products. Further, Riverstone Holdings Limited offers healthcare products comprising white, blue, black, and accelerator free nitrile exam gloves. Its products are used in the hard disk drive, semiconductor, and healthcare industries. The company also exports its products in Asia, Europe, and the Americas. Riverstone Holdings Limited was founded in 1989 and is based in Singapore.

Frasers Logistics Trust

Proposed Acquisition of 21 Properties in Germany and the Netherlands Acquisition of predominantly freehold interests in 21 logistics and industrial properties located in Germany and the Netherlands (the “New Properties”), comprising:

 17 properties in Germany

 4 properties in the Netherlands

 Property purchased price : €596.8 million (approximately S$972.8 million)

 Purchase consideration : €316.2 million (approximately S$515.4 million)

Proposed funding for the acquisition comprises:

 A private placement of new units to institutional and other investors; and / or

 A non-renounceable preferential offering of new units to existing unitholders on a pro rata basis; and/ or

 Balance of transaction cost to be funded by borrowings

Focused on primary industries including logistics services, automotive, food logistics and industrial manufacturing.

 Diversified tenant base including multinational companies with investment grade ratings and publicly listed corporations

20 high quality tenants(2) with no single tenant contributing more than 15% of GRI(1)


Transaction Rationale and Highlights

1. Strategic entry into the attractive German and Dutch logistics and industrial markets.Strategic Entry into the Attractive German and Dutch Logistics and Industrial Markets. Key global logistics hub – Germany and the Netherlands ranked #1 and #4 logistics hubs globally(1). Located in heart of Europe with extensive road, motorway and rail  network. Further extension of global reach given critical role in China’s Belt and Road Initiative

2. Prime, strategically located and predominantly freehold portfolio. Stable leases backed by high quality tenants

3. Enlarged and diversified portfolio positioned for long term growth. Reduced concentration risk in the top 10 tenants.

4. Leveraging Sponsor’s integrated development and asset management platform.  FLT is well-positioned for future growth through leveraging on the Sponsor’s widened logistics and industrial platforms in Europe and Australia

5. Consistent with the Manager’s investment strategy. Proposed acquisition is in line with FLT’s key objectives.

Exposure to the attractive German and Dutch logistics markets which serve as the trade gateway to Europe

Comprises prime and predominantly freehold logistics and industrial properties

100% occupied or pre-committed by high quality tenants and long leases

89%(1) leases with CPI-linked indexation or fixed escalations

Reduces concentration risks through geographical diversification and tenant mix

Maintains optimal capital mix and prudent capital management

FLT’S OBJECTIVES Deliver stable and regular distributions to unitholders

Achieve long-term growth in DPU

I think this new acquisition would likely boost their overall portfolio spreading across Australia , Netherlands and Germany that may likely cushion the fall of rental rate for different countries.
Overall this new acquisition would be able to enhance and increase the DPU paying out per unit. Looks positive to me.

Not a call to buy or sell.
Please do you own due diligence.

The 2nd quarter is just released yesterday which saw the overall DPU rises 3.2% to 1.81 cents.

2QFY18 Distributable Income (“DI”) of A$25.9 million, up 3.2% from 2QFY17

 2QFY18 Distribution Per Unit (“DPU”) of 1.81 Singapore cents, up 3.4% from 2QFY17

 Declared distributions of 3.61 Singapore cents for 1HFY18, up 3.4% from 1HFY17

 Three leases renewed/signed  As at 31 March 2018: WALE of 6.75 years and high occupancy of 99.4% maintained

 Reduced near-term expiries in FY2018 and FY2019 by 2.5% and 4.6% respectively

 Gearing of 30.5% with debt headroom of A$531 million as at 31 March 2018  85% of borrowings at fixed interest rates

Ascendas-hTrust

4th quarter results is out , dpu incteinc 25.5% to 1.72 cents due to divestment gain from China property.
If Without this divestment gain, NPI is down 8% to 23.7m.

Together with 3rd quarter dpu of 1.41 c nts ,total 3.13 cents has been declared and XD will be on 16 May.

NAV has also rises from 86 to 92 cents.

Not a call to buy or sell.

The recent acquiring of 98.7% stake in KY-Heritage Hotel Dongdaemun for KRW72.1 billion ($89 million).

 The 215-room four-star hotel sits on a plot of freehold land in Dongdaemun, a major shopping and tourist seems quite well receive by the market.

 The company mentioned that this purchased is dpu accreditative.

 Also in early January , the company has divested two China hotel properties, Beijing Novotel Sanyuan and Ibis Beijing Sanyuan, for a total of RMB 1.16 billion ($235.9 million) in cash.

 With the money gathered from the selling of these 2 hotel properties in China, the company would be able to use part of the proceeds to pay for the new acquistion in Korea. The company may payout some of the gains from this divestment to reward shareholders with a special dividend.

Looking through the Financial results for past few years, the Total Revenue seems to be generally increasing from 214.28m (2013) to 224.43m in 2017.

Net income is not consistence as in 2013 it was generating  16.68m and has been drifted lower to 8.10m in 2017.You may want to look further into the detail for this declining net income figure.

Gearing looks fine which is below 35%.

Cash flow has also been generally declining .

Average dividend of 5.48 cents.
Yield is about 6.5%

NAV of 85.6 cents.

I have roughly workout the fair value using DDM and derive the value of about 87 cents.

The current price of 81.5 cents may still present a potential upwards of about 6.7% to reach 87 cents.

Perhaps, the capital gain might not be that great! I think investor are purely invest for the constant yearly yield of about 6.5%.

Not a call to buy or sell.

Trade/Invest base on your own decision.

Quote : Jeremyowtaip -

1. Recent sale of China hotel properties at good premium to unlock value for unitholders.

2. NAV per share after divestment of China properties is increased thus leading to an attractive P/B ratio below 1.

3. Some possible ways the trust may utilise the divestment proceeds include paying higher distributions or a one-off special distribution seen as a return of capital to unitholders. Also, the trust may utilise the proceeds to pare down debts and decrease gearing. The trust may also utilise the proceeds for AEIs of existing properties and/or for new acquisitions. Or can channel the proceeds into all of the above mentioned with different weightings for each depending on the manager.

My take is that no matter which ways the divestment proceeds are utilised, the manager should provide a sound basis to their unitholders why it chooses certain way to use the proceeds.

For example, if it chooses to do a new acquisition that is not so attractive as compared to previous China hotel properties it has divested paying too high a price for the new property which has less attractiveness. Then, we ask ourselves this question. Why exit the China hotel properties at a premium only to re-enter another new property with less attractive future prospects? This would be doing one good decision followed by one bad decision to negate the previous good effect.

If it chooses to pare down strategically some of the existing debts to increase the average weighted length of time to debt expiry in view of potential rise in interest rates. Maybe this is a good decision.

If it chooses to reward unitholders with higher one-off distributions, it is a neutral option depending how they do it. If most of the proceeds are used towards rewarding unitholders, it may help to boost their unit price higher on a short term basis when a higher distribution attracts investors to this trust. But when the buffett has already ended, what comes after next? Any more growth? If not, then it is just a short term fever with no longer term positive effects of increasing distribution on a one-off basis.

Do not get me wrong. I am not saying rewarding unitholders is always wrong. But overdoing it just to boost up the unit price on a shorter term basis may not be as optimal compared to growing the trust on a long term basis providing sustainable increase in distributions over time. Unitholders will be happy only for a short while with a buffett treat as compared to a trust or REIT which really can sustain their growth in distributable income for a very long time to come giving out better and better treats (which may not be buffett standard but still relatively good standard treats).

In conclusion, AHT has done an impressive job with the divestment of the China hotel properties at good premium gains. Let's see how they use the divestment proceeds. I believe this is more important to watch for than the ongoing price movements of this trust. Of course, if the trust proves it can use the proceeds in a very good and sound way, then buying it at the current price now is good. If otherwise, even if one can supposedly get it cheap at less than P/B ratio of 1, think again is it really a great wonderful catch.

Dyodd

Ascendas Hospitality Trust (“A-HTRUST”) was listed in July 2012 as a stapled group comprising Ascendas Hospitality Real Estate Investment Trust (“A-HREIT”) and Ascendas Hospitality Business Trust (“A-HBT”), established with the principal investment strategy of investing, directly or indirectly, in a diversified portfolio of income-producing real estate used predominantly for hospitality purposes, as well as real estate related assets in connection with the foregoing. The asset portfolio comprises 11 quality hotels with over 4,000 rooms geographically diversified across key cities in Australia, China, Japan and Singapore; and located close proximity to central business districts, business precincts, suburban centres, transportation nodes and iconic tourist landmarks. A-HTRUST is managed by Ascendas Hospitality Fund Management Pte. Ltd., the manager of A-HREIT, and Ascendas Hospitality Trust Management Pte. Ltd., the trustee-manager of A-HBT. A-HTRUST is sponsored by Ascendas Land International Pte Ltd, a wholly-owned subsidiary of Ascendas Pte Ltd.