BT: Wilmar in joint bid for more China sites

Business Times - 30 Dec 2010

Wilmar in joint bid for more China sites

Wilmar, together with Kerry Properties and Shangri-La Asia, could invest up to 7.5b yuan in the project

By FELDA CHAY

FRESH from the successful bid for three plots of land in China's Liaoning province, Wilmar International, together with Kerry Properties and Shangri-La Asia have struck again.

This time, the trio are planning to enter a joint bid for six sites in the province that could see a total investment of 7.5 billion yuan (S$1.4 billion), with Wilmar to pump in up to 2.63 billion yuan.

This is based on Wilmar's shareholding in the joint venture (JV) firm that will be set up to see the project through, if the trio's bid is successful.

According to Wilmar's announcement after the market closed yesterday, it will hold a 35 per cent stake in the JV, while Kerry will take up 40 per cent. Shangri-La will have the remaining 25 per cent.

Wilmar said that it will fund the project using internal sources of funds and bank borrowings. It does not expect the investment to have a material impact on its financial position.

The three have paid an aggregate deposit of 271.6 million yuan to the Chinese authorities to qualify for the public bid, which will be held next Wednesday.

Wilmar has contributed 95.1 million yuan to pay for this deposit, while its partners Shangri-La and Kerry have forked out 67.9 million yuan and 108.6 million yuan, respectively.

Kerry and Shangri-La Asia are both linked to Malaysian billionaire Robert Kuok, while Wilmar is controlled by Mr Kuok's nephew.

Located in Yingkou city, the six pieces of land are designated for residential and commercial purposes - which will be granted land use rights of 70 and 40 years, respectively. They have a total gross site area of 6.1 million sq ft.

The joint bid comes after the trio bought three pieces of land in Liaoning province earlier this month for 240 million yuan, with the aim to pump in up to 2.57 billion yuan into the entire project.

Wilmar will own 35 per cent of this project, while Kerry and Shangri- La will respectively take up 40 per cent and 25 per cent.

The news sparked a sell-off in Wilmar's shares, as investors questioned the commodity firm's decision to diversify into property.

DMG said in a research report then: 'We fear this could mark the start of Wilmar's loss of business focus and corporate discipline, and do not think the venture will be well received by the market.'

Wilmar, however, appears unfazed by these worries. The firm said in its statement yesterday that it is 'in the process of searching for other suitable sites in China and may jointly bid for such sites in the future' with Kerry and Shangri-La.

In November, Wilmar said that its third quarter net profit plunged 60.3 per cent year-on-year due to the weaker performance of its oilseeds and grains division, and the absence of a big one-time gain.

Net profit for the period ended Sept 30 was US$259.5 million. In the corresponding period last year, Wilmar registered US$652.9 million in earnings, partly buoyed by a net exceptional gain of US$167 million from the sale of new shares by its Wilmar China unit.

Yesterday, its shares closed 1.1 per cent higher, or six cents, at $5.69.

DJ Market news: Wilmar

DJ MARKET TALK:Wilmar Down 0.5%;S/T Performance May Be Capped-UOB
12/30/2010 9:25:00 AM

0125 GMT [Dow Jones] Wilmar (F34.SG) is down 0.5% at S$5.66 after the company announced it's forming a 35:40:25 JV with the China units of Kerry Properties (0683.HK) and Shangri-La Asia (0069.HK) to bid for six sites in Liaoning province again, with a potential total investment of CNY7.5 billion (US$1.1 billion); Wilmar will inject CNY2.63 billion (US$394 million). The sites are designated for residential and commercial purposes with a total gross area of 6.1 million sq ft. UOB KayHian, which has a Buy recommendation and a S$7.10 target on the stock, says its 5.1% fall the day after its first property investment announcement (Dec. 21) "is a clear indication that investors do not like Wilmar's diversification into non-commodity business...(it) could be seen as the start of Wilmar's loss of business focus." The house adds that its short-term performance could be capped by the negative reaction over new property investments and the regulatory risks in China, but it awaits a meeting with the management Jan. 7 for more clarity. Tuesday's low at S$5.56 may support near-term. (matthew.allen@dowjones.com)

DJ: Wilmar

DJ MARKET TALK: Wilmar Off 0.9%; Property Concerns Seem Priced In
12/30/2010 10:54:00 AM

0254 GMT [Dow Jones] Selling in Wilmar (F34.SG) could be tapering off judging from its modest decline following its latest move to venture more deeply into property development. The stock is off 0.9% at S$5.64 in light volume, after losing 3.9% since December 21, when it first unveiled its entry into China's property market with Kerry Properties (0683.HK) and Shangri-la Asia (0069.HK), and down 17.3% from the November S$6.88 peak. Support is at this month's S$5.56 low. Any sustained recovery will, however, depend on whether 4Q10 margins recover from their 3Q10 weakness; results will be known around February. Wilmar's latest move with both partners involves bidding for six sites for residential and commercial use in Liaoning's Yingkou City, where they already have 3 land parcels. "Operational and execution risks from the property ventures are likely to be minimal due to the strength of Wilmar's joint venture partners," says AmResearch; has a Buy call with a S$7.60 target. (frankie.ho@dowjones.com)

怡發證券：薦吸四環醫藥 (460)

24/12/2010 09:20
《勝算在握》怡發證券：薦四環（４６０）及華潤水泥（１３１３）

　　
　　　　　　　　　　　　怡發證券：薦吸四環醫藥及華潤水泥

　　四環醫藥（００４６０）：集團主要業務在國內從事藥物研究發展、生產及銷售，以心腦血
管藥物為主。為中國領先的製藥公司，更是全國最大心腦血管藥物的供應商。集團供應超過４４
種藥物，是以「克林澳」、「安捷利」、「川青」、「曲奧」及「澳苷」等品牌銷售。專用於治
療抗感染、新陳代謝、癌症、心腦血管及中樞神經系統等。集團研發隊伍實力雄厚、重點發展創
新藥及首仿非專利藥。已成功開發１３種產品，並擁有全國分銷權。於國內正式擁有超過９９項
專利，另有超過２３３項正在申請中，而在國外則有４項。大部分已列入國家及省級醫療保健藥
品目錄和國家基本藥物目錄。集團擁有「克林澳」ＡＰＩ生產廠、鍋爐房、擴建設施及口服固體
藥包裝廠，共有６條生產線，總面積近４０００平方米。所有生產設施均獲國家藥監局之ＧＭＰ
認可證。分銷網絡遍布全國超過３１個省市及自治區，近萬間醫院和藥房。

　　截至２０１０年６月３０日止之６個月業績為營業額４﹒７３億元人民幣，上升近４７％，
而稅後盈利則上升超過１﹒１倍至２﹒５５億元人民幣。可於現價５﹒６元附近買入，中長線可
見７﹒４元，跌穿５元止蝕。（建議時股價：＄５﹒５９）

14/12/2010 10:44

《外資精點》摩通予四環醫藥（４６０）增持評級，目標價７﹒４元

　　《經濟通通訊社１４日專訊》摩根大通發表報告指，四環醫藥（００４６０）是向內地主要
醫院提供心腦血管藥物的行業領導者，首予「增持」評級，目標價７﹒４元，該股今早開市報　
５﹒８５元。
　　報告認為，內地對心腦血管藥物需求正在增加，０９年醫院購買該等藥物的金額總值３２０
億人民幣，此外，料四環醫藥其他核心藥物的增速至少能保持行業２４％水平，加上該集團正拓
展防感染、癲癇症及呼吸道藥物，相信可繼續推動增長。
　　目前四環２０１１財年預測市盈率為３２倍，較同業的２４倍市盈率高３４％。摩通認為，
憑藉行業領導地位，四環醫藥值得有較高估值，料其研發新產品能力可持續帶動增長。（ｍｈ）

08/12/2010 11:59

《外資精點》大摩：首予四環藥業「增持」評級，目標價７﹒１元

　　《經濟通通訊社８日專訊》摩根士丹利發表報告指，作為四環藥業（００４６０）保薦人首
予「增持」投資評級，目標價７﹒１元，四環較其他海外藥業股有溢價，主要是由於集團在心腦
血管市場加快增長，並有領導地位，同時營業額及純利增長較市場預期為高，銷售網絡亦理想，
研發開支有改善。
　　大摩指，該行預測與市場分別在於市場普遍認為Ｋｅｌｉｎａｏ腦產品增長空間有限，因銷
售基礎較高，但大摩相信，四環於內地藥業市場有強勁增長，已對有關產品銷售預測較為保守，
表現可能較預期佳，不過，市場認為四環過於依賴Ｋｅｌｉｎａｏ產品，相信公司可以保持數個
產品的獨家銷售權，而國家落實藥業改革對該股有利。（ｃｙ）

BT: 11,849 homes left unsold in launched private projects

Business Times - 16 Dec 2010

11,849 homes left unsold in launched private projects

Twenty eight projects have more than 100 unsold units each

By UMA SHANKARI

DEVELOPERS are sitting on close to 12,000 unsold units in private residential projects that have already been launched.

Data compiled by The Business Times using information from the Urban Redevelopment Authority (URA) shows that as at end-November this year, developers had a stockpile of 11,849 units in projects that they have already started marketing - that is, projects in which at least one unit has been sold.

While some developments have just a handful of units left unsold, a total of 138 launched projects scattered across the island have 10 or more unsold units left. And of these, 28 projects have more than 100 unsold units each.

The more recently-launched projects include Kheng Leong's The Minton; Frasers Centrepoint's Flamingo Valley; and City Developments' Residences At W Singapore Sentosa Cove - all of which were put on the market in the first half of this year when sentiment was buoyant.

But six projects with more than 100 unsold units each have been on the market for at least three years. These include prime developments such as Keppel Land's Reflections at Keppel Bay; SC Global Developments' Hilltops; Allgreen Properties' The Cascadia; and Wheelock Properties' Scotts Square.

The 11,849 units are held by the entire range of both big and small developers and include landed projects, though the majority are condominium developments.

Market observers say the stockpile could have been accumulated as developers typically roll out units in large developments in phases.

Those with strong holding power may also hold back some units in their projects as part of a larger marketing strategy. Keppel Land, for instance, did this with its Caribbean At Keppel Bay condominium.

But the ample supply of ready-to-buy homes should show prospective homebuyers that there is no need to rush to pick up units in new launches, said another industry veteran.

Homebuyers snapped up 1,909 new private homes in November even as developers launched a strong supply of 2,329 new homes for sale. The strong demand from buyers took the total sales volume for 2010 to a record 15,025 units - even higher than the then-record 14,811 homes sold in 2007 during the last property boom.

'The fact that we have recovered so quickly from the financial crisis has given a lot of false confidence to many people with money,' the industry veteran said. 'They think that it is the right time to jump into property.'

In October, URA said that at the end of Q3 2010, there was a total supply of 64,358 uncompleted units of private housing from projects in the pipeline. Of these, 33,771 units were still unsold. The numbers include both launched and unlaunched projects.

But data compiled using URA's monthly update on the number of units launched, sold and unsold in residential projects in Singapore, released yesterday, showed that as at end-November, there were 11,849 units left unsold in launched projects.

BT: Developers hold back on luxury projects in Q4

Business Times - 17 Dec 2010

Developers hold back on luxury projects in Q4

This despite higher buying interest for high-end homes in October, November

By UMA SHANKARI

DEVELOPERS continued to hold back on launching new luxury projects in the fourth quarter even as buyer interest in such projects grew slightly in October and November.

No new luxury projects were launched in the fourth quarter, noted CB Richard Ellis (CBRE) in a report yesterday.

This was even though there was increased buying interest for high-end homes - that is, units that sell for more than $2,000 per square foot (psf) - in both October and November.

Around 230 units were sold in this segment in October and another 160 units last month. By comparison, the number of new homes that cost more than $2,000 psf did not cross the 100-mark from June to September 2010.

And for units priced at above $3,000 psf, the number sold doubled to 12 units last month compared to October. Analysts also noted that older launches such as Paterson Suites, The Trizon and The Laurels also saw renewed buying interest in November.

But despite this, most of the launch activity was centred in the mass market segment as developers capitalised on the strong demand from upgraders for cheaper private homes.

'Contrary to expectations that developers would look to unload previously accumulated land for high-end properties to ride on the building up of buying momentum for such properties, developers have only launched 9 per cent more of high-end homes in November,' noted Colliers International's director of research and advisory Tay Huey Ying. 'Instead, developers have surprised many by launching primarily mass-market homes in November.'

The 1,638 units of new mass-market homes released by developers last month was more than triple the 513 units launched in October and accounted for 70 per cent of all new homes released in November.

Buyers responded well, picking up 1,229 mass market units last month - 64 per cent of the 1,909 private homes sold in the month. The strong demand took total sales volume for this year to 15,025 units - even higher than the record 14,811 new private homes sold in 2007.

'Projects located close to MRT stations remain popular among homebuyers,' said Joseph Tan, CBRE's executive director for residential. 'Besides location, other selling points include government plans for future development and new transport network, amenities, tenure and product attributes.'

The trend was true for the first 11 months of the year as well. Data compiled by CBRE shows that out of the 10 best-selling projects, eight were in the outside central region (OCR), which is a proxy for mass market locations.

The three projects that drew the most buyer interest were: UOL Group's 616-unit Waterbank at Dakota (all but one unit sold as of end-November); MCL Land's 608-unit The Estuary (fully sold); and Kheng Leong's The Minton (482 units out of 1,145 sold).

The lack of activity in the high-end segment has also kept prices of such homes dampened despite gains in other categories.

The official URA private residential price index, which already went up 14.4 per cent in the first three quarters of this year, is expected to register another marginal climb in the final quarter, translating to a total rise of 15 per cent to 16 per cent for the whole year.

But most of the growth has been led by mass market homes, analysts noted.

'Overall, prices for prime, mid-tier and mass-market homes have more or less caught up with the peak levels in end-2007. However, prices of new luxury properties were still lagging behind by around 15 per cent,' said Mr Tan.

Equity analysts are getting increasingly wary of residential stocks with large exposures to the mass market segment on concerns that the government could announce more policy measures to cool the market.

'With sales activity largely centred on mass market condos, we believe this will lead to more demand-side and supply-side tightening measures ahead,' said DMG & Partners Research analyst Brandon Lee. 'As such, we are maintaining our preference towards high-end developers, which are less susceptible to policy concerns.'

He reiterated his 'buy' calls on Wing Tai Holdings and SC Global Developments.

DBS Group Research, on the other hand, said in a fresh report that it prefers companies with greater office exposure and laggards such as Keppel Land, UOL Group and Singapore Land, which have the largest office content in their revised net asset values.

BT: Hot home sales raise odds of govt cooling

Business Times - 16 Dec 2010

Hot home sales raise odds of govt cooling

Sales of new private homes in November hit 1,909; analysts expect Dec to stay buoyant

By UMA SHANKARI

(SINGAPORE) Demand for new private homes rose again in November, despite the measures to cool the property market announced barely three months ago.

The number of units sold by developers in the first 11 months of this year has already set a new yearly record - even though there is one more month to go.

Figures released by the Urban Redevelopment Authority (URA) yesterday showed November's sales volume at a strong 1,909 units. This takes total sales volume for 2010 to 15,025 units - more than the 14,688 units sold in 2009 and even higher than the record 14,811 homes sold in 2007.

'It is clear from November's sales figure that the Aug 30 set of measures have been less than effective in taming the buying frenzy. If left unchecked, there is a potential that the current buying fever could put upward pressure on home prices again,' said Tay Huey Ying, Colliers International's director of research & advisory.

'There is now an increased risk for more and stiffer demand-side cooling measures to be announced within the next two to three months,' she added.

In fact, prices may already be on the way up. Jones Lang LaSalle (JLL) noted in an analysis that the pick-up in buying activity is mirrored in the prices of caveats lodged.

Based on data retrieved on Dec 15 for transactions up to Nov 30, the firm found that the island-wide median price for non-landed properties under the 'new sale' category rose by 13 per cent month on month in November after falling by 9 per cent in October.

To ride on the strong demand and anecdotal price increases, developers launched 2,329 new private homes in November - second only to the record 2,878 units launched in July 2009, data from the URA showed.

In particular, developers were especially bullish about the mass-market segment, where the number of new homes launched rose to hit a 16-month high last month. Developers launched 1,638 homes in the outside central region (OCR), which is a proxy for mass-market locations, in November.

Buyers were also particularly keen on mass-market units; 1,229 such homes were sold in November, accounting for 64 per cent of all homes sold in the month. But the continuing strong demand for mass-market homes is surprising as prices in the segment are currently at a peak, analysts noted.

The strong sales in this segment over the last few months could be in part due to investors opting for properties that require a lower capital outlay compared to the high-end homes in order to minimise investment risks, they noted. But the fact that the buying volume was led by mass-market homes means that the total amount spent by homebuyers is still less than what it was in 2007, when the buying spree was led by high-end homes.

An analysis by CB Richard Ellis, based on URA's statistics, showed that the total transaction value of the homes sold up to November 2010 was $16.98 billion, 30 per cent lower than the $24.11 billion worth of homes sold in 2007.

'It is unlikely that the total transaction value of 2010 will be able to exceed the 2007 value even if the volume reaches 15,500-16,000 units for the whole year,' said Li Hiaw Ho, executive director of CBRE Research.

Analysts expect sales in December to stay buoyant at above 1,000 units given that the market is awash with liquidity and interest rates remain low.

The sales tally for the whole of 2010 is likely to be in excess of 16,500 units, putting 2010's sales volume at more than 10 per cent above the historical high seen in 2007.

In the light of this, more demand-side cooling measures could be coming. Said JLL's head of research for South-east Asia Chua Yang Liang: 'The low interest rate environment, coupled with the strong urban regenerative plans and overall market demand in these areas, have encouraged more speculative buying into the market. As such, we believe the risk of further policy intervention has been elevated with the soonest policy to be introduced within a month if not by early next year.'

Nomura analyst Tony Darwell said that one area that the government may want to curb is property purchases by foreigners.

'While the representation of foreign private homebuyers declined for the second consecutive quarter (albeit slightly) in Q3 2010, the representation is still high relative to historical levels. Foreign buyers also appear to have been buying more in the mass and mid-market segment during Q3,' he said.

BT: Sim Lian is top bidder for Punggol Central condo plot

Business Times - 08 Dec 2010

Sim Lian ahead in tight race for Punggol site

Top bid of $363m, or $406 psf ppr, is just 0.4% higher than nearest rival's

By KALPANA RASHIWALA

IN one of the tightest races for a site at a state tender, a joint venture between Sim Lian Land and Sim Lian Development edged out Qingdao Construction by just 0.4 per cent to emerge as the highest bidder for a 99-year leasehold private housing plot near Punggol MRT Station.

The site, which can be developed into a condo with about 810 units, includes Matilda House, the only remaining historic bungalow in Punggol New Town.

Sim Lian plans to restore Matilda House, which is gazetted as a conservation building, for use as a clubhouse in the proposed condo.

Sim Lian bid $363 million or $406.32 per square foot per plot ratio (psf ppr), inclusive of Matilda House's gross floor area. Qingdao Construction (Singapore) offered $361.7 million or $404.86 psf ppr.

The tender attracted seven bids. The lowest bid, from Allgreen Properties, was $288.76 psf ppr.

Credo Real Estate executive director Ong Teck Hui observed that the $406 psf ppr top bid for yesterday's tender is significantly above winning bids of $320-345 psf ppr for 99-year private housing sites offered at recent state tenders.

'This is due to the Punggol site's superior attributes, including proximity to an MRT station, and not necessarily indicative of higher bidding trends,' Mr Ong added.

In fact in late October when the Punggol site was launched, Mr Ong had predicted top bids of around $400-450 psf ppr for it. Hence, yesterday's top bid was at the lower end of that range.

'If it had not been for the August 30 property cooling measures coupled with the substantial Government Land Sales Programme for H1 2011 announced recently, the top bid at today's tender would have been even higher,' he said.

Agreeing, Sim Lian Group executive director Diana Kuik said: 'Developers are becoming cautiously optimistic even for sites that are well located near MRT stations.'

The biggest risk factor for a developer for the Punggol plot is the project's substantial size. 'However, this is mitigated by the site's proximity to an MRT station. Punggol is becoming a key feature of the north-east region boasting waterfront living,' Ms Kuik said.

As well, a commercial/ residential development on a plot next to Punggol MRT Station that was launched more recently will help make Punggol an even more exciting New Town, Ms Kuik added.

Sim Lian plans to pump in about $5 million to restore Matilda House. The group's proposed 16-storey condo on the 2.75 hectare site tendered yesterday will have about 800-odd units comprising two to four-bedroom apartments as well as penthouses. But the group will fine tune its plans and is not ruling out having some one-bedders.

'We expect to launch the project by Q4 2011,' Ms Kuik said.

CBRE Research executive director Li Hiaw Ho estimates Sim Lian's breakeven cost at about $750 psf.

'A new project on the site may be able to fetch around $800 psf on average when it is ready for launch,' he said.

'One attraction about a new development on the latest plot in Punggol is Matilda House, which will enhance the lifestyle of the future residents with a piece of history of old Punggol,' Mr Li added.

Others who bid at yesterday's tender include Hong Leong Group's Intrepid Investments ($359 psf ppr), Keppel Land Realty ($357 psf ppr), a tie-up between Frasers Centrepoint, Far East Organization and Japan's Sekisui House ($332 psf ppr) and Ho Lee Group unit Khai Wah Development.

SLP International Property Consultants' executive director Nicholas Mak said the 0.4 per cent spread between the top two bids at yesterday's tender is the smallest for a 99-year private condo site offered at a state tender since 2000.

Business Times - 07 Dec 2010

Sim Lian is top bidder for Punggol Central condo plot

By KALPANA RASHIWALA

A joint venture between Sim Lian Land and Sim Lian Development has emerged as the highest bidder for a 99-year leasehold private condo plot at Punggol Central/Punggol Walk.

The tie-up bid $363 million or $406 per square foot per plot ratio (psf ppr).

The tender attracted seven bids. The lowest, from Allgreen Properties, was $288.76 psf ppr.

The plot includes a single-storey conservation building, Matilda House.

BT: URA explains why DPS is still available for exec condos

Business Times - 07 Dec 2010

URA explains why DPS is still available for exec condos

By EMILYN YAP

PROPERTY developers can continue to offer the deferred payment scheme (DPS) for executive condominiums (ECs) because eligibility and ownership rules keep speculation in such projects at bay.

But homebuyers hoping that the interest absorption scheme (IAS) and interest- only housing loans (IOL) will also be available for ECs are in for a disappointment. The withdrawal of these two schemes in September last year applies to all types of private residential projects.

The Urban Redevelopment Authority (URA) issued clarifications on the various payment schemes in response to queries from BT.

Many in the property industry thought the government had scrapped the DPS for all types of uncompleted private homes in 2007 to curb speculation. It was not until last week that they realised DPS would still be available for ECs.

The news spread when developers of Prive - an EC in Punggol - said they would offer the scheme.

As at 5pm yesterday, 823 applications had poured in for the 680 apartments available in Prive.

Asked why developers can still offer the DPS for executive condominiums, URA said that ECs 'are different from other private residential developments' as they are meant for owners to live in and are subject to eligibility criteria and ownership conditions. For instance, EC buyers must form a family unit and they have to occupy their units for five years before selling them in the open market.

In addition, the subsale of booked ECs is not allowed.

'With these conditions, there is no need to remove DPS for ECs,' URA said. The 2007 move was meant to 'discourage excessive property investments in a buoyant market'.

According to URA, when the DPS was cancelled in October 2007, it had informed the Real Estate Developers' Association of Singapore, the Law Society of Singapore and all licensed developers in writing that the withdrawal would not apply to ECs and flats under the design, build and sell scheme.

Developers which intend to offer DPS for ECs have to seek the Housing and Development Board's approval to vary the terms in the standard sales and purchase agreement.

Then what about the IAS and IOL, which the government disallowed last year for all private residential projects to also discourage speculation? The news release made no mention of ECs then.

URA said that the ban on IAS and IOL 'is effected via the Monetary Authority of Singapore's housing loan rules for financial institutions', which apply to all residential properties, including ECs.

BT: New home projects draw out buyers

Business Times - 07 Dec 2010

New home projects draw out buyers

All but penthouses at Robinson Suites sold; 205 units of d'Leedon taken up

By KALPANA RASHIWALA

SEVERAL new residential projects sold well last week. All but the five penthouses at the 167-unit freehold Robinson Suites are said to have been sold over a three day period last week beginning on Thursday. Three shop units on the ground floor of the 42-storey project have also found takers.

BT understands that 132 residential units and the three shops were released on Thursday. Of these, everything was sold by Saturday, except for the five penthouses.

The remaining 35 apartments on the lower floors are believed to have been sold to a fund.

All the apartments in the development are either one-bedroom-plus-study units or two-bedders. Unit sizes start at 484 sq ft.

The apartments are said to have sold at prices ranging from $2,600 per square foot to $3,300 psf. In lumpsum quantum, prices began at $1.2 million for a one-bedroom-plus-study unit and $1.5 million for a two-bedder.

In addition to this relatively affordable lumpsum investment size, buyers were drawn to the pitch for the project as the first freehold apartments at Robinson Road. The units face the low-rise Lau Pa Sat and will enjoy a relatively unblocked view.

Robinson Suites will rise on the former VTB Building site; the project is being developed by a consortium whose shareholders include Cheong Sim Lam (whose family developed International Plaza), Fission Holdings, Tan Koo Chuan and Saw Pik Kee.

Analysts suggest that the strong sales achieved at Robinson Suites may inspire Kwek Leng Beng's City Developments, which owns the next-door City House office block, to similarly redevelop its site into apartments.

Meanwhile, over in the Farrer Road location, CapitaLand and its partners sold a further 153 units last week at d'Leedon on the former Farrer Court site. This takes total sales to 205 apartments, inclusive of the 52 units sold the previous weekend (Nov 27-28) when sales were open to former owners of Farrer Court.

Singaporeans have picked up 80 per cent of the units sold so far.

The developers have released 250 of the 1,703 apartments in the 36-storey, 99-year leasehold project. They have yet to release six pairs of strata semi-detached houses in the development.

The 250 apartments released have been priced at $1,680 psf on average. A typical one bedroom- plus-study apartment of 635 sq ft costs about $1.1 million. A typical two-bedder of 1,055 sq ft is priced at about $1.5 million.

The condo also has three- and four-bedroom apartments as well as penthouses.

Wong Heang Fine, CEO of CapitaLand Residential Singapore, said: 'We are pleased with the strong buyer interest in d'Leedon. It is a development that has no comparable given its iconic design by Zaha Hadid and prime District 10 location. We are confident that we will continue to see robust interest in the project, especially from homebuyers who are currently away for the December holidays.'

Meanwhile, in the executive condominium (EC) market, 823 applications had been received as at 5 pm yesterday for the 680 units available at Prive, a 99-year leasehold project at Punggol Road being developed by NTUC Choice Homes and Chip Eng Seng. Applications opened on Dec 3 and will close today.

Eligible applicants will be balloted for entry into the showflat on Dec 10, when sales bookings will commence.

The average price will be $660-690 psf on a normal progressive payment scheme. Buyers who opt for a deferred payment scheme will have to pay 2 per cent more.

BT: Non-landed private home prices fall 0.7% in October

Business Times - 30 Nov 2010

Non-landed private home prices fall 0.7% in October

Drop was caused by falling prices in the central and non-central locations

By UMA SHANKARI

PRICES of non-landed private homes fell 0.7 per cent in October, according to the monthly index compiled by the National University of Singapore (NUS).

NUS' Singapore Residential Price Index (SRPI) shows overall home prices fell last month, after having climbed 1.1 per cent per month in both August and September.

The last time the overall index fell was in July, when it dipped 0.1 per cent. NUS has been compiling the index since March this year.

October's drop was caused by falling prices in the 'central' and 'non-central' locations.

Home prices in central locations fell 1.1 per cent last month, after climbing 0.9 per cent in September. The central SRPI last fell in July, by 0.8 per cent.

And in a sign that the slowdown in the property market is now spreading to the mass market segment, the non-central SRPI dipped 0.5 per cent in October - the first time it has fallen since NUS started compiling the index. The non- central SRPI rose 1.3 per cent in September.

Year-to-date, the overall SRPI is up 10.7 per cent. Non-central prices are up 12.8 per cent, while prices in the central region have climbed a smaller 8.1 per cent.

The October flash estimate for the central region is now 3.6 per cent below its pre-financial crisis high in November 2007.

However, for the non- central region, the latest index has surpassed its pre- crisis peak in January 2008 by 14.9 per cent.

As a result, the overall SRPI flash estimate for October is 7.6 per cent above its November 2007 high.

Looking ahead, analysts expect mass market home prices to moderate further, given the impending large supply of development sites being offered for sale by the government.

'Most of the sites in the H1 2011 Government Land Sale programme will inject supply to the mass market segment, and this may rein in mass market home prices,' said Christine Sun, senior manager at Savills Research & Consultancy.

But it will have little impact on the mid-tier and luxury home prices, which could rise further, given the positive economic outlook for next year, she said.

DMG & Partners Research analyst Brandon Lee, for example, expects a 10 per cent fall in mass market home prices due to supply and continued policy risks.

NUS' index, which is compiled by the Institute of Real Estate Studies, was launched to serve as a resource for developing property derivatives in Singapore.

It is computed using the market values of a basket of completed properties.

Uncompleted projects are not included in the basket, as price movements for such projects can be different from those in the rest of the market.

But the impact of new launches on the prices of completed properties in the vicinity is factored in.

AsiaOne: Government maintains strong supply of land to meet demands

Government maintains strong supply of land to meet demands

MND reveals land sales plans for private residential, commercial and hotel developments for first half of 2011. -AsiaOne

Thu, Nov 25, 2010
AsiaOne

SINGAPORE - The Ministry of National Development (MND) announced in a press release that it will maintain a strong supply of private housing and release more commercial sites to meet demands.

The Government Land Sales (GLS) Programme for the first half of 2011 will comprise 19 Confirmed List sites and 25 Reserve List sites. The 44 sites will consist of 28 residential sites, 5 commercial sites, 2 commercial & residential sites, 1 White site and 8 hotel sites. These sites can potentially yield about 14,300 private residential units, 318,000 sqm GFA of commercial space and 3,700 hotel rooms.

MND will place 17 sites on the Confirmed List of the 1H2011 GLS Programme. These sites can yield about 8,100 residential units in total.

This is comparable to the supply from the Confirmed List in the 2H2010 GLS Programme, which was the highest supply since the Confirmed List/Reserve List system was introduced in 2H2001.

The 17 Confirmed List sites comprise 16 residential sites (including 3 Executive Condominium (EC) sites) and 1 commercial & residential site.

The Reserve List in 1H2011 will have 13 sites, which can together yield about 6,200 residential units.

The 1H2011 GLS Programme will therefore have a total of 30 sites for residential development, including 4 EC sites and 2 commercial & residential sites, which can generate about 14,300 private residential units.

This is higher than the 13,900 private residential units made available in second half 2010 GLS Programme.

Most of the 30 sites, including the 4 EC sites, are located in the Outside Central Region or in locations in the Rest of Central Region where more affordable private housing is expected to be built. This will help to increase the supply of such housing.

More Commercial Sites to Meet Demand for Office Space

To ensure a steady supply of office space to support the growth of the financial and business services sector, MND will release 2 commercial sites at Robinson Road / Cecil Street and Paya Lebar Road / Eunos Road 8 on the Confirmed List of the 1H2011 GLS Programme.

Both sites will be sold with the requirement of a minimum office quantum.

The Robinson Road site will cater to the demand for office space in the Central Business District (CBD). It is located in proximity to the Tanjong Pagar area, which is establishing itself as an attractive business node within the CBD, with many new office and hotel developments.

The site at Paya Lebar Road was originally scheduled to be placed on the Reserve List in Dec 2010, under the 2H2010 GLS Programme. It will be transferred to the Confirmed List for sale in Jan 2011 to help facilitate the early development of Paya Lebar Central into an attractive commercial hub to complement the CBD. The future development can cater to businesses that do not need to be located within the CBD.

In addition, a commercial site at Sims Avenue / Tanjong Katong Road will be added to the Reserve List to provide for growth of Paya Lebar Central into a sizeable and sustainable commercial node.

Hotel Sites

Two new hotel sites at Race Course Road / Perumal Road and Kallang Riverside (Parcel B) will be added to the Reserve List of the 1H2011 GLS Programme. As a number of sites had been sold from the 2H2010 Reserve List, these new sites will ensure that a wide variety of hotel sites is maintained in the 1H2011 Reserve List for developers to choose from.

The site at Race Course Road is located in proximity to the historic district of Little India, which is popular with tourists. The hotel site at Kallang Riverside is the second hotel site to be released for sale in this new growth area which will be transformed into a new waterfront lifestyle precinct by the edge of the city. With the commencement of construction of the Sports Hub, which is scheduled for completion in 2014, it is timely to release an additional hotel site in the area to facilitate the early development of Kallang Riverside.

Other Government Supply to be Made Available in the First Half of 2011Supply in the Pipeline Expected to be Completed in Next Few Years

Apart from the GLS Programme, the Government also makes available other supply of land and properties through its various agencies. MND works closely with other agencies to coordinate this supply of space with the supply from the GLS Programme.

The projects which the various Government agencies plan to initiate outside the GLS Programme in the first half of 2011 can yield about 39,000 sqm GFA of commercial space. These projects are to meet strategic economic or development objectives. The planned commercial space supply from these projects includes:

Leasing of vacant state properties for commercial, including office, uses (about 14,300 sqm GFA), and

Localised retail facilities at Sentosa, parks, MRT stations and community centres.

The announcement of the planned supply to be made available by the Government outside of the GLS Programme will provide a more complete picture of the overall Government supply of space for 1H2011.

Maintaining a Strong Supply of Private Housing to Meet Demand

Apart from the potential supply from the GLS Programme and other Government sources in first half of 2011, there is also additional supply from projects in the pipeline which have been initiated earlier, both from Government and private land sources.

For the private housing sector, as at the third quarter 2010, there were 64,358 private residential units in the pipeline, comprising supply from projects that were already under construction and those that had been granted planning approval but were not under construction yet. Of these, a total of 36,796 new private residential units are expected to be completed between the fourth quarter 2010 and 2013. Of the 64,358 units, 20,965 units will be in Core Central Region, 18,220 units in Rest of Central Region and 25,173 units in Outside Central Region.

There are another 7,700 units from sites sold or to be sold under the 2H2010 GLS Programme that have not been included in the 64,358 private residential units in the pipeline as submissions for planning approval have not been made for these sale sites yet. Together with the 8,100 private units that can be potentially generated from the Confirmed List of the 1H2011 GLS Programme, the potential supply of private housing units that can be completed in the next few years will be about 80,200 units.

In addition, of the 64,358 private residential units in the pipeline as at the third quarter 2010, 33,771 units were still unsold. These comprised 3,248 units that had been launched for sale by developers and 11,382 units which had the pre-requisite conditions for sale and could be launched for sale immediately. The pre-requisite conditions for sale have not been obtained for the remaining 19,141 units with planning approval.

For the office sector, as at the third quarter 2010, there was a total supply of about 887,000 sqm GFA of office space from various Government and private land sources in the pipeline. Of these, about 762,000 sqm GFA of office space is expected to be completed between the fourth quarter 2010 and 2013. Apart from office space, there is a pipeline supply of about 368,000 sqm GFA of Business Park (BP) space, of which 278,600 sqm GFA is expected to be completed between the fourth quarter 2010 and 2013. Space in BPs can meet the needs of some companies, such as the backroom operations and data centres of financial institutions and small and medium enterprises (SMEs).

For the shop and hotel sectors, as at third quarter 2010, there was a total supply of about 382,000 sqm GFA of shop space and 11,133 hotel rooms in the pipeline, most of which are expected to be completed between the fourth quarter 2010 and 2013.

A summary of the estimated pipeline supply of private residential units, office space, shop space and hotel rooms as at the third quarter 2010 can be found in Appendix 3. The estimated pipeline supply is based on expected project completion dates provided to URA by developers on a quarterly basis. These completion dates will be updated when URA releases the Real Estate Statistics for the fourth quarter of 2010 in end Jan 2011.

The Government will continue to monitor the property market closely and is prepared to inject even more supply of private housing should demand continue to be strong.

BT: Morgan's China-play picks include Wilmar

Business Times - 11 Nov 2010

Morgan's China-play picks include Wilmar

By LYNETTE KHOO

INVESTORS hoping to get a slice of the China action should do so through multinational companies (MNCs) in the consumer, water treatment, energy resources and electronics space. These would include companies such as Apple, Pfizer, Suez, Infineon, Wilmar International and Samsung Electronics.

Morgan Stanley Hong Kong and China strategist Jerry Lou noted that these companies have long track records and offer transparency and consistent disclosure standards. They are also less vulnerable to policy and asset price cycles in China.

'If China's economy comes to represent 14 per cent of global GDP by 2020, MNCs need to think about how they can benefit strategically from China's advancement,' said Mr Lou in his presentation at the Morgan Stanley's 9th Annual Asia Pacific Summit 2010.

His top picks include Singapore-listed Wilmar International, which controls 25 per cent of the Chinese oilseed crushing market and 40 per cent of the branded cooking oil market, and which he believes will achieve mid-teens average earnings per share growth from 2011 to 2015.

Mr Lou also favours Apple, which will benefit from its brand recognition and major consumer upgrade; and Samsung Electronics, which is poised to tap China's growing LCD TV market.

He noted that consumption is becoming a compelling story in China, with the country expected to replace Japan as the largest luxury consumer market in the next few years.

'Companies that can make things cheap will not necessarily be the ultimate winners. The ultimate winners will be those that can offer a first-class consumer experience,' Mr Lou said. 'Do not underestimate Chinese consumers' appetite to upgrade, especially when the baby boomers become the mainstream consumers.'

Also among his top picks were Pfizer, the largest foreign pharmaceutical firm in China; Suez, the second largest drinking water private operator in China; and chipmaker Infineon, which is expected to benefit from car consumption and industrial capacity upgrade in China.

Qing Wang, Greater China chief economist at Morgan Stanley, noted that China's consumption growth is expected to outpace investment growth over the next 10 years.

According to him, China is at a similar stage of development as Japan 40 years ago and South Korea some 20 years ago. Mirroring the past trend of the two economies, China has seen growth deceleration and rising inflation since its inflexion point in 2007.

Morgan Stanley expects consumer price index growth to peak at 3.7-3.8 per cent year-on-year for the October to November period before falling below 3.5 per cent in December, with GDP estimated at 10.2 per cent for 2010 and to ease to 9.5 per cent in 2011.

In a bid to mop up excess liquidity following the US's second round of quantitative easing this month, China's central bank yesterday said that it was raising the required reserve ratio of its top lenders by 50 basis points from Nov 16, its fourth official increase this year. This followed an interest rate hike last month, which lifted the one-year deposit rate and one-year lending rate by 25 basis points to 2.5 per cent and 5.56 per cent respectively.

Dr Wang, however, does not expect China to embark on an interest rate hike cycle, saying that it is more likely to rely on tightening bank's reserve requirement ratios.

Given its capital and credit controls, Mr Lou said, China is unlikely to face a systemic risk arising from any sudden pull-back in liquidity.

BT: Wilmar Q3 net profit plunges 60.3%

Published November 11, 2010

Wilmar Q3 net profit plunges 60.3%

Loss in oilseeds and grains unit; absence of big one-time gain

By FELDA CHAY

WILMAR International's third-quarter net profit plunged 60.3 per cent year-on-year due to the weaker performance of its oilseeds and grains division and the absence of a big one-time gain.

Net profit for the period ended Sept 30 was US$259.5 million, or 4.1 US cents a share. In the corresponding period last year, Wilmar registered US$652.9 million in earnings, partly buoyed by a net exceptional gain of US$167 million from the sale of new shares by its Wilmar China unit.

The latest poor showing took a heavy toll on Wilmar's share price yesterday. It touched a low of S$6.48 before recovering slightly to close 37 Singapore cents lower at S$6.51, a fall of 5.4 per cent. Some 37.3 million shares changed hands.

Despite the lacklustre results, the world's biggest listed palm oil plantation firm remained upbeat about its prospects.

Chairman and chief executive Kuok Khoon Hong said: 'Despite the weak Q3 performance, the group remains positive on its long-term prospects.'

'The outlook for Asian economies, especially China, India and Indonesia, remains positive. The group will continue to leverage on its well-established presence in these markets and invest in existing and new businesses for growth.'

For Q3, Wilmar's oilseeds and grains division recorded a pre-tax loss of US$37.1 million, despite a 28 per cent rise in sales volume. The loss was attributed to 'weaker margins and less timely purchases of raw materials'.

Revenue for the period rose 23.3 per cent to US$7.8 billion.

For the nine-month period, Wilmar's earnings dropped 30.2 per cent to US$1 billion, or 15.7 US cents per share. Sales were 25.5 per cent higher at US$21.3 billion.

At Sept 30, the company had cash and cash equivalents of US$596.3 million, compared with US$1.2 billion a year earlier.

摩通：工行盈利優於同業平均，升ＡＨ目標價１７％

11/11/2010 12:21
《外資精點》摩通：工行盈利優於同業平均，升ＡＨ目標價１７％

　　《經濟通通訊社１１日專訊》摩根大通發表研究報告指，工商銀行（０１３９８）（滬：６０１３９８）明年貸款增長有可能減慢至１３％，低於行業平均的１５％，惟其明年盈利受惠維持穩定擴闊的息差，可望有２０％增長，高於行平均，因此該行上調其ＡＨ股目標價１７％，Ａ股目標價升至７元人民幣，Ｈ股則升至８﹒５元，維持其「增持」投資評級。

　　報告指，工行盈利可望優於同業，主要由於貸款定價能力改善、利率上調及強勁的服務費收入增長，有助其減沙依賴資本集中的業務，其充裕的流動資金，亦對其債券收益有幫助。

　　報告又指，由於工行的貸款減值準備對貸款比率已達到２﹒５％，即使人行上調有關需求，對其盈利亦不會構成影響，明年並無增加撥備的壓力。

　　該行又指，Ｈ股的大型銀行首選為工行，可受惠於加息及內地經濟增長強勁，由於工行估值高及股價波幅較低，因此股價表現一直落後於同業。不過，摩通料工行未來３至５年股本回報率逾２０％，工行Ａ股表現可能更佳。（ｏｓ）

First Reit Rights Issue: First REIT’s 2011 distribution yield expected to rise to 9.14% following acquisition of two Jakarta hospitals

First REIT’s 2011 distribution yield expected to increase to 9.14% following acquisition of two Jakarta hospitals

Wednesday, 10 November 2010 23:17

Bowsprit Capital Corporation, the manager of First Real Estate Investment Trust (First REIT), Singapore’s first healthcare real estate investment trust, announced today that First REIT’s distribution in projection year 2011 is expected to rise from 8.57%1 to 9.14% following the acquisition of two new healthcare properties in Indonesia – The Mochtar Riady Comprehensive Cancer Centre and Siloam Hospitals Lippo Cikarang.

This is based on a forecast annualised distribution per Unit (DPU) of 6.40 cents for the full financial year ending 31 December 2011, in relation to its enlarged portfolio and financing through a combination of the underwritten renounceable rights issue of 345,664,382 new units at an issue price of $0.50 per rights unit and bank loan.

Apart from the upside in yield, the manager also expects to see an increase in annual gross rental income of 80%, from $30.3 million in forecast year 2010 to $54.5 million in projection year 2011 as a result of its enlarged portfolio. On the same basis, distributable income is also expected to increase by 89% from $21.3 million to $40.3 million.

Upon completion of the Acquisitions, First REIT’s aggregate leverage will also be lowered from 18.60% to 17.25% for the projection year 2011. Accordingly, First REIT’s statement of financial position will be strengthened, leaving sufficient capability for debt financing should the need for such financing arises in the future.

“Through these acquisitions, we will be able to deliver long-term value and returns to our unitholders by way of an improved distribution yield. This is testament to our sound acquisition strategies whereby we are constantly looking out for yield-accretive healthcare related properties, and we will continue to embark actively on such acquisitions whenever opportunities are available,” said Dr Ronnie Tan, CEO of Bowsprit.

Based on a proforma capitalisation of First REIT as at 31 December 2009, as if First REIT had purchased MRCCC and SHLC (the “Properties”) and completed the Rights Issue on 31 December 2009, First REIT’s total capitalisation would have stood at S$565.9 million as compared to its actual capitalisation of S$323.3 million.

The Acquisitions

MRCCC, which will begin operations in December 2010, is Indonesia’s first private comprehensive cancer treatment centre equipped with state of the art cancer treatment and diagnostic facilities. SHLC, which began operations in 2002, is a six-storey hospital (with a basement and a covered roof space) and will accommodate 75 beds by the end of 2010.

MRCCC will be acquired from Wincatch Limited, an unrelated third party, for S$170.5 million, and SHLC will be acquired from the sponsor of First REIT, PT Lippo Karawaci Tbk (“Lippo”), for S$35.0 million. The respective purchase prices of MRCCC and SHLC represent an attractive discount of 19.7% and 13.8% respectively to the average of the Properties’ latest independent valuations.

The Acquisitions will increase the value of First REIT’s portfolio by 74.3% to S$603.4 million. The total gross floor area of the enlarged portfolio will increase by 58.7% from 83,638.2 sqm to 132,696.2 sqm. The total number of hospital beds in relation to First REIT’s Indonesia portfolio will increase by 43.8% from 537 to 772.

On completion of the Acquisitions, the conditional master lease agreements entered into with Lippo in relation to the Properties will commence for a 15 year lease term (with an option to renew for a further term of 15 years, subject to the renewal of the Properties’ HGB4 titles).
Rental income of both Properties comprise a base rent component which is payable quarterly in advance, and subject to a stepped up increase every year thereafter at a rate equal to 2 times of the percentage increase of Singapore’s Consumer Price Index for the preceding calendar year; as well as a variable rent component5.

Key benefits of the Acquisitions

The Manager believes that the Acquisitions and the Rights Issue (collectively, the “Transactions”) will bring, among others, the following key benefits to the unitholders:

(i) opportunity to purchase attractive and high quality properties at prices below valuation;

(ii) increased income stability of First REIT through the MRCCC master lease agreement and the SHLC master lease agreement and increase in First REIT’s weighted average lease to expiry;

(iii) unique opportunity to acquire two quality hospitals in Jakarta, Indonesia;

(iv) increased absolute size of First REIT’s asset base which may raise the profile of First REIT among global investors and increased portfolio size enhances First REIT’s competitive positioning and ability to pursue future acquisitions;

(v) increased market capitalisation and potential increased liquidity through the Rights Issue;

(vi) yield accretive acquisitions with expected increase in distribution yield to unitholders for Projection Year 2011;

(vii) the Acquisitions would enable First REIT to grow through the acquisition of a portfolio of hospitals which enhances the diversification of First REIT’s portfolio across locations and medical specialisations; and

(viii) increase in attractiveness of the enlarged portfolio given the reduction in the weighted average age of the Properties in the enlarged portfolio after the completion of the Acquisitions.

The Rights Issue and Debt Financing

The acquisition of MRCCC and related transaction costs will be funded in cash through a combination of the net proceeds from the Rights Issue and partially through a new term loan facility of up to S$50.0 million from Oversea-Chinese Banking Corporation Limited. The acquisition of SHLC and related transaction costs will be fully financed in cash from the proceeds raised from the Rights Issue.

The Manager intends to raise approximately S$172.8 million in gross proceeds through the Rights Issue to eligible unitholders, on a pro rata basis of five (5) Rights Units for every four (4) existing Units, at the Issue Price of S$0.50 per Unit (fractional entitlements to be disregarded). Oversea-Chinese Banking Corporation Limited and Credit Suisse (Singapore) Limited are the joint lead managers and underwriters for the Rights Issue.

Moving Ahead

First REIT will be looking to achieve a portfolio size of S$1 billion in the next two to three years. The Manager will continue to look for other yield-accretive assets in Singapore and Indonesia, as well as the rest of the Asia Pacific region.

JES News release 9 Nov 10: Q310 Results

SGX-LISTED JES INTERNATIONAL 3Q2010 NET PROFIT SOARS TO RMB 22.5 MILLION from RMB1.6 MILLION; ORDERBOOK REACHES US$ 900 MILLION FOR DELIVERY UP TO FY2012

- Revenue rose 113.7% to RMB 641.0 million on contributions from new yard completed in mid-2010
- Total of 35 vessels for delivery up to FY2012
- FY2010 financial performance to exceed FY2009

*Based on weighted average number of ordinary shares of 1,166,028,000
**As at 31 Dec 2009


SINGAPORE, 9 November 2010 – JES International Holdings Limited (“JES” or the “Group”) (JES 国际控股有限公司), a major PRC shipbuilder, said today that its net attributable profit for the July- September 2010 (“3Q2010”) soared to RMB 22.5 million from RMB 1.6 million in 3Q2009.

Singapore Exchange Mainboard-listed JES, with capabilities to build a wide range of vessels, said profit surge was achieved on the back of a 113.7% increase in revenue to RMB 641.0 million in 3Q2010 from RMB 300.0 million in 3Q2009, mainly due to more RMB (Million) 3Q2010 3Q2009 Change (%) vessels in construction, with the increased capacities coming from the recently completed new yard facilities.

In 3Q2010, the Group delivered two 37,500 deadweight tonnes (“DWT”) bulk carriers and one 79,800 DWT bulk carrier, as compared to 3Q2009 where shipbuilding operations were affected by slower production progress and delays in vessel deliveries.

JES reported gross profit margin of approximately 9.0% in 3Q2010. Earnings per share rose to 1.93 RMB cents from 0.14 RMB cent for 3Q2009 (based on weighted average of 1,166,028,000 shares). Net asset value per share as at 30 September 2010 rose to 140.8 RMB cents from 138.6 RMB cents as at 31 December 2009.

For the nine months ended 30 September 2010 (“9M2010”), the Group recorded revenue and net attributable profit of RMB 1.5 billion and RMB 27.0 million, respectively, compared to RMB 980.1 million and a loss of RMB 43.9 million, respectively, in 9M2009.

JES’s Chairman and Chief Executive Officer Mr. Jin Xin said, “The completion of our new yard has increased JES’s capabilities and enhanced our reach to a wider market.

Our improved performance in 3Q2010 strengthens the reputation of JES as one of the PRC’s largest non-state-owned shipbuilders and underscores our sales and marketing efforts which led to securing business within a competitive business environment.”

The Group continues to maintain prudent financial policies to ensure sustainable growth.

As at 30 September 2010, the Group held cash and cash equivalents of approximately RMB 775.0 million, with short-term borrowings of RMB 256.1 million and no long-term borrowings.
Orderbook Updates To-date in FY2010, the Group has successfully contracted 24 new vessels, bringing its total orderbook as at 30 September 2010 to a total of 35 vessels valued at approximately US$900 million. These orders, which will be constructed at both the Group’s old and new yards, will be progressively delivered over the next 24 months.

Outlook

“In the near term we seek to secure new orders to fully utilize our expanded production facilities. With capabilities now that we have competed our new yard, we plan to expand our portfolio to include more sophisticated vessels such as Floating Oil Production, Storage and Offloading (“FPSO)” units and ocean engineering vessels. Over the medium to longer term we plan to penetrate the offshore equipment sector to produce oil rigs,” Mr Jin said.

The Group has commenced prospective discussions with potential business partners in this area and will announce any such development as it arises.

While economic conditions have improved significantly, the Group remains cautiously optimistic about the long-term operating outlook of the global economy and shipbuilding industry. As such, the Group will continue to actively monitor market developments to ensure the sustainability of its future earnings.

In view of the above factors and barring unforeseen circumstances, the Group remains confident that its financial performance for FY2010 will exceed FY2009.

~ Ends ~

Issued on behalf of JES International Holdings Limited by WeR1 Consultants Pte Ltd

About JES International Holdings Limited

JES is a major PRC shipbuilding group with production facilities capable of producing different types of vessels, including non-standard vessels. Its principal products include:

• Bulk Carriers
• Crude oil tankers
• Containerships
• Ocean engineering vessels

The Group’s customers include major shipowners based in Europe, Canada and Asia, including the PRC.

The Group’s shipyard is located at Shiwei Port, Jingjiang City in Jiangsu Province, PRC
and features a 1 km-long coastline with access to deep water and stable currents. The
facilities stretch over a gross land area of approximately 467,000 sq.m. The existing
yard facilities include two slipways equipped with gantry cranes, two outfitting wharfs, a
hull and section steel shop, a sub-assembly shop, a block assembly shop, a metal
treatment shop, two paint shops, a pipe shop and an electrical shop that cover every
stage of the shipbuilding process.

In 2010, the Group completed the construction of its new yard facility located on the land
adjacent to its existing yard. The new yard consists of a 400m by 140m wide dry dock, a
steel hull structure shop, one 1,200 tonne and two 400 tonne gantry cranes, auxiliary
facilities and other lifting equipment. With the addition of the new yard, JES is now
equipped with the additional capacity to concurrently construct three bulk carriers of up
to 176,000 DWT each or two crude oil tankers of up to 300,000 DWT each or very large
ocean engineering vessels and offshore equipment such as oil rigs.

BT: ICBC eyes more S-E Asian acquisitions

Business Times - 04 Nov 2010

ICBC eyes more S-E Asian acquisitions

(BANGKOK) Industrial and Commercial Bank of China (ICBC), the world's most valuable lender, said yesterday it was looking for acquisitions in countries in South-east Asia where it currently has no presence.

'South-east Asia is where we also focus on as it offers growth potential,' ICBC chairman Jiang Jianqing told a news conference here. 'We are looking for opportunity in the region where ICBC has no operations.' ICBC, which has 194 overseas branches and subsidiaries in 22 countries, now operates in five countries in South-east Asia: Indonesia, Thailand, Malaysia, Singapore, and Vietnam.

In April, it completed the acquisition of a 97.24 per cent stake of Thailand's smallest lender, ACL Bank, for about US$550 million. The acquisition would be a platform for entering Thailand, Vietnam, and Cambodia, as ICBC expands its network in South-east Asia's fast-growing banking market, the bank said.

ICBC (Thai), which has about 71.5 billion baht (S$3.08 billion) in assets, expected to expand its assets by 20 per cent a year by focusing on retail businesses and expansion into Chinese firms in Thailand, ICBC (Thai) CEO Chen Youbin told reporters. 'We could be bigger than CIMB Thai over the next three to five years,' Mr Chen said, referring to the Thai unit of Malaysia's CIMB Group Holdings.

ICBC (Thai) also planned to increase the number of its branches to 30 over the next three years from 19, Mr Chen said. The bank planned to delist from Thailand's stock exchange as its free float did not meet the minimum 15 per cent requirement set by the stock exchange.

Asked if China's ICBC wanted to buy more assets in Thailand, Mr Jiang said: 'The first priority is to make ICBC successful.' - Reuters

CNA: JES Q310 results

SINGAPORE, 9 November 2010 – JES International Holdings Limited (“JES” or the“Group”) (JES 国际控股有限公司), a major PRC shipbuilder, said today that its net attributable profit for the July- September 2010 (“3Q2010”) soared to RMB 22.5 millionfrom RMB 1.6 million in 3Q2009.

Singapore Exchange Mainboard-listed JES, with capabilities to build a wide range ofvessels, said profit surge was achieved on the back of a 113.7% increase in revenue toRMB 641.0 million in 3Q2010 from RMB 300.0 million in 3Q2009, mainly due to more vessels in construction, with the increased capacities coming from the recentlycompleted new yard facilities.

In 3Q2010, the Group delivered two 37,500 deadweight tonnes (“DWT”) bulk carriers and one 79,800 DWT bulk carrier, as compared to 3Q2009 where shipbuilding operations were affected by slower production progress and delays in vessel deliveries.

JES reported gross profit margin of approximately 9.0% in 3Q2010.
Earnings per share rose to 1.93 RMB cents from 0.14 RMB cent for 3Q2009 (based on weighted average of 1,166,028,000 shares). Net asset value per share as at 30 September 2010 rose to 140.8 RMB cents from 138.6 RMB cents as at 31 December 2009.

For the nine months ended 30 September 2010 (“9M2010”), the Group recorded revenue and net attributable profit of RMB 1.5 billion and RMB 27.0 million, respectively, compared to RMB 980.1 million and a loss of RMB 43.9 million, respectively, in 9M2009

AFP: ICBC expanding in Europe, Middle East

ICBC expanding in Europe, Middle East

Posted: 09 November 2010 1550 hrs

BEIJING : Industrial and Commercial Bank of China, the world's largest by market value, is accelerating its global expansion with new branches in Europe and the Middle East, a newspaper reported Tuesday.

The Beijing-based bank opened a branch in Abu Dhabi on Sunday and is planning others in Paris, Madrid, Milan, Brussels and Amsterdam as it follows a rising tide of Chinese firms going abroad, the Financial Times reported.

"ICBC anticipates some big developments in terms of Chinese companies doing more business in Europe and they want to be ready," the newspaper quoted an unnamed senior China-based European banker as saying.

Bank officials were not immediately available to comment on the report.

The bank is also looking at potential acquisitions in Europe and the Middle East and plans to expand in Canada after buying a small network of six branches from Hong Kong's Bank of East Asia this year, the report said.

ICBC has a subsidiary company in Qatar and is mulling opening branches in Kuwait and Saudi Arabia, the report said.

The bank already has branches in London, Frankfurt and Luxembourg, where it is planning to establish its European headquarters, the report said.

ICBC has been the most aggressive of China's "big four" banks in expanding overseas, as the country's lenders restart plans that were put on hold by the global financial crisis and seize upon new opportunities left in its wake.

- AFP /ls

BT: Hock Lock Siew - The curious case of two shipbuilders

Business Times - 10 Nov 2010

Hock Lock Siew
The curious case of two shipbuilders

By LYNN KAN

DOES one march to the drumbeat of the market or heed the advice of research analysts when investing?

This dilemma is thrown into sharp relief when the two views diverge, as with the curious case of the two Chinese shipbuilders listed on the Singapore Exchange: Yangzijiang Shipbuilders and Cosco Corporation.

Consistently, Yangzijiang has been preferred by analysts covering both shipping companies. Yangzijiang has received higher target price (TP) guidances over Cosco. The 12-month analyst consensus TPs peg Yangzijiang at $2.14 over Cosco at $1.94.

However, those who look to the market behaviour would have to abandon these endorsements by analysts. Cosco has already exceeded these expectations. By yesterday, two market days after it announced a 137 per cent improvement in net profit of $55.1 million, Cosco shares have put on 22 cents to $2.16 - way past analysts' targets. Instead, YZJ is the laggard at $2.02.

The market has repeatedly taken Cosco's side, making it an expensive shipping stock compared to its peers. According to a report by DBS Vickers, Cosco's 2011 forward price-earnings are at 16.1 times versus YZJ's more modest 11.9 times.

The market could certainly be right right now, but analysts seem to be making convincing cases for Yangzijiang over Cosco in their reports.

For one thing, Yangzijiang - whose ambitions are to be an integrated shipping company - takes on new expertise through less risky acquisitions or joint venture undertakings. Case in point: It recently penned a memorandum of understanding with CSBC Corporation in Taiwan, which would likely see Yangzijiang learn from the large-capacity shipbuilder and allow it to venture into building larger ships than it is doing now. Cosco, on the other hand, has ventured into unfamiliar terrain such as offshore equipment building without such tie-ups. Though it delivered the Seven driller this year, the project led to a year's worth of delays and dented its profit margin severely in 2009.

Secondly, YZJ has had better margins because of better execution in the past. Yangzijiang maintained its shipbuilding margins at about 23-24 per cent this quarter and analysts are typically confident about its execution time.

Cosco has a rockier execution track record. It reported at its third-quarter briefing margins of 10 per cent for its bulk carrier segments. This isn't a cushy margin but is already an improvement from the time its margins were deeply compressed at 2.9 per cent.

Lastly, while Cosco's orders amounting to about $6.1 billion into 2012/2013 have recently pipped Yangzijiang's $5.3 billion, the quality of their order books differs greatly. Cosco is dogged by a delay/cancellation rate of about 50 per cent, compared with Yangzijiang's much healthier 9 per cent.

Yangzijiang also has helped reduce cancellations and delays from its clients because it helps clients liaise directly with banks to secure financing. Cosco doesn't have a similar mechanism, so risks of cancellations are much higher.

On paper, the case for Yangzijiang is a stronger one. But a glance at Cosco's skyrocketing price hits home a sobering fact: much of the good news from Yangzijiang is already priced in, while the rebound for Cosco isn't entirely.

What could explain the occurrence is what's slightly beyond the market's horizon: the risk of oversupply in the bulker market in 2011, which will trouble Cosco more than Yangzijiang next year.

Although Cosco's improving margins and larger order books are the causes of much exuberance, the company's shares might not fare so well in a few months because it's much more exposed to the building of bulk carriers than is Yangzijiang. According to a report by Credit Suisse released in July, Yangzijiang's order books are 64 per cent bulk carriers and 36 per cent containership. Cosco's order books are 93 per cent bulk carriers. Its most recent announcement last week of new order wins were also all bulk carriers, adding and not subtracting to its dependence on bulker newbuilds for revenue.

So, those scratching their heads over the Yangzijiang versus Cosco dilemma might want to bear in mind that there's more to a company's fortunes than current upward-trending price movements. Exuberance on a stock - especially in shipping - should include longer-term calculations, such as industry-wide systemic risks and sound business strategies.

BT: Shipping to recover in 3-5 years: Cosco chief

Business Times - 10 Nov 2010

Shipping to recover in 3-5 years: Cosco chief

(GUANGZHOU) The global shipping market will recover in 3-5 years, led by the container industry, which has already started to return to profit, a top executive said yesterday.

The shipping industry is seen to be returning to pre-crisis levels with the help of soaring consumer consumption in China, said Wei Jiafu, head of China Ocean Shipping Company (Cosco), the world's largest dry bulk firm.

'China's internal demand is huge, external demand is also growing and we will see another spring in 3-5 years' time,' he told reporters at an industry conference in China's southern port hub of Guangzhou.

Mr Wei forecast that the Baltic Dry Index would average 3,500 points in 2011, up from Monday's close of 2,482 points.

A flood of new dry bulk and oil tanker vessels may weigh on the freight market in 2011, slowing the industry's recovery from the global financial crisis two years ago.

Signs of a recovery were already becoming evident in the container industry, a sector closely linked to world economic growth, since it does not face the same oversupply problems as dry bulk and tankers.

Mr Wei urged the freight industry to avoid 'irrational fleet expansion' that could threaten to burden the market for years.

The global fleet of dry bulk carriers is expected to outpace economic demand in 2011, a result of the industry's buying spree two years ago before the financial crisis slashed sea trade.

'We should pursue a more rational growth model, restricting irrational fleet expansion and staying on the right course,' he said. 'This is our only choice to sustain growth in this highly volatile market.'

Outstanding bulk cargo ship orders represent more than half of the existing capacity, according to Clarkson Research.

Dry bulk freight supplies were expected to increase to 616 million deadweight tonnes next year, a 15 per cent rise from this year's 537 million dwt, analysts said.

That would surpass a 5 per cent rise in expected demand growth in seaborne trade to 413 million dwt from 395 million dwt\. \-- Reuters