JES, BUY S$0.36, Bloomberg: JES SP
Stay in positive territory
Price Target : S$ 0.46
By: Pei Hwa HO
· 3Q10 results in line
· Earnings turnaround on track with improved operating environment, higher order book and new yard
· Maintain BUY; TP S$0.46
Comment on Results
Recovery on track. JES reported net profit of RMB23m on the back of 21% rise in topline to RMB641m. Net profit was down 53% q-o-q but improved sequentially from recurring profit of RMB20m in 2Q10 (excluding US$4m or RMB27m one-off gain from contract cancellations last quarter). Gross margin recovered to c9% vs 7.3% in 2Q10. Continued delivery of better recurring earnings would boost investors’ confidence in JES’ execution and provide catalysts for the counter.
JES saw a strong order flow YTD with 24 vessels contracted or over US$600m of new orders. JES’ orderbook grew to a total of 35 vessels worth US$900m, to be delivered over the next 2 years.
Making inroad into offshore. With the commencement of the new yard, which is one of the most advanced yard facilities in China, JES is in talk with strategic partners to penetrate the offshore segment by constructing offshore vessels like FPSO. Such positive development, if successful, will raise JES profile among the Chinese shipbuilders.
Recommendation
Our TP of S$0.46 is based on 1.5x FY11 P/BV, which is the mean of its peak and trough valuations. We reckon JES to be a potential one-bagger in the shipbuilding sector, assuming net margins recover back to 2006 level of 8.2%. Maintain BUY. Near term price catalysts are strong order wins and earnings delivery. Possible key risks are poor.
Wednesday, November 10, 2010
Monday, November 8, 2010
BT: Cosco reports 147% jump in Q3 net profit
Business Times - 04 Nov 2010
Cosco reports 147% jump in Q3 net profit
Firm expects new contracts in Q4; sees 2010 earnings being better than 2009's
By LYNN KAN
COSCO Corporation (Singapore) yesterday announced a heartening third-quarter performance. It maintains a cautious outlook for the remaining quarter but expects 2010 earnings to be better than 2009's.
The Chinese shipbuilder recorded net profit attributable to equity-holders of $55.1 million, a jump of 147 per cent from $22.3 million a year ago. Earnings per share rose to 2.46 cents from one cent.
The profit surge was despite a $27.6 million provision for future losses to construction projects, compared with $8.9 million previously. The provision, said Cosco Singapore's management, was based on 'worst case scenario' projections on on-going and completed work on heavy lift carriers, a vessel which the group is new to building.
Revenue for Q3 climbed 27 per cent to $952.7 million, of which 96 per cent came from its ship repair, ship building and marine engineering operations and 3 per cent from its dry bulk shipping operations.
Turnover in Cosco's ship building and marine engineering activities rose 27.4 per cent year-on-year to $918.7 million on progressive completion of projects. Cosco's Zhoushan, Dalian and Guangdong shipyards each delivered two bulk carriers in the third quarter alone.
Currently, the group's ship building productivity stands between 14 and 16 months, with 14 months being the average time to build 57,000 deadweight ton (DWT) vessel. It is setting its targets at 12 months for future builds to further improve productivity.
Although dry bulk shipping operations makes up a slim 3 per cent of group revenue, these activities showed a 13.7 per cent increase in revenue contribution because of higher charter rates secured by the group.
Also helping the results was a 42.8 per cent rise in 'other income' to $40.4 million, due mainly due to higher sales value of scrap materials and higher net currency exchange gain.
As at 30 Sept, Cosco's order books showed US$6.1 billion worth of projects that would keep Cosco's seven shipyards busy until Q1 2013.
On Nov 1, Cosco added contracts for three bulk carriers worth US$87 million to its books.
While Cosco expects FY2010 to be a profitable year, it sees next year as still beset by uncertainty. For one thing, Cosco foresees the dry bulk carrier market in 2011 being weaker with problems of oversupply in bulker capacity creeping in.
Despite this grey outlook for next year, it said that the fourth quarter looks likely to see some new contracts, as interested parties are in talks with Cosco for more bulk carriers.
Cosco shares added five cents to close at $1.94 yesterday.
Cosco reports 147% jump in Q3 net profit
Firm expects new contracts in Q4; sees 2010 earnings being better than 2009's
By LYNN KAN
COSCO Corporation (Singapore) yesterday announced a heartening third-quarter performance. It maintains a cautious outlook for the remaining quarter but expects 2010 earnings to be better than 2009's.
The Chinese shipbuilder recorded net profit attributable to equity-holders of $55.1 million, a jump of 147 per cent from $22.3 million a year ago. Earnings per share rose to 2.46 cents from one cent.
The profit surge was despite a $27.6 million provision for future losses to construction projects, compared with $8.9 million previously. The provision, said Cosco Singapore's management, was based on 'worst case scenario' projections on on-going and completed work on heavy lift carriers, a vessel which the group is new to building.
Revenue for Q3 climbed 27 per cent to $952.7 million, of which 96 per cent came from its ship repair, ship building and marine engineering operations and 3 per cent from its dry bulk shipping operations.
Turnover in Cosco's ship building and marine engineering activities rose 27.4 per cent year-on-year to $918.7 million on progressive completion of projects. Cosco's Zhoushan, Dalian and Guangdong shipyards each delivered two bulk carriers in the third quarter alone.
Currently, the group's ship building productivity stands between 14 and 16 months, with 14 months being the average time to build 57,000 deadweight ton (DWT) vessel. It is setting its targets at 12 months for future builds to further improve productivity.
Although dry bulk shipping operations makes up a slim 3 per cent of group revenue, these activities showed a 13.7 per cent increase in revenue contribution because of higher charter rates secured by the group.
Also helping the results was a 42.8 per cent rise in 'other income' to $40.4 million, due mainly due to higher sales value of scrap materials and higher net currency exchange gain.
As at 30 Sept, Cosco's order books showed US$6.1 billion worth of projects that would keep Cosco's seven shipyards busy until Q1 2013.
On Nov 1, Cosco added contracts for three bulk carriers worth US$87 million to its books.
While Cosco expects FY2010 to be a profitable year, it sees next year as still beset by uncertainty. For one thing, Cosco foresees the dry bulk carrier market in 2011 being weaker with problems of oversupply in bulker capacity creeping in.
Despite this grey outlook for next year, it said that the fourth quarter looks likely to see some new contracts, as interested parties are in talks with Cosco for more bulk carriers.
Cosco shares added five cents to close at $1.94 yesterday.
BT: Top Global eyes plot of land on Shanghai-governed island
Business Times - 05 Nov 2010
Top Global eyes plot of land on Shanghai-governed island
Site can be developed at a cost of $900m for residential, retail and commercial use
By JAMIE LEE
TOP Global, the Catalist-listed property company that was part of a consortium that recently succeeded in its $250 million bid for an iconic site in Singapore, has revved up its interest in China, with its sights set on a plot of land on an island governed by Shanghai.
The land, which has a gross floor area of about 808,000 square metres, can be developed for residential, retail and commercial use, with development cost expected at about $900 million.
Top Global - led by Sukmawati Widjaja - will acquire a 51 per cent stake in Longrunn International for about $1.5 million under a memorandum of understanding signed yesterday. 'Additional capital requirements shall be subject to plans to be jointly agreed,' said Top Global.
Longrunn International, which is run by a Chinese investor, will co-manage the planning and development of the piece of land on Fisherman Pier, Changxing Island. It takes about 30 minutes by car to access Changxing Island from the city centre of Shanghai.
Top Global is now looking at various options of developing the land, including bringing in investors, chief operating officer of Top Global Jennifer Chang said, adding that the company has not committed the amount that it would set aside to develop the land.
The company has also not decided if the property development would be more focused on residential or retail and commercial purposes, she told BT.
The stock of Top Global was in active play once again yesterday, closing unchanged at 1.5 cents with 124.3 million shares changing hands for the day.
It was in the limelight when the company, through a consortium, won the tender for the iconic site that includes Capitol Theatre, Capitol Building and Stamford House.
With its partners - Pontiac Land's Kwee Liong Seen and Pua Seck Guan, founder of Perennial Real Estate Group and former chief executive of CapitaMall Trust Management - Top Global plans to turn the historic site into a hotel, theatre, retail and residential development.
It has also plans to lease and acquire hotels near transportation points such as airports and railway stations in China, as well as set up and manage an investment fund to acquire these hotels.
Over in Singapore, it has also set up a real estate agency, with the aim of gathering data and research on property deals, executive director Hano Maeloa told BT.
Top Global eyes plot of land on Shanghai-governed island
Site can be developed at a cost of $900m for residential, retail and commercial use
By JAMIE LEE
TOP Global, the Catalist-listed property company that was part of a consortium that recently succeeded in its $250 million bid for an iconic site in Singapore, has revved up its interest in China, with its sights set on a plot of land on an island governed by Shanghai.
The land, which has a gross floor area of about 808,000 square metres, can be developed for residential, retail and commercial use, with development cost expected at about $900 million.
Top Global - led by Sukmawati Widjaja - will acquire a 51 per cent stake in Longrunn International for about $1.5 million under a memorandum of understanding signed yesterday. 'Additional capital requirements shall be subject to plans to be jointly agreed,' said Top Global.
Longrunn International, which is run by a Chinese investor, will co-manage the planning and development of the piece of land on Fisherman Pier, Changxing Island. It takes about 30 minutes by car to access Changxing Island from the city centre of Shanghai.
Top Global is now looking at various options of developing the land, including bringing in investors, chief operating officer of Top Global Jennifer Chang said, adding that the company has not committed the amount that it would set aside to develop the land.
The company has also not decided if the property development would be more focused on residential or retail and commercial purposes, she told BT.
The stock of Top Global was in active play once again yesterday, closing unchanged at 1.5 cents with 124.3 million shares changing hands for the day.
It was in the limelight when the company, through a consortium, won the tender for the iconic site that includes Capitol Theatre, Capitol Building and Stamford House.
With its partners - Pontiac Land's Kwee Liong Seen and Pua Seck Guan, founder of Perennial Real Estate Group and former chief executive of CapitaMall Trust Management - Top Global plans to turn the historic site into a hotel, theatre, retail and residential development.
It has also plans to lease and acquire hotels near transportation points such as airports and railway stations in China, as well as set up and manage an investment fund to acquire these hotels.
Over in Singapore, it has also set up a real estate agency, with the aim of gathering data and research on property deals, executive director Hano Maeloa told BT.
Thursday, November 4, 2010
DBSV: COSCO Q310 - Upside surprise
From DBSV.
Cosco : Upside surprise!
• 147% rise in 3Q earnings blew estimates, 9M10 accounts for 88% of consensus’ full year forecast • Fuelled by improved shipbuilding margins, tax savings and lower operating costs
• FY10F raised 10%; street to upgrade earnings and TPs
• BUY the powerful recovery play; TP S$2.35
3Q10 is a confidence booster.
3Q net earnings rose 147% yoy to S$55.1m on higher sales from all divisions except conversions, strong margin recovery from shipbuilding, and cost savings from preferential tax rate and tightened cost management.
Shipbuilding margins leaped further.
Adding back the cost overrun provision of S$27.6m for heavy lifts, bottomline would have been stronger at over S$70m, raises overall margins by 2.8ppt. In particular, gross margin for bulk carriers is estimated to have lifted to c10% from 6-8% in 2Q. We believe this is owing to efficiency gains, cuts in staff headcount and lower steel cost. We expect margin improvement to be sustainable, as projects delivered next year are based on higher shipbuilding prices secured in 2007 vs lower cost of steel.
Street to play catch up.
9M10 net profit of S$155m beats our already highest estimate on the street, accounting for 81% and 88% of our and consensus’ full year estimates. We believe the street will react positively on this set of strong results and bring about FY11 earnings upgrades closer to our 25%-above-consensus forecasts. We are leaving our FY11 numbers intact, but tweaked FY10 estimate upwards by 10% to reflect the lower tax rate and operating costs.
Target order wins met.
Cosco has won US$1.8bn new orders YTD, hitting our FY10 assumption. Current order book of US$6.1bn will sustain workflow till 1Q13. Going into 2011, offshore orders should take centre-stage with expected order wins of US$2.15bn in anticipation of 2-3 turnkey projects including SEVAN drilling rigs and FPSOs.
Earnings turnaround play.
We expect sequential improvement in shipbuilding earnings over the next few quarters to underpin share price performance. There is ample room for growth as Cosco maximizes the utilization of its seven shipyards. Maintain BUY. Our TP of $2.35 is based on blended fair values based on SOTP (S$2.13) and P/BV (S$2.59). Key risks to our forecast lie in RMB appreciation, rising steel cost, weak shipping rates and project execution.
Cosco : Upside surprise!
• 147% rise in 3Q earnings blew estimates, 9M10 accounts for 88% of consensus’ full year forecast • Fuelled by improved shipbuilding margins, tax savings and lower operating costs
• FY10F raised 10%; street to upgrade earnings and TPs
• BUY the powerful recovery play; TP S$2.35
3Q10 is a confidence booster.
3Q net earnings rose 147% yoy to S$55.1m on higher sales from all divisions except conversions, strong margin recovery from shipbuilding, and cost savings from preferential tax rate and tightened cost management.
Shipbuilding margins leaped further.
Adding back the cost overrun provision of S$27.6m for heavy lifts, bottomline would have been stronger at over S$70m, raises overall margins by 2.8ppt. In particular, gross margin for bulk carriers is estimated to have lifted to c10% from 6-8% in 2Q. We believe this is owing to efficiency gains, cuts in staff headcount and lower steel cost. We expect margin improvement to be sustainable, as projects delivered next year are based on higher shipbuilding prices secured in 2007 vs lower cost of steel.
Street to play catch up.
9M10 net profit of S$155m beats our already highest estimate on the street, accounting for 81% and 88% of our and consensus’ full year estimates. We believe the street will react positively on this set of strong results and bring about FY11 earnings upgrades closer to our 25%-above-consensus forecasts. We are leaving our FY11 numbers intact, but tweaked FY10 estimate upwards by 10% to reflect the lower tax rate and operating costs.
Target order wins met.
Cosco has won US$1.8bn new orders YTD, hitting our FY10 assumption. Current order book of US$6.1bn will sustain workflow till 1Q13. Going into 2011, offshore orders should take centre-stage with expected order wins of US$2.15bn in anticipation of 2-3 turnkey projects including SEVAN drilling rigs and FPSOs.
Earnings turnaround play.
We expect sequential improvement in shipbuilding earnings over the next few quarters to underpin share price performance. There is ample room for growth as Cosco maximizes the utilization of its seven shipyards. Maintain BUY. Our TP of $2.35 is based on blended fair values based on SOTP (S$2.13) and P/BV (S$2.59). Key risks to our forecast lie in RMB appreciation, rising steel cost, weak shipping rates and project execution.
Top Global News release 4 Nov 10: MoU ACQUISITON OF A 51% STAKE IN LONGRUNN INTERNATIONAL LIMITED
MEMORANDUM OF UNDERSTANDING IN RESPECT OF AN ACQUISITON OF A
51% STAKE IN LONGRUNN INTERNATIONAL LIMITED
1. INTRODUCTION
The Board of Directors of Top Global Limited (the “Company”) is pleased to announce that the Company has entered into a Memorandum of Understanding (“MOU”) dated 4 November 2010 with the shareholder of Longrunn International Limited (“LRI”), a BVI registered company (collectively referred to as the “Parties” in this Announcement) in relation to an acquisition of a 51% stake in LRI, whose purpose is to co-manage the planning and development of a plot of land at Fisherman Pier on Changxing Island, governed by Shanghai City (the “Acquisition ”) for residential, retail and commercial use.
The principal terms of the Acquisition as set out in the MOU are subject to the terms and conditions to be agreed and set out in sale & purchase agreement and shareholders’ agreement to be entered into between the Parties (the “Definitive Agreements”).
2. SALIENT TERMS OF THE MOU
• Subject to the entry into the Definitive Agreements, the Company or its nominees shall acquire a 51% stake in the issued and paid-up share capital of LRI.
• The paid-up capital of LRI shall be increased to S$3,000,000. Additional capital
requirements shall be subject to plans to be jointly agreed by the Parties.
• Fisherman Pier is located at the south eastern part of Changxing Island, which is one of the several islands of Shanghai City and is linked to Pudong, Shanghai by the 8.9km Shanghai Yangtze River Tunnel which opened in October 2009. It takes approximately 30 minutes by car to access Changxing Island from the city centre of Shanghai.
• The land area and gross floor area subject for development are approximately 1,117,225 square meters and 808,000 square meters respectively.
• The estimated development cost is approximately S$900,000,000.
• The Company shall appoint the Chairman of LRI and other shareholder of LRI shall
appoint the Chief Executive Officer.
• The Definitive Agreements shall be governed by the laws of Singapore.
3. EXECUTION OF DEFINITIVE AGREEMENTS
Subject to satisfactory due diligence review by the Company, the Definitive Agreements shall be executed within six months from date of the MOU, failing which, the MOU shall be automatically terminated and neither party shall have any claim whatsoever against the other thereafter.
Shareholders should note that none of the Parties are under any legal obligation to undertake the Joint Venture until such time as the Definitive Agreements are negotiated, mutually executed and delivered.
4. FURTHER ANNOUNCEMENTS
Further announcements on this matter will be made in due course in the event that the
Definitive Agreements are signed, and as and when appropriate.
51% STAKE IN LONGRUNN INTERNATIONAL LIMITED
1. INTRODUCTION
The Board of Directors of Top Global Limited (the “Company”) is pleased to announce that the Company has entered into a Memorandum of Understanding (“MOU”) dated 4 November 2010 with the shareholder of Longrunn International Limited (“LRI”), a BVI registered company (collectively referred to as the “Parties” in this Announcement) in relation to an acquisition of a 51% stake in LRI, whose purpose is to co-manage the planning and development of a plot of land at Fisherman Pier on Changxing Island, governed by Shanghai City (the “Acquisition ”) for residential, retail and commercial use.
The principal terms of the Acquisition as set out in the MOU are subject to the terms and conditions to be agreed and set out in sale & purchase agreement and shareholders’ agreement to be entered into between the Parties (the “Definitive Agreements”).
2. SALIENT TERMS OF THE MOU
• Subject to the entry into the Definitive Agreements, the Company or its nominees shall acquire a 51% stake in the issued and paid-up share capital of LRI.
• The paid-up capital of LRI shall be increased to S$3,000,000. Additional capital
requirements shall be subject to plans to be jointly agreed by the Parties.
• Fisherman Pier is located at the south eastern part of Changxing Island, which is one of the several islands of Shanghai City and is linked to Pudong, Shanghai by the 8.9km Shanghai Yangtze River Tunnel which opened in October 2009. It takes approximately 30 minutes by car to access Changxing Island from the city centre of Shanghai.
• The land area and gross floor area subject for development are approximately 1,117,225 square meters and 808,000 square meters respectively.
• The estimated development cost is approximately S$900,000,000.
• The Company shall appoint the Chairman of LRI and other shareholder of LRI shall
appoint the Chief Executive Officer.
• The Definitive Agreements shall be governed by the laws of Singapore.
3. EXECUTION OF DEFINITIVE AGREEMENTS
Subject to satisfactory due diligence review by the Company, the Definitive Agreements shall be executed within six months from date of the MOU, failing which, the MOU shall be automatically terminated and neither party shall have any claim whatsoever against the other thereafter.
Shareholders should note that none of the Parties are under any legal obligation to undertake the Joint Venture until such time as the Definitive Agreements are negotiated, mutually executed and delivered.
4. FURTHER ANNOUNCEMENTS
Further announcements on this matter will be made in due course in the event that the
Definitive Agreements are signed, and as and when appropriate.
The Edge 1 Nov 10: Top Global's Capitol plan
Dated 1 Nov 10
Top Global's Capitol plan
Stock in focus as historic Capital Theatre gets new lease of life Catalist traded TOP GLOBAL has long operated below the radar screens of analysts, apart from making a few forays into the top-volume list. This week, however, the co could find itself in the limelight.
Top Global is part of a consortium that has successfully bid to redevelop the much sought after Capital site on North Bridge and Stamford Roads. Formerly a shell, Top Global has so far developed one property, Top Residence, near Kovan MRT.
The loss making company recently made news after major shareholder Sukmawati was installed as chairman and CEO and her son Hano Maeloa as managing director.
Together, the duo owns 54% of Top Global. Widjaja is business Oei Hong Leong's younger sisiter and also known as Oei Siu Hoa. Last week, the URA announced it had awarded the tender to redevelop the Capitol site to Perennial Capitol, a consortium comprising Perennial Real Estate, owned and run by Pua Seck Guan, former CEO of CapitalLand Retail and CapitaMall Trust; Chesham Properties, the private vehicle of Kwee Liong Seen, who controls Pontiac Land; and Top Global. Theirs was the top bid of $250 million for the land, and the plans are grand.
Capitol Building & Stamford House will be restored into a luxury 200 room five star hotel; Capitol Theatre will be turned into an 800 to 1,000 seat cinema cum performance theatre, and the nondescript Capital Centre will be torn down and redeveloped into a 15 storey and residential development. The total cost of the project is likely to be $700 million, according to details released by Perennial Real Estate. A spokeswoman from Perennial declined to reveal the individual shares of the joint venture.
The yr alone, Perennial Real Est has stitched together three deals, including the Capitol redevelopment. In Apr, it announced it had acquired Katong Mall for $248 m and would be spending a further $55 m to upgrade it. In jul, it acquired the retail podium of Chinatown Pt for $250 m. In just 6 mths, Perennial Real Est has managed to accumulate $1.2 b to $1.3 b in assets under management.
No doubt, Perennial Real Est will be able to raise the funds necessary for the Capitol project. But what abt Top Global, the only listed entity among the Perennial Capitol consortium? On opening on Oct 28, its share price tripled to 1.5 cts. Top Global reported a net loss of $7.4 m for the 6 mths to jun 30, compared with a profit of $1.3 m in FY2009, attributed to profits from the completion of Top Residence last yr.
In Sep, the Co announced a three for one rts issue of 8.4 b rts shares, at one cent, with attac hed (five yr) wrts of 8.4 b, convertible intp 8.4 b new shares. That wld cause the no of shares outstanding to balloon frm 2.48 b currently to 10.88 b this yr. The exercise price for the free wrt is half a cent.On Sep 29, the Co announced that 8,078,460,456 rts shares & 8,078,460,456 wrts were alloted, raising $80.78 m. If all the wrts are exercised over their 5 yr lifespan, the co wld raise a further $40 m. Before the rts exercise, the co was already in net cash position, but had a small equity base of $17 m.
Thr rts document stated that 90% of the proceeds wld be used to invest in new business. Since the rts announcement, Top Global has been announcing various investments in commercial paper, which offers a higher yield than fixed deposits, including Russian bank VTB and Glencore Finance. The timing of the Capitol redevelopment is opportune.
I am vested in Top Global. With patience, I believ e that it will be a multiple bagger in the long term giving time to the Mgt of the co. Congrats to all holders of Top Global. God bless.
Top Global's Capitol plan
Stock in focus as historic Capital Theatre gets new lease of life Catalist traded TOP GLOBAL has long operated below the radar screens of analysts, apart from making a few forays into the top-volume list. This week, however, the co could find itself in the limelight.
Top Global is part of a consortium that has successfully bid to redevelop the much sought after Capital site on North Bridge and Stamford Roads. Formerly a shell, Top Global has so far developed one property, Top Residence, near Kovan MRT.
The loss making company recently made news after major shareholder Sukmawati was installed as chairman and CEO and her son Hano Maeloa as managing director.
Together, the duo owns 54% of Top Global. Widjaja is business Oei Hong Leong's younger sisiter and also known as Oei Siu Hoa. Last week, the URA announced it had awarded the tender to redevelop the Capitol site to Perennial Capitol, a consortium comprising Perennial Real Estate, owned and run by Pua Seck Guan, former CEO of CapitalLand Retail and CapitaMall Trust; Chesham Properties, the private vehicle of Kwee Liong Seen, who controls Pontiac Land; and Top Global. Theirs was the top bid of $250 million for the land, and the plans are grand.
Capitol Building & Stamford House will be restored into a luxury 200 room five star hotel; Capitol Theatre will be turned into an 800 to 1,000 seat cinema cum performance theatre, and the nondescript Capital Centre will be torn down and redeveloped into a 15 storey and residential development. The total cost of the project is likely to be $700 million, according to details released by Perennial Real Estate. A spokeswoman from Perennial declined to reveal the individual shares of the joint venture.
The yr alone, Perennial Real Est has stitched together three deals, including the Capitol redevelopment. In Apr, it announced it had acquired Katong Mall for $248 m and would be spending a further $55 m to upgrade it. In jul, it acquired the retail podium of Chinatown Pt for $250 m. In just 6 mths, Perennial Real Est has managed to accumulate $1.2 b to $1.3 b in assets under management.
No doubt, Perennial Real Est will be able to raise the funds necessary for the Capitol project. But what abt Top Global, the only listed entity among the Perennial Capitol consortium? On opening on Oct 28, its share price tripled to 1.5 cts. Top Global reported a net loss of $7.4 m for the 6 mths to jun 30, compared with a profit of $1.3 m in FY2009, attributed to profits from the completion of Top Residence last yr.
In Sep, the Co announced a three for one rts issue of 8.4 b rts shares, at one cent, with attac hed (five yr) wrts of 8.4 b, convertible intp 8.4 b new shares. That wld cause the no of shares outstanding to balloon frm 2.48 b currently to 10.88 b this yr. The exercise price for the free wrt is half a cent.On Sep 29, the Co announced that 8,078,460,456 rts shares & 8,078,460,456 wrts were alloted, raising $80.78 m. If all the wrts are exercised over their 5 yr lifespan, the co wld raise a further $40 m. Before the rts exercise, the co was already in net cash position, but had a small equity base of $17 m.
Thr rts document stated that 90% of the proceeds wld be used to invest in new business. Since the rts announcement, Top Global has been announcing various investments in commercial paper, which offers a higher yield than fixed deposits, including Russian bank VTB and Glencore Finance. The timing of the Capitol redevelopment is opportune.
I am vested in Top Global. With patience, I believ e that it will be a multiple bagger in the long term giving time to the Mgt of the co. Congrats to all holders of Top Global. God bless.
Friday, October 29, 2010
BT: Jittery developers go low-rise on confidence
Business Times - 29 Oct 2010
Jittery developers go low-rise on confidence
34% expect prices of new launches to fall; some fear more cooling measures
By KALPANA RASHIWALA
(SINGAPORE) The worst- kept secret in the property market is out in the open. Not only are developers less upbeat about the future but a third of them actually expect prices of new homes to decline. And market performance for the suburban residential sector may be the worst hit.
This dose of pessimism was reflected in the latest readings of Real Estate Sentiment Index (RESI) put out by the developers body and NUS.
In the wake of the Aug 30 cooling measures, some 34 per cent of developers polled for Q3 expect prices for new residential launches to decline, albeit by less than 10 per cent, over the next six months. None of the developers surveyed in Q1 and Q2 had predicted price drops.
Just 44 per cent expect more new residential units to be launched over the next half year, down from 68 per cent in the previous quarter.
The sentiment indices slipped below the psychologically significant mark of 5 in Q3, indicating respondents were less upbeat in the quarter and expect more uncertain market conditions over the next six months.
The consensus as indicated by net balances is generally weaker.
Polled on how the suburban residential sector would perform, the net balance in Q3 was -43 per cent. This means that most expect the sector to perform worse over the next six months. In Q2, this net balance was +27 per cent, hinting at better future performance.
'The strong historical price growth in the sector is not likely to be sustained moving forward. Downward adjustment to the price growth, if it occurs in the next few months, will ease some pressure on the affordability level of mass-market residential properties in suburban areas,' said Associate Professor Sing Tien Foo of NUS.
The net balance for the future market performance of the prime residential sector, while still in positive territory, has also been declining significantly, from +54 per cent in Q1 to +32 per cent in Q2 and +3 per cent in Q3.
About 70 per cent of the developer respondents in the latest survey were concerned that the government could intervene to dampen the property market further.
They also cited other factors that could hurt sentiment over the next six months. The concerns included a slowdown in the global economy (cited by 60 per cent), an increase in the supply of development land (53 per cent), too many new property launches (49 per cent), rising interest rates (47 per cent) and tightening financing/liquidity in the debt market (40 per cent).
Eighty-four per cent of all survey respondents consider it likely and very likely that there will be a further increase in the supply of development land over the next six months. An even higher proportion, 90 per cent, of respondents expect the government to further boost the supply of Build-to-Order and Design, Build and Sell Scheme public housing flats as well as executive condo (EC) units.
Recent government steps to cool the market are expected to have most impact on the HDB resale and mass private housing market segments. About 76 and 64 per cent respectively of survey respondents rated their impact on these two market segments over the next six months as significant. Conversely, the measures are expected to have the least impact on the high-end/luxury segment with 64 per cent predicting minimal impact. For the mid-end private housing segment, 79 per cent foresee only moderate impact.
Real Estate Developers' Association of Singapore and NUS' Department of Real Estate polled slightly over 70 respondents for their latest Q3 survey, similar to the size for the Q1 and Q2 surveys.
The Current Sentiment Index, where respondents are asked to rate overall Singapore real estate market conditions now compared with six months ago, fell from 5.8 in Q2 to 4.8 in Q3.
The Future Sentiment Index, where respondents rate overall property market conditions over the next six months, also slipped from 5.9 in Q2 to 4.8 in Q3. As a result, the Composite Sentiment Index (the average of the two indices), also declined to 4.8. The index ranges from 0 to 10 with a score below 5 indicating deteriorating market conditions.
Redas CEO Steven Choo said: 'The RESI was able to track closely the immediate impact the cooling measures has on sentiments in the property sector.'
Agreeing, Knight Frank chairman Tan Tiong Cheng said: 'The findings are not surprising. Just look at the amount of land government has been releasing and the supply of new HDB flats and ECs they're planning, plus the demand-side measures. People have put on their thinking caps to figure out how they'll be affected, whether they are HDB upgraders, buying a second/investment property, or even downgrading.
'The latest survey results are a clear signal to government that the measures are having an impact,' he added.
Separately, the NUS' Institute of Real Estate Studies yesterday released its monthly Singapore Residential Price Index tracking prices of completed non-landed private homes. The overall index rose one per cent month on month in September, slightly slower than the 1.1 per cent increase in August.
NUS' sub-index for Central region, which covers a basket of properties in districts 1-4 and 9-11, increased 0.6 per cent in September, the same pace as in August. The sub-index for Non-Central region appreciated 1.4 per cent in September, slightly slower than the 1.6 per cent gain posted in August.
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