SBS Transit(S61)

Draft: 2/9/2017 (Market size: 717m, shares: 310m)
Updated: 2/10/2017 on BCM.

Based on 2016 FR.

EPS: 10.12c.
Dividend: 0.035/0.028(2016/2015)

First impression, similar to Vicom(V01), its staff costs is the most significant item, increased faster than revenue increase, helped by fuel saving of 40+m, OP improved by 16m.

	2016'mil	2015'mil
Total assets	1055	1091
Liabilities	637	752
Equities	418	339

CFO:  64.9m / 1.7m (2016/2015)
EBITDA: 123m / 110m (2016/2015)

CAPEX:

	2016'000	2015'000
Disposal of vehicles and equipment	15,630	218,801
Purchase of vehicles	(23,455)	(155,801)
Net CAPEX (used)	(7,825)	63,000

 Carrying value of Vehicles, premises and equipment: 866m /  904m (2016/2015)
It seems the depreciation is on average 10years(COE lifespan?)

Basically it means FCF: 40m+ on average, with yield of 1.5% , an average annual growth over 3-year period 7~8% (est.), the valuation today(2/9/2017 share price 2.3) is a bit too high.

2016 FR Auditor: Deloitte & Touche LLP.
(there is some big change in current/no-current liabilities numbers in the report, the explain is:
The decrease in non-current liabilities was due mainly to the reclassification of the second series of Medium-Term-Notes (MTN) maturing in September 2017 to current liabilities. vice versa)
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Biz updates:
8mths of fare share model, 4 mths of Bus Contracting Model(BCM). 
Q1: Does that mean future purchase of new bus will be done by LTA?

Q2: What is BCM?
 A2: found on wikipedia. LTA will "own all bus assets like bus depots and fleet management systems".
It means that CAPEX will gradually be reduced, to be replaced by leasing price SBS Transit put fwd to LTA for getting awarded with various Bus packages.
Thus the valuation of SBS Transit is on what exactly SBS paid to authority(isn't this commercial secret highly guarded).
It is my guess that LTA will have a reserved price tag, leaving SBS some NP% on a vis-a-vis usual biz level, say 3~5% over its revenue.
An valuation can then be worked out backwards.

Vicom(V01)

Draft: 2/8/2017 (Market size: 503.5m, 88,642,000 shares)

Updated: 2/9/2017

Info based on 2016 FR.

Rev: 101m (drop 5.2%)
Op: 32m(drop 11%)
Profit to shareholder: 28.1m (-10%)
CFO: 39m

Total asset: 180m
Liabilities: 28.8m
EBITDA: 38.9m

ROE: 18% (2006-2015: 17~22%)

Dividend: 18.5c=final: 8.5c, special 10c.(2015: 9.5+10.25c)
EPS: 31.77c(2015: 35.45c)
Payout ratio:  58.2% (2015: 55.7%)
At today's price (2/8/2017) 5.69, yield: 3.25%

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With revenue goes side line, the yield not attractive, and staff cost increases(or at least under pressure) every year, where is the rosy story for this counter?

FirstREIT(AW9U)

Draft: 2/1/2017 (Market value: 977.3m, PB:1.2, Yield 6.67%, PE: 8)
Update: 2/2/2017

Based on 2016 Report.

Asset under mgmt. 1.27b (CAGR: 16.4%); 18 hospitals,  majority in Indonesia; 3 in SG, 1 in KR. 314k sqm. 4700 beds.
Total debt: 417m,
Gearing: 31.1%

Gross revenue: 107m;
Net property income: 105.8m;
Distributable income: 65.2m;
Sponsor: Lippo Karawaci (LK)

Distribution Reinvestment Plan(DRP) in lieu of  dividend payout, DRP @S$1.2559 per Unit.
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Biz outlook
Annual base rental escalation (2x percentage increase of  SG CPI, capped at 2%)

(Does that imply the growth strategy can only be more acquisition of hospitals from LK group, 43 in the pipeline?)
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Questions:
1. How to subscribe to "S$60 million subordinated perpetual securities" with coupon rate of 5.68% for first 5 years?
2. My impression of FirstREIT: it is an investment vehicle of LK group to monetize the family wealth.

Keppel (BN4) needs a prosperous year

Draft: 1/29/2017 (Market Value: 11.4billionS$)
Updated: 1/31/2017

Based on webcast.

Activities: Restructuring and creation of Keppel Capital, previously contribution of asset mgmt under infrastructure and property division will be parked under Keppel Capital(Investment division).

Webcast is led by CEO, Mr. Loh Chin Hua (CFA/55), pkg:

Salary	$1,190,600
Bonus	$3,254,900
Total Annual Compensation	$4,445,500
Stock Options*
Restricted Stock Awards	$2,281,900

Total dividend: $.20 for 2016, over a weighted avg. share of 1,814,792,000 units.

Net Asset value per share: $6.34~6.42.

Gearing ratio 0.56.

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Business Prospects
Offshore & Marine (O&M) division: net order book(exclude Sete) $3.7b.
Property division: sold 3800 homes in China, 1520 in Vietnam, 380 in SG.
Investments consist mainly of the Group's investments in fund management, M1, KrisEnergy, k1 Ventures, Sino-Singapore Tianjin EcoCity Investment and Development Co.

Data from here.
2015's provision for losses for the Sete Brasil rig building contracts of ~$230 million no more repeat(?).

The strategy of Keppel is on "Multiple Income Streams".

Dividend history

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Puzzled
1. Who prepared this unaudited report, why roman number (i), ... (xix) are used, so mind boggling; can they be presented in alphanumeric numbers?
2. What is ~200m provision for Doha North Sewage Treatment Works?
3. While it is understandable O&M division gets hit, what is the reason all other 3 divisions recorded lower sales/profit?

NeraTel (N01)

Draft: 1/25/2017 (Market Cap: S$134m)

Updated: 1/28/2017


Based on 2015AR, and Q3/2016 Report.

Nera is in the business for 37 years, biz covers 17 countries.

Current chair(wo)man: Ms. Wong Su-Yen.
ex-CEO: Mr. Samuel Ang Seong Kang(resigned in Oct 2016, with company since 1996)

(including employer's CPF)

Director Fees

acting CEO: Mr. Beck Tong Hong

Total issued shares: 362m.

(of my interest is Northstar, who has a alliance with TPG capital)

Size of Shareholdings	No. of Shareholders	%	No. of Shares	%
1 – 99	5	0.1	35	0
100 – 1,000	184	3.83	173,951	0.05
1,001 – 10,000	2,617	54.43	16,232,716	4.49
10,001 – 1,000,000	1,982	41.22	101,866,959	28.15
1,000,001 AND ABOVE	20	0.42	243,623,339	67.31
TOTAL	4,808	100	361,897,000	100

Consists of:
Telecom biz segment(Wireless/WIN), Infocomm biz segment(NW infrastructure, Payment solutions)
Pdt: Evo series microwave radio
end-to-end electronic payment solutions




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Price History

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Business Review

NW infrastructure biz suffered a loss due to lower margin equipment sales and exchange loss in Nigeria project(1.2mSGD).
Sold POS business, and announced an interim dividend of $0.15/share.

Income stabilized, margin dropped in 2016 Q3.
Issue with Current Assets ($'000) in 2015:

Stocks	7,601
Contract work-in-progress	27,183
Trade receivables	72,578

Revenue: 181,513 (Telecom: 57,792/Infocom: 123,721)
Wages: 22,538

By segment:

	Telecom	%	Infocom	%
Turnover	57,792	32%	123,721	68%
Cost of sales	-33,037	57%	-88,958	72%
Gross profit	24,755	43%	34,763	28%
Distribution and selling expenses	-11,430	20%	-18,740	15%
Administrative expenses	-4,000	7%	-7,799	6%
Profit from operating activities	9,410	16%	8,098	7%
Segment assets	46,176	38%	76,309	62%
Segment liabilities	28,277	49%	28,940	51%
Capital expenditure	940	2%	3,895	3%
Depreciation and amortisation	788	1%	5,650	5%

By country:

Revenues	2015	2014
Singapore	53,956	55,810
Malaysia	36,378	32,241
Thailand	28,195	20,663
Indonesia	17,317	13,312
Philippines	13,261	21,964
Burkina Faso	8,711	–
Pakistan	5,675	5,589
Morocco	5,035	14,814
Afghanistan	4,456	8,352
Other Asian countries	4,415	6,170
Other Middle East countries	2,765	2,337
Others	1,349	1,147
	181,513	182,399

By sectors:

Customer Profile(by Sectors)	$’000	%
Telecommunications	51,720	71%
Financial institutions	7,033	10%
Government agencies	7,195	10%
Multi industry conglomerates	2,556	4%
Media and broadcasting	1,630	2%
Others	2,444	3%
	72,578	100%

One major customer income $20m(is that Singtel/Optus group)?
35% TR from 3 telecom providers.

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What analysts say

target price before special dividend.

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My assessment
NeraTel faces fierce competition in Telecom, Infocom infrastructure business, its growing story is lacking, leading to rather price book comparison.
Estimated valuation: S$140m.
鸡年的鸡肋。

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Questions remained:
1. What is the reason company incurred Nigeria project FX loss of 1.2mSGD when it claims using forward currency contract hedging the exposure for any contract >100k. (Pg 105)

(Approximately 19% (2014: 34%) of the Group’s sales and 66% (2014: 73%) of the Group’s purchases are denominated in foreign currencies)

2.Gearing ratio(Pg 115)
My usual understanding of Gearing ratio, or at least what I understood in China, is debt-to-equity ratio (total debt / total equity). I do not understand why on Pg 115 of AR, it is defined as net debt divided by total capital plus net debt. And net debt is counted as loans and borrowings and obligations under finance leases, less cash and cash equivalents. So it is gearing ratio is NIL(since no Net Debt by its definition), but how about its long term debt/liabilities, when the denominator is equity(both short & long term), how can numerator just counts short term ones?
 

	$’000
Cash and cash equivalents (Note 27)	20,770
Deposits pledged (Note 27)	250
Less: Borrowings (Note 15)	-16,311
Net cash and cash equivalents	4,709
Capital:
Equity attributable to equity holders of the Company	56,026
Capital and net debt	56,026
Gearing ratio	–

 

Marco Polo Marine (5LY)

Draft: 1/25/2017
Update: 1/25/2017

Some initial impression after reading the initial portion of Marco Polo Marine(AR2016): - financial year ends on Sep 30th.

It pays director fee (of 4) at $180,000 per annum even during downturn. The company made a loss of 16m in 2016.

It is about 47c per share NAV, but is sold on market (1/25/2017) at 4.5c, with a market value S$15m. (date: 1/25/2017)

It consists of shipyard repair/maintenance division and ship charting business. Based on AR:

- Total Asset 449m (Non-current: 319m/Current: 130m)

- Total Liabilities 290m (Non-current: 134m/Current: 156m (of which 116m is the loan/interest bearing))

- NA: 159m

Exec chairman and CEO are of father-son relationship. Remuneration pkg in 2016 >250k <500k each.

Mr. Lee Wan Tang (chairman) owns deemed interest of 200m+ shares in the company. 61% of company.

 

Underwent a nego on Loan restructuring exercise with local banks (DBS?) $50m bond(from that of 116m under current liability?), at 5.75% coupon rate, extended till 2018 with condition: +1.5% extra interest; mortgage with a piece of land in Batam.

Auditor (MAZARS LLP) emphasis:
Note 2.1, net current liabilities of 26m, uncertainty to continue as a going concern. Indicating that if the group is unable to continue its normal course of business, assets may need to be realized at significantly different amount; and reclassify non-current asset/liabilities as current asset/liabilities.
"Our opinion is not qualified in respect of this matter"

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My assessment(stopped at pg43):

Until it trims director fee, it is not on the same boat as shareholders', or wait unless it is below Xc?

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Owner's own words:

Sean: Typically for tug and barge operations, we are talking about 70% to 80% financing today, depending on the age of the vessels.

These banks prefer to lend in USD. (FX risks?)

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An old analyst article in 2015

Maintain BUY, with a SGD0.60 TP. Being profitable and cash-flow positive, we think that valuations have troughed at 0.5x P/BV. Our SGD0.60 TP is pegged to 1.2x BV.

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Tabloid

Mr. Sean Lee (CEO) wedded Vivian Hsu, TW actress, in 2014.

中国有句古话：“情场得意，商场失意”。

It is a different landscape,Dasin RT IPO

At around Q4 of last year, I started to blog my investment on this website, because I was planning (Plan B) to come back Singapore to be a full time investor, and had wished to find some like minded souls with the interests of such activities.

And 3mths later, I'm back. 

However within these 3mths, I didn't do much: neither blogging, nor investing. I had planned of trying to get time to prepare myself better for SG market. But in the end, my energy and time was really occupied to work out all the logistics arrangement for moving.

Starting the new year, I bought into my first IPO on SG bourse. It started with a google search on the web, DASIN Retail Trust popped up. It is the first counter to be listed on main board  this Rooster Year. The price is $0.80.

After the application, I got an unexpected allotment ratio of 1:1, never have imagined that ratio before, it is very different from the experience I apply IPO in China. The chances of getting the IPO share there is usually in the range of 0.0x%. 

Obviously this has somewhat caused its poor performance on D1(1/20/2017), I quickly dumped all my allocation, with some minimum gains. It is really a different landscape. Usually an IPO listed on China market straightaway hits 44% price increase cap on D1 of its listing, and reaching 10% increase cap each day in the subsequent 10-days period is a common phenomenon. 

I did my research before applying this IPO, and after I did my own rough measurement, I searched web for reference, the information is scarce, I only found one article from Mr. IPO. 

My assessment(in RMB unless specified otherwise):

Total Asset: 4.686B

Total liability: 1.983B

NA: 2.7B

$0.80@549,606,331 units, assuming FX rate 4.83

Market value: 2.1~2.2B

Yield(with distribution waiver undertakings) is 8.5%(2017)/9%(2018).

I'm not sure if I did the wrong thing in applying it, or I did the wrong thing in dumping it.

It is indeed a different landscape.

A bonus question, which group did I apply under Public Offer, can you make a guess?