Although we don’t believe in timing the market or panicking over market movements, we do like to keep an eye on changes — just in case they’re material to our investing thesis.
The Straits Times Index (SGX: ^STI) ended effectively flat at 3,291 points today – the index had gained just 0.44 points for a 0.01% increase. Within the index’s 30 constituents, 15 shares had managed to make some headway while 11 others suffered losses.
Given a collectively lacklustre day for Singapore’s blue chips, let’s take a look outside the index for some market beaters.
Construction and civil engineering outfit Wee Hur Holdings (SGX: E3B) is up 2.6% to S$0.40. Last week, the company was awarded a parcel of land at Woodlands, Singapore, for a sum of S$76.9 million. The parcel of land has a lease-hold of only 30 years.
With total assets of just S$647 million, the capital outlay for the plot of land is actually quite significant for the company. Although the acquisition of the land “is not expected to have a material impact” on the asset base and earnings of the company for the year ending 31 December 2014, investors should still keep an eye out for Wee Hur Holdings’ intentions for it.
Rubber producer Halcyon Agri Corporation (SGX: 5VJ) has gained 1.7% to S$0.895. Last Friday, the company had announced that it would be acquiring Anson Company (Private) Limited for a total sum of S$450 million.
Anson’s a rubber producer as well and had sold more than 300,000 tonnes of rubber in 2013, in the process generating annual revenue of S$960 million.
The acquisition would make Halcyon one of the top 5 Technical Specified Rubber (TSR) producers in the world with annual production capacity of 748,000 metric tonnes. The company’s number crunching of its financials for 2013 shows that on a pro-forma basis – i.e. the financial figures are prepared as though the acquisition was completed prior to the end of 2013 – its earnings before interest, taxes, depreciation and amortisation (EBITDA) would jump from 3.65 Singapore cents to 12.73 cents. That’s a big improvement, although it must also be noted that its earnings per share would fall slightly from 2.87 cents to 2.76 cents.
Halcyon does not “intend to undertake an equity fund raising exercise” to pay for the acquisition. Instead, the company would be funding it through internal resources, loans, and a co-investment from the private investment vehicle of Robert Meyer (Meyer’s the chief executive of Halcyon).
With just US$23 million worth of cash on hand in its balance sheet as of 31 March 2014, investors in Halcyon would need to keep an eye out on the company’s acquisition-related borrowings to determine if they’re comfortable with the leverage Halcyon’s going to assume.
After jumping by 6.9% to S$0.17 yesterday, Cheung Woh Technologies (SGX: C50) has gained a further 1.8% to S$0.173. The precision hard-disk drive parts maker had previously impressed the market with the release of its latest first quarter earnings last Friday. A 35.5% increase in quarterly revenue compared to a year ago had helped drive a huge spike in profit from S$189,000 to S$2.25 million.
Click here now for your FREE subscription to Take Stock Singapore, The Motley Fool’s free investing newsletter. Written by David Kuo, Take Stock Singapore tells you exactly what’s happening in today’s markets, and shows how you can GROW your wealth in the years ahead.
The Motley Fool’s purpose is to help the world invest, better. Like us on Facebook to keep up-to-date with our latest news and articles.
The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore writer Chong Ser Jing doesn’t own shares in any companies mentioned.