What You Need to Know about Singapore’s Newest S-Chip: Chiwayland International Ltd

SchipsThere is a new S-Chip (China-based companies which are listed in Singapore) in town and this is what investors need to know about it.

Chiwayland International Ltd  (SGX: ACW) got its listing status on 6 August 2014 through the reverse takeover of RH Energy in a S$399 million deal. RH Energy had issued 550 million new shares at S$0.69 each to Chiwayland international as part of the deal, thus resulting in the latter becoming the controlling stakeholder of the former. The company is the first S-Chip to be listed here in Singapore over the past two years.

As part of the deal, RH Energy also sold most of its legacy businesses which include RH Energy (HK) Limited, Zoneda Energy Ltd, RH International Pte Ltd, Greenzone Energy Pte Ltd, and 70% of Amersun Energy Pte Ltd.

Who is Chiway International?

An online search for Chiwayland International showed that it is the property division of a conglomerate in China, the Chiway Holding Group. The conglomerate has business interests in the real estate and education industry and actually runs international schools in China under the Etonhouse brand.

Chiwayland International is based in Shanghai and according to its corporate website, is amongst the top 100 real estate development companies in China. With its new listing status, the company intends to venture into foreign real estate markets. On that front, the company had recently announced a joint venture in Australia which is related to development projects in Brisbane, Australia.

The 50:50 JV sees Chiwayland International working with Property Solutions Pty Ltd to “jointly develop three property development projects which occupy an aggregate site area of approximately 5,500 square metres in Brisbane, state of Queensland, Australia.” Chiwayland International’s new partner is a “Brisbane-based property developer with over 20 years of real estate experience in Queensland, Australia.”

Questions to think about

In Singapore, it might not be an exaggeration to say that S-Chips face a stiff challenge in trying to gain the trust of investors here.

Given the fact that Chiwayland International became a listed entity through a reverse takeover of RH Energy, information on the company is still very limited. Until Chiwayland International can provide more information on its business through its annual reports and other sources, the company might be a sort of black box to investors.

In addition, the company’s decision to list in Singapore when the property market in China is slowing down might be a source of worry for investors.

It is a shame that S-Chips in Singapore have a generally tainted reputation. But, it’s no real surprise if we consider that 1 in 10 S-chips had been delisted in Singapore between 2011 and 2013. Let’s hope Chiwayland International Ltd would not be an addition to that kind of statistic.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Stanley Lim doesn't own any shares of companies mention above