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) has finished the day essentially flat at 3,324 points. Let’s take a look at some market beaters outside the index. United Engineers Ltd (SGX: U04) has jumped by 7.4% to S$2.46 before it requested for a trading halt at 11:13 am today. It appears that the property outfit’s largest shareholders are looking to sell their stakes in it, according…
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) has finished the day essentially flat at 3,324 points. Let’s take a look at some market beaters outside the index.
United Engineers Ltd (SGX: U04) has jumped by 7.4% to S$2.46 before it requested for a trading halt at 11:13 am today.
It appears that the property outfit’s largest shareholders are looking to sell their stakes in it, according to a Bloomberg article earlier this morning. The shareholders in question are Oversea-Chinese Banking Corp. Limited (SGX: O39), Great Eastern Holding Limited (SGX: G07) and the Lee Foundation.
The Bloomberg article also mentioned that if the transaction does happen, the potential buyer – identified as Thai billionaire Mr. Charoen Sirivadhanabhakdi by the business newswire – would have to launch a mandatory takeover offer for United Engineers.
My colleague Stanley Lim brought up an interesting point regarding the potential deal:
“The last deal that Mr. Sirivadhanabhakdi had struck with OCBC was when he bought the latter’s stake in Fraser & Neave Limited (SGX: F99) in 2012…
…Thai Beverage’s investors might also want to watch [any announcements made by United Engineers] – the alcoholic beverage maker is already heavily indebted with THB57.7 billion in total borrowings and THB2.97 billion in cash & equivalents. If Thai Beverage is used as a vehicle by Mr. Sirivadhanabhakdi to participate in any deal involving United Engineers – Thai Beverage was one of Mr. Sirivadhanabhakdi’s investment vehicles for the Fraser & Neave deal – the company’s balance sheet might be weakened further.”
There’s been no official word from United Engineers yet as of the time of writing (6:05pm, 21 August 2014), so investors can only speculate about what is really going on for now.
Centurion Corp Ltd (SGX: OU8) is up 3.2% to S$0.64. Last week, the dormitory owner and operator had released its second quarter results. For the six months ended 30 June 2014, Centurion saw a 35% year-on-year jump in revenue to S$37.4 million. Its profit meanwhile, had spiked by 252% to S$30.4 million after stripping away fair value gains on its properties and one-off impairment charges.
Centurion’s accommodation business segment, which contributed to almost 90% of the company’s overall revenue, experienced a 46% increase in revenue due to an expansion in bed capacity for some of its Singapore assets as well as maiden contributions from an Australian student dormitory which was acquired only in February this year.
Looking ahead, the company’s accommodation segment “remains favourable, supported by healthy demand and a more diversified portfolio of purpose-built workers and student accommodation across four countries.”
Industrial farmer Japfa Ltd (SGX: UD2) rounds up the trio with a 2.9% climb to S$0.895. Having listed at S$0.80 just last Friday, Japfa has certainly been a strong performer with its shares having gained 12% since.
At its current price, the company’s valued at 25 times its earnings for 2013. That’s not a cheap valuation and would mean that investors have to be fairly certain of Japfa’s ability to deliver earnings growth in the years ahead. For some context, the company’s profit has decreased from US$44.5 million in 2011 to US$41.5 million in 2013.
Besides its valuation, investors should probably also take note of the company’s balance sheet, which seems heavily leveraged: as of 31 March 2014, the company had total borrowings of US$1.1 billion with cash and short-term investments of just US$218 million.
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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 writer Chong Ser Jing doesn’t own shares in any companies mentioned.