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. It’s not a good start to the week with the Straits Times Index (SGX: ^STI) dipping by 0.4% to 3,314 points. Within the index, 19 of its 30 constituents had ended up with losses as opposed to only eight which made some headway. With winning shares in short supply within Singapore’s market benchmark, let’s venture outside the index for a closer look at some market beaters….
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.
It’s not a good start to the week with the Straits Times Index (SGX: ^STI) dipping by 0.4% to 3,314 points. Within the index, 19 of its 30 constituents had ended up with losses as opposed to only eight which made some headway.
With winning shares in short supply within Singapore’s market benchmark, let’s venture outside the index for a closer look at some market beaters.
KTL Global Limited (SGX: EB7) has climbed by 5.8% to S$0.127. Last week, the rigging equipment supplier had made two important announcements.
The first was on Thursday when the company released its full-year results. For the fiscal year ended 30 June 2014 (FY2014), KTL Global saw its revenue grow by 6.5% to S$72.5 million. Profit however, had jumped manifold from S$519,000 a year ago to S$2.87 million. The company’s top-line growth was fuelled by higher sales across all its business segments. During the year, KTL Global managed to keep costs in check, hence resulting in the huge spike in bottom-line.
The next announcement concerns KTL Global’s future. On Friday, the company proposed a joint-venture and acquisition. Under the 40:60 joint venture, KTL Global would be working with Nantong Kaidele Trading Co. Ltd. in China to trade in “high-end slings, processing, storage, display and other services within the Nantong Comprehensive Bonded Zone.” The move is “in line with [KTL Global’s] plans to expand into new markets.” Meanwhile, the proposed acquisition involves KTL Global possibly buying over a 30% stake of a company called FW Coastal Ventures Pte Ltd.
Interestingly, the FW Coastal Ventures stake will be bought from Tan Kheng Yeow, who also happens to be KTL Global’s Chief Executive Officer and controlling shareholder. If the deal goes through, Tan would end up owning 19% of FW Coastal Ventures with Frederick Yong Kar Kian holding the remaining 51% stake. FW Coastal Ventures’ main business activities are in the provision of training services for personnel in the offshore oil and gas, commercial maritime, and energy resources industries. Another big part of its business involves the running of welding training courses, welding test centre, and qualification for welders for offshore assignments. In a similar manner to the joint-venture, this acquisition would allow KTL Global to expand its business horizons.
Manhattan Resources Limited (SGX: L02) is next in line – shares of the company have jumped by 8.1% to S$0.465. Just last week, Manhattan Resources announced that it has entered into a conditional agreement to purchase Singxin Water Pte Ltd in its entirety for S$4.5 million. Singxin Water is based in Singapore, but is “currently in the midst of acquiring China-based mineral water mining business, Wuqia County Kunlun Mineral Water Co., Ltd, which in turn holds a mineral water mining permit covering a total area of 0.5 sq km in Wuqia County in the Xinjiang Uygur Autonomous Region” in China.
There are a few hoops Singxin Water must jump through before the deal with Manhattan Resources can be confirmed and one of them involves the former completely acquiring Wuqia County Kunlun Mineral Water.
If Manhattan Resources successfully buys over mineral water mining rights in China, it will be another collection to its odd smattering of business activities. The company currently deals with barging activities in addition to the provision of logistics, marine transportation, and support services to the coal mining and resources industries in Indonesia.
Rounding up the trio is movie production outfit Spackman Entertainment Group Ltd (SGX: 40E). Shares of the company have increased by 1.25% to S$0.405 following the release of its second quarter results last Friday.
Spackman Entertainment only started trading on the Catalist exchange back in 22 July 2014 with a listing price of S$0.26 – early investors in the company must be very satisfied with the company given it has already gained some 56% since its IPO.
Interestingly, despite the market’s favourable reaction to Spackman Entertainment’s earnings release so far, the financial numbers seemed to be painting a different sort of story. For the six months ended 30 June 2014, the company’s revenue had ballooned from US$650,000 a year ago to US$8.745 million due to sales from a number of films such as For The Emperor and Confession that the company had produced and/or presented.
But other than a big jump in the company’s top-line, most of its other important financial figures took a step backward. The company’s half-yearly loss had widened from US$701,000 a year ago to US$898,000; its operating cash flow also slid from a negative US$1.03 million to a negative US$8.41 million. In addition, the company’s balance sheet had weakened since the end of 2013 with its net debt position (total borrowings minus total cash) growing from US$1.71 million to US$8.45 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.