IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

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Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

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<li>
<a href="https://www.smartkarma.com/entities/chip-eng-seng-corp-ltd" target="_blank" data-smartkarma-citation="entities:6441:1" rel="noopener">Chip Eng Seng Corp (CHIP SP)</a> disclosed a conditional VGO from the Tangs at S$0.720, a 6.7% premium to the undisturbed price (6 September). The price is not declared final. </li>
<li>Irrevocables and family represent 41.44% of outstanding shares. The VGO has a 50%+ minimum acceptance condition which requires around a 15% minorities acceptance rate.</li>
<li>While the last close is in line with the offer, it is attractive in the context of historical prices/multiples. Therefore, there is a good chance of hitting the 50% threshold.</li>
</ul>



Chip Eng Seng Corp (CHIP SP) disclosed a conditional VGO from the Tangs at S$0.720, a 6.7% premium to the undisturbed price (6 September). The price is not declared final. 
Irrevocables and family represent 41.44% of outstanding shares. The VGO has a 50%+ minimum acceptance condition which requires around a 15% minorities acceptance rate.
While the last close is in line with the offer, it is attractive in the context of historical prices/multiples. Therefore, there is a good chance of hitting the 50% threshold.


Chip Eng Seng (CHIP SP)’s S$0.72 VGO from the Tangs

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

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Singaporean property play <a href="https://www.smartkarma.com/entities/singhaiyi-group-ltd" target="_blank" data-smartkarma-citation="entities:19307:1" rel="noopener">SingHaiyi (SHG SP)</a> has announced a <a href="https://links.sgx.com/FileOpen/Offer_Announcement.ashx?App=Announcement&amp;FileID=689919" target="_blank" rel="noopener">voluntary conditional cash Offer</a> from Gordan and Celine Tang, who control 75.56% of shares out. 
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The Offer Price of S$0.117/share is an 8.3% premium to last close and 0.78x P/NAV. The acceptance condition is 90%, including the Tang's stake, although the Tang's reserve the right to reduce this to 50%. Family members with 2.81% have given an irrecoverable to tender into the Offer taking the accumulated holding to 78.37%. Save for the acceptance condition, the Offer is unconditional in all other respects.
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This appears a relatively listless Offer premium, however, it pitches SingHaiyi around a multi-year high. The Offer has not been declared final.
The entire construct is reminiscent of the Offer from <a href="https://www.smartkarma.com/entities/guoco-group-ltd" target="_blank" data-smartkarma-citation="entities:5290:1" rel="noopener">Guoco Group Ltd (53 HK)</a> for <a href="https://www.smartkarma.com/entities/gl-ltd" target="_blank" data-smartkarma-citation="entities:2540:1" rel="noopener">GL Ltd (GLL SP)</a> - <a href="https://skr.ma/SdJKh" target="_blank" rel="noopener">GL Limited (GLL SP): Privatisation Offer Renews Interest In Guoco</a> - which was successfully completed after terms were bumped. 
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As always, more below the fold.
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Singaporean property play SingHaiyi (SHG SP) has announced a voluntary conditional cash Offer from Gordan and Celine Tang, who control 75.56% of shares out. 


The Offer Price of S$0.117/share is an 8.3% premium to last close and 0.78x P/NAV. The acceptance condition is 90%, including the Tang's stake, although the Tang's reserve the right to reduce this to 50%. Family members with 2.81% have given an irrecoverable to tender into the Offer taking the accumulated holding to 78.37%. Save for the acceptance condition, the Offer is unconditional in all other respects.


This appears a relatively listless Offer premium, however, it pitches SingHaiyi around a multi-year high. The Offer has not been declared final.
The entire construct is reminiscent of the Offer from Guoco Group Ltd (53 HK) for GL Ltd (GLL SP) - GL Limited (GLL SP): Privatisation Offer Renews Interest In Guoco - which was successfully completed after terms were bumped. 


As always, more below the fold.


SingHaiyi Group (SHG SP): Tang's Conditional Offer

Singapore and emerging market real estate

Royston Foo

Thematic (Sector/Industry)

Singapore’s Urban Redevelopment Authority (URA) today released the data on property developers’ private home sales for the month of May 2019.Property developers in Singapore launched a total of 1,374 non-land private residential units for sale in the month of May and this was an increase of 214% MoM and 30% YoY.A total of 934 non-landed private residential units were sold in May. This was an increase of 29% MoM, but a decline of 15% YoY. Buyers continue to gravitate towards the earlier launched mass-market property projects that are priced at more reasonable levels in comparison to the newer projects. Interest in mid-range to high-end projects remained subdued.Total developers’ inventory available for immediate launch decreased by 3.6% MoM in May to 16,782 units, aided by the improvement in sales and fewer projects getting sales approval in May. Developers’ inventory in the CCR continued to increase in May, rising by 2.5% MoM to 3,061 units in May. This is the highest level since December 2016.

Singapore’s Urban Redevelopment Authority (URA) today released the data on property developers’ private home sales for the month of May 2019.Property developers in Singapore launched a total of 1,374 non-land private residential units for sale in the month of May and this was an increase of 214% MoM and 30% YoY.A total of 934 non-landed private residential units were sold in May. This was an increase of 29% MoM, but a decline of 15% YoY. Buyers continue to gravitate towards the earlier launched mass-market property projects that are priced at more reasonable levels in comparison to the newer projects. Interest in mid-range to high-end projects remained subdued.Total developers’ inventory available for immediate launch decreased by 3.6% MoM in May to 16,782 units, aided by the improvement in sales and fewer projects getting sales approval in May. Developers’ inventory in the CCR continued to increase in May, rising by 2.5% MoM to 3,061 units in May. This is the highest level since December 2016.

Singapore Property – 29% Increase in Property Sales in May but No Recovery in Sight Yet.

Equity Bottom-Up

Bukit Sembawang Estates / Equity Bottom-Up

<a href="https://www.smartkarma.com/entities/17987" target="_blank" data-smartkarma-citation="entities:17987:1">Bukit Sembawang Estates (BS SP)</a> (”BSEL”) reported its 4Q FY18/19 and full year results this evening. Some unexpected surprises in BSEL’s 4Q FY18/19 results are a S$9.7 mil impairment loss on Fraser Residences Orchard (fka Paterson Collection and a S$10.0 mil allowance for foreseeable losses on The Atelier (former Makeway View).With the S$10 mil impairment made for Makeway View, this brings the book value of the development site down to S$179 mil or S$1,540 psf ppr. The accounting breakeven cost for the upcoming new development on this site, named The Atelier, would be lower at approximately S$2,100 psf. With the adjustment in selling price for The Atelier to S$2,400 psf (previously S$2,600 psf), RNAV estimate for BSEL has been reduced to S$7.92 per share (previously S$7.96 per share). Keeping a RNAV discount of 30%, fair value for BSEL has been lowered to S$5.54 per share (previously S$5.57 per share).Outlook for Singapore residential sector remains challenging. Whilst valuation looks fair, there is no catalyst in sight yet. Hence, I maintain my HOLD rating.

Bukit Sembawang Estates (BS SP) (”BSEL”) reported its 4Q FY18/19 and full year results this evening. Some unexpected surprises in BSEL’s 4Q FY18/19 results are a S$9.7 mil impairment loss on Fraser Residences Orchard (fka Paterson Collection and a S$10.0 mil allowance for foreseeable losses on The Atelier (former Makeway View).With the S$10 mil impairment made for Makeway View, this brings the book value of the development site down to S$179 mil or S$1,540 psf ppr. The accounting breakeven cost for the upcoming new development on this site, named The Atelier, would be lower at approximately S$2,100 psf. With the adjustment in selling price for The Atelier to S$2,400 psf (previously S$2,600 psf), RNAV estimate for BSEL has been reduced to S$7.92 per share (previously S$7.96 per share). Keeping a RNAV discount of 30%, fair value for BSEL has been lowered to S$5.54 per share (previously S$5.57 per share).Outlook for Singapore residential sector remains challenging. Whilst valuation looks fair, there is no catalyst in sight yet. Hence, I maintain my HOLD rating.

Bukit Sembawang – Kicking off the Property Impairment Cycle

Singapore’s Urban Redevelopment Authority (URA) today released the data on property developers’ private home sales for the month of April 2019.Property developers in Singapore launched a total of 438 non-land private residential units for sale in the month April, a decline of 76% MoM and 30% YoY.A total of 726 non-landed private residential units were sold in April, a decline of 30% MoM.Take-up rate rebounded in April to 166% after falling to the lowest level since November 2014 but the recovery was attributable to the decline in launches, rather than an improvement in sales.Total developers’ inventory available for immediate launch increased by 5.3% MoM in April to 17,411 units, reaching the highest level since August 2015.The deleveraging of Oxley’s balance sheet with the Chevron House sale and the planned divestment of Novotel and Mercure on Stevens, and the healthy sales momentum at Oxley’s residential projects in Singapore are expected to reduce Oxley’s risk profile in the coming months and could be potential catalysts for re-rating.

Singapore’s Urban Redevelopment Authority (URA) today released the data on property developers’ private home sales for the month of April 2019.Property developers in Singapore launched a total of 438 non-land private residential units for sale in the month April, a decline of 76% MoM and 30% YoY.A total of 726 non-landed private residential units were sold in April, a decline of 30% MoM.Take-up rate rebounded in April to 166% after falling to the lowest level since November 2014 but the recovery was attributable to the decline in launches, rather than an improvement in sales.Total developers’ inventory available for immediate launch increased by 5.3% MoM in April to 17,411 units, reaching the highest level since August 2015.The deleveraging of Oxley’s balance sheet with the Chevron House sale and the planned divestment of Novotel and Mercure on Stevens, and the healthy sales momentum at Oxley’s residential projects in Singapore are expected to reduce Oxley’s risk profile in the coming months and could be potential catalysts for re-rating.  

Singapore Property – 30% Decline in Property Sales in April; Rising Inventory Remains a Concern

Singapore

Chip Eng Seng Corporation Limited specializes in building construction activities in the private and public sector.  The Company also owns, develops, and invests in properties.

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Chip Eng Seng Corp (CHIP SP)

Chip Eng Seng (CHIP SP)’s S$0.72 VGO from the Tangs

The price is not declared final. There is a good chance of hitting the 50% minimum acceptance threshold. Not worth chasing through terms in hopes...

Arun George

SingHaiyi Group (SHG SP): Tang's Conditional Offer

The Offer has not been declared final. I think there's probably enough here to get the deal over the line. I would not chase this much through...

David Blennerhassett

Singapore Property – 29% Increase in Property Sales in May but No Recovery in Sight Yet.

Singapore’s Urban Redevelopment Authority (URA) today released the data on property developers’ private home sales for the month of May...

Royston Foo

Bukit Sembawang – Kicking off the Property Impairment Cycle

Bukit Sembawang Estates (BS SP) (”BSEL”) reported its 4Q FY18/19 and full year results this evening. Some unexpected surprises in BSEL’s 4Q FY18/19...

Royston Foo

Singapore Property – 30% Decline in Property Sales in April; Rising Inventory Remains a Concern

Singapore’s Urban Redevelopment Authority (URA) today released the data on property developers’ private home sales for the month of April...

Royston Foo

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