IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

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

<ul>
<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 revised conditional VGO from the Tangs at S$0.75, a 4.2% premium to the previous offer of S$0.72. The offer is final.</li>
<li>The offeror (47.27% of outstanding shares) and immediate family represent 50.49% of outstanding shares or 48.63% of diluted shares, which is just shy of the 50%+ minimum acceptance condition. </li>
<li>The bump was to increase the chances of privatisation rather than hitting the 50%+ minimum acceptance condition. At the last close, the gross spread is 1.4%. </li>
</ul>



Chip Eng Seng Corp (CHIP SP) disclosed a revised conditional VGO from the Tangs at S$0.75, a 4.2% premium to the previous offer of S$0.72. The offer is final.
The offeror (47.27% of outstanding shares) and immediate family represent 50.49% of outstanding shares or 48.63% of diluted shares, which is just shy of the 50%+ minimum acceptance condition. 
The bump was to increase the chances of privatisation rather than hitting the 50%+ minimum acceptance condition. At the last close, the gross spread is 1.4%. 


Chip Eng Seng (CHIP SP)’s Revised S$0.75 VGO from the Tangs

<ul>
<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

SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Asia’s leading multi-asset exchange

Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

Equity Bottom-Up

<ul><li>Non-STI stocks with the highest 3Q22 buyback consideration included YZJ Financial Holding, The Hour Glass, OUE, First Resources and Hong Fok Corporation.</li><li>The Hour Glass commenced a new buyback mandate in 3Q22, with 2.05% of its shares bought back between 3 Aug and 30 Sep.</li><li>Total buyback consideration was comparatively more consistent, with 46 primary-listed companies buying back shares with a total consideration of S$586 million, which was down from the S$657 million in consideration filed for 2Q22, but up from the S$241 million in consideration filed for 3Q21.</li></ul>

Non-STI stocks with the highest 3Q22 buyback consideration included YZJ Financial Holding, The Hour Glass, OUE, First Resources and Hong Fok Corporation.The Hour Glass commenced a new buyback mandate in 3Q22, with 2.05% of its shares bought back between 3 Aug and 30 Sep.Total buyback consideration was comparatively more consistent, with 46 primary-listed companies buying back shares with a total consideration of S$586 million, which was down from the S$657 million in consideration filed for 2Q22, but up from the S$241 million in consideration filed for 3Q21.

Share Buyback Consideration of Primary Listings total S$586M in 3Q22 

<ul>
<li>The Ong directors tried every trick in the book to derail the <a href="https://www.smartkarma.com/entities/hwa-hong-corp-ltd" target="_blank" data-smartkarma-citation="entities:6648:1" rel="noopener">Hwa Hong Corp (HWAH SP)</a> offer. The trump card was hiring Evercore to attract competing offers by 25 July.</li>
<li>The Board confirmed today that there are no competing offers. This is a catalyst for shareholders sitting on the fence to accept the S$0.40 per share offer.</li>
<li>The offer closes on 1 August. While meeting the 50%+ minimum acceptance condition will be a close-run, we think it will be met. The gross spread is 5.3%.     </li>
</ul>


The Ong directors tried every trick in the book to derail the Hwa Hong Corp (HWAH SP) offer. The trump card was hiring Evercore to attract competing offers by 25 July.
The Board confirmed today that there are no competing offers. This is a catalyst for shareholders sitting on the fence to accept the S$0.40 per share offer.
The offer closes on 1 August. While meeting the 50%+ minimum acceptance condition will be a close-run, we think it will be met. The gross spread is 5.3%.     


<figure>
 <img src='https://api2.sgx.com/sites/default/files/2022-06/share%20buyback_1.PNG' alt='Share Buybacks' />
 </figure>
 <div class='content-caption'>Share Buybacks</div>
<!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd">
<html><body>
FOR the 5 trading sessions that spanned Jun 17 to 23, the Straits Times Index (STI) declined 0.2 per cent, with the FTSE China A50 Index gaining 2.8 per cent, the Hang Seng Index adding 2.5 per cent and the FTSE Bursa Malaysia KLCI falling 2.7 per cent. 

Overall, institutions were net buyers of Singapore stocks over the 5 sessions with S$116 million of net inflow, following S$166 million of net outflow for the preceding 5 sessions. DBS, Singtel, CapitaLand Investment, Digital Core Reit and Hongkong Land led the net institutional inflows for the 5 sessions through to Jun 23.

 

Share buybacks

There were 27 primary-listed stocks conducting share buybacks over the 5 sessions ended Jun 23, with a total consideration of S$64.6 million, approximately half the previous week’s consideration tally. Wilmar International and Keppel Corporation again led the consideration tally, buying back shares at average prices of S$4.02, and S$6.59 respectively.

 

Director and substantial shareholder transactions

The 5 trading sessions saw 70 changes to director interests and substantial shareholdings filed for 35 primary-listed stocks. This included 15 company director acquisitions with 3 disposals filed, while substantial shareholders filed 11 acquisitions and 3 disposals.

 United Hampshire US Reit

On Jun 20 and 22, United Hampshire US Reit Management non-independent non-executive director David Tuvia Goss acquired 500,000 units of United Hampshire US Reit (UHReit) at an average price of 60.9 US cents per unit. With a consideration of US$304,650 this took his direct interest in UHReit to 0.09 per cent. 
UHReit is the first US grocery-anchored shopping centre and self-storage Reit to list in Singapore, and back in May reported Q1 2022 (ended Mar 31) distributable income of US$8.1 million, 7.9 per cent higher than Q1 2021.

Goss is the managing director of UOB Global Capital since September 1998. Prior to co-founding UOB Global Capital, he was president and CEO of AIG Asset Management Services in New York from March 1995, with global responsibility for AIG’s third-party asset management activities. UHReit completed its inaugural acquisitions of Colonial Square on Nov 12, 2021 and Penrose Plaza on Nov 24, 2021, with both acquisitions contributing positively to Q1 2022 distributable income.

 

Oiltek International

On Jun 20, Koh Brothers Eco Engineering acquired 1 million shares of Oiltek International at 23.0 cents per share. The married deal increased non-executive director Koh Keng Siang’s total interest in the integrated process and renewable energy solutions provider from 67.44 per cent to 68.14 per cent. Koh has been a non-executive director of the subsidiaries, Oiltek Sdn Bhd and Oiltek Global Energy Sdn Bhd since February 2013. He is the managing director and group CEO of Koh Brothers Group, which is the ultimate controlling shareholder of Oiltek International through its shareholding interest in Koh Brothers Eco Engineering. 
Listed on Catalist, Oiltek International operates 3 key businesses – the edible &amp; non-edible oil refinery segment, renewable energy segment, and product sales and trading segment. Oiltek International’s revenue for FY21 (ended Dec 31) grew 15.0 per cent to RM100.63 million from FY20, mainly due to new projects secured in FY21 for the group’s edible &amp; non-edible oil refinery segment.

 

Hong Fok Corporation

On Jun 17, Hong Fok Corporation executive director and joint CEO Cheong Pin Chuan acquired 201,800 shares of the company, for a consideration of S$187,665 at 93.0 cents per share. This increased his total interest in the property developer from 20.64 per cent to 20.66 per cent. He is principally involved in the group’s overall operations and management with greater emphasis in Hong Kong and has over 50 years of experience in property development at both management and board levels in Singapore and Hong Kong.

 

PropNex

Between Jun 16 and 17, PropNex executive director Kelvin Fong Keng Seong acquired 101,100 shares of the company, at an average price of S$1.63 per share. This took his deemed interest in PropNex from 8.71 per cent to 8.73 per cent. His preceding acquisitions were between May 24 and 26, with 300,000 shares acquired at S$1.70 per share. Fong has gradually increased his deemed interest in PropNex from 7.63 per cent in February 2019.

Fong oversees the group’s training development curriculum and also administers the development of IT strategies and technology innovations to improve the group’s competitive edge in the industry. For its Q1 FY22 (ended Mar 31), PropNex reported that revenue grew 9.5 per cent year on year to S$241.6 million, with net profit declining 8.1 per cent year on year to S$14.9 million.

The company, which is Singapore’s largest listed real estate agency noted that its Q1 FY22 was impacted by the government’s new cooling measures, growing uncertainties arising from the Russian-Ukraine war, concerns over rising inflation and interest rates dampening sentiment, while limited new launches and the seasonal lull reined in sales volumes.

Looking forward, PropNex noted in May that it expects the private housing market to remain fairly resilient this year and prices could grow by 3 per cent to 5 per cent in 2022, as reflected in the 0.7 per cent price increase in Q1 2022 and higher new launch prices expected in subsequent quarters. The company also highlighted that it is well on its way to attaining its goal of having 12,000 salespersons by end 2022. It has already achieved a growth of 26.4 per cent in the number of salespersons from 8,918 as at Jan 1, 2021 to 11,268 as at Apr 11, 2022.

 Singapore Shipping Corporation

Between Jun 16 and 21, Singapore Shipping Corporation executive chairman Ow Chio Kiat acquired 225,400 shares at an average price of 28.4 cents per share. With a consideration of S$63,948, this increased his total stake in the company from 41.92 per cent to 41.97 per cent. With a career spanning 60 years, Ow also serves as the executive chairman of Stamford Land Corporation. Singapore Shipping Corporation is a spin-off from Stamford Land Corporation (formerly known as Hai Sun Hup Group) when the latter de-merged its shipping and logistics businesses in 2000 to concentrate on its hotel and property businesses. 
On May 26, Singapore Shipping Corporation reported that its revenue for FY22 (ended Mar 31) increased 8.6 per cent from FY21, with attributable profit down 4.3 per cent from FY21.

 

Centurion Corporation

Between Jun 17 and 23, Centurion Corporation : OU8 0% executive director and joint chairman David Loh Kim Kang acquired 200,000 shares of the purpose-built accommodation developer and manager for a consideration of S$70,000. At 35.0 cents per share, this took his total interest from 55.40 per cent to 55.43 per cent. His preceding acquisitions were between May 20 and 26, with 1,860,400 shares also acquired at 35.0 cents per share.

 Uni-Asia Group

On Jun 23, Uni-Asia Group executive chairman Michio Tanamoto acquired 50,000 shares at S$1.00 per share. This increased his total interest in the company from 3.44 per cent to 3.50 per cent. This closely followed his acquisition of 150,000 shares at S$1.04 per share on Jun 13 and 50,000 shares at S$S$1.09 per share on Jun 9. Tanamoto was appointed the executive chairman of Uni-Asia Group in April 2020.

 Sasseur Reit

On Jun 17, Sasseur Asset Management CEO Cecilia Tan Hong Lye acquired 22,000 units of Sasseur Reit at an average price of 73.8 cents per unit. This increased her direct interest in the first outlet mall Reit to be listed in Asia to 40,000 units. Tan has been the CEO of the manager of Sasseur Reit since Aug 1, 2021. She has more than 20 years of professional career experience spanning across a wide spectrum of real estate expertise in real estate investment banking, real estate direct investment, Reit management, real estate fund management and property development.

Prior to joining Sasseur Asset Management, she was the senior strategic adviser to Vito Xu, the chairman of Sasseur Group from July 2019 to June 2021.

Back on May 12, Sasseur Reit reported a record high Q1 (ended Mar 31) distributable income of S$24.7 million, which was up 4.7 per cent from Q1 2021.

 

Inside Insights is a weekly column on The Business Times,<a href="https://www.businesstimes.com.sg/companies-markets/koh-brothers-group-ceo-koh-keng-siang-adds-to-his-oiltek-stake"> read </a>the original version.
</body></html>


      
    
    Share Buybacks


FOR the 5 trading sessions that spanned Jun 17 to 23, the Straits Times Index (STI) declined 0.2 per cent, with the FTSE China A50 Index gaining 2.8 per cent, the Hang Seng Index adding 2.5 per cent and the FTSE Bursa Malaysia KLCI falling 2.7 per cent. 

Overall, institutions were net buyers of Singapore stocks over the 5 sessions with S$116 million of net inflow, following S$166 million of net outflow for the preceding 5 sessions. DBS, Singtel, CapitaLand Investment, Digital Core Reit and Hongkong Land led the net institutional inflows for the 5 sessions through to Jun 23.

 

Share buybacks

There were 27 primary-listed stocks conducting share buybacks over the 5 sessions ended Jun 23, with a total consideration of S$64.6 million, approximately half the previous week’s consideration tally. Wilmar International and Keppel Corporation again led the consideration tally, buying back shares at average prices of S$4.02, and S$6.59 respectively.

 

Director and substantial shareholder transactions

The 5 trading sessions saw 70 changes to director interests and substantial shareholdings filed for 35 primary-listed stocks. This included 15 company director acquisitions with 3 disposals filed, while substantial shareholders filed 11 acquisitions and 3 disposals.

 United Hampshire US Reit

On Jun 20 and 22, United Hampshire US Reit Management non-independent non-executive director David Tuvia Goss acquired 500,000 units of United Hampshire US Reit (UHReit) at an average price of 60.9 US cents per unit. With a consideration of US$304,650 this took his direct interest in UHReit to 0.09 per cent. 
UHReit is the first US grocery-anchored shopping centre and self-storage Reit to list in Singapore, and back in May reported Q1 2022 (ended Mar 31) distributable income of US$8.1 million, 7.9 per cent higher than Q1 2021.

Goss is the managing director of UOB Global Capital since September 1998. Prior to co-founding UOB Global Capital, he was president and CEO of AIG Asset Management Services in New York from March 1995, with global responsibility for AIG’s third-party asset management activities. UHReit completed its inaugural acquisitions of Colonial Square on Nov 12, 2021 and Penrose Plaza on Nov 24, 2021, with both acquisitions contributing positively to Q1 2022 distributable income.

 

Oiltek International

On Jun 20, Koh Brothers Eco Engineering acquired 1 million shares of Oiltek International at 23.0 cents per share. The married deal increased non-executive director Koh Keng Siang’s total interest in the integrated process and renewable energy solutions provider from 67.44 per cent to 68.14 per cent. Koh has been a non-executive director of the subsidiaries, Oiltek Sdn Bhd and Oiltek Global Energy Sdn Bhd since February 2013. He is the managing director and group CEO of Koh Brothers Group, which is the ultimate controlling shareholder of Oiltek International through its shareholding interest in Koh Brothers Eco Engineering. 
Listed on Catalist, Oiltek International operates 3 key businesses – the edible &amp; non-edible oil refinery segment, renewable energy segment, and product sales and trading segment. Oiltek International’s revenue for FY21 (ended Dec 31) grew 15.0 per cent to RM100.63 million from FY20, mainly due to new projects secured in FY21 for the group’s edible &amp; non-edible oil refinery segment.

 

Hong Fok Corporation

On Jun 17, Hong Fok Corporation executive director and joint CEO Cheong Pin Chuan acquired 201,800 shares of the company, for a consideration of S$187,665 at 93.0 cents per share. This increased his total interest in the property developer from 20.64 per cent to 20.66 per cent. He is principally involved in the group’s overall operations and management with greater emphasis in Hong Kong and has over 50 years of experience in property development at both management and board levels in Singapore and Hong Kong.

 

PropNex

Between Jun 16 and 17, PropNex executive director Kelvin Fong Keng Seong acquired 101,100 shares of the company, at an average price of S$1.63 per share. This took his deemed interest in PropNex from 8.71 per cent to 8.73 per cent. His preceding acquisitions were between May 24 and 26, with 300,000 shares acquired at S$1.70 per share. Fong has gradually increased his deemed interest in PropNex from 7.63 per cent in February 2019.

Fong oversees the group’s training development curriculum and also administers the development of IT strategies and technology innovations to improve the group’s competitive edge in the industry. For its Q1 FY22 (ended Mar 31), PropNex reported that revenue grew 9.5 per cent year on year to S$241.6 million, with net profit declining 8.1 per cent year on year to S$14.9 million.

The company, which is Singapore’s largest listed real estate agency noted that its Q1 FY22 was impacted by the government’s new cooling measures, growing uncertainties arising from the Russian-Ukraine war, concerns over rising inflation and interest rates dampening sentiment, while limited new launches and the seasonal lull reined in sales volumes.

Looking forward, PropNex noted in May that it expects the private housing market to remain fairly resilient this year and prices could grow by 3 per cent to 5 per cent in 2022, as reflected in the 0.7 per cent price increase in Q1 2022 and higher new launch prices expected in subsequent quarters. The company also highlighted that it is well on its way to attaining its goal of having 12,000 salespersons by end 2022. It has already achieved a growth of 26.4 per cent in the number of salespersons from 8,918 as at Jan 1, 2021 to 11,268 as at Apr 11, 2022.

 Singapore Shipping Corporation

Between Jun 16 and 21, Singapore Shipping Corporation executive chairman Ow Chio Kiat acquired 225,400 shares at an average price of 28.4 cents per share. With a consideration of S$63,948, this increased his total stake in the company from 41.92 per cent to 41.97 per cent. With a career spanning 60 years, Ow also serves as the executive chairman of Stamford Land Corporation. Singapore Shipping Corporation is a spin-off from Stamford Land Corporation (formerly known as Hai Sun Hup Group) when the latter de-merged its shipping and logistics businesses in 2000 to concentrate on its hotel and property businesses. 
On May 26, Singapore Shipping Corporation reported that its revenue for FY22 (ended Mar 31) increased 8.6 per cent from FY21, with attributable profit down 4.3 per cent from FY21.

 

Centurion Corporation

Between Jun 17 and 23, Centurion Corporation : OU8 0% executive director and joint chairman David Loh Kim Kang acquired 200,000 shares of the purpose-built accommodation developer and manager for a consideration of S$70,000. At 35.0 cents per share, this took his total interest from 55.40 per cent to 55.43 per cent. His preceding acquisitions were between May 20 and 26, with 1,860,400 shares also acquired at 35.0 cents per share.

 Uni-Asia Group

On Jun 23, Uni-Asia Group executive chairman Michio Tanamoto acquired 50,000 shares at S$1.00 per share. This increased his total interest in the company from 3.44 per cent to 3.50 per cent. This closely followed his acquisition of 150,000 shares at S$1.04 per share on Jun 13 and 50,000 shares at S$S$1.09 per share on Jun 9. Tanamoto was appointed the executive chairman of Uni-Asia Group in April 2020.

 Sasseur Reit

On Jun 17, Sasseur Asset Management CEO Cecilia Tan Hong Lye acquired 22,000 units of Sasseur Reit at an average price of 73.8 cents per unit. This increased her direct interest in the first outlet mall Reit to be listed in Asia to 40,000 units. Tan has been the CEO of the manager of Sasseur Reit since Aug 1, 2021. She has more than 20 years of professional career experience spanning across a wide spectrum of real estate expertise in real estate investment banking, real estate direct investment, Reit management, real estate fund management and property development.

Prior to joining Sasseur Asset Management, she was the senior strategic adviser to Vito Xu, the chairman of Sasseur Group from July 2019 to June 2021.

Back on May 12, Sasseur Reit reported a record high Q1 (ended Mar 31) distributable income of S$24.7 million, which was up 4.7 per cent from Q1 2021.

 

Inside Insights is a weekly column on The Business Times, read the original version.



Koh Brothers group CEO, Koh Keng Siang adds to his Oiltek stake

Singapore

Hong Fok Corporation Limited is an investment holding company whose principal activities consist of property investment, property development, property management, and investment trading.

Hong Fok Corp (HFC SP)

Chip Eng Seng (CHIP SP)’s Revised S$0.75 VGO from the Tangs

The bump was to increase the chances of privatisation rather than hitting the 50%+ minimum acceptance condition. At the last close, the gross...

Arun George

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

Hwa Hong Confirms No Competing Offers

It will be close but we think the offer meets the 50%+ minimum acceptance condition. The offer lapses at 5:30 pm on 1 August. At the last close,...

Arun George

Koh Brothers group CEO, Koh Keng Siang adds to his Oiltek stake

FOR the 5 trading sessions that spanned Jun 17 to 23, the Straits Times Index (STI) declined 0.2 per cent, with the FTSE China...

Singapore Exchange Ltd (SGX)

Chip Eng Seng (CHIP SP)’s Revised S$0.75 VGO from the Tangs

The bump was to increase the chances of privatisation rather than hitting the 50%+ minimum acceptance condition. At the last close, the gross...

Arun George

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

Share Buyback Consideration of Primary Listings total S$586M in 3Q22

Non-STI stocks with the highest 3Q22 buyback consideration included YZJ Financial Holding, The Hour Glass, OUE, First Resources and Hong Fok...

Singapore Exchange Ltd (SGX)

Hwa Hong Confirms No Competing Offers

It will be close but we think the offer meets the 50%+ minimum acceptance condition. The offer lapses at 5:30 pm on 1 August. At the last close,...

Arun George

Koh Brothers group CEO, Koh Keng Siang adds to his Oiltek stake

FOR the 5 trading sessions that spanned Jun 17 to 23, the Straits Times Index (STI) declined 0.2 per cent, with the FTSE China...

Singapore Exchange Ltd (SGX)