Inphyy Corner

Ntegrator: Ushers In 2014 With S$4.02 Million Worth Of Orders

22 Jan 2014 10:52

Ntegrator International Ltd has started 2014 with four major contracts, worth S$4.02 million, from repeat customers in the region. These contracts are for the supply of equipment and services to Vietnam, Myanmar and Singapore. The first contract is awarded by the Viettel Group, Vietnam's largest mobile network operator and a customer of Ntegrator since 2002, for the supply of laboratory equipment to its operations in Vietnam. The second contract is awarded by Myanmar's Ministry of Defence, for the supply of ECI Telecom's transmission equipment and accessories to Myanmar...

ntegrator.listedcompany.com/newsroom/201...257C66002A150C.1.pdf

Can Singapore Exchange Limited’s Circuit Breakers Really Protect Investors?

By Ser Jing Chong - January 22, 2014

Singapore Exchange (SGX: S68), operator of the Mainboard and Catalist stock exchanges here in Singapore, announced earlier today that it would be introducing circuit breakers to the securities market from 24 Feb 2014 onwards “as an additional market safeguard.”

Bloomberg had reported back in October 2013 that the company had plans for a circuit breaker that would be implemented early this year. SGX had started to explore the initiative after the massive collapse in share prices of Blumont Group (SGX: A33), Asiasons Capital (SGX: 5ET), and LionGold Corp (SGX: A78) early in the month (all three shares are now still more than 90% below where they were prior to their collapse).

According to today’s announcement, the circuit breakers would initially be applied to two types of securities: constituent shares of both the Straits Times Index (SGX: ^STI) (which includes SGX) and the MSCI Singapore Index; as well as securities that are priced at S$0.50 and above. SGX added that “stapled securities, funds, exchange traded funds, exchange traded notes and extended settlement contracts” would also be part of the basket of ‘securities’ in question. All told, these securities together account for 80% of the trading done on Singapore’s stock market.

The circuit breaker would be triggered if a security actually rises or falls more than 10% from the reference price, which is the last traded price of the security from at least five minutes ago.

If the breaker is triggered, there would be a five-minute cooling-off period that would only allow trading to take place within a +/- 10% range from the reference price. After the cooling-off period ends, trading would resume normally with a new reference price that could be set during the cooling-period itself.

SGX would also be implementing a new error trade policy at the same time as the circuit breakers. The new policy would not allow any trades for all securities, except bonds, to be cancelled if the price of the transaction is within 5% of the last traded price. For structured warrants, trades can’t be cancelled if they are made within a 25% price range from the last valid price.

The company added that “trades done outside of the relevant price range are eligible for review by SGX. For bonds, any error trade will be eligible for review.”

According to Muthukhrisnan Ramaswami, president of SGX, the two new measures – the circuit breaker and the error trade policy – “will assure investors of continued safety and transparency even under volatile market conditions.” The initiatives would also “compliment [SGX’s] existing safeguards in support of a fair, orderly, and transparent market.”

So there you have it, the long-awaited circuit breaker that can likely help to safeguard investor’s interests.

But while the circuit breakers can help provide “safety and transparency”, can they actually help prevent investors from facing massive losses like what happened with shipping firm Cosco Corp. (SGX: F83), whose shares have fallen in price by more than 90% from almost S$8 in Oct 2007 to S$0.74 today?



From the table above, we can see how investors were willing to pay very high valuations for Cosco’s shares back then, essentially embedding expectations for huge growth going forward. When the growth didn’t pan out – earnings fell by more than 80% from 30 Oct 2007 till today – reality set in and expectations were reset.

Can circuit breakers help prevent investors from paying crazy prices for a business? Well… they can’t. Share prices reflect the underlying value of a business over the long-term and that’s something investors have to realise if they want to really protect their capital.

Blumont’s crazy 90% fall in the space of three trading days raised some questions. But the company was also selling for 500 times earnings and 60 times book value shortly before its collapse. If anything, questions should also be asked of the ‘investors’ who were literally paying through the nose for Blumont’s shares… What were they thinking!?

No amount of circuit breaking could have saved America investors in 1999 when they were awarding market values in the billions for internet companies with no revenue and no earnings. Only a realisation that market prices had been ripped so far apart from businesses’ true economic values could have saved them. There’s a lesson in there for us.


Courtesy of The Motley Fool

Three Things To Like About Global Logistic Properties

By David Kuo - January 22, 2014

The name says it all – Global Logistic Properties (SGX: MC0). The company is global; it is involved in logistics or support services, and it is a play on the property market. The company, which through a recently signed lease agreement in Brazil, has reinforced its presence in South America to add to its existing logistics facilities in China and Japan.

That is the first thing to like about Global Logistic Properties – its wide geographic presence. The company, which designs, builds and manages distribution facilities, currently generates 60% of its revenues from Japan, just under 40% from the People’s Republic of China and the remainder from Brazil. The recent Brazilian deal should increase the company’s exposure to and revenues from the seventh largest economy in the world.

The second thing to like about GLP is its high Return on Equity, which has been achieved without taking on excessive debt. At 1.7, its Leverage Ratio is about average for Singapore’s blue chips. The median Leverage Ratio for the 30 companies that make up the Straits Times Index (SGX: ^STI) is also 1.7.

Global Logistic Properties, which only floated on the Singapore market in 2010, has delivered a total annual return of 10.7% over the last three years. That is the third thing to like about GLP. Over 90% of the return has come from capital growth since the company has only recently started to pay a dividend. Currently, the payout ratio is a modest 20%, which would suggest that the company is not overreaching in rewarding shareholders.


Courtesy of The Motley Fool

K-Green Trust: K-Green 4Q13

S&P Capital IQ Equity Research

research.sgx.com/reports/rpt_view.pl?id=6944

Full Year Revenue Up 4% at Ascott Residence Trust

By Stanley Lim, CFA - January 23, 2014

Ascott Residence Trust (SGX: A68U) announced its fourth quarter earnings this week. For the 12 months ended 31 Dec 2013, revenue and profit both improved but due to the increase in unit count because of a rights issue, the distribution per unit decreased 4% to 8.40 Singapore cents compared to a year ago

Ascott Residence Trust is a real estate investment trust that focuses on serviced residences. It has more than 80 properties located across 12 countries (including Singapore, Australia, China, United Kingdom, an Germany) under its belt and is sponsored by The Ascott Ltd, which is a wholly owned subsidiary of CapitaLand (SGX: C31).

In addition, the REIT is very diversified geographically, with no country accounting for more than 20% of its total assets.

Currently CapitaLand Group owns about 45% of the trust.

Business Model

Ascott Residence operates its serviced residences through 3 models: 1) Master Leases; 2) Management contracts with Minimum Guarantee; and 3) Management contracts.

There are 26 properties in its portfolio that’s managed under a master lease and they contributed 32% to its gross profit for the year.

There are only eight properties managed under the second model and it accounted for 19% of the REIT’s gross profit.

Lastly, the rest of the properties are managed through management contracts and they made up 49% of the REIT’s gross profit for the whole of last year.

2013 Performance

Ascott Residence’s annual revenue for 2013 improved by 4% year-on-year to S$316.6 million. During the year, the revenue per available units (RevPAU) declined by 9% as the trust divested one of its properties in Singapore, the Somerset Grand Cairnhill, which had an above average daily rate (ADR) and instead purchased three properties in China with lower ADRs.

Rights Issue

On 12 December 2013, Ascott Residence raised a total of S$ 253.75 million through a rights issue. This helped to strengthen the REIT’s balance sheet and prepare it for future acquisitions by reducing its gearing (the ratio of total debt to total assets) from 40% to 34%.

Looking Forward

With its stronger balance sheet, the trust is currently looking for acquisitions mainly in China, Japan, Malaysia, Australia and Europe. Additionally, it will continue to add value to its assets through asset enhancement initiatives.

The REIT’s currently selling for 0.9 times book value at its current price of S$1.23 per unit.


Courtesy of The Motley Fool

Cache Logistics Trust Handles Its Way to Higher Distributions for the Year

By Stanley Lim, CFA - January 23, 2014

Cache Logistics Trust (SGX: K2LU) is a Real Estate Investment Trust focusing on logistical properties in Singapore and China. It currently has 12 industrial properties in Singapore and 1 warehouse in Shanghai.

Cache Logistics is sponsored by CWT (SGX: C14), the largest logistics company in Singapore. The REIT’s managed by ARA-CWT Trust Management, a joint venture between real estate fund management outfit Ara Asset Management (SGX: D1R) and CWT.

Most of Cache Logistics’ properties are single-tenanted. This might create a certain level of consistency and predictability for its rental income.

Current gross floor area has increased to 5.1million sqft and all the 13 properties are collectively valued at S$1.04b. The REIT’s properties are very new, with an average age of only 5.8 years. At the moment, the end users of the properties are mostly from the industrial and consumer goods sector.

Cache Logistics released its full-year earnings on Tuesday and saw annual revenue improve by 11.4% from S$72.6m to S$80.9m. Combined with much lower interest costs, the REIT’s operating income before fair value gain increased by 43%.

Distribution per unit for the year also increased by 3.3% to 8.64 Cents. At its current price of S$1.12 a unit, that is a yield of roughly 7.8%. During the year, the trust also strengthened its balance sheet by lowering its gearing ratio (total debt over total assets) from 31.2% to 28.8%.

Furthermore, Cache Logistics has a pipeline of properties that it can acquire as it has the “Rights of First Refusal” on some of its parents’ (CWT) properties. There are 14 properties, located in Singapore, Malaysia and China from CWT that can potentially add another 4.7million sqft to Cache Logistics’ total gross floor area.

There’s a caveat though. In order to grow through acquisitions, Cache Logistics might need to raise more equity from time to time resulting in potential dilution for existing owners; from past records, the REIT had raised S$59m in 2012 and another S$86.8 m last year in private placements.

Cache Logistics Trust is one of the few industrial REITs listed on the Singapore Exchange. Other REITs that have a focus on industrial properties here in Singapore include Ascendas REIT (SGX: A17U), Mapletree Logistics Trust (SGX: ME8U), Sabana REIT (SGX: M1GU) and Soilbuild Business Space REIT (SGX: SV3U).


Courtesy of The Motley Fool