Prior to his retirement, Chan Kit Whye worked more than 30 years as Regional Finance Director, Financial Controller and Manager in a multinational specialty chemical business. He previously played an active role in CPA (Australia) Singapore Branch, taking up positions in its Continuing Professional Development and Social Committees. Kit Whye is a Fellow of CPA Australia, CA of Institute of Singapore Chartered Accountants and CA of the Malaysian Institute of Accountants. He holds a BBus(Transport) Degree from RMIT, MAcc Degree from Charles Sturt University and MBA from Durham Business School.YANGZIJIANG SHIPBUILDING:
Yangzijiang ("YZJ") reported a flat Q3 revenue of RMB 3.7 billion when compared to prior year Q3.
Net profit was also flat at RMB 826 million. On a nine months YTD, revenue was RMB 11 billion, 2.5% lower than prior year YTD.
Net profit was at RMB 2.34 billion, down by 15% over prior year of RMB 2.75 billion, mainly due to lower other income and higher tax expense.
Q3 free cash flow was negative at RMB 2 billion due to higher cash restriction of RMB 2.2 billion.
Yangzijiang's shipyard on the banks of the Yangtze River in Jiangsu province.Expected full year earnings per share attributable to shareholder at RMB 0.82 (S$0.168) vs previous year at RMB 0.93 (S$0.19). NAV per share is at S$0.91. At current share price, its PE ratio is 7 while is price-to-book ratio is 1.3.
Total borrowings stood at RMB 11.3 billion, of which RMB 8.3 billion will mature within a year.
Cash balance stood at RMB 10.2 billion of which RMB 6.9 billion was restricted cash.
Gross debt to equity ratio was 0.65. Interest cover ratio at 13.5 times confirmed that its borrowings is at a comfortable level.
YTD order book is strong with 67 contracts valued at RMB 16 billion (US$2.63 billion) that will keep the company busy till 2016.
YZJ annual revenue needs to go past RMB 15 billion a year to see improvement, which means that more new contracts must continue to flow in to ensure its earnings continue to grow.
Whether 5 cents dividend will be declared this financial year is still uncertain, unless the RMB 8.3 billion matured debt could be refinanced.
Alternatively, YZJ could receive up to RMB 2.4 billion should all the holders of 330 million warrants convert their warrants into shares at RMB 7.222 (S$1.48) a share. Currently, the share price is way below the conversion price.
OXLEY HOLDINGS:
Ching Chiat Kwong, chairman and CEO of Oxley Holdings. Photo: annual reportQ1 2014 report show that Oxley's debt to equity ratio is 358%. Net borrowings for Q1 was $300 million vs additions to investment properties of $340 million.NAV per share was 16.6 cents. EPS for Q1 was 8.5 cents boosted by most of the completed projects in the period.
Admin expense also provide a full provision of $15.5 million for Chairman's performance bonus.
We need to monitor the next few quarters to see if the earnings could be maintained and whether the full effect of interest coverage ratio is reasonable.
The high gearing obviously causes nervousness and this is reflected in its low PE. It appears to me that this company is aggressive in bidding and buying up assets at very high prices.
Provided that the assets value are sustainable, any fall in the values could hurt Oxley's balance sheet and business environment.
Public float is about 17%, represented by 500 million shares. There are approx. 1030 shareholders on its register.
I am a member of The Pines and the history of the project, how much Peter Kwee paid for when he tried to outbid NUSS for the property, and currently, how much Oxley is paying and the premium, etc.. all tell me that the amount paid by Oxley is overly aggressive.
Also, Peter Kwee bought The Pines from the previous owner as a freehold land, and sold to Oxley now only on leasehold term.
Whatever it is, this is a good stock to watch. The proposed dividend has attracted my attention, although I am not vested.
Around Nov 7, 2012 Oxley made a bonus issue of 18 for 10 that caused its share price to drop from 0.44 to 0.24. Today the share price has move back to the high of 0.47. We shall see if this will be repeated.
| UE E&C: UE E&C reported a Q3 revenue of $113 million, 9% higher than prior year Q3 and a net profit of $11.6 million, 50% more than prior year Q3. The bulk of the increase came mainly from 55% improvement in gross profit, but which segment contributed to the increase was not identified. On a nine-months YTD, revenue came in at $306 million, 18% higher that prior year YTD. 72% of its revenue came from Construction, 21% from M&E Engineering and the balance came from Building Material & Equipment. Net profit was $36 million, an 89% improvement over prior year YTD. YTD earnings per share was 13.4 cents vs prior year YTD of 6.8 cents. NAV per share was $0.82 vs prior year of $0.73. YTD free cash flow was positive $16.7 million vs prior year of $18.9 million. Working capital ratio was 1.28, an improvement over prior year at 1.15. As the company had booked a huge $30 million net profit in the last quarter of 2012, I would expect Q4 2013 profit will be lower than Q4 2012. Therefore, conservatively, full year profit would probably stay flat with earnings per share of 18 cents, unless miracles happen. At current share price, its prospective PE is at the low 5.3 times and a price-to-book ratio of 1.15 times. The company would likely maintain its 5 cents dividend which give a dividend yield of 5% vs its earnings yield of 19%. From the technical chart, the share is price is sitting just above the 50-day MA and 78.6% retracement. Volume transacted is low. UE holds 68.2% of UE E&C shares. There are about 1,400 shareholders, and public float is about 25.6% represented by about 70 million shares. |
