UNI-ASIA: 2017 profit highest in 5 years, operating cashflow rising

Investors who have looked over Uni-Asia Group in the past few years have often remarked on the attractive discount its stock trades to its net asset value (NAV).

Stock price	$1.43
52-week range	$1.02 - $1.55
Market cap	$67m
PE (ttm)	8.2
Dividend yield	4.37%
P/BV	0.5
Data: Bloomberg

Even currently, Uni-Asia at $1.43 a share goes for about 62% discount to its US$2.89/share NAV.

The thing now is, after a solidly profitable 2017, Uni-Asia is offering more reasons for investors to like it.

Its 2017 profit was its biggest in five years -- and there's a 6.25 cent/share final dividend to come.

Here's how the various business segments did -->

US$’000		2017	2016	% change
Shipping (and related financial services)	Revenue Net Profit / (Loss)	39,981 3,419	30,404 (18,212)	31% NM
Property & Hotels (and related financial services)	Revenue Net Profit	64,054 11,342	59,957 11,975	11% (5%)
Headquarters (Shared corporate services)	Revenue Net Profit / (Loss)	54 (5,895)	41 (4,226)	32% 39%
Group total	Revenue Net Profit	103,874 8,866	86,298 (12,228)*	20% NM
*In 2016, Uni-Asia took an impairment loss of $8.6 m for ships held under fixed assets; provided $3.5m for an onerous ship contract; and booked $7.1m fair valuation losses.

Full-year net profit amounted to US$8.9 million (attributable to shareholders: US$6.2 million), reversing a loss of US$12.2 million in 2016.

And the cashflow trend is encouraging:

Rising operating cashflow
2013	2014	2015	2016	2017
US$12.14m	US$4.80m	US$10.30m	US$12.33 m	US$14.10m

From the table it can be seen that the star segment was "property & hotels" while the shipping segment grew steadily.

MichioTanamoto3.18 @FY17 results briefing: Michio Tanamoto, executive chairman of Uni-Asia Group.
Photo by Leong Chan TeikWithin the property & hotel segment, the bright spot was investment returns which surged 296% to US$8.5 million in 2017:

♦ Realised gains on investment properties of US$4.35 million,
♦ Fair value gain from investment properties of US$1.2 million, and
♦ Net fair value gain from a Hong Kong property project (commercial office building) of US$6.8 million.

LimKaiChing3.18 CFO Lim Kai Ching. Photo by Leong Chan TeikShip charter income increased by 10% to US$37.8 million in FY2017 attributable to:

♦ Better spot charter rates for the Group’s portfolio of ships under short-term charter, and
♦ More charter-hire days for the ships due to an addition to the ship portfolio in 2017.

The Group’s shipping business -- largely made up of dry bulkers -- is expected to continue to recover from the doldrums of the past five or so years.

The oversupply situation in the dry-bulker segment is easing, and demand picking up from infrastructure projects in ‘Belt and Road’ countries.

Looking further out, Uni-Asia is expected to see a profit boost from its hotel management operations from 2019 when it attains about 3,000 rooms under management.

KGI Securities has forecast US$2 - 2.5 million in recurring net profit a year.

For more on the 2017 results, see presentation materials here.

UNI-ASIA: 2017 profit highest in 5 years, operating cashflow rising

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