Phillip Singapore Strategy – Free lunch for the few
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· Three special purpose acquisition companies (SPACs) will be launched on the SGX – Vertex Technology Acquisition Corp. (VTAC), Pegasus Asia (PA) and Novo Tellus Alpha Acquisition (NTAA, pending).
· The IPO offers are an attractive free lunch for investors. SPAC shares are 100% redeemable at S$5 offer price with free warrants thrown in with the shares. The public or retail offer is only 1.5 – 2.0% of the total issued shares.
· Apart from SPAC-ulating on the newsflow, we are cautious on SPACs post-IPO until valuations and ownership structures of the target company are determined.
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Q&M Dental ($0.61, down 0.5 cents) wishes to announce that its
51% subsidiary, Acumen Diagnostics Pte. Ltd. (“ADPL”) is exploring a proposed listing of its securities on the NASDAQ stock exchange in New York, USA. In this regard, ADPL has appointed UOB Kay Hian Private Limited (“UOBKH”) to assist ADPL with the listing evaluaƟtin and all
relevant preparatory work including the selection of professional
advisers and underwriting banks in relation to the Proposed NASDAQ Listing and fund raising exercise.
Q&M Dental’s market cap stands at S$576.3mln and currently trades at 17.4x forward PE and 4.5x PB, with a dividend yield of 8.3%. Consensus target price stands at S$0.8, represenƟ ng 31.1% upside at current share price.
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Yoma Strategic (S$0.133, down 0.1 cent) and Telenor Group have
entered into an agreement to sell Telenor Group’s 51 percent share of Digital Money Myanmar Limited (“Wave Money”) for USD 53 million to Yoma MFS Holdings Pte. Ltd, a subsidiary of Yoma Strategic. This subsidiary is to be funded by a consortium of investors led by Yoma Strategic which remains subject to completion and final funding.
The company runs a network of more than 45,000 active agents or “Wave Shops” in urban and rural areas across 295 out of the 330 townships nationwide. The business has seen a signifi cant recovery in volumes since June 2021 with the trend expected to continue. At $0.133, market cap of Yoma is $298mln and current P/B is 0.4x. The Group is loss-making and does not pay dividends.
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United Overseas Bank Limited – Turning more competitive overnight
- UOB acquired Citigroup’s consumer banking franchise in Indonesia, Malaysia, Thailand and Vietnam for ~S$5bn.
- Maintain ACCUMULATE with a higher GGM TP of S$31.30, from S$29.00. We raise FY21e earnings by 3.8% as we increase NIM estimates for FY21e. We now assume 1.26x FY21e P/BV in our GGM valuation, up from 1.17x, as we raise our ROE estimates to 10.2%. Recovery path for UOB is on track. Potential upside surprise includes GP writebacks and special dividends
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