UOB divests its non-core assets

United Overseas Bank (UOB), the second largest bank in Singapore by market capitalization have divested its interests in affiliated companies, Oversean Union Enterprise (OUE), Haw Par, and United Overseas Land (UOL). The bank sold up to 55% of its shareholdings in listed hotel and property developer, OUE to a consortium comprising of Indonesian Lippo Group and Malaysian tycoon Ananda Krishnan. The purchase price of nearly S$990 million values OUE at S$10.20 per share which was a 7.94% premium over OUE's price of S$9.45 at 25 May 2006. UOB will book in a net gain of approximately S$353.5 million. In addition it has entered a separate agreement to sell up to 16.7% of its stake in OUB Centre to Lippo Property that would net a further S$1.9 million. Analysts are hoping that this total gain of approximately S$355 million could be translated into a special dividend for the bank's shareholders.

The bank have also released further news of its sale of around 1.0% of its stake in UOL and 2.2% in Haw Par to UOB's chairman private investment holding company for a total of S$48.5 million. This private sale would value UOL and Haw Par at around S$2.84 and S$5.74 per share respectively. With the whole sale of these stakes, UOB will be left with 10.1% of UOL and 10.0% of Haw Par, which would mean that it is near to complying with the rules and guidelines set by the Monetary Authority of Singapore on the need for banks to reduce non-core asset holdings by 17 July 2006.

Guocoland in tie-up to develop properties in India

India's Bhagyanagar Metals Ltd., a copper cables maker said on Monday that it had tied up with Singapore's listed GuocoLand Ltd. and Gayatri Projects Ltd. to bid for the Hyderabad Urban Development Authority's township plan. The company hopes to expand further into other prime projects in the future.

The company is a relatively new entrant into the booming Indian property market. Last week Bhanyangar Metals said it plans to raise $40 million via overseas bonds, shares or debt and spend 3 billion rupees to buy properties for business purposes. Its partner, Guocoland have also sold some of its investment properties such as its holdings in another listed property firm HPL and has indicated an interest in expanding into the China and Indian property market. Guocoland also emerged as one of the few property developers puchasing apartments en-bloc for new developments in the back of a booming property market across Asia.

Link-Hi Holdings IPO shoots up on opening day

China precision steel tubing manufacturer Link-Hi Holdings was actively traded on its debut in the Singapore Exchange on 22nd May 2006. The company offered 25 million new share at S$0.25 each. On its first trading day, the counter started at S$0.38 which was 50% higher than its offer price. The company's products are mainly used in the auto, oil and gas, and machinery and equipment industries. With a total of 6 production lines in Wuxi, it has easy access to customer's base in the Yangtze River Delta region. Overseas sales of its products accounted for up to 19% of revenues for the 1st half of FY2005. With its half year results, the company estimates FY2005 revenues to come in at RMB241.8 million and net profit to be at RMB18.9 million.

Based on the offer price, the firm said it would have a market capitalisation of about S$31.25 million. NRA Capital Pte. Ltd. was the manager for the IPO, while UOB Kay Hian Pte. Ltd. was the placement agent and underwriter.

Shanghai property developer Yanlord lodges prospectus to list in Singapore Exchange

Yanlord Land, a property developer incorporated in Singapore has lodged preliminary prospectus seeking to list its shares in Singapore Exchange. Yanlord Land primarily develops residential complexes in major cities in China like Shanghai, Nanjing and Chengdu. The company will be the second property developer after Sunshine Holdings to list in Singapore. However, unlike Sunshine Holdings, this company is a must buy as I have a great interest in its business model which targets the high-end residential market. The company has developed a total of 15 residential complexes in Shanghai, Nanjing and Guiyang and 2 commercial complexes in Guiyang and Chengdu. Total GFA completed so far amounts to about 2.8 million sq. metre. The company reported a net profit of S$185.3 million in 2005 compared to S$79.6 million in 2004. In addition, the company's future development looks set to include more commercial buildings and retail malls which could bring in fixed returns for the company.

Due to its land bank being primarily in high end residential areas of Pudong in Shanghai and with the company's expertise in building gardens for large scale residential complexes, it's developments have the ability to call for higher prices. Some of its prominent developments include Yanlord Gardens in Shanghai which will be adjacent to the World Financial Centre (to be the tallest building in China and Asia when completed). One of its landbanks include a plot of land near the Macau and China customs and the future HK-Zhuhai-Macau crossing.

StarHub posts sterling 1Q results; expect good dividend payout

StarHub's 1Q revenue increased by 14% to S$426.8 million and its net profit of S$61.4 million was nearly twice that of last year for the same period. The results was an improvement from the last quarter and the huge jump in net profit shows a good integration of the 3 services under the StarHub banner, consisting of its mobile, broadband, and cable TV services. While its mobile division consisted about 51% of the group's revenue, it represented up to 66% of the group's EBITDA. However the highest growth comes from its broadband division as revenue rose by 31% from last year and 7% from last quarter to reach S$52.5 million. With the economy expanding and the higher employment expected, broadband penetration is expected to increase and it seems that StarHub's broadband package seems to be leading so far.

Going forward, StarHub is still expected to post good results in the next few quarters especially through its higher subscription of cable TV due to the upcoming World Cup matches. Analysts have mentioned StarHub to be the key beneficiary amongst listed stocks due to the World Cup 2006. OCBC Investment Research puts a fair value of S$2.45 for StarHub and expects a S$0.19/share dividend for the year 2006 which would translate to a good yield of 8.5%. This is on an assumption of a cash payout of S$200 million to its shareholders on top of the annual dividend of S$0.10.

Thailand's largest brewer prepares its listing in Singapore

Thailand's largest brewer, Thailand Beverage Public Company Limited (ThaiBev) which scrap its plans to list in the Bangkok Stock Exchange has lodged preliminary prospectus to launch its share in Singapore. The company plans to offer up to 4.88 billion of new and vendor shares at between 26 to 36 Singapore cents per share. This share offering looks set to be one of Singapore's largest. ThaiBev which is controlled by possibly Thailand's richest tycoon, Charoen Sirivadhanabhakdi, reported a US$2.24 billion sales in FY2005 and total net profits of US$255.5 million. This would translate to an earnings per share of US$0.01.

ThaiBev plans to use the net proceeds of this share offering to repay its outstanding loans as well as to expand its reach across Asia. It has set its sights into expanding to China, India and South East Asia.

DBS set to venture into Middle East and India

After its expansion in the Greater China region with its purchase of Dao Heng Bank in Hong Kong, DBS has placed emphasis now in growing in Middle East and India. It will join part of a consortium to provide loans to Dubai for the expansion of its airport. The Dubai Department of Civil Aviation has agreed to a 3 year US$1 billion loan with banks that complies with Islamic banking guidelines. DBS joins a group of international banks like Standard Chartered, ABN Amro, Deutsche Bank, WestLB, Societe Generale, Depfa Bank and DZ Bank to help Dubai Islamic Bank manage the loan. The expansion of Dubai's International Airport will allow it to serve up to 70 million passengers by the end of 2010.

In addition, DBS has also announced its plans to introduce its 'Treasures' banking service into India. It has announced plans to target up to 1,800 affluent clients in India's key regional financial centres at Mumbai and New Delhi. The level of commitment is seen by its US$120 million investment in the region since setting up operations a decade ago.

Sofa manufacturer and retailer Lorenzo launches IPO

Lorenzo International Limited, a sofa manufacturer based in Singapore with manufacturing facilities in Kunming, China and Malaysia launches its IPO today by offering 25,000,000 new shares to the public with 1,500,000 for public offer priced at S$0.22 per share. The company operates up to 29 retail stores in Singapore, Taiwan and Malaysia carrying the 'Lorenzo' brand name that is composed of the 'Dante' and 'Enzo' collections. In addition, the company's manufacturing facilities also exists as an ODM and OEM vendor to other global sofa retailers. Deriving more than half of its revenues from its retail business, it relies heavily on its sofa business.

The company reported a profit after tax of S$2.6 million with revenues of S$52.5 million for the year 2004. It estimates a profit of S$3.0 million for FY2005 with HY2005 profit at S$1.9 million. Though the company has shown steady growth in revenues and profits, it would be tough to repeat a similar standard achieved by HTL, another market player in the sofa and furniture business. The company's IPO is handled by UOB Asia.

City Developments posts good results and looks forward to a better year

City Developments Limited or better known as CDL, posted a 4.5% increase in revenue for 1Q2006 compared to 1Q2005. This higher revenues resulted in an increase in gross profits to S$287.6 million which was 9.8% higher compared to 1Q2005. The main drivers for the higher revenues and earnings is attributed to new development properties especially from its successful launch of The Sail at Marina Bay and City Square Residences. Net profit for the whole period increased by only 2.3% from S$40.3 million in 1Q2005 to S$41.2 million in 1Q2006. This is due to lower contribution from its Millenium & Copthorne hotel arm as pre-tax profit contribution from M&C dropped to S$27 million from S$59.3 million.

As Singapore's second largest property developer by market capitalization, the company is expected to launch 2 much awaited projects including the St. Regis Residences in Singapore and the Sentosa Cove project. In addition, the revaluation theme is likely to continue for its properties in Singapore which includes Republic Plaza. Property looks set to be the focus in the next few months as a result of the announcement of the IR winner in Singapore and counters like CDL should see some minor appreciation.