Wilmar International moves up on rising palm oil prices

Wilmar International, which completed its reverse takeover of Singapore listed Ezyhealth earlier in August has been targeted by institutional investors for its large expanse of agri-business paricularly in the palm-oil sector, which is in favour due to increasing palm oil prices. Today, Wilmar became the most heavily traded stock in the Singapore Exchange, rising from S$1.12 to close at $1.23. This came after ABN-Amro placed a target price of S$1.52 for the stock as it forecasts a 3 year 51% CAGR in earnings.

In addition to the 'buy' rating, Wilmar is also particularly noted for its production of one of the world's largest palm oil biodiesel plant that could have a capacity of up to 250,000-tonne in Sumatra, Indonesia. This factor could potentially increase investor's interest in the company due to the company's strategy of entering the alternative energy markets. Just last week, another public-listed company, Advanced Holdings also rose on heavy trade upon its application to build a biodiesel plant in Malaysia.

China Wheel strikes co-operation agreement with Michelin

China Wheel, an alloy wheel manufacturer based in the Pan Bohai region of China has released details that one of its subsidiary has signed an agreement of strategic co-operation with Michelin (China) Investment Co. Ltd. Under this agreement, the named subsidiary, Baoding Lizhong Wheel Manufacturing Co. Ltd. will start to supply wheel products to the 300 TyrePlus that is run by Michelin across the 30 provinces and autonomous regions of China. Through this agreement, China Wheel will join other premium car parts suppliers and manufacturers such as BBS, Johnson Controls, Shell and Hunter who has also signed similar agreements with Michelin.

With a wide variety of in-house designed rims and possessing several trademarks, China Wheel will be able to reach out to a larger pool of end-users. The share price of China Wheel was last done at S$0.37 which is favorably compared against its IPO price of S$0.36. This news will most probably increase the contribution by its retail segment which only consisted 12.7% of the company's total revenue.

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.