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Singapore Daily Bulletin – 01/04/13

Disposal Gain Sends Tianjin Zhong Xin’s FY12 Profit Soaring 61.5%
A gain of Rmb66 million from the disposal of a subsidiary in FY12 boosted Tianjin Zhong Xin Pharmaceutical Group’s earnings for the period under review by 61.5 percent to Rmb399.9 million from Rmb247.7 million a year ago. The improved performance also came on the back of a 16.8 percent increase in revenue and better results from associated firm, Sino-American Tianjin Smithkline & French Lab. Appropriate allocation of marketing resources, consolidating the sales and sourcing channels, and optimising the services to end customers sent revenue to Rmb5.1 billion from Rmb4.4 billion in FY11. Chinese medicine made up the main revenue generator, making up 64.6 percent of total revenue in FY12. Looking ahead, the company expects to face certain challenges which may be caused by the increase in the price of raw materials, energy resources and human resources, controls over liquidity by the Chinese government and relatively high financial costs.

Significance: Taking into account the competitive environment in China, Tianjin Zhong Xin intends to shift from an extensive and broad-based marketing management to a more precise and specific marketing management, and to effectively improve revenue growth.

Shell Appoints TA Corp Product Distributor In Myanmar
Property and construction group TA Corporation announced that its 51 percent-owned subsidiary, Que Holdings, has been appointed by Shell Eastern Petroleum as the distributor of its automotive and industrial lubricants products in Myanmar. Under the terms of the distributorship agreement, Que Holdings will distribute Shell’s products for a one-year period, with an option to renew for another two years upon expiry. This operation is expected to start in the second quarter of 2013. The latest development closely followed TA Corporation’s announcement earlier this year for a strategic 51:49 joint venture with Synergy Resources Group, to pursue business opportunities in the sale and distribution of lubricants in Myanmar. With the local partners’ knowledge and established business networks in Myanmar, together with TA Corporation’s experiences in the lubricants business, TA Corporation believes the joint venture is well positioned to capture market opportunities in the emerging Myanmar market.

Significance: Starting off with a strong footing, the agreement secured by the joint venture places TA Corporation in a good position to spearhead its expansion into the Myanmar market and benefit from Myanmar’s improving economic landscape.

Loyz Energy To Grow Into A Sizeable Independent Energy Player
In a filing with the Singapore Exchange, Singapore-based upstream energy group, Loyz Energy, said it will be able to expedite its plans to grow into a significant independent player in the upstream energy sector. This came after the company divested its sanitary ware business, which was held under its wholly owned subsidiary Sim Siang Choon Hardware, for $9 million in March. This will enable the company to focus all its resources on strengthening its position in the exploration and production segment as a sizeable independent player. Executive director of Loyz Energy, Adrian Lee, said that the company will be drilling its first well in North Dakota in the US, and it will also commence gas production at the Baola field in India. The drilling programme in the US fall under a participation-and-exploration agreement inked in August 2012 with Rex Oil & Gas and Norway-based Fram Exploration to develop the latter’s leases in North Dakota and Colorado.

Significance: With these ongoing developments at its assets, Loyz Energy expects to see an impact on its revenue and cash flow from 4Q13 onwards.