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Stocks In Focus (AA REIT, CCM, CNA) – 07/06/13
AA REIT To Further Develop 20 Gul Way
AIMS AMP Capital Industrial (AA REIT) has entered into a further development agreement with CWT and its subsidiary, Indeco Engineers, for the warehouse located on 20 Gul Way. Currently, the property have a gross floor area of 1,159,536 square feet which will expand to approximately 1,656,480 square feet after the development. The development will cost about $77.2 million which will be funded from the $110 million raised by AA REIT in a private placement in April. Upon completion, the development will add $89.4 million to the property’s value, creating an asset valued in total at $306.4 million. Indeco will be appointed to design and construct the warehouses, and the warehouses will be leased to CWT upon completion of each phase of the development. Warehouses will be completed within 17 months of the commencement date and CWT will lease the warehouses on tenures ranging from 32 months to 5 year and 2 months.
Significance: For the further development at the property, AA REIT is expected to deliver a net property income yield on cost of around 8.3 percent. Although the development will bring more value to the REIT, shareholdings was diluted through the private placement.
CNA Wins A Series of Projects Across Asia Worth $13.8m
CNA Group has been awarded projects, totaling up to $13.8 million, including its first airport-related recurring income project from Laos Airport Authority for a Common Use Terminal Equipment solution in Luang Prabang Airport. The contract, based on a per-passenger concession fee, lasts for 15 years, commencing in June 2013. In addition, CNA has won a project to supply, install and commission Programmable Logic Control based control systems in all seven underground Bangalore Metro Rail Corporation stations. The project is expected to start in June 2013 and be completed in August 2014. Apart from the wins, CNA has also secured its third contract to supply, install, test and commission a Local Sequential Controller system for 16 underground stations on Singapore’s Mass Rapid Transit Down Town Line, expected to be completed by 31 June 2017. CNA-HTE Vietnam, a subsidiary of the firm, was recently awarded several Vietnam contracts, valued at approximately $4 million, including office decoration and reinstatement projects.
Significance: CNA has been actively cultivating market opportunities in different Asian markets in the past few years which brought about the recent wins and lifts the firm’s order book to $81.5 million.
CCM Raised $4.1m Through Placement Shares
CCM Group has placed 44 million new ordinary shares at a placement price of $0.0920 per share to raise approximately $4.1 million. The placement price represents a discount of approximately 9.3 percent to the volume weighted average price of $0.1014 for trades done on the shares on SGX from 31 May 2013 up to the time of the trading halt of the firm’s shares on the afternoon of 3 June 2013. “This latest fund raising exercise is necessary to strengthen the financial position of the Group. At the same time, the funds will also be used for the proposed upgrading of the Group’s financial grading with the Building and Construction Authority for building development from A2 to A1. This will allow the Group to tender for larger Government projects,” said Joseph Liew, executive chairman and chief executive officer of CCM. The firm had recently secured a $6.8 million contract from the National Parks Board for maintenance and upgrading works of park facilities in conservation.
Significance: Following the completion of the placement, the new shares represent 25.7 percent of the firm’s enlarged share capital. CCM was up $0.006 at 12pm to $0.106 compared to $0.100 when the trading suspension was requested on 3 June 2013.
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