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Stocks In Focus (Aussino Group, Indofood Agri Resources, Raffles Medical Group) – 29/04/13
Aussino’s Myanmar Acquisition Bid Stumbles
The Singapore Exchange (SGX) in a letter dated 28 April 2013 rejected Aussino Group’s application for a controversial $70 million reverse takeover of the energy business of Max Myanmar Group, saying it is unable to proceed with the review of the application as major issues have not been adequately resolved. The reasons include the fact that new controlling shareholder, U Zaw Zaw remains on the US sanction list, as well as Max Myanmar Group’s alleged involvement in human rights violations, and allegations that the company is under investigation by the tax authorities of Myanmar. There are also concerns on the status of land occupational rights critical to the company’s operations post acquisition, as well as Aussino’s failure to adequately address concerns on its plans to place a 65 percent of its cash with Ayeyarwady Bank, a US sanctioned bank owned by U Zaw Zaw, post acquisition.
Significance: When Aussino lifted its trading halt on Monday morning, its counter fell as much as $0.097, or 57.7 percent from its previous close of $0.168 on Friday. At mid-day, it recovered slightly to $0.112, down 33.3 percent, and is the top volume counter with approximately 125 million shares switching hands.
IndoAgri’s 1Q13 Net Profit Plummets 71.7%
Indofood Agri Resources posted a 71.7 percent plunge in its net profit to 106.8 billion rupiah ($13.5 million) for its first quarter ended 31 March 2013, from 376.9 billion rupiah ($48 million) mostly due to lower commodity prices for key plantation crops, higher production costs resulting from newly matured plantations and higher operating expenses. Likewise, revenue edged down 3.2 percent year-on-year to 3.1 trillion rupiah for the quarter as higher sales volume of crude palm oil and positive sales contribution from sugar products was substantially offset by lower average selling price of key plantation crops and lower edible oils sales. Gross profit dropped 41.9 percent from 1.1 trillion rupiah in 1Q12 to 0.6 trillion rupiah on lower selling prices for key plantation crops and higher cost of production, partly offset by higher profit contribution from Edible Oils and Fats Division and sugar operations.
Significance: The lower selling prices of IndoAgri’s main plantation crops, crude palm, palm kernel and rubber are in line with the general decline in agricultural commodity prices. The group expects the sugar harvest season in May to mitigate some of the impact from lower palm oil prices.
Raffles Medical 1Q13 Net Profit Rose 16%
Raffles Medical Group reported revenue for the quarter amounting to $81.1 million, up 11.2 percent, mainly attributed to contributions from the Hospital and Health care Services segments, which increased by 16.4 percent and 4 percent respectively. Operating profits increased 14.1 percent from $14.2 million in 1Q12 to $16.2 million in 1Q13. Similarly, net profit climbed 16 percent to $13.4 million for the first quarter ended 31 March 2013, from $11.6 million a year ago, mostly due to improved revenue performance and higher operating efficiencies. “Higher patient acuity and the addition of specialist consultants have expanded the depth and breadth of medical services provided by the group, which also contributed to the better performance,” said the group. As at 31 March 2013, the group had a healthy net cash position of $98.7 million which will support its growth and expansion plans in the medium term.
Significance: Going forward, the group is concerned about the slower pace of economic growth in China and Singapore having a dampening effect on healthcare demand. In addition, beds of new public and private hospitals coming on-stream in Singapore and the region will create a competitive healthcare landscape. But, it remains optimistic on its continued growth in 2013.
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