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Stocks In Focus (ComfortDelGro Corp, DMX Technologies Group, Technics Oil & Gas) – 21/05/13
ComfortDelGro Expands Operations Down Under With A$22m Bus Acquisition
ComfortDelGro Corporation is extending the firm’s market reach in Australia through the acquisition of 100 percent of the issued shares of Driver Group in Melbourne, Victoria for A$22 million ($27 million), expected to be completed in July 2013. The proposed acquisition will be made through CDC Victoria, a subsidiary of ComfortDelGro Cabcharge, which is a joint venture between ComfortDelGro and Cabcharge of Australia. The Driver Group operates metropolitan bus routes under a long term contract with the Victorian Government. Under the proposed acquisition, CDC Victoria will acquire five metropolitan bus routes and a fleet of 42 vehicles. Commenting on the investment, managing director, Kua Hong Pak, said: “We remain strongly committed to growing our business and relationship with the authorities in Australia. The acquisition of the highly regarded Driver Group’s routes and buses is testimony to this.”
Significance: ComfortDelGro seeks to reduce its reliance on the local market through organic and external growth overseas. Presently, overseas ventures accounts for 48.9 percent of the group’s operating profit. The acquisition will strengthen the firm’s presence in Australia where it currently operates bus services in both South Wales and Victoria.
DMX’s Indonesia Unit Bags Largest Contract To-Date
Internet network infrastructure and digital media solutions provider DMX Technologies Group clinched US$10.6 million worth of contracts from PT Pegadaian Persero through its Indonesia arm, PT Packet Systems Indonesia (PSI). PT Pegadaian Persero is an Indonesian government-owned corporation with a monopoly in fiduciary services in Indonesia. Under the arrangement, PSI will provide data centre and network infrastructure to interconnect 3,000 branches across Indonesia. The latest contract award is a breakthrough for DMX as it has been working to penetrate the government sector and develop its capabilities in data centre, cloud and virtualisation solutions. The contract is not expected to have any material impact on the firm’s financials for the year ended 31 December 2013.
Significance: Not only is the latest contract the largest deal PSI has clinched to-date which showcases its strength in data centre implementation, it marks its foray into another vertical market for PSI while leveraging on the current market trends such as cloud computing.
Technics Oil & Gas Secures Leasing Contract Worth $3.6m
In a filing with the Singapore Exchange yesterday, Technics Oil & Gas announced that it has been awarded the first leasing contract worth $3.6 million. The leasing contract involves a two-year rental, with the option to further extend by one year, of two reciprocating gas compressor engine driven packages as well as the operations and maintenance support from Malaysia. The company said that “it was eventually selected due to its excellent technical proposal, experience and proven track record in the related field” despite strong competition from other international competitors. Commenting on the contract win, Robin Ting, chairman and managing director of Technics Oil & Gas said “The group has been consistently securing contracts so far and we are pleased that this momentum in order flow continues. Given our recent successes in EPCC and CE projects in several countries in the region, we are witnessing higher interest level and support from large multi-national corporations while we maintain strong ties with key customers.”
Significance: Shares of Technics Oil & Gas started today’s session unchanged from yesterday close of $0.855. The contract win would bring the firm’s deals secured year-to-date to $10.2 million. This compared to $33.7 million in the corresponding period last year.
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