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Stocks In Focus (Oxley, Tiger Airways, Tiong Seng) – 13/06/13
Oxley Acquires Land In Selangor, Malaysia
Oxley Holdings’ subsidiary, Oxley Diamond, entered into a sale and purchase agreement with Rising Star City (RSC) to acquire a piece of land in Selangor, Malaysia. The land, possessing a freehold tenure, has an area of approximately five acres intended for commercial development. The purchase price, worth RM104.5 million, was based on the current market prices of properties in the surrounding area and Oxley’s assessment of the land’s development potential. In a separate press release statement, Oxley’s other subsidiary, Oxley Emerald, has subscribed 1 million shares, representing a 50 percent stake, in Posh Properties (Posh) for RM10 million. Posh engages in property development and is the beneficial owner of a 0.8 hectares plot of freehold vacant undeveloped land in Kuala Lumpur, Malaysia.
Significance: At the transacted prices, the sale and purchase agreement with RSC and acquisition of Posh are equivalent to 4.1 percent and 0.4 percent of Oxley’s market capitalisation of $1.06 billion as at 10 June 2013.
Tiger Airways Inks Cargo Partnership With ECS
Tiger Airways Holdings has tied up a three year cargo deal with Europe-based ECS Group in a bid to increase its turnover from cargo operations. Pursuant to the partnership, ECS will market Tiger’s cargo space on the group’s fleet of Airbus A320 aircraft. Revenue from cargo makes up approximately 3 percent of Tiger’s total revenue. Managing director of Tiger Airways, Ho Yuen Seng, said: “We’re going to have more aircraft and we’re increasing our frequencies to certain destinations where there is a lot of cargo.” As at end-May 2013, Tiger’s fleet comprised 45 Airbus A320 covering over 50 destinations across 13 countries in the Asia Pacific. Ho added that Tiger’s fleet is expected to grow to 53 aircraft by 2015. Tiger entered the air cargo distribution business back in July 2011 with Airtropolis GSA Singapore.
Significance: The cargo partnership with ECS will officially commence from 1 July 2013. Tiger is looking to fully utilise its aircraft as it expands its fleet, growing its cargo operations in tandem so as to foster a healthy revenue stream.
Tiong Seng To Invest In New Plant In Iskandar
Tiong Seng Holdings will invest $15.6 million through its subsidiary, Robin Village Development, to build a precast plant in Iskandar region of Johor Bahru (JB), Malaysia after given the go ahead by Malaysian authorities. The new plant will stand on 5.57 hectares of land and has a maximum annual capacity of about 66,000 cubic metres. It will allow Tiong Seng to ramp up capacity for the production of precast components by 60 percent to 160,000 cubic metres by 2015. The JB plant will work as a supplement to the Tiong Seng Prefab Hub in Tuas as the larger land space will also allow the group to produce a wider range of precast components to serve the growing demand for precast in Singapore and Malaysia.
Significance: Tiong Seng’s expansion into Malaysia serves to feed the rising demand for housing in Singapore. According to the Population White Paper, up to 700,000 new homes will be constructed by 2030, with a large part of these new homes likely to be HDB flats.
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