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Stocks In Focus (PLife REIT, Keppel FELS, Midas) – 04/07/13
PLife REIT To Strengthen Japan Portfolio
Parkway Life REIT (PLife REIT) announced that it will be making two further acquisitions in Japan as part of plans to continue growing its Japan portfolio. The acquisition of two nursing home properties located in Japan will be made at a combined purchase price of JPY1.755 billion ($23.1 million) through its subsidiary, Parkway Life Japan3. The funding for the acquisition will be sourced via a five-year committed and unsecured JPY term loan facility at an all-in cost of approximately 1.55 percent per annum. The properties currently enjoy a stable and healthy average occupancy rate of approximately 85 percent (as at 19 June). Commenting on the acquisition, Yong Yean Chau, chief executive officer of the manager, Parkway Trust Management, said that with Abenomics afoot and the Japanese government’s support for the healthcare industry boosting interest in aged care facilities, this sector is set to continue growing.
Significance: This acquisition is expected to bring the REIT a net property yield of 7.1 percent amid current market conditions. It will be an addition to the current 33 healthcare properties PLife REIT owns in Japan which will allow the trust to be well-positioned to tap into the growth of the elderly care market as the population in Japan rapidly ages.
Keppel FELS Secures US$210m Order For Jackup Rig
Keppel FELS, a subsidiary of Keppel Offshore & Marine, announced that PV Drilling Overseas (PVDO) is acquiring from the company a KFELS B Class jackup rig for approximately US$210 million, scheduled for delivery in 1Q15. The high specification rig will be the 19th KFELS B Class rig on order at Keppel, with 45 already delivered since 2000. Pham Tien Dung, the chief executive officer of PV Drilling and chairman of PVDO, said the company is looking to catch up on the huge demand for offshore rigs. “To meet this aim, we are pleased to be able to acquire a premium jack-up rig with such an early delivery schedule,” he said. ” This is an important addition to our current fleet of rigs to expand our fleet through acquisitions and charters to accelerate our drilling programme for Vietnam and the overseas market.” It is said that the secured order would have no material impact on the net tangible assets or earnings per share of Keppel Corporation for the current financial year.
Significance: The inked deal shows a strong indication of Keppel FELS’ ability to grow its pool of loyal customers with its expertise in jackup rigs. Despite the number of deliveries slated for 2015 that Keppel FELS currently holds, the management team is confident that its construction programme would allow them the flexibility of meeting its customer requirements.
Midas Wins Metro Contract Worth $9.1m
Midas Holdings announced that it has secured a metro contract worth Rmb44.3 million ($9.1 million) through its subsidiary, Jilin Midas Aluminium Industries, from CNR Changchun Railway Vehicles; the contract is for the building of Changchun Metro Lines 1 and 2. Jilin Midas will supply aluminium alloy extrusion profiles for 44 trains, taking place from 2013 to 2015. The contract is expected to have a positive impact on the group’s financial performance for those financial years. This marks the ninth contract won since the beginning of the year, showing the presence and credibility of the company in the market. According to chief executive officer of Midas, Patrick Chew, “The ongoing upgrades of existing metro systems and development of new train lines in the PRC has kept the order momentum healthy, which bodes well for industry players. Moving forward, we will continue to seek new opportunities to strengthen the Group’s market position.”
Significance:According to the national plan, China is expected to invest Rmb520 billion in railway infrastructure this year. With only Rmb54.52 billion of investment made in railway infrastructure for the first three months of 2013, we can expect more contracts for Midas in the second half of the year.
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