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Stocks In Focus SG (Albedo, TTJ, SATS) – 27/09/13
Albedo Rally Eyed With Curiosity
Catalist listed Albedo has been in the most active list for at least twice last week. Observers drew a parallel to how Rowsley’s share price shot up after it unveiled plans to buy the RSP Group and the Vantage Bay site in Iskandar. Albedo is a loss-making steel trader, which have recently commanded trading volume past the billion mark. Albedo’s independent auditors, Foo Kon Tan Grant Thorton LLP, highlighted in April that there were factors that indicated the existence of a material uncertainty which may cast significant doubt on Albedo’s ability to continue as a going concern, in which Albedo responded saying it was able to continue as a going concern and maintain its listing status. Details revealed on 20 September 2013 showed Albedo mention its plans to become a major property player in Iskandar. This will be done through a reverse take-over (RTO) by Infinite Rewards, which belongs to prominent Malaysia tycoon Danny Tan.
Significance: Albedo’s shares have quadrupled from two cents to eight cents. Although the future does look bright if the RTO does go through, Albedo is still largely a speculative play at this stage. It is good to reassess its stand, and its financial sheets as we wait for the updates pertaining the RTO.
TTJ Reports A Slip Of 10.6% in Earnings
TTJ Holdings reported a fall of 10.6 percent in net profit to $14.9 million from its recently released full year results ended 31 July. The structural steel specialist’s revenue for the full year also slipped 10.9 percent to $127.4 million, primarily dragged down by lower revenue in the structural steel business. As TTJ completed less work for ongoing projects compared to a year ago, segmental revenue from its structural steel business reflected a 13.1 percent decline. In addition, fewer large-scale projects of higher contract value were also executed. Gross profit margin did however show signs of improvement despite the drop in revenue, rising to 22 percent from that of 20.6 percent a year ago. Earnings per share, as a result of the lower profit slipped to 4.25 cents from 4.75 cents a year ago.
Significance: TTJ foresees greater spending in Singapore’s construction industry, which bodes well for its business prospects. Its order book stands at $110 million, which is expected to be substantively delivered within the next two financial years.
SATS Extends Footprints On Local Cruise Industry; Buys Cruise Centre From Temasek
SATS and its subsidiaries will be expanding its footprints in the local cruise industry by buying Singapore Cruise Centre (SCC) from Temasek Holdings for $110 million. SATS wholly owned subsidiary, SATS Airport Services (SAS) will directly own 92 percent of SCC. Another subsidiary, SATS-Creuers will also own 8 percent. As SAS currently also owns 60 percent stake in SATS-Creuers, it means SATS will have effective ownership of 96.8 percent of SCC. This effectively drives down the purchase price to $106.5 million instead of that of $110 million. SATS mentioned that the $110 million price tag for the SCC has already taken into account of “current market conditions” and the business prospects of SCC.
Significance: The deal, though still subjected to regulatory approval, will be a compelling fit to SATS’ existing cruise handling and terminal operations. Coupling this with SATS’ strong partnership with Creuers, this transaction will enable SATS to grow its gateway-services business.
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