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Stocks In Focus SG (Cambridge Industrial Trust, Sysma Hldgs, Yoma Strategic Hldgs) – 17/01/14
Cambridge FY13 DPU Up 4% Y-O-Y
• Despite a lower turnover in 4Q13, $23.3 million versus $24 million a year earlier, Cambridge Industrial Trust recorded an 8.4 percent revenue hike for the full year, up from $89 million to $96.5 million.
• The increase was attributable to a rise in net rental income from property acquisitions net of divestments, completion of development projects and rent escalations occurring after FY12.
• This led to a 32.9 percent surge in total return for the year after income tax before distribution to $118.9 million, from $89.5 million a year ago. Consequently, FY13’s distribution per unit (DPU) grew 4 percent year-on-year (y-o-y) to $0.04976.
Significance: Based on its closing price on 16 January 2014, $0.695, Cambridge Industrial Trust’s FY13 DPU translates to a dividend yield of 7.2 percent. Moving forward, a gearing ratio of 28.7 percent would provide headroom for future acquisition opportunities and asset enhancement initiatives.
Sysma To Acquire Gul Lane Property
• Sysma Holdings’ (Sysma) subsidiary, Sysma Energy, has exercised an option to buy a property – a leasehold factory with a land area of approximately 8,300 square metres, located at No. 5 Gul Lane – from an independent third party for $12.3 million.
• On 10 October 2013, another of Sysma’s subsidiary, Sysma Land, had entered into a joint venture agreement, with Encore Investment, to engage in the manufacturing, trading and provision of services related to refined petroleum products.
• The proposed acquisition is intended to house a plant for storage, warehousing and office purposes which are in line with Sysma’s strategy to diversify its revenue sources.
Significance: The proposed acquisition, not expected to have any material impact on Sysma’s net tangible assets or consolidated earnings per share, is slated to be completed by mid-April 2014.
LDR Sales Lift Yoma’s Earnings
• For the quarter ended 31 December 2013, Yoma Strategic Holdings’ top line more than doubled to $30.2 million, from $13 million 12 months ago.
• Following an agreement, signed in the current financial year, to sell land development rights (LDR) and apartment units relating to Zone B of Star City to a third party investor, Yoma sold the LDR for the final two of five buildings and recorded revenue amounting to $14.6 million.
• Coupled with income recognised from sales of residences in Star City’s Building A3 and Building A4, in line with Yoma’s accounting policy of revenue recognition based on percentage of completion method, 3Q14 earnings rose 42 percent, from $3.7 million to $5.2 million.
Significance: Driven by current and anticipated economic growth and the persistent real estate supply shortage, Yoma is optimistic of strong growth in the rental business as foreign companies expand their businesses in Myanmar, particularly in Yangon, where its activities are congregated.
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