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Stocks In Focus SG (Duty Free Int’l, Oversea-Chinese Banking Corp, United Envirotech) – 14/01/14
Duty Free Int’l’s 3Q14 Earnings Declined 10.2%
In tandem with more competitive pricing of its goods and merchandise, Duty Free International recognised revenue of RM153.8 million for the quarter ended 30 November 2013, a 15.7 percent increase as compared to the corresponding quarter last year of RM132.9 million.
For the quarter, the company recorded change in inventories in the negative territories as a result of higher sales. Rental expenses jumped 92.3 percent to RM9 million mainly due to higher rental expenses incurred in the outlets of Johor Bahru and Penang International Airport.
Consequently, on a year-on-year basis, earnings for the quarter slumped 10.2% to RM17.2 million from RM19.1 million.
Significance: Duty Free International declared a cash dividend of $0.01 per share, payable on 6 March 2014. Including the dividend of $0.01 paid in 1Q14, the latest dividend payment translates into a yield of 6.7 percent based on the closing price of $0.3 on 13 Jan 2014.
OCBC Boosts Stake In Ningbo To 20%
In support of Bank of Ningbo’s planned private placement of new shares to its substantial shareholders, Oversea-Chinese Banking Corporation (OCBC) agreed to boost its stake in Bank of Ningbo by subscribing for up to 207.5 million shares at Rmb8.85 per share.
The total consideration for the shares subscription is Rmb1.8 billion (approximately $383 million) and will be funded through internal resources.
When the proposed shares subscription is completed, OCBC’s equity stake in Bank of Ningbo is expected to increase from the current 15.3 percent to 20 percent of the enlarged issued capital.
Significance: The planned shares subscription alongside with its proposed acquisition of Wing Hang Bank, allows OCBC to further penetrate China’s market, where China is expected to be the key driver of economic growth in Asia and is one of the three areas of focus for the bank.
United Envirotech Signs Water Solution Agreement In Sichuan, China
United Envirotech (UEL) signed an agreement with Guangan Municipal Government and West Jean City Investment Management (WGIM) for the provision of industrial water supply, wastewater treatment and wastewater recycling to West Guangan Jeans and Textile Commerce and Technology Park in Guangan City, Sichuan Province, China.
Under the terms of the agreement, UEL will form a joint venture with WGIM (UEL: 90 percent, WGIM: 10 percent) to undertake three Build-Operate-Transfer projects with a long term capacity ranging from 0.08 million cubic metres per day to 0.15 million cubic metres per day.
Slated to be completed by 31 August 2014, phase one of the project will commence immediately and is expected to incur a capital outlay of Rmb160 million ($33 million), where it will be funded by the company’s internal resources.
Significance: As a result of the tightening of environmental regulations in China, UEL with its advanced membrane technology and track record is well-positioned to tap on this greater demand created for industrial water treatment solutions in China. The latest project is UEL’s third major investment in textile industrial water treatment after its investments in Jiangsu, China.
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