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Stocks In Focus SG (Gaylin Hldgs, Liongold Corp, Religare Health Trust) – 13/11/13
Gaylin To Acquire Rig Marine
Gaylin Holdings via its subsidiary, Gaylin Asia (formerly known as Gaylin Korea), has entered into a conditional sales and purchase agreement with two vendors namely, Michael John Duncan and Alexander Charles Cobban, to acquire shares representing 51 percent of the share capital in Rig Marine Holdings. The target acquisition, a company incorporated in United Arab Emirates with several other subsidiaries in other countries, is engaged in the business of the supply, rental, inspection and recertification of all lifting, mooring, towing and deck equipment. The consideration for the sale of shares amounts to more than $7 million where the deal will be financed through the use of company’s internal resources as well as additional issue of Gaylin shares.
Significance: The proposed acquisition in the view of Gaylin represents an opportunity for the company to expand into the Caspian Sea region. When completed, on proforma basis for FY13, the company’s net tangible assets per share is expected to increase from $0.2076 to $0.2182, alongside with an increase in earnings per share from $0.0295 to $0.0358.
Liongold 2Q14 Losses Widen To $47.7m
Despite a 52.2 percent year-on-year increase in 2Q14’s revenue and a 52 percent jump in gross profit, Liongold Corp fell deeper into the red with losses widened to $47.7 million. This was in light of recording a $46.6 million in other losses that were mainly attributed to the unrealised loss on marketable securities at fair value of $49 million in 2Q14. The revenue increase was largely due to higher contributions from its gold mining and PRC manufacturing operations, while the marketable securities were tendered as consideration for the disposals of the company’s interests in Industrial Power Technology, Think Greenergy and Think Environmental. Other expenses in 2Q14 jumped 300 percent to $2.5 million which was mainly due to an increase in care and maintenance related expenses of $4.6 million incurred by the operations at Owee Mines and Minera Nueva Vista, partially offset by the fair value gain of $3.6 million in convertible bonds.
Significance: Despite the one-off loss incurred from marketable securities, Liongold’s continued investment in the development of currently non-producing gold mining assets is expected to show some results in the coming quarter.
RHT 2Q14 DPU Up 3.5%
Religare Health Trust (RHT) has reported total revenue of $26.5 million for the quarter ended 30 September 2013, which fell 3.1 percent short of its projection. This was mainly attributed to lower contribution from service fee due to foreign exchange conversion losses between the Indian rupee and Singapore dollar. The upward revaluation of land as well as the purchase of medical equipment in FY13 has resulted in higher depreciation charges that were not included in the projection. As a result, the company’s 2Q14 total expenses came in at $16 million, which exceeded its projection by 23.3 percent. Despite the variance in actual and projected expenses, RHT’s distribution income came in as projected, at $11.7 million for the quarter. This translates to a distribution per unit of $0.026, a 3.5 percent increase when compared to 1Q14.
Significance: RHT’s performance is expected to remain strong as it continues to increase occupancy rate (2Q14: 86 percent, 1Q14: 78 percent) for its portfolio of 13 clinical establishments, while bed capacity was also increased to 551 from the launch of Gurgaon in May 2013. In addition, the company’s two operating hospitals, Nagarbhavi and Rajajinagar have been outperforming projections each quarter due to higher occupancy rates and operating margins.
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