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Stocks In Focus SG (Q&M, Soilbuild Construction, Thai Village) – 19/11/13
Q&M To Acquire Stake In Dental Materials Manufacturer
Q&M Dental Holdings (China), a subsidiary of Q&M Dental Group (Singapore), has entered into a memorandum of understanding to purchase a 51 percent interest in a specialised dental materials manufacturer, Qinhuangdao Aidite High Technical Ceramic (Aidite), located in Hebei Province, China, for Rmb76.5 million (approximately $15.3 million). Aidite manufactures zirconium oxide blocks, a product increasingly used in dentistry as an alternative material for non-metallic esthetic material that is high crack resistant. Notably, key terms of the acquisition includes a Rmb35 million injection from Aidite’s existing shareholders for working capital and further expansion purposes as well as a profit guarantee to Q&M of at least Rmb159 million in dividends over the next 12 years commencing from 2014. The acquisition, to be satisfied in cash or Q&M shares or partly in both, is expected to be completed on 1 May 2014.
Significance: The proposed acquisition will crystallise Q&M’s plan to assimilate and offer synergy to the various components of its dental business, from supplies manufacturing to supply distribution and its dental clinics and centres.
Soilbuild Construction To Build Aerospace-Related Facility
Soilbuild Construction Group has secured a $13 million contract for the proposed erection of a part single-storey and part 2-storey factory building with ancillary office at Seletar Aerospace View, located within Seletar Aerospace Hub, from Vector Aerospace. Vector Aerospace is a global leader in aerospace maintenance, repair and overhaul. Work on the contract is expected to commence by December 2013 and be completed by 3Q14. “This contract marks two milestones for Soilbuild, being both our first aerospace-related project and also our first project in the vibrant Seletar Aerospace Hub,” commented Ho Toon Bah, executive director of Soilbuild. The win lifts Soilbuild’s order book to $435 million to date, with a substantial portion expected to be completed over the next 12 to 24 months.
Significance: While Soilbuild intends to maintain its focus on its industrial and commercial projects, as well as public and private residential property construction projects, the aerospace contract opens up revenue diversification possibilities.
Thai Village FY13 Net Profit Down 20.6%
For its FY13 ended 30 September 2013, Thai Village Holdings posted a 16 percent, or $4.1 million, fall in turnover. Revenue from its Singapore operations dipped by $0.5 million due to keen competition in the food and beverage (F&B) industry while China’s top line tumbled $3.6 million due to lower sales achieved by the outlets in Shanghai in light of lower high-end F&B spending and disposal of the Shanghai Thai Village City Restaurant. Royalty income from franchise outlets in Vietnam and Indonesia remained stable but declined in China. Despite an overall reduction in expenses, in tandem with the softened turnover, Thai Village’s bottom line narrowed 20.6 percent.
Significance: In view of the competitive landscape in the F&B industry, Thai Village had announced on 31 October 2013, its intention to raise $24.8 million through placement shares to diversify away from its existing restaurant operations and restaurant management services business and explore opportunities in commercial properties development and investment in Asia.
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