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Stocks In Focus SG (Vard Holdings, CNA Group, China Minzhong) – 03/09/13
Vard Bags Order For A Platform Supply Vessel To Be Built In Vietnam
Vard Holdings announced that it has secured a new contract for the design and construction of one platform supply vessel (PSV) for Carlotta Offshore. The vessel is a multifunctional PSV of VARD 1 08 design with a total length of 81 meters, beam of 18 meters and a cargo deck area of 830 square metres. The vessel of approximately 4,000 deadweight tonnes will be prepared for standby, rescue, firefighting and oil recovery operations. Delivery is scheduled from Vard Vung Tau in Vietnam in 4Q14. The value of the order has not yet been disclosed.
Significance: As at 30 June 2013, the year-to-date order book for Vard stands at NOK14 billion. The contract won is in line with Vard’s focus to rebuild its order book at its Vietnam yard. Notably, the major concern remains in the stability of its operations in its Brazil yard.
CNA Wins $10.6m Project For Ho Chi Minh City’s Airport
CNA Group has signed a letter of award via its Vietnamese subsidiary, CNA-HTE Vietnam (CNA-HTE) to renovate, upgrade and expand Ho Chi Minh City’s Tan Son Nhat International Airport’s domestic terminals for approximately $10.6 million. CNA will be providing mechanical, engineering and plumbing (MEP) solutions including air conditioning, ventilation, fire protection, electrical, plumbing and sanitary and providing extra low voltage systems for the airport’s new two-storey domestic terminal building. It will also upgrade the airport’s existing domestic terminal which includes a new bus terminal building, VIP lounge as well as a roof upgrade. The project marks CNA-HTE’s largest airport-related MEP project to date and is also its parent’s second airport-related project in South East Asia clinched this year. The project is expected to be completed in October 2014.
Significance: With the new contract win, CNA’s order book of $63.6 million as at 30 June 2013 will be increased to approximately $74.2 million as at the same date. It is expected to contribute positively to the revenue and profits of the group’s financial year ending 31 December 2013.
Indofood Offers To Takeover China Minzhong
Indofood Sukses Makmur (ISM), the largest shareholder of China Minzhong Food Corporation announced a general offer of China Minzhong Food Corporation, a Fujian based food processor. News of the general offer came after ISM acquired an additional 3.9 percent, thereby increasing its stake to 33.49 percent which triggered the mandatory takeover offer at $1.12 per share valuing the company at $734 million. The offer is conditional on ISM receiving more than 50 percent valid acceptances. China Minzhong has seen its stock market value plunged significantly by almost 50 percent after coming into short selling attacks by Glaucus Research Group. The US-based company has issued a report providing allegations of accounting issues at China Minzhong. However, shares in China Minzhong have since recovered after it has issued a rebuttal on Sunday, producing evidence saying that it had not fabricated its sales or accounts. It had also reviewed the report and strongly rejected what it viewed as “reckless opinions” and “inferences” drawn by Glaucus.
Significance: While Voyage Research notes that the takeover offer provides some form of synergistic value in the upstream business for ISM, it is unclear if the takeover will go through given that China Minzhong’s Chairman and Chief Financial Officer (holding 6.64 percent in total shareholdings) have given irrevocable undertakings to reject the offer.
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