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Stocks In Focus (Singapore Exchange, Global Logistic Properties, Nam Cheong) – 24/07/13
SGX Reports Best Performance Since FY08
For the full year ended 30 June, Singapore Exchange (SGX) recorded a 10.4 percent increase in revenue to $715.1 million and a 15.1 percent jump in net profit to $335.9 million. The results were largely in line with analysts’ expectations; a Bloomberg poll of 17 analysts showed a consensus estimate net profit of $335.8 million. Chief executive officer, Magnus Bocker was pleased to share that this is SGX’s best performance since FY08, supported by its continuing investments in new products and wider distribution that is benefiting from the increased market activities. The bulk of SGX’s growth came in the first six months of 2013, as improved investor sentiment drove total market capitalisation to record highs in June. Notably, fourth-quarter securities revenue jumped 40 percent to $76.6 million. The initial public offering market also picked up, with 30 listings during the year raising $8.1 billion compared to $1 billion from 24 listings in fiscal 2012. SGX proposed a final dividend of $0.16 per share, bringing total dividend to $0.28 per share.
Significance: Despite the good performance, SGX notes that the uncertain global economic will continue to be a concern. It hopes to improve retail participation in Singapore which is only slightly above 8 percent, as well as to retain the current base dividend of $0.04 per share per quarter.
GLP Signs Lease Agreements Totaling 44,000sqm To Goodbaby
Global Logistic Properties (GLP) has signed lease agreements totalling 44,000 square metres (sqm) to Goodbaby, a leading global manufacturer and retailer of infant and children products. With the addition of the new lease agreements, Goodbaby has increased its leased area with GLP to 51,000sqm. The lease contracts consist of an lease expansion to 45,000sqm at GLP Park Qiandeng from the initial 7,000sqm, and a 6,000sqm pre-leased at GLP Park Langfang. Commenting on the rationale of increasing its lease with GLP, the company credited GLP’s network and scale as well as its facilities and service that have provided Goodbaby with the infrastructure to meet growing demand from its customers and growth plans.
Significance: With these lease agreements, GLP Park Qiandeng in Suzhou is now 90 percent leased upon completion and GLP Park Langfang in Northern China is pre-leased ahead of completion. This is a testimony to GLP’s record and quality of assets, and will continue to boost its market position as it expands across China.
Nam Cheong Secures Contracts Worth US$70.5m
Nam Cheong announced that it sold three vessels, consisting of two platform supply vessels (PSVs) and one accommodation work barge, worth a total of US$70.5 million ($88.9 million). The two PSVs are sold separately to a subsidiary of an existing customer and the other to a new customer in Cyprus, EDT Offshore. The accommodation work barge is sold to Perdana Petroleum. The three vessels are being constructed as part of the group’s build-to-stock series in two of its subcontracted yards in China. They are scheduled for delivery between the first and fourth quarters of 2014, and are expected to contribute positively to the group’s earnings for the financial years ending 2013 and 2014.
Significance: As at 23 July, Nam Cheong’s order book stands at RM1.5 billion ($597 million). Year to date, it has sold a total of 16 vessels compared to seven vessels sold during the same period last year. Given the robust industry momentum, the company is confident to surpass their record high of 21 vessel sales achieved last year.
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