Stocks In Focus (SingHaiYi, Singapore Press Holdings, Ezra Holdings) – 15/04/13

SingHaiYi’ Chan Heng Fai Invests $3m In CCM Group
CCM Group, a Class-A main contractor which has built numerous residential, commercial and hotel buildings in Singapore, announced that Hengfai Strategic Investment (HSIPL) which is led by Chan Heng Fai, has invested $3 million in new CCM shares to emerge as the second-largest shareholder of the home-grown construction specialist. CCM said it has placed out 35 million new shares at $0.086 per share to HSIPL, a private investment holding controlled by Chan. Born in Hong Kong, Chan is the executive director and deputy managing director of SingHaiyi, formerly known as Singxpress Land. “We warmly welcome Heng Fai to CCM as a strategic investor and as a Board member. His depth of experience in corporate restructuring in the USA and Asia, along with his extensive contacts in international finance circles and among regional developers will be of tremendous strategic value to CCM,” said executive chairman and chief executive officer of CCM, Joseph Liew.

Significance: The share price represents a discount of 4.4 percent to the volume weighted average price of CCM shares traded on the SGX between 10 April and 12 April, when the placement agreement was signed. The net proceeds of approximately $2.7 million will be used as working capital for the CCM.

SPH’s 2Q13 Earnings Drop 15% On Weak Ad Sales
Singapore Press Holdings’ (SPH) net profit attributable to shareholders for the second quarter ended 28 February 2013 dropped 15 percent to $71.5 million. Operating revenue fell 5.5 percent to $282.2 million but this was mitigated by a reduction in operating costs of $6.9 million. Notably, the revenue for the Newspaper and Magazine business declined $17.2 million to $224.4 million. This was mainly attributable to a fall in advertisement revenue of $13.9 million to $168.5 million, particularly in the property and transport sectors. In addition, circulation revenue contracted by $2.4 million to $47.3 million. Meanwhile, an interim dividend of 7 cents per share has been declared by SPH with payment date set on 23 May 2013.

Significance: Moving forward, SPH’s advertising revenue performance will be driven by market conditions and consumer sentiment in the key advertising sectors. Against the backdrop of evolving media consumption trends, SPH said it will continue to explore opportunities in new growth areas and other adjacent businesses, while striving for a sustained performance in the core newspaper business.

Ezra’s 2Q13 Earnings Jump 34%; Order Backlog Exceeds US$2.1b
Ezra Holdings’ revenue and earnings for the second quarter ended February 2013 jumped 17 percent and 34 percent to US$247.1 million and US$29.7 million respectively. Half year revenue jumped 34 percent to US$525.8 million while gross profit increased 34 percent to US$92.2 million. EMAS AMC, Ezra’s Subsea Services arm, led the contribution to the top line, accounting for US$107.1 million of the US$133.5 million jump in the group’s sales for 1H13. The offshore support services division added another US$9.7 million while the marine services arm (TRIYARDS) contributed US$16.7 million. Ezra also booked a net attributable profit of US$36.4 million, compared with US$35.4 million in 1H12. With more effective management of working capital, Ezra has also improved its operating cashflows and trimmed net gearing to 0.9x in 1H13 from 1.1x in FY12.

Significance: Ezra continues to maintain a healthy order backlog of more than US$2.1 billion of contracts spanning the globe with its subsea division underpinning more than half of these projects. In addition, the firm’s gross profit margin remained relatively steady at approximately 18 percent for 1H13 and 1H12.