Avarga leads buybacks; director filings decline ahead of earnings

FOR the five local trading sessions that spanned Jan 8 to Jan 14, the Straits Times Index (STI) gained 3.2 per cent with the Nikkei 225 Index, Hang Seng Index and S&P/ASX 200 Index averaging 2.7 per cent gains. This has brought the STI's total return for the 2021 year to Jan 14 to 5.5 per cent.

STI stocks that have been recipients of the highest net institutional inflow in the 2020 year to Jan 14 include DBS Group Holdings, OCBC, Singapore Telecommunications, Wilmar International and United Overseas Bank.

Meanwhile, City Developments, Ascendas Reit and Singapore Technologies Engineering have seen the highest net institutional inflows over the nine sessions.

Over the five sessions, the iEdge S-Reit Leaders Index gained 1.9 per cent, bringing its decline in total return for the 2021 year to Jan 14 to 2.7 per cent.

Share buybacks

There were 13 primary-listed stocks conducting share buybacks over the five sessions with a total consideration of S$4.1 million. This was not far from the S$6.1 million filed between Jan 4 and Jan 7.

Avarga led the buyback tally, buying back 10 million shares for a consideration of S$2,959,551. As of Jan 14, the current buyback mandate had seen the company purchase 1.72 per cent of its issued shares (excluding treasury shares) as of the date of the current share buy-back resolution.

Formerly known as UPP Holdings, Avarga operates three core businesses that include paper manufacturing, power generation and building materials distribution.

The company operates in five countries, employs more than 800 people and is expected to report its FY20 (ended Dec 30) financial results before the end of February.

The group's revenue for its H1FY20 was S$720.3 million, compared to S$688.6 million for its H1FY19.

The overall gross profit for its H1FY20 increased by S$10.2 million or 14 per cent with revenue and gross profit from the building products business contributing at least 88 per cent of the group's performance for both comparison periods on a consolidated basis.

In Avarga's Q3FY20 business update back on Nov 13, for its statement on building products distribution, it referred to the Q3FY20 press release and earnings report announced by Taiga Building Products (Taiga), a firm in which it has an interest.

On May 22, 2020, Avarga announced it was increasing its interest in Taiga, including the interest held through Avarga Canada, from 67.9 per cent to 69.7 per cent of the issued common shares of Taiga. For its Q3FY20 (ended Sept 30), Taiga reported its consolidated net sales had increased 40 per cent from Q3FY19, largely attributed to higher selling prices for its commodity products.

Avarga maintains a market value of more than S$300 million. Its share price rallied from 15.6 Singapore cents per share at the end of 2019 to 28.0 cents per share at the end of 2020, with 1.22 cents paid in dividends over the calendar year. The company ended 2020 as a top 100 stock by turnover, up from its ranking as a top 300 stock by turnover for the first six months of the year.

Global Investments bought back 3,049,800 shares for a consideration of S$432,762, at an average price of 14.19 Singapore cents per share. As of Jan 14, the current buyback mandate had seen Global Investments purchase 3.55 per cent of its issued shares (excluding treasury shares) on the current mandate. The preceding share buyback mandate saw it buying back 8.52 per cent of its issued shares (excluding treasury shares).

Director and substantial shareholder transactions

The five trading sessions saw just over 40 changes in director interests and substantial shareholdings filed for 25 primary-listed stocks. This included five company director acquisitions, with one disposal filed, and substantial shareholders filing 12 acquisitions and nine disposals.

Parkway Life Reit

Cohen & Steers Capital Management's deemed interest in ParkwayLife Reit has increased above the 7 per cent threshold interest.

This was due to it acquiring 7,095,525 units in Parkway Life Reit through a novation agreement of a client on Jan 6. While Cohen & Steers Capital Management is not the registered holder of any units of the Reit, the agreement increased its deemed interest in the Reit from 6.25 per cent to 7.43 per cent.

Parkway Life Reit will be releasing its FY20 (ended Dec 30) financial results after the Jan 25 close.

On Dec 18, the company completed the acquisition of a nursing home in Japan after reporting on Nov 4 a distribution per unit of 3.54 Singapore cents for its Q3FY20, and 10.22 cents for its 9MFY20, representing respective year-on-year increases of 7.4 per cent and 3.8 per cent respectively.

Yinda Infocomm

Between Jan 8 and Jan 12, Yinda Infocomm substantial shareholder Hing Chow Yuen continued adding to his direct interest in the company. He acquired 7,242,600 shares for a consideration of S$837,674 at an average price of 11.57 Singapore cents per share. This took Mr Hing's direct interest in the company from 9.31 per cent to 11.26 per cent.

On Jan 14, Yinda Infocomm reported its projects in Singapore, the Philippines and Thailand have been affected and delayed due to measures taken by the respective governments in their efforts to curb Covid-19.

The company added that due to the uncertainty caused by the Covid-19 pandemic, the group is unable to ascertain the expected completion dates for the delayed projects in the respective countries and the corresponding impact on the group's financial performance and operations.

On Nov 1, 2020, Yinda Infocomm entered into a non-binding memorandum of understanding with the shareholders of International Biometrics, setting out certain key understandings in respect of the company's proposed acquisition of up to 51 per cent of the ordinary shares in International Biometrics Pte Ltd.

Yangzijiang Shipbuilding Holdings

On Jan 7, Yangzijiang Shipbuilding Holdings (Yangzijiang) independent non-executive director Toe Teow Heng took a deemed interest in the company, with ICH Invest & Trade acquiring 300,000 shares for a consideration of S$293,880 at an average price of S$0.98 per share. ICH Invest & Trade is a wholly owned subsidiary of ICH Group.

Mr Toe holds 31.67 per cent of the total issued and paid up share capital of ICH Group.

He is a former fund manager and was appointed to the board of Yangzijiang on April 30, 2020.

He was also a former independent non-executive director of Tianjin Zhongxin Pharmaceutical Group Corporation.

Yangzijiang operates four shipyards in Jiangsu Province, China, along the Yangtze River. The group produces a broad range of commercial vessels including large containerships, bulk carriers and LNG carriers, serving the orders from a well-established customer network covering Northern America, Europe and other parts of the world.

As reported on Dec 29, in the 2020 calendar year, the group had secured new orders for 53 vessels worth approximately US$1.77 billion (not considering the value of the option orders). Yangzijiang is expected to report its FY20 (ended Dec 30) financial results, at the end of February/early March.

SingHaiyi Group

On Jan 7, Haiyi Holdings (Haiyi) acquired 1,332,350 shares of SingHaiyi Group for a consideration of S$95,929 at 7.2 Singapore cents per share.

The married deal increased the deemed interest of SingHaiyi Group managing director Celine Tang in SingHaiyi Group from 64.77 per cent to 64.80 per cent. Her preceding acquisitions of more than 18 million shares between Aug 21 and Sept 1 were also booked at 7.2 cents per share.

Mrs Tang also serves as managing director of Haiyi where she oversees its daily operations and decision-making, and is the non-executive chairman of Chip Eng Seng Corporation and OKH Global.

SingHaiyi Group recorded total revenue of S$50.6 million for H1FY21 (ended Sept 30) compared to S$12.9 million for H1FY20, an increase of S$37.7 million, mainly due to revenue recognised for Parc Clematis of S$44.8 million, offset by the absence of revenue recognised for Vietnam Town phase 2 of S$5.8 million.

Roxy-Pacific Holdings

On Jan 6, Roxy-Pacific Holdings independent director Winston Tan Tien Hin acquired 25,000 shares of the company for a consideration of S$8,750. His total interest in the established property and hospitality group is 0.91 per cent. Mr Tan is also executive chairman of Serrano and non-executive director of Plastoform Holdings.

On Jan 8, Roxy-Pacific Holdings provided profit guidance for its FY20 (ended Dec 30), noting that the prolonged Covid-19 pandemic has continued to adversely impact the group's operational performance.

The group expects to report a loss for its H2FY20 and FY20 mainly due to the losses, including expected impairments on hotel assets, incurred by the group's hospitality segment resulting from the pandemic, which has caused an unprecedented collapse in global travel and tourism.

This is in addition to the share of losses in overseas associated companies resulting from the impairments of properties and additional tax expense incurred, following the final assessment by the Hong Kong Inland Revenue Department.

Jadason Enterprises

On Jan 8, Jadason Enterprises substantial shareholder Liaw Hin Hao acquired 640,700 shares of the company for a consideration of S$17,940 at an average price of 2.80 Singapore cents per share.

The substantial shareholder's direct stake in the printed circuit board supplier has gradually increased to 9.18 per cent, from 6.08 per cent as at Dec 29, 2017.

Jadason Enterprises' H1FY20 (ended June 30) revenue was S$16.7 million, 24 per cent lower than H1F19 revenue, as weak demand persisted to hamper the performance of both of the group's business segments, with Covid-19 causing significant disruptions to economic activities in the first half of the year. The company is expected to report FY20 results at the end of February.

PEC

On Jan 7, PEC independent director David Wong Cheong Fook acquired 28,000 shares of the company for a consideration of S$10,976. At 39.2 Singapore cents per share, this increased his direct interest in PEC from 0.02 per cent to 0.03 per cent.

PEC is a plant and terminal engineering specialist with fabrication facilities spread across the world and serves four main sectors: energy, petrochemicals, oil & chemical terminals and pharmaceuticals.

Appointed to the PEC board in January 2014, Mr Wong is the chairman of the Audit and Risk Management Committee.

• The writer is the market strategist at Singapore Exchange (SGX). To read SGX's market research reports, visit sgx.com/research.