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INSIDE INSIGHTS

Buyback activity slows; directors build UOB-Kay Hian, Ho Bee Land stakes

FOR the 2018 year through July 26, the Straits Times Index (STI) generated a 0.12 per cent decline in total return, compared to the Nikkei 225, Hang Seng and S&P/ASX 200 Indexes, which averaged a 1.85 per cent total return. For the five trading sessions ended July 26, the STI gained 1.56 per cent, while the three regional benchmarks averaged a 0.55 per cent increase.

Share buybacks

Buyback momentum continued to decrease over the five sessions ended July 26, with consideration totalling S$8.33 million, down from S$18.3 million the previous week. Seven stocks conducted buybacks over the five sessions, with Duty Free International leading the tally, buying back 1.95 million shares for a total consideration of S$415,495.

This was followed by Keppel Corporation and Sembcorp Marine, which bought back 939,000 shares for a consideration of S$6.64 million, and 400,000 shares for a consideration of S$738,828, respectively.

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Director and substantial shareholder transactions

The five sessions spanning July 20 to 26 saw more than 30 primary-listed stocks lodge over 70 changes in interests for directors and substantial shareholders. Company directors filed 10 acquisitions and one disposal, while substantial shareholders lodged 13 acquisitions and nine disposals.

UOB-Kay Hian

Wee Ee Chao, who serves as chairman and managing director of UOB-Kay Hian, continued to increase his total shareholding in the regional broking and corporate finance services firm via three open market transactions between July 20 and 25. Mr Wee bought a total of 66,000 shares during this period, at prices ranging between S$1.300 and S$1.33786 per share. This lifted his total interest to 27.55 per cent from 26.51 per cent as at the end of 2017.

For the three months ended March 31, 2018, UOBKH reported an 18.9 per cent year-on-year increase in total income to S$108.7 million, while profit after tax jumped 29.3 per cent to S$26.1 million.

Ho Bee Land

Listed on SGX Mainboard in 1999, the real estate development and investment company has a portfolio of residential, commercial and high-tech industrial projects spanning Singapore, China, Australia and the UK.

On July 20, chairman and chief executive officer Chua Thian Poh raised his total shareholding in Ho Bee Land to 75.006 per cent, through an off-market purchase of 4.5 million shares for a consideration of S$10.5 million.

Mr Chua, who has been gradually increasing his total stake in the property developer over the past year, held a total interest of 73.9464 per cent as at July 13, 2017.

Mr Chua - the founder of Ho Bee Land - is responsible for the group's strategic planning and direction, as well as its financial and investment decisions.

He serves on the boards of several other companies and community organisations, and was appointed an alternate member of the Council of Presidential Advisers in April 2017. The notable philanthropist was also named in Forbes Asia's Heroes of Philanthropy list in 2014.

For the three months ended March 31, 2018, Ho Bee Land reported a 2.1 per cent year-on-year decline in total operating income to S$50.2 million. Net attributable profit fell 12.3 per cent to S$49.4 million, largely due to a gain from the sale of an investment property in London in the year-ago quarter.

China Jinjiang Environment

China Jinjiang Environment, a forerunner in China's waste-to-energy (WTE) industry, is one of the country's largest private operators in terms of waste treatment capacity. Listed on SGX Mainboard in August 2016, the group runs 21 WTE facilities in 12 provinces, autonomous regions, and centrally administered municipalities in China, with a current waste treatment capacity of 30,980 tonnes per day.

On July 20, Whitel Management Co Ltd became a substantial shareholder of Jinjiang Environment with a deemed interest of 12.58 per cent, after entering into an agreement to purchase 180,620,574 shares for a total consideration of S$117.4 million.

Whitel is indirectly wholly owned by a fund managed by Hopu Investments, which is a private equity firm that conducts investments in China.

Prior to this transaction, Planet Investment Ltd, an investment vehicle indirectly owned by another fund managed by Hopu, held 15,029,400 shares in Jinjiang Environment, which translates into a shareholding of 1.05 per cent.

Hopu was founded in 2008 by former Goldman Sachs China partner Fang Fenglei, former Goldman Sachs co-head of Asia ex-Japan Investment Banking Richard Ong, and former KPMG China head Dominic Ho.

For the three months ended March 31, 2018, Jinjiang Environment reported a 35.4 per cent year-on-year gain in revenue to RMB754.9 million, while net attributable profit fell 20.9 per cent to RMB100.8 million.

Allied Technologies

Allied Technologies, which started operations in 1994, was listed on SGX Mainboard in 2003 and transferred to the Catalist board in May 2017. The group provides precision manufacturing services, including design and product development, prototyping services, tool and die fabrication, mass production, plastic injection moulding and mechanical sub-assembly, as well as box assembly services.

On July 24 and 25, substantial shareholder Lim Tah Hwa made four disposals - comprising two open-market transactions and two married deals - totalling 235.4 million Allied shares. The total consideration from the four transactions amounted to S$11.1 million.

Following these disposals, Mr Lim's total shareholding in Allied Tech fell to 9.49 per cent from 22.79 per cent.

In a separate filing on July 24, executive director Kenneth Low Si Ren raised his direct shareholding in Allied to 1.81 per cent from 1.13 per cent, through an off-market purchase of 12 million shares for a total consideration of S$600,000.

Mr Low, who was appointed to his role on June 27, 2018, is responsible for managing and overseeing the group's strategic investments and corporate development activities.

Since 2007, Mr Low has managed and overseen investments in various seed and growth-stage companies in the industries of e-commerce, payments, sports and entertainment. These investments have included both debt and equity structures, and have focused on the South-east Asian and Greater China regions, the company said in a filing.

In March 2018, Allied received shareholders' approval to diversify into a new business arena, mainly in e-commerce and related technologies, such as e-payment systems and platforms.

This is aimed at achieving diversified returns for shareholders as the group seeks to build a new pillar of growth in the years ahead.

In early April 2018, Allied completed the acquisition of Asia Box Office Pte Ltd, marking its first move into the e-commerce and event ticketing industry.

For the three months ended March 31, 2018, Allied reported a 21 per cent year-on-year rise in total revenue to S$26.9 million, while net attributable profit sank 39 per cent to S$516,000.

Vicplas International

Vicplas, which listed on SGX's Sesdaq second board in 1999 and was transferred to the Mainboard in 2009, makes and distributes plastic building products, including uPVC pipes, pipe fittings and electrical conduits. It also designs, develops and manufactures innovative medical devices through its subsidiary, Forefront Medical Technology.

Based on a July 20 filing for a transaction dated July 19, Vicplas director Robert Gaines-Cooper raised his total shareholding to 59.32 per cent through an off-market purchase of 2 million Vicplas shares for a total consideration of S$196,000.

Mr Gaines-Cooper, who has been accumulating Vicplas shares over the last few months, had a total interest of 58.05 per cent in the company as at Jan 18, 2018.

Mr Gaines-Cooper, 80, serves as a member of the Remuneration and Strategy Committees, and is a Fellow of the Royal Society of Medicine.

For the half-year ended Jan 31, 2018, Vicplas reported a 4.6 per cent year-on-year increase in revenue to S$34 million, while net attributable profit fell 7.8 per cent to S$1.53 million.

Jadason Enterprises

Jadason, which began its operations in 1980, is a leading supplier of equipment and supplies to the printed circuit board (PCB) industry in Asia. Listed on SGX Mainboard in 2000, it has a distribution network spanning China, Hong Kong, Japan, Malaysia, Singapore, Thailand and Taiwan.

On July 23, substantial shareholder Liaw Hin Hao continued to boost his direct stake in Jadason through an open-market purchase of 225,600 shares for a total consideration of S$9,217.30. The latest transaction lifts his direct stake to 7.4466 per cent from 6.0834 per cent as at Dec 29, 2017.

For the three months ended March 31, 2018, Jadason reported a one per cent year-on-year fall in revenue to S$13.2 million, while net attributable profit declined 93 per cent to S$21 million.

  • The writer is a director of research & products at Singapore Exchange (SGX). To read SGX's market research reports, visit sgx.com/research.