INSIDE INSIGHTS

Directors of Q & M, Lian Beng and Fortress Minerals raise stakes

Published Mon, Feb 1, 2021 · 05:50 AM

FOR the five local trading sessions that spanned Jan 22 to 28, the Straits Times Index (STI) declined 3.2 per cent with the Nikkei 225 Index, Hang Seng Index and S&P/ASX 200 Index also averaging a 3.2 per cent decline. This has brought the STI's total return for the 2021 year to Jan 28 to 2.7 per cent.

Within the STI, DBS Group Holdings, OCBC and United Overseas Bank have seen the highest net institutional inflows in the 2021 year to Jan 28, while outside the STI, the highest net institutional inflows were logged by technology trio Fu Yu Corporation, AEM Holdings and UMS Holdings.

The three stocks that have seen the highest net market maker and liquidity provider inflows in the 2021 year to Jan 28 include Singapore Telecommunications, Yangzijiang Shipbuilding Holdings and CapitaLand.

Over the five sessions, the iEdge S-Reit Leaders Index declined 3.1 per cent, bringing its total return for the 2021 year to Jan 28 to 1.1 per cent.

Among the business trusts, stapled trusts and Reits of the S-Reit sector, Keppel Reit, Frasers Centrepoint Trust and Ascendas India Trust were recipients of the highest net institutional inflows in the 2021 year to Jan 28.

Share buybacks

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There were six primary-listed stocks conducting share buybacks over the five sessions with a total consideration of S$239,973.

The significant number of companies reporting full year results this earnings season has coincided with a slowdown in buyback activity last week, with just S$2.0 million filed the week before.

Global Investments bought back one million shares on Jan 22, at an average price of 14.58 cents per share.

As of Jan 28, its current buyback mandate had seen Global Investments purchase 3.79 per cent of its issued shares (excluding treasury shares) on the current mandate.

The preceding share buyback mandate saw Global Investments buy back 8.52 per cent of its issued shares (excluding treasury shares).

HC Surgical Specialists bought back 124,100 shares for a consideration of S$54,634, at an average price of 44.02 cents per share. As at Jan 28, its current buyback mandate had seen HC Surgical Specialist purchase 1.01 per cent of its issued shares (excluding treasury shares) on the current mandate.

Director and substantial shareholder transactions

The five trading sessions saw 75 changes in director interests and substantial shareholdings filed for less than 40 primary-listed stocks.

This included eight company director acquisitions, with one disposal filed, and substantial shareholders filing as many as 10 acquisitions and 13 disposals.

Q & M Dental Group (Singapore)

On Jan 25, Quan Min Holdings Pte Ltd acquired 15,810,000 shares of Q & M Dental Group (Singapore) (Q & M) for a consideration of S$6,324,000.

At an average price of 40 cents per share, this took Quan Min Holdings' total interest in Q & M from 57.09 per cent to 59.09 per cent.

This increased the total interest of Q & M founder and group CEO Ng Chin Siau in the company from 58.55 per cent to 60.56 per cent.

The majority of Dr Ng's interest in Q & M is by virtue of his direct shareholding in Quan Min Holdings.

He has gradually increased his total interest in Q & M from 49.88 per cent at the beginning of 2018.

Dr Ng is responsible for the corporate direction of the group, leading it in all aspects of its business strategies, policy planning and business development in Singapore and overseas.

Back on Sept 15, Q & M announced its 51 per cent subsidiary Acumen Diagnostics obtained the healthcare institution licence issued by the Ministry of Health to offer clinical laboratory testing services for the Sars CoV-2 RNA, joining in Singapore's national efforts in Covid-19 testing, infection control and contact tracing.

Lian Beng Group

Between Jan 21 and 25, Ong Sek Chong & Sons acquired 1.3 million shares of Lian Beng Group.

The consideration of the three acquisition filings was S$599,500 at an average price of 46.1 cents per share.

This took the total interest of Ong Sek Chong & Sons in the homegrown construction group from 31.45 per cent to 31.71 per cent.

These transactions closely followed the acquisition of 902,000 shares between Jan 18 and 20 at 44.8 cents per share.

Ong Sek Chong & Sons' total interest in Lian Beng Group has gradually increased from 29.62 per cent in August 2019.

Lian Beng Group chairman and managing director, Ong Pang Aik, and executive director, Ong Lay Huan maintain deemed interests in Ong Sek Chong & Sons.

Mr Ong Pang Aik now maintains a 37.44 per cent total interest in Lian Beng, while Ms Ong maintains a 34.92 total interest.

Geo Energy Resources

A filing on Jan 27 noted that Geo Energy Resources substantial shareholder Heah Theare Haw's direct interest in the company crossed above the 7.0 per cent threshold.

The transaction saw 500,000 shares acquired at 18.6 cents per share, increasing Mr Heah's direct interest in Geo Energy Resources from 6.97 per cent to 7.01 per cent.

He first registered as a substantial shareholder of Geo Energy Resources on April 1, 2015 with the then acquisition taking his direct interest from 4.89 per cent to 5.58 per cent.

His substantial shareholding crossed above the 6.0 per cent threshold on June 21, 2019, with the acquisition of 2 million shares at 15.3 cents per share.

Back on Nov 12, Geo Energy reported a net profit of US$91.6 million for its 9MFY20 (ended Sept 30) mainly due to higher sales volume and other income from the gain on repurchases of the senior notes, as well as lower production cash cost and lower finance costs following the repurchases of the senior notes.

These were partially offset by the lower average selling prices, higher other expenses and higher general and administrative expenses.

Fortress Minerals

On Jan 8, 2021, Fortress Minerals entered into a conditional share purchase agreement with Monument Mining for the acquisition of the entire issued and paid-up share capital in Monument Mengapur Sdn Bhd for a cash consideration of US$30 million.

In connection with the proposed acquisition, Fortress Minerals had entered into the royalty agreement for the payment of the gross revenue royalty by the company at the rate of 1.25 per cent of gross revenue from the sale of the final products to the vendor subject to the completion of the proposed acquisition and in accordance with the terms thereof.

Fortress Minerals maintain the proposed acquisition will increase the group's inferred mineral resources to 17.57 million tonnes grading 37.44 per cent Fe iron in addition to the Bukit Besi indicated mineral resource of 0.36 million tonnes grading 40.74per cent Fe iron all from within magnetite mineralisation domains and bolster its objective to become a significant regional player in the iron ore industry.

On Jan 11, Fortress Minerals reported its 9MFY21 (ending Nov 30) NPAT of US$12.2 million had already exceeded the FY20 full year NPAT of US$6.5 million.

In a recent kopi-C interview with SGX, Mr Chee noted that while the iron ore price index is determined by market forces, Fortress Minerals expects high-grade ore to command a premium over lower grades given its higher iron content and low impurities, which enhances production efficiency levels for steel makers.

In terms of resources, the group's joint iron ore reserves committee (JORC) resource estimates expanded to indicated mineral resource of 0.36 million tonnes grading 40.74 per cent Fe iron and inferred mineral resource of 6.82 million tonnes as of Feb 29, 2020 in Bukit Besi, despite depletion through production and sales.

Mr Chee noted that apart from the discovery of new resources, which can replenish the mined resource and add to opportunities for future mining, Fortress Minerals has adopted a low-cost exploration strategy, continuously adding new resources net of depletion, extending the life of the mine.

The company had also observed improvements in the financial and social well-being of residents in the Bukit Besi Mine vicinity - and over the years, Fortress Minerals has met its needs by providing stable employment and basic infrastructure.

Trading at 20 cents per share at the end of October 2020, the share price of Fortress Minerals had moved to a high of 35 cents on Jan 13, before ending on Jan 28 at 28.5 cents.

Average daily trading turnover in the explorer, producer and seller of high-grade iron ore concentrate has been more than S$700,000 a day in the 2021 year to Jan 28.

This is more than 40 times its average daily trading turnover for the 2020 year.

Fortress Minerals mines the iron ore concentrate from its East, Valley and West Deposits of its Bukit Besi Mine situated in the district of Dungun, state of Trengganu in Malaysia.

It then sells these iron ore concentrates primarily to steel mills and trading companies.

Fortress Minerals executive director and CEO, Ivan Chee Yew Fei maintains a 50.25 per cent deemed interest in the company.

He has been leading Fortress Minerals since 2011, taking on the role of executive director cum chief executive officer. In 2018, he was conferred the Legacy and Business Excellence of the Year title by Malaysia's SME & Entrepreneurship Business Awards.

On Jan 27 and 28, Fortress Minerals non-executive and non-independent director Loong Ching Hong acquired 300,000 shares of the company for a consideration of S$88,250.

At an average 29.4 cents per share, this took his total interest in Fortress Minerals from 1.31 per cent to 1.37 per cent.

Mr Loong's preceding acquisitions were on Sept 18 2019, with 20,000 shares bought at 22.0 cents per share and 21,000 shares acquired at 23.0 cents per share on Aug 28, 2019.

Back on May 2, 2019, Mr Loong also acquired 1,250,000 shares in a married deal also at 22 cents per share.

Enviro-Hub Holdings

On Jan 22, Enviro-Hub Holdings executive chairman Raymond Ng acquired 500,400 shares of the environmental management solutions group for a consideration of S$45,036 at 9.0 cents per share.

This took his total stake in the stock from 33.81 per cent to 33.85 per cent.

The acquisition followed Mr Ng's acquisition of 1.2 million shares at 9.6 cents per share between Jan 14 and 18.

Mr Ng is responsible for the group's overall management, business development, investment decisions as well as strategic direction and planning.

ABR Holdings

On Jan 21, ABR Holdings managing director Ang Yee Lim acquired 59,000 shares of the company for a consideration of S$40,352 at an average price of 68.4 cents per share.

This took his stake in the stock from 50.54 per cent to 50.57 per cent.

Mr Ang has over 10 years of experience in the food and beverage business and more than 30 years of experience in property development and investment in Singapore, Malaysia, Indonesia and Thailand.

A-Sonic Aerospace

Between Jan 20 and 21, A-Sonic Aerospace CEO Janet LC Tan acquired 25,800 shares of the company for a consideration of S$8,514 at 33.0 cents per share.

This took Ms Tan's total interest in the company from 54.28 per cent to 54.32 per cent.

A-Sonic Aerospace has two areas of businesses, aviation and logistics, and operates in 28 cities in 16 countries, spanning four continents in Asia, North America, Sub-Continent India, and Europe.

Ms Tan's responsibilities include setting the overall long-term business direction, developing business strategies, and implementing growth strategies for A-Sonic Aerospace and its subsidiaries.

On June 30, 2020, A-Sonic Aerospace announced that SGX had granted the company a 12-month extension for the company to meet watch-list exit requirements, to June 4, 2021.

For its H1FY20 (ended June 30) A-Sonic Aerospace achieved profit before tax of US$5.15 million (S$7.21 million), with its net book value strengthening to US$33.98 million as at June 30, 2020.

In its quarterly update filed in November, the company maintained that it remained on the SGX watch-list solely because it had not achieved an average daily market capitalisation of S$40 million.

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

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