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INSIDE INSIGHTS

Focus on earnings; SLB Development and Asia Healthcare Specialists debut

FOR the five sessions ended April 26, the Straits Times Index (STI) declined 0.8 per cent, with the benchmarks of Japan, Hong Kong and Australia averaging a similar 0.6 per cent decline. The STI has continued to be the strongest of these benchmarks in the 2018 year through to April 26, with a 5.6 per cent total return, compared to the three benchmarks averaging a 1.4 per cent decline, while the Dow Jones has declined 1.7 per cent.

On April 20, SLB Development and Asia Healthcare Specialists listed on Catalist. Both stocks came to the market with issue prices of S$0.23 and on their first day of trading ranked among Singapore's 20 most active stocks by turnover. After five sessions, Asian Healthcare Specialists was trading at S$0.305 and is the ninth largest capitalised healthcare play on Catalist.

With the SGX Real Estate Developers & Operators Index down 0.7 per cent over the five sessions, SLB Development was trading at S$0.225, and with its diversified real estate business, is now the third largest capitalised real estate play on Catalist.

During the five sessions, share buyback consideration continued to decline with a total value of S$2.8 million as the March quarterly earnings began in earnest. Eight primary-listed companies bought back their SGX-listed shares over the five sessions.

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The five sessions also saw 48 primary-listed stocks lodge close to 160 changes in director interests or substantial shareholders. There were 28 director acquisitions and no disposals filed, while substantial shareholders filed 18 acquisitions and six disposals.

Keppel Corporation filed eight director acquisitions relating to directors' FY17 remuneration which were approved by shareholders at the April 20 AGM. Keppel Telecommunications & Transportation filed similar acquisitions following its AGM on April 18.

On the Reit front, Mapletree Commercial Trust Management Ltd non-executive director Hiew Yoon Khong acquired 600,000 units of Mapletree Commercial Trust on April 25 at a price of S$1.59 per unit. This took Mr Hiew's total stake in the trust to 0.157 per cent.

Imperium Crown

Last week, substantial shareholder Henry Wee continued to increase his stake in Catalist-listed Imperium Crown. Mr Wee acquired 8 million shares for a consideration of S$536,000 on April 23, then 13.7 million shares for a consideration of S$931,600.

This has brought Mr Wee's stake in the property investment and development stock to 20.29 per cent. His stake in the stock has increased from 14.67 per cent at the end of March. As noted by Imperium Crown, Mr Wee is a businessman with an extensive network, and has over 20 years of experience in investing in China.

An EGM held on March 29 passed the resolutions that the company will grant, and Mr Wee shall acquire, 300 million options with each option carrying the right to subscribe for one new ordinary share - with an exercise price of S$0.085 for each new share.

The company also entered into a share options agreement with its executive director Sun Bowen. Assuming that all of the options are validly exercised, the aggregate gross proceeds from the issuance of the option shares to both parties would be S$51 million.

Proceeds from the exercise of the options are intended to be split 25 per cent to development of projects in Shandong province and 75 per cent to potential future investments in Shandong province.

Roxy-Pacific Holdings

On April 23, Roxy-Pacific Holdings allotted and issued 119,354,850 bonus shares which were listed with effect of the open on April 24, 2018. This bonus offer of one share for 10 went ex-bonus on April 13.

All of the board of directors of Roxy-Pacific Holdings are shareholders, and participated in the issuance. Hence their relative percentage shareholdings remained unchanged.

Roxy-Pacific Holdings executive chairman and CEO Teo Hong Lim also acquired another 180,500 shares of the company on April 19, for a consideration of S$96,568.

Mr Teo is deemed to maintain the majority shareholding of the company with a total stake of 61.72 per cent.

He has been a director of Roxy-Pacific since May 1993 and currently sets out the group's strategies and leads overall management.

Mr Teo noted in the recently released FY17 Annual Report that management will continually seek an optimal mix between the three business segments - property development, property investment and hotel ownership - and balance its asset portfolio both geographically and across sectors for sustainable growth.

Sino Grandness Food Industry Group

Headquartered in Shenzhen, Sino Grandness is an integrated manufacturer and distributor of its own-branded juices as well as canned fruits and vegetables.

On April 20, Sino Grandness Food Industry Group chairman and CEO Huang Yupeng acquired 100,000 shares at an average price of S$0.1986 per share, increasing his direct interest in the company to 35.79 per cent. This also brought the number of company shares acquired by Mr Huang in the month to date to 500,000, with Mr Huang's preceding acquisitions back in September 2017.

In the recently released FY17 Annual Report, Mr Huang noted that e-commerce is a vital part of China's efforts to promote a consumer driven economy and Sino Grandness is constantly positioning itself to capitalise on the opportunities.

He detailed initiatives that were rolled out in FY17 with online sale of its products on www.JD.com and in September 2017, the group entered into an agreement with Wechat Food to distribute its own-branded Garden Fresh beverage products on a new distribution network.

Sapphire Corporation

Sapphire Corporation is an integrated provider of railway infrastructure and mining specialist services which has undergone a major restructuring exercise and corporate transformation over the past three years.

On April 25, executive director and CEO Wang Heng acquired 500,000 shares of the company for a consideration of S$101,138. This has increased Ms Wang's deemed stake in the stock to 28.11 per cent. Ms Wang is also a co-founder and executive director of Ranken Railway Construction Group Co, Ltd as well as its current legal representative.

Hiap Hoe

On April 26, Hiap Hoe CEO Teo Ho Beng acquired 800,000 shares for a consideration of S$696,000, taking his total stake in the stock to 74.46 per cent, from 74.29 per cent. This was a direct acquisition unlike Mr Teo's preceding transactions that had been made through Hiap Hoe Holdings Pte Ltd.

Hiap Hoe is a regional real estate group with a diversified portfolio of hospitality, retail, commercial and residential assets. In the FY17 Annual Report Mr Teo noted that Hiap Hoe's FY17 net profit after tax of S$80.5 million (compared to S$45.4 million in FY16) was largely attributed to the gains on the sale of Marina Tower in Melbourne.

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