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INSIDE INSIGHTS

Korean healthcare group ups SMG stake to 24%

FOR the five trading sessions through to Feb 28, the STI declined 2 per cent, with mixed performances across the region as the Nikkei 225 Index, Hang Seng Index and S&P/ASX 200 averaged a 0.2 per cent decline.

This has brought the total return of the STI for the first two months of 2019 to 4.8 per cent.

Share buybacks

There were a dozen stocks conducting share buybacks over the five sessions ended Feb 28.

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The consideration totalled S$18.5 million, up from S$10 million for the preceding five sessions.

Singapore Technologies Engineering, Oversea-Chinese Banking Corporation, StarHub, Keppel Reit and Global Investments led the buyback tally. Starburst Holdings commenced a new buyback mandate on Feb 27, buying back 70,600 shares. The mandate had been approved back on April 26, 2018.

The preceding buyback mandate had seen Starburst Holdings buy back 3.3 per cent of its outstanding shares over 28 transactions.

Director and substantial shareholder transactions

Similar to the previous week, the five sessions spanning Feb 22 to 28 saw 35 primary-listed stocks lodge more than 80 changes in director interests or substantial shareholdings.

There were 14 company director acquisitions and no disposals filed, with substantial shareholders filing six acquisitions and five disposals.

Due to the decrease in the total number of issued shares (excluding treasury shares) that arose from StarHub buying back shares on Feb 22, Temasek Holdings (Private) Ltd's deemed interest in StarHub increased to the 56 per cent threshold.

Singapore Medical Group

CHA Healthcare Singapore Pte Ltd (CSG), an international subsidiary of leading Korean comprehensive healthcare group CHA Health Systems (CHA), increased its stake in Singapore Medical Group (SMG) from 6.86 per cent to 24.13 per cent through a married deal on Feb 20.

This involved a share purchase agreement (SPA) with existing SMG shareholders which included three directors: non-executive chairman Tony Tan Choon Keat, executive director and CEO Beng Teck Liang, and executive director Wong Seng Weng. CHA acquired 83 million SMG shares for a consideration of S$50,215,000.

As highlighted in a press release, CHA and SMG first formalised their strategic relationship In early 2017 when CSG became a significant shareholder in SMG though a S$15 million private placement. The two parties have since worked closely together on a number of strategic initiatives to support the group's growth and to cooperate on joint regional expansion opportunities.

SMG also noted that CHA, which is headquartered in Seoul after being founded in 1960, is one of the largest and most diversified private healthcare service groups in Asia.

As a group, CHA currently operates 26 general hospitals and medical centres in six countries around the world, with more than 1,300 doctors, 2,500 nurses and 500 researchers and medical staff and serving some three million patients annually.

In the US, CHA operates the largest privately owned, for-profit general hospital in Los Angeles, located in Hollywood.

On Feb 19, SMG reported its FY18 net profit increased 52.1 per cent from FY17 to S$12.9 million.

Management noted that revenue surged 25.1 per cent from FY17 to S$85.1 million which was attributed to growth initiatives in key specialist verticals such as O&G, paediatrics, diagnostics and aesthetics.

TEE International

On Feb 25, TEE International announced it had entered into a term sheet with Top Capital Securities Pte Ltd (Top Capital) for the proposed sale of a 28 per cent stake in its subsidiary, TEE Land, at an indicative price of between S$0.179 and S$0.201 per share, for up to 125.1 million shares.

Between Feb 26 and 27, TEE International managing director and group CEO Phua Chian Kin acquired 1.2 million shares of the listed company for a consideration of S$120,000. This took Mr Phua's total interest in TEE International from 57.57 per cent to 57.81 per cent.

Prior to the two acquisitions, TEE International stated that following the recent rights issuance of 190,742,003 new ordinary shares in the capital of the company, Mr Phua's total interest in Tee International had been reduced from 61.68 per cent to 57.57 per cent.

This rights issue raised funds for the expansion and growth of existing business, acquisitions and new investments, and for general working capital requirements of the group.

Mr Phua has been the group CEO and managing director of TEE International since 2000.

He is instrumental in spearheading the expansion and growth of TEE Group and is also responsible for TEE Group's overall management, investment decisions, direction and policy decision-making.

JB Foods

On Feb 27, JB Foods CEO Tey How Keong acquired 101,300 shares of the listed company for a consideration of S$69,897. The married deal took Mr Tey's total stake in JB Foods to 45.93 per cent.

The majority of Mr Tey's holdings in JB Foods comprises a deemed interest in shares held by JB Cocoa Group Sdn Bhd.

AP Oil International

On Feb 27, AP Oil International director and group CEO Ho Chee Hon acquired 300,000 shares of the listed company for a consideration of S$61,500. This increased Mr Ho's direct interest in AP Oil International from 6.788 per cent to 6.970 per cent.

Mr Ho joined the group in 2005 and was appointed to the board in July 2009. He was promoted to group deputy CEO in September 2012 and later group CEO in May 2015.

His responsibilities, apart from working with the chairman in overall corporate directions, business policy and strategic planning, include overseeing the day-to-day operation of the lubricant business.

On Feb 26, AP Oil International reported FY18 total revenue decreased by 15 per cent over FY17 to S$78 million due mainly to decreases in manufacturing and franchising volume during the year.

PropNex

On Feb 26, PropNex co-founder, executive chairman and CEO Mohamed Ismail Gafoor acquired 100,000 shares of the stock for a consideration of S$56,000.

The acquisition took his total interest in PropNex from 64 per cent to 64.02 per cent. The majority of Mr Mohamed Ismail's deemed stake is via his 62 per cent ownership of P&N Holdings Pte Ltd.

Mr Mohamed Ismail's total interest in PropNex has gradually increased from 62.14 per cent in July 2018.

He is responsible for the group's strategic direction and oversees business operations as a whole including functions such as compliance, finance, human resources, legal, operations, sales, marketing and information technology.

Hai Leck Holdings

On Feb 22, Hai Leck Holdings (Hai Leck) founder and executive chairman, Cheng Buck Poh acquired 60,000 shares of the listed company for a consideration of S$31,424.

This took his total interest in the integrated services provider from 84.04 per cent to 84.07 per cent.

Mr Cheng is responsible for charting corporate directions and strategies for Hai Leck. His total interest in Hai Lek was 83.34 per cent at the end of August 2018. Mr Cheng started Hai Leck Engineering as a sole proprietorship in 1971.

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