Sunday, June 12, 2016

KepInfraTrust - Basslink

Just read the news that  Basslink has return to service after being down since late dec 2015.This is indeed good news.It also tell me that repairing undersea cable is not a trivial affair.Currently, KepInfraTrust do not rely on Basslink Cashflow for DPU but rather used it to pay down debt it own for the asset.

Thursday, June 9, 2016

NOL Is Gone, What's next?

Today is a sad day in the history of corporate Singapore. A national icon is officially
gone. The offer for NOL by the French shipping group has turned unconditional.There are grave implications. Without a strong anchor shipping line, Singapore position as a shipping hub will be eroded in the longer term or completely diminished.

According to the outgoing CEO Ng YC, NOL was reluctant and slow to adjust to changes
where shipping services are increasingly commoditized. NOL relied on premium services and it cost structures are higher than its peers.

Let me share a story. In the early days of ecommerce in China when Alibaba was still just one of the guys, Ebay bought a company called EachNet which was rapidly establishing itself as the leader in ecommerce in china. Its CEO was  a US ivy league trained PRC.On a interview with a broadcasting programme, he openly snide at JaMa's approach of not charging its suppliers on its site as it would lead to a deterioration of service and quality as any 'Tom, Jack or Harry'  could be a supplier on Alibaba's Taobao site. On the other hand Eachnet imposed a charge on its supplier to host itself on its site,so it will provide a impetus for quality and control.
The rest is history.

Currently, Uber and Didi is locked in a ferocious struggle in China as both seek to grow as fast as possible to achieve scale over its competitor at the cost of losing billions a year. JackMa and Tencent are using the same tricks of running your competitor into the ground by showing who can 'tahan' the bleeding longer. Uber is no Eachnet but is still losing ground at this stage to Didi.

The moral of the story is that quality of  management matter. NOL problem is that it was not able to appoint the right people to run the company like its own baby where everyday you go to sleep worrying when will your competitor eat you up for lunch.That why you see Ng YC can still smile and tell a story for press interview.Frankly, no saf or civil servant should be 'parachuted' to run a listed company without spending at least 8 to 10 years working through the ranks and go through some excruciating business cycles. What more is that they have a CFO whose time is split between his CFO and MP roles. You don't do that when your company is in dire straits and require your utmost attention. You don't do justice to your shareholders,employees and customers.

Now NOL is gone. What's next? Keppel, SembCorp, SIA, SGX, Singpost etc are all potential targets.

For me, I had the good fortune to divest NOL when it was above $2.

Wednesday, June 8, 2016

China Merchant Pacific Update

Accordingly, as at 5.00 p.m. (Singapore time) on 8 June 2016, the total number of (a) Shares owned, controlled or agreed to be acquired by the Offeror and its Concert Parties; and (b) valid acceptances of the Offer, amount to an aggregate of 1,568,880,555 Shares, representing approximately 87.43% of the total number of issued Shares of the Company.

I have yet to accept the GO offer. Wait till next week to see what happen. No hurry.

Tuesday, May 31, 2016

Technics Oil & Gas - Jialat

Just read that Technics Oil & Gas has applied to the courts to be placed under judicial
management. This is quite jialat. Luckily I am not vested in this counter but I am vested
in Soilbuild Trust where Technics Oil & Gas has a leasing agreement on its current premises.

Tuesday, May 10, 2016

OUE Comm Reit 1QFY2016

Revenue                          $42.9m
NPI                                  $33.3m
Amount Avail For Dist   $17.0m
DPU                                1.32 cents
NAV                                91 cents
Gearing                            40.5%
Avg Cost Of Debt            3.56%
Avg Term Of Debt           2.04 years
Interest Cover                   3.4 years

Monday, May 9, 2016


Basic Cable TV                       759K (ARPU: NT$ 528)
Premium Digital TV                149K (ARPU: NT$173)
Broadband                                195K (ARPU: NT$493)

Revenue                                    $77,832,000
EBITDA                                    $46,014,000 (EBITDA Margin: 59.1%)
Gearing                                      46.5%
Interest Cover                            Greater than 4
NAV                                           82 cents

Sunday, May 8, 2016

China Merchant Pacific - Buyout Offer $1.02/shr

China Merchant Group has launched a conditional voluntary cash offer of $1.02/shr for
China Merchant Pacific. the price will not be adjusted for the dividend to be paid on 19th May( 3.5 cents /shr).

The offer represent a premium of 22.9% over the last traded price of 83 cents on 5th May before trading halt pending news release.The Offeror current own 75.9% of the shares and intend to privatise and delist the company.

Frankly, I sort of saw this coming since last year when the the Offeror (through Easton Holding) took up all the rights issue at $1/shr when the share price was trading below $1.You list a company so that you can raise capital but if you cannot effectively raise capital and you own more than 75% of the company then it will make better sense to delist. Maybe their intention is to delist and then relist on HKEx later on.

As for me, I had the fortune to bought an additional 10 lots at 76 cents two months earlier
on top of what I already own. All in all, my average purchase price/shr is around 60 cents (exclusive of dividends). So the current buyout offer is attractive to me. The only remorse is that there is less one good company to invest in SGEx.