Reports » Singapore

Singapore stock market and companies daily report (Wilmar International, Tai Holdings, C&O Pharmaceutical ) (August 24, 2010)

Contributed by Shares Investment

By Shares Investment

Wilmar Adds 2 More Sugar Assets In Indonesia And Singapore

Wilmar International (Wilmar), the world’s No.1 listed palm oil firm, said it will buy an Indonesian sugar refinery and a Singapore sugar trading firm, Windsor & Brook Trading to complement the development of plantations in Papua. The company said it had bought PT Jawamanis Rafinasi (JMR), an Indonesian sugar refinery with a throughput of 1,000 tonnes per day (tpd), but is licensed to increase it up to 1,600 tpd. Its refinery caters to the industrial sugar market with a customer base comprising multi-national corporations and large Indonesian food manufacturers. Wilmar said the purchase ‘will form an integral part of Wilmar’s future Indonesian sugar business’, providing downstream refining and distribution to complement its plans to develop sugar plantations and milling operations in Papua. The JMR purchase is expected to be completed in the fourth quarter of this year and is subject to certain conditions, including regulatory approvals from the Indonesian Capital Investment Coordinating Board.

Significance: With squeezed profit margins that caused by rising raw material prices, the latest two deals follow Wilmar’s acquisition of Australian sugar giant CSR last month enable company to diversify further from its heritage of palm oil, which accounts for almost half of its pre-tax profit.

Wing Tai’s FY10 Bottomline Surges More Than 7-Fold

Property group Wing Tai Holdings’ FY10 net profit rose more than 7-fold on the back of a 64% jump in revenue, mainly contributed from the development properties sold in Belle Vue Residences as well as the progressive sale recognized from The Riverine by the Park in Singapore. For 4Q10, Co returned the black with a net profit of $68.9m, a reversal from the net loss of $53.9m a year ago. Revenue was up 17% from a year ago to $222.3m. A dividend of five cents a share for the financial year, comprising a first and final dividend of three cents a share as well as a special dividend of two cents a share has also been declared. Going forward, Wing Tai intends to focus on market segments that offer better prospects over the medium to long term, such as the high-end residential sector, said chairman Cheng Wai Keung. The group submitted two bids to buy and redevelop a landmark commercial site at City Hall, with the historic Capitol Theatre, Capitol Building and Stamford House on it, at the close of the state tender on Aug 18. Next up, Wing Tai will launch a new development on the site of the former Anderson 18, which the group is developing through a joint venture with City Developments. The group also intends to continue selling units in the 176-unit Belle Vue Residences and the 140-unit Helios Residences.

Significance: Singapore economy expanded by 17.9% in 1H10. Coupled with improved property market sentiments, outlook seems promising for Wing Tai.

C&O’s FY10 Earnings Lifted By High-Margin Drugs

C&O Pharmaceutical (C&O) has reported a 62.6% jump in its 4Q10 net profit to HK$60m ($10.5m), as revenue rose 16% to HK$189.3m. FY10 net profit on the other hand increased 44% on the back of a 18.7% jump in revenue, buoyed mainly by higher sales of exclusive and own-brand products, which carry high margins. Meanwhile, a final dividend of 1.35 Singapore cents per share, making its total FY10 payout 8.15 Singapore cents per share has been declared. According to executive chairman Gao Bin, the growth of C&O is a result of streamlining of operations, focusing on high-margin products and consistently building of C&O brand. Phillip Securities (PS) believes that if C&O introduces Edarvone, a prescription drug used to treat stroke, which C&O is licensed to manufacture and sell on a commercial basis, the company will benefit from ‘a major earnings driver’ as gross margins for the drug are estimated to be ‘in the high 80%’. PS maintained ‘BUY’ call on C&O, with a target price of 53 cents.

Significance: The market for Edarvone is huge in China with an ageing population, and there are limited pharmaceutical companies capable of producing this drug. Coupled with four of C&O’s research projects were chosen for state sponsorship and two own-brand products were launched in this year, sales will continue to increase as government healthcare funding and demand for healthcare services rises.

This article is contributed by Shares Investment. Visit Sharesinv.com for the latest Singapore, Malaysia and China stock market news and reports.