Reports » Singapore

Singapore stock market and companies daily report (Yangzijiang Shipbuilding,United Industrial Corp,Sinotel Technologies ) (August 31, 2010)

Contributed by Shares Investment

By Shares Investment

Yangzijiang Lands 28 Shipbuilding Deals Worth US$915m

Yangzijiang Shipbuilding (Hldgs) has entered into 28 shipbuilding contracts with a total value of about US$915m since July 1. The new contracts will see Yangzijiang building mostly dry bulk carriers and 8 container vessels, which will be scheduled for deliveries from 2011 to 2013. Out of the 28 contracts, 5 contracts worth about US$127m have been factored into the order book after receiving initial deposits from the ship-owners. 15 other contracts worth US$489.5m will be effective following received deposits from the ship-owners. The remaining 8 which make up US$298.1m are options for the ship-owners to exercise. Separately, Yangzijiang’s subsidiary, Jiangsu New Yangzi Shipbuilding Company intends to enter into a three-way JV with a top Chinese ship-designing company, and a marine components manufacturer to provide design services for commercial vessel building and marine engineering projects.

Significance: The contract wins affirm Yangzijiang’s track record and ability to deliver a range of solutions to its customers’ satisfaction. Meanwhile, the proposed JV acts as a complement to Yangzijiang’s shipbuilding business and also offers an alternative source of income for the firm.

UIC To Redevelop UIC Building At 5 Shenton Way

United Industrial Corp (UIC) has paid a development charge of $160.1m to the Urban Redevelopment Authority (URA) for the redevelopment of UIC Building at 5 Shenton Way. The redevelopment will be based on a 60% residential and 40% commercial scheme with a gross floor area of about 926,589 sq ft. This followed UIC’s announcement that it had won in-principle approval from the URA to convert the building into a mainly residential development. The redevelopment will be financed by internal funds and bank borrowings. Earlier this month, UIC reported that net profit rose to $79.1m for 2Q10 from a net loss of $251.8m a year ago. Revenue rose 7% to $291.8m from $271.5m in the corresponding period last year.

Significance: The integration of residential space in UIC Building may help to diversify income source from the building such that it would not be totally dependent on office rents. The redevelopment also places UIC in a good position to capitalise on the rising luxury home prices.

Sinotel Launches Rights Issue To Raise $23.6m

Sinotel Technologies has launched a 1-for-4 rights issue to raise gross proceeds of up to $23.6m, which will involve up to 84.35m new shares at an issue price of $0.28 each. The issue price represents a 23.3% discount to the stock’s closing price of $0.365 on Aug 27. Based on Sinotel’s issued share capital of 337.4m shares, the rights issue equates to about a quarter of the company’s issued share capital. The net proceeds will be utilised to expand its business of providing telecoms services to end-users, possible M&As to expand such services, and to fund other capital expenditure.

Significance: The rights issue provide Sinotel’s shareholders the chance to participate in the firm’s growth at a discounted price. This opportunity seems enticing, particularly following China State Council’s announcement of a scheme for the integration of three telecommunication networks whereby several key cities in which Sinotel has a presence have been hand-picked to pilot the program.

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