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Singapore stock market and companies daily report (CapitaLand, Tiger Airways, OSIM International) (October 31, 2012)

Contributed by Shares Investment

CapitaLand Signs Strategic Co-Operation Agreements With 4 Chinese Banks
CapitaLand announced that it has entered into strategic co-operation agreements with Agricultural Bank of China, Bank of China, China Construction Bank and Industrial and Commercial Bank of China to grant a credit limit allocation of up to Rmb50 billion (about $10 billion) to CapitaLand Group’s China businesses. CapitaLand has a diversified portfolio comprising homes, offices, shopping malls, serviced residences and mixed developments in China, bestowing it as one of the top foreign real estate companies in Mainland. Since January 2012, CapitaLand has committed $3 billion of new investments, with Singapore and China accounting for the bulk of the new investments.
Significance: The move will provide funding for CapitaLand’s growth plans in the residential, commercial, retail, serviced residence, integrated developments and financial services sectors across China. As at 30 September 2012, 38 percent of CapitaLand’s total assets (excluding treasury cash) amounting to $13 billion are in China.

Tiger Airways Proposes Divestment Of Tiger Australia; 2Q12 Results Improves
Following the proposed divestment of a 60 percent stake in Tiger Australia to Virgin Australia for A$35 million, Tiger Airways continues to surprise investors with an improved set of results for the quarter ended 30 September 2012. Tiger Airways’ 2Q12 overall group loss narrowed from $49.9 million to $18.3 million, underpinned by a 79 percent leap in revenue to $196.7 million. Notably, Tiger Australia trimmed its 2Q12 operating losses from $27 million to $20 million as services were reinstated. Meanwhile, Tiger Singapore turned in an operating profit of $5 million for the quarter, compared to a loss of $12 million a year ago. Passenger traffic grew 11.8 percent, while passenger load factor increased 1.2 percentage points to 82.1 percent.
Significance: The proposed divestment enables Tiger Australia to tap opportunities for further expansion in terms of fleet and market reach in Australia. Notably, Tiger Airways announced that Tiger Australia will more than triple its fleet of Airbus A320 in five years.

OSIM Unperturbed By China Slow down
Despite the slew of negative news signalling a China slowdown, OSIM International’s (OSIM) founder, chairman and chief executive, Ron Sim remains unperturbed and expressed that people who think China is going to collapse is in for a big loss. With over 270 outlets in the country, revenue contribution from China to OSIM’s total revenue stands at more than 20 percent. Sim expressed that the China market remains very profitable and that it’ll be a key focus for OSIM in the next 10 to 20 years. Sim stressed that he is careful to only open stores with the right developers, and close them when they are underperforming. He added that he wants quality stores that deliver, and that sales per square foot is more important. OSIM is also setting up franchise operations in Europe and other markets such as Brazil, Russia and South Africa.
Significance: OSIM has dissipated China’s slowdown fears as its 3Q12 results showed a 49 percent increase in net profit, which also showed a 15 consecutive growth quarter. The move towards other markets mentioned above also projects further potential growth prospects which could be achieved in those markets.