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Reports Singapore

Singapore stock market and companies daily report (Stamford Tyres Corp, ValueMax, Yangzijiang Shipbuilding) (December 09, 2013)

December 9, 2013, Monday, 05:54 GMT | 00:54 EST | 10:24 IST | 12:54 SGT
Contributed by Shares Investment

Stamford Tyres Returns T0 Black In 2Q14

- Stamford Tyres Corporation recorded a turnover of $71.5 million in 2Q14, a decline of 12.1 percent as compared to the corresponding period last year.  The decline was attributed to weaker export sales of Sumo Firenza tyres and mining tyres.

- Despite its poorer turnover performance, the company was able to achieve a 5.5 percentage points increase in gross profit margin from 18.3 percent to 23.8 percent in 2H14. This was as a result of an 18 percent reduction in cost of sales and higher contributions from value-added services at the company’s Stamford Tyres Mart retail chain and truck tyre centres.

- Total expenditure decreased 21.1 percent to $66.3 million, mainly due to a $1.7 million other operating income compared to the $3.1 million other operating losses in 1Q14 75.1 percent lesser other operating expenses incurred during this period. Consequently, company was back in black at $4.9 million in 2Q14.

Significance: Stamford Tyres expects its business operating environment to remain challenging in view of uncertainties present in the global economy. In response, the company will continue to optimise its product mix and minimise operating costs in order to enhance performance and boosts its competitiveness.

ValueMax’s 3Q13 Net Profit Shrank 33.2%

- Revenue of ValueMax Group went South in 3Q13 to $81.4 million, from $131.6 million in 3Q12. This represented a 38.1 percent decline in revenue, which was as a result of lower revenue recognised from the retail and trading of pre-owned jewellery.

- On the other hand, gross profit margin in 3Q13 went up from 3.9 percent to 8.5 percent due to higher revenue mix from the company’s pawnbroking business which commands a higher gross margin compared to the retail and trading business.

- Administrative expenses increased 38.8 percent to $3.4 million, mainly attributed to the increase in employee benefits, rental and other operating expenses. Overall performance in 3Q13 was weak and dragged net profit down to $3 million, a 29.3 percent decrease as compared to 9M12.

Significance: As a whole, the pawnbroking industry is facing challenging business conditions amid lower gold prices and the increased level of competition. Moving forward, ValueMax will continue to grow and enhance its brand awareness in order to differentiate itself from its competitors.

Yangzijiang Enters Marine Materials And Supplies Trade

- Yangzijiang Shipbuilding (Holdings) via its subsidiary, Jiangsu New Yangzi Shipbuilding, has incorporated a subsidiary, Newyangzi International Trading (NYIT).

- The newly established subsidiary is incorporated in Singapore, has an authorized capital of US$99.8 million and will be completely owned by Yangzijiang.

- NYIT’s primary business involves international trade activities which includes but not limited to the trading of shipbuilding related materials/supplies and commercial vessels. The rationale of the incorporation of NYIT is to optimise the company’s business operating model as well as to lower funding costs.

Significance: In the long run, by broadening its existing trading platform and tapping on Singapore’s developed capital markets and logistics infrastructure, NYIT is expected to generate an additional revenue stream for Yangzijiang with progressive expansion of its business to third parties.