From 1Q report, the group took in revenue of S$15.4 mil but after expenses, the group is in loss of S$6.1 mil.
If we take revenue S$15.4 mil and minus from the expenses, the group is left with S$52,000 as profit EBITDA. Other expenses of S$4.785 mil further hit the group and brings it to negative profit. The cash flow on hand is left with S$11.3 mil. If the next quarter, the group don't clock in extra revenues, I think we will see negative cash flow.
Point number 8 in their financial report reflect how badly the company is in currently. Even thou their international BU has an increased revenue of 87.7% but the revenue generation was lower than anticipated due to some project delays in 1Q2019. I think this point is valid as most likely the revenue will start to come in when the project is at near completion or completed.
Personally, I felt that this stock has lost its previous glory and on-road towards a loss-making company. This quarter 2Q is critical to the group as their cash is drying up.
Last month, Genting Singapore announced It will invest S$4.5b in renewal and refresh of the IR. The funding will be by internal funds and borrowings (which will likely start only from end-2020). The upgrading writeup is available here.
Genting Singapore Ltd released its Q1 FY19 results after trading hours on 9th May. Revenue drop 5% and gross profit of 16%. The figures are S$640 mil and S$286 mil respectively.
Due to lowered revenue, Net profit drops 5% to S$205 mil.
Gaming revenue drops 8% to S$430 mil while the non-gaming sector is increasing steadily. This is the eighth consecutive quarter of year-on-year revenue growth with higher spends per visitor. Hotel occupancy remained high at 93% during the quarter which means more tourists will be spending on F&B and attractions within RWS.
Under their debt which is due for repayment on 23 March 2020 is reclassified to current liabilities. The amount is S$680 mil and was voluntary full prepayment by the Group towards the end of Q1 financial period.
With the expansion of IR and Japan IR, I'm afraid Genting Singapore has to spend more on Capax and getting resources for Japan IR when the government officially publishes the National Guidelines and likely we won't see the Return of Investments within the next 5 years.
On my previous write up, my target price to enter this stock is 84 cents and it seems the target price is approaching. As of writing this post, the trading price is 91 cents.
In 2006, Genting was awarded the Sentosa integrated resort project by Singapore. It was officially open in 2010. The integrated resort is in operation for close to 10 years.
Last week, Genting announced it will invest S$4.5b in a renewal and refresh of the IR. The funding will be by internal funds and borrowings (which will likely start only from end-2020).
The project will take 5 years to complete and approximately 50% new gross area, adding 164,000 square meters of GFA of leisure and entertainment space. Developments and enhancements that will be carried out in connection with the Expansion Development, include the following:
Expansion of Universal Studios Singapore, with two (2) new highly themed and immersive environments – Minion Park and Super Nintendo World;
Expansion of the S.E.A. Aquarium to be re-branded as "Singapore Oceanarium";
Conversion of the Resorts World Theatre into a new Adventure Dining Playhouse;
Expansion of in-resort accommodation with up to 1,100 more hotel rooms at a new waterfront lifestyle complex and within the central zone of Resorts World Sentosa ("RWS");
An enhanced waterfront promenade to be lined with restaurants and retail outlets, and a spectacular public attraction;
Expansion of Meetings, Incentives, Conferences and Exhibitions (MICE) facilities which will bring in more events into Singapore; and
Development of a driverless transport system ("DTS") which will enhance last-mile connectivity to bring greater footfall to RWS and the rest of Sentosa Island.
Gaming Revenue
The casino will be able to expand its floor area by 500 sqm once the above is complete. The exclusivity casino license is extended to 2030.
From March 2022, both IRs will have to pay higher casino tax rates under a new tiered structure. Premium gaming will be taxed at 8% for the first S$2.4b of gross gaming revenue, and 12% for gaming revenue in excess of S$2.4b. Mass gaming will be taxed at 18% for the first S$3.1b and 22% for any excess revenue.
On top of the revised taxes, Singapore citizens and permanent residents will have to pay higher entry now, rising 50% to $150 for 24 hours.
Genting Performace
The company revenue is constantly at S$2 billion mark. During the econnamy downturn in 2015 and 2016, the company still manage to have a nett profit of S$193 mil and S$384 mil.
Source: Bloomberg
Earning per shares increased from 0.62 cents in 2015 to 6.27 cents in 2018. Dividends per share maintained for 2017 and 2018 at 3.5 cents per share.
Source: Genting Singapore
Conclusion
The golden question, to buy or hold?
With the upcoming Capex and fundings, I believe can adopt a wait and see attitude. Currently, the price is trading at $0.975 and P/B of 1.5x. I believe it can go lower and hopefully can go to $0.85 range for a 4% yield.
The impact will be known after end 2020 or beginning of 2021 not forgetting Genting is currently also bidding for IR projects in Japan.
However, Genting committed that there will be no change in the distribution of dividends in lieu of the increasing Capex.
Many bloggers had summarised the SIA Bond and what's the pro and con. You can view the chili rating from Singapore IPO and in-depth information from Investment Moats.
SIA is offering the bond at 3.03% for 5 years to mature while SSB requires 10 years to mature. But we have to note that SSB you can withdraw out anytime with a fee of $2 and your principle will be fully returned back.
Let's say I took a 5 years average of yield for SSB for the lowest rates in April, it will be 2.01% and while SIA is offering it at 3.03%. Which means the difference is 1.02% but I have to take up a lot of risks by applying for SIA bond.
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With that saying, I really don't see any point in applying for SIA Bond when there is a risk-free bond with slightly lower interest compared to SIA. But i will be tempted if SIA is issuing the bond at a higher rates.
Sim Leisure Group debuts on Catalist below IPO price
Sim Leisure Group Ltd commence trading today with SGX name Sim Leisure and code URR. Sim Leisure Group Ltd opened on the Catalist board at S$0.17 below its IPO price of S$0.22 a drop of 22.8%. The write up of IPO can be found here.
Balloting Results
The balloting results shown that there isn't any interest from the public for this IPO.
Hanwell has been trading below book value. Is it a good investment for long term?
Hanwell Holding Businesses
Hanwell is one of Singapore’s and Malaysian's key players in the manufacturing, brand management and marketing of fast moving consumer goods (FMCG).
In Singapore, Topseller is distributing famous brands like Royal umbrella rice, Golden Circle oil and brands like Kao and Lion. Tipex is distributing Beautex tissue and diaper brands Pet Pet and Fortune with Tofu and Noodles.
In Malaysia, SOCMA distributes Mentos, Chupa Chups, Smint, Fruitella, Tao Kae Noi, Tai Sun, Supernut, Mazola, Soyalite, Golden Circle, Harmuni, Indomie and Jia Duo Bao(formerly called Wong Lo Kat).
Hanwell Holdings also own 63.95% of Tat Seng Pkg T12 which is listed in SGX. The company reported revenue of SGD 163,205,000 for the period of first 6 months.
Financial
The group's reported Revenue of S$377 million and S$16 million net profit for end 3rd quarter and an increase of 24.6% YoY.
Hanwell 3rd Quarter Statement
Hanwell Holdings gearing is at 32.70% and debt S$86 million. I personally feel that it's on the high side and should be worrying. The company is currently trading at S$0.22, the NAV is S$0.48. The company is trading at a discount of 55%
Conclusion
Hanwell Holdings is an undervalued stock from my point of view, i believe it is worth more than current market price. Hope 4th Quarter results will be flying color and investors faith will be back.
Grand Venture Technology Limited announced that it's IPO Garner "STRONG SUPPORT" in its Press Release. 42,918 mil shares was 1.3x subscribed. Public shares was oversubscrib at 12,568 mil shares at 15.66x. The IPO write up is here.
Grand Venture Technology Limited commence trading today with SGX name Grand Venture and code JLB. Grand Venture opened on the Catalist board at S$0.27 below its IPO price of S$0.275 a share on Wednesday and close at S$0.270 a share.
The first IPO for 2019. Hope It's a good start for the new year.
Grand Venture Technology Limited is offering 42.918mil shares for its IPO on Catalist at $0.275 per share. These comprise a public tranche of 800,000 shares and a placement tranche of 42,118,000 shares. The IPO will close on 11th Jan 2019 at 12 pm and starts trading on 23rd Jan 2019. The market cap for this IPO is $64.4mil.
Company Overview
Established in Singapore in 2012, Grand Venture Technology (“GVT”) is a trusted manufacturing solutions and services provider for the semiconductor, analytical life sciences, electronics and other industries. Backed by a highly experienced management team, GVT delivers engineering, assembly, testing and product life cycle management solutions. GVT operates out of its facilities in Singapore, Malaysia (Penang) and the PRC (Suzhou) to serve a portfolio of customers that are some of the largest OEMs in these industries.
What's their business
GVT provide manufacturing solutions and services provider for the semiconductor, analytical life sciences, electronics and other industries.
CVT Business
How do GVT fare in the business
Financial Hightlights
Key Profit and Loss
The loss in FY2015 is due to low production volume as GVT is fulfilling the audit and accreditation process to be an approved vendor and to clear first articles inspections of certain new customers and products. FY2016 GVT ramp up their production causing the gross profit to increase.
GVT is listing at PE ration of around 11.2 PE and $0.078 NAV which is quite expensive compare market cap to equity.
What is good about GVT
Good range of products from small high-precision components to large structural components.
10-year agreement with SICO Technology GmbH and Sico Asia Quartz Pte Ltd to build up quartz and ceramic machining capabilities which not much competitions in the market with the knowledge.
Track record in optimizing operations, implementing strategic plans and creating shareholder value
Losses in FY 2015, other than that YoY is making profit and new components are in production for better margin.
What is not so good about GVT
Small pool of major customers and they accounted for an aggregate of 78.7%, 92.3%, 89.7% and 94.8% FY2015, FY2016, FY2017 and HY2018 respectively.
Raw material prices for aluminium and stainless steel fluctuate and will have a significate impact on P&L.
Conclusion
At an expensive listing price, I feel that It's not worth to invest and the risk of raw materials supply and pricing. The profit margin might not be as current and might see a big drop compare to current profit margin.
DSG Annual Report 2018[/caption]
