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Sinostar PEC (SGX:C9Q)
1. One of the largest producers of downstream petrochemical products (mainly propylene and polypropylene) within the 400km radius of its production facilities in Dongming Petrochem.
2. Not your typical S-chip (with a strong heritage and backing). Listed in 2007, Sinostar shares a strategic affiliation with Shandong Dongming Petrochem Holdings Group, which is one of the largest privately-owned crude oil refiners in PRC.
3. 2.4% dividend yield. Sinostar has been consistently paying out dividends of at least S$0.005/share in the last 5 years, translating to a dividend yield of 2.4%
4. Announced expansion plans hints at future growth ahead. Sinostar is increasing its production capacity of propylene and polypropylene by 1x and 5x respectively. Propylene and polypropylene forms more than 90% of the total profit of the group.
- Double propylene production capacity, which will start contributing from FY19. At the end of FY18, Sinostar has completed its acquisition of a 70% equity stake in Dongming Qianhai Petrochemical Co., which will double the Group’s propylene production capacity to 180,000 metric tons/year, and will start contributing to the group from FY19 onwards.
- 5x increase in polypropylene capacity by FY21. It is also constructing a polypropylene production plant, which is expected to increase the Group’s production capacity by 5x to 250,000 tonnes per annum. The grade of the polypropylene produced is also expected to be higher, as it adopts the latest production technology, Spheripol, and is expected to drive margins ahead, as the higher grade polypropylene produced can be used in higher valued products such as high-end medical equipment, automotive accessories, home appliances, electrical films, food packaging and other consumer products. The plant is expected to be ready in end 2020/2021.
5. Vote of confidence from major shareholder. Major shareholder, Mr Li has been increasing his stake in the group as early as 3Q2015, with more aggressive additions in recent years, consistently adding on to his stake in each quarter since 4Q2017. His stake has increased by nearly 3% since 4Q2017 to 55% as at 15 Mar 19.
About Sinostar:
Price: S$0.210; Market Cap: S$134m
Free Float: 45.0%; Major Shareholders: Li Xiang Ping 55%;
FY18 PE: 8.1x; Dividend yield: 2.4%; P/B: 0.9x
- Listed in 2007
- One of the largest producers and suppliers of downstream petrochemical products within the 400km radius of our production facilities within the Dongming Petrochem Industrial Zone in Dongming County of Shandong Province, PRC.
Business Segments:
- Process raw LPG (annual capacity: 550,000 tonnes)
- Propylene – extracted from raw LPG to produce other chemical intermediates such as polypropylene, vinyl (annual capacity: 180,000 tonnes)
- Polypropylene – major derivative of propylene which is resistant to chemicals and heat. Mainly sold to plastic manufacturers to produce plastic products for various industrial applications eg. Flexible and rigid packaging, automotive and consumer products (annual capacity: 50,000 tonnes- but is currently constructing new plant to increase its capacity by 5x to 250,000 tonnes)
AGM of Sinostar PEC Holdings Monday, 29 April 2019 at 9.30 a.m.
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Section 198(1) of the Securities and Futures Act provides that a person shall not carry out two or more transactions in securities of a corporation which will have the effect of affecting or maintaining the price of the securities, with intent to induce other persons to subscribe for, purchase or sell securities of the corporation or of a related corporation.
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GEM Exclusive- Investment Idea-PEC
PEC Ltd.
Price: $0.60; Mkt cap: $152.5m;
NAV: $0.898, Net cash/share: $0.255
P/B: 0.67x, 2018 P/E: 14.6x, Ex-cash PE: 8.4x,
Dividend yield: 3.3%
Free float: 33.4%
Value play- At 0.7x P/B, of which $0.255/share is net cash, $0.024 is investment property, $0.202 for accrued income (revenue from services earned but not invoiced yet), PPE of $0.304.
Receivables more than offset payable – Accrued income has been increasing from S$0.08/share (S$20m) in FY16 to currently S$0.184/share (S$47m) at end of FY18.
Maintenance income has been rising over the years- Rose by 50% from 2016 to $226m in FY18, 67% of total revenue. EBITDA margins for it has been stable to rising at 24.2% at 2018. The contracts due date maybe a risk to the Company
Solid order book of $279.4m as at end of 2018– This excludes maintenance contracts which form 67% of FY18 revenue. if we assume substantial of the order book will be recognised in 2019-2020, will translate to about $125m of annual revenue, (at least safely comparable to 2018). Orderbook is highest at least over the last 3 years. PEC recently secured another S$100m in new contracts in Apr 19.
A very positive outlook- Citing investments in Refining and Petrochem projects to come onstream in Asia and Middle east in next 5 years, and IMO decision to reduce bunker sulphur levels to 0.5% to result in investment by refiners to comply to the regulation.
Price supported by consistent share buybacks, In the meantime, 3% dividend yield to wait. Additionally, shareholders be rewarded with a small mini special dividend happened in 2016/2017, of 0.005 or 0.01, translates to 4-5%
Chartwise, after correcting from as high as $0.74, seem to have found a base at $0.56, amidst all the positive development and earnings, are prices ready to go higher? Prices have already broken higher with greater than average volume. If we assume profit revert back to about $18m (average of 2017 and 2016), it will be about 5-6x ex cash PE.
So far, profit has surged in 1H19, revenue +33%, GP +18%, Net profit +74%- attributable to revenue increase from project works and maintenance.
Synagie Expands its Footprint in Vietnam
- The Group marks its inaugural foray into one of the fastest growing e-commerce markets – Vietnam
- On boards one of the world’s biggest luxury beauty companies as brand partner for
Vietnam
Synagie Corporation Ltd. (SGX: V2Y) (“Synagie”, “思腾控股有限公司”, the “Company”, or the “Group”), Singapore’s No 1 fastest growing technology company in 2018 according to Deloitte Fast 500 Asia Pacific, is delighted to announce its inaugural foray into one of the fastest-growing e-commerce markets – Vietnam, as it extends its strategic regional expansion. The Company has signed on one of the world’s biggest luxury beauty companies as its first brand partner who will use the Company’s ecommerce enablement solutions to help them grow in the Vietnamese market.
Chief Executive Officer and Executive Director of Synagie, Mr Clement Lee commented, “In 2019, we have achieved another commendable milestone as we paved our way into Vietnam, one of the fastest growing e-commerce markets that is set to thrive and boom. Vietnam’s flourishing e-commerce landscape is undoubtedly poised for massive growth and we are well-positioned to benefit from it. As we chart further growth in the year ahead, we look forward to creating more revenue synergies and will continue to be on the lookout for opportunities to extend our business service offerings in other markets with untapped potential, especially Philippines.”
UnUsUaL is bringing Walking with Dinosaurs to Singapore from 29 Aug 2019
UnUsUaL Entertainment Pte. Ltd. (“UnUsUaL”), a wholly-owned subsidiary of UnUsUaL Limited, and Sliding Door Entertainment Pte Ltd, will be presenting “WALKING WITH
DINOSAURS – The Arena Spectacular” in an Asia Tour comprising 117 shows across a total of 11 cities. The Tour is expected to commence in the second half of 2019. See Press Release
WALKING WITH DINOSAURS – The Arena Spectacular” is based on the award-winning BBC Television Series and is produced by Global Creatures. The $20 million globally-acclaimed production has been watched by over 9 million people in more than 250 cities, underlining its position as the biggest and best dinosaur show in the world
HC Surgical will represent as AIA’s Sole Screening Service Provider for colorectal cancer
The Group has been appointed exclusively by AIA to provide health services for eligible policy holders (age 50 and above). This exclusive appointment is expected to generate additional recurring revenue stream for HCSS