Special Situations, Content Strategist, Smartkarma

Crispin Francis

Special Situations, Content Strategist

Smartkarma

Smartkarma unites the fragmented investment industry, connecting institutional investors, independent research providers, and corporates within a single network.

Research Reinvented

Event-Driven

More than a decade ago, Sembcorp Industries ("SCI") tried to privatize Sembcorp Marine ("SMM") but they weren't successful as SMM's shareholders turned down the offer. For close to 15 years, SCI have held more than a 60% stake in SMM and most of the time, SMM had been trading at PNTA (price to net-tangible assets) above the 1.71x offered by SCI in their 2002 failed privatization attempt. SMM is now below this level and has been hovering there for several months.If SCI wants to privatized SMM, now might be the time for them to do so, but will they?

More than a decade ago, Sembcorp Industries ("SCI") tried to privatize Sembcorp Marine ("SMM") but they weren't successful as SMM's shareholders turned down the offer. For close to 15 years, SCI have held more than a 60% stake in SMM and most of the time, SMM had been trading at PNTA (price to net-tangible assets) above the 1.71x offered by SCI in their 2002 failed privatization attempt. SMM is now below this level and has been hovering there for several months.If SCI wants to privatized SMM, now might be the time for them to do so, but will they? 

Sembcorp - 14 Years Wait, Will SCI Strike Again?

SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Asia’s leading multi-asset exchange

Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

Equity Bottom-Up

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§  The 10 largest Industrials stocks averaged a total return of 3.6% in the 2016 YTD with two heavyweights, Jardine Matheson Holdings and Jardine Strategic Holdings, averaging 19.0% total returns in the YTD.
 
§  Industrials had the largest representation among the 10 most actively traded stocks with the biggest volume increases last week. Six of these 10 most actively traded stocks were Industrials. The six Industrials plays also generated an average total return of 3.7% last week bringing their…
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§  The 10 largest Industrials stocks averaged a total return of 3.6% in the 2016 YTD with two heavyweights, Jardine Matheson Holdings and Jardine Strategic Holdings, averaging 19.0% total returns in the YTD.
 
§  Industrials had the largest representation among the 10 most actively traded stocks with the biggest volume increases last week. Six of these 10 most actively traded stocks were Industrials. The six Industrials plays also generated an average total return of 3.7% last week bringing their…



Industrials Dominate Last Week's Volume Leaders

Leading Independent Investment Research, Morningstar, Inc.

Morningstar

Leading Independent Investment Research

Morningstar, Inc.

Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. We offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors. 

Morningstar provides data on more than 500,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 16 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries, with more than $180 billion in assets under advisement or management as of June 30, 2015. We have operations in 27 countries.

Download the Morningstar Fact Sheet : http://corporate.morningstar.com/US/documents/MarketingFactSheets/AboutMorningstarFactsheet.pdf

We reduce Sembcorp Marine’s, or SMM’s, 2016-18 earnings forecasts by 10%-54% to factor in disappointing third-quarter results. SMM’s cumulative nine-month net profit of SGD 44 million, down 82% year over year, is significantly below our expectation. In particular, SMM reported a third-quarter net loss of SGD 22 million, mainly due to higher foreign exchange loss as well as a higher share of losses from Cosco Shipyard Group.We cut our fair value estimate to SGD 0.95 from SGD 1.08, but we see no change to SMM’s narrow moat rating, given its proprietary knowledge in high-specification vessel design and its efficient scale. Our fair value estimate  implies a 2016 price/book ratio of 0.75 times, which we think is fair, taking into account the challenging outlook  for the offshore and marine, or O&amp;M, sector, along with concerns regarding further impairment losses.Analyst: John Hu &amp; Chokwai Lee

We reduce Sembcorp Marine’s, or SMM’s, 2016-18 earnings forecasts by 10%-54% to factor in disappointing third-quarter results. SMM’s cumulative nine-month net profit of SGD 44 million, down 82% year over year, is significantly below our expectation. In particular, SMM reported a third-quarter net loss of SGD 22 million, mainly due to higher foreign exchange loss as well as a higher share of losses from Cosco Shipyard Group.We cut our fair value estimate to SGD 0.95 from SGD 1.08, but we see no change to SMM’s narrow moat rating, given its proprietary knowledge in high-specification vessel design and its efficient scale. Our fair value estimate  implies a 2016 price/book ratio of 0.75 times, which we think is fair, taking into account the challenging outlook  for the offshore and marine, or O&amp;M, sector, along with concerns regarding further impairment losses.Analyst: John Hu &amp; Chokwai Lee

SembCorp Marine's Q3 Disappoints; Fair Value Estimate Cut

Bespoke Research on China and neighbouring regions, Bixmoor

Bixmoor

Bespoke Research on China and neighbouring regions

Bixmoor specialises in providing bespoke research to business, governments and the financial community on China and neighbouring regions. We seek to build long-term relationships with our clients, based on our expertise, our reliability and our determination to find the right solution.

Thematic (Sector/Industry)

Despite winning several big orders, Chinese-supplied railway rolling stock does not have the best of reputations in Asia, whilst several prestigious track-laying projects have been beset with delays and technical problems.

Despite winning several big orders, Chinese-supplied railway rolling stock does not have the best of reputations in Asia, whilst several prestigious track-laying projects have been beset with delays and technical problems. 

Founder, Riedel Research

David Riedel

Founder

Independent equity research on GEM Markets

Riedel Research

Riedel provides equity research and analysis to leading financial organizations. By becoming members of a region (Asia, Latin America, Emerging Europe or Global), organizations have access to an integrated set of services including:

Regular company coverage reports
Up-to-date investment decision advice (buy, hold, sell)
Monthly regional and global conference calls
Customized company reports and unlimited on-line access to the program's services.

Riedel provides research coverage of companies across the full range of market capitalization. Experienced research professionals in each market develop company reports and analysis as well as earnings models and projections. Ratings are Buy, Hold and Sell with a focus on compelling investment ideas - both long and short. Downloadable, dynamic earnings models are built to facilitate sensitivity analysis.

Please feel free to contact us for complimentary access to our written research.  We want to show you that our unique research flow can add value and help develop a long-term, high value-add relationship.

Riedel's model focuses on providing clients with unique insights and consulting in addition to unlimited access to all produced research This model allows members to receive exponential benefits for their retainer fees.

<ul>
<li>Obama continues the 'pivot to Asia' by attending the ASEAN meeting in Laos.</li>
<li>ASEAN is a critical component of SE Asian stability, partnership with the US and should be a united front in protesting Chinese intrusions into the South China Sea.</li>
<li>A high-profile spat with Philippine president Duterte was an unfortunate distraction and an unhelpful development for the Philippines which benefits from strong U.S. support.</li>
<li>Thailand and Malaysia look like the best opportunities in ASEAN in the medium-term.</li>
<li>BUY…</li>
</ul>


Obama continues the 'pivot to Asia' by attending the ASEAN meeting in Laos.
ASEAN is a critical component of SE Asian stability, partnership with the US and should be a united front in protesting Chinese intrusions into the South China Sea.
A high-profile spat with Philippine president Duterte was an unfortunate distraction and an unhelpful development for the Philippines which benefits from strong U.S. support.
Thailand and Malaysia look like the best opportunities in ASEAN in the medium-term.
BUY…


Takeaways from ASEAN - Investment Opportunities

Singapore

Seatrium Ltd offers engineering solutions for the offshore, marine, and energy industries. The Company provides rigs and floaters, repairs and upgrades, offshore platforms, and specialized shipbuilding. Seatrium serves customers worldwide.

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Seatrium (STM SP)

Sembcorp - 14 Years Wait, Will SCI Strike Again?

More than a decade ago, Sembcorp Industries ("SCI") tried to privatize Sembcorp Marine ("SMM") but they weren't successful as SMM's shareholders...

Crispin Francis

Industrials Dominate Last Week's Volume Leaders

§ The 10 largest Industrials stocks averaged a total return of 3.6% in the 2016 YTD with two heavyweights, Jardine Matheson Holdings and...

Singapore Exchange Ltd (SGX)

SembCorp Marine's Q3 Disappoints; Fair Value Estimate Cut

We reduce Sembcorp Marine’s, or SMM’s, 2016-18 earnings forecasts by 10%-54% to factor in disappointing third-quarter results. SMM’s cumulative...

Morningstar, Inc.

Rolling Stock and Railway Track

Despite winning several big orders, Chinese-supplied railway rolling stock does not have the best of reputations in Asia, whilst several...

Bixmoor

Takeaways from ASEAN - Investment Opportunities

Obama continues the 'pivot to Asia' by attending the ASEAN meeting in Laos. ASEAN is a critical component of SE Asian stability, partnership with...

David Riedel

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52-week Range

Market Cap (USDm)

P/E

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