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

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

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Singapore Exchange Ltd (SGX)

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Equity Bottom-Up

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 <div class='content-caption'>Halcyon Agri - CEO</div>
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Relentless in his pursuit of excellence, rubber industry veteran David Li Xuetao always plays to win. 
“My passion is winning - that’s my definitive goal,” said the Chief Executive Officer of SGX-listed natural rubber supplier Halcyon Agri Corporation Ltd. “I want Halcyon Agri, and myself, to be the best we can be in the natural rubber industry.” 
“My deep-seated passion and belief in the business of natural rubber is driven by the fact that it’s a strategically important but scarce raw material for the world. Without rubber, the world will stop moving as there would be no tyres! This passion keeps me going, and I’m determined to inspire changes in this critical industry,” he added. 
Li, who holds a Bachelor of Economics degree from Beijing’s University of International Business and Economics, and a Master of Change Management from Bl Norwegian School of Management at Fudan University, was appointed Halcyon Agri’s CEO in June 2020.  
Formerly the CEO of GMG Global Ltd, Li has more than two decades of experience in the tyre, synthetic rubber and natural rubber industry. He has held various senior positions in Sinochem International Corporation (SIC) and Sinochem Group (SG), including Deputy Director of Strategy Development, Department of Chemical SBU at SG and SIC, as well as Vice President of SIC and CEO of its Rubber Business Division. 
In 2016, Halcyon Agri acquired Mainboard-listed GMG Global and SIC’s natural rubber assets through a cash and share swap. Consequently, SIC became Halcyon Agri's major shareholder. GMG Global was subsequently delisted from SGX and became Halcyon Agri’s wholly owned subsidiary, with its businesses being allocated amongst various divisions within the Group. 
“During my tenure as the head of the SIC rubber division, I spearheaded the strategy to build a global, publicly listed and vertically integrated natural rubber supply chain manager,” Li recounted. 
“To achieve this, our team had drawn up a well-defined acquisition roadmap, through which we completed a series of high-value acquisitions, including GMG Global and Halcyon Agri. This allowed us to consolidate our global natural rubber assets into a single listed platform, which would facilitate the merger of expertise and economies of scale.” 
Today, Halcyon Agri is the world's leading rubber company, with an integrated global network spanning plantations, processing, and distribution of high-quality and sustainable rubber. 
Headquartered in Singapore, the Group owns and operates significant assets along the natural rubber value chain, and distributes a range of natural rubber grades, latex and specialised rubber for the tyre and non-tyre industries.  
The Group has 38 processing factories in major rubber-producing regions, with a production capacity of 1.6 million metric tonnes per annum, and is one of the largest owners of commercially operated rubber plantations globally. 
Its multinational workforce numbers more than 15,000 in over 100 locations worldwide, while its key operating assets are situated in Indonesia, Malaysia, Thailand, China and Africa. 
The Group has two major business units: Halcyon Rubber Company (HRC) and Corrie MacColl (CMC). HRC is the pre-eminent supplier of natural rubber to the global tyre fraternity. CMC offers integrated supply chain services to the global non-tyre and specialty tyre segments, providing third-party sourced rubber products, as well as in-house, fully traceable rubber and latex products from its own plantations. Digitalisation Drive 
For Li, maintaining a strong people focus and an inclusive management style are priorities as he leads Halcyon Agri into the next stage of development. 
“I believe it’s the people who will write the history and create the future - an organisation can achieve sustainable growth only if it has the right talent to consistently create and deliver value to its stakeholders,” he said. 
At the same time, the 51-year-old believes a good leader is defined by both mettle and mindset. “I would characterise my core leadership style as ’humble but fearless, peaceful but persistent’,” he added. 
“A winning mentality is also important. There’s a saying that ‘a team is only as strong as its weakest link’, so I seek to inculcate these values in my team members. I have a strong team, and I strive to build on this foundation, formulate the right strategies for the business, and motivate them to scale greater heights.” 
One key strategy for the Group, in particular, is digitalisation. “Digitalisation will be a key trend influencing the future of the natural rubber industry and the wider commodities sector,” he pointed out. 
“HeveaConnect, a start-up we’ve incubated in-house three years back to drive digitalisation in the natural rubber industry, is now gaining industry acceptance. We’re looking to explore more initiatives along this line.” 
Li also remains a strong proponent of vertical integration. “Increased mobility will inevitably drive the surge in consumption of natural rubber-based products. Since we already have a strong presence upstream, we’re looking to further accelerate our growth, which may include downstream opportunities along the natural rubber supply chain.” 
Halcyon Agri is also benefiting from the e-commerce boom following a pandemic-induced shift in consumption patterns. 
“The surge in e-commerce adoption has propelled a spike in overall delivery vehicle utilisation and miles, which in turn translates to higher natural rubber demand for replacement tyres,” Li pointed out. 
“This is on top of the already-prominent sharing economy, where the introduction of Mobility-as-a-Service has increased vehicles’ on-road time, and improved overall vehicle utilisation, which in turn consumes more rubber. We believe our market positioning will allow us to capitalise on this trend.” 
Measures to curb the spread of COVID-19 have also sent the global supply chain into a tailspin, prompting companies to rethink their production and distribution strategies. “As a leading integrated natural rubber player, Halcyon Agri’s presence across key origins and destinations is a strategic advantage,” he added. 
“We’re leveraging our strong global sourcing capability and distribution network to overcome logistical constraints, working closely with clients to fulfil their needs. This enables us to take advantage of the demand vacuum, as smaller rubber players exit the industry amidst financial difficulties caused by the pandemic.” Turning Risks into Opportunities 
While growth opportunities abound, Halcyon Agri must also contend with a number of industry risks, such as a dwindling supply, Li noted. 
“Around 85% of natural rubber supply comes from smallholders, but years of unprofitable prices have discouraged new plantings and forced farmers to de-prioritise plantation maintenance, or simply abandon the trade altogether. Under-maintained plantations are also susceptible to tree diseases and shorter lifecycles. These developments represent imminent supply risk to the industry,” he added. 
Besides strategic investments in natural rubber plantations to mitigate this risk, Halcyon Agri also seeks to boost current industry practices. These include training smallholders to develop good agricultural principles in its operating areas. 
One example is the Group’s Cameroon Outgrower Programme, which aims to provide up to 13,000 smallholder farmers with agricultural education and financing to cultivate sustainable and fully traceable latex.  
Additionally, in the area of rubber prices, HeveaConnect’s digital marketplace seeks to revolutionise price discovery for sustainably produced natural rubber, so smallholders can be fairly and adequately remunerated for the additional cost and effort associated with sustainable cultivation.    
“There has never been a time where sustainability is this closely linked to the success of an industry, the impending rubber shortage is real if we don’t do something about the price discovery process,” Li pointed out. 
“The smallholders must be fairly rewarded for their contribution to the natural rubber supply chain in following responsible and sustainable practices, and consumers cannot expect to be paying the same price as before if they want sustainable products.” 
Looming large in the background is climate risk, which is even more of an issue for Halcyon Agri, which owns some of the world’s largest commercial rubber plantations, Li said. 
“We’ve pledged zero-deforestation vis-à-vis our own plantation operations, and have recently aligned with GPSNR’s Policy Framework, which lists concrete commitments to address environmental harm, human rights and inequity in the natural rubber supply chain,” he noted, referring to the Global Platform for Sustainable Natural Rubber. 
GPSNR is a membership-driven platform that aims to bring various stakeholders in the natural rubber value chain together. Its Policy Framework are aligned with international norms such as the UN Global Compact, as well as the UN Guiding Principles for Business and Human Rights.  
“For our next goal, we’re laying the foundation to contribute towards the climate change agenda. This will involve setting ambitious science-based, net-zero targets, and building resilience against climate effects on our business,” he added. 
“These comprise the core elements of Halcyon Agri’s ESG strategy, which remains cognisant of the environmental and social developments across our value chain. We’re determined to ensure that our business operations and strategy formulation are in line with these ESG goals.” Halcyon Agri Corporation Ltd 
Headquartered in Singapore and listed on SGX, Halcyon Agri owns and operates significant assets along the natural rubber value chain, and distributes a range of natural rubber grades, latex and specialised rubber for the tyre and non-tyre industries. With 38 processing factories in most major rubber producing origins and a production capacity of 1.6 million mT per annum, it is one of the largest owners of commercially operated rubber plantations globally. Halcyon Agri has a multinational workforce of more than 15,000 employees in over 100 locations globally. The Group has two major business units: HRC Group, the pre-eminent supplier of natural rubber to the global tyre fraternity, and CMC Group, a leading provider of specialist polymers for industrial and non-tyre applications. 
The company website is: <a href="https://www.halcyonagri.com/en/">www.halcyonagri.com </a> 
Click <a href="https://www.sgx.com/securities/equities/5VJ">here </a>for the company's StockFacts page. 
For the quarter ended 30 September 2021 business update, click <a href="https://links.sgx.com/1.0.0/corporate-announcements/XABABDISMAR02HIS/690332_HAC_Interim_Update_Q3_2021.pdf">here</a>. About kopi-C: the Company brew

Text: Jennifer Tan-Stanisic Photo: Company file kopi-C is a regular column on the SGX Research website that features C-level executives of leading companies listed on Singapore Exchange. These interviews are profiles of senior management aimed at helping investors better understand the individuals who run these corporations. 
For previous editions of kopi-C: the Company brew, please click <a href="https://www.sgx.com/research-education/market-dialogues">here</a>.   
For more information, or if you would like your senior executives to be featured on SGX Market Dialogues, please send suggestions to <a href="https://www.sgx.com/jennifer.t@sgx.com">jennifer.t@sgx.com</a>.
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    Halcyon Agri - CEO


Relentless in his pursuit of excellence, rubber industry veteran David Li Xuetao always plays to win.  
“My passion is winning - that’s my definitive goal,” said the Chief Executive Officer of SGX-listed natural rubber supplier Halcyon Agri Corporation Ltd. “I want Halcyon Agri, and myself, to be the best we can be in the natural rubber industry.”  
“My deep-seated passion and belief in the business of natural rubber is driven by the fact that it’s a strategically important but scarce raw material for the world. Without rubber, the world will stop moving as there would be no tyres! This passion keeps me going, and I’m determined to inspire changes in this critical industry,” he added.  
Li, who holds a Bachelor of Economics degree from Beijing’s University of International Business and Economics, and a Master of Change Management from Bl Norwegian School of Management at Fudan University, was appointed Halcyon Agri’s CEO in June 2020.   
Formerly the CEO of GMG Global Ltd, Li has more than two decades of experience in the tyre, synthetic rubber and natural rubber industry. He has held various senior positions in Sinochem International Corporation (SIC) and Sinochem Group (SG), including Deputy Director of Strategy Development, Department of Chemical SBU at SG and SIC, as well as Vice President of SIC and CEO of its Rubber Business Division.  
In 2016, Halcyon Agri acquired Mainboard-listed GMG Global and SIC’s natural rubber assets through a cash and share swap. Consequently, SIC became Halcyon Agri's major shareholder. GMG Global was subsequently delisted from SGX and became Halcyon Agri’s wholly owned subsidiary, with its businesses being allocated amongst various divisions within the Group.  
“During my tenure as the head of the SIC rubber division, I spearheaded the strategy to build a global, publicly listed and vertically integrated natural rubber supply chain manager,” Li recounted.  
“To achieve this, our team had drawn up a well-defined acquisition roadmap, through which we completed a series of high-value acquisitions, including GMG Global and Halcyon Agri. This allowed us to consolidate our global natural rubber assets into a single listed platform, which would facilitate the merger of expertise and economies of scale.”  
Today, Halcyon Agri is the world's leading rubber company, with an integrated global network spanning plantations, processing, and distribution of high-quality and sustainable rubber.  
Headquartered in Singapore, the Group owns and operates significant assets along the natural rubber value chain, and distributes a range of natural rubber grades, latex and specialised rubber for the tyre and non-tyre industries.   
The Group has 38 processing factories in major rubber-producing regions, with a production capacity of 1.6 million metric tonnes per annum, and is one of the largest owners of commercially operated rubber plantations globally.  
Its multinational workforce numbers more than 15,000 in over 100 locations worldwide, while its key operating assets are situated in Indonesia, Malaysia, Thailand, China and Africa.  
The Group has two major business units: Halcyon Rubber Company (HRC) and Corrie MacColl (CMC). HRC is the pre-eminent supplier of natural rubber to the global tyre fraternity. CMC offers integrated supply chain services to the global non-tyre and specialty tyre segments, providing third-party sourced rubber products, as well as in-house, fully traceable rubber and latex products from its own plantations.  Digitalisation Drive  
For Li, maintaining a strong people focus and an inclusive management style are priorities as he leads Halcyon Agri into the next stage of development.  
“I believe it’s the people who will write the history and create the future - an organisation can achieve sustainable growth only if it has the right talent to consistently create and deliver value to its stakeholders,” he said.  
At the same time, the 51-year-old believes a good leader is defined by both mettle and mindset. “I would characterise my core leadership style as ’humble but fearless, peaceful but persistent’,” he added.  
“A winning mentality is also important. There’s a saying that ‘a team is only as strong as its weakest link’, so I seek to inculcate these values in my team members. I have a strong team, and I strive to build on this foundation, formulate the right strategies for the business, and motivate them to scale greater heights.”  
One key strategy for the Group, in particular, is digitalisation. “Digitalisation will be a key trend influencing the future of the natural rubber industry and the wider commodities sector,” he pointed out.  
“HeveaConnect, a start-up we’ve incubated in-house three years back to drive digitalisation in the natural rubber industry, is now gaining industry acceptance. We’re looking to explore more initiatives along this line.”  
Li also remains a strong proponent of vertical integration. “Increased mobility will inevitably drive the surge in consumption of natural rubber-based products. Since we already have a strong presence upstream, we’re looking to further accelerate our growth, which may include downstream opportunities along the natural rubber supply chain.”  
Halcyon Agri is also benefiting from the e-commerce boom following a pandemic-induced shift in consumption patterns.  
“The surge in e-commerce adoption has propelled a spike in overall delivery vehicle utilisation and miles, which in turn translates to higher natural rubber demand for replacement tyres,” Li pointed out.  
“This is on top of the already-prominent sharing economy, where the introduction of Mobility-as-a-Service has increased vehicles’ on-road time, and improved overall vehicle utilisation, which in turn consumes more rubber. We believe our market positioning will allow us to capitalise on this trend.”  
Measures to curb the spread of COVID-19 have also sent the global supply chain into a tailspin, prompting companies to rethink their production and distribution strategies. “As a leading integrated natural rubber player, Halcyon Agri’s presence across key origins and destinations is a strategic advantage,” he added.  
“We’re leveraging our strong global sourcing capability and distribution network to overcome logistical constraints, working closely with clients to fulfil their needs. This enables us to take advantage of the demand vacuum, as smaller rubber players exit the industry amidst financial difficulties caused by the pandemic.”  Turning Risks into Opportunities  
While growth opportunities abound, Halcyon Agri must also contend with a number of industry risks, such as a dwindling supply, Li noted.  
“Around 85% of natural rubber supply comes from smallholders, but years of unprofitable prices have discouraged new plantings and forced farmers to de-prioritise plantation maintenance, or simply abandon the trade altogether. Under-maintained plantations are also susceptible to tree diseases and shorter lifecycles. These developments represent imminent supply risk to the industry,” he added.  
Besides strategic investments in natural rubber plantations to mitigate this risk, Halcyon Agri also seeks to boost current industry practices. These include training smallholders to develop good agricultural principles in its operating areas.  
One example is the Group’s Cameroon Outgrower Programme, which aims to provide up to 13,000 smallholder farmers with agricultural education and financing to cultivate sustainable and fully traceable latex.   
Additionally, in the area of rubber prices, HeveaConnect’s digital marketplace seeks to revolutionise price discovery for sustainably produced natural rubber, so smallholders can be fairly and adequately remunerated for the additional cost and effort associated with sustainable cultivation.     
“There has never been a time where sustainability is this closely linked to the success of an industry, the impending rubber shortage is real if we don’t do something about the price discovery process,” Li pointed out.  
“The smallholders must be fairly rewarded for their contribution to the natural rubber supply chain in following responsible and sustainable practices, and consumers cannot expect to be paying the same price as before if they want sustainable products.”  
Looming large in the background is climate risk, which is even more of an issue for Halcyon Agri, which owns some of the world’s largest commercial rubber plantations, Li said.  
“We’ve pledged zero-deforestation vis-à-vis our own plantation operations, and have recently aligned with GPSNR’s Policy Framework, which lists concrete commitments to address environmental harm, human rights and inequity in the natural rubber supply chain,” he noted, referring to the Global Platform for Sustainable Natural Rubber.  
GPSNR is a membership-driven platform that aims to bring various stakeholders in the natural rubber value chain together. Its Policy Framework are aligned with international norms such as the UN Global Compact, as well as the UN Guiding Principles for Business and Human Rights.   
“For our next goal, we’re laying the foundation to contribute towards the climate change agenda. This will involve setting ambitious science-based, net-zero targets, and building resilience against climate effects on our business,” he added.  
“These comprise the core elements of Halcyon Agri’s ESG strategy, which remains cognisant of the environmental and social developments across our value chain. We’re determined to ensure that our business operations and strategy formulation are in line with these ESG goals.”   Halcyon Agri Corporation Ltd  
Headquartered in Singapore and listed on SGX, Halcyon Agri owns and operates significant assets along the natural rubber value chain, and distributes a range of natural rubber grades, latex and specialised rubber for the tyre and non-tyre industries. With 38 processing factories in most major rubber producing origins and a production capacity of 1.6 million mT per annum, it is one of the largest owners of commercially operated rubber plantations globally. Halcyon Agri has a multinational workforce of more than 15,000 employees in over 100 locations globally. The Group has two major business units: HRC Group, the pre-eminent supplier of natural rubber to the global tyre fraternity, and CMC Group, a leading provider of specialist polymers for industrial and non-tyre applications.  
The company website is: www.halcyonagri.com   
Click here for the company's StockFacts page.  
For the quarter ended 30 September 2021 business update, click here.    About kopi-C: the Company brew

Text: Jennifer Tan-Stanisic Photo: Company file  kopi-C is a regular column on the SGX Research website that features C-level executives of leading companies listed on Singapore Exchange. These interviews are profiles of senior management aimed at helping investors better understand the individuals who run these corporations.  
For previous editions of kopi-C: the Company brew, please click here.    
For more information, or if you would like your senior executives to be featured on SGX Market Dialogues, please send suggestions to jennifer.t@sgx.com.



Halcyon Agri: A Leading Natural Rubber Franchise

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Thematic (Sector/Industry)

In 1998, before the US and China entered into Permanent Normal Trade Relations with China in 2000, the US Congress enacted a law requiring the Clinton Administration to publish a list of Chinese companies in the US which did business with the People's Liberation Army (Public Law 105-261, Section 1237), and a "Communist Chinese military company" was defined in that law as any company named in to Defense Intelligence Agency documents from 1990 and 1995 and "any other entity owned or controlled by the PLA and engaged in providing commercial services, manufacturing, or exporting."That law basically lay dormant until last year when the Pentagon launched a review of such companies following the Trump White House's labelling of China (and Russia) a "revisionist" power in its first National Security Strategy <a href="https://www.whitehouse.gov/wp-content/uploads/2017/12/NSS-Final-12-18-2017-0905-2.pdf" target="_blank" rel="noopener">report</a> in 2017. The goal was to investigate and warn about supply-chain vulnerabilities. The Department of Defense published a list in June 2020 of 20 companies which were "Qualified Entities". It updated the list in late August 2020. The former Secretary of Defense was ousted several days ago and the new Secretary of Defense is now responsible for the list. There is, as of last night, an Executive Order by the White House blocking US 'persons' investment in any of the names mentioned - a list now 31 names long.More below on the impact.

In 1998, before the US and China entered into Permanent Normal Trade Relations with China in 2000, the US Congress enacted a law requiring the Clinton Administration to publish a list of Chinese companies in the US which did business with the People's Liberation Army (Public Law 105-261, Section 1237), and a "Communist Chinese military company" was defined in that law as any company named in to Defense Intelligence Agency documents from 1990 and 1995 and "any other entity owned or controlled by the PLA and engaged in providing commercial services, manufacturing, or exporting."That law basically lay dormant until last year when the Pentagon launched a review of such companies following the Trump White House's labelling of China (and Russia) a "revisionist" power in its first National Security Strategy report in 2017. The goal was to investigate and warn about supply-chain vulnerabilities. The Department of Defense published a list in June 2020 of 20 companies which were "Qualified Entities". It updated the list in late August 2020. The former Secretary of Defense was ousted several days ago and the new Secretary of Defense is now responsible for the list. There is, as of last night, an Executive Order by the White House blocking US 'persons' investment in any of the names mentioned - a list now 31 names long.More below on the impact.

Trump's Executive Order on Chinese Military Companies

Event-Driven

<div>In late morning 22 June 2020, after asking for a trading halt earlier in the day, natural rubber producer <a href="https://www.smartkarma.com/entities/halcyon-agri-corp-ltd" target="_blank" data-smartkarma-citation="entities:18191:1" rel="noopener">Halcyon Agri Corp (HACL SP)</a> (11% global market share) made a <a href="https://links.sgx.com/FileOpen/HAC_Rights_Issue.ashx?App=Announcement&amp;FileID=619881" target="_blank" rel="noopener">release</a> to the SGX announcing a 1-for-2 (one new share for every 2 shares held) non-underwritten renounceable rights issue. </div><div>
The Company asked for and received a general mandate for share issuance at the 2020 AGM held on 26 June which would allow the Directors "to allot and issue Shares, whether by way of rights, bonus or otherwise, of up to 50% of the total number of issued Shares" outstanding as of the AGM.
The Rights issue was to be for new shares at S$0.22/share. 
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/155/815/original/Screenshot%202020-08-30%20at%208.55.32%20AM.png?1598748956" class="editor-image img-responsive" data-smartkarma-image-id="155815"></figure>The market reaction on the first day it traded after that was not terribly salutary, taking the shares down to S$0.25. The shares magically rose in early July then trickled off again to get below S$0.22 for several days in the past two weeks. 
<h3>The NEW News</h3>
Late Friday night (9:39pm local time) in classic Friday Night Drop fashion, <a href="https://www.smartkarma.com/entities/halcyon-agri-corp-ltd" target="_blank" data-smartkarma-citation="entities:18191:1" rel="noopener">Halcyon Agri Corp (HACL SP)</a>made an <a href="https://links.sgx.com/FileOpen/HAC_Funding_Options_Updates.ashx?App=Announcement&amp;FileID=629844" target="_blank" rel="noopener">announcement</a> regarding the rights and alternate funding possibilities.
Included in the announcement is a section containing a proposal for Halcyon Agri to issue Guaranteed Perpetual Securities.
<blockquote>On 27 August 2020, Sinochem International Corporation (“SIC”) notified the Company that SIC’s board of directors has passed a resolution to approve the provision of a corporate guarantee (the “SIC Guarantee”) to support the issuance of perpetual securities of up to US$200 million (the “Guaranteed Perpetual Securities”) by the Company. Sinochem International (Overseas) Pte. Ltd. (“SIO”) 1 , the Company's major shareholder, is wholly owned by SIC.</blockquote>
This changes things.
More below the fold.

</div>

In late morning 22 June 2020, after asking for a trading halt earlier in the day, natural rubber producer Halcyon Agri Corp (HACL SP) (11% global market share) made a release to the SGX announcing a 1-for-2 (one new share for every 2 shares held) non-underwritten renounceable rights issue. 
The Company asked for and received a general mandate for share issuance at the 2020 AGM held on 26 June which would allow the Directors "to allot and issue Shares, whether by way of rights, bonus or otherwise, of up to 50% of the total number of issued Shares" outstanding as of the AGM.
The Rights issue was to be for new shares at S$0.22/share. 
The market reaction on the first day it traded after that was not terribly salutary, taking the shares down to S$0.25. The shares magically rose in early July then trickled off again to get below S$0.22 for several days in the past two weeks. 
The NEW News
Late Friday night (9:39pm local time) in classic Friday Night Drop fashion, Halcyon Agri Corp (HACL SP)made an announcement regarding the rights and alternate funding possibilities.
Included in the announcement is a section containing a proposal for Halcyon Agri to issue Guaranteed Perpetual Securities.
On 27 August 2020, Sinochem International Corporation (“SIC”) notified the Company that SIC’s board of directors has passed a resolution to approve the provision of a corporate guarantee (the “SIC Guarantee”) to support the issuance of perpetual securities of up to US$200 million (the “Guaranteed Perpetual Securities”) by the Company. Sinochem International (Overseas) Pte. Ltd. (“SIO”) 1 , the Company's major shareholder, is wholly owned by SIC.
This changes things.
More below the fold.



Halcyon Agri: Goodbye Rights, Hello Perps

In late morning 22 June 2020, after asking for a trading halt earlier in the day, natural rubber producer <a href="https://www.smartkarma.com/entities/halcyon-agri-corp-ltd" target="_blank" data-smartkarma-citation="entities:18191:1" rel="noopener">Halcyon Agri Corp (HACL SP)</a> made a <a href="https://links.sgx.com/FileOpen/HAC_Rights_Issue.ashx?App=Announcement&amp;FileID=619881" target="_blank" rel="noopener">release</a> to the SGX announcing a 1-for-2 non-underwritten renounceable rights issue. The Company will seek to use the general mandate for share issuance to be decided at the 2020 AGM to be held on 26 June to allow the Directors "to allot and issue Shares, whether by way of rights, bonus or otherwise, of up to 50% of the total number of issued Shares" outstanding as of the AGM.This is an illiquid stock despite a float not too far off US$100mm as of yesterday. More details and strategy below.

In late morning 22 June 2020, after asking for a trading halt earlier in the day, natural rubber producer Halcyon Agri Corp (HACL SP) made a release to the SGX announcing a 1-for-2 non-underwritten renounceable rights issue. The Company will seek to use the general mandate for share issuance to be decided at the 2020 AGM to be held on 26 June to allow the Directors "to allot and issue Shares, whether by way of rights, bonus or otherwise, of up to 50% of the total number of issued Shares" outstanding as of the AGM.This is an illiquid stock despite a float not too far off US$100mm as of yesterday. More details and strategy below.

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. 

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The latest gathering of China’s National People’s Congress has produced some reassuring news for the domestic infrastructure sector. In our view, we should see a similar level of fixed-asset investment, or FAI, growth (8%-9%) in 2017, and the public-private partnership, or PPP, project financing method will play an increasingly instrumental role in infrastructure development. The National Development and Reform Commission, the nation’s top economic development planning agency, is targeting about 8% year-on-year FAI growth, with a heavy emphasis on transportation infrastructure development in both inland regions and prosperous coastal provinces. The implied growth target in 2017 is in line with our assumption and reinforces our view that infrastructure firms with heavy PPP exposure (<a href="https://www.smartkarma.com/entities/265" target="_blank" data-smartkarma-citation="entities:265:1">China Communications Construction Co Ltd (1800 HK)</a>, or CCCC, and <a href="https://www.smartkarma.com/entities/265" target="_blank" data-smartkarma-citation="entities:265:1">China Communications Construction Co Ltd (1800 HK)</a>, or CSCI) are among the top beneficiaries in the latest transportation driven spending push. Our fair value estimates for no-moat CCCC and narrow-moat CSCI are unchanged at HKD 11.5 per share and HKD 14 per share, respectively, and we will revisit our valuations upon the release of annual results in late March.Analyst: John Hu

The latest gathering of China’s National People’s Congress has produced some reassuring news for the domestic infrastructure sector. In our view, we should see a similar level of fixed-asset investment, or FAI, growth (8%-9%) in 2017, and the public-private partnership, or PPP, project financing method will play an increasingly instrumental role in infrastructure development. The National Development and Reform Commission, the nation’s top economic development planning agency, is targeting about 8% year-on-year FAI growth, with a heavy emphasis on transportation infrastructure development in both inland regions and prosperous coastal provinces. The implied growth target in 2017 is in line with our assumption and reinforces our view that infrastructure firms with heavy PPP exposure (China Communications Construction Co Ltd (1800 HK), or CCCC, and China Communications Construction Co Ltd (1800 HK), or CSCI) are among the top beneficiaries in the latest transportation driven spending push. Our fair value estimates for no-moat CCCC and narrow-moat CSCI are unchanged at HKD 11.5 per share and HKD 14 per share, respectively, and we will revisit our valuations upon the release of annual results in late March.Analyst: John Hu

The Latest Government FAI Target Warrants Stable Growth Prospects for Infrastructure Sector

China

Sinochem International Corporation imports and exports chemical products including plastics, rubber, coke, and other chemicals,  The Company also operates in domestic trading, freight transportation, and warehousing businesses.

Sinochem International Corporation A (600500 CH)

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Sinochem International Corporation A (600500 CH)

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