AssGX Offers No Value??? While Minitoots Overpaid!

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Published April 10, 2010

Yangzijiang plans secondary listing in HK or Taiwan
By LYNETTE KHOO
YANGZIJIANG Shipbuilding is the latest to disclose that it is jumping on the bandwagon of dual listings, as this trend looks set to stay this year.
This S-chip is planning to undertake a dual listing in Hong Kong or Taiwan this year to fund its venture into ship breaking business and potential mergers and acquisitions, according to a CIMB-GK report released yesterday. Its analyst Ho Choon Seng said the dilution is limited to 5 per cent.
A Yangzijiang spokesman told BT yesterday that 'this is in the planning stage but the exact timing is not fixed yet'.
The group is among a handful of S-chips that attended a three-day investor conference in Shanghai that ended yesterday. They met more than 200 funds from the US, Europe, Hong Kong and China.
The other six companies are Changjiang Fertilizer, C&O Pharmaceutical, C&G Industrial, China Hu An Cable, China Kunda and GMG Global. GMG is 51 per cent owned by Shanghai-listed Sinochem.
The conference, 'Halter Financial Summit 2010', was organised by Halter Financial Group. According to Financial PR, which is a partner for the event, more than 70 companies from four markets - the US, London, Singapore and Hong Kong - took part in the conference.
CIMB-GK's Mr Ho said he believes 'attractive risk-reward opportunities still exist in the S-chip space as investor confidence and interest in the space is still recovering'.
'We believe that most of the S-chips which were not directly associated with the negative publicity during the last crisis have stronger fundamentals and are less likely to repeat the mistakes which brought down their peers,' he added.
Sound Global (formerly Epure) and Yangzijiang are his top picks with 'outperform' ratings on potential upside of 39 per cent and 25 per cent respectively. Key catalysts are coming from more newsflow on dual listings and new order wins, he said. Yangzijiang is also more attractively traded at nine times CY11 price-earnings ratio compared to Cosco Corp's 20 times CY11 PE.
Dual listings are likely to remain a key theme in the S-chip space this year, Mr Ho reckons. Companies that are currently undertaking dual listings in Hong Kong include Midas and Sound Global, while China Fishery is headed for a secondary listing on Oslo Bors.
Shares of China XLX and Z-Obee traded in Singapore are now respectively 19 per cent and 36 per cent higher since their dual listings in Hong Kong.
But Mr Ho foresees that in the case of Yangzijiang, the impact of a dual listing on its trading multiples here would be small, so any re-rating of the stock would be mainly driven by fundamentals.
Since Taiwan Depository Receipts (TDRs) are non-fungible, issuing TDRs is unlikely to cause a sustained surge in the Singapore Exchange-listed shares here, he said. 'Alternatively, even if the company chooses to list in Hong Kong, there is no valuation gap with the Hong Kong-listed peer (Guangzhou Shipyard).'

 

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Published April 10, 2010

SGX orders China Sun to delist by April 30
By LYNETTE KHOO
CHINA Sun Biochem Technology Group has joined the list of companies that are ordered to delist by the Singapore Exchange (SGX).
This stems from the group's failure to submit a proposal to SGX to resume trading of its shares, which has been suspended since March 25 last year.
Its deadline for submission was 12 months from the date of suspension. Under SGX listing rules, the company has to offer a reasonable cash exit offer to shareholders to delist.
SGX has informed the company in a notification letter that it will be removed from the Official List of SGX-listed companies and requested that it 'make the necessary arrangements to delist by April 30'.
The board said it is currently considering and exploring the available options to comply with SGX listing rule on the exit offer.
Lead independent director of China Sun, Lai Seng Kwoon, told BT yesterday that the independent directors are persuading Sun Guiji, the group's executive chairman who owns a majority stake of 39.52 per cent, to provide an exit offer to minority shareholders.
China Sun shares were suspended from trading when its auditors could not complete the annual audit due to unverifiable bank balances and receivables.
A subsequent probe by special auditors was disrupted by a stolen truck of accounting records, missing disk drives and a mysterious power failure.
The troubled firm suspended its chairman over 929 million yuan (S$190 million) of allegedly questionable transactions, only to have him reinstated with restricted powers.
China Sun had also defaulted on its US$100 million convertible bonds (CBs) when bondholders exercised their put options last September. After receiving some cancellations of put options and repurchasing some CBs, the company still faces outstanding put options worth US$60.6 million as at March 11.
About seven other companies have been compulsorily ordered to delist so far this year. These include China Printing & Dyeing, which went under judicial management after its parent firm went broke, and Memory Devices, which went into liquidation last year and is slated to delist on April 16.
Chuan Soon Huat was among the five companies on SGX watch-list of loss-making firms that were ordered to delist last month. Out of these five companies, three could not provide an exit offer.