Post Election Updates: FJ Benjamin, United Engineers, Pac Andes, Oceanus

Fresh from our election break (despite the unbearably hot weather), we strive to bring you even "hotter" analysis and pictures from our Kiasu desk.


First, we kick off with a couple of results updates:

Hot contributions from new brand

1) FJ Benjamin announced higher earnings on record turnover for its third quarter ended 31 March 2011. This was due to a combination of strong consumer sentiment, higher tourist arrivals and contributions from new brand Givenchy. Improvements were seen across major markets of Singapore, Malaysia, Hong Kong, China and Taiwan. We expect the counter will continue to do well on the back of strong consumer sentiment and spending across the region.

2)United Engineers disappointed with a sub-par price-action performance post ex-date of dividend. (price dropped by 15 cts versus 10 cts dividend payout.) It went on to announce a decent but not too spectacular 20% increase in gross profit (10% increase in net profit).  Our kiasu instinct continue to get aroused by its huge discount to NTA (its NTA increased to $4.03 per share versus closing price of $2.35) and its relatively low PE ratio of about 3.5x. New hotels and retail space coming up at Vista Exchange (next to Buona Vista MRT) and UE BizHub East (next to Expo MRT) bodes well for the future recurring earnings of the group. In the meantime, we can only eagerly anticipate the awakening of this sleepy giant.

Former Specialists’ Centre/Hotel Phoenix and Orchard Emerald

3) Pac Andes announced plans for a listing of TDRs on Taiwan Stock Exchange at an indicative price of NT$18 (or 77 Singapore cts). Since each TDR unit represents 2 PARD shares, this works out to be around 38.5 cts each. This could potentially raise up to around S$219 million in a best case scenario (which we view as net positive for the stock due to its high gearing that we had pointed out in our earlier article). However, its share price continue to languish at $0.315 after a brief spike after the initial announcement. We might potentially see more favorable action subsequently if the market response to the TDR issuance is good (which we feel will be the case).

4) Oceanus directors had came out scrambling to issue an announcement (i.e. denial) that there weren't anything concrete behind rumors of an impending buyout by a private equity firm, KKR. We tend to believe otherwise and view the announcement as a "cover" to allow negotiations to continue in the background without too much disruptions in the share price.


Finally, if you had managed to bear with us through all our earlier ramblings, we reward you with our "hot" kiasu tip of the night.  DBS Group Holdings CEO, Piyush Gupta had made a maiden purchase of 100,000 DBS shares on 9-May at a price of $14.825 per share. This translates to a cool $1.5 million dollars! (Of course, this is "peanuts" compared to his >$8 million a year CEO salary, but still, we take it as a strong indication that the boss is confident in his own business). Also worthy to note is that tomorrow (11-May) will be the last day that the stock will be trading Cum-Div of 28 cts dividends. So what better time than now to try getting your hands on some? We at Kiasu Investors will definitely be giving it a shot...