To The Moon

Selective Singapore Stocks Analysis 

Sembcorp Industries is buying a stake in a renewable energy company in China. This will enable the Singapore-listed energy and urban solutions provider to enter into a partnership with the world’s largest renewables player. Sembcorp announced on Thursday (Nov 17) that wholly-owned subsidiary Sembcorp Energy (Shanghai) is acquiring a 45.3 per cent interest in Hunan Xingling New Energy for 1.1 billion yuan (S$204 million) from Wuling Power. Wuling Power is an affiliated company of Chinese state-owned enterprise State Power Investment Corporation (SPIC). The transaction will result in Xingling New Energy becoming a joint venture between Sembcorp and Wuling Power, with the SPIC affiliate holding the remaining 54.7 per cent stake in Xingling New Energy. “SPIC is the largest renewables player in the world with over 80 gigawatts of installed capacity. Sembcorp is privileged to partner them,” said Wong Kim Yin, Sembcorp Industries’ group president and chief executive officer. The acquisition will push Sembcorp’s gross renewables capacity globally to 9.4 GW – one step closer to its target of reaching 10 GW of gross installed renewables capacity by 2025. Sembcorp said the transaction, which is expected to be completed in the first half of 2023, will be funded through a mix of internal cash resources and external borrowings. It added that, upon completion, the acquisition is expected to be accretive to earnings. Shares of Sembcorp closed 5.2 per cent or S$0.15 higher at S$3.05 on Thursday, before the announcement.

CSE Global reported 22.0% higher revenue y-o-y of $141.1 million for 3QFY2022 ended September. This was attributed to growth in project, time and material revenues across all geographic regions. Higher revenues in the Asia Pacific region were mainly attributable to higher mining and minerals and infrastructure project revenue in Australia. Also, higher revenues from the Americas were driven by both the energy and infrastructure sectors, says the company in a Nov 17 press release. Revenue improved across all three business sectors in 3QFY2022. Revenue in the Energy segment increased by 7.1% y-o-y to $72.4 million in 3QFY2022, mainly attributed to more project and time and material revenues recognised in the Americas. Infrastructure revenue improved by 44.8% y-o-y from $37.0 million in 3QFY2021 to $53.6 million in 3QFY2022, mainly driven by higher revenue contributions across all key geographies in Australia, Singapore, United Kingdom and USA. Mining & Minerals revenue increased by 37.7% y-o-y, as projects are progressing as compared to delays in project execution in 3QFY2021. About 52.6%, or $86.8 million, of new orders were secured by the Group’s Energy sector in 3QFY2022, as compared to $73.8 million in 3QFY2021, representing a 17.7% increase. This was mainly due to higher field services orders in the Americas. In 3QFY2022, new orders for the Group’s Infrastructure sector rose by 53.2% y-o-y to $55.1 million. This was due to several wastewater and industrial project orders secured in the Americas region arising from increased infrastructure spending. The Mining & Minerals Sector clinched S$23.0 million worth of new orders in 3QFY2022, compared to $10.6 million in 3QFY2021, mainly a result of a steady pipeline of orders for radio communication network projects from mining customers in Australia. With these new orders, the Group closed 3QFY2022 with an order book of $412.8 million. CSE Global announced a $33.4 million rights issue in October. In a Singapore Exchange filing on Oct 10, the company says it intends to issue over 102.4 million new ordinary shares at 33 cents per share. Shares of CSE Global then closed 12.04% down on Oct 11. Shares in CSE Global closed 1 cent higher, or 2.9% up, at 35.5 cents on Nov 17.

Legend Logistics is exploring an initial public offering (IPO) in Singapore to raise as much as S$200 million, according to people with knowledge of the matter, in what would be the largest IPO in the city-state in nearly a year. The logistics firm is working with financial advisers on the potential first-time share sale, said the people. A listing could take place as soon as 2023, said the people, who asked not to be identified as the process is private. Deliberations are ongoing and the size and timing of the IPO could still change, the people said. Representatives for Legend Logistics did not immediately respond to calls or emails requesting comment. The offering would boost the first-time share sale market in Singapore, which has hosted only US$348 million worth of IPOs this year, down 15 per cent from the same period a year earlier, according to data compiled by Bloomberg. At US$146 million (S$201 million), Legend’s offering would be the biggest in the city-state since Digital Core Reit Management raised US$647 million in an IPO in November 2021. Founded in 2012, Legend is a one-stop logistics provider for heavy haulage, bulk liquid, dry commodities, perishable products and oversized cargos, according to its website. The Singapore-headquartered company operates in 10 countries and has regional offices in Asia, Oceania and Europe.