SingHaiyi Group - RHB Invest 2017-12-27: Ceasing Coverage

SINGHAIYI GROUP LTD. 5H0.SI

SingHaiyi Group - Ceasing Coverage

SingHaiyi has been expanding its geographical presence, with the recent acquisition of a small stake in Australia-listed Cromwell Property Group. The company has also been active in Singapore’s en-bloc market, with the acquisition of two sites in recent months.
A strong recovery in the Singapore and US property markets could potentially boost share price performance. That said, we are ceasing coverage on this counter due to a redistribution of internal resources.

SingHaiyi recently announced that it has subscribed for 61m units of stapled securities in Australia-listed Cromwell Property Group (Cromwell) for AUD59.1m (SGD 60.1m), representing a stake of 3.45%.
The units were purchased at a 4.9% discount to Cromwell’s one- month volume weighted average price (VWAP). The move is aimed at further diversifying its regional presence and to strengthen its recurring income base.

The company has also been active in the Singapore en-bloc market, with the acquisition of a 50% stake each in How Sun Park and Sun Rosier condominiums. The total purchase prices for these projects are SGD81m and SGD271m respectively.
The acquisition is likely to be funded by the proposed renounceable non- underwritten rights issue (one rights share for every two ordinary shares), which is expected to raise gross proceeds of SGD143.5m.

The divestment of the project to an unrelated third party is to be done at a total cash consideration of USD95.3m (SGD128.3m). The commercial condominium development project in San Jose, California, comprises nine blocks of commercial condominium units and a four- storey parking structure.
The divestment is expected to be completed by 30 Sep 2018 and is expected to have a positive impact on the company’s NAV and EPS.

Vijay Natarajan RHB Invest | http://www.rhbinvest.com.sg/ 2017-12-27

RHB Invest SGX Stock Analyst Report CEASE Maintain BUY 0.140 Same 0.140