ADV-Trades Redirection from SGX Mobile to POEMS Mobile

Trades Redirection from SGX Mobile to POEMS Mobile

We are pleased to inform that POEMS Mobile apps (for iOS v1.4.24 and Android v1.4.19) are now integrated with SGX Mobile App. You will be able to trade through POEMS mobile app via a redirection from SGX Mobile App.

1. You can now place trades from respective SGX “Stock Quote” screen.
2. On the same "Stock Quote" screen, you may select "Phillip Securities" as your preferred broker.
3. Once you are redirected to POEMS mobile, login with your User ID and password and submit the trade. If you have yet to download POEMS mobile app, you will be redirected to the respective App Stores to download the app.

For more information on the trade redirection from SGX Mobile App to POEMS Mobile, please send an email to poemsmobile@phillip.com.sg

We look forward to your continuous support and do look out for more exciting news on POEMS Mobile soon!

For Account Opening, please click Here

Download our POEMS Mobile app today! 

Free Shares Investment eBook! – Discovering Value Amidst Uncertainties

Introduction

Major benchmarks in the United States continue to break new highs with the Dow Jones Industrial Average marking a historic high of 21,115.55 on 1 March 2017, lifted by the Trump Administration’s policies of infrastructure plans and tax cuts. Asian markets, on the other hand, lagged far behind in comparison to the performances of their western counterparts. Despite already achieving a year-to-date return of eight percent by closing at 3,118.84 on 09 March 2017, Singapore’s Straits Times Index still has a lot more room for advancement before it can reach its previous high of 3,525.19 in April 2015. In terms of price-to-earnings (P/E) valuation, current P/E ratio of SPDR Straits Times Index (STI) ETF, an exchange-traded fund which tracks the performance of Straits Times Index, stood at 12.8 times as of 10 March 2017. This does not seem expensive at all given that the historic P/E ratio of SPDR STI ETF has a long term average of around 16.9 times from 1973 to 2010. Market sentiments are generally beaten down due to a lack of confidence attributable to the impending US rate hike, low oil price, and political uncertainties in the Europe zones. To help investors make better-informed decisions, we seek to discover value amidst uncertainties in the market by compiling this report, sifting out 20 companies (18 listed on the Singapore Exchange and two on Bursa Malaysia) with strong fundamentals. We highlight their respective strengths so as to help investors gain a quick understanding of these companies through our introduction and insights. Among these featured companies, we hope that you may find some hidden gems which could be suitable candidates to be added into your portfolio. Enjoy the read.

I am going to mass email out the E Book to my distribution list as I am unable to upload the PDF file. Should you not receive it, please let me know your email address and I will send it to you.

Innovalues Limited - Earnings Review, Future Prospects & Possible Transaction

Innovalues Limited

Earnings Review and Future Prospects 

As reported in the latest earnings announcement, Innovalues marks strong earnings recovery as net profit rises to S$6.2 million for 2Q16.

• Gaining traction from the previous quarter, growth in the Automotive and Office Automation business segments led to an overall revenue growth of 10.6% qoq to S$30.1 million

• Core business segments continue to generate strong positive operating cash flows resulting in a net cash position of S$28.0 million

• Building on the momentum from the first half of the year, the Board of Directors is cautiously optimistic on a stronger second half for 2016.

Despite challenging economic conditions, the Group reported revenue growth of 2.1% year-on-year (“yoy”) to S$30.1 million for 2Q16. Comparing on a quarter-on-quarter (“qoq”) basis, the Group recorded a 10.6% rise in revenue as it continues to drive momentum for a strong showing in the second half of the year. 

On a segmental basis, the Automotive (“AU”) segment continued to be the primary contributor of revenue accounting for 78.8% while the Office Automation (“OA”) segment accounted for 21.1% of the overall revenue for 2Q16. 

Revenue from the AU segment increased 4.4% yoy to S$23.8 million for 2Q16 driven by an increase in orders from customers in China. 

Conversely, revenue from the OA segment slipped marginally by 3.3% yoy to S$6.4 million due to a decline in orders from customers in the US. 

The Group’s commitment to enhancing operational efficiencies led to a 7.7% yoy increase in gross profit to S$9.5 million for 2Q16. 

Correspondingly, the Group’s gross profit margin expanded from 29.9% for 2Q15 to 31.6% for 2Q16. 

In terms of profitability, the Group’s net profit is on track for earnings recovery from preceding quarter, posting a 63.9% qoq increase to S$6.2 million for 2Q16. 

Comparing on a yoy basis with 2Q15, it also improved by 5.7%. 

The Group’s core business operations continue to generate strong positive operating cash flows of S$11.4 million for 1H16. 

As a result, cash and cash equivalents amounted to S$30.2 million with a net cash position of S$28.0 million as at 30 June 2016. Going forward, the Group will continue to focus on strengthening cost controls and improving productivity across all business segments. 

The increasing trend for governments worldwide to adopt stricter regulations towards safety, energy consumption and environmental protection remains and continues to represent an opportunity for the Group’s core AU business. 

As such, the Group strives to enhance its engineering capabilities and improve upon its competitive advantage in order to take advantage of the available growth catalysts in the industry. 

While charting steady growth, the Group adopts a prudent approach in relation to business headwinds such as increasing labour costs and volatility in the foreign exchange markets. 

Barring any unforeseen circumstances, the Board of Directors is cautiously optimistic for a stronger financial performance in the second half of 2016.



Possible Transaction to Enhance and Unlock Shareholder Value

The Board of Directors (“Board”) of Innovalues Limited (the “Company”) refers to the announcements made by the Company on 3 July 2016, 19 July 2016 and 2 August 2016 (the “Announcements”) where the Company had informed shareholders in the Announcements that the Company was in discussion with various parties in connection with a possible transaction.

The Company wishes to update shareholders that matters have progressed since the Announcements and at this time, the Company is continuing discussions with one of those parties.

Such discussions are still on-going and there is no assurance or certainty that any transaction or agreement will be entered into pursuant to these discussions. 

Key Ratios (Extracted from Poems 2.0 Analytics on 6/9/2016 9.18am)

Basic Stock Information

Stock Data
Market Capitalization (SGD 'mil)	293.66
Common Shares Outstanding ('mil)	328.1090
52 Week High (SGD) (07/07/2016)	1.115
52 Week Low (SGD) (23/09/2015)	0.611
52 Week Return (%)	38.741
Average Volume ('mil)	1.5050
Beta	0.86

Financial strength
Current Ratio	3.37
Quick Ratio	2.88
Long Term Debt to Equity (%)	0.39
Total Debt to Equity (%)	4.62
Interest Coverage Ratio (TTM)	-
Free Cash Flow to Firm (TTM) (SGD 'mln)	16.66

Margin
Gross Margin (TTM) (%)	31.18
Operating Profit Margin (TTM) (%)	22.21
Net Profit Margin (TTM) (%)	19.22

Dividend §
Annual Dividend per share (SGD)	0.0240
Dividend Yield (TTM) (%)	1.34
Dividend Yield (Annual) (%)	2.68
Payout Ratio (TTM) (%)	57.16
3-Year Growth Rate (%)	58.74

Valuation
Historical P/E Ratio	12.74
P/E Ratio (TTM)	13.59
P/BV (latest interim)	3.55
BVPS (latest interim) (SGD)	0.2522
EPS TTM (SGD)	0.0659

For more information, please see Company Website http://www.innovalues.com/

Recent Broker Calls
DBS Group Research
BUY (Upgrade from HOLD) Last Traded Price: S$0.895 (STI : 2,856.67) Price Target 12-mth: S$1.07 (19% upside) (Prev S$1.01)
Read More ...

UOB KayHian
BUY (Maintained) Share Price S$0.945 Target Price S$1.06 Upside +12.2%
Read More ...

CIMB
HOLD (no change)
Read More ...

MayBank Kim Eng
BUY
Share Price SGD 0.90 12m Price Target SGD 1.15 (+28%) Previous Price Target SGD 1.15
Read More ...


About Innovalues Limited 
Established in 1997, Innovalues Limited (“Innovalues” or the “Group”) specializes in the manufacturing of customized precision machined parts and components. 
These include automotive components, printer rollers, mechanical devices, and sub-assemblies as well as surface treatment services. 
Headquartered in Singapore, Innovalues has grown extensively through a combination of customer and product diversification and regionalisation. 
At present, the Group has operations in Malaysia, Thailand and China, occupying a total manufacturing space of approximately 50,000 sqm. 
With an aim to be the preferred global partner in precision engineering, the Group is focused on delivering the highest quality of products and services to its global customers.


Source: 
Innovalues Limited Q2 2016 Press Release
Innovalues SGX Announcement on 2/9/2016
Poems 2.0 Analytics (Key Ratios extracted on 6/9/2016 9:18am) 

Disclaimer:       
http://lionelltp.blogspot.sg/p/disclaimer.html


Not Vested

Market Update.

The slump in the oil and energy prices had a negative impact on the Singapore Economy since 2014. From the last quarter, we have witness some recovery in fossil fuel prices. Supply had been reduced due to the shutting down of higher cost oil productions. Recent supply disruptions have also an impact in supply.

However, the low prices have resulted to an increase in demand of oil, especially in Asia and United States. 

Interest rates are likely to rise with the recovery of US economy. Growth is likely to remain weak in Japan and Europe and China is slowing down.

Based on the recent reports, global growth in 2016 has been downgraded. Due to the global headwinds, property cooling measures, immigration and labour restrictions, many Singapore listed companies in the cyclical sectors are traded below the book value.

The recovery in equities and energy prices is likely to take place till we see a sustainable increase in global demand.

Redemption of Poems Reward Points:

We reward you when you trade! From May 2016 onwards, you can use your POEMS reward points to exchange for free travel and accident insurance coverage.

We reward you when you travel! Collect POEMS reward points when you book your travel accommodations via Agoda. For every S$1 you spend, we will credit 1 reward point to your POEMS account.

Enjoy S$10* minimum commission for online trades in Singapore listed stocks:

For further queries on the above, please click the above links or contact me.

Should you have any friends or colleagues or relatives who are interested to open a trading account to trade with me, please contact me at 90400848 or email me at tplim1975@gmail.com.

At the same time, you may wish to contact me as and when you need help for the following:

1)      New Password

2)      Change of Address

3)      Subscribe to Free Daily Brokerage Reports via email

4)      Opening of New Trading Account

5)      Stocks and Bonds Portfolio Review

6)      Receive Daily Market News Via Mobile

Thanks and Regards

Lionel Lim

Principal Trading Representative/Remsier

Blog: http://lionelltp.blogspot.sg/

Disclaimer: http://lionelltp.blogspot.sg/p/disclaimer.html

Basics on Bond Investments

Basics on Bond Investments

Investors buy bonds to make Money from Interest Income and Capital Gains.

Earning Interest Income is fairly straight forward. Movement in the Bond Prices will either result in Capital Gains or Losses. Investors can sell Bonds in the secondary market if they do not wish to hold it until maturity.

Factors Affecting Bond Prices
1) Interest Rates
2) Credit Quality of Issuer

1) Interest Rates have an inverse relationship with Bond Prices. If interest rates goes up, the Price of Bond drops. This is because Investors will demand a higher return than the coupon rate. They would rather buy a newly issued Bond at a higher yield.

2) The Bond price will sink if the Credit Quality of Issuer deteriorate. If the health of the Company changes from healthy to the verge of bankruptcy, other bond investors are unlikely to buy it from you unless the Bond price drops.

If the bond prices rises, the yield to maturity declines. The bond investors can choose to hold on to the bond and or sell it into the open market to make a capital gain. The bond investor can reinvest the proceeds into another bond with a higher yield to maturity.

Please see http://lionelltp.blogspot.sg/p/bonds.html to know about Bonds.

If you are interested in Bond Investments, please contact me at 90400848 or email to me at tplim1975@gmail.com.

http://lionelltp.blogspot.sg/p/disclaimer.html

Bonds, Fixed Income, Perpetual Notes

Bonds, Fixed Income, Perpetual Notes

Do you feel uncomfortable of the volatility of the stock market?
Are you keen to know more about Fixed Income Investments?

If yes, please see below.

A bond is a debt investment in which an investor loans money to an entity (typically corporate or governmental) which borrows the funds for a defined period of time at a variable or fixed interest rate.

To know more about bonds, please see
http://www.moneysense.gov.sg/Understanding-Financial-Products/Investments/Types-of-Investments/Bonds.aspx


The 2 main type of bonds that provide higher yield are:

1) Corporate Bonds
2) Perpetual Securities

Difference between Corporate Bonds and Perpetual Securities.
Corporate bonds are issued by a Corporation and sold to investors. The tenor of the Corporate Bonds are normally range from 2-7 years. The Yield of the Bond depends on the Credit Quality of the Bond Issuer. The Corporate bonds are redeemed by the issuer upon maturity. 

Perpetual Securities are hybrid securities that combine the features of both debt and equity. Perpetual securities do not have a maturity date but can have a callable date. 
The issuer may include step up feature on coupon payments after the callable date, if the issuer may, but is not obliged to redeem the perpetual securities on the callable date.

If the issuer does not exercise the redemption option, you can only exit your investment by selling the perpetual securities in the secondary market.
You will be exposed to market price fluctuations and liquidity risks.

FAQ
1) Is there a possibility that the listed issuer of the perpetual bonds chooses not exercise the option of redeeming the bonds?

Ans: The possibility is always there, but I think the probability is low. The reason is because the perpetual bonds normally have a step up feature on the callable date. If the issuer does not redeem the perpetual bonds, the coupon will be reset at a higher rate which will strain the balance sheet of the issuer.
If the listed issuer does not have sufficient funds to redeem the bonds, the Company will normally attempt to raise funds via new bond and or equity placement, equity rights issue, bank borrowings, and or sell assets.

2) Will the issuer of Corporate Bond or Perpetual notes ever default?

Ans: There is always a possibility. Please do your own due diligence and or consult your financial adviser. Always invest in a viable business and a well managed and well run company. If there is a default, you make not get back anything or your whole capital. Fundamentals of company may change with the economic and external environment.


If you are interested in Bond Investments, please contact me at 90400848 or email me at tplim1975@gmail.com.

Analysing Vallianz Holdings Limited

I think it is very clear to all of us that the oil and gas sectors are undergoing a bear market right now. Companies with big order books and long term chartering contracts are likely to ride out this difficult moment. One of the companies I have been analysing is Vallianz Holdings Limited.

Corporate Profile

VALLIANZ HOLDINGS LIMITED ("Vallianz" and together with its subsidiaries, "the Group") is a provider of offshore support vessels and integrated offshore marine solutions to the oil and gas industry. Headquartered in Singapore, Vallianz serves oil majors and national oil companies worldwide, and focuses on supporting customers' offshore exploration and production operations in shallow waters. With a young and modern fleet of 37 offshore support vessels, the Group has been actively expanding its presence and building its network in the major and emerging offshore markets in Asia Pacific, the Middle East, Latin America and West Africa.

Despite presently tougher market environment, Vallianz Holdings Limited achieved

• Profitable Performance
• Stable Fleet Utilisation Rate
• Stronger order backlog

On 20 July 2015, Vallianz Holdings Limited have negotiated with an average of 10% cut in chartering rates with a National Oil Company. But extended duration of the chartering contracts till 2020 including options.

In December 2014, Vallianz Holdings Limited was awarded a US$97 million time charter to supply a customized Offshore Floating Storage and Supply Vessel to the NOC for up to 5 years. On 13 July 2015, the Group secured a time charter worth up to US$300 million to supply two self-elevating platforms to support the NOC’s offshore oil production activities for up to 7 years.

If you have gone through Vallianz Holdings Limited presentation slides on 12 August 2015, both the charter period for both contracts will start in Q3 2015.

As at July 2015, according to the presentation slides, the total outstanding order book is US$968 million.

Vallianz Holdings Limited have 2 bonds expiring in 2016. They are likely to seek funding through the debt and capital markets to redeem the bonds. As long as there is no contract cancellation, in my opinion, they are unlikely to have funding issues.

Chart: Source Chart Nexus dated 19/10/2015. For Illustration purposes only.

Key Ratios and Data:

NAV US$0.0688

Basic EPS US$0.26

Diluted EPS US$0.25

Order Book as at 31 July 2015: US$968 mil

Generated US$11.1 mil free cash flow in Q2 2015 after completing major capex to drive initial growth

My View:

Earnings growth likely to pickup in Q3 or Q4 2015.

Key Risk: Contract Cancellation, Vessel Delivery Delay

However, do note that the above recent contracts are negotiated and or renegotiated are done when the oil price is lower than the peak.

If you have further queries, you can contact me at 90400848 or email me at tplim1975@gmail.com.

Please let me know if there is any error in my posting as well.

Presentation slides and information are extracted from company announcements from sgx website.

http://infopub.sgx.com/FileOpen/VHL_IR.Presentation.2Q2015.ashx?App=Announcement&FileID=364386

Vested Interest

Lionel Lim
lionelltp.blogspot.sg

Please do read the disclaimers.

http://lionelltp.blogspot.sg/p/disclaimer.html