CWT

http://www.remisiers.org/cms_images/CWT-2804111.pdf - a pretty comprehensive report released yesterday.

(Not Vested)

Business Times - 01 Jul 2011

CWT to buy into Swiss-based commodity trader

It will pay US$94m for 73.81% stake in MRI Trading

By MINDY TAN

INTEGRATED logistics provider CWT Group has entered into a deal to acquire 73.81 per cent of MRI Trading AG - a Switzerland-based commodities marketer - for US$94 million.

CWT, which is making the acquisition through wholly owned subsidiary Capsolon Pte Ltd, will make payment in four tranches: about US$60.8 million on the deal completion, which is expected this month, with the balance to be paid in three equal instalments at one-year intervals.

The first payment of US$60.8 million will come from CWT's own funds and/or borrowings, and through the issue of 10 million new CWT shares.

CWT sees the acquisition as a strategic move to strengthen and expand its commodity logistics business.

'Building upon our strong growth momentum, the strategic acquisition of MRI is a very important milestone which continues to accelerate CWT's focus on the commodities sector and strengthen our businesses,' said CWT Group chief executive officer Loi Pok Yen.

Deputy CEO and chief financial officer Lynda Goh said: 'The commodity sector is a huge industry that deals in big volume and they are essential to industrial and economic development. Hence, we feel it is strategic to focus on growing this sector.'

'Within the sector, it is typically the big trading giants/banks that are bought out by logistics players . . . We are doing the reverse here to map our own path forward to create opportunities for new, higher margin and resilient base metals origination flows,' Ms Goh added.

Since early 2011, CWT has delved into coal trading, with the aim of developing trading flows with Singapore as a hub.

MRI is a commodity marketing company focused on base metals non-ferrous concentrates. It also facilitates logistics and provides operations support services. It also has international offices in Latin America, Africa and Asia.

CWT is acquiring MRI following a spin off of MRI's previous investments in mining operations, leaving MRI to focus on its core base metals trading operations.

MRI is said to have 'generated consistently over US$2 billion in turnover over the past years' and 'demonstrated its capability to generate in excess of US$40 million gross profit and US$20 million net profit on a standalone basis'. Its net asset value as at June 30, 2011, was estimated at US$82.41 million.

According to CWT, the acquisition is expected to be earnings accretive from the first full year of consolidation.

CWT shares, which resumed trading yesterday after a trading halt since Monday, closed 10 cents, or 8.06 per cent, up at $1.34 after pre-market announcement of the acquisition.

I Expect CWT to be a STI component stock one day.

---

Take a look at the list of stable clients CWT makes their money from


Ministry of Defence
Ministry of Education
Ministry of Health
Ministry of the Environment
A*Star
Singapore Airport Terminal Services
Singapore Police Force
Land Transport Authority
Civil Aviation Authority of Singapore
Port of Singapore Authority
Public Utilities Board
Singapore Tourism Board
National Skin Centre
Commercial & Industrial Security Corporation
Federal Express
Singapore Telecoms
Changi International Airport Services
National Trades Union Congress (NTUC) Income Insurance
Americal Insurance Group (AIG)
Asia Insurance

Very good performance for CWT! Expect the price to shoot up further as their trading business yields synergies with their logistic business

CWT is on the verge of breaking out of multi-year highs (between 1.38 and 1.41). There appears to be accumulation but CWT share price remains locked into a trading channel for the last few years.

It is a multi-national logistics company with a REIT originator model - Cache REIT is the latest listed REIT that CWT is sponsoring. Before GFC, Cambridge REIT was the sponsored vehicle. Understand that CWT continues to have an investment in Cambridge.

The Swiss based trading business MRI Trading is one of the latest foray by CWT last year. Unfortunately with the disappointing performance of NOW (Noble, Olam and Wilmar) and the disappointing performance of MRI so far, it appears that this new unit is keeping CWT share price in check.

With a healthy portfolio of logistics and warehouse, CWT's REIT originator valuation ratings appears to be under-rated. CWT's rationale in acquiring MRI was the synergistic benefits it can derive with its logistics business. So far, it appears that CWT has yet to achieve the benefits of the acquisition and hence the subdue share price performance.

Thus far, CWT CEO has been steadfast in his own company as indicated by his regular open market purchases.

Any other insights on CWT will be greatly appreciated.

(17-01-2013, 02:35 PM)propertyinvestor Wrote: Very good performance for CWT! Expect the price to shoot up further as their trading business yields synergies with their logistic business

I believed you are right, whats holding the major price resistance is MRI trading. After CWT acquire MRI, I stop adding more position in my investment book.

I dont really quite understood the model of MRI trading, supply chain manager co all about - these Co need high working capital to support high volume of business. Overtime chalk up high level debt burden.

Sometimes only appreciating share price that matters to the market players. Once Olam and Noble back to its glory days, more players will be keen to know to uncover this gem.

(22-01-2013, 08:21 PM)greengiraffe Wrote: CWT is on the verge of breaking out of multi-year highs (between 1.38 and 1.41). There appears to be accumulation but CWT share price remains locked into a trading channel for the last few years.

It is a multi-national logistics company with a REIT originator model - Cache REIT is the latest listed REIT that CWT is sponsoring. Before GFC, Cambridge REIT was the sponsored vehicle. Understand that CWT continues to have an investment in Cambridge.

The Swiss based trading business MRI Trading is one of the latest foray by CWT last year. Unfortunately with the disappointing performance of NOW (Noble, Olam and Wilmar) and the disappointing performance of MRI so far, it appears that this new unit is keeping CWT share price in check.

With a healthy portfolio of logistics and warehouse, CWT's REIT originator valuation ratings appears to be under-rated. CWT's rationale in acquiring MRI was the synergistic benefits it can derive with its logistics business. So far, it appears that CWT has yet to achieve the benefits of the acquisition and hence the subdue share price performance.

Thus far, CWT CEO has been steadfast in his own company as indicated by his regular open market purchases.

Any other insights on CWT will be greatly appreciated.

(17-01-2013, 02:35 PM)propertyinvestor Wrote: Very good performance for CWT! Expect the price to shoot up further as their trading business yields synergies with their logistic business

Here is another reason why CWT will ALWAYS make money. Take a look at their long list of BLUE CHIP clients!

Ministry of Defence
Ministry of Education
Ministry of Health
Ministry of the Environment
A*Star
Singapore Airport Terminal Services
Singapore Police Force
Land Transport Authority
Civil Aviation Authority of Singapore
Port of Singapore Authority
Public Utilities Board
Singapore Tourism Board
National Skin Centre
Commercial & Industrial Security Corporation
Federal Express
Singapore Telecoms
Changi International Airport Services
National Trades Union Congress (NTUC) Income Insurance
Americal Insurance Group (AIG)
Asia Insurance

On the verge of clearing the last high of $1.41, technically a breakout from multi-year highs if $1.41 is breached.

Indeco engineers was acquired by CWT for a token sum of 9million in 2006. Last year, Indeco Engineers generated net profits of 22million.

Hi PI,

I was going through CWT's 2011 AR, I can't find the figures that you mentioned. Can you give me a lead on the page that reveal the performance of Indeco?

Cheers
GG

(28-01-2013, 09:57 PM)propertyinvestor Wrote: Indeco engineers was acquired by CWT for a token sum of 9million in 2006. Last year, Indeco Engineers generated net profits of 22million.