2nd Chance Properties

[zquan]

The share price of the stock has dropped more than 40% since the previous high?

[cyclone]

Proposed Bonus Issue of Warrants on the basis of ONE (1) Bonus Warrant for every ONE (1) existing ordinary share

Second Chance Properties Ltd is pleased to announce that the Company intends to undertake a proposed bonus issue of free warrants to subscribe for new ordinary shares in the capital of the Company at an exercise price of S$0.25 per share.

The Bonus Warrants may be exercised at any time during the period commencing on the date which is six (6) months after the date of issue of the Bonus Warrants and expiring at 5.00 pm on the date which is the third (3rd) anniversary of the date of issue of the Bonus Warrants (but excluding such period(s) during which the register of holders of the Bonus Warrants may be closed). The Bonus Warrants remaining unexercised at the expiry of the Exercise Period shall lapse and cease to be valid for any purpose.

<not vested>

[cyclone]

Sale of the property at a loss ?

Second Chance Properties Ltd announced that the company’s subsidiary, Super Chance Properties Pte Ltd ("SCP") has granted an option to Fok Chuen Yin and/or Nominee to purchase SCP’s property at 12 Haig Road, #01-323, Singapore 430012 situated on Lot U12166X of Mukim 25 for a total consideration of S$10,000,000 excluding GST.

The sale price was arrived at on a willing-buyer and a willing-seller basis after taking into consideration the valuation performed by Jones Lang Lasalle on 31 August 2016 and was to be satisfied in cash.

More details in http://infopub.sgx.com/FileOpen/SCPL_Ann...eID=458802

[Debronic]

Sale of the property at a loss ?

Second Chance Properties Ltd announced that the company’s subsidiary, Super Chance Properties Pte Ltd ("SCP") has granted an option to Fok Chuen Yin and/or Nominee to purchase SCP’s property at 12 Haig Road, #01-323, Singapore 430012 situated on Lot U12166X of Mukim 25 for a total consideration of S$10,000,000 excluding GST.

The sale price was arrived at on a willing-buyer and a willing-seller basis after taking into consideration the valuation performed by Jones Lang Lasalle on 31 August 2016 and was to be satisfied in cash.

More details in http://infopub.sgx.com/FileOpen/SCPL_Ann...eID=458802

Nope. They made a calculation error and have since released a rectified one:

http://infopub.sgx.com/FileOpen/SCPL_Ann...eID=458940

Wouldn't have made sense to be recording a loss otherwise when the property is sold at premium to last valuation as all their investment properties are carried at valuation prices (fair value).

[cyclone]

Second Chance to close more baju kurung stores to arrest profit slide

By: PC Lee
28/06/18, 06:41 pm

SINGAPORE (June 28): Second Chance Properties reported a 61.6% fall in 2Q net profit to $2.1 million from $5.4 million a year ago on lower sales

Revenue for the three months ended May closed 3.2% higher at $9.7 million but cost of sales rose 10.8% to $4.9 million. This resulted in gross profit falling 3.6% to $4.8 million.

Second Chance says its apparel business continues to be affected by increasing trend of online sales as well as poor consumer spending. To prevent future losses, four more stores will be closed this year leaving only one First Lady Store in Singapore and another in Malaysia.

More details in https://www.theedgesingapore.com/second-...ofit-slide

Second Chance today closed at S$0.24.

Third Quarter Financial Results : http://infopub.sgx.com/FileOpen/Second%2...eID=512324

[cyclone]

Profit Guidance for the Financial Year Ended 31 August 2019

The Board of Directors of Second Chance Properties Ltd announced that, based on the preliminary review of the unaudited consolidated financial statements of the Group for the financial year ended 31 August 2019 (the “FY2019”), the Group expects lower profit for FY2019 as compared to the consolidated financial statements for the financial year ended 2018 (“FY2018”). Overall, the Group is expected to remain profitable for FY2019 and the fourth quarter ended 31 August 2019 (“4Q2019”).

The Group is expected to report a lower profit in 4Q2019 and FY2019, primarily due to unrealised loss on revaluation of properties recorded in FY2019 as compared to unrealised gain on revaluation of properties reported in FY2018. In addition, there is a loss on sale of investment property in FY2019 against profit on sale of investment property in FY2018.

This profit guidance is based on preliminary review of the unaudited financial results of the Group. Further details of the Group’s performance will be disclosed when the Company finalises and announces its unaudited financial results for FY2019 on or before 24 October 2019.

[cyclone]

Financial Results for the Year ended 31 August 2019 ("FY2019")

Highlights :
1. Revenue has decreased by $0.85 million or 2.69% from $31.61 million in FY 2018 to $30.76 million in FY 2019
2. The Group net profit decreased by $3.16 million from $7.91 million in FY 2018 to $4.75 million in FY 2019
3. Adjusted EBITDA increased by $0.65 million from $7.54 million in FY 2018 to $8.19 million in FY 2019
4. The net cash flow from operating activities was $13.92 million in FY 2019
5. Cash and cash equivalents at the end of the period i.e. 31 August 2019 was $11.11 million ($10.80 million at 31 August 2018)
6. Investment properties of the group totaled $159.55 million
7. As at 31 August 2019, the Group has short-term borrowings of $21.20 million ($39.10 million as at 31 August 2018)
8. The gearing ratio of the Group improved from 0.11 at 31 August 2018 to 0.04 at 31 August 2019
9. No dividend has been declared or recommended by the Board of Directors of the company for the current financial period ended 31 August 2019 as the company has declared an interim dividend of 0.4 cent per ordinary share in the 3rd quarter of FY 2019.

More details in :
1. https://links.sgx.com/FileOpen/SCPL_Unau...eID=582899
2. https://links.sgx.com/FileOpen/Annexure%...eID=582900

[weijian]

Is it time for a SECOND look at ANOTHER CHANCE?

Under its FY23 commentary section, it has stated the below:
We expect dividend income to decrease as we need to adhere to SGX Listing rule 1020 and downsize our existing investment portfolio.

- To recap, the company's investment portfolio has ballooned from 80mil (FY20 end) to 270mil (FY23 end). This ~190mil increase is funded by ~100-110mil from properties sales, 60mil from borrowings, ~10mil from existing cash hoard and remaining are probably portfolio gains.

- So what is SGX Listing rule 1020?
Where an issuer, which had originally qualified for a listing of its equity securities under Chapter 2, intends to set up an investment fund or undertake any business(es) in investment fund management, which in aggregate, exceeds 50% of the issuer's net asset value, the issuer must demonstrate to the Exchange that it satisfies the listing requirements for investment funds stipulated in Chapter 4 before it takes any steps to undertake such a business, whether through a transaction or a series of transactions.
https://rulebook.sgx.com/rulebook/1020

- With >90% of its NTA in investments, it seems that the company is now an "investment fund". Chapter4 has a couple of rules for investment funds but I wonder which exact criteria is it failing to adhere to?

- That said, Out of its balance sheet (FY23) --> Investments (FVOCI/FVPL) ~95%, investment properties/PPE ~30% and inventory (retail gold shops) ~5%, is balanced out by ~30% of gearing to achieve 100%. Most of the current loans were taken form FY21 onwards to take advantage of "cheap equity prices". So for a start, the wind-down of its investment portfolio will involve a reduction/elimination of gearing (especially with interest rates rising). If SECOND CHANCE has to wind down its portfolio to <50% of NTA, that will mean excess cash on its balance sheet even after fully paying down its loans. Is there a GOOD CHANCE that the ex-presidential hopeful CEO will reward him/family members/OPMIs with something special? After all, Chairman Salleh has always proven to give a FAIR CHANCE to minorities.

Second Chance Properties FY23 results:
https://links.sgx.com/FileOpen/SCPL%20-%...eID=776281

SGX listing rule chapter 4:
https://rulebook.sgx.com/rulebook/404

[weijian]

From AGM2023 QnA, Second Chance may be soon be recognizing mark to market losses from its property portfolio in coming 1H24 based on its AGM QnA below:

Unlike CP which is a freehold property, SLQ is a leasehold property with 58 years remaining. Despite offering a 20% discount below present valuations for SLQ over the last few months, we were unable to sell any unit.

Second Chance now finds itself caught between a rock and hard place - It has to divest its securities portfolio (abeit over a period of 4 years after they got a waiver from SGX). From the proceeds, it should be levering down 1st, since most of the borrowings were first incurred to scale up the securities portfolio to current size. Then on the other hand, Chairman has rightly determined that most of its strata titled commercial units are better off sold than holding them. Even after repaying its loans, it probably still has substantial cash on the BS. Paying out the cash will mean that NAV drops and risk breaking the listing rule again. It probably has to start finding new businesses/assets to invest in again.

OR will it be better to delist? After all, they are reaching the limits of doing their scrip dividend-warrant thing. Chairman and his related family members collectively own ~86% of the company now.

AGM2023 QnA:
https://links.sgx.com/FileOpen/SCPL%20-%...eID=780780

[ghchua]

Hi weijian,

I think you might have mistaken. The NAV disclosure by Second Chance is based on Rule 748(1) of SGX listing manual, which relates to investment fund. Which means, what they have disclosed is only the NAV of their securities portfolio, and not the other business segment of the company.

18.83cents is only the NAV of their securities portfolio, and it excludes others like gold, apparel inventories and properties in the company.

https://rulebook.sgx.com/node/5135/revis...rase=false

Hope that the above clarifies.