Far East Group

[merxantia]

Just wondering if anyone has looked into this counter? FY EPS 3.91cts, NAV 24cts and about 3.7% dividend yield. Recently did a rights issue to acquire a refrigeration company. Currently trades at about 15.3cts, close to 6x PE

[Zelphon]

I was looking at it..

But the share float is so little..
Sell volume and buy volume so low..
Can't even accumulate at current price

[merxantia]

Only about 108m shares issued so not many shares available to begin with, but their earnings potential looks decent in my view.

[merxantia]

Based on current share price of $0.173 (+ 12.3%), seems that there is some interest being picked up in this counter.

[Dividend Hermit]

I have queued for this counter for some time but didn't get anything due to low liquidity. The spread is also quite significant.

[nsengkia]

Have been watching this counter for some time. Major catalyst is the purchase of Eden Manufacturing in July 2013 which appeared to have boosted performance for the last six months of FY13. But I assess the rights issue as negative because of the impact on EPS.

Now we have this "strange" Corporate and Business Update (see http://infopub.sgx.com/FileOpen/FEG%20-%...eID=307353)

I find it strange because it was not presented as a positive profit warning. Reading between the lines, I believe that revenue is up but profit is either down or flat for the latest six months.

Have decided to vest a small position even at the wide spread and monitor some more for the time being.

[nsengkia]

Interestingly enough, this week's The Edge Magazine (Issue 637) has a feature on this company entitled "Far East Group bets big on China a year after acquisition in Jiangsu". One interesting nugget of information in the article is that "One of the company's biggest assets, and one that has gone unnoticed among many investors, is its 20,839 sq ft freehold headquarters building on Lavender Street. The property, which it bought in 2002, is reflected in its balance sheet based on its historical cost".

Given the previous SGX announcement being followed so closely by this Edge Magazine article, I sense an investor relations "push" in the works. The confirmation would be a positive 1HFY2014 results due on 8 August.

The Edge Magazine article did include one other piece of information that serves as a warning flag though. It appears that Eden Refrigeration Manufacturing (ERM), the vehicle for their China push, was acquired for $11.7 million in cash from the Group's controlling shareholder.

Currently vested and watching with the intention to pyramid up if the 1HFY2014 is positive.

[nsengkia]

1FY2014 turned out to be a dud (http://infopub.sgx.com/FileOpen/FEG%20-%...eID=309017).:@
Overall revenue is up with the contribution from China operations but the core Singapore operation revenue is down. Worse still is the drop in overall nett margin as the more profitable Singapore operations fails to be adequately supplemented with the less profitable China operations.
Looks like I made a mistake with this one. The investor relations "push" seems to be just trying to put a positive spin on what is deteriorating fundamentals.
May have to see how to gracefully exit.

[cyclone]

Proposed Disposal of 112 Lavender Street Singapore 338728

The company has, on 23 March 2018, issued a conditional option to purchase agreement to Chang Hua Construction Pte Ltd (the “Purchaser”), an independent and unrelated third party, to grant an option to the Purchaser for the sale of the property situated at 112 Lavender Street Singapore 338728 (the "Property").

The Property is a four-storey building situated at 112 Lavender Street, Singapore 338728 and occupies a land area of approximately 1,936 square metres. The Property is a freehold estate and it serves as the regional headquarters of the Group’s operations. The Property has a net book value of S$4.2 million as at 31 December 2017

The aggregate sale consideration for the Proposed Disposal excluding GST is S$27,000,000. The Consideration was arrived at based on arm’s length negotiations and on a willing-buyer and willing-seller basis, after taking into account, inter alia, prevailing market conditions and the current market prices of the properties in the surrounding vicinity of the Property

The net proceeds from the Proposed Disposal of approximately S$26.2 million, after deducting related fees and expenses of approximately S$0.8 million, will be utilised for working capital, business expansion and future investment opportunities.

Assuming that the Proposed Disposal was completed on 31 December 2017, the gain on the Proposed Disposal or the excess of the Net Proceeds over the book value of the Property as at 31 December 2017 would be approximately S$22.0 million.

More details in http://infopub.sgx.com/FileOpen/Proposed...eID=494077

[karlmarx]

All that cash will be used to repay the debt that has been accumulated due to their investing activities.

This move should be seen as FEG trying to improve their short-term liquidity, rather than the prospects of a windfall dividend. If business doesn't improve, the cash burn will leave the company with nothing else.

Nevertheless, this is a good opportunity for shareholders to exit.