Winas (formerly: Sinwa Limited)

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#1
For info. I am NOT vested.

Business Times - 06 Jan 2011

Sinwa acquires 70% of Rapid Offshore & Marine


Acquisition set to add heft to Sinwa's earnings by Q2

By JOYCE HOOI

MARINE supply and logistics firm Sinwa Limited may not have had the best of luck with partnerships, but it is upbeat that its latest deal will be a winner.

Yesterday, Sinwa announced an acquisition of a 70 per cent stake in Rapid Offshore & Marine through a mix of shares and cash. The maximum consideration, based on 70 per cent of a P/E ratio of 3.5 times of specified audited net profits, is $12.25 million.

Rapid is a heating, ventilation, air-conditioning and refrigeration (HVAC&R) firm that services the offshore and marine industry. To date, it is said to have completed HVAC&R systems for more than 20 per cent of the global floating production, storage and offloading (FPSO) vessel fleet.

The acquisition is expected to start adding heft to Sinwa's earnings by Q2 this year.

The deal, expected to be finalised by March 1, will be carried out in two tranches. The first tranche of $7.35 million will be paid in equal parts cash and new Sinwa shares.

The remainder - also equal parts cash and new Sinwa shares - will be paid in a second tranche after the audited accounts of FY2011.

The deal also comes with a put option for Rapid's chairman and chief executive officer - Jeffrey Choo - to sell the remaining 30 per cent of Rapid to Sinwa. Sinwa, conversely, has a call option to buy that stake, but no price has been set for either option. The options are to be exercised within six months from the end of 2014.

The acquisition was set in motion by a chance meeting between Mr Choo and Mike Sim - Sinwa's executive chairman and chief executive officer - at a shipping conference in London in September last year.

'We met by accident in Kensington Town Hall at a shipping conference and we decided that there is this fantastic synergy,' said Mr Sim.

According to Mr Sim, Rapid will give Sinwa an engineering edge in China and Western Australia where the latter is established.

Rapid, in turn, will be able to gain a foothold in these markets.

'(Sinwa) has a database of owners which we can immediately access. For geographical expansion, we can immediately become operational in two countries - China and Australia in the very near future,' said T K Naga, Rapid's director.

Sinwa's previous partnerships have not gone as swimmingly as hoped, what with the cancellation of a 50-50 joint venture with Nordic International to build a barge and a deal to sell a stake in Sinwa to Sinohit Offshore Engineering falling through.

Nonetheless, Mr Sim sees a turnaround in fortunes for the industry, at least. 'I think we have seen the worst of the shipping recession. We noticed that our customers - the shipowners - are beginning to build new ships, so that's very good indication of their confidence in the rebounding of the market,' he said.
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#2
I am impressed by how Sinwa has structured the latest earnings accretive acquisition announced today (1Sep11).....
http://info.sgx.com/webcoranncatth.nsf/V...E0037FBF5/$file/Acquisition_of_Seventypercent_of_the_Business_and_Assets_of_FOPL_APGPL_ALDAPL_PSMPL_and_FOME.pdf?openelement

It looks like Mike Sim has developed a knack for buying smaller related businesses. Would Sinwa emerge as yet another agent - just like Viking Offshore & Marine - to facilitate the consolidation of local SMEs engaged in marine services industry?

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#3
I thought today's (27Mar12) announcement makes interesting reading.....
http://info.sgx.com/webcoranncatth.nsf/V...E003B0BEE/$file/Sinwa_Announcement_Update_of_Investigation.pdf?openelement
This concerns an old CAD investigation (first reported on 19Jun08) against Executive Chairman Mike Sim Yong Teng on insider trading. After more than 3 years, apparently CAD has recently charged Sim for 1 count of insider trading, and 4 counts of failure in making timely disclosure and in meeting disclosure standards.

Poor Sim has to suffer more than 3 years of agony. I suppose someone under official investigations would naturally try much harder to follow rules and regulations closely, and now maintains house-keeping in his business spic-and-span!
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#4
(27-03-2012, 09:25 PM)dydx Wrote: I thought today's (27Mar12) announcement makes interesting reading.....
http://info.sgx.com/webcoranncatth.nsf/V...E003B0BEE/$file/Sinwa_Announcement_Update_of_Investigation.pdf?openelement
This concerns an old CAD investigation (first reported on 19Jun08) against Executive Chairman Mike Sim Yong Teng on insider trading. After more than 3 years, apparently CAD has recently charged Sim for 1 count of insider trading, and 4 counts of failure in making timely disclosure and in meeting disclosure standards.

Poor Sim has to suffer more than 3 years of agony. I suppose someone under official investigations would naturally try much harder to follow rules and regulations closely, and now maintains house-keeping in his business spic-and-span!

Sentencing is today, and we will know the fate of Mike Sim. Whatever the outcome, I believe the impact to the company is limited.
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#5
With the completion of disposal of loss making businesses of AMS Group as well as KS Titan 2 (lift boat), Sinwa will be in a net cash position of 5 cents per share. Furthermore with these disposals, Sinwa is likely be back to profitability of $6 million per year based on last 2 years performance of their Marine Supply, Agency & Logistics and Property Holding segments. In addition, the company intend to give dividend from the sale proceed of KS 2 Titan.

The following is a the expected net cash position of sinwa balance sheet after these disposals.

Number of shares ('S000) 334,679.34
Sale proceed from KS Titan (S000) $26,033.70
Sale proceed from AMS (S000) $2,800.00
Cash (S000) $10,437.00
Total Cash (S000) $39,270.70
Total Debt (S000) $21,387.00
Net Cash (S000) $17,883.70
Cash Per share $0.0534

However, sinwa will realizes a total loss of USD $1,610.635 from sale of KS 2 Titan and S$1,000.00 from sale of AMS Group.

Completion of KS 2 Titan
http://info.sgx.com/webcoranncatth.nsf/V...50043F7D9/$file/Sinwa_Announcement_Result_of_EGM_20130325_1.pdf?openelement

Sale of KS 2 Titan
http://info.sgx.com/webcoranncatth.nsf/V...E003E5ACD/$file/Sinwa_Announcement_Titan_2_2013_02_26.pdf?openelement

Sale of AMS Group
http://info.sgx.com/webcoranncatth.nsf/V...A0044D3B2/$file/Sinwa_Announcement_Divestment_of_AMS_Group_1.pdf?openelement

Vested
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#6
I think Sinwa has suffered a lot and enough from the few ill-fated diversification ventures into vessels ownership/leasing and marine engineering services. By going back to its original established core business of ship supplies, I guess steady profitability should be quite assured.
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#7
The reward comes fast and good! - Sinwa has just declared a $0.015/share Special dividend, to be paid out from the proceeds of the sale of the liftboat known as KS Titan 2.....
http://info.sgx.com/webcorannc.nsf/Annou...endocument
The dividend will be paid on 23May13.
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#8
(26-03-2013, 08:54 PM)dydx Wrote: The reward comes fast and good! - Sinwa has just declared a $0.015/share Special dividend, to be paid out from the proceeds of the sale of the liftboat known as KS Titan 2.....
http://info.sgx.com/webcorannc.nsf/Annou...endocument
The dividend will be paid on 23May13.

I was expecting a special dividend from the company since they openly announced it, but the size of the dividends caught me by surprise. Based on current price, this year yield is more than 10%. Fast hand fast leg this morning went in to grab some more at relatively “low” price. Big Grin

I started buying into Sinwa in the middle of last year, but I was not convinced that the company will turn around anytime soon. So I didn’t have a sizable holding. The company proved me wrong by decisively disposing off the non-core businesses which were a drag on its performance. Now, it is back to its origin, and a much more focus company.

One should take note of the NTA per share of $0.26 versus the current price of $0.14.
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#9
Today (27Mar13), backed by a very high volume traded of 2.72m shares, Mr Market decided to reward Sinwa's shareholders more than the just declared $0.015/share Special dividend amount, by marking up the counter by $0.026 - a cool 20.6%! - to close at 12-month high of $0.152.

It only shows how under-priced Sinwa had been during most of the past 2 years, when the company's financial performance was weighted down by losses from the few ill-fated diversification ventures into vessels ownership/leasing - which are now no longer a burden.
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#10
The company looks cheap in PB sense but fairly valued base on PE. The management has a "good" history of making bad diversification ventures one after another. They are also very optimistic in projections but usually cant deliver.

1) "Though our charter (KS TITAN II) was recently terminated, we remain very confident of securing another charter for this vessel. " (AR 2009)

What happen?
"Our jointly held jack-up liftboat (KS TItan II) was off-hire for the entire year of 2010" (AR 2010)

2) "The decision to expand our services to include engineering, steelworks, and heat exchangers operations is definitely a positive step forward for the Group." (AR 2011)

What happen?
"Despite increases in revenue in the engineering division in FY2012, the revenue were not regular during the year and hence resulted in some unutilised capacity at the back of committed overhead costs. Margins were also squeezed as the industry slows down and the costs of employing foreign workers increases" (FY2012)

The company management people remains the same. I think they lack business foresight. Can we count on them to make the same mistakes, i bet they will.
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