Mencast Holdings attracts new investors, including Temasek-linked fund
MENCAST HOLDINGS has just attracted a host of investors to take up 22.5 million new shares.
The most striking name in the list announced yesterday is SME Co-Investment Fund Limited Partnership, which has agreed to take up 7 million new shares, or a 3.7% stake in Mencast, for S$3.7 million.
SME is a private equity fund managed by Heliconia Capital Management, an investment firm wholly-owned by Temasek.
Temasek is of course, in turn, an Asia investment company headquartered in Singapore.
SME Co-Investment Fund Limited Partnership provides growth capital to Singapore-headquartered SMEs, with a view to develop them into globally competitive companies.
In all, 22.5 million new shares will be issued at S$0.53 apiece to raise net proceeds of S$11.895 million for M&As, expansion and general working capital.
For information on other investors and details of the share placement, see Mencast’s announcement on SGX website.
Mencast listed on the SGX in 2008 and has evolved a business model from being a manufacturer of sterngear to a MRO (maintenance, repair and overhaul) player in the oil & gas industry.
Its shares have done well, rising 56% from 38.52 cents a year ago to close at 60 cents yesterday.
It tracks the rise in its net profit, from $4.8 million in FY2007 to $10.2 million last year, thanks in part to M&As.
Revenue grew from $18.9 million to $56.3 million in the corresponding period.
The stock is currently at a trailing PE of 10.4X and Mencast has a market value of S$115 million.
Roxy-Pacific upgraded to a 'buy' and fair value estimate of 62 cents by OCBC
Roxy-Pacific, whose stock price has been on a tear in the past week and touched a record 55.5 cents, could see its already big order book boosted in the next few weeks and months.
It is preparing to launch projects Eon Shenton (70 Shenton Way), Millage (55 Changi Rd) and Natura@Hillview (Hillview Terrace).
Roxy-Pacific recently said it had S$599 million of revenue from sold units to be booked between this year and 2015.
That works out to an average of $200 million a year, which is sharply higher than the $132.6 million of property development revenue that Roxy-Pacific recorded last year.
Given the substantial $599 million of revenue in the bag, and that which is yet to come from new projects in 1H2012, Roxy-Pacific’s risk profile has turned more positive, according to OCBC Investment Research yesterday.
OCBC analysts Eli Lee and Kevin Tan added that they saw limited risk in the long-term on Roxy-Pacific’s existing landbank as most of its remaining sites would likely be launched in 1H12.
Roxy-Pacific therefore now warrants a lower RNAV discount at 30%, versus 40% previously.
OCBC upgraded Roxy-Pacific from 'hold' to a ‘buy’ and raised their fair value estimate to S$0.62 from S$0.45.
In addition, they noted that a significant portion of value (46% of RNAV) is anchored on Roxy-Pacific's Grand Mercure Roxy Hotel, which they valued at a fairly conservative $460k per room.
Roxy-Pacific's hotel (located opposite Parkway Parade) stands to benefit from a projected growth in hotel room demand in Singapore at 6.4% p.a. from 2012 to 2015 – which significantly lags behind an expected hotel room supply CAGR of only 3.8% p.a, according to the OCBC analysts.
Roxy-Pacific's management has signalled an interest in adding to its hotel portfolio, either by acquiring an existing hotel or developing a new one.