Excerpts from analysts' reports

OSK-DMG keeps 'buy' rating on Lian Beng on news of Cambodian venture

Sarah Wong

Lian Beng's 32.65%-owned associated company, Imperial South East Asia Investment (ISEA), has formed a joint venture named New Global to acquire land in Phnom Penh, Cambodia, for USD64mil, with plans to redevelop the existing hotel.

imperialgarden_phnom-penh3.14Imperial Garden Villa & Hotel in Phnom Penh. Photo: Internet The joint venture was formed with Lok Oknha Sear Rithy (Sear Rithy), a Cambodian national who is not related to Lian Beng. 

The land to be acquired has a site area of 15,882 sqm and houses a hotel operating under the name of "Imperial Garden Villa & Hotel". 

The purchase price of USD64mil will be paid in three tranches and will be funded by shareholders' funding from ISEA and Sear Rithy in a 49%-51% proportion.

Other shareholders of ISEA are KSH Holdings and Heeton Holdings.

Lian Beng's stake in this Cambodian project thus translates to an investment of USD10.24m, and is expected to be funded internally.

We have a BUY on the stock, with a TP of SGD0.70. 

Recent story: OCBC Investment Research: Earnings spikes for Roxy-Pacific & Lian Beng

Kevin Scully highlights big discount to AddValue's NTA 
350_kevin_aiceKevin Scully, executive chairman of NRA Capital. NextInsight file photo AddValue Technologies announced that it had reached an agreement to sell one of its subsidiaries for $330mn.  

The shares rose from 6.5 cents to an intra-day high of 18.1 cents but closed at 15.7 cents.

The transaction is interesting because:

a) it raises AddValue's NTA from US$4.6mn to US$239.3mn
b) NTA per share rises from US cents 0.4 to US cents 20.3 or S cents 25.6
c) there is a payment schedule for the S$330mn
d) the buyer seems to be a Chinese party because one of the condition precedents is that "all relevant permits, approvals, authorizations and consents of the relevant government authorities of the PRC (including, for the avoidance of doubt, the approval of the FECB) or Singapore (as the case may be) or third parties necessary to perform their respective obligations under the S&P Agreement and to complete the Disposal having been obtained and not revoked."

There is no information on who the buyer is.

At its share price of S cents 15.7, the market is giving a discount of 38.7% to its implied NTA of S cents 25.6.  

I expect this to narrow once the market senses that this sale is going through.....watch out for the announcements especially FECB approval for the remittance of the money.

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+1 #1 divads 2014-03-29 00:17
When I was searching through news on the deal, I happened to come across the following:

It seems that back in 2008 Nov, it was announced that a foreign company by the name of PYTHEAS also wanted to buy Addvalue's business at 11 cents per share.

Then in June 2009, the deal was terminated and strangely enough, issued shares at only 5 cents to some investors. Wondering why the investors offered only 5 cents, a drastic drop from 11 cents to 5 cents.

I taken my profit already.. I think is better to be on the safe side. If it was Temasek buying over, then no worries, but now involves a China company, so I think is better to be careful..

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