Excerpts from UOB Kay Hian report


Share price: 
98 c

Maintain BUY with upward potential in target price due to M&As. While the upside is less than 10%, we see potential M&A interest driving share price further.

In Dec 15 alone, we saw two precision engineering-related takeover deals in the region. IPE Group in Hong Kong was acquired at a trailing PE of 17.4x.

check1.16Quality control: Visual inspection of all products to ensure they are in accordance with customers’ requirementsThis multiple would imply a fair value in excess of S$1.20 for Innovalues’ trailing 12-month PE ratio. Innovalues’ 2015 favourable net cash position, free cash flow-generating capabilities, strong management team and potential cost-cutting measures make for a prime leveraged buyout target, in our view.

Target price of S$1.06 is based on DCF methodology (COE: 10%, terminal growth: 0%).

China Aviation Oil
Share price: 

• Five-year plan to double profits through organic growth and M&A acquisitions. Management has shared its aim of doubling profits to US$120m by 2020 through both organic growth (as it establishes itself overseas in Europe and the US) and M&As.

They intend to deploy their war chest of US$228m (S$319m) in net cash (around 35.6% of market cap) to acquire more synergistic fuel-related assets.

Maintain BUY with S$1.56 target price based on a DCF model (using 9.5% WACC and 0% terminal growth) with 50.7% upside to current price levels. The target price implies a reasonable 2017F PE of 12.0x and P/B of 1.4x.


Full report here. 

Share Prices

Counter NameLastChange
AEM Holdings7.020-0.130
Alliance Mineral0.3800.005
Avi-Tech Electronics0.505-0.005
Best World Int.1.770-0.080
China Sunsine1.4500.010
DISA Limited0.008-0.001
Dutech Holdings0.2600.005
Federal Int. (2000)0.385-
Food Empire0.675-
Geo Energy0.225-
Golden Energy0.3800.005
GSS Energy0.1710.001
Heeton Holdings0.570-
KSH Holdings0.690-0.010
Lian Beng Group0.660-0.010
Nordic Group0.5750.005
Oxley Holdings0.5250.005
REX International0.0510.001
Serial System0.172-
Sing Holdings0.4300.005
Sino Grandness0.2000.003
Straco Corp.0.775-0.010
Sunningdale Tech1.930-0.020
Sunpower Group0.5800.015
The Trendlines0.1270.002
Tiong Seng0.390-0.005
Trek 2000 Int.0.2600.005
Uni-Asia Group1.4100.010
XMH Holdings0.260-
Yangzijiang Shipbldg1.270-0.030

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