Uni-Asia Group's 2017 profit (attributable to shareholders: US$6.2 million) was its biggest in five years -- and there was a 6.25 cent/share final dividend that came with it.

briefing1Q18CFO Lim Kai Ching @ 1Q18 results briefing.Going into 1Q2018, Uni-Asia stayed strong, with a 50% increase in net profit to US$3.3 million. Highlights:

• The two business segments -- shipping, and property & hotel -- grew their net profit 10% and 92% y-o-y, respectively. (See table for details)

MichioTanamoto3.18Executive chairman Michio Tanamoto. NextInsight file photo. Ship charter income was buoyed by the recovery in the shipping market and improved charter rates.

For example, a 1-year charter for a handysize bulk carrier has gone up from roughly US$5,200 a day in 2016 to US$10,200 currently --which is a profitable level for Uni-Asia, according to mangement.

• Uni-Asia's property segment was boosted by a US$1.0 million reversal of impairment losses following the sale of a hotel in Japan.

Uni-Asia's cashflow trend is encouraging:

Rising operating cashflow (US$’m)

2013

2014

2015

2016

2017

1Q2018

12.14m

4.80m

10.30m

12.33 m

14.10m

4.43m


Uni-Asia in 1Q2018 recorded the highest first-quarter profit (US$3.3 million) in 5 years.

Stock price 

$1.40

52-week
range

$1.02 - $1.55

Market cap

$67m

PE (ttm)

6.7

Dividend
yield

4.37%

P/BV

0.37

Data: Bloomberg

The bulk of that came from its shipping segment -- specifically, sub-segment Uni-Asia Shipping -- which  recorded a profit of US$2.6m.

Of that, US$0.75 million arose from a reversal of impairment for a 17-year-old bulk carrier, Orient Sunrise, after it was sold. This reflects the recovery of the value of vessels along with charter rates.

Uni-Asia Shipping's fleet is made up of 8 handysize bulk carriers (post disposal of Orient Sunrise).

The bulk carrier sector is buoyed by limited new fleet growth and buoyant global seaborne dry bulk trade of commodities such as iron ore and coal.

Here's a quick look at the segmental performance:

US$’000

 

1Q2018

% change

Shipping 
(and related financial services)

Revenue
Net Profit

11,982
2,620

9%
10%

Property & Hotels (and related financial services)

Revenue
Net Profit

13,603
1,805

13%
92%

Headquarters
(Shared corporate services)

Revenue
(Net Loss)

18
(1,109)

38%
(9%)

Group total

Revenue
Net Profit

25,550
3,316

11%
57%

 

Set against the two positive one-offs (ie, reversal for Orient Sunrise and the Japan hotel) was a net fair valuation loss of US$1.4 million booked in 1Q2018, mainly for tanker and containership investments.

In the property investment in Hong Kong, Uni-Asia is looking to receive proceeds from the completion and disposal of its second project (a commercial office building) in 2Q or 3Q.

Uni-Asia holds a 13.4% stake in the investment which is carried out with a consortium.

Uni-Asia Group

Share price: 
S$1.40 

Target: 
S$2.00

Uni-Asia stock (recently at S$1.40) trades at a substantial 65% discount to its Net Asset Value, as of 31 March 2018, of US$3.00 a share.

KGI Securities, in its 22 May report, set a S$2.00 target price for the stock. 

It said: "Uni-Asia is positioned to ride the growth in its 3 business segments:
1) dry bulk shipping recovery,
2) completion of its 2nd /3rd HK property and investment into its 4th/5th HK property in 1H18, and
3) an increase in hotel rooms under operations ahead of two of the world’s largest sporting events to be held in Japan."



For the 1Q18 Powerpoint materials, click here.  


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