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Sinwa Ltd (“Sinwa” or “the Group”) announced that the Group has signed a sale and purchase agreement with the shareholder (“Vendor”) of Rapid Offshore & Marine Pte Ltd (“RO&M”) to acquire 70% of the issued and paid up share capital of RO&M via payment through two tranches. Rapid Offshore & Marine is the leading VAC&R (Heating, Ventilation, Air-conditioning and Refrigeration) and Integrated M&E (Mechanical & Electrical) one-stop solution Sinwa is taking a 70% provider for the Offshore and Marine industry. stake and payment is through two tranches at 3.5 times PE multiple capped at S$12.25 million. The acquisition will significantly contribute to the Group’s future earnings.
SINWA LIMITED
CONSOLIDATED INCOME STATEMENT FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009
Revenue $128.4 mlns -2.2%
Profit for the year $15.0mlns +59.4%
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http://info.sgx.com/webcoranncatth.nsf/VwAttachments/Att_03E0A875613BDFBC482576C7000F78D9/$file/SINWA_FY2009_SGXannouncement.pdf?openelement
Been looking at this counter for a couple of days. It seems to be facing resistance at $0.60 according to the weekly charts. Volume has been increasing albeit slightly with several big buys of more than 150 lots. Am wondering if any funds or insiders are buying into the stock ... does anyone else have any views on this stock? Thanks!
Hi stockie,
May i know who is Tan Kim Seng?
Mr Tan Kim Seng also holding 6% stake in this company
Any reason why the run up n sudden increase in vol? Anyone care to comment?
Sias has a price target of $0.445. Buy on dips.
wait for price to bottom from the rally 1st before entry. some insider or big fish may be clearing this counters as it has rallied for quite alot. to reach 0.46 may need some time to achieve.
Hi Nostradamus Elite,
So are you saying that Sinwa is a good buy now, since they are now being mention as a buy from some Research Company as a target to purchase now. The Company
also deals with offshore equipment supplies and has some related relations with some of the Companies such as Ezra & ASL Marine.
Although, it is being consider the most under-rated marine sectors, but there is still a target to obtain a price of S$0.46. What do you think ?
Thank you for yr reply
In the past four years, Sinwa's core marine supply and logistics business has posted sales and net profit CAGR of 33% and 17%, respectively. With an extensive network covering PRC and Australia, the marine supply propsects remain bright given the shipping traffic boom in Asia-Pacific. With a reputation for professional and reliable service and scale economies in procurement, Sinwa has managed to maintain >20% ROEs for a business which is typically regarded as commoditised.
The recent formation of a 50:50 JV with KS Energy marks Sinwa's maiden foray into the offshore equipment supply space. Under the JV, Sinwa and KS would undertake the building of a workover rig with a firm 5-year charter contract from a Central America-based national oil company. Upon the end of the 5-year charter, the rig can either be re-chartered or sold for its residual value. We expect the latest contract to have a significant financial impact in FY08, boosting group earnings by as much as 56%.
KE believe Sinwa's offshore ambitions will not be restricted to this single rig contract as management is currently exploring opportunities for other offshore equipment supply projects. In this regard, KE see the recently formed JV with Longzhu Oil Services in February 2006 as a possible catalyst. Longzhu Oilfield Services, which is part of the Longzhu Group, has strong ties with the PRC oil majors - its main business model is in the supply of parts and equipment to Chinese oil rig owners. KE believe that Sinwa's strong balance sheet will enable it to take on two more projects of the KS-Sinwa scale without overstraining its finances.
Sinwa currently trades at 8x FY07 PE and 4.5x FY08 PE; it is arguably one of the most under-rated marine plays compared with sector valuations of 11-23x. Conservatively, KE value the marine supply business at 9x forward earnings, with an attributable value of 37 cents/share. KE derive an additional 9 cents/share on the discounted cashflow of the rig JV to obtain an SOTP target price of $0.46/share..
KS Energy Services and partner Sinwa KS Ltd have won a US$109.5m deal to charter a jack-up rig to an unidentified national oil company in Central America for five years, KS Energy said.
Sinwa KS and KS Energy are forming an equally-owned JV company to buy the rig and charter it to the customer.
The rig will be deployed in the Gulf of Mexico, KS Energy said.
http://www.listedcompany.com/ir/sinwa/newsroom/newsroom.cgi?action=view_news&id=86
to view the full announcement.