Sharing my thoughts on JEP.
In my original post i mentioned that i expected a turnaround in the 1st half result. It did, but marginally .. only S$10k.
I mentioned that 2nd half result will be much better. We will know soon whether its correct next month when the
company report its 2nd half/full year result next month in feb.' 18.
Prior to my original post on 4th Apr ' 17, company mentioned that they had undergone restructuring starting 3 years ago.
The restructuring was more or less completed when the company move to Seletar Aerospace in July ' 17.
Something to think about -
1. completion of restructuring in July ' 17
2. move to Seletar Aerospace Park w a much bigger manufacturing area
3. commissioning of plant
4. implementing Smart Factory concept
5. major shareholders selldown to new controlling shareholder ... UMS
6. forthcoming Singapore Aerospace Show .. the biggest in Asia
7. j/v with Chinese company ... Kun Shan Hang Fu Investment Co., Ltd
8. incresing paid up capital from RMB 30 mil to RMB 300 mil
Questions i asked myself are:
What are the implications of the 3 years restructuring, the movement to Seletar Aerospace Park, and the bigger factory space? What is the implication of Smart Factory concept? Would the Singapore Airshow be good for them? What about the j/v w the chinese investment company? Why do they want to increase the registered capital from 30 mil RMB to 300 mil RMB? Why do UMS want to take control of the company? What did the directors/shareholders of UMS see in JEP? What is the
implication of this change in controlling shareholders?
Above are questions i pondered on.
Just sharing the thoughts that went thru my mind.
Last edit: 6 years 4 weeks ago by josephyeo. Reason: paragraphing
UMS now controls 29.5% of JEP.
Joseph -- Do you think privatization is on the cards?
It's only a matter of time and it will not be too far away?
Obviously UMS sees a gem in JEP.
Currently market cap is $100 million. UMS knows what it can do to increase the value of JEP but it should privatize JEP before the value add leads to a jump in market cap and makes it more expensive to privatise by buying out the remaining 70% of shareholders.
In my 1st post i mentioned that the company should turnaround in the 1st half and that the 2nd half would be much better.
So far the 1st half has beared me out. Am now looking forward to the results for the 2nd half end of this month (Feb).
In that posting i mentioned that the real excitement is in financial year 2018. Reasons given were that the company had
completed the it's 3 year of reorganising/restructuring. The completion date was in July 2017 when they finally moved to
a new premise in Seletar Aerospace Park. The 2nd half result later this month will be a good indicator of the company's
performance going forward to financial year 2018.
In between a few positive events appeared:
1. the Singapore Airshow which should is positive for the aerospace
2. the bigger factory space which enable them to take more orders (if any)
3. the Smart Office concept which the company introduced, should help improve efficiency n productivity,
meaning, lower costs and higher margins.
4. being located at Seletar Aerospace Park means they are closer to where the businesses are
More positive news came along, when UMS decided to take a majority stake in the company.
They see values in the company and invested S$29 plus mil to have a controlling stake. There should
be synergies on both sides in the form of more customers n "shared" productions for maybe some products.
UMS is much bigger company with a market cap of more than S$500 mil.
Another positive i see was when they increased the registered capital from 30 mil rmb to 300 mil rmb. in the
joint venture company in China. This is a strong show of confidence. The aerospace business is China is still
young and there will be immense potentials for the aerospace business going forward, as eventually China will
have more planes and airports than any other country in Asia. Being there early will give a 1st mover advantage. Will
all these translated into better bottom line? I dont know.
JEP Holding, as i see it now, is good for long term. With all the recent changes, it will take awhile for the company
to morph into something else, probably much bigger than what it is today.
Just sharing my thoughts ... not to be taken as a recommendation.
Am vested for the long term.