GENTING SINGAPORE: Good news seem to generate healthy demand for Genting S'pore shares. The key lies with the intended disposal of its Jeju casino JV. The proceeds of approx. S$580 million would bring down Genting's debt by half or use to redeem part of its perpetual securities, or a blend of both, thereby reducing its hefty interest costs.

This would improve its bottom line and profit attributable to shareholders considerably. Expected full year 2016 profits of around S$400 
million or more, and excluding interest on perpetuals, S$320 million, or 2.6 cents a share. This is 4 times last year's 0.6 cents EPS.

NAV per share will still be about $0.62. Current share price has priced its PE at around 35 times, and price-to-book ratio at 1.6 times. Share price has been moving higher since 4 November, and its recent spike appear overdone.

There are still plenty to be done in order to move its earnings and dividends higher, while strengthening its balance sheet further. Based on the chart, 1.023 may be a good price to exit as it has hit 78.6% Fibo. However, Deutsche Bank research analyst has put a price target of Genting S'pore at $1.20.

 

mm2 Asia: Share split of 1 to 2 shares in mid-October when its share price was around 45 cents. Rightfully, after the split, its share price should be half to about 23 cents.

It appears strange that the split did not impact the share price. After the split, with more than 1.05 billion shares outstanding, and an expected full year attributable net profit of $17 million, its earnings per share should come in at around 1.6 cents, while its NAV per share at around 8 cents.

Theref
ore, its prospective PE is at around 28 times, while its price-to-book ratio is 5.6 times, confirming that its share price valuation is rich currently.

Its subsidiary, UnUsUaL Pte Ltd, plans to get itself listed on Catalist, and has secured three cornerstone investors taking an interest at a price offered at 15 percent discount to its IPO price.

When the IPO offer is made, mm2 Asia shares would certainly arouse more interest from the public at large, and possibly could bring its share price higher. Not that its share price is undervalued, but supply/demand situation could see another spike for its shares.


ChanKitWhyePrior to his retirement, Chan Kit Whye (left) worked more than 30 years as Regional Finance Director, Financial Controller and Manager in a multinational specialty chemical business. He has played an active role in CPA (Australia) Singapore Branch, taking up positions in its Continuing Professional Development and Social Committees.   Kit Whye is a Fellow of CPA Australia, CA of Institute of Singapore Chartered Accountants and CA of the Malaysian Institute of Accountants. He holds a BBus(Transport) Degree from RMIT, MAcc Degree from Charles Sturt University and MBA from Durham Business School.

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