Compiled by Andrea Soh
KINGSMEN CREATIVES | CEASE COVERAGE
DEC 28 CLOSE: $0.585
RHB Research, Dec 27
Kingsmen Creatives provides interior fit-out services for high-end brands such as Tiffany, Dior, Swarovski, Guess, Abercrombie & Fitch and Gucci.
In recent years, softening demand for high-end products coupled with competition from e-commerce have led to smaller project sizes and weakening margins at Kingsmen Creatives' retail interior segment.
However, the group has remained tenacious and ventured into other opportunities including affordable luxury retail, fast fashion retail, travel retail, corporate interior and food & beverage segments.
This should mitigate the negative impact from smaller project sizes in the high-end space, but margins are likely to be softer. Exhibitions and thematic division continue to see healthy demand. It has secured a line-up of projects and attractions.
Moving forward, the group has plans to combine its strengths in the interior and thematic divisions to come up with new entertainment concepts with large franchise names. This may be a potential catalyst for its share price once materialised. We are ceasing coverage on Kingsmen Creatives due to internal resource reallocation, coupled with the low institutional interest and trading liquidity of the stock.
Our last recommendation on the stock was a "buy" with TP of 75 cents.
SINGHAIYI GROUP | CEASE COVERAGE
DEC 28 CLOSE: $0.117
RHB Research, Dec 27
SingHaiyi has been expanding its geographical presence, with the recent acquisition of a small stake in Australia-listed Cromwell Property Group.
The move is aimed at further diversifying its regional presence and to strengthen its recurring income base.
The company has also been active in Singapore's collective sale market, with the acquisition of two sites in recent months. A strong recovery in the Singapore and US property markets could potentially boost share price performance.
The divestment of the Vietnam Town Phase II project to an unrelated third party is to be done at a total cash consideration of US$95.3 million (S$127.5 million).
The commercial condominium development project in San Jose, California, comprises nine blocks of commercial condominium units and a four-storey parking structure.
The divestment is expected to be completed by Sept 30 next year and have a positive impact on the company's net asset value and earnings per share.
We are ceasing coverage on this due to a redistribution of internal resources. Our last recommendation was "buy", with a TP of 14 cents.
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