Capital markets news summary for Thu 23 Mar 2023

Capital markets news summary for Thu 23 Mar 2023

Hap Seng sells HS Credit (Manchester) for RM837.34m

The company’s subsidiary – HSC Manchester Holding Pte Ltd – entered into a share sale agreement with Lei Shing Hong Capital Limited (LSHCL) – a Hong Kong-based conglomerate – to dispose of all 50m shares of HS Credit (Manchester) Ltd (HCML) for GBP152.96m. HCML was incorporated in England and Wales in 2018 and gives out term loans to corporations in the United Kingdom. LSHCL’s ultimate shareholder is Hap Seng’s largest shareholder – Tan Sri Lau Cho Kun. The disposal is done on a price-to-book ratio of 3 times. Hap Seng will book a proforma gain of RM558.43m. The company will use part of the proceeds to repay RM650m of its total borrowings of RM7.07b as at 31 Dec, RM186.44m for working capital and the balance for other expenses. The company will save RM29.25m in interest payments per year, based on a 4.5% rate per annum. The counter closed at RM5.19, down 19% from its 3 Jan closing price.

Sancy closes 150% higher than IPO price

The company – which was established in 2017 and provides digital healthcare solutions – debuted on the LEAP Market with 51,100 units changing hands to close at 30 sen. Its IPO price was 12 sen. Sancy raised RM7.67m for working capital, and research and development. The company currently serves 27 customers and has 42 hospitals in Malaysia waiting to be onboarded into its Insurance Data Exchange and Analytical System (IDEAS). It expects to add up to 5 more by middle 2023 and is confident of hitting a target of 100 hospitals this year, and deliver double digit growth for revenue and net profit in its next financial year ending 31 Mar 2024. IDEAS and the hospital information system will be the primary driver of growth, while the business processing operations and maintenance business segments will contribute the rest. The company is also looking at healthcare providers in Pakistan, Thailand, Philippines, India, Bangladesh and Senegal to be onboarded into IDEAS and the hospital information system. Sancy plans to eventually list on the ACE Market. Tan Sri Shahril Shamsuddin – formerly CEO of Sapura Energy – has a 20.25% shareholding in the company.

VS Industry 2Q net profit falls 32%

The services that the Johor-based electronics manufacturing services company provides include plastic injection mould design and fabrication, finishing processes, printed circuit board assembly, automated assembly, and packaging and logistics. It operates in Malaysia, China, Indonesia and Vietnam, and employs more than 12,000 workers. VS Industry posted net profit for 2Q ended 31 Jan of RM30.36m down from RM44.49m a year ago. The company blamed forex losses and higher financing costs. Revenue was up 13.86% though, from RM1.01b to RM1.15b. For 6MFY2023, net profit climbed 8.57% from RM83.88m to RM91.07m. Revenue jumped 23.23% from RM1.98b to RM2.44b. The 6-month results were contributed by higher sales orders. So far, VS Industry has declared 0.8 sen in dividends. The company expects an uptick in consumer demand. The counter closed at 82 sen, down from the year’s high of RM1.02 on 13 Feb.

Pelabuhan Tanjung Pelepas sets RM3b 5-year capex to raise capacity by 3.5m TEU

The Port of Tanjung Pelepas (PTP) in Johor has a current capacity of 12.5m twenty-foot equivalent units (TEU) after having spent RM750m in 2022. The new capex plan will grow the port’s footprint in free-zone and terminals to compete more effectively with Singapore and Port Klang. PTP handled 9.85m TEU in 2019, 9.8m in 2020, 11.2m TEU in 2021 and 10.5m in 2022. Its compound annual growth rate was 6.6% from 2020-2022 – considerably more impressive than Singapore’s 1.2% and Port Klang’s 0.7% – despite Covid. The capex will be used to fund the remaining 15% of Phase 2 Tanjung Adang expansion, which is expected to be completed in 2Q2023. PTP is 70% owned by MMC Corp Berhad and 30% by APM Terminals. MMC was delisted on 16 Dec 2021.

Rakuten Bank IPO to raise USD888m

The listing on 21 Apr will be Japan’s biggest in 4 years, after Softbank Corp’s USD21b IPO in 2018. The IPO price is set indicatively at JPY1,630-JPY1,960 (USD12.42-USD14.93) per share, to be fixed on 13 Apr. Almost 60m shares are being offered with 16% new shares to be issued by Rakuten Bank and 84% existing shares to be sold by Rakuten Group. There is a 4.4m over-allotment upsizing option. Rakuten plans to expand its financial services business as stiff competition from Amazon limits its e-commerce revenues and its mobile unit is facing losses from aggressive marketing. The company’s share price has more than halved since a 2021 peak. Analysts expect the group to apply the IPO proceeds towards its non-financial units. Daiwa, Morgan Stanley, Goldman Sachs and Mizuho are joint global coordinators.