HK Land transfers stakes in MBFC Towers 1 and 2, One Raffles Quay into new $8b fund; shares rise

SINGAPORE – Shares of Hongkong Land closed higher last week after the property group

unveiled a new $8 billion Singapore private real estate fund

and said it will inject its stakes in Marina Bay Financial Centre (MBFC) Towers 1 and 2 and One Raffles Quay into the vehicle.

The stock closed at US$7.17 on Dec 12, up 7.34 per cent from the previous week’s closing price of US$6.68.

The fund will focus on managing prime commercial property assets in the Republic and is expected to be the largest private real estate fund here.

The announcement of its launch came a day after the sale of its $1.45 billion stake in MBFC Tower 3 to Keppel Reit on Dec 11.

To fund the acquisition, Keppel Reit launched an underwritten non-renounceable preferential offering to raise about $886.3 million.

An underwritten non-renounceable preferential offering gives existing shareholders the right to buy new shares – typically at a discount – but they cannot sell or transfer this right. If shareholders choose not to subscribe, their ownership may be diluted and the underwriter will take up any unsubscribed shares.

Upon completion of the deal, expected on Dec 31, Keppel Reit’s existing one-third interest, together with the acquired interest, will result in it holding an aggregate two-thirds interest in MBFC Tower 3.

Shares of Keppel Reit closed 7.69 per cent lower at 96 cents on Dec 12, from Dec 5’s closing price of $1.04.

Sembcorp announces acquisition, Seatrium consortium wins contract

Shares of Sembcorp Industries closed down 1.17 per cent to $5.92 on Dec 12, from the previous week’s close of $5.99.

The company on Dec 11 said that it will

fully acquire Australian power company Alinta Energy

from Chow Tai Fook Enterprises for an agreed enterprise value of A$6.5 billion (S$5.6 billion), which represents the total value of the business, including its debt.

The estimated purchase price is approximately A$5.6 billion and will be paid in cash through Sembcorp’s bridge and working capital facilities.

In its bourse filing, the company said that the move will bring “meaningful scale and diversification” to its portfolio across renewables, energy storage and gas assets.

Citi Research analyst Luis Hilado in a Dec 11 note pointed out, however, that the acquisition includes Alinta’s 1.2 gigawatt (GW) coal-fired power plant, which will “initially” take Sembcorp’s decarbonisation targets “backwards”.

This implies that Alinta’s coal assets could raise near-term emissions and lead to slow progress towards the company’s existing emissions goals.

However, Sembcorp said the primary focus of the acquisition is gaining access to an attractive portfolio of development opportunities – comprising 10.4GW of renewables and firming systems – rather than the coal-fired power plant.

Mr Hilado kept his “buy” call on Sembcorp Industries with a $7.84 target price, while citing potential downside risks such as execution challenges in renewable energy projects.

Separately, a consortium of Seatrium and energy firm GE Vernova announced on Dec 11 that it has won a contract from European grid operator TenneT to build key parts of BalWin5, a project that will bring 2.2GW of wind power from the North Sea to Germany’s electricity grid.

The contract is the fourth project won by the consortium under a five-year agreement with TenneT announced in March 2023.

Analysts at CGS International reckon the contract could be worth up to $2 billion and yield gross margins in the “high single digits”, noting in a Dec 12 report that it takes Seatrium’s estimated order wins in 2025 to around $4 billion so far.

CGS International is positive on Seatrium and expects the stock to be worth $2.67 in 12 months’ time on the back of further orders in 2026.

Seatrium shares closed 0.47 per cent higher at $2.13 on Dec 12, from Dec 5’s closing price of $2.12.

Leong Guan makes debut, Toku files for IPO

Food and noodle maker Leong Guan jumped as much as 15.2 per cent on its Catalist debut on Dec 11.

The stock opened at 24.5 cents, hit an intraday high of 26.5 cents and closed at 24 cents, up 4.38 per cent from its initial public offering (IPO) price of 23 cents.

The shares gained a further 2.08 per cent on Dec 12 to close at 24.5 cents.

The group plans to use the $2.15 million in net proceeds raised from the issue of new shares to expand its export markets and product range, and improve its manufacturing facilities.

It also intends to pay out a minimum of 80 per cent of its 2025 financial year net profit, and at least 35 per cent of the 2026 net profit, as dividends to shareholders.

Toku, a Singapore-based cloud-native, AI-powered customer experience platform, on Dec 10 lodged its preliminary prospectus for a listing on the Catalist board.

The firm said its customer experience platform allows organisations to seamlessly orchestrate all conversations across voice, chat, e-mail and other digital channels while navigating complex regulatory, linguistic and infrastructure requirements.

With operations spanning 32 countries, Toku plans to use the IPO proceeds to expand its customer experience platform through increased research and development and other initiatives, which will fuel the company’s global expansion.

The funds will also be used as a cash reserve to improve the firm’s financial position for potential partnerships and acquisitions, as well as to repay loans.

Toku’s audited financial results from 2022 to 2024 showed revenue growth: US$31.8 million (S$41 million) in 2024, US$28.9 million in 2023 and US$21.6 million in 2022.

However, its losses also widened over the years, increasing to US$5.3 million in 2024 from US$4 million in 2022.

On its outlook, the firm said current market conditions for the next 12 months are favourable for platform providers with proven capabilities in complex markets.

Sales momentum and a “substantial” order book of US$23.4 million provide the basis for the firm’s confidence in driving revenue growth that supports its progression towards profitability, Toku said.

Singapore Paincare buyout fails, Mandarin Oriental’s privatisation gets nod

A privatisation offer for medical services company Singapore Paincare fell through

after offeror Advance Bridge Healthcare did not meet the conditions of the scheme of arrangement by its Nov 27 deadline.

The companies said on Dec 5 that the credit facilities between Advance Bridge Healthcare and UOB also lapsed after Nov 27.

Paincare shares closed at 12.9 cents on Dec 12 after resuming trading. The stock last traded at 15.9 cents on Nov 25 before the trading halt.

The cut-off date to satisfy the scheme conditions will not be extended as Advance Bridge Healthcare does not have available assets, funds or collateral to provide a new financial resources confirmation and does not anticipate securing alternative funding.

Another privatisation offer, though, was successful.

Shareholders of Mandarin Oriental on Dec 8 voted in favour of Jardine Matheson’s move to delist its hotel subsidiary via a scheme of arrangement that values the company at about US$4.2 billion.

Shares of the hotel chain closed at US$3.31 on Dec 12, up 0.3 per cent from Dec 5’s close of US$3.30.

Jardine Matheson said on Oct 17 that if the acquisition goes through, Mandarin Oriental shareholders would receive US$3.35 per share in cash, made up of a scheme value of US$2.75 per share and a special dividend of 60 US cents.

Jardine Matheson shares rose 2.24 per cent over last week to US$69.94 on Dec 12, from the previous week’s close of US$68.41.

Other market movers

Yangzijiang Maritime, Centurion Accommodation REIT and Golden Agri-Resources will join the iEdge Singapore Next 50 Index on Dec 22.

Based on their indicative weights as at Nov 28, the trio could enter among the index’s top 15 constituents, the Singapore Exchange (SGX) said on Dec 9.

Yangzijiang Maritime shares closed at 70 cents on Dec 12, down 2.78 per cent from the previous week’s close of 72 cents.

Centurion Accommodation REIT closed at $1.10 on Dec 12, unchanged from the previous week’s close.

Golden Agri-Resources was also unchanged at 28 cents last week.

Banking stocks rose over the week, with DBS Bank up 1.63 per cent to $55.04 and UOB edging 0.58 per cent higher to $34.72. OCBC Bank gained 1.48 per cent to reach a new high of $19.20 on Dec 12.

The gains helped lift the Straits Times Index – where banks are major constituents – to 4,586.45 on Dec 12, up 1.22 per cent from 4,531.36 a week earlier.

Risk sentiment improved after the US Federal Reserve cut rates by 25 basis points to a range of 3.5 per cent to 3.75 per cent at its December meeting, boosting broader equities, including bank stocks.

What to look out for this week

Asian equities – including Singapore’s – will be in focus this week as markets digest the Fed’s rate cut announced last week.

The MAS Survey of Professional Forecasters, which summarises forecasts of Singapore’s key economic indicators by economists and analysts, is scheduled for release on Dec 17.

The public offer launched by Catalist-listed engineering services provider Ever Glory United Holdings, as part of its planned move to the SGX mainboard, is expected to end at noon on Dec 17.

The offer of up to two million new shares at 64 cents each represents a 9.1 per cent discount to the volume-weighted average price of 70.4 cents for trades done on Dec 9, the company said in a bourse filing on Dec 10.

The offer was made to meet the bourse operator’s requirement that the company has at least 500 shareholders for its listing transfer from the Catalist board.