Kuok Khoon Hong, chairman and CEO of Wilmar International, has seen his stake in his company rise this month. The most recent increase was on Nov 8 when HPRY Holdings acquired one million shares on the open market at $3.94 each. HP is one of the several entities which Kuok uses to hold Wilmar shares he owns.
Together with his direct holdings, Kuok now has a total stake of around 810.7 million shares or 12.99% in the company. On Nov 1, 2 and 3, Kuok acquired a total of 1.17 million shares at $3.88 each. On Nov 4, he acquired 478,400 shares at $3.95 each while on Nov 7, he acquired 226,400 shares at $3.94 each.
On Oct 28, the company reported record earnings of US$766.2 million ($1.07 billion) for 3QFY2022 ended September, up 34.7% y-o-y from US$576.4 million a year earlier. Revenue in the same period was up 10.2% y-o-y to US$18.88 billion. For the nine months ended Sept 30, earnings increased 46.3% y-o-y to US$1.93 billion; revenue was up 17.9% y-o-y to US$55 billion. Wilmar attributes the better numbers to all-rounded improvements in its various business segments.
“While external conditions are still challenging, we are confident that our integrated and diversified business model and sound risk management policies will enable us to overcome these challenges and achieve satisfactory performance for the rest of the year,” says Wilmar in its earnings commentary.
Exiting US marine business
See also: UHUY HEHE 123 DBS CEO sells more shares, pockets proceeds of $13.8 million thus far this month
Singapore Technologies Engineering has been buying back shares from the open market at mainly monthly intervals, albeit sporadically. The most recent purchase was on Nov 7 when it acquired 500,000 shares in the open market for between $3.31 and $3.36. This brings its total number of shares bought back under the current mandate to 5 million or a stake of 0.1604%.
On Sept 19, ST Engineering acquired 500,000 shares at between $3.69 and $3.71. On Oct 6, ST Engineering again acquired the same amount of shares at $3.51 each.
Despite ST Engineering’s perceived defensive nature, its shares are not immune to the market downturn. Year to date, the share price is down 11.44% to close at $3.33 on Nov 8. In the same period, the Straits Times Index is up slightly by 0.56%.
See also: Chairman and CEO Kuok raises stake in Wilmar International following softer 1Q
On Nov 7, the company announced the sale of its loss-making marine business in the US for US$15 million. ST Engineering may receive earnout payments post-closing of up to an aggregate amount of US$10.25 million, subject to certain conditions.
DBS Group Research notes that these businesses have been loss-making for quite some years with no turnaround in sight. This is despite a “reasonably robust” order for 3 Polar Security Cutter vessels from the US Navy worth some $1.9 billion. However, ST Engineering is suffering from cost overruns from these projects.
With the disposal, ST Engineering’s order book is seen to remain “strong” given that it is at $25 billion as at end of September. In addition, ST Engineering will be booking a loss on disposal of $13 million, which is equivalent to around 2–3% of earnings. DBS says it has been ascribing negative margins to the shipbuilding business just sold. It might now review its margins upwards, pending the coming 3QFY2022 results. DBS has a “buy” call and a $4.70 target price on the stock.
DBS believes that the disposal though does not impact ST Engineering’s overall growth plans in the US, with its aerospace MRO operations and smart mobility business (Transcore) being key for the group. It also notes that ST Engineering is not exiting from the shipyard operations in Singapore, which is principally engaged in ship repair and defence shipbuilding for Asian markets.
