Beng Kuang Marine on Aug 5 announced its 1HFY2024 ended June results, which saw the group clock in earnings of $8.6 million, turning around from a loss of $854,000 in the same period a year ago. While this was mainly thanks to a one-off gain from a partial land sale amounting to $5.53 million, the group&rsquo s revenue did show some promising growth of 88.1% y-o-y to $59.9 million.

 

The revenue growth was thanks to the group&rsquo s infrastructure engineering division, which saw strong growth of 141.7% y-o-y to $50.1 million, accounting for 83.6% of overall revenue. This was mainly due to the strong performance by its 51%-owned subsidiary ASOM.

 

This growth was partially offset by an 11.5% y-o-y decline in the corrosion prevention division, which generated $8.2 million due to the company' s exit from the water distribution business. 1HFY2024 also saw the gross profit margin increase by 9.2 percentage points to 35.5%, which helped gross profit surge by 153.4% to $21.3 million.

 

&ldquo Our progress reflects the turnaround strategy we have been re-engineering since 2021, and our steadfast commitment to strengthening our value propositions and achieving durable results. Guided by our 2.0 business model, together with further targeted business development, we are building a stronger foundation to expand our value propositions and increase our operational scale globally,&rdquo says Beng Kuang&rsquo s CEO Yong Jiunn Run, who has recently joined the company and initiated a business restructuring.

 

To reward shareholders, the group had also proposed bonus issue of three year warrants on the basis of three bonus warrants for every 10 existing ordinary shares, where each bonus warrant shall carry the right to subscribe for one new ordinary share at the exercise price of 22 cents during the exercise period.

 

Following the results announcement, Maybank Securities is keeping its &ldquo buy&rdquo recommendation on Beng Kuang Marine BEZ -14.58% , but with a lower target price of 29 cents from 47 cents previously, this was due to the group&rsquo s core earnings for 1HFY2024 coming in below expectations due to much higher-than-expected admin expenses, which surged 72% y-o-y to $11 million.

 

Despite that, analyst Jarick Seet remains bullish on the counter. &ldquo We expect 2H2FY2024 to likely replicate or perform even better than 1HFY2024 due to the robust tailwind in the FPSO sector. However, much higher than expected admin expenses hampered operating margins, but we believe this will improve going forward.&rdquo

 

&ldquo While we remain bullish on the FPSO market and ASOM as it recorded a strong performance, the warrants dilution has put a cap on its share price upside for FY2024,&rdquo says Seet, while noting that total net proceeds from the warrants issue could amount to $13.02 million.

 

Seet is cautiously optimistic and will continue to review the group&rsquo s cost control measures and core earnings performance going forward and make any necessary adjustments.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

On Jan 5, Beng Kuang Marine chief executive Yong Jiunn Run acquired 300,000 shares at an average price of S$0.068 per share. With a consideration of S$20,400, this took his direct interest in the company from 4.29 per cent to 4.44 per cent.

 

His preceding acquisitions in 2023 were on Nov 16, with 200,000 shares acquired at S$0.058 per share on Aug 30, he acquired 250,000 shares at S$0.065 per share and on Jul 4, he picked up 100,000 shares at S$0.07 per share.

 

Yong&rsquo s responsibilities include making major corporate decisions, developing and steering corporate plans, and implementing business directions and strategies for the group.

 

This year marks 30 years since Beng Kuang Marine was founded. The group is currently pursuing a transformation to an asset-light and service-oriented business model, with recurring revenue streams anchored by its infrastructure engineering and corrosion prevention businesses.

 

As reported in November, the group&rsquo s 9M FY2023 (ended Sep 30) revenue increased 21.4 per cent from 9M FY2022 to S$53.25 million, mainly driven by the revenue contribution of its infrastructure engineering and corrosion prevention business divisions. This was despite negligible revenue contribution from its supply and distribution and shipping business divisions, which are being streamlined and phased out accordingly.

 

Notably, the group highlighted that its infrastructure engineering business division continued its strong growth performance for 9M FY2023, with a service-centric business model that aims to create new value propositions and recurring income streams within the offshore and marine market.

 

For its 9M FY2023, the group&rsquo s gross profit increased 115.8 per cent from 9M FY2022 to S$16.03 million, with a net profit of S$2.73 million in 9M FY2023 from its continuing operations, compared to a net loss of S$1.85 million in 9M FY2022.

 

Yong noted that the group maintained positive organic growth, with its core infrastructure engineering and corrosion-prevention business divisions delivering strong performance, providing good momentum in a turnaround.

 

He added the group&rsquo s strategy is delivering &ndash demonstrated with the strength of its underlying performance and monetising efforts &ndash and it remains confident that it is well positioned to create high-value growth within the marine and offshore industry.

 

On Dec 21, the group announced it had completed the partial disposal of its shipyard in Batam, and received the remaining amount of the consideration of approximately S$8.9 million in cash. The group is completing the second partial disposal of its shipyard in Batam for an aggregate consideration of S$8.64 million.

 

Institutions were net buyers of Singapore stocks over the five trading sessions through to Jan 11, with S$166 million of net institutional inflow

 

On a separate note, INSTITUTIONS were net buyers of Singapore stocks over the five trading sessions through to Jan 11, with S$166 million of net institutional inflow, as 19 primary-listed companies conducted buybacks with a total consideration of S$5.4 million.

 

CapitaLand Investment : 9CI -0.99% led the consideration tally, buying back 1,072,100 shares at an average price of S$3.00 per share on Jan 10. The company has now bought back a total of 22.47 million shares, or 0.44 per cent of its issued shares excluding treasury shares, under its current mandate. CapitaLand Investment will be reporting its FY2023 results prior to the Feb 28 open.

 

OUE : LJ3 0% bought back 430,200 shares at an average price of S$1.17 per share, and has now bought back 0.49 per cent of its issued shares excluding treasury shares, under its current mandate.

 

Leading the net institutional inflow over the five sessions were Oversea-Chinese Banking Corporation : O39 -0.08%, United Overseas Bank : U11 -0.11%, Sats : S58 +0.34%, Yangzijiang Shipbuilding : BS6 0%, DBS Group Holdings : D05 -0.34%, Sembcorp Industries : U96 -0.55%, Singapore Exchange : S68 +0.41%, Hongkong Land : H78 -3.19%, Genting Singapore : G13 -0.99%, and UOL Group : U14 -1.12%.

 

Meanwhile, Keppel DC Reit : AJBU -0.54%, Singtel, Mapletree Industrial Trust : ME8U -0.8%, Seatrium : S51 +0.89%, Jardine Cycle & Carriage : C07 -0.65%, iFast Corporation : AIY +0.51%, Keppel : BN4 -0.43%, Nanofilm Technologies International : MZH 0%, Lendlease Global Commercial Reit : JYEU 0%, and Dyna-Mac : NO4 -1.69% led the net institutional outflows.

 

The five trading sessions brought more than 50 changes to director interests and substantial shareholdings filed for over 20 primary-listed stocks. Directors or chief executive officers filed 12 acquisitions and no disposals substantial shareholders filed 10 acquisitions and two disposals.

 

On Aug 30, Beng Kuang Marine CEO Yong Jiunn Run acquired 250,000 shares at an average price of S$0.065 per share. With a consideration of S$16,250, this took his direct interest in the company from 4.07 per cent to 4.19 per cent. His preceding acquisition was on Jul 4, with 100,000 shares acquired at S$0.07 per share.

 

Yong&rsquo s responsibilities include making major corporate decisions, developing and steering corporate plans, and implementing business directions and strategies for the group.

 

On Aug 11, Beng Kuang Marine reported its H1FY23 (ended Jun 30) revenue increased to S$31.86 million, representing a growth of 9.7 per cent increase from H1FY22.

 

Yong attributed the result to significant efforts by the teams in implementing the group&rsquo s business strategy to monetise its assets, and with its core infrastructure engineering and corrosion prevention business divisions delivering resilient performance.

On Jul 4, Beng Kuang Marine : BEZ +2.9% CEO Yong Jiunn Run acquired 100,000 shares at an average price of S$0.07 per share, taking his direct interest in the company from 4.02 per cent to 4.07 per cent. His preceding acquisition was on Sep 7, 2022, with 2.4 million shares acquired at S$0.053 per share. Yong&rsquo s responsibilities include making major corporate decisions, developing, and steering corporate plans, implement business directions and strategies for the group.

 

FOR the five trading sessions that spanned Jun 30 to Jul 6, the Straits Times Index declined 1.8 per cent while the Hang Seng Index declined 2.0 per cent and the FTSE Bursa Malaysia KLCI gained 0.2 per cent.

 

Institutions were net sellers of Singapore stocks over the five sessions with S$130 million of net outflow. Singapore Airlines : C6L +1.53%, DBS Group : D05 -0.13%, Jardine Matheson : J36 +1.01%, Oversea-Chinese Banking Corporation : O39 -0.41% and Mapletree Industrial Trust : ME8U -0.91% led the net institutional outflow. Meanwhile Keppel Reit : K71U -1.1%, Seatrium : S51 0%, CapitaLand Ascendas Reit : A17U -1.48%, Jardine Cycle & Carriage : C07 -0.24% and Yangzijiang Shipbuilding : BS6 -0.68% led the institutional inflow.

 

For the month up to Jul 6, all three Singapore Depository Receipts (SDR) on Thai blue-chip companies continued to attract net buying interest from individual investors. The largest inflows were into CP All : TCPD -0.41%, the exclusive operator of 7-Eleven convenience stores in Thailand, Cambodia, and Laos. Of the SDRs traded on SGX, PTT Exploration & Production : TPED -0.17%, Asean&rsquo s largest listed exploration and production petroleum company, was the best performing with returns of 1.6 per cent for the first four sessions of July, and 5.8 per cent since the close of the first SGX trading day on May 30, 2023.

 

Share buybacks

There were 17 primary-listed companies conducting share buybacks over the five trading sessions through to Jul 6 with a total consideration of S$12.8 million. United Overseas Bank : U11 -0.4% and UOB-Kay Hian Holdings : U10 +0.71% led the buyback tally, buying back shares at respective average prices of S$27.89 and S$1.40.

 

Note the table does not include the buyback filings of secondary-listed Comba Telecom Systems Holdings : STC 0% which since Mar 28 has been conducting all its share buybacks on the Hong Kong stock market. These buybacks have seen 36,782,000 shares repurchased for a consideration of HK$55,427,407, at an average price of HK$1.51 per share, as of Jul 6.

 

Director and substantial shareholder transactions 

The five trading sessions saw close to 90 changes to director interests and substantial shareholdings filed for 40 primary-listed stocks. This included 17 company director acquisitions with three disposals filed, while substantial shareholders filed 12 acquisitions and five disposals.