ShareJunction - Stock Forum Messages

Union Gas Last:0.45 -

IPO 19-21 JULY

How did you get the info of UEC?s 31 million paid up capital?

jsmorgan ( Date: 24-Jul-2020 15:15) Posted:

Any price from now, will be good price to enter. They have announced on 17 jun they have interest in UEC. So it about one month plus to talk about the price tag for UEC. FYI, UEC paid up capital 31 million.

What you said makes sense.

I think right now we have to wait for them to publish the announcement on the details of taking over of UEC.

Once the announcement is release, the price should go up.

HopeToBeRight ( Date: 26-Jul-2020 21:05) Posted:

Very first day of union gas' s trading of its shares reached a high of 0.315 then drop down to hover around 20+ cent for the last 3 years. Technical wise if can clear 0.31-0.315 range should be solid and ready to burst.
Business wise, they have so far been quite profitable and shown improving trend, with owner ownself injecting the other complementary assets into the listco. Think their last announcement of injecting the remaining assets (LPG distribution, bottling, storage) of UEC into the listco is akin to pumping in their crown jewel already, hence his fortune somewhat tied to this share. The owner likes to acquire his own assets through a combination of cash and shares (was also hinted in the announcement), whereby the ' issuance of shares' will ultimately increase his stake in the listco. This UEC as mentioned by jsmorgan got paid-up capital of 31 million, which to me sounds like this acquisition going to be bigger than all those before, which also means issue even more shares to acquire and at the end of the day, the owner hold even larger stake in the company. If owner inject his crown jewel in this listco + his fortune tied to the share price (which he has a large stake), I think eventually will pump up share price.

Disclaimer: My thoughts only ah. Investment go wrong don' t find me. Investment go right can treat me kopi. Thanks.

Any price from now, will be good price to enter. They have announced on 17 jun they have interest in UEC. So it about one month plus to talk about the price tag for UEC. FYI, UEC paid up capital 31 million.

Agree with you on this.
so it should be a good time to enter.

jsmorgan ( Date: 24-Jul-2020 13:36) Posted:

I remember that they are going to acquire UEC, this is the story about this stock. So they will use cash plus shares to acquire them. Once this news is out, I think the stock price will shoot up

Past few days, transaction volume hit millions shares for four consecutive days. These two days suddenly the volume drop to zero. Any goods news coming up.

I think Union Gas is under value at $0.305.

Last:0.305 --
channel uptrend
resilient biz
gd yields
gd luck dyodd

Sold today lock in profits

suddenly this counter become alive

Union Gas may buy LPG businesses from parent Union Energy

LIQUEFIED petroleum gas (LPG) dealer Union Gas Holdings plans to buy LPG distribution, bottling and storage businesses from substantial shareholder Union Energy Corp, the board has disclosed in a bourse filing.

Catalist-listed Union Gas inked an exclusive, non-binding memorandum of understanding on Wednesday with Union Energy Corp, its sole supplier of bottled LPG cylinders.

The deal is expected to be funded by a mix of cash and shares, with the possibility of tapping bank borrowings or a fund-raising exercise.

It would count as an interested-person transaction and depends on fulfilling conditions such as an independent valuation of the assets.

The Union Gas board billed the potential purchase of Sembas (Asia) Trading, Semgas Supply and Summit Gas Systems as " strategic and complementary to its existing business" .

The transaction would likely improve Union Gas' s business performance and financial results, as well as raise its scale, operational efficiencies and resilience, said the board.

It noted that the new businesses might let Union Gas expand into wholesale distribution of bottled LPG cylinders, or the bottling and refilling of LPG cylinders to other entities. The company could also build its commercial and industrial customer base and beef up its supply chain, it added.

Besides the potential vendor' s stake in Union Gas, Union Gas chairman Teo Kiang Ang, chief executive Teo Hark Piang and substantial shareholder Ellen Teo also hold substantial stakes in Union Energy Corp.

As it would be an interested-party transaction, shareholders would have to approve any potential purchase at an extraordinary general meeting.

But shareholders and potential investors were advised to exercise caution when trading in Union Gas shares, as a definitive sale-and-purchase agreement may not materialise.

" The company will provide relevant update announcements as and when there are material developments," the board said in its filing.

Union Gas conserving funds for expansion

Slowing of commercial LPG sales during lockdown cushioned by increase in sales to households company has S$21m war chest for opportunities such as acquisition.

STEADY growth in two of its three business segments over the past three years has put fuel retailer Union Gas Holdings in a strong position to weather the Covid-19 pandemic, and given it room to think about continued expansion and what its next big venture will be.

Revenue and net profits have more than doubled to S$78.8 million and S$8.4 million, respectively, since the company listed on the Catalist board in April 2017. Careful stewardship of its funds has allowed Union Gas to build up a war chest of S$21 million as at the end of 2019, with lease liabilities of just S$1.9 million. That is substantial when measured against its market capitalisation of S$60.7 million.

Much of the cash has come from its liquefied petroleum gas (LPG) retail business, which the company enlarged with two major acquisitions in 2018. Coupled with continued growth in its diesel business, Union Gas has been more than able to offset a decline in its compressed natural gas (CNG) segment and keep earnings on an upward path.

Its shares, which dipped to S$0.21 in late March, have since recovered to close at S$0.265 on Friday. They have returned 11.8 per cent over the past year.

" Our broad base has helped us ride through different cycles. We started with residential (LPG), then added the commercial and industrial pieces. That has helped us as we go through the Covid cycle," said Teo Hark Piang, executive director and CEO of Union Gas.

Impact from Covid-19

Union Gas has not been untouched by the pandemic, as its business of retailing fuel and delivering LPG cylinders cannot be conducted remotely. Deputy CEO Ng Yong Hwee said the company' s first concern was for the safety of its staff, especially those who could not work from home. It created split-team arrangements, set up an additional office, and organised pick-ups for call centre and office staff so they would not need to use public transport.

As sales to restaurants and dormitories fell, the take-home pay of sales staff in those teams was hit. Union Gas committed to paying these employees 85 per cent of the weighted average of their salaries from January to March for as long as the outbreak affects their earnings.

" We want to make sure we take care of them, because our business is very dependent on people, and many of them have been with us since the company started," Mr Ng said.

But even as commercial LPG sales suffered alongside the restaurant industry' s loss of business, Mr Teo said an increase in sales to domestic households has helped to buffer the slowdown.

With its overall business secure, the company has been able to focus on other areas of growth such as looking out for acquisition opportunities. This is where its cash reserves will come in handy.

" As we move forward, there will be opportunities for us to acquire some of the dealers who may have suffered a bit more during this period. This LPG business is a tough business, and many dealers have reached an age where their children have ventured out to do their own things and may not want to continue (their business)," Mr Teo said. " Financially, we are strong. We can weather through this, and go out and acquire some of them if they decide to exit."

Continuing to grow

Keeping the growth momentum going weighs heavy on the minds of Union Gas' management, Mr Ng said.

Union Gas has received a boost from recent acquisitions. One was its purchase of U-Gas from Union Energy Corporation (UEC), which added a hawker centre business and marked its first step into the commercial and industrial space. Another was an acquisition of domestic customer relationships from UEC subsidiary Semgas Supply, which expanded Union Gas' residential customer base by about a third.

Union Gas also acquired an LPG supply system from UEC, along with commercial clients using the system, and incorporated a new subsidiary called Union LPG in January 2019 to oversee this business. Union LPG was responsible for a 300 per cent increase in revenue for the commercial LPG segment in FY2019.

Before the pandemic hit, Mr Teo and Mr Ng discussed a goal of acquiring sizeable commercial and industrial customers at a rate of roughly 20 a month, if no large acquisition opportunities were available. But such a pace still may not be enough to keep up with expectations that have been built up by its past performance.

" The challenge is: is the market expecting us to repeat what we have done - doubling in three years?" said Mr Teo. " We may reach a point where we think we should focus on something really big or different, but still in the energy and infrastructure space."

One potential avenue is expanding its existing LPG business upstream into wholesaling or bottling plants, or overseas into new markets. Another lies in following the government' s lead in exploring hydrogen as a new fuel source and providing more infrastructure for electric vehicles.

Union Gas set up a CNG station at Toh Tuck Road in the early 2000s, in response to the government' s push for more CNG vehicles at the time. The station has since been modified to supply diesel as well, and the company is exploring the possibility of adding hydrogen supply and electric charging points.

" Hydrogen and electric vehicles are something exciting, something different," said Mr Teo. " In the process, we will acquire new knowledge and skills, and start to beef up and change our profile by going into more technology, knowledge-based businesses."

Shareholders have also been asking about the company' s plans to diversify into supplying and retailing piped natural gas to the local manufacturing and services sectors. Union Gas obtained a licence to do so from the Energy Market Authority in 2017, but has not provided much in the way of updates since.

Mr Ng said the diversification is a work in progress, and plans that were set in motion had to be delayed due to the pandemic.

Drawing on his prior experience developing the natural gas business at City Gas, he said Union Gas will need time to execute the expansion properly. This is especially since many customers in this space are multinational corporations, instead of the smaller coffeeshops and restaurants Union Gas is used to.

" We are excited about this business," Mr Ng said. " All we need is to land the first customer and have our first breakthrough."

Optimising existing resources

Meanwhile, Union Gas has plenty to do to optimise its business, such as implementing a fleet management system for its 300 or so vehicles and improving service standards. Mr Ng said customers want speedy service: sometimes calling multiple LPG suppliers and making a decision based on which company reaches their premises first. Managing a team of the size needed for such swift responses is a challenge.

Union Gas is also looking into other ways of improving yields on its excess cash, with the possibility of investing it through financial instruments. Management reiterated, however, that it is committed to declaring 50 per cent of its net profit as dividends, and could pay out more in FY2020.

It is also working on its branding, as it recognises it will need a strong brand to replicate its success story overseas. Part of this involves setting up a central headquarters, which will make it easier for teams to collaborate and for the company to restructure.

Union Gas is awaiting approval from JTC Corp for its proposed acquisition of a property at 89 Defu Lane to serve as its new headquarters.

" Especially as we go into expanding our business, there is quite a fair bit of technology and upskilling needed," Mr Ng said. " It' s an exciting phase for us because there' s a good chance for everybody to come back together as one Union family."

this one can aim MULTI-BAGGER

wait for shortist make it second bottom~

KiLrOy ( Date: 01-Aug-2017 20:41) Posted:

First bottom formed. Will wait for second bottom~ :)

Good luck to the buyers. Lol

finally... buyer come now~

KiLrOy ( Date: 31-Jul-2017 22:09) Posted:

Newton third law of motion does apply in stocks too. Trade (short) with care. :)

dun short leh...
really upset to trap at this IPO... evening see buying momentem at 0.235, near closing seller sell down again...

Anderton ( Date: 31-Jul-2017 11:19) Posted:

Wow 0.235 now. If Everyday short will win money.

Login Register

IPO 19-21 JULY