Strong insider buying @ SERIAL SYSTEM, LEY CHOON GROUP

Strong insider buying @ SERIAL SYSTEM, LEY CHOON GROUP:

an established one-stop underground utilities infrastructure service provider, was listed on the mainboard of the Singapore Exchange in August 2012 via a reverse takeover of Ultro Technologies.

The stock price, recently trading at 18 cents, is way below the 28 cents at which the RTO was transacted involving an issue of 392.9m new shares.

There was a compliance placement, as part of the RTO exercise, involving an additional issue of 57.6m new shares and sale of 23.4m vendor shares at $0.22.

There has since been a spate of big share purchases, as shown in the table at the top.

A placement of new shares in Aug 2013 at 16.42 cents was taken up by Hiap Hoe Investment, a subsidiary of property developer Hiap Hoe Limited, and Mr Teo Kian Huat, a private investor and a partner at a fund management company in Singapore.

Meanwhile, the other key buyer was Zheng Choon Holding, the investment vehicle of the controlling shareholders (the Toh family) of Ley Choon, which bought back shares from the open market at various times of the year.



In a report on Nov 4, Voyage Research estimated that Ley Choon Group will achieve $12.2 million (or 2.1 cents a share) in net earnings in 2013, which means the stock (18 cents) is currently trading at 8.6X earnings.

However, on 13 Nov, the group reported that in the first nine months of 2013, it had already achieved $19.0 million in net profit. This was boosted by a $11.1 million gain recognized on disposal of a building at Senoko Drive.

No dividend was declared for 2012 but in its annual report 2012, chairman Toh Choo Huat said the board would recommend a final dividend of not less than 30% of the net profit attributable to shareholders for FY 2013. 



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