Comments on Asia Enterprise

For the benefit of those who asked my view on Asia Enterprise:

Market Uncle said...
Hi, Nice blog you have here.Asia Enterprises seems to ride well on the current oil and commodity bubble (increase steel demand from ship & rig building), kind to share your comments?
29/5/08 11:53 PM

Kit said...
Hi Market Uncle,
Thats a fair statement and the Co will continue to do well. I have the following points for your consideration:
1. Company not sexy, low profile hence no hype and no spike in share price. You will be disappointed if u are looking for quick gain.
2. Different sales mix has caused GP% to drop eventhough is still healthy. Market does not like any drop in GP% for any reason.
3. Increased sales to Indonesia will increase credit risk and currency risk. This is from my own biz experience.

So long as the above 3 points not accepted by Mr Market, we are likely to see ah pek performance in the share price. But one thing i can assure u is that the founder is a solid man. You can sleep well investing in this company. He is my FC good fren :) The daughter is taking over the helm slowly.
31/5/08 12:09 AM

Latest holding of My Portfolio ~ May 2008

Latest holding of My Portfolio ~ May 2008

Latest Holdings as at 31 May 2008

Cash
China Energy
Courage Marine
Lizhong Wheel
ChinaXLX
Jiutian Chemical
Sihuan
Swiber

CPF
Asia Enterprise
Midas
Raffles Education

During the month, I sold off all holdings in Cacola, Changtian and Sino Techfibre. The idea is to conserve some cash as May - July has traditionally been a poor quarter after Q1 reporting. This also allowed me to trim the number of counters that I own.

Analysts continue to be a nuisance. Some of the rubbish reports have caused prices of counters that I own to tank. Today there is another idiot causing ChinaXLX price to drop >7% :(

Jiutian was cheered by the news of share placement as influencial personnel like Mr Chew Hua Seng of Raffles Education took up some 38million shares. Without this positive doze of good news, the share price might have fallen <10 cents under the vicious attacks of anaysts with their no brain downgrades etc.

Performance of Virtual Fund ~ May 2008

Performance of Virtual Fund ~ May 2008
Performance of Virtual Fund as at end May 2008

China Fish +$2,000
Raffles Education -S$6,000
Noble Group +S$6,380
STX Pan Ocean +S$10,010
Total Unrealised Gain = +S$12,390 = +2.478%
Sum invested = $524,510
Cash holding = $4,110
Realised Profit = $28,620 = 5.724%

The portfolio registered an unrealised gain of $12,390 from an unrealised loss of $33,390 in April mainly due to strong recovery in price of STX Pan Ocean and the switching of Sino Techfibre to Noble Group. The switch was timely as Sino Techfibre price continued to weaken and Noble has risen some 4.6% since my purchase. The performance might have been better if not because of some idiot downgrades on STX Pan Ocean. It hit $4 briefly and the report together with softening of BDI caused it to fall apart like an earthquake.

Raffles Edu expands China operations

RAFFLESEDUCATIONCORP EXPANDS CHINA OPERATIONS THROUGH ACQUISITION OF SHAAN XI RUIZHI EDUCATION INVESTMENT
- Acquisition by RafflesEducationCorp’s wholly-owned subsidiary, Value Vantage Investment and Management (Hangzhou)
- Further strengthens leadership position in the PRC education industry

Singapore, May 26, 2008 - Mainboard listed Raffles Education Corporation Limited (“RafflesEducationCorp” or “the Group”), the largest private education group in the Asia Pacific region, announced that it has on May 23, 2008, entered into an agreement to fully acquire Shaan Xi Ruizhi Education Investment Co., Ltd (“SXRZ”), through its wholly-owned subsidiary in China, Value Vantage Investment and Management (Hangzhou) Co., Ltd (“VVIM”).

SXRZ is a company involved in the business of secondary and higher education investment, providing consulting services in relation to vocational and technical education, training and international education. It also manages and operates a higher vocational institute, Shaan Xi Electronic Information Institute, which provides diploma courses in computer science & information technology.

Under the terms of the agreement, VVIM will fully acquire SXRZ for a purchase consideration of RMB 44 million (approximately S$8.7 million), from the existing shareholders of SXRZ.

The acquisition will be funded either through external financing, internal resources, or a combination of both external financing and internal resources.

Are CFOs equipped for evolving role?

Extracted from Business Times online edition
Published May 21, 2008
Are CFOs equipped for evolving role?
By MICHELLE QUAH

FACT: The role of the chief financial officer (CFO) has expanded greatly in recent decades. Fiction: All CFOs are necessarily equipped for such a change.

Fact: CFOs want to be business partners, not just bookkeepers. Fiction: Participating in the management of business risks and strategy is a natural extension of a CFO's traditional responsibilities and does not conflict with his compliance and corporate governance duties.

Evolving role
Much has been said in recent weeks about the growing responsibilities of CFOs around the world. The issue took on a local focus when Monetary Authority of Singapore's (MAS) executive director of insurance supervision, Low Kwok Mun, touched on it earlier this month.

He said CFOs not only have a responsibility for financial soundness and cost control, but also have to provide financial leadership in determining strategic business direction and aligning financial strategies. He also said CFOs have to be agents for change, stimulating the right behaviours across the organisation to achieve its strategic and financial objectives.

The evolving role of the CFO - from being mere bookkeepers to becoming more of business partners of CEOs in a company - was recognised in Ernst & Young's global study, released yesterday.

It found that companies and practitioners alike believed CFOs should be more actively engaged in the strategic direction and management of the business, in addition to their traditional compliance and corporate governance duties.

Critically, though, the study found that not all CFOs are necessarily equipped to handle such new responsibilities. Of the 251 C-suite and board-level executives interviewed - from the US, Europe and Asia - a sizeable 31 per cent of them said that CFOs do not have enough understanding of the wider issues their businesses face.

While companies may want their finance chiefs to become actively engaged in the strategic direction of the business, participate in strategy development, lead M&A activity and provide leading indicators for business performance, the reality is that most CFOs are still far too distracted by the demands of compliance and corporate governance.

E&Y's study found that while CFOs were good at managing financial information, they were not as capable when it came to thinking strategically. Respondents said CFOs were better at analysing past data than predicting future performance, and were not very good at integrating non-financials into the business.

Respondents also found that CFOs lacked key people management skills - such as the ability to move talent through an organisation in a way that motivates and keeps that talent.

Conflicting duties

The capability of individual CFOs aside, there's also the issue of whether such increased responsibilities conflict with their traditional duties.

By its very nature, the need to think strategically, invest in the company's future and spearhead M&A opportunities conflicts with a CFO's need to be financially prudent. Being a strategic partner to the board and to the CEO could also leave a CFO with precious little time to maintain the company's internal controls and to meet its compliance and regulatory obligations - and could conflict with his corporate governance duties.

Such concerns were also cited by MAS's Mr Low, who pointed out that a CFO who does not handle investment decisions will have greater independence to report any adverse developments promptly to the board.

While it's undeniable - amidst the growing complexities of the business world - that CFOs can no longer remain mere bookkeepers, companies also need to ensure that their finance chiefs aren't overloaded in their new responsibilities beyond their skills set, and to the detriment of the company's financial integrity.

Transaction of Own Portfolio

Sold all Changtian Plastic at $0.235 today, cost = $0.17

Transactions of Virtual Fund

Transactions of Virtual Fund:

Sold 180,000 Sino Techfibre at $0.775, realised loss -$20,000
Bought 58,000 Noble Group at $2.39

Sum invested: $524,510
Cash holding: $4,110
Realised profit: $28,620 = 5.724%

Sihuan invests in Beijing's Largest Privately Owned Drug Distributor

Acquires 45% of Beijing Purenhong for RMB50.7m

Earnings-accretive based on PE of 3.8 times FY08 guaranteed profitafter tax

Deal further strengthens Sihuan’s market share in Beijing

SINGAPORE, 15 May 2008 Mainboard-listed Sihuan Pharmaceutical Holdings Group Ltd (四环医药控股集团有限公司, Sihuan, or the Group) , a leading manufacturer of cardiocerebral vascular (CV) drugsin the PRC, today announced that it will acquire 45% of Beijing’s largest privately owned pharmaceutical products distribution company for RMB 50.7 million.

Established in 2000, Beijing Purenhong Pharmaceutical Co Ltd (北京普仁鸿医药销售有限公司 or Beijing Purenhong) distributes a variety of pharmaceutical products, in particular specialised medicines on behalf of major PRC and international pharmaceutical companies to 130 major hospitals in Beijing.This latest move is part of Sihuan’s continuing efforts to ramp up products sales. With the acquisition of Beijing Purenhong, Sihuan will be able to generate even greater demand for both its CV and non-CV drugs, other than its best-selling Kelinao in the capital.

Sihuan’s Executive Chairman and Chief Executive Officer (CEO), Dr Che Fengsheng (车冯升), said: “Beijing is one of our core markets for CV drugs and this acquisition represents a key step towards building a stronger presence in China’s booming capital. Last year, approximately 10% of our sales revenue came from Beijing. Going forward, we believe this contribution will increase as we leverage on Beijing Purenhong’s established distribution network and sales experience to secure an even higher market share in Beijing.“Beijing Purenhong is a well-managed company with excellent long-term prospects. We are pleased to have this opportunity to participate in its growth. The deal, which is accretive toour earnings, will certainly add to our future profits.

”The Group is paying an attractive price-earnings (PE) multiple for Beijing Purenhong at 3.8 times, based on FY08 guaranteed profit after tax of RMB 30.0 million. In the event that the actual profit after tax is lower than the guaranteed level of RMB 30.0 million, Beijing Purenhong will undertake to compensate Sihuan for any shortfall in profit by proportionately returning the RMB 50.7 million purchase price. This company recorded a net attributable profit of RMB 10.0 million for the financial year ended 31 December 2007.

Recently, Sihuan reported a strong 66% year-on-year jump in net net attributable profit toRMB 53.1 million for the first quarter ended 31 March 2008, continuing the growth momentum of the earlier quarters. This sterling performance arose from higher demandfor a wide range of its CV and non-CV drugs, as Sihuan stepped up marketing to top-tier hospitals.

Transactions of Own Portfolio

Sold all Cacola at S$0.41, avg cost S$0.33

Sihuan donates to help victims of earthquake

CONDOLENCE TO THE VICTIMS OF THE SICHUAN EARTHQUAKE;

DONATION OF RMB1 MILLION AND RMB2 MILLION WORTH OF PHARMACEUTICALS TO THE BEIJING RED CROSS

The Board of Directors and management of Sihuan Pharmaceutical Holdings Group Ltd (“SihuanPharmaceutical” or the “Group”) would like to express our deepest sympathy and condolence to the victims of the recent earthquake in Sichuan, the People’s Republic of China (“PRC”). Our subsidiary, Beijing Sihuan Pharmaceutical Co., Ltd, has donated RMB1 million in cash as well as RMB2 million worth of life-saving drugs such as Naloxone to the Beijing Red Cross. Naloxone is one of the emergency drugs used to treat unconscious patients. In addition, we will look at other ways in which we can aid the survivors of this disaster. The Board of Directors wishes to announce that the Group’s operations have not been affected by the earthquake in Sichuan on Monday. The destruction caused by the earthquake was concentrated mainly in the Sichuan rural area, and the Group does not have any operations in the affected area.

ON BEHALF OF THE BOARD

Che Fengsheng

Executive Chairman and Chief Executive Officer

14 May 2008

Swiber Q1 2008 Results

Swiber 1Q earnings soars 184% to US$10.4million on continued influx of EPCIC projects

• Contribution from Indonesian projects and shipyard business

• Order book totaling US$476 million as at 31 March 2008

SINGAPORE – 14 May 2008 – Swiber Holdings Limited (“Swiber” or together with its subsidiaries, the“Group”), a niche service provider to the offshore oil and gas industry, is barreling strongly ahead in 2008 amidst continued demand for its offshore oil and gas services in the region. Swiber towed in its strongest ever quarter with a top-line that was almost half FY2007’s.

For the 3 months ended 31 March 2008 (1QFY2008), the Group posted revenue of US$70.9 million, a year-on-year increase of 266.9% over US$19.3 million in 1QFY2007. Net profit soared more than 180% to US$10.4 million from US$3.6 million previously. Swiber’s strong first quarter was largely due to increased number of EPCIC projects completed during the period and contributions from its shipyard business.

In 1QFY2008, the Group recorded gross profit and margins of US$18.3 million and 25.9% respectively. Said Swiber’s Executive Chairman and Chief Executive, Mr Raymond Goh, "Demand for our niche services remained strong in the first three months of 2008. During the quarter, Swiber completed threepipeline projects and two installation projects in Malaysia and Indonesia which propelled us to a good, strong start in 2008.”

He continued, “Swiber’s growth momentum in each successive quarter is quite remarkable. We have grown our top-line more than 250% in 1QFY2008 year-on-year, and 16% quarter-on-quarter vis-à-vis US$61.1 million in 4QFY2007. I am very pleased with our results and, with oil prices reaching a historical high of US$126 per barrel just last week, I am confident that, barring unforeseen circumstances, Swiber will be able to continue to perform well in the next nine months based on the schedule of projects to be completed.”

“Currently, Swiber operates a fleet of 28 owned vessels, compared to a mere 10 vessels a year ago. This fleet expansion strategy has significantly reduced our third party charter-in costs and kept our profitability levels healthy. We firmly believe that this strategy will pay off in the longer term as it will give us the necessary scale and vessel capacity to bid for, and handle, more offshore oil and gas projects as well as expand geographically,” said Mr Goh.

Based on the latest results, earnings per share increased to 2.43 US cents (based on 424,350,000 weighted average ordinary shares in issue), from 0.99 US cents in the year-ago period (based on 369,000,000 weighted average ordinary shares in issue). Net asset value per share rose to 44.85 US cents as at 31 March 2008, from 13.13 US cents as at 31 December 2007.

As at 31 March 2008, Swiber’s balance sheet remained healthy with total equity of US$191.0 million and debt to equity ratio of 1.02 times. This compared to total equity of US$177.5 million and debt to equity ratio of 0.53 times as at 31 December 2007.

Sailing ahead on order books of US$476 million

Riding on the crest of continued strong oil prices and sustained demand, Swiber is sailing smoothly ahead. As at 31 March 2008, the Group is sitting on a hefty order book of US$476 million (this excludes the conditional LOI for the installation of platforms and pipelines in the Gulf of Thailand for a period of five years which has an estimated value of approximately US$50 million per year), from US$176 million in March 2007 and US$350 million as at end February 2008.

“Our projects in the region are growing at a healthy rate. In this first quarter, the total value of new projects won in Malaysia, Indonesia, India and Thailand amounted to approximately US$248 million, excluding the US$50 million per year conditional LOI in the Gulf of Thailand for a period of 5 years. And we have taken strategic steps to further deepen our penetration into these markets as well as new markets in the Asia Pacific region,” said Mr Goh. To spearhead its growth, Swiber will continue on its fleet expansion strategy, with the aim of increasing the number and technological capabilities of its vessels. In addition, the Group has extended its capabilities to subsea and deepwater activities; and ship building, design and engineering. The Group will continue to explore strategic alliances throughout the Asia Pacific and Middle East regionas part of its strategy to increase its presence geographically. To this end, Swiber inked a MOU(“Memorandum of Understanding”) on 30 April 2008 with Thailand’s CUEL Limited (“CUEL”), allowing both companies to jointly pursue offshore EPCIC (Engineering, Procurement, Construction, Installationand Commissioning) projects in the Asia Pacific region.

Under this alliance, the competitive advantagesof Swiber and CUEL are merged to offer existing and future customers a consolidated source of expertise to provide turnkey solutions to the regional offshore Oil and Gas industry. CUEL is one of theregion’s foremost offshore EPC fabrication contractors. “Through this collaboration, Swiber and CUEL expect to enhance revenue and earnings growth by crossoffering our products and services. It will also fulfill our objective of strengthening our presence in the Asia Pacific,” commented Mr Goh.

Midas Q1 2008 Results

MIDAS’ 1QFY08 NET PROFIT RISES 15.7% TO S$7.7 MILLION
- Revenue up 25.6% to S$36.2 million
- Profit before tax grows 37.0% to S$9.9 million
- Declares first interim dividend of 0.5 Singapore cents per ordinary share

Changtian Q1 2008 Results

CHANGTIAN’S FIRST QUARTER NET PROFIT RISES 30.2% TO RMB57.2
MILLION

Revenue up 8.2% to RMB163.2 million, due mainly to higher sales of release papers and specialty chemical 2-A2MPS

Maintains gross profit margin at approx 37.0%

Progressive capacity expansion in the second half of the year to drive growth in FY2008 and FY2009

Sino Techfibre Q1 Results

Sino Techfibre posts 22% rise in 1Q08 net profit to RMB 120.6 million

• Revenue increased 19.7% to RMB331.1 million due to higher sales of microfibre synthetic leather and higher ASPs for both PU and microfibre products y-o-y
• Trial production of PMP has been successful – samples being used in synthetic leather production to further determine its quality. On track to commence commercial production in 2H08
• A distributor for its in-house PMP products has been appointed

China Fishery Q1 2008 Results

CHINA FISHERY POSTS 33% RISE IN 1QFY2008 NET PROFIT TO US$40.4 MLN

> Oganic growth in trawling operations reflected in increased catch volume and higher product prices
> Group maintains stable financial profile through prudent policies

>Fishmeal prices recovered from lowest levels in late-2007 and expected to remain stable in year ahead
> Upgraded supertrawlers to be deployed to the South Pacific Ocean for new fishing operations

Cacola Q1 2008 Results

NEWS RELEASE CACOLA REPORTS 72% JUMP IN 1Q2008 NET PROFIT

SINGAPORE, 13 May 2008 – Cacola Furniture International Limited, an integrated lifestyle furniture designer and manufacturer in the PRC, has posted net profit of RMB44.9 million for the first quarter ended 31 March 2008 (“1Q2008”), a 72% increase from RMB26.1 million achieved in the corresponding period last year. This was on the back of a 38% rise in revenue to RMB188.5 million, from RMB 136.8 million in 1Q2007. Earnings per share rose 27% to 13 RMB cents, from 10.2 RMB cents in 1Q2007.

Mr Lu Ling Jia (卢领佳), CEO of Cacola said, “We’re off to a good start in the new financial year with a strong set of first quarter results. Our team’s effort to build a strong brand position via innovative furniture designs, successful retail concepts and targeted marketing activities are indeed paying off.”

OPERATIONS REVIEW

The strong performance was fuelled by surging new home sales on the domestic front as well as growing consumer awareness of Cacola’s brand of lifestyle furniture. This was supported by the Group’s expanded distribution network in the PRC from 101 at the close of 1Q2007 to 136 at the close of 1Q2008. The new specialty stores are located in different cities in the provinces of Anhui, Guangdong, Sichuan, Zhejiang and Hunan.

In addition, the Group also enjoyed a substantial increase in sales orders from South Africa, Spain, Australia and United States. Average gross margin improved slightly from 33.2% in 1Q2007 to 33.8% in 1Q2008 despite higher raw material cost, due to strong demand for Cacola’s higher-value products such as its new “Golden” series of premium sofas and the “White Oak” and “Black Walnut” series of panel furniture. The Group’s leading brand position has also enabled it to adjust its selling prices in response to the increase in raw material prices.

OUTLOOK

The Group expects the growing real estate industry in the PRC to continue to drive domestic demand for its customized panel furniture, sofa and mattress products, from real estate developers and contractors, as well as new home buyers. To capitalize on the burgeoning demand, it plans to further expand its distributor network and increase its retail points of sale.

The Group has also inked a deal to open a 6,000m2 mega store in Chongqing in the second half of the year. Said Mr Lu, “These are exciting times for Cacola. For the rest of the year, we will focus on implementing our business strategy as mapped out in our IPO prospectus, to bring about the desired return on shareholder value that we have promised.”

Sihuan Q1 2008 Results

Sihuan's 1Q08 Profit Surges 65.8% To RMB53.1Million As Revenue More Than Doubles; Expects FY08 Performance To Exceed That of FY07

Revenue soars 115.4% as Group reaps benefits of increased marketing of cardiocerebral vascular (CV) drugs to top-tier hospitals in China;

Sales of non-CV drugs rise nearly four-fold, buoyed by second quarter of contributions from Shenzhen Sihuan which was acquired in October 2007

Launch of Aogan (or GM-1) and Sodium Ozagrel expected to further consolidate our market positioning in the CV sector in China

Expects to receive more new product approvals to propel future growth in and outside China

Jiutian Chemical - Q1 2008 Results

Q1 FY 2008 – Key Highlights

• Snow storm that hit South China adversely impacted on PU downstream industries, Jiuyang’s DMF factory had to shut downtemporarily.
• Consequently average prices of key products, DMF, Methylamine were significantly lower against 4Q07 and 1Q06 average prices.
• Methanol prices surged in March 08 further aggravating production costs of methylamine and DMF.
• Pre-operating expenses (RMB1.5 million) of Jiulong from amortization of land use rights and wages of new workers recruited increased group’s overheads vs Q1'07.

Courage Marine Q1 '08 Results

SINGAPORE, 8 May 2008 FOR IMMEDIATE RELEASE
Courage Marine Group Limited (Courage or the Group), an efficient dry bulk shipper focused on infrastructure and energy-related commodities, began its new financial year on a robust note. The Group reported a strong 32% year-on-year (yoy) rise in net attributable profit (PATMI) to US$12.6 million for the first quarter ended 31 March 2008 (1Q FY08).

Though freight rates have been rather volatile in the past few months, they were still much higher than in the preceding quarter. The Baltic Freight Index (BDI) rose 60% to an average of 7,500 from 4,700 previously. Courage continued to ride this firm freight uptrend, growing its revenue by 29% yoy to US$21.5 million. Average revenue per vessel rose 60% to US$2.7 million from US$1.7 million.

The Group was able to reverse the impact of higher bunker costs on its profitability, as it worked diligently to pare administrative and operating expenses to 2.8% of 1Q FY08 revenue, down from 4.3% in 1Q FY07. This tight control over costs helped push up the corresponding net profit margin to 58.3% from 57.1% previously.

Said Chairman Hsu Chih-Chien: “We are pleased with our performance, which was achieved even though the Group drydocked three vessels for 70 days, including two Panamaxes in the past three months. Vessel utilisation remained at a high 85%, despite severe weather conditions in China that resulted in the closure of several ports for some weeks.

“When fierce snow storms battered China at the end of January, Courage worked rapidly with the local buyers to transport coal from Kalimantan, Indonesia to Guangzhou, China. During this period, we deployed two Handysize bulk carriers to meet this urgent need for coal as China aggressively stepped up efforts to restore power supplies to regions hit by the worst snowstorms in five decades.”

Given the Group’s deep understanding of Asia, coupled with its strong client relationships in the region, Courage is well-placed to meet regional demand for strategic cargoes such as coal and gravel going forward. The Group is actively seeking more of these longer-term affreightment contracts and is confident of building a stable earnings stream from this segment.

Courage believes a voracious appetite for raw materials particularly in giant economies such as China and India will continue to drive them into buying from sources much further afield. This has already resulted in a supply-demand gap for bulk carriers that has precipitated a sharp and sustained rise in freights. The Group believes market conditions will remain positive in the near- to medium-term.

Mr Hsu concluded: “Courage is therefore on the lookout for new and secondhand vessels to add to its fleet, though the timing of the purchases will hinge on price and vessel availability. The Group’s healthy balance sheet, with cash reserves of some US$77 million, will definitely facilitate these future vessel acquisitions.”

Asia Enterprises Q1 2008 Results

ASIA ENTERPRISES HOLDING LIMITED
(extract from the Company's Q1 results announcement)

Group revenue rose 35% to S$54.6 million for the three months ended 31 March 2008 (“1Q08”) on the back of an increase in sales volume and higher average selling prices compared to the corresponding period in FY2007.

Distribution costs and administrative expenses rose at a slower pace than Group revenue in 1Q08. Distribution costs, which include freight charges related to export orders, rose 23% to S$0.4 million in 1Q08, while administrative expenses were higher at S$2.5 million, an increase of 17% from 1Q07.

Net profit rose 17% to S$5.2 million in 1Q08 as the Group benefited from a lower effective tax rate due to its entry in the Global Trader Program for a period of three years from FY2008 onwards. As a result, the Group registered a respectable net profit margin of 9.5% for the financial quarter under review.

Cost of sales (measured on a weighted average cost basis) rose 40% year-on-year in 1Q08, which outpaced the Group’s revenue growth of 35%. This was due primarily to higher replacement cost of inventory as the Group has continued to replenish its stock level amid rising global steel prices, as well as the increasingly competitive conditions in the steel distribution industry.

The Group also continued to capitalise on the increased opportunities in Singapore’s construction sector and raised the revenue contribution from this customer segment to 12% in 1Q08, as compared to 4% in the same period a year ago.

Sales to other stockists and traders also increased during 1Q08 to account for 14% of Group revenue. The remaining 11% of Group revenue came from customers in the engineering/fabrication, manufacturing, precision metal stamping and other sectors. Sales to Malaysia remained stable at 6% of Group revenue in 1Q08. The Group continued with its efforts to make inroads into other potential markets in Asia Pacific region, which contributed to the remaining 6% of revenue in 1Q08.

Global steel prices have continued on a sustained upward trend during 1Q08 due primarily to the rising cost of steel production and firm steel consumption by industrial end-users. As a result, the Group benefited from the higher average selling prices of its steel products in 1Q08 compared to 1Q07, as well as gained from continuing orders from its customers in the Asia Pacific region.

In addition, the sales mix with respect to products and customers was different in 1Q08, compared to 1Q07. In 1Q08, the Group sold greater quantities of shipbuilding plates, which are fast-moving items. The Group also recorded a higher revenue contribution from customers in the construction and stockists/traders segment during the quarter under review.

As a result, the Group’s gross profit margin was lower at 16.1% in 1Q08, compared to 1Q07, which is within the range of 15% to 20% that the Group has achieved over the past three financial years.

By geographical market, sales to Indonesia rose to account for 54% of Group revenue in 1Q08, spurred primarily by the higher level of shipbuilding and marine-related activities there. Sales to the Singapore market declined marginally to form 34% of 1Q08 Group revenue, compared to 48% previously. This is in line with the shift in offshore and marine-related activities from shipyards in Singapore to Indonesia. However, this was partially offset by buoyant sales to the construction industry in Singapore.

With the shipbuilding and marine-related sectors as its primary focus, the Group saw sales to customers in these sectors increase by 36% to S$34.6 million in 1Q08. This customer segment continued to dominate the Group’s revenue with a contribution of 63%.

Raffles Edu Corp Q3 Results

RAFFLES EDUCATION CORP REPORTS 76% GROWTH IN NET PROFIT FOR 3QFY2008 TO S$19.4 MILLION

- Revenue increased 73% to S$49.2 million
- Net profit increased 76% to S$19.4 million
- Declares Q3 interim dividend of 0.65 Singapore cents per share

Singapore, May 6, 2008 – Mainboard listed Raffles Education Corporation Limited (“RafflesEducationCorp” or “the Group”), the largest private education group in the Asia Pacific region, today announced a 76% increase in net profit to S$19.4 million for the three months ended March 31, 2008 (“3QFY2008”). This came on the back of a 73% increase in revenue to S$49.2 million in 3QFY2008.

The Group’s performance was attributed to an overall increase in student enrolment, increase in course fees and contributions from Zhongfa College, Oriental University City and newly acquired Hefei Wanbo College (“Wanbo College”). Mr Chew Hua Seng, Chairman and CEO of RafflesEducationCorp, said, “We are pleased with our consistent performance. Moving forward, we will continue to build up shareholders’ value through both organic growth and strategic acquisitions.”

For 3QFY2008, the Group declared an interim dividend of 0.65 Singapore cents per ordinary share.

Transactions of Own Portfolio

Sold:

Sinotech Fibre


Bought more:

Cacola
Sihuan

Latest holding of My Portfolio ~ April 2008

Latest Holdings as at 3o April 2008

Cash
Cacola Furniture
Changtian
China Energy
Courage Marine
Lizhong Wheel
ChinaXLX
Jiutian Chemical
Sihuan
Sinotechfibre
Swiber

CPF
Asia Enterprise
Midas
Raffles Education