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Sarine Technologies starts buybacks; Fund raises stake in UOL Group

The Edge Singapore
The Edge Singapore • 3 min read
Sarine Technologies starts buybacks; Fund raises stake in UOL Group
UOL recently opened the Pan Pacific Orchard hotel / Image: UOL Group
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Sarine Technologies has started buying back its shares at a steady clip. Under the current mandate, it first bought back shares on the open market on Aug 15, acquiring 33,000 shares at 37 cents each. The following day, it again acquired another 18,000 shares at the same price.

Sarine was in the market again when its share price dipped lower, acquiring 10,000 shares at 35.5 cents each on both Aug 21 and 24, and 15,000 shares at 35 cents each on Sept 18. The most recent buyback was made on Sept 19, when it acquired 20,000 shares at 34 cents each. This brings the total number of shares bought back under the current mandate to 116,000 shares.

On Aug 28, Sarine announced it has engaged Global Close Alliances Group, described as an investment banking consultancy, to help “in analysing and pursuing means to maximise shareholder value.”

Sarine, which is dual-listed in both Singapore and Israel where it is based, calls itself a global leader in the development, manufacturing, marketing and sale of precision technology products for the evaluation, planning, processing, measurement, grading and trading of diamonds and gems.

On Aug 13, Sarine reported earnings of US$953,000 ($1.3 million) in 1HFY2023 ended June, down 85.4% y-o-y. Revenue in the same period was down 23.9% y-o-y to US$23.7 million. In line with the lower earnings, Sarine reduced its dividend payout to 0.25 US cents for 1HFY2023, versus 1.5 US cents in 1HFY2022.

The company attributes the poorer showing to lower demand for its capital equipment and diamond scanning services, which, in turn, is blamed on economic uncertainties amid this inflationary environment which has dampened consumer demand in the US.

See also: Temasek’s Fullerton disposes of 82,200 units in MLT at $1.5753 each

China, another key market, did not do well also due to a weaker-than-expected post-Covid reopening recovery.

Sarine warns that as interest rates and inflation are likely to stay high and with the possibility that the US economy might still tip into a recession, overall industry conditions are likely to remain challenging for the rest of FY2023. “Our traditional businesses of selling capital equipment and to a much lesser extent our Galaxy scanning services will remain affected under subdued market conditions,” says Sarine.

See also: Sarine reverses into the red in 3Q; launches equal access share buyback

To trade these stocks with Tiger Brokers:
Sarine Technologies
and UOL Group

Discount to book value

On Sept 13, asset manager Silchester International Investors, already a substantial shareholder of UOL Group, acquired another 197,600 shares at $6.416 each on the open market. This brings its stake in the property and hospitality group to nearly 50.72 million shares or 6.002%, up from 5.979%.

On Aug 10, UOL reported earnings of $135 million for 1HFY2023 ended June, down 64% y-o-y from $371 million recorded in the year earlier. Revenue in the same period was down 11% y-o-y to $1.37 billion.

The property group attributes the lower earnings to “significantly” lower attributable fair value gains on investment properties of just $3.5 million compared to $190 million booked in 1HFY2022. Higher finance costs weighed down earnings too.

UOL’s 1HFY2023 earnings have yet to take into account the sale of Parkroyal Kitchener Road for $525 million. The sale, announced on July 4, will let UOL book a gain of $446.2 million, and on a pro-forma basis, lift its NTA per share as at Dec 31, 2022 from $12.55 to $13.08, which means UOL shares are trading at around half its book value at its Sept 20 close of $6.51.

“We have been proactively engaged in asset management and asset enhancement initiatives of our existing commercial portfolio while looking for acquisition opportunities,” says group CEO Liam Wee Sin.

For more stories about where money flows, click here for Capital Section

“For hospitality, we recently opened Pan Pacific Orchard, entered into a sale and purchase agreement for ParkRoyal on Kitchener Road, and continue to review our hotel portfolio with the view of unlocking value at an opportune time,” he adds.

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