3Cnergy in Focus


3Cnergy in focus (502.SI)

(14 July 2017) close: S$0.052

Mean Target price: S$- (No research houses covering; No consensus estimates are available)

1.) Sector: Investment holding.

2.) Core business structure: Property development.

3.) Segment that generates the highest revenue: Real estate and property development consultancy.

4.) Countries that the business operates: Singapore and Malaysia.

5.) Challenges: Lacklustre property demand in Johor; high supply of properties in the last 2 to 3 years; tightening of mortgage loan approvals.

6.) Strengths: Affordably priced and unique property products that cater to market segments that are currently not served while preserving profitability.

7.) Significant events: 2016 has seen steady inflows of foreign investments into the state. Further, the Malaysian government’s commitment to promote Iskandar as a Strong and Sustainable Metropolis will allow the company to further conduct property development operations there- of which, Iskandar’s proximity to Singapore also gives it further locational advantage.

8.) TABLE:

9.) ALP Conclusion: 3Cnergy seems to be going through a hard time. The Chairman Statement described financials as ‘bleak’, with the “loss of $5.5 million during the financial year (2015), after having also suffered losses for a few years previously.” Worse, “3Cnergy had no significant business operations and had no cash”, prompting the Chairman to extend an interest free loan of $5 million to the company. It remains to be seen whether the company can pull itself together with the acquisition of 3C Marina Park Sdn. Bhd., and proceeds of $5 million from its compliance placement.

DISCLAIMER: Readers should not rely solely on information published and should seek independent financial advice prior to making any investment decision. The publisher accepts no liability for any loss whatsoever arising from any use of the information published herein.

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