Mehta Vimesh Piyush, a substantial shareholder of Huationg Global 41B , has raised his stake in the provider of civil engineering services. On June 30, Piyush acquired 390,000 shares on the open market for $61,639.50 or 15.8 cents each. He now holds 11 million shares, equivalent to 6.21% of the company, up from 5.99%. A week earlier on June 22, he had acquired 350,000 shares for $49,700 or 14.2 cents each.
Separately, Patrick Ng Kian Ann, CEO of Huationg Global, has also raised his stake in recent months. On April 3, he acquired 101,000 shares on the open market for $10,201 or 10.1 cents each. The acquisition brings his direct stake to 827,800 shares or 0.467%. As Ng is deemed interested in another 121.76 million shares, this gives him a total stake of 69.165%.
The last time Ng acquired his company’s shares was back on March 30, 2022, when he acquired 200,000 units for $19,400 or 9.7 cents each. Earlier, Ng also made a series of purchases. On Jan 16 and 20, 2022, he had acquired 200,000 shares for $17,600 and 27,000 shares for $2,326.80. This works out to 8.8 cents and 8.6 cents each respectively.
On March 1, Huationg Global reported revenue was down 7.9% to $156.9 million in FY2022 ended Dec 31, 2022, from FY2021 because of lower levels of civil engineering business activities. However, FY2022 earnings were up 91.7% y-o-y to $10.2 million because of lower costs and contributions from its dormitory operations.
The company plans to pay a final dividend of 0.5 cents per share, bringing the full-year payout for FY2022 to 0.8 cents. The company has built up an order book of $492.8 million, to be completed over the next four years.
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Huationg Global and HRnetGroup
Buyback maintained
HRnetGroup has kept up its pace of share buybacks after a series of downgrades by analysts in the face of a slowing economic environment, which is assumed to weigh down on job markets. The most recent buyback was on July 5 when the company acquired 50,000 shares on the open market for 74.85 cents each. This brings the total number of shares bought back under the current mandate to 550,000, equivalent to 0.06% of the share base.
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Before the latest buyback, the company on July 3 and 4 bought back shares at 74.6 cents and 74.4 cents respectively. The company had bought back shares too on June 30 and on most other trading days in June. Typically, the company would buy 50,000 shares per day.
HRnetGroup has seen a few downgrades by analysts in recent months. The most recent was on June 28 when Andy Sim of DBS Group Research decided to rate the stock “hold” from “buy”, citing concerns that a slowing economy will dampen the recruitment firm’s business in its key markets of Singapore and China.
“Easing labour market in Singapore and sputtering growth in China a double whammy,” writes Sim, whose lower target price of 86 cents is based on estimated ex-cash 10x FY2023 and FY2024 earnings. The previous target price of 1.07 cents was from a lower valuation of estimated ex-cash 11.5x FY2023 and FY2024 earnings.
According to Sim, the Singapore labour market continues to lose steam as reflected in higher job vacancies and changes in total employment numbers. In addition, China’s economic recovery also came below market expectations and the growth reflected in the recent figures is largely a result of base effects.
Sim’s downgrade follows a similar June 23 report by CGS-CIMB’s Kenneth Tan and Lim Siew Khee, who now deem the stock a “hold” from “add” with a new target price of 80 cents, from $1 previously.
Meanwhile, HRnetGroup announced on June 27 that its subsidiary, RecruitFirst, which specialises in flexible staffing services, has secured a further two-year contract from last month to May 2025 to hire temporary staff for Gardens by the Bay in Singapore. The company has had a contract to provide this service since 2013. On April 5, the company announced a similar contract with Singapore Pools.
