Here’s another edition of our top stock highlights where we feature the latest groundbreaking corporate news and updates.
Sea Limited (NYSE: SE)
Sea Limited is an e-commerce giant with three main divisions — digital entertainment (i.e. gaming) under Garena, e-commerce under Shopee, and digital payments branded under SeaMoney.
Two days ago, the company proposed to raise money through an offering of 11 million American Depository Receipts (ADS) and US$2.5 billion in the aggregate principal amount of notes.
Sea ended up upsizing this share offer to 11 million ADS due to strong institutional demand and priced each ADS at US$318 per share. The equity offering will raise around US$3.8 billion.
In total, the company raised around US$6.3 billion.
Underwriters Goldman Sachs (NYSE: GS) and JPMorgan Chase & Co (NYSE: JPM) have the option to purchase an additional 1.98 million ADS which could raise a further US$386 million for the company at the same price.
This news caused Sea Limited’s shares to decline by 6.2% to US$322.60.
The proceeds from this offering will be used for business expansion, including potential strategic investments and acquisitions.
The weighted average number of shares for Sea Limited as of 30 June 2021 stood at 523.2 million.
The issuance of the ADS will result in around 2.5% dilution for the company.
Year to date, shares of Sea Limited have surged by 64.5% and continue to scale new all-time highs.
Ascott Residence Trust (SGX: HMN)
Ascott Residence Trust, or ART, is the largest hospitality REIT in Asia Pacific, with assets under management of S$7.3 billion as of 30 June 2021.
Its international portfolio consists of 88 properties located in 38 cities across 15 countries.
ART announced the acquisition of its third student accommodation asset located in Texas, US.
The REIT will fork out US$70 million for the 1,005-bed asset that serves over 40,000 undergraduate and graduate students at Texas Tech University.
Investors should note that this is ART’s third acquisition in seven months in the purpose-built student accommodation (PBSA) sector since the REIT expanded its investment mandate earlier this year.
The PBSA sector promises to provide the REIT with income stability and post-acquisition, its contribution to ART’s portfolio will rise from 5% to 11%.
With a medium-term target to raise the proportion of PBSA assets to around 15% to 20% of the portfolio’s value, investors could see more acquisitions from the REIT in this space.
Furthermore, the acquisition is set to increase the distribution per stapled security by around 1.5%.
ART is undertaking a private placement of 152,594,100 new units at an issue price of S$0.983 per unit to raise gross proceeds of S$150 million.
Because of the placement, the REIT has also declared an advance distribution for the period from 1 July till 19 September.
This distribution is estimated to be between S$0.00486 and S$0.00586.
Hongkong Land Holdings Ltd (SGX: H78)
Hongkong Land Holdings, or HKL, is a major property development, investment and management group.
The group owns more than 850,000 square metres of prime office and luxury retail properties in major cities such as Hong Kong, Singapore, Beijing and Jakarta.
HKL announced its intention to use up to US$500 million in a share buyback programme that extends until 31 December of next year.
This exercise is in line with the group’s capital allocation practice which includes investment in new assets and the payment of dividends.
This announcement resulted in HKL’s share price shooting up 12.6% to US$4.73 as investors cheered this piece of news.
HKL has immediately moved to repurchase shares in the wake of its announcement.
On 7 September, the group bought back 320,000 shares, paying an average price of US$4.6712 per share.
In total, HKL has forked out around US$1.49 million on this purchase.
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Disclaimer: Royston Yang does not own shares in any of the companies mentioned.