Simons Trading Research

Author: simonsg   |   Latest post: Wed, 15 Jan 2020, 5:25 PM


Rex International - Near First Oil Production, Backed by Huge Cash War Chest & Assets

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  • REX INTERNATIONAL (SGX:5WH) has proven its ability to create substantial value from its recent divestment of two Norwegian assets to Lundin Norway for US$45m and its remaining assets could be worth more vs its book value. Rex International targets to achieve first oil in Oman by 1Q20 and we expect a strong cash flow if production drilling is successful.
  • Also, Rex International has a strong net cash balance of S$89.5m, forming 41.5% of its market cap.
  • We initiate with a BUY and SOTP-based target price of S$0.218, implying 1.1x 2020F P/B.

Investment Highlights

Deeply undervalued given first oil prospects and strong balance sheet.

  • In the recent SGX Market Updates, Rex International is highlighted as one of the SGX Stocks with Consistent Momentum in Recent Years.

Source: UOB Kay Hian Research - 12 Dec 2019

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Labels: Rex Intl

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