Thursday, April 27, 2017

SG Market (27 Apr 17)

The market may consolidate its gains, taking cue from the muted reaction on Wall Street as investors assess the implications of Trump’s radical tax plan and question how it will be funded and whether it will pass muster with Congress.Regional bourses in Tokyo (-0.4%), Seoul (-0.2%) and Sydney (-0.1%) opened lower.Technically, immediate support for STI is 3,140 (50-dma) with topside resistance at 3,190.

Stocks to watch:
*Economy: If US President Trump’s proposed tax bill is passed, Singapore’s role as a regional HQ and top investment destination could be affected; the government may have to lower corporate tax rate but raise other taxes such as GST to make up for the reduced corporate tax revenue.

*Mapletree Greater China Commercial Trust: 4QFY17 DPU of 1.969¢ (+1.9%) brought full year payout to 7.32¢ (+1%), at the higher end of estimates. Revenue and NPI rose 7.9% and 6.1% to $94.7m and $77.5m on higher rental income across its portfolio and from the reversal of VAT at Gateway Plaza. Occupancy steadied at 98.6%, while aggregate leverage fell 1.3ppt q/q to 39.2%. Trading at 6.9% annualised 4Q yield and 0.8x P/B.

*Duty Free Int'l: 4QFY17 net profit of RM17.8m (-14.9%) brought FY17 headline earnings to RM72.7m (+17.8%), ahead of consensus estimate. However, the beat was largely due to one-off gains on FX (RM9.9m) and fair value of option (RM4m) during the year. For the quarter, revenue fell 7.4% to RM150m, weighed by the recent flood in Thailand and the after-effect from the demise of Thai King Bhumibol, as well as the imposition of GST at its border outlets and duty free zones from 1 Jan '17. Gross margin narrowed by 1.4ppt to 34.7%. Cash position ballooned to RM272.2m (FY2/17: RM49.3m) or S$0.071/share. NAV/share at RM0.4488

*AIMS AMP: 4QFY17 DPU fell 5.8% to 2.78¢ (-5.8%), translating to FY17 payout of 11.05¢, which met expectations. Gross revenue edged up 1.1% to $30.6m on maiden contributions from 30 Tuas West Road and higher rentals from 27 Perjuru Lane. But NPI slipped 2% to $20m due to higher maintenance and costs arising from the conversion of 20 Gul Way to multi-tenant building. Occupancy improved 0.6ppt q/q to 94.6%, while aggregate leverage rose to 36.1% (+1.5 ppt q/q). Currently trades at FY17 yield of 7.9% and 1x P/B.

*AsiaPhos: Broke even in 1Q17 with net profit of $0.1m (1Q16: $0.9m loss). Revenue surged 512% to $12.1m, largely attributable to its downstream contributions of $10m (1Q16: $0.3m) on sales volume of 3,700 tonnes (1Q16: nil). Gross margin slipped to 14% (-11ppts), mainly from the change in sales mix. Bottomline was shored by lower general & admin costs (-9%). NAV/share at $0.0974.

*Rowsley: Slumped to 1Q17 net loss of $1.6m (1Q16: $4.8m profit), dragged by a 68% decline in fair value gains on purchase consideration payable. Revenue grew 10% to $22.6m mainly due to consolidation of its M&E arm, Squire Mech, which was previously an associate, but this was partially offset by a weaker GBP. NAV/share at $0.085.

*SBS Transit: Entered MOU with ST Kinetics to collaborate and strengthen maintenance and engineering capabilities for its rail operations, through the use of automation, robotics solutions and data analytics to improve operational productivity and efficiency.

*ST Engineering: ST Kinetics signed its first agreement to provide expertise and services to refurbish electronics components used in SBS Transit's trains on the North East Line and light rail vehicles on the Sengkang-Punggol LRT systems. This marks the group's entry into rail MRO and engineering.

*Civmec: Commenced construction of a 53,470 sf purpose-built ship and module construction, ship repair, and maintenance facility. This will be Australia's largest undercover shipbuilding facility, and its construction plan requires the daily removal of 90-120 truckloads of earth over six months from a 7-ha site.

*YuuZoo: Signed framework agreement with Harbin Municipal Government, to set and run an eSports college and sSports development park in Harbin, China.

*Z-Obee: Expects to record a significant increase in net profit due to growing purchase orders from its customers.

Wednesday, April 26, 2017

SG Market (26 Apr 217)

The market could be greeted by positive spillover sentiment from US as investors get excited over Trump’s long-awaited tax cut announcement tonight.

Regional markets are higher again this morning in Tokyo (+0.7%), Seoul (+0.4%) and Sydney (+0.9%).Technically, STI is likely to break above its 20-dma at 3,164 before heading towards next objective at 3,190. Immediate support is now at 3,140.

Stocks to watch:
*CapitaLand: 1Q17 core net profit leapt 121.1% to $337.8m, or 35% of full year street estimate, boosted by a $160.9m gain from the 45-unit sale of The Nassim, otherwise earnings would have improved by 15.7% to $176.9m. Revenue was relatively flat at $897.5m (+0.4%) as higher handover from development projects in China and rental income from newly acquired properties were offset by fewer sales in Singapore. Net gearing stood at 0.44x. Trades at 0.72x P/RNAV and 0.88x P/B. MKE last had a Hold with TP of $3.70.

*Ascendas REIT: 4QFY17 DPU of 3.852¢ (+13%) brought FY17 payout to 15.743¢ (+2.5%), meeting estimates. Quarter revenue edged up 2.4% to $208.9m on contributions from newly acquired ONE@Changi City, three Science Park Buildings and a Sydney business park, while NPI rose 7.4% to $154.1m due to lower utility expenses and a property tax refund. Portfolio occupancy held steady at 90.2%, while aggregate leverage crept up 2ppt q/q to 33.8%. Trades at 6% 4QFY17 annualised yield and 1.24x P/B. MKE maintains Buy with TP of $2.85.

*Mapletree Commercial Trust: 4QFY17 DPU rose 11.9% to 2.26¢ despite an enlarged unit base, bringing FY17 DPU of 8.62¢ (+6%), in line with expectations. For the quarter, revenue and NPI surged to $107.5m (+47.3%) and $83.2m (+51.2%), mainly driven by Mapletree Business City I (acquired in Aug '16) and higher rental income from VivoCity. Portfolio occupancy slipped 1.1ppt q/q to 97.9%, while aggregate leverage narrowed 0.7ppt q/q to 36.3%. Trades at 5.7% 4QFY17 annualised yield and 1.14x P/B.

*Suntec REIT: 1Q17 DPU of 2.425¢ (+2.3%) was in line with estimate on distributable income of $61.8m (+3.1%). Revenue and NPI climbed to $88.4m (+12.9%) and $61.8m (+14.6%), led mainly by contribution from newly-opened 177 Pacific Highway A-Grade office in North Sydney, Australia. Both occupancies for office (+0.3ppts to 98.9%) and retail (+0.3ppts to 98%) improved, while aggregate leverage was flat at 37.7%. NAV/unit at $2.145.

*CDL Hospitality Trusts: 1Q17 DPS rose 9% to 2.42¢, in tandem with higher distributable income of $26.8m (+10%), meeting estimates. Revenue and NPI rose to $46.4m (+3.9%) and $35.9m (+6.4%), on higher contribution from Grand Millenium Auckland and lower property expenses (-3.8%), although partially offset by weaker contribution from properties in Australia (-5.1%), Maldives (-8.2%) and Japan (-13.1%), and further dragged by a weaker GBP. Singapore occupancy improved to 88.4% (1Q16: 83.9%; 4Q16: 83.6%) with RevPAR at $159 (1Q16: $161; 4Q16: $154). Aggregate leverage held steady at 36.8%. NAV/unit at $1.5298..

*Ho Bee Land: 1Q17 net profit surged 205% to $56.3m, lifted by a divestment gain of $7.4m from Rose Court, as well as higher associate income of $32.7m (+252%) arising from profits from the Shanghai JV project. Revenue grew 13.9% to $42.4m from sales recognition of two Australian residential projects in Melbourne and Gold Coast, but partially offset by a 4.3% decline in rental income. NAV/share of $4.45. MKE retains Hold with TP of $2.60, based on a 36% discount to its RNAV/share of $4.07.

*Citic Envirotech: 1Q17 net profit swelled 41.2% to $17m but achieved just 19% of the sole FY17 street forecast. Revenue grew 14.3% to $113.7m, on increased takings from engineering (+53.4%) and treatment (+4.7%) divisions, offset by a 43.4% reduction in membrane sales. Gross margin narrowed to 31.4% (-5.9ppts) on the shift in sales mix, while bottom line was buttressed by lower finance costs (-42.2%) after redemption of its $100m MTN bond. NAV/share at $0.658.

*SIIC Environment: 1Q17 net profit rose 34.3% to $120.1m, meeting 22% of FY17 consensus estimate. Revenue shot up 77.6% to Rmb999.7m, boosted by significant growth in construction (+70.7%), operating and maintenance income (+73.2%), financial income (+135.9%) and others (+107%), while gross margin expanded to 35.5% (+4.1ppts) on the change in sales mix. However, bottom line was weighed by a spike in finance costs (+180%) and lower JV/ associate income (-53.6%), as well as a higher effective tax rate of 28.1% (1Q16: 19.7%). NAV/share at Rmb2.735.

*Far East Orchard: 1Q17 net profit tumbled 66.8% to $5.6m, weighed by a sharp drop in JV income (-94%) due to the absence of one-off gain. Revenue slumped 22.9% to $39.4m following the expiry of certain lease agreements in Australia and New Zealand, as well as weaker performance from two hospitality assets in Perth. NAV/share at $2.94.

*Talkmed: 1Q17 net profit dipped 0.4% to $8.5m, dragged by higher staff costs (+5.7%), while revenue inched higher to $16.3m (+1.4%) from increased patient loads and higher contribution from subsidiary Stem Med.

*SPH: Diversifying into the healthcare sector via the acquisition of nursing home operator Orange Valley Healthcare, which owns and operates five nursing homes in Singapore, for $164m or 2.3x P/RNAV. The group notes that one in four Singaporeans will be aged above 65 by 2030, which will lead to strong demand for elderly care services in the next decade.

*Atlantic Navigation: 49/51 JV with Oceanus Co. Korea was awarded a US$45.2m project by a Mid-East national oil company to purchase and remove decommissioned offshore and onshore facilities. The project is expected to start in Jun '17, and be completed within 18 months. In addition, the group is also providing around seven vessels to support the offshore phase of the project.

*First Ship Lease Trust: Extended bareboat charters for three vessels, namely Speciality, Superiority, and Seniority.

*Lian Beng: Disposing a freehold property with 1,915.5 sqm NLA at Collins Street, Melbourne, Australia for A$35m..

*Amplefield: Disposing three plots spanning 19,181 sqm in Johor, Malaysia, along with buildings constructed on the land, to URC Snack Foods Malaysia for RM12.75m ($4m) or 1.28x P/B and realising a net gain of RM0.3m.

*Global Premium Hotels: Chairman Koh Wee Meng will exercise his right to compulsorily acquire all remaining shares in Global Premium Hotels at $0.33/share, after obtaining 94.55% control through the voluntary offer.

*Bukit Sembawang: Granted an option to an associate company of non-executive and non-independent director Lee Chien Shih, to purchase a unit in the Paterson Collection development project for $3.3m. The proposed sale price is based on market valuation and no preferential terms were given.

*Yanlord: Credit ratings agency Moody's has upgraded the group's corporate family and senior unsecured debt ratings to Ba2 from Ba3, with outlook stable.

*YuuZoo: Applying to SGX for extension to current deadline of 30 Apr '17 to hold its FY16 AGM, as it needs more time to prepare its audit report for shareholders' review.

*Eratat: To be liquidated following a failed judicial management bid.

*Profit warnings:
- Asia Enterprises
- Weiye

Tuesday, April 25, 2017

SG Market (25 Apr 17)

Sentiment could be positively swayed by the global relief rally after the first round of French election eased fears of Frexit, but outsized gains may be capped by caution ahead of key corporate results.

Regional markets opened higher in Tokyo (+0.1%), Seoul (+0.2%) and Sydney (+0.3%).Technically, STI is poised to break above its 20-dma at 2,160 before heading towards next objective at 3,190. Immediate support is at 3,110.

Stocks to watch:
*Hutchison Port Trust: 1Q17 net profit plunged 70% to HK$166.9m, accounting for just 13% of full year forecast in the absence of a HK$430m government rebate. Excluding the one-off rent and rates refund, earnings would have dropped 15.7%. Revenue fell 6.3% to HK$2.58b on weaker container throughput at Yantian terminals (-1.4%) as well as lower revenue per TEU from its HK and Shenzhen ports due to concessions offered to certain liners and depreciation of the yuan. Bottom line was also hurt by a jump in finance costs (+15%) from higher interest rates. NAV/unit dipped 3.2% q/q to HK$4.59.

*Mapletree Industrial Trust: 4QFY17 DPU of 2.88¢ (+2.5%) brought full year DPU to 11.39¢ (+2.2%), slightly ahead of estimates. Quarter gross revenue and NPI climbed 4.5% and 6.4% to $87.8m and $66m, respectively, on higher rentals, new contribution from Phase 1 of the HP BTS property and lower maintenance expenses and marketing commission. Occupancy rose 1ppt q/q to 93.1%, while aggregate leverage held steady at 29.2% (-0.25ppt q/q). NAV/unit at $1.41. MKE last had a Buy with TP of $2.00.

*Frasers Centrepoint Trust: 2QFY17 DPU held steady at 3.04¢, in line with estimates, but both revenue and NPI fell to $45.7m (-2.9%) and $32.6m (-3.3%) from the loss of revenue from Northpoint due to ongoing AEI works. Occupancy fell to 87.2% (-4.1% q/q) with WALE of 1.7 years, while aggregate leverage fell 0.3ppt to 29.4%. NAV/unit at $1.93.

*ParkwayLife REIT: 1Q16 DPU of 3.28¢ (+9.6%) was in line and included a 0.22¢ capital distribution on divestment gains. Gross revenue inched up 0.2% to $26.9m, while NPI stayed flat at $25.1m, as contribution from one nursing home acquired on Mar '16, higher rent from the Singapore properties and JPY appreciation was offset by the absence of contribution from four divested Japan properties in Dec '16. Aggregate leverage rose to 37.6% (+1.3ppts q/q). NAV/unit at $1.72.

*Cambridge Industrial Trust: 1Q17 DPU of 1.004¢ (-9.7%) was dragged by the absence of capital distribution and cash payment of management fees but remained on track with estimates. Gross revenue of $27.7m (-2.2%) and NPI of $19.7m (-8.4%) slipped amid the transition from single-tenanted to multi-tenanted properties and higher conversion costs. Occupancy inched 0.7ppts q/q higher to 95.4%, while aggregate leverage ticked up 0.3ppts to 37.8%. NAV/unit at $0.634.

*AEM: 1Q17 net profit of $4.1m (1Q16: $0.2m) overshot the street's sole estimate as revenue soared more than three-fold to $42.1m from increased sales of the latest generation HDMT test handlers and related consumables. Gross margin contracted 12.7ppt to 28.2% on a shift in sales mix, but is anticipated to improve when higher-margin consumables pick up. Management guided 9M17 revenue and pretax profit of $142m and $17.5m, respectively. Based on FY16 tax rate of 22%, AEM is trading at an implied 9M17 annualised P/E of 5.6x..

*Soilbuild Construction: 1Q17 net profit dived 90.7% to $0.4m, as revenue of $66.6m (-35%) was weighed by lower recognition from ongoing projects, while recently-secured projects are still at preparation stages. Gross profit margin slumped to 4% (-3.1ppts) from a higher mix of lower-margin HDB projects and increased construction costs. Order book grew to $493.6m (4Q16: $385.7m). NAV/share at $0.147.

*Cheung Woh: Swung to a 4QFY17 net loss of $1.8m (4QFY16: $2.6m profit), as revenue tumbled to $21.1m (-16.3%) on slower sales of HDD components. Gross margin collapsed to 0.6% (4QFY16: 19.4%) as operating costs remained sticky, while bottom line was further dragged by an absence of a $1m tax credit. Final DPS slashed to 0.1¢ (4QFY16: 0.75¢), bringing full-year payout to 0.4¢ (FY16: 1.25¢). NAV/share at $0.3597.

*Citic Envirotech: 90:10 JV with Xinji county government for a Rmb204m project to operate an existing 66,000 m3/day wastewater treatment plant in Xinji City, China. The project will include the construction of a separate 34,000 m3/day BOT wastewater treatment plant, with works scheduled between Jul '17 and Mar '18, which will have a 30-year minimum offtake service agreement with the local government. Separately, group was also awarded a Rmb230m BOT project for a 90,000 m3/day water recycling plant in Changyi City, China, which will come with a 30-year concession period. Construction for phase 1 (30,000 m3/day) will start immediately and expected to be completed by Oct '17.

*First Resources: 1Q17 FFB harvest surged 43.7% to 706,264 tonnes, with yield rising 0.9ppts to 4.0 tonnes/ha. CPO production jumped 33.9% to 161,194 tonnes, despite lower extraction rate of 22.4% (-0.6ppts). MKE last had a Hold on the counter with TP of $1.97.

*UMS: 51% owned water and chemical engineering solutions provider, Kalf Engineering, secured five electro-chlorination systems projects in Singapore, Chile and Middle East, which are expected for completion in 2H17. It also clinched an acid cleaning system project in Qatar and a drinking-water treatment plant project in China, both slated to complete by 2H18. Total value of the seven projects is $13m.

*Sapphire: Secured new infrastructure construction and consultancy contracts worth Rmb432m ($88m) bringing its order book to ~Rmb2.5b ($510m), with activity stretching up to 2021.

*NeraTel: Received contracts worth $7.2m for the supply, delivery, installation and maintenance of security application equipment for a Filipino telco.

*Profit warnings:
- Serrano
- Secura Group

Monday, April 24, 2017

SG Market (24 Apr 17)

Several global events could sway market sentiment this week, including the French election runoff (between centrist Macron and far-right leader Le Pen), North Korea’s increasing louder war drumbeat and announcement of Trump’s tax plan. Investors are also eyeing more 1Q results to gauge the current business climate.

Regional markets opened stronger in Tokyo (+1.5%), Seoul (+0.4%) and Sydney (+0.5%).Technically, STI is likely to trade within the 3,110-3,190 range, with six index stocks slated to go ex dividend this week.

Stocks to watch:
*Raffles Medical: Flat 1Q17 net profit of $15.5m (+0.1%) came in at the lower-end of estimates, buttressed by better cost control. Revenue slipped 1.7% to $114.9m on softer demand from foreign patients. MKE last had a Buy with TP of $1.70.

*CRCT: 1Q17 DPU of 2.74¢ (+1.1%) was in line despite growing at a slower pace than distributable income of $24.4m (+5%) due to an enlarged unit base. Revenue climbed 13.4% to Rmb290.9m on contribution from recently-acquired CapitaMall Xinnan in Sep ’16, while NPI jumped 15.1% to Rmb194.9m, thanks to cost savings. Occupancy improved slightly to 96.2% (+0.3ppt q/q), but aggregate leverage inched higher to 36.4% (+0.9ppt q/q). NAV/unit of $1.58.

*GL: 9MFY17 net profit tumbled 47% to US$29m, partially hurt by the absence of an one-off compensation from hotel management contract termination fees. Revenue fell 17% to US$252.9m on lower hotel contribution amid a softer GBP against USD, as well as weakness in gaming and property development segments. NAV/share at US$0.772.

*Frasers Centrepoint: Sales launch for 843-unit Seaside Residences in Siglap over the weekend saw a strong take-up of 392 units, or 70% of the 560 units released, reflecting continued recovery in the private residential market. Average selling price achieved was reportedly $1,700 psf.

*Nam Cheong: As part of on-going measures to restructure its business amid the protracted O&G sector downturn, the group is in discussions with its principal lenders on refinancing options, as well as possible cost cutting measures to help improve its tight liquidity position.

*Keong Hong: Acquiring a 60% stake in timber flooring supplier Hansin Timber Specialist and Trading for $4.5m, comprising $3m cash and 2.6m new shares at $0.585 each.

*Delfi: Formed 60:40 JV with Japan’s Yuraku Confectionary to produce, market and sell a range of chocolate snack products under the “Delfi” masterbrand in Indonesia. Total initial capital commitment is estimated at ~US$5-7m.

*United Foods: Entered into an MOU to acquire an 80% stake in food traders and distributor, The Really Time Trading, for Rmb16m. The potential acquisition will come with an annual profit guarantee of Rmb2m till 2020.

*KS Energy: Updated that its geothermal drilling contract for work in North Sumatra, Indonesia will conclude at end Apr, one month earlier than expected. Hence, the contract value will be reduced by US$1.2m from US$7m.

*Imperium Crown: Disclosed that Executive chairman and CEO Wan Jinn Woei is in discussions with third party financial and strategic investors on a private placement.

*Singtel: Granted aggregate credit facilities of ~$4.1b from 12 banks, to be used for general corporate purposes and refinancing of existing facilities.

*Profit warnings:
- Asia Fashion
- Grand Banks Yachts
- Lion Asiapac

Friday, April 21, 2017

SG Market (21 Apr 17)

Bargain hunters may offer some respite following the overnight rally on Wall Street on optimism over tax reform and BoJ governor Kuroda’s dovish stance.Regional bourses in Tokyo (+0.8%), Seoul (+0.7%) and Sydney (+0.8%) opened firmer.Technically, the STI could break above its 50-dma at 3,138 with next resistance at 3,160.

Stocks to watch:
*Keppel Corp: 1Q17 net profit rose 24% to $260.4m (+24%), boosted by $169.3m of land sales, writebacks, divestment, FX and Fair value gains; otherwise the results would have been a big miss. Revenue of $1.25b (-28%) was dragged by lower volume of O&M work and slower property sales from China and S’pore. O&M barely broke even amid continued yard downsizing and shrinking order book ($3.5b), while property earnings slipped 3% to $102.8m. Bottom line was cushioned by one-off gains from infrastructure ($32m) and investment ($125m) divisions. MKE has Sell with TP of SGD4.57.

*SGX: 3QFY17 net profit of $83.1m (-6.8%) was weighed by a $4m loss from the disposal of its investment in Bombay Stock Exchange. Otherwise, core earnings would have dipped 2% and met estimates. Revenue slipped 1.5% to $202.7m on weaker contributions from derivatives trading (-8.6%), partially offset by stronger contributions from equities & fixed income (+1.1%) on higher securities total traded value (+5%). Operating margin widened to 50.8% (+0.9ppts) on tight cost control. Interim DPS of $0.05 was maintained.

*CapitaLand Mall Trust: Flat 1Q17 DPU of 2.73¢ came in line with expectations. Revenue and NPI fell to $172m (-4.3%) and $120.1m (-6.1%) respectively, mainly due to loss of income from the redevelopment of Funan DigitaLife Mall. Both shopper traffic (-0.5%) and tenant sales (-0.7%) slipped, Portfolio occupancy declined 0.8ppt q/q to 97.7%, while aggregate leverage edged up 0.5ppt to 35.3%. Trading at 1Q annualised yield of 5.5% and 1.06x P/B.

*Ascott Residence Trust: 1Q17 results missed estimate, as DPU sank 14% to 1.51¢ on an enlarged unit base following a placement and lower distributable income of $25.1m (-8%) due to absence of FX gain. Revenue rose 5% to $111.3m, shored by the acquisition of Sheraton Tribeca New York Hotel in Apr '16. On same store basis, RevPAU declined 2% on weaknesses in Singapore and UK. Gross margin shrank 3.6ppt to 42.4%. Aggregate leverage rose to 41.1% (+1.3ppt q/q), but will be pared to 36.6% post rights issue. Currently offers 1Q annualised yield of 5.5%.

*Frasers Commercial Trust: 2QFY17 DPU grew 2.4% to 2.51¢ meeting expectations, shored up by capital distributions, while distributable income rose 3.5% to $20m. Revenue of $40.2m (+3.2%) and NPI of $30m (+4.1%) benefitted from 357 Collins Street’s stronger occupancy and rental rates, as well a firmer AUD, partially offset by lower occupancy rates at China Square Central and Alexandra Technopark. Portfolio occupancy slipped to 91.8% (-1.2ppts q/q) with WALE of 3.7 years. Aggregate average held steady at 35.9% with an average borrowing rate of 3.01%. Trades at annualised yield of 7.6% and 0.86x P/B..

*Cache Logistics Trust: 1Q17 DPU fell 2.7% to 1.8¢, meeting street estimates. Distributable income fell 2.5% to $16.2m. Revenue was shaved 0.8% to $27.1m due to the divestment of Cache Changi Districentre 3 and the lower income received under protest for 51 Alps Avenue, while NPI fell at a faster 2.6% clip due to expenses from single-to-multi tenant building conversion. Occupancy improved 0.8ppt q/q to 97.2% with WALE of 3.6 years. Aggregate leverage steady at 43.1%. Trading at 8.3% annualized 1Q yield.

*GuocoLand: 3QFY17 net profit of $29.6m (+161%) brought 9MFY17 earnings to $112.3m (-80%) and 52% of street's full-year estimate. Quarter revenue jumped 63% to $271.1m on higher sales and revenue recognition from Singapore's residential projects, but gross margin shrank 6.5ppt to 23.3% from a change in sales mix. Bottom line was shored by FX gain of $18.9m and turnaround in associates and JVs' contribution to $2m (3QFY16: $1.5m loss). NAV/unit at 2.95.

*Singapore Medical Group: Acquiring two earnings accretive Singapore paediatric clinics for $25.3m, funded by the issuance of new shares at $0.54/share and $13.9m cash payable in three tranches. The acquisitions come with 5-year profit guarantee of $2.3m p.a., implying 11x P/E.

*Federal 2000: Signed MOU with China Merchants Industry to co-operate exclusively on certain identified O&G projects in Indonesia.

*Sabana REIT: Has received non-binding proposals in relation to its ongoing strategic review. Discussions are currently preliminary, and these will be reviewed with the assistance of financial adviser Morgan Stanley.

*Asiamedic: Conditionally agreed to acquire LuyuEllium Healthcare for $42.2m, which will result in a very substantial acquisition. The target provides non-clinical management services to medical institutions in South Korea and China. The deal comes with profit guarantees ranging $3.3m-4.2m for FY16-20, and would have resulted in FY16 EPS of 0.27¢ from loss per share of 0.42¢ on a pro-forma basis.

*Nera Telecoms: Received purchase orders of about $19.9m for the supply, delivery, installation and maintenance of IP network equipment for service providers in Singapore.

*Alliance Mineral: Requested for trading halt. The announcement could pertain to an announcement made by HK-listed Burwill Holdings (24 HK) where it entered into an exclusive lithium concentrate offtake agreement with where it will buy lithium concentrate from Alliance Mineral and Tawana for five years. Burwill highlighted that the offtakes are only legally binding once signed.

Thursday, April 20, 2017

SG Market (20 Apr 17)

The market is likely to come under pressure from the overnight drop in crude prices following the surprise build in US gasoline stockpiles, poltical uncertainty over upcoming elections in Europe as well as growing voices for ECB to end its monetary easing.

Regional markets had a tepid opening today in Tokyo (flat), Seoul (flat) and Sydney (+0.3%).Technically, the STI has broken below its 50-dma at 3,135 with next support at 3,110.

Stocks to watch:
*Keppel REIT: 1Q17 DPU fell 13.7% to 1.45¢ in absence of a capital distribution, achieving 23% of full year street forecast. Revenue and NPI slipped 3.2% and 4.6% to $39.9m and $31.4m, due to absence of income from 77 King Street (divested in Jan ’16) and lower contribution from Bugis Junction Towers. Portfolio occupancy inched up to 99.4% (+0.2ppts q/q), while aggregate leverage held steady at 38.4% (-0.1ppts). Trades at 5.4% annualised yield and 0.8x P/B. MKE last had a Buy with TP of $1.18.

*China Aviation Oil: 1Q17 net profit climbed 4.7% to US$25.3m, meeting 26% of FY17 street estimate. Revenue soared 126.1% to US$3.31b from increased volume traded to 7.39m tonnes (+49%), fuelled mainly by expansion of trading in crude oil to China and fuel oil to Mid-East, but gross margin was squeezed to 0.5% (-0.4ppts). Bottom line was lifted by stronger associate contribution from Shanghai Pudong Int’l Airport Aviation Fuel Supply Company (+7.1%), but pared by weaker contribution from its Korean oil hub (-1.6%). NAV/share at US$0.788.

*ComfortDelGro: 75% owned SBS Transit was awarded the Seletar bus package (currently operated by SMRT) after putting in the lowest bid of $480.3m, well below the first two packages won by Tower Transit (Bulim: $556m) and Go-Ahead (Loyang: $498m). This is the third and last package up for grabs, with the remaining contracts held by incumbents set for future tender once they expire over the next 2-10 years. The five-year contract with a 2-year extension option will commence in 1Q18 and will add ~2% to CDG’s FY18 revenue and earnings. MKE maintains Hold with TP of $2.68.

*Hong Leong Asia: 40.2% owned China Yuchai has acquired the remaining 47.5% and 20% interests in JVs Sichuan Yuchai Machinery Industrial Development and Chongqing Yuchai Machinery Monopoly for Rmb8.9m and Rmb0.15m, respectively.

*ABR Holdings: Raised its stake in Malaysia property developer Sering Manis (SM) from 10% to 19% for RM1.1m. ABR will also dish out a shareholder loan of RM21.7m. SM is in the process of acquiring a 1.13m sqm plot of freehold land in Pahang, Malaysia, near Genting Highlands for RM170.67m.

*Meghmani Organics: 57% owned Meghmani Finechem plans to expand both the chemical and power capacity at GIDC Dahej, South Gujarat in India, by 50%. The project will cost Rs4b and is expected to be commissioned in Jun 2019.

*IEV: 25% owned JV Gas Malaysia IEV has commenced its virtual pipeline business, following the launch of the compressed natural gas distribution station in Gelang, Malaysia.

*Profit warning:
- SP Corp
- Versalink

Wednesday, April 19, 2017

SG Market (19 Apr 17)

The market remains in a cautious mood as investors wait for more corporate results amid a recovering economy and ahead of crucial elections in France and Britain.

Regional markets opened lower in Tokyo (-0.3%), Seoul (-0.4%) and Sydney (-0.5%).Technically, the STI appears trapped between the 20 and 50-dmas at 3,135 and 3,160, with downward bias towards next level at 3,110.

Stocks to watch:
*CCT: 1Q17 DPU climbed 9.6% to 2.4¢, meeting 26% of full year street estimate. Post-acquisition of remaining 60% stake in CapitaGreen in Sep ’16, gross revenue and NPI surged to $89.5m (+33.9%) and $69.9m (+32.6%). Portfolio occupancy improved slightly to 97.8% (4Q16: 97.1%), while aggregate leverage inched 0.3ppt higher to 38.1%. Management guided that NPI of some properties is expected to soften in later part of 2017 as more renewals and new leases are committed below expiring rents. NAV/share at $1.75.

*Keppel T&T: 1Q17 results missed estimates as net profit fell 13.1% to $11.6m on weaker contributions from data centre and logistics units. Revenue dropped 15.6% to $40.7m following the partial disposals of 90% stake in Keppel DC Singapore 3 and 50% interest in Keppel DC REIT Management to sister companies, both of which have been reclassified as associates. NAV/share inched up 1¢ q/q to $1.44.

*ST Engineering: Its electronics arm secured $464m worth of contracts in 1Q17 for rail electronics & intelligent transportation, satellite & broadband communications as well as advanced electronics & information communications technologies solutions.

*Keppel Corp: Its Infrastructure arm has signed a non-binding agreement with the EDB to develop, own and operate a gasification facility on Jurong Island.

*UOB/ SIA: UOB launched the KrisFlyer UOB current account, which allows customers to earn KrisFlyer miles at a quicker rate on spending, provided there is a minimum average balance of $3,000 and above. The bank aims to open at least 200,000 KrisFlyer UOB accounts over the next five years, and bring in deposits of ~$1.5b. MKE last had a Hold and TP of $19.54.

*AEM: Flagged that it has received purchase orders worth $152m for delivery in FY17.

*King Wan: Secured new mechanical and electrical projects in Singapore worth $33m in 1Q17. This brings its order book to $163m with contracts lasting till 2024.

*China Kangda: A group of vendors led by Gao Sishi with cumulative shareholding of 57.1% and Zensho Holdings (12.1% stake) have entered into two separate agreements with a potential purchaser to extend the exclusivity period for a possible transaction till 30 Apr.

*Far East Hospitality Trust: Withdrew its Moody's corporate credit rating, following the amendment to the Code on Collective Investment Schemes to adopt a single-tier aggregate leverage limit of 45% without the requirement for a credit rating.