SG Market (07 Feb 13)

SG Market: S’pore shares are likely to remain muted in a narrow range as investors await the ECB’s policy meeting later in the day. The muted reactions on Wall Street and the weak Nikkei start are likely to keep the STI in consolidation mode with resistance at 3300 and underlying support at 3240. SIA and Olam are likely to be in focus ahead of their earnings after the market close. Among stocks in focus: *CapitaMalls Asia: 4Q12 net profit fell 10% to $184.8m mainly due to lower fair value gains but revenue nearly doubled to $113.6m. Stripping out fair value gains, adjusted earnings would have been 81% higher at $51.3m. Proposed DPS of 1.625¢ for an annual payout of 3.25¢. NAV stood at $1.67. *Global Logistic Properties: 3QFY13 results came at top end of estimates with net profit of US$112.8m (+31% yoy) vs US$95m forecast, driven higher revenue of US$174m (+20%) as well as fair value gains from development completions of US$78.8m and rental growth in China. Performance was however impacted by unrealized FX losses of US$34.2m on the group’s Japan assets. As at Dec 12, NAV stood at US$1.75. *ASL Marine: Robust set of 2Q13 results with net profit +40% yoy and +8% qoq to $10.6m. All 3 business segments posted increase in sales lifting group revenue by 7% to $83.0m with shipbuilding +3%, shiprepair/conversion +17% and shipchartering +12%. Gross margins improved to 23.4% vs 17.3% yoy. Going forward, group expects the strong rig pipeline to support to support the growth of OSVs. *Tiong Woon: Solid 2QFY13 results with net profit climbing to $5.0m as revenue surged 45% to $55.7m. This brings 1HFY13 earnings to $9.1m vs $1.2m in the previous year. The much improved showing came on the back of better sales and margins from the heavy lift and haulage and trading segments. Despite the challenging environment, the group sees growth opportunities in regional O&G projects. *Goodpack: Lacklustre 2QFY13 results with net profit of $11.1m (+4% yoy) on pedestrian revenue growth of 6% to $43.4m. Earnings were impacted by higher finance costs from increased borrowings undertaken in anticipation of additional demand for IBCs despite the uncertain economic outlook. *China Fishery: Net profit for 1QFY13 plunged 43% to US$13.6m as revenue -25% was hit by a significant reduction in allowable catch of Peruvian anchovy, limited mackerel catch, low volumes from suppliers to support its North Atlantic processing activity as well as lower inventory carryover for sale. *PEC: 2QFY13 net profit fell 15% to $2.6m despite a 11% rise in revenue to $144.3m, lifted by increased project work in S’pore. However, margins were affected by intense price competition and rising wage costs as a result of policy changes and tight labour market. Excluding maintenance projects, its orderbook stood at $152m. *Viz Branz: 2QFY13 net profit slipped 7% to $5.1m in tandem with the 9% drop in revenue to $45m due to declining sales in all its business segments, mainly instant beverages, flexible packaging as well as key markets in China, SEA and Indochina. Group maintained interim DPS of 1¢. Management guides that outlook remains competitive and challenging. *Eu Yan Sang: The group swung back to profitability with 2QFY13 net profit of $4.7m vs loss of $2.7m due to an impairment charge on an associate last year. Revenue grew 12% to $77.9m, largely attributed to contributions from the Healthy Life Group but operating profit declined 15% because of higher A&P, rental and salary expenses. It expects the performance of its core business line to improve with the economic pick-up in China. *Metro: Net profit for 3QFY13 jumped 43% to $15.3m, boosted by a $5.8m balloon payment of interest income from loan notes and fair value gains of $3.5m relating to equity investments in Reits. Gross profit was adversely affected by the loss of rental contribution from Metro City Beijing and higher operational costs at its retail division. Maintains healthy balance sheet with net cash of $165m and NAV of $1.35. *Midas: Its 32.5% JV Nanjing SR Puzhen Rail Transport Co has won a Rmb710m contract to supply 104 train cars for the Nanjing Metro Line 11 Phase 1 with delivery slated from 2014 to 2015. Together with an earlier contract, this brings the value of contracts bagged by NPRT so far this year to over Rmb1b and will contribute Midas earnings over 2014 and 2015. *UE E&C: Awarded $35.2m tender sub-contract for electrical installation works to the proposed residential/commercial development at Waterway Point and Watertown project comprising 11 housing blocks totaling 992 units with commercial component in Punggol. The project is scheduled to be completed in 2 phases in Jul 15 and Jul 16. *Boustead: Awarded $70m contract to design and build an integrated ramp-up logistics and office facility for DB Schenker at the Tampines LogisPark. Completion is expected in 2Q14. This is the 3rd design-and-build contract secured by the group this year totaling $158m and is 6th project bagged over the past 3 months, bringing its orderbook backlog to $422m. *Ryobi Kiso: Secured $18m worth of contracts since 1 Jan, comprising foundation and geoservices works for 2 apartments in Western Australia, HDB Punggol West and a condo in Jalan Lempeng. *Cache Logistics: Enters into call option to acquire Precise Two, a 3-story ramp-up warehouse at Gul Way with a GFA of 284,381sf and lease tenure of 30 years wef Oct 03 for a total consideration of $57.3m. The initial net property income yield is ~8.7%, which should be accretive to the group. The proposed acquisition would boost Cache’s portfolio size to $1.03b. Tiger Airways: Australia’s competition regulator has expressed concerns about Virgin Australia’s move to take 60% control of the Australian arm of Tiger Airways, citing that the A$35m deal would create a duopoly. But it may approve the deal if a rejection drives Tiger to exit the market. A final decision would be made next month. *TMC Education: 1HFY13 loss widens to $2.4m from $1.3m in previous year. The group attributed the 8% drop in revenue to lower course and exam fee income and cautioned that the private education industry in S’pore will continue to be competitive and challenging in the next 12 months given new entrants, higher wage pressures and recruitment difficulties. *Overseas Education: This operator of the Overseas Family School makes its listing debut on SGX-Mainboard on 7 Feb. Based on the IPO price of $0.48, the stock is valued at a historical P/E of 6.6x (9.6x on enlarged share capital) and P/B of 1.7x.