SG Market (26 Feb 13)

SG Market: S’pore shares are likely to open weaker as a potential political gridlock in Italy renewed concerns about Europe’s debt situation, causing steep losses on Wall Street. Sentiment may also be weighed by the S’pore Budget especially on labour intensive industries such as construction offshore & marine, F&B and banks with those in land transport and perhaps Iskandar plays benefiting as some SMEs may relocate there following the tightening of foreign labour imports. Immediate support for the STI now tipped at 3255 with topside resistance is at 3310. Stocks to watch out for: OUE: Core earnings for FY12 broadly in line. Operating profit rose 31% largely driven by higher revenue from hospitality and property businesses but bottomline earnings plunged 76% to $90.1m due to smaller revaluation gains from investment properties ($32.5m vs $265.5m in FY11) and fair value losses of $40.6m from One Raffles Place. Final + special DPS pared to 8¢ from 11¢. NAV stood at $3.49. *Nam Cheong: Delivered strong set of 4Q12 results, which met expectations. Net profit soared 87% to RM49.3m as revenue surged 172% to RM379.2m on strong vessel sales, partially offset by weaker chartering revenue. Group boasts a strong orderbook of RM1.3b with deliveries stretching till 2015. DPS of 0.5¢ proposed. *ARA Asset Management: Results came largely in line. 4Q12 net profit rose 33% to $17.7m but FY12 earnings of $72.7m missed estimates. Total assets under management jumped 12% to $22.1b. Company is proposing a 1-for-10 bonus issue and final DPS of 2.7¢. *Armstrong: Turned in 4Q12 net profit of $1.4m (vs $0.9m in 4Q11) and FY12 earnings of $11.5m (+61%) on flattish revenue growth amid a weakened global HDD market and rising Sino-Japan tensions affecting Asia’s supply chain. DPS of 0.6¢ declared. Gallant Venture: 4Q12 net profit of $17.1m was 47% higher than $11.1m achieved previous year due to higher realization of land sales, lower doubtful debts and a $4.1m FX gain. Outlook for its industrial park and utilities business remains challenging following the withdrawal of several tenants and low electricity consumption. Koon Holdings: Recorded $3m (-60%) net profit on the back of 141% jump in revenue to a record $212.4m. The earnings drop was attributable to one-off gain on a property disposal and non-recurrent dividend income totaling $12.1m. To-date, the construction and precast divisions have outstanding orderbooks of $179m and $83m. Final DPS of 0.5¢ proposed. Separately, its 20% JV has been awarded a $40m contract to construct container berths and stacking yards at PSA’s Pasir Panjang Terminal. *Lee Kim Tah: 4Q12 results boosted by $10.2m revaluation gains from Jurong Point, lifting net profit to $14.9m and FY12 earnings to $31.5m. DPS of 1.5¢ maintained. *Global Logistic Properties: GIC reducing its stake to 37% from 49% through proposed sale of 595.7m shares at $2.60 apiece or 5% discount to last closing price. *Golden Palm Resources: Flagging a net loss for 4Q12 and FY12 due to changes in value of biological assets. *Cordlife: Entered into 3-year strategic alliance with CordLabs Asia to provide cord tissue banking services, widening market to S’pore, HK, Malysia, Indonesia, Philippines, Thailand and India. *UPP: Extended the long stop date for its JV agreement with Myan Shwe Pyi to engage in excavation, drilling and blasting activities in Myanmar till 30 Jun 2013.