SG Market (28 Feb 13)

SG Market: S’pore shares are likely to open higher following gains on Wall Street Wednesday as sentiment is boosted by reassurance from Fed chief to support further accommodative policy. However, worries about US spending cuts that will take effect on Fri may keep any rally in check. The STI is expected to inch towards the 3,300 psychological resistance while immediate support is at 3255. Positive earnings surprises are expected to draw buying interest in UOB, ThaiBev, Sino Grandness and Geo Energy, while Sound Global disappointed. Stocks to watch out for: *UOB: 4Q net profit grew 25% to $696m, beating street estimate of $614m. As expected, net interest income slipped 1.2% on further margin compression but higher fee-based income (+18.7%) from fund/wealth management and capital market activities, coupled with increase in other income (+38%) from trading and investments, as well as lower provisions, bolstered the bottomline. NPL ratio stayed low at 1.5%, while Tier 1 CAR strengthened to 14.7%. Higher DPS of 50¢ proposed, taking FY12 DPS to 70¢ vs 60¢ in previous year. City Dev: 4Q12 net profit rose 53% to $249.3m, mainly due to robust sales and one-off gains from sale of some property and an insurance settlement on a NZ hotel owned by M&C, which closed after the Feb 11 earthquake. 4Q revenue rose 23% to $886.4m backed by its property development segment. Book NAV climbed to $8.03. Group announced a special DPS of 5¢, taking the total to 13¢. *Sino Grandness: FY12 net profit of Rmb289.1m (+89%) came in 7% ahead of consensus estimates on higher sales contributions across the board, particularly from China market (+60%). 4Q12 earnings surged 203% to Rmb64.8m, driven largely by beverage sales, which commanded better margins. Group is setting up a new Hubei plant amid more optimistic outlook for 2013 and is proposing a 1-for-2 bonus issue. *Mewah Int’l: FY12 results in line with expectations with core earnings netting US$20m. On a qoq basis, net profit for 4Q12 saw a sharp improvement to US$4.2m (+262%), supported by higher sales and operating margins in the consumer pack segment, which was offset by continued weakness in the bulk segment. Group remains cautious on the near term outlook and is paying a final DPS of 0.55¢, maintaining full year DPS of 0.85¢. *ThaiBev: FY12 net profit of Bt17.8b topped estimates of Bt16.4b. Including F&N, earnings came in at Bt28.5b, translating to EPS of Bt1.135 or 4.7¢. Revenue grew 22% to Bt161b, driven by sales of spirits (+10%), beer (+4%), non alcohol beverages (+167%) and food (+29%). Overall EBITDA margins widened to 24.4% from 16% despite wider losses from its beer business and declining margins from its food division. Net gearing ballooned to 1.17x from 0.23x. Final DPS of Bt0.28 declared taking total to Bt0.42 (1.75¢) for FY12 vs Bt0.37 (1.54¢) for FY11. *CWT: Posted strong set of results which was in-line with bullish estimates. FY12 revenue doubled to $5.4b while net profit surged 89% to $107.9m boosted by growth in from supply chain management on higher volumes, logistics business arising from higher capacity, volume and yield and engineering services from project income. Strong bottom-line was partly boosted by a $22.6m gain from the sale and leaseback of a logistics property. Group is recommending a 3¢ DPS. *Sound Global: FY12 net profit of Rmb427.5m missed estimates of Rmb464.7m as its performance was impacted by 61% spike in finance charges. This was also evident in its 4Q results, which saw bottomline profit shrink 23% to Rmb82.4m. Of note, the group loaded more debt, reaching Rmb2.83b from Rmb1.68b in FY11 and incurred higher financing costs even as its cash pile swelled to Rmb2.9b. *Interra: So much for its Myanmar hype, the group booked a 4Q12 loss of US$0.05m and FY12 net profit of US$3m. Despite achieving higher share of production of 93,328 barrels vs 81,491 barrels in 4Q11, revenue fell 8% to US$7.2m in 4Q12 due to lower transacted price for its Indon oil. Group is identifying more wells to be drilled in 2013 to improve production and is awaiting approval for its acquisition of Kuala Pambuang PSC in Indonesia. *Geo Energy: 4Q12 net profit more than doubled to US$6.9m, bringing FY12 earnings to US$19.2m (+33%) as the group benefited from higher revenue (+14%) and better profit margins. Gross profit margins expanded to 46% in FY12 (66% in 4Q) from 38.5% In FY11 due to a 88% jump in coal production volume and lower average stripping ratio. But average selling price of coal plunged from US$73.40 to US$46.50/tonne due to the poorer quality coal produced at its mine compared to its previous coal sales under its cooperation contracts. Meantime, the group is acquiring options, representing 93% interests in 4 mining concessions in East Kalimantan totaling 21,377 ha. These target companies have not commenced coal production and are currently loss-making. #mDR: 4Q12 results essientially a non-event with revenue at $95.2m, flat yoy, as growth in the after market services segment (10% of sales, +53%), offset a decline in the distribution business (90% of sales, -4%). Net profit declined 13% to $2.3m due to lack of a positive tax credit available in the previous year. Otherwise, net profit would be 10% higher on adjusted basis. To broaden its revenue streams, group is eyeing overseas investments in new and complementary businesses, including Myanmar. *Keppel Corp: Bags another 3 contracts worth US$300m from repeat customers for the construction of a KFELS B Class jack-up rig for Jindal Group and upgrading of 2 semi-submersibles for Ensco and Diamond Offshore. This brings the total order wins secured to-date to $572m.