SG Market (13 Mar 13)

SG Market: S’pore shares are expected to consolidate its gains as Wall Street ground to a near halt on lack of catalysts and stretched technicals. On the home front, traders appear to be rotating out of the over-hyped penny stocks into the blue-chips. This has enabled the STI to push past 3300 psychological resistance although it remains to be see if the advance can be sustained. Overhead resistance is at the recent high of 3320, while underlying support lies at 3280. Stocks to watch out for: *UE/WBL: Received shareholder approval to launch takeover bid for WBL and raises offer price to $4.15 from $4.00 for remaining 60.5% of WBL shares following bond to equity conversion by concert parties, lifting their stake to 39.5% to narrow the gap with Straits Trading’s 44.6% stake. *Keppel Corp: Cancelled US$1.2bn contract from Naftogaz for 2 semi-submersible rigs, citing certain conditions within set timeline not met. *SATS: Partners Delaware North Companies in setting up 70/30 JV Sports Catering Services, which has been appointed exclusive caterer for S’pore Sports Hub. The contract tenure is for 21 years with projected annual revenue of $50m. *Midas: Subsidiary Jilin Midas Aluminium Industries won a combined Rmb109.6m worth of contracts to supply aluminium alloy extrusion and fabricated parts for 99 train sets to 5 PRC metro projects. Delivery will be over 2013 to 2016. *AusGroup: Awarded an offshore pipeline supply and fabrication contract by Allseas for Chevron’s Wheatstone project in Western Australia. *Ace Achieve: Clinched Rmb20m contract to supply IT infrastructure equipment and installation services to repeat customer China Unicom in 11 provinces across China. *Keppel T&T: Leased a 2-ha JTC site for 30 years to develop an air logistics facility with warehouse capacity of 350,000 sf at the Tampines Logistics Park. The new 4-storey ramp-up warehouse would increase the group’s warehouse capacity by 20% to >2m sf when completed in early 2015. Sim Lian: Submitted the top bid of $701.1m ($1,009 psf ppr GFA) for a 1.1-ha land tender site at Venture Avenue, Jurong Lake District which is slated for office development with estimated selling price is touted at ~$1,750 psf. *SMRT: Govt is mooting radical ideas to beat peak-hour morning congestion such as free early morning MRT trains, new bus operators plying services to the city to complement trains during morning rush. UFS: Subsidiary Poh Lian Construction applied for judicial mgmt after facing significant financial and operational difficulties. This may complicate the group’s RTO deal with Golden Energy Mines. *Freight Links: 3QFY13 revenue +17% to $43.1m; net profit +129% to $8.7m, mainly due to gain in fair value of marketable securities ($2.4m vs loss of $2.5m yoy), higher dividend income from Sabana Reit and interest income from associates. The higher revenue was attributed to the new ISO tank operation business, started in May 12. Net gearing is a comfortable 0.28x with NAV of $0.0865. *Medi-Flex: 2QFY13 net profit +271% to RM43.9m; revenue +6% to RM43.5m, boosted by higher nitrile sales, better production utilisation, lower raw material costs (latex price -14.5%, nitrile -26%) as well as a positive deferred tax effect. NAV stood at 10.36 sen. *Mencast: FY12 net profit +30% to $13.3m, revenue +49% to $84m on the back of higher contributions from all its units as well as higher production capacity from its Penjuru workshop facility.