SG Market (12 Aug)

SG Market: S’pore shares are likely to open on a muted note after a long weekend following the sluggish Wall Street performance last Fri despite strong economic data. There was little concrete news to spark a rally as the market brushed off news that China’s industrial production rose 9.7% in July, beating expectations. Instead, investors pulled funds from ETFs amid growing signs that the Fed would cut stimulus next month and took the opportunity to lock in gains after the record-breaking run the previous week. In a slightly more positive light, S’pore’s GDP grew faster-than-estimated 3.8% in 2Q13 due to increased manufacturing output which was supported by the biomedical and electronics sectors. But a ongoing worries about Fed’s stance on tapering and the lower than expected results from NOL, Biosensors and AHT may dampen local sentiment. Near term support for STI remains at 3,200 with upside resistance at 3,260. Stocks to watch for: *NOL: Reported a smaller-than-expected 2Q13 loss of US$34.6m (-71% y/y) on a 12% slide in revenue to US$2.06b due to a 13% decline in liner turnover from lower freight rates and volume. Core operating loss narrowed to US$35m as it benefitted from cost efficiencies and lower bunker prices, as well as decrease in impairment loss on obsolete vessels held for sale. Despite difficult trading conditions and industry headwinds, group is hopeful of a better performance in 2013 through operational efficiencies and lower vessel slot costs with the delivery of larger and more fuel-efficient ships. *Noble: 2Q13 results fell behind expectations chalking up net profit of US$62.8m (-68% y/y but +52% q/q) amid depressed gross margin of 1.4%. But revenue hit a record US$25.3b (+5% y/y, +12% q/q) on strong underlying bulk commodity volumes reaching 57.6m tonnes (+7% y/y, +9% q/q). Strong performance in the energy sector, improved soft commodity trading business and crushing margins were unable to cover for agricultural losses due to disruptions in the grains and oilseeds origination business and underutilisation of its Brazilian sugar mills. The metals, minerals and ores segment benefitted from the broadening of its product range. Adjusted gearing remains at a mangeable 50.3% *Biosensors: 1QFY14 results disappointed with net profit of US$12.1m (-63% y/y, -59% q/q) on a 11% y/y and 14% q/q revenue decline to US$76.7m due to inventory adjustment which disrupted DES sales in China and reduced royalty income from Japan. But sales in EMEA and other Asia-Pacific markets achieved double-digit growth. Gross margin slid to 75% from 81% in 1Q13 due to a fall in DES sales and costs related to newly acquired cardiac diagnostics business. Net cash shrank to US$273.6m from US$337m last quarter. *CWT: Dimmed 2Q13 results as net profit of $18.1m (-6% y/y) masked a tax write-back and a steeper 31% drop at the pretax level despite the group achieving record revenue of $1.7b (+66%), on the back of its commodity supply chain management (SCM) business. However, overall performace was weighed down by margin squeeze and fall in certain sales volume, as well as higher management and restructuring costs related to its SCM unit. Increased finance costs due to higher borrowings and trade finance volume also dragged down its earnings. *PRCT: 2Q13 distributable income continued to be supported by the drawdown of $10.9m under the Rmb226.5m earn-out deed, giving rise to 1H13 DPU of 1.9¢. Contributions from 50% owned Shenyang assets doubled to $1m from $0.5m in 1Q13 reflecting higher revenue from master lease arrangements at Shenyang Red Star Macalline Furniture Mall and Shenyang Longemont offices. NAV rose 4% q/q to $0.74 as at end 2Q13 due to FX gains on its portfolio of assets, while gearing stood at a comfortable 23.7% with an average interest rate of 4.22%. *Ascendas Hospitality Trust: Maiden 1QFY14 results missed targets with NPI of $16.2m and DPU of 1.29¢ (including advance distribution of 1.03¢ of pre-Park Hotel Clark Quay acquisition) v IPO forecasts of $17.4m and 1.54¢ respectively. The poor showing was attributed to soft economic conditions in Australia and unfavourable FX movements of AUD and JPY, which affected the performance of its Australian and Japan hotel portfolios. Gearing stood at 35.4% with NAV of $0.77. UOL: 2Q13 net profit soared 151% y/y to $431.4m, while revenue edged up 2% to $304.3m. Excluding fair value gains on investment ptoperties, earnings would have stayed flat at $93.6m, Higher contributions from hotel operations of $107.1m (+15%) was dampened by lower sales from property development of $133.2m (-10%) following the completion of Double Bay Residences and Waterbank at Dakota, and slower progress for Katong Regency. NAV climbed to $8.50 as at end Jun. *China Fishery: 3QFY13 net profit slumped 28.7% y/y to US$15m, while revenue stablised at US$152.4m. Gross margin eased 1.3 ppt to 25.6% due to lower catch volume from a reduced fishing quota in Peru. Earnings were also hit by soaring finance costs. Group has received acceptances for its Copeinca offer, which together with its existing holdings, represent 97.72% of the Peruvian fishmeal producer and is now reviewing its options, including the possibility of a compulsory acquisition. *Vard: Signs contracts with DOF Subsea and Technip for four pipelay support vessels. The contracts, valued at NOK6.5b (US$1.1b) are the largest order in Vard’s history and will be delivered between 2Q16 and 2Q17. *Courts: Secured strategic sites for its second megastore (66,000 sf) in Subang Jaya, Klang Valley and two new stores in Sabah. The Subang megastore is scheduled to open by Dec 13 and will be the second largest store in Malaysia. This completes its retail coverage in Malaysia and will increase its Malaysian store footprint by 17% to 288,000 sf by Mar 14. *Yongnam: Announced that the Yongnam-CAPE-JGC consortium has failed in its tender bids for the Yangon Int’l Airport and Hanthawaddy Int’l Airport concessions but will be the back-up tenderders for both airports. *Yoma: 100& subsidiairy SPA Project Management has together with a consortium comprising Mitsubishi Corp and JALUX won the tender to upgrade and operate the Mandalay Int’l Airport pending agreement of the terms of the final contract. SPA will hold a 5% interest in the JV company to be set up to manage the Mandalay project. *Profit warnings: Darco, PSL Holdings, Pan Asian Holdings, Epicentre, China Yongsheng