Wednesday, August 14, 2013

SG Market (14 Aug 13)

SG Market: S’pore market may track higher after rising US retail sales in July, coupled up a positive German sentiment index and eurozone industrial production led to modest gains on Wall Street. Th data pushed US Treasury yields higher but the frim market undertone seemed to reflect a growing acceptance that any monetary easing by the Fed is a sign of stronger economic outlook. Amid the uncertainty and lack of clear catalyst, gains for the STI will remain limited with immediate upside capped at 3,260 and underlying support at 3,200. Focus will centre on the the steady 2Q results from SingTel and ST Engineering, while Tat Hong and Venture may encounter some selling pressure after their results disappointed. Stocks to watch for: *SingTel: 1QFY14 net profit crossed the $1b mark (+6.9%) on stonger operational performance and higher contributions from its regional associates. Stripping out exceptional items, underlying core earnings rose 6% to $897m and would have increased 8% excluding the FX impact. Revenue slid 5% to $4.3b, reflecting the more cautious business environment and slowdown in the Australian mobile market. Still, earnings from Australian unit Optus rose 7.7% to A$167m though revenue slipped 5.3% to A$2.12b. Pretax contributions from associates jumped 14% to $552m with Bharti Airtel putting up a better showing on higher calling rates and usage. *ST Engrg: Steady overall performance for 2Q13 with net profit of $147.9m (+3% y/y, +10% q/q) and revenue of $1.6b (+2% y/y, +3% q/q) pushing up 1H13 earnings to $281.9m (+1.6%), while revenue was flat at $3.14m. Marine sales rose 12% on higher shipbuilding activities from S’pore operations. Except for aerospace, all business sectors achieved robust pretax earnings growth of between 11% and 32%. Group will deliver $2.8b of its order book in 2H13, which stood at $12.7b at end Jun. Interim DPS of 3¢ maintained. *Tat Hong: Poor 1QFY14 results; net profit toppled 51% y/y to $8.2m, while revenue sagged 18% to $175.5m as many of its cranes went off-hire or were pending redeployment to new projects. The economic slowdown in Australia, crane relocation costs incurred for a new LNG project in Darwin, losses at its Indonesian unit, competition and weaker demand in S’pore as well as high labour costs impacted its crane rental, distribution and general equipment rental businesses and contributed to the 2.8 ppt erosion in overall gross margin to 36.4%. *Venture: 2Q13 results missed estimates with net profit of $30.1m (-11% y/y, +8% q/q) on revenue of $587.7m (-4% y/y, +11% q/q) due mainly to higher tax provision (+158%). Top-line growth was fairly broad-based across its core sectors with the group achieving sequential improvement pretax margins to 5.8% vs 5.4% in 1Q13. Balance sheet remained sturdy with positive net cash of $202.8m and NAV at $6.37. *Dyna-mac: 2Q13 net profit rose 23% y/y to $7.5m, while revenue grew 33% to $76.6m as more projects were undertaken by its S’pore and overseas yards. However, gross margin narrowed to 17.7% vs 22.5% in 2Q12 due to lower recognition of revenue pending variation orders by two major projects that were nearing completion. Bottom-line was shored by unrealized $1.9m FX gain. Reflecting the growing order backlog for floating production systems, group’s current order book has more than doubled to $246m since mid-May. *Yanlord: 2Q13 net profit plunged 99% y/y to Rmb6.4m or 49% revenue drop to Rmb1.38bn on lower gross floor area delivered and absence of fair value and disposal gains (totalled Rmb604.3m in 2Q12). This pulled down 1H13 earnings by 92% to Rmb73.7m and revenue by 4% to Rmb3.06b. However, the group’s pre-contracted sales rose 21% to Rmb7.66b, of which a significant portion will be recognized in 2H13. End Jun NAV stood at Rmb8.42/share. *CSE Global: 2Q13 net profit slumped 41% y/y to $12.5m as revenue declined 20% to $116m on lower revenues in Americas, Europe, Mid-East and Africa regions. However, earnings would have been 12% higher excluding discontinued operation and one-time disposal gain last year. Gross margin improved to 34.1% vs 24.9% in 2Q12. With new orders totaling $127m, outstanding order book rose to $375m from $361m in 1Q13. Separately, group plans to list UK unit, CSE Global UK, on London Stock Exchange this year and would return part of the proceeds to shareholders. *Centurion: Reported 12-fold jump in 2Q13 net profit to $56.0m, mainly due to one-off items arising from the fair value gain from investment properties, which more than offset the impairment loss of assets of its optical disc business. Excluding the fair value gains, net profit would have been $4.6m, +16% y/y, boosted by higher contribution from the higher margin workers’ accommodation business. Revenue came in 6% lower at $16.0m despite a 9% q/q growth in the workers’ accommodation business due to a drop in sales in the optical business of $2m. Group has declared 1 free bonus warrant (ex price $0.50) for every 10 shares held.

No comments:

Post a Comment