SG Market (27 Aug 13)

SG Market: S’pore shares are expected to take cover after Wall Street turned lower in final hour after US edged closer towards taking military action against Syria, which might draw Iran and Russia into a wider Mid-East conflict. Investors could also spooked by a WSJ report that suggested the US government would hit its debt limit by mid-Oct. Stocks traded higher for most of the session amid thin volumes as durable goods orders fell 7.3% in July, compared to forecast for a 4% drop, prompting hopes that the Fed would not commit to a large scale reduction in its bond purchases. Markets in Asia opened slightly weaker with Nikkei -0.7% and ASX -0.4%. Yesterday, the STI backed away to close lower after bridging the breakdown gap at 3,108, suggesting the bearish trend is still intact. Immediate downside support is at the 3,065 with resistance at 3,108, followed by 3,180. Stocks to watch for: *Cordlife: Stellar FY13 results slightly above estimates with net profit of $13.5m (+95%) on revenue of $34.7m (+15%). The better performance was driven by an increase in the number of client deliveries, which rose from 7,200 in FY12 to 7,700 in FY13 owing to greater awareness. DGross margin expanded from 71% to 73% in FY13. The bottom-line was also aided by a $2.7m gain in the disposal of its 10% stake in China Stem Cells. Final DPS of 1¢ proposed, taking full year dividend payout to 2¢ *Silverlake: FY13 results spot-on with net profit coming in at RM196m (+21%) on flat revenue of RM398.6m. Growth was underpinned by high margin business activities, namely software licensing and maintenance and enhancement services but dampened by poor project and product sales. Gross margin improved to 64% with change in product mix. Including the final DPS of 1.1¢, total dividend for FY13 will amount to 3.1¢, 63% higher than the 1.9¢ paid in previous year. *Civmec: 4QFY13 net profit rose 10% y/y to $9.2m but revenue tumbled 30% to $79.4m due to the timing of recognition from ongoing projects and new start-ups. For FY13, earnings grew 19% to $36m, driven by a 24% expansion in revenue to $405.9m on higher activity levels in the oil & gas, mining and other segments. Gross margin slid to 17.2% from 18.5% in FY12 (4Q13: 18.7%) but bottom-line benefited from a R&D tax incentive. As at July, order book totalled $190m. DPS of 0.7¢ declared. *FJ Benjamin: FY13 net profit slumped 89% to $1.6m as sales of its timepieces declined in North Asia on slower economic growth in China. The results included a $2.8m gain from sale of properties in HK and fair value gain of $2.4m on an investment. Revenue dipped 5% to $373.4m due to 22% drop in timepiece sales to $109.9m with HK -26% and China -47% but Indonesia +13%. Sales from fashion business ticked up 4% to $262.9m. Net gearing jumped to 53% from 39% in FY12. DPS slashed to 0.5¢ vs 1¢ prior year. *Global Logistic Properties: Leased a second completed building (9,400 sqm of GFA) at GLP Guarulhos in Sau Paulo to new customer Atlas Transporte & Logistica, one of Brazil’s largest third-party logistics providers. The building was completed in May 2013 and is now fully leased. GLP Guarulhos is part of GLP Brazil Development Partners 1, in which GLP holds a 41.3% stake. The development will be constructed over four years and will comprise 17 buildings with a total GFA of up to 390,000 sqm when completed. *KS Energy: Setting up JV with Pertamina to own and operate drilling rigs in Indoneisa. Both parties currently jointly operate two high specification land rigs for an oil major (US$98m contract) and an offshore jack-up rig in West Madura oilfield (US$87.6m contract). The new JV will take over the two contracts and tender for new ones in the Indonesia. *Scorpio East: Entered into MOU to acquire KOP Properties subject to an agreed price via an issue of consideration shares at a post 2-into-1 consolidation price of $0.21 each. KOP is involved in the development, management and marketing of residential and commercial properties, as well as the management of hotels, resorts and yachts in Asia and Europe. The reverse takeover is also conditional on the approval of a whitewash resolution to exempt the vendors from having to make a mandatory general offer.