SG Market (29 Aug 13)

SG Market: S’pore shares may get a small technical bounce after US stocks rebounded following a two-day slump as oil prices surged to a two-year high and energy shares. The market is reflecting growing anxiety over a potential Mid-East crisis as US war drumbeats grew louder over Syria. Over in S’pore, the STI bounced off the 2,990 support level yesterday, which represents 50% Fibonacci retracement of the run-up from Dec 2011 to May 2013. After its steep 100-point drop over the past three days, the key index is likely to close the gap at 3,028, before resuming its downward trend. Stocks to watch for: *China Minzhong: Management refuted the allegations by short-seller Glaucus Research, noting that the issues arose out of a complete lack of understanding of its business model and the operating environment in China and reiterated that its financials are sound and that there were not fabricated sales or cover up. Company delayed the release of FY13 results till this evening in order to prepare a detailed response to the report. Accordingly, it will extend its trading halt to 5pm, 30 Aug. *ASL Marine: FY13 net profit of $45.3m (+40%) beat estimates on revenue of $465.4m (+19%). Revenue for 4QFY13 jumped to $149.5m (+28% y/y, +4% q/q), with growth coming from shipbuilding (+76%) due to more OSVs being constructed and maiden engineering sales but offset by slower shiprepair/conversion and charter businesses. Bottomline of $15.2m (+83% y/y, +58% q/q) was boosted by other operating income of $12.1m, mainly from FX and gain related to partial disposal of a subsidiary. Prospects supported by a $370m shipbuilding order book and long term shipchartering contracts worth $74m. Final DPS raised from 1.75¢ to 2¢. *Memstar: FY13 net profit slid 6% to Rmb56.9m despite higher revenue of Rmb220.9m (+20%). Gross margin widened 4.7 ppt to 60.7% as the group focused on expanding higher margin membrane business (+29%). As a result, pretax profit improved 24% to Rmb87.8m. However, a three-fold jump in tax charge due to deferred tax liabilities over temporary timing differences in accounting led to the weaker bottomline. No dividends declared this year compared to 0.05¢ paid in FY12. *Sin Heng: 4QFY13 net profit rose 16% to $4.4m, while revenue jumped 60% to $61.9m. Full year earnings of $13.8m (+47%) was more in line with revenue of $186.5m (+44%). The better performance for both 4Q and FY13 was attributable to an expanded fleet size and higher volume of cranes traded as a result of strong demand in the domestic and regional markets. Gross margin was relatively stable in FY13 over FY12 but softer in 4Q due to higher repair and maintenance costs. Final DPS of 0.45¢ proposed, taking full year dividends to 0.8¢. *Oxley Holdings: 4QFY13 net profit soared to $38m vs to $1.7m a year ago on the back of a 640% surge in revenue to $277.3m. This brought FY13 earnings to a record $69.1m, beating estimates on 187% jump in revenue to $457.7m. The sterling performance was achieved on the back of 12 ongoing property development projects. Rental income of $7.6m (+21%) was boosted from The Corporate Office at Robinson Road and McDonald’s Place at King Albert Park, where lease obligations were in place prior to their acquisition. Accordingly, NAV jumped 56% to 8.1¢. *LC Development: FY13 net profit plunged 98% to $1.4m, while revenue slid 3% to $57.7m, with the results skewed largely by one-off exceptional items of $78.1m in FY12. Without the one-off gains, operating profit jumped 41% to $5.9m. The hotel segment continues to be the main revenue contributor to top-line at $45.9m (-3%) while revenue from service residences was flat and leisure and others segment was 9% lower due to a drop in the group's entertainment business. *United Environtech: Awarded a Rmb90m contract to upgrade a 100,000 m3/day industrial wastewater treatment plant in Nantong, China. Work will begin immediately and the project is expected to be completed by end 2013. *Fortune Reit: Acquiring Kingswood Ginza, comprising a mall, other retail, kindergarten, parking lots and ancillary spaces, in Yuen Long, Hong Kong, for HK$5.85b. The property has gross lettable area of 665,200 sf, with monthly rental of HK$27.40 psf, occupancy of 95.5% and generated net property income of HK$110.4m for the half year ended Jun 13. *Hiap Hoe: Obtained approval for the Foreign Investment Review Board of Australia for it’s a$28.8m acquisition of 6-22 Pearl River Road in Melbourne, paving the way for its maiden development in Australia. The group is now seeking regulatory approval to develop the waterfront property into a mixed use development, comprising two high-rise residential blocks with 428 units and a 300-room hotel tower. *Lum Chang/Ryobi Kiso: Both parties have initiated arbitration proceedings over the construction of the Bukit Panjang station and tunnels for Downtown Line Stage 2. Lum Chang is claiming $32m from Ryobi Kiso for breach and default of subcontract while the latter is counter claiming $19m for sums owed. *Ramba: Akatara-2 appraisal well in the Lemang block encountered 20 potential reservoir layers with approximately 800 feet of hydrocarbon column. Group will now mobilize a smaller rig for a full comprehensive test on the Akatara-2 appraisal well and the remaining potential reservoir layers on the Akatara-1 well and Selong-1 discovery wells. Ramba holds a 51% working interest in the Lemang block. *Sino Grandness: Substantial sharehlolder Alan Wang of Asdew Acquisitons purchased 1.75m shares @ $1.0642 in the open market on 27 Aug, raising his stake from 6.67% to 7.27%. *Stamford Tyres: Sold a retail shop at Balestier Towers for $6.3m or $4,093 psf. Group will book a net gain of $5.5m over the book value of the property, raising NTA by 2.4¢ to 53.4¢. Proceeds will be redeployed to fund investments in distribution and warehousing as well as for working capital purposes.