SG Market (28 Oct 13)

SG Market: S’pore shares are likely to remain in cautious mood despite Wall Street closing at a new record on solid corporate earnings from Amazon, Microsoft, and UPS, while a drop in consumer confidence added to hopes that the Fed will delay scaling back monetary stimulus. The STI is expected to stay within its 3,150-3,238 range with its 200—dat avarege providing still resistance and technical indicators pointing to a downward bias in the near term. Stocks to watch for: *Wing Tai: 4QFY13 net profit dropped 66% y/y to $24.5m, while revenue slid 10% to $222.8m. Topline contributions were from progressive sales recognized from Foresque Residences, Le Nouvel Ardmore and L'VIV, additional units sold in Helios Residences in S’pore, and Jesselton Hills in Malaysia. Share of profits from associates slumped 80% to 7.9% as the group booked one-off gains from the disposal of an apparel business in HK and office units by a JV in S’pore last year. NAV stood at $3.62 as at Sep. *Guocoland: 1QFY14 net profit soared more than eight-fold to $84.7m (+825%) on revenue of $233.9m (+29%), driven by sales recognition of completed units of Seasons Park in Tianjin, China, handed over to buyers in Sep 13. Bottomline was propelled by a 1379% surge in other income to $110.9m, mainly due to a gain from sale of a Rmb1.2b land parcel in Nanjing. NAV lifted to $2.27 as at Sep. *Guocoleisure: 1QFY14 net profit slumped 29.3% y/y to US$16.4m, while revenue edged up 3.2% to US$107.8m, mainly on higher revenue from property development segment. There was a one-off gain from the sale of a casino licence by Clermont Leisure amounting to US$0.8m. However, volatility in the gaming sector affected overall revenue performance. Income from Bass Strait fell 5.7% on lower crude oil prices and lower oil production. Expenses were generally higher this quarter, resulting in the lower bottomline. *Raffles Medical Group: 3Q13 results were largely in line with net profit at $13.9m (+10% y/y), risng in tandem with an 8% rise in revenue to $85.1m. Revenue from hospital services and healthcare services divisions increased by 9.4% and 5.7% respectively, facilitated by increased patient load and improved operating efficiencies. *GMG Global: 3Q13 net profit dwindled to $1.5m (-87.4% y/y, +31.3% q/q), while revenue slumped to $243.7m (-19.9% y/y, -6.4% q/q) following a 3.6% drop (+6.2% q/q) in tonnage sold to 78,732 tons (+6.2% q/q) and 16.9% decline in rubber prices to $3,096 (-11.9% q/q). Management expects 4Q13 natural rubber prices to remain range-bound around the current price of $2,842. *Mercator Lines: 2QFY14 net loss widened to $5.4m compared to $0.3m a year ago. Revenue sank 40% to $21.4m, due to a fall in spot rates, termination of vessel, disposal of vessels and new contracts at lower than previous rates. *Starhill Global: 3Q13 distributable income rose 20.8% to $26.1m, lifting DPU by 9% to 1.21¢. NPI improved 4.4% to $38m, while gross revenue increased 5.5% to $48.8m on the back of full-quarter contributions from the 6.7% rental uplift and 10% increase in base rent from master tenant Toshin and the ongoing asset repositioning of Wisma Atria. Overall portfolio occupancy improved 0.1ppts to 99.7% with average lease term of 6.6 years. Gearing of 30.6% has an average interest cost of 3.02% and weighted average debt maturity of 3.4 years. NAV as at Sep stood at $0.87. *First REIT: 3Q13 DPU rose 16.7% y/y to 1.96¢ on the back of a 30.4% jump in distributable income to $13.8m. NPI surged 53.4% to $21.7m, while gross revenue accelerated 60.7% to $22.8m mainly due to the full quarter contributions from four newly acquired properties - Siloam Hospitals Makassar, Siloam Hospitals Manado & Hotel Aryaduta Manado, Siloam Hospitals Bali and Siloam Hospitals TB Simatupang. Gearing stood at 32.9% with NAV of 90.55¢. Group is planning AEIs for three of its Indonesian properties. *Ascendas India Trust: 2QFY14 distributable income grew 8% y/y to $11.2m butl DPU slipped 8% to 1.1¢. Revenue in rupee remained stable but fell 9% to $28.9m on SGD appreciation. NPI fell 14% to $16.4m due to higher fuel costs. Occupancy stood at a healthy 97%. Gearing was 0.2x with NAV at $0.57. Management highlighted that focus remains on distinguishing themselves from competitors, while maintaining financial discipline. *Boustead S’pore: Sets upJV with AME Group (35%), Tat Hong (25%) and CSC 95%) to develop six parcels of vacant industrial land, totalling 1.3m sf, in Nusajaya, Iskandar. *ISOTeam: Group awarded seven new contracts worth $19m comprising repairs and redecoration (R&R) works for 10 blocks of HDB flats ($8.1m) and three private projects ($0.6m), neighbourhood upgrading and electrical works ($10.3). The projects are expected to be completed between Nov 2013 and Oct 2015, and will bring the group's post-IPO contract wins to $29.9m. *Sheng Siong: Acquired six units costing $54.9m at upcoming development, Junction 9 for a new supermarket. The 99-year leasehold units have a total space of 1,729 sqm and is part of a 14-storey mixed use development comprising retail and residential components, with an expected completion date in Jun 2020. *ASL Marine: Proposed listing of 36%-associate, PT Capitol Nusantara Indonesia (CNI) on Indonesian Stock Exchange. CNI provides ship chartering and management services. *SCI: commences commercial operations of a $30m expansion to its Sembcorp Woodchip Boiler Plant on Jurong Island. The expansion triples the output of the plant – which produces renewable energy from woodchip, a sustainable alternative fuel derived from waste wood – to 60 tph of steam from its initial of 20 tph capacity. The new enlarged woodchip boiler plant will use around 400 tpd of woodchip processed from construction and demolition waste collected by Sembcorp’s solid waste management operations, the largest operator in S’pore. *Rex Int’l: Proposed placement of 70m new shares to institutional and accredited investors at $0.755 a piece. Of the $50.5m net proceeds raised, 35% will be used for exploration and drilling activities in new opportunities in the Asia-Pacific region, 33% will be used for exploration and drilling activities in new opportunities in geographical regions, including the Mid-East, Norway and Western Europe, and the remainder for business expansion in the oil services sector using well stimulation technology. *Ezion: Received a letter of intent with contract value of up to US$65m over a three-year period to provide a service rig to be used by an oil major to support its oil & gas activities in SE Asia. The service rig is expected to be deployed by late 3Q15. *UOL: Entered into a conditional 20/80 JV agreement with Shwe Taung Junction City Co (STJC) and City Square, to develop and manage a 348-room hotel situated in the Junction City mixed use development along Shwedagon Pagoda Road in the prime city centre of Yangon, Myanmar. *Triyards: has secured two contracts worth an additional US$59m, comprising its 10th self-elevating unit (SEU) order from an Asian-based client, and the construction of a turret for a floating storage offloading (FSO) in Indonesia. This boosts Triyards’ order book to ~US$276m, underpinning revenue through to 2015.