SG Market (30 Oct 13)

SG Market: S’pore shares are expected to remain in the doldrums even as Wall Street surged to new all-time highs after economic data supported views that the Fed will keep its stimulus intact at a FOMC policy meeting on Tue/Wed. The gains also came on the heels of solid earnings boost from Pfizer and a US$15b share buyback by IBM. The latest economic news showed a 0.1% drop in retail sales in Sep, restrained by the big drop in auto sales, while consumer confidence plummeted in Oct as the budget impasse and debt ceiling deadlock took its toll. Weaker-than-forecast factory output and home sales also added to concerns that gowth has slowed. The STI remains trapped within its 3,150-3,238 trading range in the near term with little signs of a breakout. Stocks to watch for: *CMA: 3Q13 net profit inched up 4% y/y to $64.8m, coming in slightly above consensus forecast of $61m, largely due to a decrease in finance costs, and improvement in share of results from associates and JVs. However, revenue dipped 10% to $91.8m, on lower property management fee from China as fewer malls opened in 2013 compared to the previous year. Still, management remains confident that its key markets in S’pore, China and Malysia will perform well in 2013. *CDLH Trust: Reported 3Q13 DPU of 2.64¢ (-3% y/y), which translates to 6.3% annualized yield. Gross revenue dipped 0.8% to $35.9m, mainly due to weaker operating performance from its S’pore hotels, dragged by an influx of new hotel rooms and an overall weaker corporate demand environment. Average occupancy for its S’pore hotels dipped 0.7ppt to 87.6%, while daily room rate fell 5.6% to $218, leading to a 6.4% decline in RevPAR to $191. Fixed rent contribution from the Australia hotels also dropped due to the weakened AUD, which negated the $1.9m revenue boost from the recently acquired Angsana Velavaru resort in the Maldives. The trust ended 3Q13 with NAV of $1.58. *Indofood Agri: 3Q13 results were largely in line with estimates with net profit of Rp122.9b (-52% y/y, +86% q/q) and revenue of Rp3,076b (-13% y/y, -8% q/q). The sales performance was adversely affected by lower average selling prices of key plantation crops, lower bulk oil and copra-based product sales. On a positive note, the profit decline was partly negated by the recognition of a maiden profit contribution of Rp50b from its investment in a joint venture, CMAA in 3Q13. *China Minzhong: 1Q14 results missed estimates with net profit at Rmb48.4m (-89% y/y) and revenue at Rmb637.8m (+4%). Bottomline was hurt by a plunge in EBITDA margins, which contracted to 19.5% from 33.2%, on higher operating costs in the both the cultivation and processed business segments. The group is expected to face continuing margin pressure as average selling prices not rising fast enough to offset higher labour costs. *Yanlord: Acquired a 386,000 sqm GFA prime integrated development site in Nanjing Eco-Island for Rmb2.88b or Rmb7,447/sqm in a public auction. The project will include residential (274,000 sqm), commercial and office space (59,200 sqm) as well as R&D facilities (53,500 sqm) and is well connected to planned key roads and adjacent metro station. *Ezra: Awarded new projects in subsea construction and offshore support services worth US$110m, comprising a SURF type offshore installation project from a national oil company operating in the Gulf of Mexico, pipeline repair works for an oil major operating in Asia and three new charters with a oil major in SE Asia for two AHTS and a PSV vessel. The group’s order book stands in excess of US$2b. *Loyz Energy: Draws first oil in North Dakota and Colorado, US, one year after inking its landmark E&P deal. Initial flow tests indicate varying flow rates up to 50bpd at the Schlak #3 well in North Dakota, while in Colorado, the group is awaiting flow tests results at the Mansur 33-1-N and 33-1-L wells. The agreement gives the group a 20% share of net revenue interest for each producing well in the 60,000-acre concession. *JEP Holdings: Leased a 1,216 sqm plot of land at Loyang Way from JTC to build a new $3.5m manufacturing facility, expected to be operational in 1Q15. Group intends to invest an additional $1.5m to fully equip the facility over the next three years t support its aerospace business and turnkey projects. *Sembcorp Industries: Divested its entire interest in Sembcorp Enviro (India), which owns a 51% stake in SembRamky Environmental Management, a medical waste collection and treatment player in India, to Ramky Int’l for $7.25m. *Cacola: Entered MOU to acquire 51% stake in Yunxi XingQiang Gold (YXG), which owns Hubei Goldmine, for Rmb71.4m. The goldmine, located in Shiyan City, Yunxi County, Hubei Province in China, has a preliminary indicative valuation of not less than Rmb150m. Meanwhile, the group is still in the midst of finalizing its acquisition of Gold Depot Investments, which holds a 90% indirect interest in a Guizhou goldmine. *Asiasons Capital: Entered term sheet with Deepvale Capital for a proposed four-year 6% convertible loan facility of up to $25m with a conversion price of $0.25 each. The facility will be earmarked for private equity investments ($20m) and working capital purposes ($5m). Deepvale is wholly owned by Ng Teck Wah and Jared Lim, both of whom are Directors and controlling shareholders of Asiasons. *OKH Global: In a reply to SGX query, group declared that apart from the completion of its proposed 40/60 joint venture with Pan Asia Logistics, it is unaware of any other information to explain the trading volatility of its shares. *ValueMax: Drew strong demand for its IPO of 138m new shares, which was 6.3x subscribed. The pawnbroker will make its trading debut on the mainboard on 30 Oct. *LH Group: Issues a profit guidance that it expects to continue to incur a loss for 3Q13. Results are likely to be released on or before 8 Nov.