SG Market (04 Nov 13)

Market Roundup: US stocks rose last Fri, halting a tow-day retreat following upbeat US and China manufacturing data and solid car sales. The gains came after China’s official Oct PMI of manufacturing acitivity climbed to 51.4 from 51.1 in Sep, its highest reading since Apr 12, while the US ISM factory index rose at a faster pace to 56.4 in Oct from 56.2 the previous month. Oct sales figures from the from the three largest US auto makets also posted double digit percentage gains, driving up bullish sentiment. Despite the positive close on Wall Street, the local bourse remains range bound with the STI showing little signs of any possible near term breakout from its 3,150-3,238 trading band. Stocks to watch for: *SingLand: 3Q13 net profit fell 13% y/y to $49.4m as revenue sagged 28% to $110.1m due mainly to lower sales recognition from its trading properties (The Excellency in Chengdu and The Trizon), partially offset by higher revenue from 53% owned Pan Pacific S’pore hotel following its reopening in Sep 12. But higher contributions from 50% owned Archipelago condo project boosted its share of JV profits more than 3-fold to $4.8m. Balance sheet remains sound with net gearing of 0.1x and backed by NAV of $12.84. *UIC: 3Q13 net profit climbed 8% y/y to $43.4m despite revenue falling 16% to $152.4m as lower sales of trading properties was partially offset by higher revenue from hotel operations. Bottomline benefitted from a 30% decrease in marketing costs for the V on Shenton residential project and higher contribution from the Archipelago property project. As at end Sep, NAV rose to $3.54. *Dyna-mac: Secured new fabrication orders worth US$117m from two new customers, Daewoo Shipbuilding & Marine Engineering and OneSubsea (Cameron-Schlumberger JV). The order from Daewoo is for 14 units of pre-assembled modules for surface facilities on artificial islands in the Arabian Gulf, with delivery in 3Q16, while that for OneSubsea is for subsea piping and supporting structures on one of its projects, with completion slated for end 2013. The latest contracts will take its total order wins this year to US$318m, surpassing that for whole of 2012 and top its order backlog at a record US$392m. *CH Offshore: 1QFY14 net profit dipped 19.7% y/y to US$7.4m, pulled down by the 40.3% drop in revenue to US$7.9m as two vessels were docked for compulsory major overhaul and upgrading works, which were only completed in Jul and were only mobilized on new charters in Sep. The poorer performance was partially mitigated by a reversal of provision for planned demobilization of two vessels, which found new employment and lower operating costs for its fleet. The group is in the midst of recovering outstanding debts from PDV Marina.in relation to a charter hire amounting to US$56m (10¢/share). *Yamada Green: 1QFY14 net profit fell 35.6% to Rmb0.6m, bucking the 21.5% growth in revenue to Rmb40.1m, mainly due to margin contraction on higher raw material and labour costs. The buoyant topline was driven by export revenue, which surged 35% to Rmb27.7m, attributable to higher demand for processed foods products such as dried mushrooms and water-boiled bamboo shoots in Japan. Group expects better performance from the seasonally stronger 2QFY14 quarter, as well as higher sales of Moso bamboo shoots and winter bamboo shoots from its newly acquired Moso bamboo plantations. *Kreuz: 3Q13 revenue and net profit surged 69% and 60% y/y, respectively. To-date, the group has already surpassed FY12 revenue in 9M13. Gross margins dipped from 34.4% to 31.8% a year ago but are still within expectations. Balance sheet remains strong with low gross gearing ratio of 11.3%. NAV per share rose 26% year-to-date to US36.09¢. #Sarin: 3Q13 net profit grew 22% y/y to US$3.1m but core earnings jumped 124% to US$5.7m after adjusting for the one-off US$2.6m tax charge on exempt profits in prior period,. This came as revenue expanded 48% to US$17.3m due to increased Galaxy-related revenues from a broader installed base and higher recurring revenue. However, on a sequential basis, revenue and core net profit fell 21% and 32% respectively, due to a slowdown in Indian manufacturing activity, attributable to the weakening INR against the USD, tightened credit lines available to Indian diamond manufacturers and a squeeze in margins on the back of high rough diamond prices. *China Aviation Oil: 3Q13 net profit jumped 65% y/y to US$21.8m after associate Shanghai Pudong Int’l Airport Aviation Fuel Supply Company booked a US$11.9m tax writeback. Topline revenue slid to US$3,7b with middle distillates contributing US$3b (-9%) and other oil products US$667.8m (+39%). Separately, CAO proposed 1-for-5 bonus issue to reward shareholders. *Rowsley: 2QFY14 loss widened to $2.4m from $0.05m in previous year due to expenses incurred by the acquisitions of RSP Architects and Vantage Bay land in Johor. NAV per share quadrupled to 16.12¢ (+348%) primarily attributed to the provisional goodwill arising from the acquisitions. *Oxley: Acquired seven land parcels, known as Royal Wharf, with total gross effective area of 363,000 sqm and 500m of River Thames frontage at East London’s 40-acre Royal Docks site for £200m, with plans to build >3,400 homes and develop a mix of commercial, retail, leisure and educational facilities. *Olam: Olam Australia sold its Dirranbandi cotton gin in Queensland to Cubbie Ginnery Pty Ltd for A$20.0m. The sale is in line with group's strategy to unlock value and redeploy capital in higher growth areas. *Wilmar: Formed a 50/50 a JV with Kemira Oyj, for the manufacture of alkyl ketene dimer (AKD) wax in China. Kemira, a leading manufacturer of AKD, will contribute its current facilities in Yanzhou, while Wilmar will integrate its facilities in Lianyungang. Wilmar will supply Kemira with stearic acid, a raw material used in AKD production and capitalise on the cost efficiencies from the expansion of its oleochemicals value chain.