SG Market (07 Feb 14)

Market Roundup: US stocks posted their best gains in seven weeks as investors welcomed a larger-than-expected drop in jobless claims and upbeat earnings from Walt Disney and Akamai. The rally came ahead of the widely-followed nonfarm payroll report for Jan on Fri, which is forecast to see an 188,000 addition after a dismal 87.000 increase in Dec, which was blamed on the cold weather. Stocks to watch: *SIA: 3QFY14 results saw a worse-than-expected 65% fall in net profit to $50.1m, hurt by exceptional items, which included $78m paid by SIA Cargo to settle a US class action and a $2m fine by the Swiss Competition Commission for a separate air cargo competition law case. Tigerair also contributed to the red ink as it booked impairment losses on its Indonesian and Philippine units. While SIA managed to boost its operating profit by 49% to $130m, SilkAir’s profit dived to $6m from $64m. Excluding the one-off items, SIA would have seen its bottomline lifted by 23.1%. Revenue remained flat at $3.81b as higher passenger carriage (+2.1%) was offset by lower yields (-2.7%) amid stiff competition and unfavourable exchange rate movements from key revenue-generating currencies. As at Dec ’13, NAV was $11.34. *Starhub: 4Q13 net profit came in at $83.7m (-4.8% y/y), taking FY13 earnings to $370.7m (+3.2%), a tad below forecasts. Quarterly revenue fell 6.2% to $613.7m due to lower equipment sales, while service sales were flat with all lines of services except broadband (-10.5%) showing growth. EBITDA margin eased to 30.6% from 33.6% in preceding quarter. Final DPS of 5¢ is maintained, bringing full year payout to 20¢. *Ascendas Hospitality Trust: 3QFY14 distributable income jumped 33.2% y/y to $16.6m, while DPU improved 3.9% to 1.61¢. Revenue rose 10% to $56.6m from better performance of Australia portfolio, full-quarter contributions from Ibis Beijing Sanyuan and Park Hotel Clarke Quay acquired Dec ’12 and Jun ’13 respectively. NPI surged 36.9% to $23.4m, boosted by $1m income from Accor for its 50% share of AEI capex spent on Australia Accor hotels. Leverage stood at 35.8% with average debt maturity extended to 3.7 years from 2.2 years and NAV at $0.73. *FJ Benjamin: 2QFY14 net profit tumbled 55% y/y to $0.6m amid a softer retail market in SE Asia and a slump in demand for luxury timepieces in North Asia. Higher revenue of $104.6m (+8%) was shored by aggressive promotions and year-end clearance sales but heavy discounting, shaved its gross margin to 38% vs 43% in 2QFY13. Its S’pore stores were hurt by the devaluations of the rupiah and ringgit, which reduced spending by Indon and M’sian tourists. Operating profit rose 36% as costs were reined in. Excluding a $0.9m disposal gain of an HK property in previous year, bottomline would have improved 51%. *Keppel Corp: Secured its first jackup rig contract this year, worth US$218m from repeat customer UMW Drilling. It will be the third KFELS B Class jackup rig for UMW and is scheduled for delivery in 3Q15. *PEC: Bagged $79m worth of contracts for a range of contracts from repeat MNC clients, including EPC works for a storage facilities terminal in S’pore (completion in Sep ’15), field piping erection works for LNG plant in Malaysia (completion in Jan ’16) and other civil, mechanical, structural and piping works for various refineries in S’pore (completion in 12 months). This adds to its $176m order book as at Sep ’13. *Otto Marine: Secures US$8m time charter contract (152 days) for its platform supply vessel, Sea Frost, to support the Atwood Eagle rig in Australia with option to extend by another two terms. *TEE Int’l: Signed non-binding MOU with Guangdong Wanlv Environment Engineering Co (WL) for a long term partnership in municipal infrastructure and environmental projects in Guangdong, China. Both parties will explore the viability of three wastewater treatment projects with a total capacity of 230,000 m3/day owned by WL. Separately, group confirmed an interim DPS of 0.45¢ for 1HFY14 results. *Soilbuild REIT: Newswires flag that Barclays’ technology unit is moving out from Eightrium at Changi Business Park to consolidate its offices in the city centre. Barlcays is the REIT’s fifth largest tenant, and accounts for ~2.5% of its gross rental income.