Monday, February 17, 2014

SG Market (17 Feb 14)

Market Roundup: US stocks rose as S&P 500came within 10 points of its record amid better-than-forecast earnings and renewed confidence in the economy. The VIX index or fear gauge fell 4% to below 14, erasing its gain for the year. Investors shrugged off an unexpected 0.3% decline in industrial output in Jan, which was blamed on the severe winter weather. But consumer confidence was stronger-than-expected in Feb as Americans grew upbeat on the economy. The STI may make another test of the immediate resistance at 3,050 with the next target at 3,100. Downside supports remain at 3,024 and 2,990. Stocks to watch: *UOB: 4Q13 net profit of $773m (+11% y/y) exceed $656m street estimate. Net interest income trended up 13% to new record of $1.1b, led by a 17% loan expansion, while net interest margin improved 3 bps q/q to 1.74%. Fee-based income grew 12% to $435m, benefitting from lending and wealth management products, while trading and investment income shed 2% to $144m due to lower gains on sale of securities. Impairment charges fell 7% to $1395m, while NPL ratio was lower at 1.1%. Tier-1 CAR ended at 13.2%, NAV rose to $15.36. Final and special DPS of 40¢+5¢ declared, taking full year payout to 75¢ vs 70¢ in FY12. *GLP: 3QFY14 net profit surged 56.3% to US$176.2m, higher than revenue of US$170.9m (-1.5%) as it benefitted from fair value gains from jointly-controlled entities (+253%), lower finance costs (-81.1%) and taxes (-2.8%). The lowerturnover was mainly due to sale of properties to GLP J-REIT in Japan and a slump in the JPY. On an adjusted basis, revenue would have increased 29%. Revenue in China soared 54% to US$105m on strong leasing momentum (+5.2m sf) and higher rents (+5.8%). New and expansion leases in Japan and Brazil totaled 2.1m and 1.2m sf respectively. NAV grew 2.3% to US$1.81/share. *HanKore: 2QFY14 net profit rose 20% y/y to Rmb29.4m as revenue surged 245% to Rmb197.9m on the back of higher contruction revenue of Rmb116.1m (+12-fold) arising from work performed in Xianyang, Yangzhou and Nanjing Liuhe plants, maiden contract revenue of Rmb25.5m and recurring water treatment income of Rmb56.3m (+18%). Gross margin eased to 39% from 51% due to higher construction mix. Bottomline was weighed by higher admin (+52%), repair and maintenance (+385%) and finance expenses (+35%), coupled with tax increase attributed to newly acquired Jiangsu Tongyong. *Courts Asia: 3QFY14 net profit inched up 1.7% y/y to $6.3m on a 4% rise in revenue to $203.3m. S’pore sales (67% of total revenue) fell 2.9% due to lower digital and electrical product sales, led by weaker consumer demand and lower bulk sales, while Malaysia’s sales grew by 20.8%, mainly attributable to higher credit sales from an aggressive credit campaign and higher furniture and electrical product sales. Bottomline was partially weighed by a 50% tax increase, mainly due to non-tax deductible expenses. *Dukang Distillers: 2QFY14 net profit slumped 93% y/y to Rmb10m as revenue tumbled 45% Rmb402.8m due to reduced volume sales (-30%) and lower ASPs of its Luoyang Dukang and Siwu baijiu brands amid China’s severe austerity measures on luxury gifting and spending. This coupled with thinner gross margin of 35.2% (-4.4 ppt) and heavy advertising and promotional expenses (+47%) and higher finance costs, led to the dismal performance. *Goodpack: Delivered 2QFY14 net profit of US$12.5m (+12% y/y) on revenue of US$50.9m (+10%) from increased penetration of existing markets. EBITDA margin was stable at 45%. *Linc Energy: 2QFY14 net loss deepened 120.1% y/y to A$73.9m even as revenue jumped 40.3% to A$41.2m on improved USA O&G sales volumes, increased syngas revenue in Uzbezkistan, offset by reduced contributions from clean energy consulting. But bottomline was hit by a 58% spike in finance costs and A$48.7m finance charges, largely arising from fair value losses on its US$200m convertible note facility. NAV as at end Dec was A$0.6744. *Lion Teck Chiang: 2QFY14 net profit improved 78.6% y/y, while revenue climbed 8.9% to $46.3m, mainly from property development, offset by steel turnover on lower steel prices, despite higher tonnage delivered. Bottomline was also improved by lower tax margins. NAV at end Dec was 1.39¢. *Cosco Corp: 51% owned Cosco Shipyard Group has secured a US$57m contract to build two livestock carriers from a European buyer, to be delivered in 3Q15 and 4Q15. *AIMS AMP: Proposed 7-for-40 rights issue at $1.08 each. Gross proceeds of $100m will be used to finance the trust’s asset enhancement initiatives, development projects and/or third party acquisitions in S’pore, debt repayment and working capital purposes. *Kencana Agri: Guided that while it expects to record an operating profit in 4Q134, the group will report a loss for FY13 due to unrealized FX losses resulting from the depreciation of the IDR against the USD. *Ntegrator: Expects to report a net loss for FY2013, mainly due to a write-off for substantial non-recurring manpower and equipment-related costs, incurred in a developmental project for a customer in Indochina which is no longer viable, as well as cost overrun for one of its project. *Seroja Investments: Expects to report a loss for FY13, mainly due to provisions for impairment losses of jointly owned vessels. *Pteris Global: Warns of a significant loss in 4Q13 and FY13 *Annica: Expects to report a net loss for FY13 due to loss on the disposals of financial assets, unrealised fair value loss adjustments and available-for-sale financial assets, following declines in quoted market prices of equity securities held.

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