SG Market (21 Feb 14)

Market Roundup: US stocks closed higher with the S&P 500 coming within 10 points of its record as US factory activity accelerated in Feb and a Facebook’s mega deal for Whatsapp overshadowed downbeat economic data from China and Europe. Traders found encouragement as US Markit flash manufacturing index jumped to a four-year high in Feb, while jobless claims edged down 3,000 to 336,000 last week. Separately, the Conference Board of leading indicators rose in Jan but the Philadelphia Fed’s manufacturing index unexpectedly delined in Feb. Markets were initially pinned by a sharp contraction in China’s PMI, which hit a seven-month low, while business activity in eurozone lost momentum inFeb, owing to weakness in France. Stocks to watch: *Genting S’pore: 4Q13 and FY13 net profit of $140.3m (+5% y/y) and $589.4m (+1%) both came in short on revenues of $692.9m (-13%) and $2.85b (-3%) respectively. Despite higher VIP volumes, 4Q13, gaming revenue dropped to $508.6m (-19% y/y, -16% q/q), impacted by lower win rate. Non-gaming segment enjoyed strong daily visitation (>20,000) and healthy occupancy of 92%, as revenue climbed to $183.9m (+12% y/y, +8% q/q). Adjusted EBITDA slumped to $250.3m (-32 y/y, -28% q/q). Bottomline included fair value gains on financial derivatives of $30m and FX gains of $38.7m. Final DPS of 1¢ maintained. *NOL: 4Q13 net loss deepened to US$137.2m (+51% y/y), but FY13 net loss of US$76.3m beat estimates, buttressed by a US$200m gain from sale of NOL Building. 4Q13 revenue dipped 7% to US$2.3b, dragged down by weaker liner business due to capacity management and lower freight rates. Core EBIT widened its loss to US$82m (+46%) with both liner (-US$101m) and logistics (US$19m) delivering worse off performances. Net gearing deteriorated to 1.87x from 1.44x , while NAV slipped to US$0.80 from US$0.83 a year ago. *Wilmar: 4Q13 and FY13 net profit of US$369.1m (-22.6% y/y) and US$1.32b (+5.1%) were in line. Revenue of US$11.6b was flat despite strong volume growth across all key business segments except sugar miling. This drove a 7.1% increase in core pretax profit to US$496.4m with solid showing from oilseeds/grains (+1548%) and consumer products (+40%). But fair value losses from biological assets (-US$8.6m), lower investments gains (-60%) and higher effective tax rate were drags on the bottomline. Final DPS of 2.5¢ declared, taking total FY13 payout to 8¢, higher than the 5¢ paid in previous year. *Hyflux: Sank to 4Q13 net loss of $7m from $21.2m profit a year ago as revenue slumped 55% to $85.1m due to depletion of EPC order book following the completion of Tuaspring Desalination plant in Sep. This brought FY13 earnings to $44m (-28%), which missed forecasts of $63.3m. FY13 revenue sagged 18% to $535.8m across Asia ex China (-6%), China (-64%) an MENA (-23%). Both municipal (-17%) and industrial (-43%) sectors saw declines in revenue. Net gearing ballooned to 1.16x from 0.52x. Final DPS of 1.6¢ proposed, taking FY13 payout to 2.3¢, less than the 3.2¢ paid in FY12. *Sheng Siong: 4Q13 results met expectations as net profit of $9.3 (+16.7% y/y) took FY13 earnings to $38.9m (-6.6%). In 4Q13, revenue grew 5.9% to $170.4m, of which 4.6% came from new store sales and 1.3% from same store sales. mainly on contribution from new stores of $12.6m. Gross margin ticked up to 23.2% due to lower input costs derived from distribution centre and better sales mix. Proposed final DPS of 1.4¢, bringing total FY13 payout to 2.6¢ vs 2.75¢ in FY12. *Hi-P: Dived into a 4Q13 net loss of $14.5m, cutting FY13 net profit to $6.4m (-64.3%). 4Q13 revenue dipped 5.6% to $344.5m on reduced orders from existing clients, while gross margin contracted to 4.4% from 10.7% in 4Q12 due to lower manufacturing yield and efficiency during inntial ramp up stages of new products secured from new customers, increased inventory provisions and depreciation. Group was also hit by impairment loss and provisions for Tianjin plant relocations and consolidation. First and final DPS of 0.6¢ proposed vs 1.2¢ in FY12. *NeraTel: 4Q13 net profit slipped 0.6% y/y to $3.8m on a 2% pullback in revenue to $44.5m due to lower sales of microwave radio requipment in the Mid-East and Africa market in its telecom business (-27.5%), partially offset by better sales of network equipment to service providers under its infocomm segment (+21.7%). Gross profit margin improved from 31% to 35.1% on a change in sales mix. Final DPS of 4¢ declared, taking total FY13 payout to 6¢, similar to FY12. *ARA Asset Management: 4Q13 net profit climbed 25% y/y to $22.1m on revenue of $43.8m (+19%), mainly due to a jump in acquisition fees to $11.8m from a low base, in relation to Fortune REIT’s acquisition of Kingswood and Suntec REIT’s purchase of the Pacific Highway property in North Sydney. This was offset by a 70% fall in finance income to $2m. AUM grew 13% to $25.5b. NAV as at end Dec was 32.84¢. Final DPS of 2.7¢ declared, taking total FY13 payout to 5¢. *Mun Siong: 4Q13 net profit surged 60.8% y/y to $2.7m on revenue of $21.3m (+12.2%). For FY13, earnings soared 126% to $3.1m. The strong 4Q13 peformance arose from higher volume of works undertaken in the M&E engineering segment supported by a gross margin expansion to 21.3% from 14% a year back. *Chip Eng Seng: 4Q13 net profit declined 11.7% y/y to $34.6m, while revenue fell 22.2% to $173.2m due to a 35.5% drop in property development sales to $97.2m, as the recognition of revenue of My Manhattan in Melbourne last year was much higher than sale bookings of Nine Residences and Junction 9, which were both launched in 4Q13. NAV as at end Dec was $0.7712. *Koh Brothers: 4Q13 net profit slid 2% y/y to $6.3m, as revenue slumped 23% to $88.8m, primarily due to weak property sales. Performance would have been worst had there been no deposit forfeit ($1.1m), fair value gains on investment properties ($0.8m) and write-back of trade receivables ($1m). Group proposed a final DPS of 0.5¢ plus special DPS of 0.2¢ vs 0.35¢ in FY12. *GLP: 40% owned GLP Brazil Development Partners has raised additional capital commitment of US$230m to cater to new investment opportunities, bringing its total size to US$1.1b. Asset under management now stands at US$11.1b. *Dyna-Mac: Bagged $42m worth of new orders, for the fabrication of two structural blocks, six topside modules and six pipe-racks, from Keppel FELS, Armada C7 (a Bumi Armada JV) and Modec Offshore. *Ascott REIT: Acquiring its first property in Dalian, China, for Rmb571m ($118.6m). The property comprises 195 serviced residence units with an average 80% occupancy, three retail units and one clubhouse. The accretive acquisition will increase DPU by 1.6% to 8.53¢. *Aspial: Acquired a 24,109 sqm land plot in Queensland, Australia, for A$18.9m. Located in CBD of Cairnes, the group intends to develop a mega integrated development with about 1.2m sf of residential units and offices. *Yoma: Announced that the design for the landmark development in downtown Yangon has been finalized, with an estimated development cost of US$415-US$440m, on top of land development rights of US$101.6m. On the deal, Yoma remains confident that the master lease will be issued and that the completion will take place before the long-stop date at end Jun 2014. *RH Petrogas: Found 4m barrels of estimated recoverable resources from Koi-2 appraisal well, located within the Salawati Kepala Burung PSC (33.21% working interest) in Indonesia and will commence a preliminary front end engineering design study to evaluate the development of the field for submission to the authorities, before production can begin.