SG Market (27 Feb 14)

Market Roundup: US stocks eked out modest gains in a choppy session on better-than-expected new home sales but investors were hesistant to take big bets ahead of Fed chairperson Janet Yellen’s Senate testimony on monetary policy. The S&P 500 erased earlier gains and failed to hold above its record close for a third straight day Buying momentum on the S’pore market is starting to wane with technical indicators hovering in overbought territory. Immediate support for the STI lies at 3,070 with heavy resistance found near the 3,150 level. Stocks to watch: *Sembcorp Industries: FY13 net profit of $820.4m (+8.9%) exceeded estimates, boosted by $39.6m of net tax incentives, otherwise results would have been in line, Revenue grew 6% to $10.8b. 4Q13 net profit rose 9.3% to $233.8m on revenue of $2.97b led by rigbuilding projects, which offset lower electricity sales in S’pore and deconsolidation of Salalah. The marine and utilities businesses continue to be the mainstay contributors, accounting for 49.4% and 34% of 4Q13 earnings. Urban development benefitted from a write-back of doubtful debt provisions in its China associate and land sales. First and final DPS of 15¢ plus bonus DPS of 2¢ declared vs 15¢ in previous year. *Venture Corp: 4Q13 net profit was flat y/y at $38m but up 8.4% q/q as revenue grew 5.1% y/y and 5.8% q/q to $622.9m. This brought FY13 earnings to $131.1m (-6.1%), which met street estimates. Pretax margins continued to trend up to 6.7% from 5.4% in 4Q12 and 6% in 3Q13. Net cash position was down 20% but remained sturdy at $229.1m with NAV per share of $6.65. Final DPS of 50¢ maintained. *Sino Grandness: Turned in lower 4Q13 net profit of Rmb59.4m (-9% y/y, -65% q/q) as revenue slowed to Rmb553m (+36%, -26% q/q). This took FY13 earnings to Rmb401.1m (+39%) on revenue of Rmb2.27b (+39%). 4Q13 sales of Garden Fresh juices (+57%) and domestic canned products (+80%) but was dampened by weaker overseas canned products segment (-5%). Gross margin of 41.1% was maintained but bottomline was adversely impacted by a steep Rmb33.6m increase in admin expenses arising from higher depreciation from its new Hubei plant, FX losses and and Garden Fresh spinoff-related fees. *Yangzijiang: 4Q13 net profit of Rmb746.3m (-8% y/y) was broadly in line with street estimates, on revenue of Rmb3.4b (-5%). For the full year, net profit was Rmb3.1b (-14%), while revenue came in at Rmb14.3b (-3%) due to fewer vessel deliveries (34 vs 51 in FY12). Gross margin expanded to 33.2% (from 30.9% in FY12), as the group executed higher-priced shipbuilding orders secured prior to the financial crisis, and benefited from the increase in contribution from the higher margin investment segment. Order book stands at US$4.6b for 111 vessels, with 11 outstanding options worth US$0.8b. DPS maintained at 5¢. *CWT: 4Q13 reveune soared to $3.7b, more than double that for the first three quarter of 2013, while net profit jumped 73% to $41.8m with energy products SCM and engineering services the main contributors. FY13 net profit slipped 2% y/y to $106m in the absence of a $22.3m gain from sale and leaseback of a logistics property last year, and higher finance costs (+105%) from trade credit facilities and structured trade services. Revenue surged 69% to $9.1b mainly due to trading of new products like naphtha and distillates. First and final DPS of 3.5¢ declared, higher than FY12's DPS of 3¢. *Interra: 4Q13 net loss ballooned to US$3.8m from almost breakeven despite revenue swelling 89% to US$13.7m as the group was hit by impairment of a Myanmar exploration well amounting to US$6.2m. The results brought FY13 earnings to US$7m (+131%) on revenue of US$50.2m as its shareable production leapt 76% to 649,473 barrels albeit at a lower average oil price of US$105.05/barrel (-8%). EBITDA shot up three-fold to US$8.2m in 4Q13 giving a EBITDA margin of 60%. Cash and cash equivalents slid to US$12.4m as at end Dec with no debt. *Sembcorp Marine: Bagged two major rig contracts overnight worth a combined US$1.35b. The first is a US$1.08b contract to build two drillships for Transocean, scheduled for delivery in 2Q17 and 1Q18. The deal comes with options for three additional units. The second is a US$214.3m turnkey jack-up rig contract from Marco Polo, to be delivered in 4Q15 and comes with option for two more similar rigs. *Marco Polo: Ordered a Pacific Class 400 high-specification jackup rig from PPL Shipyard for a contract value of US$214.3m, to be delivered in 4Q15. This comes with options for another two similar rigs for delivery in 3Q16 and 1Q17. *KrisEnergy: Withdrew from a 60% working interest in the G3/48 exploration licence in the Gulf of Thailand after a partner exercised its right of pre-emption over the acquisition. Separately, group was awarded a three-year operating licence and 95% working interest in the Sakti PSC covering 4,974 sq km in offshore East Java, Indonesia. *GLP: Established a strategic partnership with state-owned Cofco, one of China’s largest suppliers of food and agri products, to provide a national network of modern logistics facilities in China. Cofco currently leases a total of 71,600 sqm with GLP across three cities in China. Separately, GLP is leasing 36,000 sqm at GLP Park Huangpi in Wuhan to Vipshop, one of China’s leading e-commerce companies. Ith this latest deal, Vipshop becomes GLP’s third largest customer in China with total leased area of 180,000 sqm across three cities. *Lifebrandz: Raising $3.4m via a share placement of 425m new shares (19.9% dilution) at 0.81¢ each to several individuals. Separately, group has proposed to dispose its current business, and acquire a 7.5m sqm land parcel in Vietnam that is slated for development into a country club and 18-hole golf course, and a 2,125 sqm land parcel located at Middle Road to be developed into a boutique hotel cum commercial development in a reverse takeover deal via issue of new shares at 1.2¢ each. *Q&M Dental: FY13 results beat estimates. Net profit climbed 29% to $6.5m, while revenue was 24.7% higher at $71m, led by a 22% increase in dental and medical clinics from both existing and new clinics. Dental equipment and supplies distribution contributed $4.2m (+110%), with the growth mainly from a Malaysian acquisition made last July. As at end FY13, the group has a total of 64 outlets compared to 56 in FY12. Final DPS of 0.64¢ proposed, bringing full year payout to 1.3¢ (FY2012: 0.675¢). *GMG Global: Expects to report a 4Q13 loss due mainly to the decline in average selling price of natural rubber but will remain profitable for full year FY13. #Sarine: 4Q13 net profit accelerated 17% to $4.5m, on revenue of $16.7m (+18%), mainly from delivery of 12 Galaxy Solaris and 2 Galaxy Ultra systems. Gross profit margin improved to 71% (+4.4ppts). Final DPS of US2¢ declared, taking total FY13 payout to US6¢ vs US4.5¢ in FY12. Further, group proposed to raise its dividend payout by 33% from 2014 onwards to semi-annual 2¢. #Wee Hur: 4Q13 net profit tumbled 79% y/y to $20.1m, as revenue declined 31% to $321.6m, mainly from an absence of revenue recognition after it completed Harvest@Woodlands in Oct '12. Wee Hur’s construction order book stood at $358.5m and will provide activity through FY2017. Mgmt declared final DPS of 1¢ for total FY13 DPS of 2¢, half of FY12's 4¢. #Jason Holdings: In response to SGX's trading query, group provided that its currently considering undertaking corporate actions which may involve a possible acquisition and financing arrangements, as highlighted previously on 19 Feb. #Ying Li: 4Q13 net profit tumbled 30% y/y to Rmb227.3m on gross margin compression to 30% (-13.5ppts), increased selling expenses (+69%) as IFC retail mall gains higher occupancy into its second year of operations, admin fees (+150%) for a loan facility, a 31% drop in fair value gain and higher finance cost upon completion of the IFC project. Revenue spiked 163% to Rmb417.6m on recognition on property handover (+193%) and rental income (+18%) from higher occupancy in IFC's office space. NAV of Rmb1.57¢. No dividends declared. #Allied Technologies: 4Q13 net profit turned around y/y to $10.3m from loss of $4.1m, mainly from a gain on property disposal of $15.3m and lower finance cost (-67%) from reduced debt. Revenue dropped 13% to $22.4m led by lower contribution from its Suzhou subsidiary due to relocation and declining orders on products reaching its end-of-life, as well as delays for new projects. This was partially offset by Shanghai, Vietnam and Malaysia subsidiaries. Mgmt declared first and final DPS of 0.5¢, compared to nil in FY12. #Auric Pacific: 4Q13 net loss of $22.4m from profit of $13.8m, mainly due to costs incurred from closure of non-performing restaurants ($6.7m), adjustment to depreciation of fixed assets ($1.1m), one-off provision for impairment loss on Delifrance ($10m), allowance for impairment loss on unquoted investment ($3m) and provision for a regulatory claim ($0.8m). Revenue improved marginally to $102.2m (+2.3% y/y) on contributions from new restaurants (+11.6%) and manufacturing (+11.4%), offset by a reduction of interest income and absence of disposal gain from quoted investments. Mgmt declared first and final DPS of 2¢, compared to FY12's 3¢. #G. K. Goh: 4Q13 net profit spiked 274% y/y to $9m, mainly due to a $6.5m maiden contribution from 47.6% associate- Australian aged care operator Domain Principal Group (DPG), including a one-off gain of $3.1m. Revenue dipped 6% to $8.1m on a substantial decline in activity for futures and forex broking, offset by a 82% spike in investment income from mark-to-market gains in equities and redemption. Mgmt maintained first and final DPS of 4¢.