SG Market (02 May 14)

US Market: US stocks ended mixed as investors digested a slew of economic releases ahead of Fri’s closely-watched monthly jobs report. The Dow eased back from its record high set a day earlier, while gains in Internet shares helped lift the Nasdaq. Economic data showed encouraging signs for consumer spending and maufacturing activity but construction spending and jobless claims missed forecasts. Consumer spending accelerated in Mar by the most in almost five years, while the ISM factory index expanded Apr at the fastest pace since end of last year in Apr. But construction spending rose just 0.2% in Mar and jobless claims climbed to a nine-week high last week. In corporate results, cosmetics seller Avon (-10%) tumbled after earnings trailed estmates and ExxonMobil (-1%) slipped after revenue missed expectations. T-Mobile (+8.1%) rallied after adding more subscribers last quarter and Yelp (+9.8%) jumped after raising its 2014 revenue forecast. GM (+1.2%) rose after US car sales rebounded in Apr but Ford (-1.5%) slid as sales declined and its CEO stepped down. Among Internet and tech gainers, Facebook (+2.3%), TripAdvisor (+3.4%) and Netflix (+4.5%) rose. Linkedin climbed 5.1% in the regular session but sank 2.7% in extended trading after it gave a 2Q sales forecast that was below expectations. In Asian markets, both Nikkei (-0.3%) and Kopsi (-0.1%) opened softer in early morning trades. S’pore shares are likely to be flatlined tracking both Wall Street and regional bourse. Near term upside for STI will be capped at 3,285 with underlying support at 3,230, followed by 3,206. Stocks to watch: *UOB: 1Q14 net profit of $788 (+2% q/q, +9% y/y) surpassed expectation, though largely lifted by unusually low taxes from write-back of prior years’ taxes. Underlying earnings quality however, was weaker than expected and against peers, due to a q/q contraction in net interest margin (-1 bps) and reduction in fee and trading income (-4.8% q/q, -8.6% y/y), dragged by loan-related and fund management fees. NAV per share at $15.90. *Venture: 1Q14 net profit rose 9.8% y/y to $30.8m, while revenue increased 11.4% to $591m, driven by new customers and new programmes with existing customers. Growth was broad based across its business segments, mainly led by Test & Measurement (+24% to $182.4m). EPS of $0.112 and NAV per share of $6.745. *Jardine C&C: 1Q14 net profit fell 6% y/y to US$218m, as revenue declined 10% to US$4.7m, primarily due to a weaker rupiah. Key subsidiary, Astra Int’l posted earnings that grew 10% in rupiah terms, driven by improvements in its agribusiness and contract mining operations, offset by a decline in earnings from automotive and financial services business. *SMRT: 4QFY14 swung to a net profit of $16.9m from a loss of $11.9m a year ago, thanks to the absence of a $17.3m goodwill impairment of its interest in associate Shenzhen Zona, and boost from a government bus service enhancement programme grant. Revenue edged up 3% y/y to $289.5m, driven by rental (+11%) and advertising (+12%), but mitigated by an 8% decline in LRT due to lower ridership. Proposed final DPS of 1.2¢, bringing FY14 total to 2.2¢. *ParkwayLife Reit: 1Q14 DPU rose 6.9% y/y to 2.82¢. NPI increased 6.9% to $23m, boosted by higher rent from the SG properties and new rental income from Japan properties acquired in Jul and Sep ’13, though offset by the depreciation of Yen. NAV per unit at $1.63. *Fragrance: 1Q14 net profit jumped 38% y/y to $24.3m. Revenue increased 13% to $125.3m, mainly driven by the property segment (+15.6% to $111.5m) thanks to contribution from ongoing development projects such as Urban Vista, Kensington Square and Suites @ Bukit Timah. Hotel revenue fell 5.4% to $13.8m. NAV per share at $0.179. *Soilbuild Construction: 1Q14 revenue jumped 28% y/y to $87.3m, driven by progressive recognition of projects such as the Lavendar mixed-used development project, Ang Mo Kio HDB project, and Bukit Batok BizHub project. Net profit however, rose at a slower 4% clip to $3.9m, as gross margins fell to 7.2% (from 8.8%) mainly due additional costs incurred from the extension of construction period for additional works. *Creative Technology: Fifth consecutive quarter in the red. 3QFY14 revenue slumped 26% to US$25.1m, due to the uncertain and difficult market conditions which continued to affect product sales. Net loss narrowed to US$8.8m from US$10.4m a year ago, due to lower SG&A (-11%) and an absence of FX losses booked in 3QFY13 (US$2.8m). NAV per share at US$1.98. #HL Global Enterprises: 1Q14 net loss widened y/y to $1.6m from $0.4m, due to the absence of tenant deposit forfeiture and higher finance cost on the revaluation of Rmb assets. Revenue deteriorated 22% to $1.4m due to lower sales of apartment units at Cameron Highlands. Separately, HL Global announced that the group is in the midst of discussions to increase its equity stake in Augustland Hotel Sdn Bhd, which owns Copthorne Hotel Cameron Highlands, from 45% to 100%. *GuocoLand: Awarded a $530.9m tender by HDB for a residential site at Sims Drive, which can be developed into a condo with more than 850 units. The 99-year leasehold land parcel has a site area of 23,900 sqm, and gross plot ratio of 3.0. *Cordlife: Entered into a 3-year licensing agreement with StemLife Bhd to jointly explore and develop new umbilical cord tissue-related services in Malaysia. In exchange for a sub-license to be granted to StemLife, Cordlife will receive $1m upfront, and royalty fees payable every quarter. *Ausgroup: Awarded service and maintenance works under an existing Multi-Discipline Services Agreement contract, to support Woodside Energy’s Karratha Gas Plant in the North West Shelf Project in Australia. *HanKore: Extended the deadline for the acquisition of China Everbright Water Investments to 31 May 2014. *ITE Electric: Received notices from Commercial Affairs Department to provide information of the company for the period from Jan ‘11 to Mar ‘14.