SG Market (27 May 14)

US Market: Closed for Memorial Day holiday. S’pore shares may track European and Asian markets higher as the STI attempts to clear the 3,285 immediate resistance, towards the next hurdle at 3.312 level with technical indicators turning supportive. Downside risk remains at 3,255 Stocks to watch: *Cosco: Option contracts for four platform supply vessels, with total value of US$120m, awarded by a S’pore based ship owner to 51% owned Cosco Guangdong Shipyard has been exercised, with delivery of the four vessels is scheduled from 2Q16 to 1Q17. The shipowner has also secured additional options for another two vessels. *Boustead: 4QFY14 net profit declined 8% y/y to $25.5m taking FY14 net profit to $70.7m (-13%). Revenue dipped 3% to $142m weighed by weaker energy-related engineering (-13%) and real estate solutions (-29%) segments, offset partly by a 52% jump in sales from engineering services. While gross margins contracted 4.6ppts to 34.2%, bottom-line was aided by a 24% decline in admin expenses to $11.6m. A final DPS of 5¢ declared, taking full year payout to 7¢. *Yongmao: 4QFY14 net profit nearly doubled to Rmb11m (+94.4% y/y), taking FY14 earnings to Rmb51.3m (+130.4%). Revenue for the quarter jumped 68.8% to Rmb220.5m across all markets due to higher demand for its towercranes especially in Israel/UAE, Malaysia and Hong Kong/Macau region, while China (+61%) continued to be the group’s largest market, accounting for 61.6% of total sales. Gross margins remained relatively stable at 27.6% vs 28.1% in 4QFY13. First and final DPS of 0.5¢ proposed. *KSH: FY14 net profit rose 23% to a record $44.5m on increased revenue of $324.5m (+40%), which was achieved on the back of higher construction revenue (+39%) and sale of development properties in S’pore and China (+63%). Core construction business in S’pore remained strong with order book of over $410m but earnings were hit by negative margins. Property was the saving grace contributing to both top-line and share of associate profits. Final DPS of 1.75¢ proposed, bringing FY14 total payout to 3¢ (FY13: 2.5¢). *Mapletree Logistics: Acquired Daehwa Logistics Centre, its 9th property in South Korea, for KRW25.5b ($31.2m). The property is a three-storey Grade A warehouse with a gfa of 25,600 sqm located 50km from Seoul and is fully leased to three tenants – eBay, Acushnet and Daehwa with weighted average lease expiry of 3.5 years at NPI yield of 8.3%. *Thakral: Partnering a private Australian developer to invest A$46m in FV, a mixed development project with up to 950 apartments and 5,500 sqm of retail space and car park lots, in Brisbane, Australia. Phase 1, comprising 650 apartments, 2,200 sqm of retial and over 550 car park lots in two towers (Flatiron, Valley House), will be launched for sale in mid 2014, while phase 2 may include serviced apartments. Other capital partners may be brought on at later stage. *Roxy-Pacific: Launched 222-unit Trilive, located at Tampines Road. The freehold condominium has three 13, 14 and 18-storey blocks with 70-80% dual-key units targeting at three-generational families. *China Essence: Profit warning that it expects to incur a net loss for FY14, citing heavy floods in North-east China during 2QFY14 that has damaged its potato and starch yield, as well as high finance and operating expenses for its dismal performance. Group will report its Fy14 results on 30 May. *ISR Capital: Auditors issued a disclaimer of opinion for its FY13 accounts, citing ongoing CAD investigation in the company, five wholly owned subsidiaries and two funds for securities offences.