SG Market (14 Jan 15)

Expect a softer opening from Singapore shares, taking cue from the negative close on Wall Street overnight, which was dragged by the continued weakness in oil and energy prices. Asian markets are mostly trading lower this morning, with Tokyo (-0.3%) and Sydney (-0.04%), although Seoul is up 0.3%. From a chart perspective, the STI recently rebounded strongly from its 200-dma, with most indicators in neutral positions. Near-term support is tipped at its 20-dma at 3,318, while the recent high of 3,370 would be the key resistance level. Stocks to watch *SPH: 1Q15 results were in line, with net profit down 21.9% to $69.4m. Revenue fell 6.5% to $307.1m, weighed by an 8% decline in newspaper and magazine sector, partially offset by the property sector (+3.8%) on the back of higher rental income from Paragon and Clementi Mall. Total operating costs dipped by 3% y/y, mainly driven by lower newsprint, utilities and production costs in line with lower revenue. Bottom-line was further weighed by an $8.0m loss from associate and JV contributions, due to investment in the regional online classified business. BVPS at $2.33. Maybank-KE maintains Hold, TP $4.10. *Tee International: 2Q15 net profit fell 5.8% to $1.5m on revenue of $43.0m (-14.2%). Top-line was weighed by lower recognition from on-going engineering projects, although bottom-line was aided by a 9.3ppt rise in gross margin to 17.9%. Dividend of 0.18¢ cash per share declared, alongside a proposed dividend in specie of one Tee Land share for every 15 Tee International shares held. BVPS at $0.192. *Ying Li: Signs MOU with Chongqing City Shuangfu New Area Administrative Committee and Chongqing Hardware & Electrical Industry Association Alliance to develop a new-mixed-development property in Jiangjin District with a one-stop hardware and electrical appliances hub. The project's GFA is ~1.6m m2 and initial investment is at ~Rmb1.8b. *YuuZoo: Formed JV with Hong Kong based Hamon Private Equity to develop a social e-commerce network for investors, offering a wide range of financial products and services. *Zico: To establish a 51%:49% JV company with Stamford law, which will acquire Stamford Law’s corporate secretarial business for $2.4m. The JV will place the two companies in a better position to provide seamless corporate secretarial services to their existing and future clients moving forward. *King Wan: Secured four new mechanical and electrical projecs in Singapore in Nov-Dec '14 totalling $43.3m, which include works for plumbing, sanitary and gas systems for Jewel Changi Airport, Woodland NC126 & C27, and Punggol West C40. *OUE-HT: Passed resolution for the proposed acquisition and master leases of Crowne Plaza Changi Airport and its future extension. *SATS: Signed MOU with Swiss WorldCargo and Cargologic to collaborate on areas such as quality, e-initiatives, temperature-controlled transport management and specialized handling solutions. *ST Engineering: Aerospace arm secured new contracts worth $310m in 4Q, involving projects ranging from airframe, component and engine maintenance, to VIP completion and engine wash. *GLP: Leased 14,000 sqm to one of the world’s largest automotive companies in Southern Brazil. The customer is expanding to meet demand for auto parts from its authorized dealers in the region. *REX International: Issued 1.2m new shares to Cyrus Corporation, as remuneration for strategic investor relations consultancy services rendered to the company. *United Engineers: Subsidiary MFLEX announced preliminary 1QFY15 results. Net sales expected to be at higher end of guidance at US$209m (1QFY14: US$211.7m), and gross margins at 14% (1QFY14: 1.2%)