Thursday, January 29, 2015

SG Market (29 Jan 15)

Expect Singapore shares to open lower, following the sell-off overnight in Wall Street, which brought the Dow to its biggest two-day loss in the year. Asian shares are mostly trading lower this morning, with Tokyo (-0.7%) and Seoul (-0.5%) both down, although Sydney is up 0.2%. From a chart perspective, the STI support is tipped at the breakaway gap at 3,377 with overhead resistance at 3,465, set in May 2013. Stocks to watch: *GuocoLand: 2QFY15 net profit soared 230% y/y to $42.5m on revenue of $355.7m (+40%). Revenue was led by the recognition of office tower sales in Shanghai Guoson Centre, while bottom-line was aided by a 14.5ppt rise in gross margin to 33.9%, partially offset by a 145% rise in admin fees to $41.3m and a more than 15x rise in other expenses to $14.4m. NAV/share at $2.48. *Capita Retail China Trust: 4Q14 DPU rose 12.7% y/y to 2.48¢, bringing full year DPU to 9.82¢ (+8.9%). For the quarter, revenue jumped 27.7% to $52.7m, while NPI expanded 30.1% to $33.5m, due to new contributions from CapitaMall Grand Canyon and rental growth from other multi-tenanted malls, offset by lower revenue from CapitaMall Wuhu where tenancy adjustments are ongoing. Occupancy was 95.9 (-1.7ppt q/q) due to abovementioned frictional adjustments, with WALE by rental income of 6.7 years. Aggregate leverage stood at 28.7% with average interest cost of 3.3%. NAV/unit at $1.63. *AIMS AMP Industrial REIT: 3QFY15 DPU inched up 2.2% y/y to 2.83¢, taking 9MFY15 DPU to 8.15¢ (+1.6%). Gross revenue for the quarter was up 5.2% to $29.7m, pulling NPI up 4% to $20.5m, thanks to new rental contribution from 20 Gul Way Phases 2E and 3, as well as 103 Defu Land 10. Portfolio occupancy was 95.9% (-0.7ppt q/q), with WALE of 3.4 years. Aggregate leverage at 31.7% (0.5ppt q/q) with average debt cost at 4.63%. NAV/unit at $1.5349 *CitySpring Infrastructure Trust: 3QFY15 core cash earnings shrank 17.7% y/y to $12.1m. After accounting for a $25.5m one-off dispute settlement and bond refinancing costs at Basslink, actual losses would have been at $13.5m. Revenue fell 7.3% to $120.0m due to lower gas tariffs at City Gas ($92.4m vs $99.5m) and higher negative commercial risk sharing mechanism at Basslink ($17.4m vs $19.7m). CityNet ($1.0m vs $0.7m) was the small bright speck, mainly due to completion of acquisition of OpenNet. DPU maintained at 8.2¢, paid out of accumulated earnings. NAV/unit at $0.14.6. *Terratech: Acquiring 100% stake in Meilian Changchi (MC), a Chinese company producing/selling marble tiles and marble mosaic tiles, via $15.4m in consideration shares. The acquisition will enable the group to undertake in-house processing of marble slabs to gain greater efficiencies and costs savings, while expanding the sales and marketing of its products to other overseas markets via MC's established customer base and sales network. #Ntegrator: Clinched four new orders worth $10.7m for projects in Vietnam, Singapore and Myanmar to supply high-performance batteries, supply, installation and testing of transmission equipment and network expansion. *Oceanus: Announced business restructuring initiatives, including cutting China operations costs by 50% in two months *IHC: In discussions with prospective vendor for potential acquisition of a retail mall in Penang.

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