SG Market (30 Jan 15)

Singapore shares are likely to open higher, taking cue from the relief rally in Wall Street overnight, which was led by earnings from consumer and materials shares, and a rally in crude oil. Asian shares are mostly trading lower this morning, with Tokyo (+1.0%), Seoul (+0.3%) and Sydney (+0.7%). 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: *SMRT: 3QFY15 net profit soared 58.4% to $22.5m, while revenue grew 6.8% to $313.2m, driven by growth across both fare and non-fare segments. EBITDA margin improved 4.2 ppt to 25.8%. At the operating profit level, Rail ops clocked in a profit of $2.1m, reversing last year’s loss, on higher ridership, average fare, and productivity gains while Bus ops narrowed last year’s losses by 92% to $0.7m from increased ridership and average fares, lower repairs and maintenance and lower diesel costs. NAV/share at $0.547. *Frasers Hospitality Trust: 2H14 distributable income and DPU beat IPO forecasts by 5.3% to $35.7m and 2.97¢, respectively, due to lower-than-expected expenses and interest costs. Gross revenue of $50.2m was in line, while NPI outperformed by 2.3% at $41.8m, from stronger performances of hotels in Australia, Japan and UK, but partially offset by Malaysia's The Westin Kuala Lumpur due to recent aviation mishaps. Management expects Singapore’s hospitality industry to face headwinds with increasing supply of hotel rooms by end 2015, but noted that occupancy levels should hold steady supported by the 5-7% growth in tourist arrivals. Leverage of 40.0% at higher end relatively to peers, with average interest cost of 1.8% and debt tenor of 4.0 years. NAV/unit at $0.8605. *Stats Chippac: Swung to 4QFY14 net profit of US$3.5m (3Q14 net loss: US$12.1m). Revenue climbed 3% to US$406.7m, from higher wireless communications revenue driven by high-end smartphone ramps and stronger than seasonal demand in China lower tier smartphones. Gross margin expanded 1.6 ppt to 12.1%, led by higher revenue and favourable mix change in the wireless communications business. Excluding taxes, total expenses were relatively unchanged y/y. NAV/share at US$0.43. *Creative Technology: 2QFY15 net loss widened to US$9.2m from US$4.2m, on revenue of US$31.3m (-17%), with top-line weighed by uncertain and difficult market conditions which continued to affect the sales of the group’s products. Gross margin was maintained at 30%. Bottom-line was further weighed by other losses of US$4.6m, due to foreign exchange losses and impairment loss on investments. *Tuan Sing: 4Q14 net profit slipped 4% y/y to $24.5m, largely skewed by fairvalue adjustments. Barring which, 4Q core profit before tax was at $26.5m (vs 4Q13 $3.5m). Revenue swelled 72% to $112.1m on higher contribution from Property and consolidation of Grand Hotel Group (GHG) under Hotel Investments. Gross margin rose 3.5 ppt to 21.3%, led by higher margin from GHG consolidation. Order book from Dec ‘14 was at $763.2m. Final dividend unchanged from last year at 0.5¢. NAV/share at $0.68. *Thakral Corporation: Acquiring remaining 49% stake in Thakral Capital Australia (TCAP) from 4 vendors by issuing 250k new Thakral Capital Holdings (THC) shares at $80.80/share. TCAP is the group's property investment subsidiary. Upon deal completion Thakral's stake in wholly-owned TCH will be diluted by up to 25%. *Midas: 32.5% owned JV Nanjing SR Puzhen Rail Transport Co (NPRT) secured Rmb1.73b (S$374.7m) metro train contract with a consortium partner. The contract was awarded by Shanghai Rail Transit Line 13 Development for the Shanghai Metro Line 13 Phases 2 and 3, with delivery scheduled from 2016 - 2017. *Hi-P: Guides for 4Q14 revenue to be lower y/y but higher q/q due to demand drop from certain customers and lower than forecasted yields on certain new products during production ramp-up, but remains profitable at bottom line. *SingTel: Established HOOQ Digital, a 65:17.5:17.5 JV with Sony Pictures'AXN Investment and Warner Bros. Entertainment, to offer a regional over-the-top video service in Asia, where customers are able to stream and download content on their platform of choice. *YuuZoo Corp: Formed new partnership to create live game streaming services via YuuZoo's multicast social broadcasting platform. *KLW Holdings: Terminated the 45.5% proposed acquisition of property development and construction player in Suzhou, Mega Sun Development, after the MOU period lapsed. *Spackman: Premiers documentary TV series Great Story in March.