SG Market (10 Feb 15)

Singapore shares are expected to open lower, after Wall Street lost ground overnight, dragged by on-going concerns on the Greek debt situation and disappointing trade data from China.

Asian markets are mostly trading lower this morning, with Tokyo (-0.5%) and Sydney (-0.4%), while Seoul is up 0.1%.

From a chart perspective, topside resistance for STI is seen at 3,465 with underlying support at 3,377

Stocks to watch:
*DBS: 4Q14 results fell short of estimates, with net profit of $838m (-14% y/y, -17% q/q), taking FY14 net profit to $4.05b (+10%). Net interest income was up 15% y/y to $1.7b, driven by loans growth of 9%, and improvement in net interest margin to 1.71% (+10bps). Non-interest income however fell 4% to $666m, weighed by lower contributions from trade and transaction services (-8%), brokerage (-2%) and trading gains (-44%). NPL remained stable at 0.9% with allowance coverage at a historical high of 163%. Fully-loaded CET1 CAR was stable at 13.1% with Tier 1 CAR at 13.1%. DPS of 30¢ declared taking FY14 total payout to 58¢ (unchanged). NAV/share at $14.85.

*Valuetronics: 3QFY15 net profit improved 10.3% y/y to HK$39.2m, buoyed by an increase in FX gain and interest income, while revenue was up 3.4% to HK$596.2m, led by the industrial and commercial electronics segment (+23%), offset by a drop in consumer electronics (-6.4%) due to a slowdown in demand. Gross margin gained 0.9ppt to 14% due to the change in sales mix. Net cash position improved to HK$509.7m ($0.24/share). NAV/share at HK$2.055.

*China Fishery: 1QFY15 net profit declined 13.1% y/y to US$12.8m, while revenue dropped 14.7% to US$123.9m, affected by a temporary warming of water in Peru, which translated to the delayed and reduced catch of anchovy. Gross margin improved 0.4ppt to 30.9% as a result in increased average selling prices of fishmeal (+40.3%) and fish oil (+20.3%) products. Meanwhile, bottom line benefitted from the absence of a one-off amortisation of prepayment to suppliers (US$7.6m), lower selling (-23%) and admin expense (-10%), partially offset by an absence of sales of consumables and scrap materials. NAV/share at US$0.60.

*Pacific Andes: 1QFY15 net profit tumbled 22.4% y/y to HK$80.5m, in tandem with a 25.3% drop in revenue to HK$1.8b, affected by a temporary warming of water in Peru, which translated to the delayed and reduced catch of anchovy. Bottom line was shored up by the absences of a one-off amortisation of prepayment to suppliers (HK$59.4m), impairment loss (HK$31.1m) and FX gains (HK$11.5m), as well as the lack of a provision for loss of vessel booked in 1QFY14. In addition, lower selling (-21%) and admin expenses (-6%) due to cost containment efforts bolstered the bottom line. NAV/share at HK$2.37.

*Longcheer: 2QFY15 net profit slumped 95% to Rmb2.0m, largely due to disposal gains of Rmb35.8m from the previous year, barring which core net profit was up 305%. Revenue rose 5% to Rmb2.8m, mainly from increased rental income from its investment property in Xi’an. Gross margin increased 4ppt to 79%. Bottom line was boosted by improved performance of 20%-owned associate Mentech. NAV/share at Rmb0.71.

*AusGroup: 2QFY15 net profit plunged 59.9% to A$0.9m, while revenue jumped 75.6% to A$119.4m, from increased activity in maintenance, scaffolding projects and contributions from new subsidiaries. Gross margin decreased 0.5ppt to 11%. The bottom line shortfall was largely due to tax expenses of A$0.9m versus tax credits of A$3.2m the previous year, largely as a result of R&D tax incentives. NAV/share at A$0.31.

*Wilton Resources: 2QFY15 net loss was at Rp11.6b versus a net loss of Rp638.7b the previous year. There was no revenue as the group has yet to commence production at its gold mine in Indonesia. General and admin expenses fell 50.8% to Rp8.9b, due largely to higher professional fees incurred in relation to the group's RTO the previous year. NAV/share at $0.015.

*Parkson Retail Asia: 2QFY15 net profit slumped 24.6% y/y to $10.2m while revenue was flat at $117.5m, due to weakness in Malaysia from macro headwinds and worse than expected flooding, and reduced tourist arrivals from China. Vietnam operations were also weak, due to weak discretionary spending and increased competition. This was offset by improved operations in Indonesia and Myanmar. Bottom line was further weighed by a 6.6% broad-based rise in total expenses to $109.5m. NAV/share of $0.35

*KOP: 3QFY15 swung to a net profit of $40m from a net loss last year, essentially due to a gain of disposal of junior notes of $43m. Revenue increased 21.5% to $5.6m, from increased contribution from the entertainment and hospitality segments. Gross margin decreased 8ppt to 46% due to a one-off billing that contributed to higher margins last year. NAV/share at 12.79¢

*Keppel Land: Purchasing a nine-storey free-hold office building in London at 75 King William Street for ~$186m from Aberdeen Property Trust. The building, with a total internal area of 130,000 sf, is almost 100% occupied.

*Dyna-mac: Secured $60m topside module fabrication works from Armada Cabaca, an affiliate of Bumi Armada. Work scope includes detailed engineering and fabrication of 6 units of topside modules for an FPSO vessel which will be deployed in the deep water offshore of Angola. Delivery is expected in 1Q16.

*Geo Energy: Geo Energy: Inked cooperation agreement with China Nuclear Industry 22nd Construction Co on a non-exclusive basis, for the construction, management and operation of two coal-fired power stations in Indonesia.

*Falcon Energy/ CH Offshore: Falcon Energy is revising its offer price for CH Offshore from $0.495 to $0.55 per share, and the closing date of the offer has been extended to 5.30pm, 27 Feb. Falcon has also obtained irrevocable undertakings from Chuan Hup and Mr Peh Kwee Chim to accept the offer, representing ~31.52% of outstanding shares, no later than 16 Feb ’15.

*Chuan Hup Holdings: Gave undertaking to dispose its 24.67% stake in CH Offshore at $0.55/share, through the voluntary conditional cash offer by Falcon Energy. Aggregate consideration from the offer is $95.7m, with an expected gain of US$18m ($24.2m).

*Starburst: Awarded contracts totalling ~$2.5m, where the company will undertake ballistic protection works for a project located in the Middle East. Completion is expected in Sep ’15.

*Biosensors: Biosensors: Completed patient enrollment in the LEADERS Free Japan clinical trial for its BioFreedom polymer and carrier-free drug-coated stent.

*Blumont: To proceed with acquisition of Genesis Resources despite termination of placement agreement, subject to shareholders' approval.

*Technics: Entered non-binding term sheet to dispose