SG Market (12 Feb 15)

Singapore shares are likely to open flat, taking cue from the muted close in Wall Street, as investors remained jittery over Greece’s future weighing on markets.

Asian markets are flat-lined this morning, with Sydney up 0.1% and Seoul down 0.5%. Tokyo is up 1.7% after its holiday close yesterday.

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

Stocks to watch:
*SingTel: 3Q14 results ahead of estimates, with a 11% rise in net profit y/y to $969.8m, boosted by higher contribution from associates (+24%), led by Indonesia's Telkomsel and India's Airtel, attributed to robust mobile data take-up. Revenue gained 3.8% to $4.4b, underpinned by continued momentum in Australia (+7%) through robust customer gains and higher ARPU, as well as higher equipment sales and TV revenues in Singapore (+7%), but partially offset by a weaker Australian Dollar and operating losses from digital investments. NAV/share at $1.49.

*ComfortDelgro: 4Q14 results in-line. Net profit grew 6.3% y/y to $63.7m, bringing full year net profit to $283.5m (+7.7%). Revenue for the full year was up 8.1% to $4.1b with increases from all segments, while positive FX translation also boosted top line. Bus business expanded 10.4% to $2.1b, boosted by Singapore and UK ops, offset by Australian ops. Taxi business grew 7.2% to $1.3b, with increases in all countries except the Australian ops. Rail business rose 19.5% to $196.8m from higher ridership and fares. Operating margin inched down 0.4ppt to 10.9%. Final DPS of 4.5¢ declared (FY13: 4¢). NAV/share at $1.02.

*Nam Cheong: 4Q14 results below estimates. Net profit tumbled 42% y/y to RM41.1m, taking FY14 net profit to RM301.8m (+47%). Revenue improved 29% to RM523.9m, led by shipbuilding (+32%) from progressive recognition of PSVs sold, while vessel chartering segment fell 18% due to the disposal of a vessel. Despite a FX gain (RM8.7m), bottom-line was dragged by lower gross margin (-5ppt to 14.6%) and fair value loss on derivatives (RM16.3m), partially offset by lower finance costs (-66%). NAV/share at RM0.582.

*Silverlake Axis: 2QFY15 results in-line. Net profit grew 18% y/y to RM71.6m, though revenue slipped 1% to RM124.1m as the growth in maintenance and enhancement works were offset by reductions in all other segments. Gross margin improved 4ppt to 66% on a more favourable revenue mix. Other income rose more than 146x to RM4.9m, led by FX gains on the appreciation of the SGD and USD bank balances and receivables. Interim DPS of 1.1¢.

*Wing Tai: 2QFY15 net profit slumped 85% to $7.3m, bringing 1HFY15 net profit to $31.5m (-57%). 1HFY15 revenue fell 39% to $286.7m, with top line contributions mainly coming from the progressive sales recognized from The Tembusu, additional units sold in Helios Residences, as well as that from the LakeView in China. Gross margin was maintained at 42.0%, while bottom-line was partly aided by a 56% rise in associate and JV contributions. NAV/share at $3.88.

*Sim Lian: 2QFY15 net profit fell 65% to $25.5m, in tandem with a 56% drop in revenue to $91.4m. Topline was weighed by a 83.3% decline in revenue from the property development division at $26.3m, as a result of reduced revenue contributions from several projects which were accounted for on percentage of contribution method, partially offset by higher contributions from the construction division at $54.0m (+28.4%). NAV/share at $1.02.

*IPS Securex: 1HFY15 net profit surged 285.9% to $0.9m on revenue of $5.8m (+52.0%). Top-line was led by higher contributions from both the group's security solutions business (+61.9%) and the maintenance and leasing business segment (+39.5%). Gross margin improved 2.6ppt to 49.6%, with both its key business divisions securing higher margins. Bottom-line was partly weighed by a 23% rise in admin expenses to $2.1m. DPS of 0.75c declared.

*Marco Polo Marine: 1QFY15 net profit soared 128% to $7.4m, though revenue slumped 12% to $26.6m due to the deconsolidation of BBR, lower utilization of tugboat and barge fleet amid weak demand for commodities, and the transitional deployment of an OSV to a new location. Gross margin fell 7.7ppt to 22.7% from lower chartering contributions. Bottom line was propped up by $2.9m gains on disposal of BBR and increased associate and JV's contributions at $1.0m (+153%). NAV/share at $0.514.

*Hour Glass: 3QFY15 net profit gained 7% to $14.8m on revenue of $186.5m (+4%). Gross margin was maintained at 23.6%, while associate contributions doubled to $1.5m. NAV/share at $0.54

*Swiber: Secured an engineering, procurement, construction, installation and commissioning contract worth US$310m from a national oil company in South Asia. Project is second largest contract in the group’s history and will start contributing to EPS in FY15. Current order book at record high of US$1.6b.

*Rowsley: Entered agreement to invest US$275m (mix of debt, equity, bank borrowings) for 50% stake in an integrated project in Myanmar consisting four office blocks, a five-star hotel, a retail mall, serviced apartments and residential apartments spreading over more than 73k sqm in a prime neighbourhood next to Inya Lake, Yangon.

*Keppel REIT: Issues $50m 3.15% notes due 2022 under its $1b MTN programme, unconditionally and irrevocably guaranteed by trustee.

*Keppel Land: Acquired 35% stake in a Chengdu Taixin to form strategic alliance with China Vanke (55% stake) to jointly develop a prime residential site in Chengdu to yield 6480 high-rise apartment units, 649 retail units and a kindergarten.

*China Kangda: Warns of significant decrease in net profit or a loss for FY14 due to impairment loss on goodwill and PPE write off.

*China Sunsine: Expecting substantial increase in net profit from higher average selling prices and sales volumes.