SG Market (06 Mar 15)

Singapore shares are likely to open slightly firmer, following the positive close on Wall Street, which gained momentum after the ECB announced the launch of its €1.1t bond-buying programme.

Regional bourses are mostly higher this morning in Tokyo (+0.3%) and Seoul (+0.3%) but weaker in Sydney (-0.6%).

From a chart perspective, the STI is expected to find some support near the the lower end of its 3,390-3,450 consolidation range

Stocks to watch:
*Dairy Farm: FY14 results in line. Underlying net profit grew 4% y/y to US$500m, while revenue increased 5% to US$11b, with growth from all divisions. Overall gross margin was flat at 29.9%, although bottom-line was partially weighed by a rise in selling and distribution expenses (+8.2%) and admin expenses (+5.5%). Final DPS of US16.5¢, bringing full year DPS to an unchanged US23¢.

*HongKongLand: FY14 results above estimates. Underlying net profit slipped 1% y/y to US$930m. Revenue inched up 1% to US$1.9b, as slight negative rental reversions for Central office was offset by significant improvement in occupancy. Vacancy improved q/q from 6.8% to 5.4%. Management guides for a stable commercial leasing market in FY15. Final DPS US$0.13 (+8%) bringing FY14 to US$0.19. NAV/share US$11.71

*Jardine: Mattheson’s (JM) underlying FY14 net profit up 2% y/y to $1.5b and Jardine Strategic (JS) was flat y/y at $1.6b. Strong earnings were led by Jardine Motors, but offset by weakness in Astra, which was dragged by weaker IDR and lower margins due to higher discounts. HK Land and Dairy Farm earnings were above expectations and in line respectively, led by higher office occupancy and bottom line growth across divisions respectively. JM owns 82.5% of JS, while JS owns 55.1% of JM.
JM pays final DPS of US$1.07 (FY14 US$1.45, +4% from FY13) and JS pays final DPS of US$0.19 (FY14 US$1.27, +6% from FY13). NAV/share: JM US$51.79, JS US$57.75

*United Envirotech: CKM (Cayman), the SPV owned by KKR and Citic, has made a formal offer to buy United Envirotech for $1.9b, or $1.65/ share. CKM does not intend to increase the offer price. The deal was previously announced in Nov ’14. Post transaction, CITIC will emerge as UENV’s single largest shareholder (~50.6% – 67.4%), and KKR will be the second largest (~23.8% - 36.2%). UENV’s listing status is expected to be retained.

*Sinarmas Land: The Business Times reported that the Indonesian developer is restarting talks of a potential US$300m IPO this year, of its industrial property arm, PT Puradelta Lestari, which is partly-owned by Japanese trading house Sojitz Corp.

*CNA: Won $3.1m contract from Shinwa Group to undertake the design and project management for 143 units of a new condominium to be developed in the Sukhumvit area of Bangkok. The project is expected to be completed Jul ’17 and is expected to have a material impact for its FY15 results.

*Yuuzoo: Will be delivering its first live event “Eye On Sydney” on its virtual shopping mall platform. Yuuzoo currently has access to over 85m registered users and 700m viewers across 164 countries.

*Mapletree Greater China Commercial Trust: Issued $100m 7-year 3.43% fixed rate notes due 2022, unconditionally and irrevocably guaranteed by DBS. The notes are rated Baa1 by Moody’s.

*Mandarin Oriental: Announced a 1-for-4 fully underwritten rights issue of up to 250.9m new shares at US$1.26 apiece, which will go Ex-Rights on 9 Mar. The fund raising is intended to reduce debt and boost working capital for the renovation of its flagship property in London, Mandarin Oriental Hyde Park. Substantial stakeholder, Jardine Strategic, has irrevocably undertaken to subscribe for its 74% entitlement and is also fully underwriting the balance not taken up.

*Pteris Global: Proposed to dispose 30% equity stake in Shenzhen CIMC-Tianda Airport Support for an indicative Rmb250.6m, which will net a one-off gain for the group of $21m ($0.065/share).

*EMAS Offshore: Established a US$500m multicurrency debt issuance programme, intended to be used for debt refinancing, capex and general working capital.

*Asia Fashion: To issue $2.7m worth of convertible bonds to Alternus Capital Holdings. The 2-year bonds will bear 7% interest and Alternus is able to make the conversion at $0.07/share, after the seventh month onwards.

*Asia Fashion: Proposed issuance of 7% unsecured convertible bonds due 2017 to Alternus Capital for an aggregate amount of $2.7m. The conversion price is set at $0.07 per share.

*China Flexible Package: Expects to report a net loss for 1Q15, weighed by a significant drop in sales of its high margin products.