SG Market (14 Apr 15)

Investors could remain cautious in today’s trading, ahead of the first quarter earnings season which kicks off tomorrow (15 Apr). Latching on the recent trend, small-mid cap stocks could continue to remain in favour.

Expect continued positive spill-over from the outperformance in Hong Kong, which continued to make new highs since 2007.

Regional bourses are trading mixed this morning, in Seoul (+0.3%), Tokyo (flat) and Sydney (-0.2%).

From a chart perspective, the STI may continue its positive momentum to test the 3,500 levels, with downside support at around the 3,420 levels.

Stocks to watch:
*SPH REIT: 2QFY15 DPU inched 0.7% higher to 1.4¢, while distributable income increased 4% to $36.3m. Gross revenue increased 2.8% to $52.5m, while NPI climbed 3.7% to $40.3m, on the back higher rental income from both Paragon and The Clementi Mall. Both malls are fully occupied, with WALE by NLA of 2.2 years. Aggregate leverage at 26%, weighted average debt to maturity is 3.5 years. BVPS of $0.93

*Keppel REIT: 1Q15 results fell short. DPU dropped 13.7% y/y (+12.6% q/q) to 1.70¢. Property income fell 9.4% to $42.4m y/y, while NPI fell 12.4% to $34.6m due to absence of income from Prudential Tower, partially offset by higher contributions from OFC, Bugis Junction Towers. Portfolio occupancy stood at 99.3% with WALE of 6 years. Aggregate leverage high at 42.4%, with weighted debt to maturity of 3.4 years and 65% fixed debt. BVPS of $1.39

*M1: 1Q15 net profit in line, increasing 6.6% y/y to $45.7m, while operating revenue rose 22.8% to $294.8m, propped up by handset sales, while service revenue stayed relatively flat at $204.4m. Postpaid ARPU was flat at $62, while data plan ARPU fell 10.3% to $17.5, diluted by bundling with fixed services. Data usage increased from 2.8GB to 3.2GB. BVPS of 48.2¢

*Soilbuild Business Space REIT: 1Q15 DPU gained 4.5% y/y to 1.633¢, while distributable income climbed 5.7% to $13.3m. Gross revenue and NPI improved to $18.6m (+10.5%) and $15.8m (+11.3%), respectively, from additional rental income from KTL Offshore, Speedy-Tech and Tellus Marine. Portfolio occupancy was full. Aggregate leverage stood at 38.5%. BVPS of $0.80.

*Lian Beng: 9MFY15 net profit increased 5.7% to $53.9m, while revenue grew 6.3% to $569.9m, from increased construction revenue, following the decrease in property development revenue after the complement of M-Space last year. Gross margin slipped 9.3ppt to 10%. The slump in bottom line was mitigated by contributions of shares of associates and JVs profits from the disposal of 112 Middle Road and profit recognition from Newest, KAP Residences, and The Midtown. BVPS of 80.61¢

*Tat Hong: Subsidiary Tat Hong Plant Hire Sdn Bhd is selling its property in Shah Alam, Selangor, to Hiro Food Packages Manufacturing for RM17.5m. The property comprises freehold land or 8,166 sqm with ancillary two-storey detached industrial building, as the subsidiary has moved to Kulaijaya, Johor. The sale should net a gain of RM11.5m.

*Fraser Centrepoint Trust: Additional 100 units of North Park residences was sold, bringing total sold since soft launch to 413 units, or nearly 70% o the 600 units released.

*GLP: Acquired attractively-located land parcel in Cajamar, Sao Paulo, which will be developed into a logistics facility with 76,000 sqm of space upon completion in Mar 2016

*Sino Construction: Disclosed four private individual investors took up the recent share placement at $0.0248/share, comprising three Malaysians (Lim Swee Yean, Lee Bu Hua and Wong Meng Choo) and one Singaporean, Levin Lee Keng. Net proceeds of $6.4m would be intended to provide immediate funding for the rollout of micro power plants in South Korea, as well as to shore up balance sheet.

*Asiasons Capital: Emphasis of matter by independent auditors, Moore Stephens LLP, citing group’s ability to continue as a going concern due to its current state of non-profitability and mounting short-term borrowings.

*OKP Holdings: Awarded $20.4m contract for public infrastructure construction at Tuas South Avenue from JTC Corporation. Works include the construction of roads, drains, sewers and soil improvement, with expected completion in Jan 2017. This brings order book to $317.2m.

*PEC: Awarded $176m contract to provide engineering, procurement and construction works for a new state-of-the-art oil storage terminal in Fujairah, UAE. The project is expected to be completed by Mar ’17.

*Great Eastern: Sold 8.22% stake in China Life Insurance H-shares for HK$4.305b (~$762.8m) at HK$50.65/share via private placement. Proceeds will be used for portfolio reallocation.

*Yuuzoo: Signs exclusive partnership to create online social e-commerce network for “Dreams Overseas”, a Chinese integrated service provider for overseas education, properties, investments and immigration.

*Civmec: Enters due diligence phase for the acquisition of PT Global Industries, which has 21 ha of waterfront land with deep-water access in Batam, Indonesia to be developed. In addition, it also secured a long-term collaboration agreement with Technip, a world leader in project management, engineering and construction in the energy sector.