SG Market (28 Apr 15)

Singapore shares are likely to face a muted opening following the pullback on Wall Street, as investors were unwilling to make big bets ahead of the US FOMC meeting this week.

Regional bourses are trading mixed this morning in Tokyo (+0.6%), Seoul (-0.2%) and Sydney (flat).

Technically, immediate support/resistance levels for the STI are at 3,485 (20-dma) and 3,550 respectively.

Stocks to watch:
*Sembcorp Marine: 1Q15 profit fell 13.6% y/y to $105.9m, well below forecasts, while revenue dipped 2.4% to $1.3b, largely due to a decline from the rigbuilding (-5.4% to $753m) and repair (-36.5% to $431.1m) segments, offset partially by higher sales recognition for offshore and conversion projects (+19.2% to $431.1m). Operating margin narrowed 0.5% to 10.6%, hit by a FX loss, and bottom line was further squeezed by a sharp spike in interest expense. Ytd, only $56m worth of contracts was secured. Net orderbook shrank to $10.6b from $12.9b in 1Q14. Management issued a bleak outlook with poor prospects for new rig orders and charters. NAV/share of $1.487.

*Hutchinson Port Holdings: 1Q15 results below estimates. Net profit fell 48.9% to HK$285.8m, while revenue was flat y/y at HK$2.95b. Throughput at HIT was flattish, while throughput at Yantian grew 10%, from growth in US, transhipment and empty cargoes. Average revenue per TEU for HK increased from tariff increment but was partially offset by adverse throughput mix from liners, while in China, average revenue/TEU was lower than last year due to higher empty container ratio. Bottom line was dragged by the absence of net gain of HK$243m from the disposal of 60% effective stake in ACT in 2014. NAV/unit of HK$4.90

*China Sunsine: 1Q15 net profit more than doubled to $47.4m, despite just a 1% increase in revenue to Rmb432.1m, as bottom-line was aided by a 12.5ppt jump in gross margin to 31.7%, due mainly to the decrease in the cost of raw materials, in particular, Aniline, the main raw material for accelerators. Top-line was led by a 6% rise in sales volume to 25,377 tons, but offset by a 5% decrease in average selling price to Rmb17,009 per ton. NAV/unit of Rmb2.27.

*QAF: 1Q15 net profit inched higher by 3% to $13.1m, while revenue climbed 6% to $256.4m, driven by increases in all segments, i.e. bakery (from new products), meat production (increased volume) and trading and logistics from higher exports. Total expenses grew in tandem with top line. Bottom line was partly weighed by increased tax expenses of 19% to $3.4m. NAV/share at $0.76.

*DBS: Loans growth for FY15 is expected to come in at 6%, with CEO Piyush Gupta highlighting that China’s trade contraction is moderating, adding that NIMs should rise by a few basis points in 2Q, as the bank sees the full impact from the recent rise in Sibor.

*CSE Global: Secured new contracts worth US$33.8m in the Americas region during 1Q15, which involves projects ranging from instrumentation and electrical design, fabrication and construction, engineering and integration of subsea control systems, etc. These projects are expected to contribute positively to the group’s financial performance in FY15.

*Yangzijiang: Proposing to submit an applocagtion to delist its Taiwan Depository Receipts on the Taiwan Stock Exchange.

*Yuuzoo: Expects to earn $33.4m in profits from the sale of licenses o new franchisees, following a through valuation by a big 4 audit firm. The new franchisees are committed to register a combined minimum of 5.7m new users within 12 months from launch, and 40m users within 36 months from launch.