SG Market (06 May 15)

Singapore stocks are expected to open lower, taking cue from the sell-off in Wall Street overnight, following a huge jump in the trade deficit, and a sell-off in global bonds on new concerns about Greece's debt crisis.

Regional bourses are trading lower this morning in Seoul (-0.9%) and Sydney (-1.8%), with Tokyo closed for Constitution Day.

From a chart perspective, technical support for the STI is seen at 3,445 (50-dma) with immediate resistance at 3,520

Stocks to watch:
*Economy: Jurong East picked as terminal station for planned high-speed rail linking Spore-KL, which dovetails with overall plans to transform the area into S’pore 2nd central business district. Project will not meet its original 2020 deadline but likely operational only by 2023 at earliest as actual construction would take 5 years, in addition to a year to carrying out tender process and another year to design the HSR link.

*Noble: 1Q15 results missed. Net profit fell 30% y/y to US$106.6m, which paled the same quarter last year due to the Polar Vortex in North America, which resulted in extraordinary energy demand. Overall revenue fell 7% to US$16.6b. In the energy segment, revenue was down 16% on sharp drop in prices of oil liquids and energy coal, although this was slightly offset by a 5% increase in mining & metal’s revenue. Overall tonnage rose 67.4% to 65.8m tons, while operating margin slipped 0.38ppt to 2.51%. Share of losses from JVs and associates widened 5.3x to US$71.6m due to weaknesses from Yancoal and Noble Agri. NAV/share of US$0.76.

*OSIM: 1Q15 results missed. Net profit fell 53.1% y/y to $13.5m, making up only 12% of full year consensus target, while revenue fell 13.2% to $149.8m, on softer sales due to absence of new major OSIM product launches. Operating EBITDA margin fell to 15.3% from 24.3%. Bottom line was squeezed as sales faltered but operating expenditure held steady. 1¢ interim DPS announced. NAV/share of $0.59.

*Eu Yan Sang: 3QFY15 net profit fell 38% to $5.4m, while revenue was flat, as lower revenue from Hong Kong/ Macau was cushioned by Malaysia, Australia and Singapore. Gross margin stood at 46.8% (-2.6ppt) on less favourable sales mix. Bottom-line was partially aided by $1.1m FX gains versus $68k from the previous year. NAV/share of $0.368

*PACC Offshore: 1Q15 results missed. Net profit crashed 99.9% to US$21k, largely due to the absence of gain of sale from five vessels (US$25.9m) from the previous year. Revenue rose 9% to US$57.6m, driven mainly by contributions from the OSV (+13%) and Offshore accommodation (+208%) segments. Overall gross margin crashed to 13.9% from 30%, as rates and utilisation continues to remain under pressure across most segments. Bottom-line was further weighed by a 59% decline in JV contributions to US$1.3m. NAV/share of US$0.67.

*Hafary: 3QFY15 net profit dropped 47% y/y to $1.1m, impacted mainly by inventory purchases and related expenses (+45%). Meanwhile, revenue surged 29% to $25.5m, driven by both its general (+15%) and project (+41%) segments, buoyed by a higher supply of tiles and building materials for several development projects. Interim DPS of 0.5¢ declared (3QFY14: nil). NAV/share of 9.7¢.

*mm2 Asia: FYMar15 net profit surged 85% to $5.1m, as revenue spiked 51% to $24.3m from an increased number of productions. Gross margin improved 7.5ppt to 39.1% on a change in sales mix, while bottom line was dragged by higher staff costs from a larger pool of senior management staff, as well as one time professional fees for its IPO in Dec ’14. NAV/share of $0.09.

*SGX: For the month of April, securities average daily trading value was $1.3b (+3% y/y, +11% m/m). There was 3 IPOs and 39 bond listings, raising more than $11.1b. Derivatives ADTV was up 87% y/y (+15% m/m) to 781,782 contracts. A new single-day record volume of 1.9m contracts was made on 28 Apr.

*Q&M Dental: Exploring a possible spin-off of its China and Malaysian subsidiaries, via a listing on a reputable stock exchange. The company has hired professional parties to explore the proposed listing.

*Sinarmas Land: Subsidiary PT Puradelta Lestari has obtained preliminary approval for an IPO on the Indonesia Stock Exchange, which will see the subsidiary offering up to 10.8b new shares.

*Sino Grandness: Garden Fresh juices have been sold in multiple 7-Eleven stores in HK since April, and is aiming for Thai export market next.

*Sino Construction: To undertake additional construction at Micro Power Plant One in Pohang, South Korea, its JV project with Primeforth Renewable Energy, subject to final certification.