SG Market (07 May 15)

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:
*OUE Commercial REIT: 1Q15 DPU of 1.44¢ was ahead of IPO forecasts of 1.40¢. Gross revenue beat IPO forecasts by 7% at $20.4m, while NPI at $15.7m was 12.1% ahead, led by higher occupancy and rental rates achieved in Lippo Plaza, while operating expenses fell mainly due to lower utilities and maintenance costs incurred, as a result of a switch to bulk purchase of electricity for OUE Bayfront from Jul '14. Overall portfolio occupancy improved to 98.6% from 98% the previous quarter, while leverage ratio stood at 38.6% with average cost of debt of 2.88% and tenor of 2.68 years. NAV/unit of $1.10.

*CitySpring Infrastructure Trust: 4QFY15 DPU was maintained at 0.82¢, taking FY15 payout to an unchanged 3.28¢. 4Q15 net profit came in at $9.0m versus a net loss of $4.4m the previous year. Gross revenue for the quarter fell 10% to $121.5m, due mainly to lower town gas tariff resulting from lower fuel costs. Total expenses fell 16.2% to $112.0m, as a result of lower fuel and electricity (-36.7%) and depreciation and amortization costs (-27.9%). Bottom-line was aided by an 86.3% decline in tax expenses to $0.7m. NAV/unit of $0.123.

*CH Offshore: 3QFY15 net profit fell 35.1% to US$3.8m, while revenue fell 13.1% to US$7.8m as two vessels were scheduled for their major overhaul. Gross margin before direct depreciation fell 1.2ppt to 82.9%. Bottom line slump was accelerated by admin expenses (+47.9% to US$1.3m) as a result of higher fees from the cash offer by Energian and an on-going legal case, and reduced share of associates profits (-49.9% to US$0.5m). Special DPS of 9¢ announced. NAV/share of US$0.330.

*ARA Asset Management: 1Q15 net profit climbed 6% y/y to $19.0m, while revenue inched down 1% to $37.7m, as increases in management fees (+1%) and acquisition, divestment and performance fees (+106%) were offset by reduced finance income (-64%). Bottom line was boosted by a share of associate’s profits that grew 4x to $3.2m, from the favorable performance from Am ARA REIT managers and Hui Xian Asset Management. NAV/share of $0.431.

*Petra Foods: 1Q15 results missed estimates, as net profit tumbled 43% y/y to US$7.7m, while revenue dropped 14% to US$106.2m, weighed by poor consumer off-take in Indonesia, which caused trade customers to reduce inventory levels. Gross margin slipped 1.6ppt to 30.3% due to higher costs of raw and packaging materials from a weaker Rupiah. Bottom line was further weighed by finance costs (+71%).

*LCD Global Investments: 3QFY15 net loss narrowed to $2.4m from $12.4m the previous year on revenue of $13.9m (-8%). The drop in revenue was largely due to a drop in hotel revenue, due to the closure of some rooms for refurbishment works in London which commenced in Jan '15, and a drop in average room rate in its Phuket hotel. Gross margin inched down 2.2ppt to 46.5%. Bottom-line was buoyed by FX gains of $1.4m, as well as an 82% decline in other operating expenses of $2.0m, due to a write off of certain capitalized costs from the previous year. NAV/share of $0.27.

*Federal: 1Q15 net profit soared 449.1% to $16m, while revenue jumped 160.9% to $57.5m, on improved contributions from the Trading business. Bottom line boost also came from gross margin expansion of 17.6ppt to 39.8%. Other income fell to $1.1m from the absence of a $3.6m gain from disposal of assets held-for-sale last year. NAV/share of 5.4¢

*M1: Spent $10.3m for a 15% stake in Integrated Telecommunications Oman SAOC (TeO), the Sultanate of Oman’s first private international gateway operator and a mobile services reseller.

*Viva Industrial Trust: Committing $20m to reposition Technopark@Chai Chee as a business park with retail and lifestyle amenities. Retail offerings could open doors as early as end 2015.

*TEE Int’l: Awarded $130m of contracts. The first is by FCL, for addition and alteration works to Centrepoint Shopping Centre in Orchard. The second is for engineering works for Fraser Tower, a 38-storey Premium Grade A office tower on Cecil Street.

*TEE Land: Awarded contract worth RM266.8m, for the execution and completion of building works for TEE Resources development project in Cyberjaya.

*Oxley: Entered JV with PT Karya Indo Batam (KIB) to construct, manage and operate a multi-storey mixed development in Batam. KIB will contribute the property, while Oxley will fund the construction, up to $21m, as well as an advance payment to KIB of $5m.

*Ramba: Second proposed private placement of new shares in a week, this time to two placees- Yeung Sau Shing Albert, chairman of Emperor Group (5m shares) and Harry Wangidjaja (4m shares), at $0.32/share. Net proceeds of $2.8m earmarked for Ramba's oil and gas work programme and working capital.

*Otto Marine: Two parties have commenced arbitration proceedings against Otto Marine for losses of ~US$8.9m, caused by an alleged breach of conditions by Otto for its refusal to co-operate fully in securing requisite financing for two vessels. Group intends to defend itself against the claim and seek further advice on counter-claims.

*Hiap Seng: 87% owned subsidiary awarded two contracts worth ~US$11m for the provision of offshore gas compressor packages. Completion is expected by Mar ’16.

*Singapore Windsor: Secured lease agreement with Ooredoo Myanmar to construct and install at least 500 telecommunications tower units in Myanmar, which will subsequently be leased and managed for Ooredoo over a 15 year term. Construction cost is estimated at US$39m, and works are expected to start in Jul '15 for an 18 month period.

*Profit warnings:
- Blumont: Expects net losses for 1Q15 due to fair value adjustments of its investments in financial assets.
- Global Palm Resources: Expects substantially lower