SG Market (12 May 15)

Singapore shares are in for a lacklustre opening after Wall Street ended lower on profit-taking as renewed bond selloff and missed Greek deal put investors on edge.

Regional bourses are mixed this morning in Tokyo (-0.3%), Seoul (+0.1%) and Sydney (+0.3%).

From a chart perspective, the STI has scaled back above the 3,445 support, and with Stochastics and RSI about to reverse from oversold levels, the index is likely to move towards next resistance capped at 3,520, with underlying support at 3,360.

Stocks to watch:
*Cordlife: 3QFY15 result in line, with net profit advancing more than 12x to $18.4m, largely buoyed by fair value and FX gains, barring which, core profit before income tax was at $2.2m (-7%). Revenue for the quarter was up 20.9% to $14.3m, mainly due to an increase in the number of client deliveries to 5,400 from 4,100 versus the previous year, as a result of increased marketing and client acquisition efforts. Gross margin fell to 68.6% from 74% due to an increase in revenue contribution from operations with lower margins. Bottom-line was aided by fair value gains from financial assets of $7.6m and derivatives of $3.7m, alongside FX gains of $4.6m. NAV/share of $0.554.

*Bumitama Agri: 1Q15 results below estimates. Net profit tumbled 41% y/y to Rp181.6b, as revenue dropped 1.7% to Rp1,333.9b, mainly from lower average selling price of crude palm oil (-11.5%) and palm kernel (-12.5%), which offset their higher sales volumes of 10.8% and 14.8% to 152,940mt and 29,666mt, respectively. Bottom line was dragged by higher finance cost (+174%), FX loss of Rp31.6b compared to 1Q14 gain of Rp31.9b, absence of other income and associate losses of Rp43.0b (1Q14: contributions of Rp1.3b), partially offset by higher interest income (+452%). NAV/share of Rp4,121.

*Asian Pay Television Trust: Declared 1Q15 DPU of 2¢ and reaffirmed distribution guidance of at least 8.25¢/unit for FY15. 1Q15 revenue improved 6.6% y/y to $82.3m (+0.6% q/q), underpinned by basic cable TV (+6.8%), premium digital cable TV (+8.1%) and broadband segment (+5.0%). But bottom line slipped into losses of $5.6m, weighed by higher operating expenses (+29.1%) which resulted from mark to market losses due to FX rate movements of the NT$ and one-time debt advisory fee, spike in amortization of deferred arrangement fees and higher interest and other finance costs (+33.2%), partially mitigated by absence of FX loss (1Q14: -$4.3m) and lower depreciation and amortisation expenses. Excluding depreciation, EBITDA margin narrowed 2ppts to 59.1% (-0.6ppt q/q). Aggregate leverage rose 0.8ppt q/q to 44%. NAV/unit of $0.90.

*CSE Global: 1Q15 results in line. Net profit inched up 0.9% to $7.6m on revenue of $105.5m (+13.2%). Top-line was driven mainly by higher revenues achieved in the Americas and EMEA regions. Gross margin improved moderately to 28.5% from 27.5%, led by higher recognition of offshore process control systems. Bottom-line was weighed by a 9% rise in admin expenses and 20.5% rise in selling and distribution costs. The group secured $103.1m of orders during the quarter, taking its order book to $252.5m. NAV/share of $0.442.

*Wheelock: 1Q15 net profit fell 14% to $12.3m, while revenue soared 292.5% to $99.3m, mainly from progressive recognition from the Panorama, partially offset by lower rental income from Scotts Square retail. Gross margin was 19.6% (1Q14: 72.2%), as the rise in cost of sales was in line with the increase in revenue for property development. Overall increase in expenses was offset by increase in other income and associate contributions. NAV/share of $2.66.

*Gallant Venture: 1Q15 net loss doubled to $10.4m, although revenue increased 10% due to higher passenger car sales and spare parts sales. Gross margin improvement of 0.3ppt into 13.3% and an 18% rise in other income of $26.2m, was not enough to mitigate the bottom slump which was caused by higher other operating expenses of $26.2m (+18%), finance costs of $31.4m (+20%) and FX losses of $2.9m versus gains of $2.1m the previous year. NAV/share of $0.413

*Charisma Energy: 1Q15 net profit jumped almost 16x to US$2.4m on an almost 9x increase in revenue to US$5.6m. Top-line was led by the commencement of lease income from the leasing of hydro-electric power generation equipment in 3Q14 and the commencement of charter income from the deployment of one offshore support vessel in 4Q14 and three offshore support vessels in 1Q15. NAV/share of US0.60¢.

*Chuan Hup: 3QFY15 net profit soared to US$20.1m (3QFY14: $2.3m), boosted by a US$21m gain on disposal of interest in associate CH Offshore. Revenue increased 18.6% to US$49m, driven by an increase from electronic manufacturing services revenue. Bottom line surge partially mitigated by increased employee benefit expense and fall in share of associate’s income from the divestment of CH Offshore. NAV/share of US$0.314.

*Tigerair: In April, Singapore ops recorded a 6.4% y/y fall in traffic, while capacity fell 6.0%. Consequently, passenger load factor fell 0.3ppt to 82.5%.

*Manufacturing Integration Technology: Bangs another 2 solar contracts worth Rmb97m to design and supply 2 lines of equipment for making building integrated photovoltaics (BIPV) to a customer in China. Completion of these contracts are expected by end-2015.