SG Market (15 May 15)

Singapore shares are expected to open higher today, following the positive close in Wall Street, as strong gains in tech companies and a weakened USD propelled the S&P 500 to a new all-time high.

Regional bourses are trading higher this morning in Tokyo (+0.8%), Seoul (+0.3%) and Sydney (+0.4%).

From a chart perspective, support is tipped at around the 50-dma of 3,450 with resistance seen at 3,520.

Stocks to watch:
*Olam: 1Q15 results missed estimates, with net profit down 92% y/y to $31.3m mainly weighed by absence of a revaluation gain and asset sale and leaseback in 1Q14 ($293.9m), and an exceptional loss from its bond buyback ($97.2m). Otherwise, group's core net profit improved 25.7% to $128.5m. Revenue dropped 10.7% to $4.3b as sales volume slumped 33.2% from reduced sales volume of lower margin or discontinued businesses, but partly offset by higher prices of almonds, pepper and hazelnuts. EBITDA margin inched up to 7.6% from 6.9%, as all business segments except the food staples and packaged goods achieved higher EBITDA. Net gearing lowered to 1.85x (4Q14: 1.83x). NAV/share at $1.666.

*Genting Singapore: 1Q15 badly missed.Net profit crashed 73% to $62.7m, while adjusted EBITDA fell 43% to $228.1m. Revenue slumped 23% to $639.2m. Gaming revenue fell 26% to $494.9m, held up by mass market volumes (1Q15 mkt share: 41%, 1Q14: 45%). VIP segment was weak from a steep fall in China VIP players, lower average spend and lower win rate of 2.5% (1Q14: 3%). Non-gaming revenue fell 8% to $156.4m on lower RevPAR and lower average spend at attractions. EBITDA margin fell to 35.7% from 48.3%, as a result of weak hold rates and Chinese VIP plays. Bottom-line weighed by FX losses on financial instruments of $118.0m (1Q14: $15.0m gain) but offset by other operating income of $135.0m (+546%). NAV/share at $0.614.

*SIA: FY15 results in line. Net profit jumped 46.7% to $39.6m taking FY15 net profit to $367.9m (+2.3%). Excluding tiger airways which became a subsidiary on Oct '14, full year revenue was down marginally to $15.2b (-0.2%). Passenger revenue rose 0.9%, as group passenger carriage and yields saw slight improvement. Cargo revenue fell 0.9%, notwithstanding a higher load factor (+0.8% points) and yield (+0.3%), due to capacity reduction (-2.4%). Engineering services revenue declined with reduced overhaul activities, and lower incidental revenue recorded. Overall operating margin rose to 2.6% from 1.7%, aided by a 2.1% drop in fuel costs and 1.9% decline in other operating expenses. Bottom-line weighed by impairments of $14.3m (FY14: $1.9m gain), associate losses of $129.1m (FY14: $45.2m) and lower JV contributions of $52m (-44.7%). Final DPS of 17¢ declared, taking FY15 payout to 22¢ (FY14: 46¢). NAV/share at $10.66.

*NOL: 1Q15 results below estimates. Net loss narrowed 71% to $36.2m, while revenue fell 16% to US$1.58b, on a 15% slump in volume on planned capacity cuts and US West Port congestion, and lower average freight rates (-8%). Logistics division has been discontinued post divestment. Gross margin advanced 7.6ppt to 8.6% on lower bunker costs and increased operational efficiencies. Nevertheless, this was partially offset by a reduction in other gains (-64%), increased finance expenses (+30%), and other operating expenses of $26.7m (1Q14: US$3.1m gain). NAV/share at US$0.66.

*Thai Beverage: 1Q15 net profit rose 10% to THB6.58b on revenue of THB45.7b (+11%). Top-line led by an increase in sales revenue of spirits business (+9.9%), beer business (+17.5%), non-alcoholic beverages business (+7.9%) and food business (+8.2%). Gross margin was flat at 30%. Bottom-line weighed by higher selling (+15%) and admin (+14%) expenses and lower other income (-30%), but partially offset by higher FX gains of THB57.9m (+818%). NAV/share at THB4.22.

*CWT: 1Q15 results below estimates. Net profit fell 16% to $29.2m, while revenue declined 59% to $1.9m due to lower naphtha trading volume and a significant drop in commodity prices. Bottom line slump was mitigated by gross margin that improved 2.6ppt to 4.5%, and a $4.7m gain on sale of REIT units, partially offset by a $4.9m write-off on intangible assets/ goodwill and other foreign assets. NAV/share at $1.338

*Midas: 1Q15 results below estimates. Net profit fell 5.3% to Rmb10.9m on revenue of Rmb320.6m (+8%). Topline was largely led by higher revenue from the Aluminium Alloy Extruded Products Division (+7.8%), which contributed to 90.1% of total revenue, and was also key in improving overall gross margin to 28.8% from 24.0%. Bottom-line weighed by higher selling and distribution expenses (+20.1%), admin expenses (+20.2%) and finance costs (+53.2%). Associate contributions from Nanjin SR Puzhen Ralway fell 27.6% due to different project mix in the respective periods. NAV/share at Rmb2.49.

*Silverlake: 3QFY15 results in line. Net profit increased 22% to RM76.2m, while revenue climbed 5% to RM143.3m, driven by a 38% increase in maintenance and enhancement revenue following the completion of GST enhancement projects, and increased software licensing sales, offset by weakness in software project services. Gross margin expanded 10ppt to 68% on better product mix. Other income soared to RM5m, from RM0.3m a year earlier, in part driven by FX gains. However, bottom line growth was partially negated by an 87% swell in admin expenses to RM17.2m. Third interim DPS of 1.1¢ declared (3QFY14: 1¢). 1-for-5 bonus issue announced. NAV/share of RM0.281.

*Hyflux: 1Q15 net profit crashed 85% to $5.6m, while revenue fell 32% to $60.4m, mainly from lower engineering, procurement and construction activities. Gross margin improved 6.2ppt to 65.5%. The bottom line slump came from a slump in other income (-53% to $27.0m), which included a $15.8m gain from disposal of a leasehold building, versus a $54.1m gain from sale of financial asset last year. Associate and JV losses also doubled to $7.9m. NAV/share at $0.557.

*Haw Par: 1Q15 net profit increased 10.6% to $13.5m, while revenue increased 18.6% to $45.6m, from increased healthcare sales (+29%) in key markets. This was offset by leisure segment (-28.5%) on lower visitations at Underwater World Singapore and Pattaya. Property segment revenue fell 7.6 on lower occupancy rates. Bottom line boosted by gross margin expansion of 0.6ppt to 60.5%, but partially offset by share of associate’s profits which tanked 90% to $0.2m. NAV/share at $12.63

*Otto Marine: 1Q15 net loss narrowed 8% to US$13.2m, despite a 92% surge in revenue to US$148.1m, mainly from a vessel sale, partially offset by lower utilisation and rates for its chartering operations. Bottom