SG Market (29 May 15)

Singapore shares are looking to open lower following the choppy session on Wall Street, which ended slightly lower as investors grapple with comments over Greece and the selloff in Chinese shares.

Regional bourses are trading mixed this morning in Tokyo (-0.04%), Seoul (+0.3%) and Sydney (+1.1%).

From a chart perspective, technical resistance is tipped at 3,460, with underlying support at 3,360 (200-dma).

Stocks to watch:
*GLP: Proposed to syndicate its stake in GLP US Income Partners 1 for US$1.47b (1x P/B), reducing its stake from 55% to 10%. The fund comprises 115m sf of logistics properties across US, with an occupancy rate of 92%. The stake will be taken up by three investors, of which two are leading global institutional investors from Asia and one from US. Upon completion, GLP expects to book a divestment gain equivalent to the net income earned from Dec’14 to the completion date, expected in 2QFYMar16.

*IHH Healthcare: 1Q15 in line, net profit rose 8% y/y (-6% q/q) to RM171.5m, as revenue climbed 14% (+3% q/q) to RM2b, buoyed by organic growth of existing operations and the commencement of operations of Acibadem Atakent Hospital (Jan ‘14) and Pantai Hospital Manjung (May ’14). EBITDA margin improved marginally to 25.3% (+0.3ppt y/y; -0.3ppt q/q). Bottom line was weighed by a 143% surge in finance cost due to FX translation loss on borrowings, partially offset by lower non-controlling interests (-69%).

*Falcon Energy: FY15 net profit crashed 62% to US$22.7m, while revenue slipped 2% to US$342.4m, dragged by all three divisions- marine (-0.5%), oilfield services (-2.7%) and oilfield projects (-8%). Gross margin more than halved to 15% (-18ppt) mainly due to reduced rates for third-party vessels and the absence of drilling services in the quarter. In addition, bottom line was weighed further by a one-off disposal loss of associate CH Offshore ($10.7m), higher admin expenses (+50%), finance costs (+42%) and lower share of associate profit (-50%), partially mitigated by a disposal gain of fixed assets. Maintained 1¢ final DPS, taking FY15 total to 1.5¢, similar to previous year.

*Resources Prima: 4QFY15 net profit swung to a net profit of US$5.2m (4QFY14: -US$3b), while revenue climbed 11.9% to US$18.4m, on a 45.5% increase in coal volumes to 1.6m MT, attributed to the continued development of its coal mine and completion of the all-weather road. Gross margin expanded to 30.1% (+24.1ppt y/y), despite the decrease of ASP, on improved economies of scale. This brought FY15 net loss to US$63.7m (FY14: -US$9.9m) and revenue to US$86.9m (+41%). BVPS at US$0.93.

*King Wan: Secured two mechanical and electrical contracts worth $20.7m, between the Mar to May period. The two projects comprise supply and installation works for a 6-storey light industrial factory in Yishun and sanitary, plumbing gas installation and minor sewer works for a public housing development in Sembawang. Projects are expected to be completed by 2015.

*Boustead Projects: Clinched its second project following its listing, with a $13m design-and-build contract for a central baking facility for a confectionary chain. The facility is located in Boon Lay and is expected to complete in 3Q16. Order book rose to $263m.

*TTJ: Secured new contracts worth $35m from repeat customers, for structural steel works at Jurong Island, as well as civil defence doors for the Thomson Line. This brings order book to $113m to date.

#Ascendas REIT: Proposed to divest BBR building at Changi South for $13.9m. Pro forma impact on FYMar15 net property income and DPU is expected to be $0.86m (-0.2%) and 0.03 cents respectively (-0.2%).

*Mermaid Maritime: 33.8% drilling associate, Asia Offshore Drilling (AOD), will reduce the day rates on three jackup rigs (AOD I, AOD II and AOD III) by 10%, currently contracted for drilling services to Saudi Aramco for operations in offshore Saudi Arabia. This reduces AOD’s backlog by US$20m.