SG Market (29 Jul 15)

From a chart perspective, the STI may attempt to close the small gap at 3,307-3,311 but momentum is still weak with the MACD exhibiting a bearish crossover.Downside risk is at the 2015 low of 3,250.

Stocks to watch:
*Keppel Infrastructure Trust (wef 2015): 1QFY16 (29 May '15 - 30 Jun '15) DPU of 0.25¢ declared following the merger of Keppel Infrastructure Trust (KIT) and CitySpring Infrastructure Trust. On the combined entity, revenue lowered by 14.2% to $114.4m, from 1) decreased town gas tariff and 2) higher negative commercial risk sharing mechanism payment and increased interest incurred by Basslink, but slightly offset by contributions from the KIT acquisition. Leverage reduced to 37% (-15ppt) from lower gearing of KIT assets and newly acquired Keppel Merlimau Cogen. NAV/unit at 36.3¢.

*Japfa: 2Q15 net profit slumped 86% y/y to US$3.0m, dragged mainly by a US$17m loss on fair value changes of biological assets (2Q14: US$5.6m). Otherwise, earnings would have tumbled 53.8%. Revenue was shaved 8% to US$704.3m, driven by weaker Indonesian operations in the animal protein and consumer food segments due to the continued decline in demand, partially compensated by an improvement from the other animal protein operations in Vietnam, Myanmar and India, as well as dairy operations in China. Operating margins fell 2.4ppt to 6.3% on increased costs despite weaker demand. NAV/share at US$0.37.

*CapitaLand Retail China Trust: 2Q15 results largely in line as DPU gained 5.4% y/y to 2.73¢ on higher distributable income of $22.9m (+7.9%), boosted by stronger RMB/SGD. In Rmb terms, gross revenue and NPI slipped 0.1% and 1.1% to Rmb249.6m and Rmb165.8m, respectively, despite a 4.6% rental reversion, due to lower contribution from 1) CapitaMall Minzhongleyuan- affected by road closure for the construction of a new subway line and 2) CapitaMall Wuhu- undergoing tenancy adjustments, partially offset by rental growth in other malls. Portfolio occupancy stood at 95% (-3.1ppt) with weighted average lease expiry of 8.7 years, while aggregate leverage lowered 0.9ppt q/q to 27.7% with an average debt cost of 2.98% and debt tenor of 2.8 years. NAV/unit stood at $1.70.

*AIMS AMP Industrial REIT: 1QFY16 DPU of 2.75¢ (+7.8% y/y, -5.8% q/q) slightly below estimates. Gross revenue rose 10.7% y/y (+0.7% q/q) to $30.3m, lifted by new contribution from 20 Gul Way Phases 2E and 3, as well as 103 Defu Land 10. NPI grew at a slower 3.7% y/y to $20.2m (-0.5% q/q), dragged by higher expenses from the reversion of two master-tenanted properties to multi-tenanted properties. Portfolio occupancy improved to 96.1% (+0.3ppt q/q), with WALE of 3.1 years. Aggregate leverage stood at 31.2% with an average debt cost of 4.2%. NAV/unit at $1.5224.

*iFast: 2Q15 net profit gained 24.6% y/y to $3.3m, as revenue grew 21.9% to $23.2m, boosted by the commencement of the distribution of bonds and ETFs, underpinned by a 14.7% increase in assets under administration to $5.71b (-0.7% q/q). The bottom line was boosted by a jump in net finance income, but partially mitigated by staff costs (+26.2%) on salary increments and higher rental rates at its HK office. Management updated that its proposed acquisition of stockbroker Winfield Securities is still awaiting regulatory approval. Interim DPS lowered to 0.68¢ (2Q14: 0.95¢).

*Lian Beng: 4QFY15 net profit jumped 49.6% to $54.2m, mainly boosted by higher fair value gain on investment properties of $52.4m (+40.6%), while revenue gained 20.6% to $177.1m. This brought FY15 earnings to $108m (+24%) and revenue to $747m (+9.4%). For the year, top line was largely driven by higher contributions from construction (+46.7% to $628.8m) and dormitory operations (+23.4% to $22.4m), but partially mitigated by property development (-99.2% to $1m) and ready-mixed concrete segment (-15.8% to $93.4m). Bottom line was further boosted by share of profits from associates and JV of $43.6m (FY14: $4.2m) due to a disposal gain. Declared first and final and special DPS of $0.02, bringing FY15 total to $0.03 ($0.0225).

*MTQ: 1QFY16 slipped into red with net loss of $2.3m (1QFY15: $4.1m), on lower revenue of $60m (-21.8% y/y) due to weak demand for oilfield engineering business across all segments. Gross margin fell 8ppt to 26%, while lower staff costs (-16.5%) from cost rationalisation efforts partially mitigated the negative bottom line.

*GLP: Acquiring a US$4.55b logistics portfolio in US from Industrial Income Trust, boosting GLP’s US footprint to 173m sf (+50%) and consolidates GLP's position as the second largest logistics property owner and operator in US. Deal pricing is based on a cap rate of 5.6% and GLP expects to subsequently pare down its stake from 100% to 10% by Apr '16, underpinned by strong demand from major institutional investors. The target 10% stake is expected to generate US$190m with the first year of investment, including fund management fees.

*DeClout: Unveiled PLAYe, a new 3-in-1 online-mobile-offline platform which is a digital personal assistant that displays the latest range of collectibles and gadgets.

*Global Yellow Pages: Profit warning for 1QFY16 and expects to report a loss owing to impairment of trademarks, as well as its investment in Yamada Green Resources.

*Asia Enterprises: Profit warning for 2Q15 with estimated net loss less than $1m, due to sluggish demand for steel products from key customer segments. In addition, steel prices