Singapore shares could tick up, taking lead from the positive close on Wall Street, as investors piled back into the beaten down energy plays.But sentiment remained largely muted as Singapore’s manufacturing activity contracted for the 4th straight month in Oct amid economic uncertainty.
However, Chinese President Xi Jinping's state visit to the Republic this Fri could bring some good tidings in the form of an expanded FTA and government-led projects, which might benefit certain manufacturers and GLCs.
Regional bourses are trading higher this morning in Tokyo (+1.6%), Sydney (+0.8%) and Seoul (+0.1%).
From a chart perspective, the STI may cross the psychological 3,000 resistance to test the 20-dma at 3,016 in the near term. Downside support is seen at 2,920.
Stocks to watch:
*CapitaLand: 3Q15 results in line, with net profit spiking 48.3% y/y to $192.7m, boosted mainly by FX, fair value gains and divestment of six Japanese properties. Excluding those, operating profit grew 26%. Revenue gained 17.1% to $1.1b from higher contributions from development projects in China and increased rental from shopping malls and serviced residence businesses, but partially offset by weaker development sales in Singapore and Vietnam. Bottom line was crimped by reduced associate/JV contributions and a jump in tax expenses (+35.6%). NAV/share at $4.14.
*Yangzijiang: 3Q15 results in line, with net profit of Rmb680.7m (-16% y/y) on revenue of Rmb4.1b (+10%). Topline was led by higher revenue from the shipbuilding (+9%), trading (+74.7%) and other business (+233%) segments. Gross margin fell 4.8ppt to 23.6%, largely weighed by the shipbuilding business. Bottom-line aided by a more than 3x jump in other gains to Rmb241.9m, due to recognition of compensation received from the Chinese government for the relocation of the former shipyard at Jiangyin, but partially offset by disposal and FX losses. YTD order wins at US$1.6b, with order book at US$4.8b. NAV/share at Rmb567.91.
*POSH: 3Q15 net profit beat expectations despite slipping 14.1% y/y to US$12.6m due largely to an absence of gain from vessel disposal (US$11.6m in 3Q14). Revenue grew 19.9% to US$80.4m on contributions from POSH Xanadu, and three new light construction vessels, offset by a weaker OSV (-11.5%) segment due to lower charter and utilisation rates. Gross margin slipped 3ppt to 22.9%. Bottom line supported by contributions from its JV (POSH Terasea) of US$0.9m (3Q14: -US$5.7m). NAV/share at US$0.67.
*Fortune REIT: 3Q15 results in line with expectations as DPU soared 12% y/y to HK11.54¢ in tandem with a higher distributable income of HK$217.8m (12.8%). Revenue and NPI rose to HK$470.5m (+12.9%) and HK$328.9m (+14.7%) respectively, underpinned by solid rental reversion and Laguna Plaza, which was acquired in Jan '15. Portfolio occupancy inched up 0.7ppt q/q to 98%, while aggregate leverage dipped 0.2ppt to 30.4% with average debt cost of 2.1% (+0.06ppt). NAV/unit at HK$12.43.
*Yeo Hiap Seng: 3Q15 net profit tripled y/y to $9.4m despite revenue sliding 4.6% to $109.5m. Gross margin expanded 2.7ppt to 40% on lower inventory write-offs. Bottom line was lifted by $2.5m savings from lower advertising and promotion expenses, as well as a $3.1m FX gain, but partially negated by higher admin expenses of $2.6m. NAV/share at $0.994.
*mm2Asia: 1HFY16 net profit expanded 30% to $4m, in line with a 31% increase in revenue to $12.7m, from the consolidation of a new subsidiary acquired during the year, and from existing core business. Gross margin improved 7.4ppt to 66.1%. Growth in bottom line was weighed by a surge in administrative costs. NAV/share at $0.11
*Asia Enterprise: 3Q15 swung to net loss of $0.7m (3Q14 net profit: $0.2m), while revenue slumped 43% to $7.5m, from lower volume and ASPs, as demand for steel products remained weak. Net cash position of 19.6¢ (share price: $0.21). NAV/share at $0.30.
*Capitaland: Ceased negotiations with BlackRock on the potential acquisition of Asia Square Tower 1.
*SGX: Setting up a new hub at CME Group's co-location facility in Illinois, Chicago.
*Suntec REIT: Issued $105m notes at 2.83% due 2018 under its US$1.5b MTN programme. Proceeds will be used to refinance its existing borrowings, acquisitions and/or other corporate purposes.
*Zagro Asia: Proposed a voluntary delisting, upon which two directors of the company will offer to acquire all remaining shares not within their 66.72% stake for $0.30, representing a 15.4% premium to the last closing price.
*Atlantic Navigation: Acquiring a new built-to-suit liftboat for US$56m, for the deployment in Middle-East. Expected delivery in Dec ‘15.
*Smartflex: Granted a patent in the Philippines, adding to a an existing portfolio of patents across major markets in EU, Myanmar and Mexico
*Profit warning
- Hiap Hoe
- Cosmosteel
- Jadason Enterprises
- China International
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