SG Market (12 Nov 15)

Singapore shares are likely to drift following the listless trading on Wall Street and uninspiring spate of 3Q corporate results from crowd favourites Wilmar, Singtel and Ezion.

Regional bourses are trading lower in Sydney (-0.2%) and Tokyo (-0.2%) and flat in Seoul.

From a chart perspective, downside support for the STI is at 2,950, with resistance capped at 3,050.

Stocks to watch:
*SingTel: 3Q15 results in line. Net profit and revenue slipped 0.8% y/y and 2.9% to $1.03b and $4.18b, respectively, weighed by the steep 13% drop in AUD/SGD. In constant currency terms, earnings and revenue was resilient with stable growth of 3% and 5%, driven by growth in mobile data across the region, info-Communications technology & digital services and strong revenue & customer growth momentum in Australia. EBITDA margin remained steady at 30.8% (-0.1ppt). Interim DPS of 6.8¢ maintained. NAV/share at $1.54.

*Wilmar: 3Q15 results missed, with core net profit down 16.5% y/y to US$359b on weaker revenue of US$10.6b (-7.6%). Topline was mainly dragged by the tropical oils business (-22%), which suffered from lower CPO prices and sales volume, but partially offset by stronger performance from the oilseeds and grains division (+5%). Overall EBITDA margin expanded 0.7ppt to 5.4%, led by wider margin in the oilseeds and grains division. Bottom line was hit by mark-to-market losses on investment securities, FX on inter-Co. loans and losses from sugar associates in India. Net gearing improved to 0.74x (FY14: 0.78x). NAV/share at US$2.35.

*UOL: 3Q15 results in line, with net profit slipping 1.7% y/y to $100.8m on an 18.3% drop in revenue to $354.0m, weighed by declines in contributions from property development (-33.3%) and hotel (-4.1%) segments but mitigated by a 15.5% revenue rise from property investments. Gross margin fattened 8ppt to 39% due to the change in revenue mix. Bottom line was dragged by higher marketing (+63%) and finance (+141.8%) costs, but partially mitigated by higher associate and JV contributions (+12.5%). NAV/share at $9.77.

*Ezion: 3Q15 results missed, with net profit down 38.4% y/y to US$30.3m, while revenue fell 9.1% to US$86.2m, from the absence of contribution from the marine and offshore logistic support services division as a project experienced a logistical hiccup. Gross margin fell 22.1ppt to 28.9%, from additional costs due to a deployment of service rigs. NAV/share at US$0.83.

*OUE-C REIT: 3Q15 DPU climbed 5.2% to 1.02¢, while distributable income rose 7.1% to $13.1m. Revenue climbed 5.7% to $20.6m, while NPI expanded 4.7% to $15.6m, from higher occupancy at Lippo Plaza and other property-related income from OUE Bayfront. Occupancy was 97.1% (+1.9ppt q/q), with WALE of 2.7 years. Aggregate leverage stood at 33.9%, with average cost of debt at 3.16%. NAV/share at $0.92.

*Bumitama: 3Q15 results missed, with net profit down 30% y/y to RP199.8b on revenue of Rp1.18t (-13.7%), due to lower ASP for both CPO (-17.1%) and PK (-23%), offset partially by higher sales volume in both products. NAV/share at Rp3,608.

*Pacific Radiance: 3Q15 results missed as net profit crashed 87% y/y to US$1.7m, while revenue tumbled 29% to US$33.8m, from lower utilization of subsea vessels. Gross margin slipped to 21% (-2ppt). Bottom line was weighed by FX loss and an absence of disposal gain on vessel sales. NAV/share at US$0.58.

*Dynamac: 3Q15 net profit plummeted 93.4% y/y to $0.5m despite recording higher revenue of $83.8m (+5.5%) on progressive recognition of projects. Gross margin narrowed 7.4ppt to 14.8% due to fixed direct overheads of idle facilities in Malaysia. Bottom line was eroded by higher admin costs arising from staff bonus, finance costs and FX losses. Net order book stood at $251m. NAV/share at $0.17.

*Kim Heng Offshore: Swung to 3Q15 net loss of $1.7m from net profit of $1.2m a year earlier. Revenue fell 23% to $10.6m, from the delays of projects and continued low demand for maintenance of rigs and related services, partially offset by an increase in revenue from on-going new built projects. Gross margin fell 9.2ppt to 26.9%. NAV/share at $0.13.

*Sim Lian: Swung to 1QFY16 net loss of $1.4m from net profit of $71.7m. Revenue plunged 76% to $89.6m, mainly from fewer units of properties sold, while construction revenue held steady. Bottom line also dragged by $12.6m of FX loss. NAV/share at $1.16.

*Boustead Projects: 2QFY15 net profit tumbled 33.1% to $5.5m on a 19.5% jump in cost of sales from its design-and build projects. Revenue notched a 5.8% gain largely buoyed by the leasing business. Bottom line was pressured by a 266.7% jump in finance costs mitigated by jumps in other income (+28.4%), gains and losses (+346.5%). NAV/share at $0.57.

*Metro: 2QFY16 net profit slumped 69.7% due largely to a slide in associate controubtions (-91.5%) and JVs (-58.6%). Revenue grew 22.3% to $38.3m on better contributions from its retail division. However, gross margin slipped 1.9ppt to 5.3% due to expenses from its new Metro Centrepoint store. NAV/share at $1.67.

*Singapore Shipping: 2QFY16 net profit more than doubled to US$4.2m (+137% y/y) as revenue jumped to US$12.5m (+52.1%), on back of a stronger ship owning segment (+129%) amid charter income from three additional vessels, but pared by the agency and logistics segment (-22%) that faced lower business activities. Operating margin improved 16.3ppt to 36.9%. Net gearing lowered to 1.33x (FY15: 1.5x). NAV/share at US$0.16.

*SIA: Signed a partnership agreement with Lufthansa to operate routes between Singapore and Europe on a JV basis while expanding codeshare ties and deepening commercial co-operation.

*Tigerair: Oct 15 traffic improved 0.3% y/y, while capacity decreased 0.5%. Consequently passenger load factor improved 0.6ppt to 79.8%.

*Civmec: Secured multiple contracts totalling A$45m, which lifted order book to S$267m.

*Profit warning:
- Hor Kew Corp
- Shanghai Turbo Enterprises