SG Market (05 Feb 16)

Liquidity is expected to ease as traders square off positions ahead of the two-day CNY holiday next week.

Regional bourses opened generally in negative territory in Tokyo (-1.2%), Seoul (flat) and Sydney (-0.7%).

From a chart perspective, the STI is bounded by the double bottom at 2,530 and 20-dma near 2,600.

Stocks to watch
*SIA: 3QFY16 results ahead of estimates as net profit soared 36% y/y to $274.9m, primarily boosted by lower fuel costs (-24%) arising from a drop in average jet fuel price (-41%). Revenue slipped to $3.94b (-4%) on weaker yields from pax (-5%) and cargo (-14%) operations, partially mitigated by higher carriage. Ex-fuel, opex rose 2% on capacity expansion at SilkAir and Scoot. Bottom line gains were dragged by an absence of exceptional gains (3QFY15: $56m) and increased taxes ($41m), but offset by higher disposal gains of aircraft ($66m). NAV/share at $10.97.

*Sing Post. 3QFY16 results in line with underlying net profit of $43.9m (+0.7% y/y). Revenue rose to $316.2m (+32%) on increased e-commerce volumes, but earnings were offset by lower retail rentals. Interim DPS raised to 1.5¢ (3QFY15: 1.25¢).

*Wing Tai. Dismal 2QFY16 results as net profit slumped to $1.1m (-85% y/y), on lower revenue of $120.6m (-5%) due to decreased progressive recognition and slower development sales. Bottom line was mainly dragged by a $6.2m tax charge (2QFY15 tax credit: $0.3m). NAV/share at $4.09.

*Jumbo. 1QFY16 results in line with core net profit of $2.8m (+35% y/y), as revenue rose to $30.9m (+8%) following the opening of a second restaurant in Shanghai in Aug ’15 and an overall increase in sales from its restaurants. MKE maintains Buy with TP of $0.58/share.

*Perennial Real Estate: 6QFY15 net profit soared to $41.1m (+93% y/y), while revenue surged 90% to $28.4m, mainly led by the full quarter contribution of rental income from CHIJMES and TripleOne Somerset in Singapore and Perennial Jihua Mall, and Perennial Qingyang Mall in China. Earnings were shored by higher fair value gains from JV/associates. First and final DPS of 0.4¢ maintained. NAV/ share at $1.688.

*Ara Asset Management: 4Q15 net profit surged 41% y/y to $25.6m on revenue of $46.1m (+7%), contributed by higher management fees and finance income. Operating margin expanded 15.3ppt to 64.2% on a reduction in finance costs due to lower FX losses, and lower other expenses amid absence of agency fees for property divestment. A final DPS of 2.7¢ was maintained. NAV/share at $0.5217.

*Chip Eng Seng: 4Q15 net profit crashed to $9.8m (-94%), as revenue tumbled to $153.9m (-58%) due to lower contributions from property development after the completion retail project Alexandra Central. Bottom line was further weighed by the absence of fair value gain on investment properties and increased finance costs (+212%) from a loan drawdown.

*Technics Oil & Gas: 1QFY16 net loss widened to $1.2m (1QFY15: -$0.6m) dragged by the absence of FX gain (1QFY15: $1.1m), while revenue tumbled to $15.2m (-18%) from weak market demand. Gross margin improved from 41% to 44%. NAV/share at $0.28.

*Addvalue Technologies: Proven the commercial viability for a satellite after a successful completion of a space experiment by Nanyang Technology University.

*CFM: Leased out 18,700 sf, or 76%, of total rentable area for a factory at Ang Mo Kio Avenue, Singapore.