SG Market (15 Feb 16)

Singapore shares may find stability following the snapback in Wall Street powered by a sharp rebound in oil prices, but sentiment is likely to stay fragile as investors take stock of economic data and the re-opening of Chinese markets after a week-long holiday.

Investors will be anticipating China's trade figures today and US housing starts and industrial production on Wed plus CPI readings on Fri.

Regional bourses surged in Tokyo (+4.3%), Seoul (+1%) and Sydney (+0.8%).

Technically, immediate resistance for the STI is at 2,580 (20-dma) with support at the double bottom at 2,530.

Stocks to watch:
*ComfortDelGro: FY15 net profit of $301.9m (+6.5%) met expectations on revenue of $4.1m (+1.5%), led by bus (+3.1%), taxi (+3.4%), and rail (+8.4%) segments, partially weighed by lower sales in automotive engineering (-13.6%). EBIT margin held steady at 11% (+0.1ppt) as cheaper fuel (-8.5%), were offset by increased staff costs (+3.3%). Final DPS increased to 5¢, bringing FY15 payout to 9¢ (FY14: 8.25¢).

*SATS: 3QFY16 results in line. Chalked up net profit of $60.6m (+12.8%) despite lower revenue of $441m (-2.2%) from a weaker JPY and the transfer of its food distribution business to JVCo SATS BRF Food in Jun ‘15. EBIT margin widened to 14% (+2.7ppt), thanks to cheaper raw material costs (-20.8%) and reduced opex (-5.1%).

*Cordlife: 2QFY16 results turned around to net profit of $9.6m (2QFY15 -$3m) boosted by fair value ($9.8m) and disposal gains ($5m) related to divestment of CCBC, while revenue edged up 2% y/y to $14.5m from higher client deliveries. Gross margin narrowed to 64.9% (-1ppt) on increased operations in lower margin operations.

*Tat Hong: 3QFY16 swung into net loss of $6.7m from $4.5m profit a year ago as revenue tumbled 19% y/y to $124.8m, on lower crane rental (-23%) and distribution (-23%) businesses. Gross margin contracted to 30.6% (-3.2ppt), while bottom line was dragged by FX losses of $2.9m (3QFY15: +$4.9m) from weaker RMB against SGD.

*Courts Asia: 3QFY16 net profit inched up to $4m (+0.3%) while revenue grew to $204.7m (+6.1%) on stronger sales in Singapore (+7.9%) and Malaysia (+2.4%). Earnings were eroded by lower gross margin of 29.7% (-2.4ppt) due to a change in sales mix, partially mitigated by reduced opex (-4.5%).

*Boustead: 3QFY16 net profit slumped 36% y/y to $7.5m on revenue of $142.3m (-20%), dragged by lower sales in energy-related engineering division (-35%) from a protracted weak environment, and reduced design-and-build revenue (-14%) in the real estate solutions segment. Earnings were further dragged by increased finance costs and share of loss of associates and JVs of $1m (3QFY15: $0.1m).

*GL: 2QFY16 net profit climbed 34% y/y to US$19.9m, boosted by interest savings, while revenue inched 1% to US$114.7m. For 1HFY16, top line slipped 1% to US$229.8m due to lower Bass Strait royalties and hotel operations, partly mitigated by improved gaming and property development segments. NAV/share at US$0.866.

*Sim Lian: 2QFY16 net profit jumped 59% y/y to $40.5m, while revenue more than doubled to $194.3m, boosted by a surge in property development (+186%) from project completion in Malaysia, while construction sales soared 95% on increased projects and higher percentage of completion recognised.

*Linc Energy: 2QFY16 net loss narrowed to A$95.8m from A$169.4m, while revenue plunged 31.4% y/y to US$15.8m due to the oil price slump. Gross loss widened to US$30.5m from US$12.4m a year earlier, but bottomline improvement was due to an absence of impairment recognised last year. NAV/share dived to –A$0.23 from A$0.0492 in Jun.

*800 Super: 1HFY16 net profit climbed 7.4% y/y to $4.9m, on revenue of $76.3m (+18.2%), from new contracts awarded and increased pricing. Bottom line was partially weighed by increased foreign worker levies and upkeep of additional vehicles purchased, as well as higher headcount. Separately, group terminated a non-binding MOU with Zero Spot Laundry Service to form a JV Co to undertake laundry services business.

*City Developments: 65% owned hotel arm Millennium & Copthorne Hotels will recognise a £43m impairment charge in 4Q15 on fair value change to its investment properties. This will have a $48m impact on the group.

*Technics Oil & Gas: Resume trading today following a one-month suspension, after negotiations on a proposed major transaction fell through.

*ST Engineering: Clinched four pilot training contracts worth $23m.

*Asiatavel.com: Announced a new online travel portal for the corporate travel segment. In addition, it also entered into the Indonesia and Vietnam markets.

*JES International: Proposed disposal of its core loss-making shipbuilding business for US$0.5m.

*Profit warning: Nam Cheong, EMS Energy