SG Market (29 Feb 16)

Singapore shares are likely to remain range-bound prior to the release of a slew of China, US, Eurozone economic data due this week. Singapore corporate earnings season winds down today.

Regional bourses surged in early trading in Tokyo (+1.6%), Seoul (+0.1%) and Sydney (0.8%).

From a chart perspective, the STI is in tight consolidation between the upside resistance at 2,690 and immediate support at 2,600. Technical indicators are reversing from overbought levels.

Stocks to watch:
*Thai Bev: FY15 net profit 23.5t baht (+22%), boosted by disposal gain (3.9t baht) on sale of associate F&N’s stake in Myanmar Brewery. Revenue inched up 6% to 172.1t baht from sales of spirits (+1.3%), beer (+22.5%) and non-alcoholic beverages (+4.5%), partly offset by food (-0.4%). EBITDA margin slipped to 19.1% (-0.4ppt) on higher staff cost and increased losses in non-alcoholic beverages segment due higher advertising and promo expenses from new products launch. Final DPS of 0.46¢; FY15 DPS maintained at 0.61¢.

*Yangzijiang: 4Q15 net profit slumped 93% to Rmb41.5m, mainly due to provisions and impairments (Rmb361m) and a significant drop in interest income generated from restricted cash (-84%). Revenue fell 17% to Rmb3.13b on lower shipbuilding activity, while gross margin for the core segment of 26% (+8ppt) was masked by a provision writeback. Orderbook grew to US$5.36b (3Q15: US$4.8b). First and final DPS of 4.5¢ (FY14: 5.5¢). NAV/share Rmb5.689.

*Olam: 4Q15 core earnings slumped to $88.2m (-16.2%), bringing FY15 core earnings to $346.2m (+20.1%), in line with estimates. Revenue of $5.45b (+11.7%) was driven by the food category (+9.7%) due to new acquisition, elevated prices of almonds and cashews, and increased cocoa and coffee sales and prices, as well as the non-food category (+29.6%). EBITDA margin remained stable at 5.7% (-0.1ppt). Final DPS of 3.5¢ brought FY15 total DPS to 6¢ (FY14: 7.5¢). NAV/share at $1.81.

*Vard: 4Q15 swung into net loss of NOK83m (4Q14: +NOK154m), widening FY15 net loss to NOK603m (FY14: +NOK349m), in line with street estimates. For the quarter, revenue slumped to NOK3,320m (-26%) caused by reduced activity at its shipyards, while EBITDA crashed to NOK35m (-71%) on loss provisions related to projects at the Brazilian yards. Order book reduced to NOK10.23b (3Q15: 14b). NAV/share at $0.52.

*United Engineers: FY15 net profit soared 122% to $102.2m, while revenue fell 42% to $1.86b on absence of sales from the completed Austville Residences and divested automotive and MFS businesses. Gross margin at 18.3% (+5.4%), while bottom line was boosted by reduced expenses on divestment of MFS. NAV/share at $2.97. First and final DPS of 8¢ (FY14: 10¢).

*UOL: FY15 results missed as net profit slumped to $391.4m (-42.9%) on lower fair value gain of $48.8m (-84.8%). Revenue slipped to $1.28b (-6%) from lower contributions from property development (-14.6%), and hotel segments (-23.6%), partly cushioned by property investments (+10.7%). Gross margin narrowed to 39.4% (-3.3ppt) on absence of higher margin sales. First and final DPS of 15¢ maintained. NAV/share at $9.91.

*HPL: FY15 net profit fell 34.3% to $81.7m, while revenue fell 5.7% to $579.5m on absence of contribution from Tomlinson Heights (completed Mar ’14), less The Met units sold in Bangkok, and stiff hotel competition. Gross margin narrowed 1.3ppt to 27.9%. First and final DPS of 8¢ (FY14: 10¢). NAV/share at $3.32.

*SIA/ Tigerair: SIA intends to compulsorily acquire Tigerair. Closing date for the offer has been extended to 4 Mar.

*SGX: Proposed for a 10% minimum allocation of shares (from 5%) to retail investors, for Mainboard companies seeking IPO.

*SMRT: To sell 175 buses to LTA for $66.3m, making it LTA's second batch purchase following the first with SBS Transit. Notably, LTA is paying ~$0.4m/bus, ~20% lower than the previous deal.

*Swiber: Awarded US$100m engineering, procurement, installation and construction services contract for an Asian national oil company. Project has commenced and is expected to be completed by 1H17.

*Sim Lian: Overwhelming response to EC development Wandervale, with 534 units oversubscribed by 1.4x. Units are priced at an average $750-$770 psf, with buyers being a mixed of first-timers and HDB upgraders.

*Starburst: FY15 swung to a net loss of $1.7m (FY14: +$13.2m) as revenue tumbled 59.5% to $15.9m, due to near completion of existing firearm shooting range projects and lower recognition from new ones. Final DPS of $0.01 proposed (FY14: $0.012). NAV/share at $0.1873.

*Spackman: FY15 net loss narrowed to $1.3m (FY14: -$8.1m) although revenue dropped to $13.6m (-16%) on just one film produced (FY14: 4). However, gross margin fattened to 26.9% (+23.7ppt), while bottom line was helped by negative goodwill and absence of IPO fees. NAV/share at $0.042.