SG Market (20 Apr 16)

SG Market: Market may take a pause after its steep run-up past week as investors await the release of several key corporate results.

Regional bourses opened positive in Tokyo (+0.6%), Seoul (+0.5%) and Sydney (+0.7%).

From a chart perspective, technical indicators are starting to appear stretched with STI facing immediate resistance at 2,960, with support at 2,840.

Stocks to watch:
*CapitaLand: 1Q16 headline profit came in at $218.3m (+35.4% y/y) with core earnings of $152.8m (-1.6%) meeting 21% of consensus full year estimates. Revenue slipped 2.3% to $894.2m in absence of a fair value gain (1Q15: $59.6m) and lower recognition of development projects in Singapore and Vietnam. Singapore (222 units, +222%) and China (3,377 units, +159%) enjoyed higher sales volume. Growth also came from its shopping malls in China and CapitaGreen. NAV/share at $4.13.

*OSIM: 1Q16 net profit tanked 42% y/y to $7.8m, making up just 13% of full-year estimates. The drop in sales to $138.3m (-7.6%) resulted in negative operating leverage. Key drags were South Asia (-8%) and rest of world (-56%) sales, while North Asia (-2.5%) was relatively stable. Interim DPS cut to nil (1Q15: $0.01). MKE advises investors to accept the privatisation offer.

*Sembcorp Marine. Announced 2nd delivery deferment by Transocean for two drillships worth US$1.08b by another six months to 2020. MKE has a Sell with TP of $1.00.

*Spackman Entertainment: To sell largest loss-making units Opus Pictures and UAA to former CEO and substantial shareholder Lee Tae Hun for US$1.9m. This will be satisfied by selective share buyback of 14.2m Spackman shares ($0.1315 apiece) from Lee, which will subsequently reduce his stake from 7.1% to 3.6%. In FY15, overheads and operating expenses of the units represents 41% of the group's total selling and general and administrative expenses.

*SMRT: 51:49 JV with 2 Getthere Holding to market, supply and operate automated vehicle systems in Asia-Pacific.

*Uni-Asia: Disclosed that Hotel Vista Kumamoto Airport in Kyushu currently has no water supply due to the earthquakes and has temporarily suspended operations since 16 Apr. No damage to the building has been reported.

*Olam: Announced a 5-year US$175m loan agreement with IFC to finance working capital and capex needs for four food processing facilities in Nigeria and India.

*Sim Lian: Saw strong demand at the launch of its 534-unit Wandervale EC in Choa Chu Kang, with ~60% (320 units) of the development booked. Units were priced at an average $755 psf.

*HLH: Expanded its existing 10,000 ha farm in Cambodia into a full scale agriculture park, covering the cultivation and processing of Tapioca. The farm will also have areas for investors with interest in husbandry and livestock assets to set up separate farms within the park.

*Rex: Injected an additional US$6.3m into 99% owned Lime Petroleum Norway for exploration and production activities.

*Chaswood Resources: Terminated the exclusive development rights of Mega Village Food to develop and operate its restaurants in Peninsular Malaysia due to various defaults in contractual obligations.