SG: Market (27 Apr 16)

SG: Market is likely to stay muted ahead of the Fed policy statement and key corporate results, which will shed light on US interest rate path and health of local companies amid the global slowdown.

Regional bourses opened mixed in Tokyo (-0.1%), Seoul (-0.1%) and Sydney (+0.4%).

From a chart perspective, topside resistance for the STI is seen at 2,960, with near-term support at 2,840.

Stocks to watch:
*Mapletree Commercial Trust: 4QFY16 DPU of 2.02¢ (+1% y/y) and distributable income of $42.9m (+1.8%) met estimates. Revenue rose 1.9% to $287.8m on higher rental income from VivoCity and HarbourFront, partially offset by lower occupancy at Mapletree Anson and PSAB office. NPI jumped 4.3% to $220.7m on lower utilities expenses as well as cost savings in advertising and promotion expenses. Portfolio occupancy slipped to 95.7% (-2.7ppt q/q), with WALE at 2.2 years. Aggregate leverage eased to 35.1% (-1.2ppt q/q), with average debt cost of 2.52%. NAV/unit at $1.30.

*AIMS AMP: 4QFY16 DPU of 2.95¢ (+1% y/y) and distribution income of $18.7m (+2.1%) came within expectations, boosted by retained income and capital distribution. Gross revenue and NPI remained broadly in line at $30m (+0.7%) and $20.3m (+0.3%), respectively, while portfolio occupancy remained healthy at 93.4% (flat q/q), with WALE of 2.93 years. Aggregate leverage at 32.4% (+0.9ppt q/q), with average debt term of 2.2 years. NAV/unit at $1.48.

*Far East Hospitality Trust: 1Q16 missed with DPU of 1.08¢, hitting just 17.7% of street's full year estimates. Gross revenue remained at $27.4m on softer room demand. RevPAR stayed flat at $141, while average occupancy for hotel and serviced residences was 88% (+5.7 ppts y/y) and 84.3% (-1.5ppt y/y). NPI inched up 0.8% to $24.7m on lower property expenses. Aggregate leverage stood at 32.7%, with average debt cost and tenor at 2.6% and 3 years. NAV/unit at $0.9324.

*Keppel Corp: Maintained that the $230m provision previously made for six rig contracts is sufficient in the wake of plans by its biggest client, Sete Brasil to file for bankruptcy protection.

*City Dev: HK-listed subsidiary City e-Solutions cautioned that it expects to record a 1Q16 loss of HK$19m (1Q15: -HK$9.7m), due to unrealised fair value losses of trading securities.

*CapitaLand: QSA Group, a major shareholder of its 20%-owned associate Australasian Franchise System (AFS) has exercised the option to swap the group’s entire interest in AFS with a 20% stake in QSA Group, resulting in AFS being wholly-owned and the sole asset of the latter.

*PACC Offshore: Awarded charters for eight OSVs with combined value of USD167.5m by a Mid-East national oil company. The vessels will have a 5-year charter period with 2-year extension options, and will commence progressively starting from Dec 2016.

*QAF: 1Q16 net profit soared to $16.4m (+25% y/y) on lower input costs at its Malaysian bakery and Australian meat production businesses. Revenue slipped 2% to $250.9m amid a stronger SGD, which also eased expenses, resulting in a wider operating margin of 8.5% (+1.5ppt).

*Soilbuild Construction: 1Q16 net profit slid 10.5% y/y to $3.9m on absence of divestment gains, FX losses and other non-operating expenses. Revenue jumped 45.6% to $102.5m, but failed to feed through to bottom line, as the major development projects in progress lowered overall gross margins to 7.1% (-3.3ppt).

*Kim Heng Offshore: Swung to 1Q16 net loss of $1.7m, while revenue plunged 46% y/y to $8.7m on demand weakness for rig maintenance and no newbuilds. Gross margin increased 3ppt to 33%, while bottom line was dragged by FX loss on USD weakness, higher opex and financing costs.

*Rowsley: 1Q16 net profit surged 53.1% y/y to $4.8m on a jump in associate contributions ($0.6m vs 1Q15’s $0.05m) and FV gains (+118% to $9m). Revenue staged a 25.4% uplift to $20.5m mainly due to contributions from its UK hospitality group. Bottomline was pressured by finance costs of $1.9m vs 1Q15’s $0.07m. NAV/share at $0.106.

*China Sunsine Chemical: 1Q16 net profit tumbled to Rmb33.6m (-29%) on muted revenue of Rmb445.1m (+3%), as higher sales volume was offset by a lower ASP (-13%) amid depressed raw material prices. The drop is ASP also weighed on gross profits (-21%) and resulted in a narrower gross margin (-7.5ppt to 24.2%). Nevertheless, net cash position increased 34.6% to Rmb264.3m ($0.118/share) or 30% of its last closing price $0.39, while NAV/share at $0.55.

*Heeton/KSH Holdings: 20:10:70 JV with Shikizakura to purchase an investment property in Hokkaido, Japan. The freehold asset consists a 164-room hotel, 66 residential and 4 retail units, with total gfa of ~92,000 sf.