SG Market (06 May 16)

SG Market activity is likely to be muted as investors take to the sidelines to await the key US jobs report tonight, but oil-related counters could see some interest on rising crude prices.

Regional bourses opened in the red in Tokyo (-0.2%) and Sydney (-1.1%). Seoul market remains closed post Children’s Day.

From a chart perspective, STI sees immediate support at 2,740, with resistance at 2,805.

Stocks to watch:
*Starhub: In line 1Q16; net profit of $92.8m (+26% y/y) was boosted by excellent opex management, as EBITDA margin widened to 33.8% (+3.8ppt). However, revenue declined to $591m (-4.4%) on weaker mobile (-2.4%), Pay TV (-1.2%) and equipment sales (-37%), partially offset by broadband (+11%) and enterprise (+4%). MKE maintains Hold with TP at $4.00. Interim DPS of 5¢ maintained.

*Ascendas REIT: 4QFY16 DPU of 3.41¢ met estimates, but slipped 8.1% due to an enlarged unit base. Gross revenue and NPI increased to $204m (+17.4%) and $143.5m (+22.4%), respectively, on new acquisitions in Singapore and Australia, as well as completion of AEIs. Portfolio occupancy dipped 1.6ppt q/q to 87.6% with WALE of 3.7 years, while aggregate leverage held steady at 37.2%, with average debt cost of 2.79% and debt tenor of 3.4 years. NAV/unit at $2.06.

*CWT: 1Q net profit of $23.7m (-19% y/y) missed, as revenue fell to $1.87b (-14%) on decreased commodity prices and reduced trading volume. Bottom line was further dragged by the absence of divestment gains and increased taxes. NAV/share at $1.3293.

*SIA: Tigerair 4QFY16 swung into net profit of $7.9m (4QFY15: $18.8m loss), as revenue improved to $179.3m (+4.1% y/y) on higher load factor of 82.5% (+3.5ppt) and stronger lease rental income. Bottom line was helped by lower fuel cost and reduced depreciation expenses, as well as an absence of doubtful debts and reversal of overprovision for IT & professional fees. NAV/share at $0.0866.

*Riverstone: 1Q16 net profit of RM27.2m (+0.6% y/y) came below estimates, weighed by net FX losses of RM2m (1Q15: RM2.7m gain). While revenue rose to RM148.1m (+16.5%) on stronger demand of gloves, gross margin contracted to 29.1% (-2.5 ppt) due to fluctuations in raw material prices and a relatively weaker USD. NAV/share at RM0.678.

*Oxley: 3QFY16 net profit surged more than four-fold to $51.2m (3QFY15: $11.9m), boosted by a divestment gain of $25.7m. Revenue jumped to $202.6m (+33% y/y), led by increased rental income from investment properties and recognition on residential development projects. Gross margin expanded to 32% (+2ppt). Interim DPS of 0.4¢ declared (3QFY16: nil). NAV/share at $0.1837.

*Hi-P: 1Q16 net loss narrowed to $12.4m (-10.3% y/y), although revenue slipped to $275.6m (-1.5%), as earnings was held up by higher gross margin of 6.1% (+4.5 ppt) on a shift in sales mix and cost controls. NAV/share at $0.639.

*Best World: In response to a SGX trading query, group cited it is in discussions relating to a potential property acquisition, in line with previous disclosures to tap into upstream manufacturing for its products.

*Cityneon: Proposed placement of up to 40m shares (20m new, 20m vendor) at $0.55 apiece, to placement agent UOB Kay Hian. Estimated net proceeds of $10.6m will be used for building of new attraction sets (47%), business expansion in China (28%) and working capital (25%).

*YuuZoo: 1Q16 net profit surged 197% to $12.8m, on revenue of $45m (+243%) from a surge in online payments and franchise sales. However, group continued to bleed its net cash position to $2.2m (4Q15: US$2.7m), as a significant portion of sales ($16.4m) were received in shares and advertising rights.

*Chip Eng Seng: 2Q15 net profit dived 95.5% y/y to $0.8m, dragged by increased admin (+53.6%) and finance (+70.5%) expenses attributed to its new hotel business and legal and professional fees. Revenue slumped 33.1% to $111.9m on lower recognition in property development and reduced activity in construction, partly mitigated by maiden contributions from Park Hotel Alexandra. NAV/share at $1.207.

*Roxy-Pacific: 1Q16 net profit plunged 79% y/y to $9.9m as revenue fell 48% to $103m on poorer contributions in property development (-52%), although mitigated by higher sales from hotel ownership (+7%) and property investment (+1%). Gross margin compressed to 22% (-13 ppts) on lower development margins and a decline in hotel RevPAR. NAV/share at $0.394.

*Global Yellow Pages: Proposed acquisition of a plot of freehold land of ~38,400 sqm in Queenstown, New Zealand. The site is intended for a residential development.

*Profit warning:
- Jason Marine
- Changtian Plastic & Chemical
- MTQ