SG Market (26 Aug 16)

SG Market: Tepid liquidity is expected to persist ahead of the highly anticipated speech by Fed Chair Janet Yellen at Jackson Hole as investors seek clues on whether a Fed rate hike is imminent.

Regional bourses opened lower in Tokyo (-0.7%), Seoul (-0.6%) and Sydney (-0.1%).

Immediate resistance for STI remains at 2,880 followed by 2900, with underlying support at 2,830.

Stocks to watch:
*IHH Healthcare: 2Q16 results missed estimates as net profit of RM246.1m (+7.9%) was masked by asset divestment gains (RM54.8m), which hid the drop in EBITDA margin to 22.4% (-3.6ppt) due to start-up losses from new hospitals and higher operating costs. Revenue jumped 18.1% to RM2.47b, led by increased contribution from its largest operating subsidiary Parkway Pantai (+17%) on sustained organic growth from the ramp up of Mount Elizabeth Novena in Singapore. NAV/share at RM2.64.

*Sim Lian: FY16 net profit dived 71% to $68.8m, amid a 52% drop in revenue to $570.9m, as weakness in property development (-91%) business overshadowed improvements in construction (+88%) and property investment (+22%) divisions. Bottom line was further eroded by a plunge in JV contribution (-97%). First and final DPS reduced to 1.5¢ (FY15: 7.28¢). NAV/share at $1.15.

*Croesus Retail Trust: 4QFY16 DPU of 1.7¢ (+6.9%) took full year payout to 7.06¢ (+11.2%). For the quarter, revenue surged to ¥2.68b (+34.5%), mainly led by new contributions from Torius (acquired in Oct '15), Fuji Grand Natalie (Apr '16) and Mallage Saga and Feeeal Asahikawa (May '16). NPI rose at a slower pace to ¥1.44b (+19.4%) due to higher expense ratios at the new malls. Portfolio occupancy remained at 98.1% with WALE at 7 years. Aggregate leverage eased to 45.3% (-0.9ppt q/q), with average debt cost and tenor stable at 1.9% and 2.5 years, respectively. NAV/share rose 9.1% to $1.01.

*Creative Technology: 4QFY16 turned profitable with net profit of US$0.5m (4QFY15: US$2.7m loss), helped by a 39% reduction in overheads, which fully offset the absence of a US$9.2m disposal gain. Sales fell 19% to US$17.1m due to the uncertain and difficult market conditions, while gross margin improved to 29% (+1ppt) on a shift in sales mix. Management guides for challenging environment to persist. NAV/share at US$1.40.

*Health Management Int'l: 4Q15 net profit tumbled 38% to RM4.9m, while revenue rose 11% to RM106.2m, due to higher patient load and average bill sizes. However, bottom line was dragged by a 66% increase in admin expenses due to higher provision for doubtful debts, increased wage costs, as well as the absence of a RM2.2m write-back. First and final DPS of 0.75sen (FY15: nil) declared. NAV/share at RM0.296.

*iX Biopharma: Turned around to a 4QFY16 net profit of $0.4m (4QFY15: $2.9m loss), mainly lifted by a R&D tax incentive of $3.1m. However, revenue slid 24% to $1.7m on slumping chemical analysis business (-23%). Gross margin narrowed to 38.2% (-15.3 ppt) on higher staff cost related to clinical trials. NAV/share at 6.2¢.

*800 Super: 4QFY16 net profit soared 69.1% to $4.3m on lower input cost, as revenue firmed to $39.8m (+3.5%), thanks to increased pricing of existing projects and contribution from new ones. Proposed a higher final DPS of 2.5¢ (FY15: 2¢). NAV/share at $0.3939.

*Lasseters: Entered 55/45 JV with Paramount Corp to jointly own and develop a hotel in Glenmarie, Shah Alam, Malaysia, with total project cost of RM55m. The JV will collaborate with international hotel operator upon project completion.

*Chiwayland International: Successfully tendered for a 83,467 sqm land at Wuhan, Hubei, China.

*AGV: Placement of 26.9m new shares at $0.22 was fully subscribed and counter will commence trading at 9am today. The company is a provider of hot dip galvanising services to the steel and iron fabrication industries with a diversified client base. At listing price, it is valued at 16.6x trailing PE.

*Avi-Tech: Applied for removal from the SGX Watch-List.