SG Market (29 Aug 16)

SG Market: Risk appetite is likely to remain low amid continued uncertainty after Fed Chair Janet Yellen asserted a stronger case for gradual rate hikes without giving any time-table, and ahead of key economic data from China and US this week.

Regional markets opened mixed in Tokyo (+2%), Seoul (-0.4%) and Sydney (-0.5%).

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

Stocks to watch:
*Cordlife: FY16 net profit tumbled 60% to $13m due to increased marketing costs, one-off professional expenses and lower fair value gains. Revenue edged up 3.5% to $59.6m on higher client deliveries on consolidation of StemLife, but gross margin compressed to 66.2% (-3.3ppt) from increased quality control costs. No DPS declared (FY15: 2¢). NAV/share at $0.5156.

*Oxley: 4QFY16 net profit more than doubled to $73.8m (+114%), thanks to higher fair value gains ($47.2m) on its investment properties and negative goodwill ($25.2m) arising from the acquisition of an associate. Revenue slipped 15% to $165.1m, from lower sales recognition for its development projects. This took FY16 earnings to $206m (+162%) on revenue of $981.3m (+40%). Final DPS of 0.25¢ brought full year payout to 1.9¢ (FY15: 0.41¢). NAV/share at $0.2679.

*Silverlake: 4QFY16 net profit edged up 3% to RM77. 2m despite the absence of disposal gains and lower JV contributions, as revenue rose 32% to RM166.9m, boosted by favourable FX rates and the consolidation of Symmetri Group's businesses. Gross margin widened 5ppt to 66% on a shift in sales mix. Proposed final DPS of 1¢, brought FY16 payout to 3¢ (FY15: 4.2¢). NAV/share at RM0.2271. Separately, it clinched six fintech contracts, scheduled for completion in 4Q16 and 1Q17, which will contribute positively to FY16 and FY17 earnings.

*Sin Heng: Slumped into a 4QFY16 net loss of $0.8m (4QFY15: $2.4m profit) on a 48.5% slide in revenue to $22.5m, weighed by broad declines in equipment rental (-10.7%) and trading (-63.6%) segments. Gross margin contracted to 7.7% (-11.1 ppt) on losses from non-performing and old cranes. No dividends paid out this year (FY15: 0.55¢). NAV/share at $1.07.

*Dukang Distillers: Trimmed FY16 net loss to Rmb10.7m (FY15: Rmb561.4m) on the absence of impairment losses (FY15: Rmb547.4m). Revenue crept up 0.2% to Rmb865m as higher ASPs (+13%) was offset by lower selling volumes (-11.3%). Gross margin widened 10.1 ppt to 34.8% on more sales for its premium series. Bottom line was eroded by higher selling and distribution expenses (+34.5%). NAV/share at Rmb17.84.

*Vard: Secured contract from Hapag Lloyd Cruises to design and construct two 16,100-tonne luxury expedition cruise vessels, each capable of carrying 240 passengers. Deliveries are expected in 1Q19 and 4Q19.

*Hyflux: Received positive results from the clinical study of its skin treatment product ELO Gel, which improves skin wrinkles, color, elasticity, hydration and radiance.

*Sinarmas Land: Reduced its effective stake in PT Puradelta Lestari to 56.96% from 66.96% after placing out 4.82b shares (10% interest) for Rp1.21t or $120.5m. This is to improve the liquidity of the property developer on the Indonesia Stock Exchange.

*EC World REIT: DBS has ceased price stabilisation after having purchased 4.2m units in the open market since listing.

*China Environment: Secured a Rmb3.3m contract from Shandong Shuangliang Hengli Electrical Engineering to supply one unit of hybrid dust collector.

*ABR Holdngs: Terminated the proposed acquisition of property at Yarraville, Victoria, Australia, and received the deposit refund of A$1.9m.