SG Market (17 Oct 16)

Market focus will swing inwards this week on a slew of 3Q results from REITs, CapitaLand, SGX and Keppel Corp. Sentiment could also be swayed by release of NODX today, key economic data from China (loans, industrial production, GDP) mid-week as well as the final US presidential debate on Thurs.

Regional bourses opened mostly flat this morning in Tokyo (flat), Seoul (+0.2%) and Sydney (+0.1%).Technically, immediate support for STI is at 2,800 (200-dma), with topside resistance capped at 2,852 (50-dma).

Stocks to watch:
*SPH: FY16 net profit of $265.3m (-17.5%) fell within expectations. Revenue slipped to $1.15b (-4.3%), dragged by weak advertising (-9.2%) and circulation (-3%) sales, although property income was relatively stable. Bottom line was further hit by impairment charges of $28.4m (+212%), mainly related to its magazine business. Final and special DPS cut to $0.11 (FY15: $0.15), bringing full year payout to $0.18 (FY15: $0.20). NAV/share at $2.18.

*TEE Land: 1QFY17 net profit declined 32.5% to $0.6m, despite a 311% surge in revenue to $13.8m, unnderpinned by progressive sales recognition of property projects Third Avenue (Malaysia) and Hilbre 28 (S'pore). Bottom line weakness was weighed by 1) lower gross margin of 28.4% (-25.7ppt) from reduced share of rental income, 2) 73.4% slump in associates’ contributions following project completions in FY16 and 3) 33% increase in finance costs due to higher borrowings. NAV/share at $0.356.

*TEE Int'l: 1QFY17 net profit tanked 73.7% to $0.6m, largely from a slump in JVs/associates income of $0.8m (-71.2%) and absence of disposal gains (1QFY16: $1.7m). Revenue rose 4.8% to $64m on increased sales of development properties, while gross margin improved to 11.3% (+1ppt). NAV/share at $0.20.

*STE: Secured lesser new aerospace contracts in 3Q16 of $520m (-32.5% q/q), comprising aircraft conversion, airframe maintenance, pilot training, and related MRO services. MKE last had a Hold rating with TP of $3.17.

*ISEC Healthcare: MOU to form JV with Vietnamese eye clinics operator Hai Yen Anh Tran has lapsed after pre-conditions were not fulfilled.

*GKE: 50:50 JVCo Ocean Latitude renewed its chartering contract with Sinogas Carriers for a liquefied gas carrier vessel for two months till mid-Dec 2016, albeit at a lower charter rate.

*Sri Trang: Disclosed that a fire has broken out at its rubber factory in Pontianak, Indonesia, with damage incurred at its raw material storage and sections of its production lines. Prior to the fire, the factory accounted for ~5% of the group's total rubber production of 2,000-4,000 tonnes/month.

*CFM Holdings: Renewed the lease for its factory at No.4 Ang Mo Kio Avenue 12 for 30 years commencing 1 Nov 2016.

*MYP: Clarified that the $560m consideration for its proposed acquisition of Straits Trading building will be funded by bank financing (65%), proceeds of rights issue (33.6%) and internal resources (1.4%).

*Yamada: Updated that the three recent typhoons that swept through Taiwan and China have resulted in heavy rainfall in Zhangping City, where some of the group's raw materials were kept, and may impact the production volume and/or quality of the shiitake mushrooms once the harvesting season commences.