SG Market (24 Oct 16)

Banks, O&M firms and more REITS will come under the spotlight this week as the corporate earnings season picks up pace, with SembCorp Marine (25 Oct), MCT (26 Oct), OCBC (27 Oct) and UOB (28 Oct) all releasing results.

Investors will also keep an eye on the Sixth Plenum meeting in China, which could offer clues on the strength of top leaders in securing key roles for their allies. Regional bourses opened mixed today in Tokyo (+0.2%), Seoul (+0.5%) and Sydney (-0.9%).STI remains largely range bound between its topside resistance at 2,850 (50-dma) and support at 2,800 (200-dma).

Stocks to watch:
*Raffles Medical: 3Q16 net profit of $16.2m (+4%) brought 9M16 earnings of $48.4m (+4.1%) to 66% of street FY16 estimate. For the quarter, revenue jumped 17.5% to $119.3m on increased patient load, expanding clinic network and incremental sales contribution from more specialist consultants, as well as newly acquired MCH, but bottom line was weighed by a surge in staff expenses (+23%) due to the higher headcount. MKE last had a Buy with TP of $1.84.

*CapitaLand Mall Trust: 3Q16 results in line with DPU of 2.78¢ (-6.7%) diluted by a larger unit base, increased finance cost and an absence of retained income distribution. Revenue of $169.7m (+4.9%) and NPI of $119.5m (+5.5%) rose on contributions from recently-acquired Bedok Mall and completion of AEIs. Portfolio occupancy edged higher to 98.6% (+0.7ppt q/q), with WALE of 2 years. Aggregate leverage held steady at 35.4%, with average debt cost of 3.2% and tenor of 5.5 years. NAV/unit at $1.89. Trades at annualised yield of 5.2%, and 1.1x P/B.

*Cache Logistic Trust: 3Q16 results met expectations even though DPU slid to 1.847¢ (-13.7%) on the absence of a distribution of divestment gain. Revenue jumped 21.2% to $28m on increased contributions from DSC ARC building and three Australian properties acquired in 4Q15, although NPI rose at a slower pace to $22.1m (+17.5%) due to higher property expenses. Portfolio occupancy inched up to 96.5% (+0.7ppt) with WALE of 4 years, while aggregate leverage remained at 41.2% (+0.3ppt), with average debt cost at 3.62% and tenor of 2.4 years. Trades at 8.4% annualised yield and 1.1x P/B.

*Hwa Hong: 3Q16 net profit surged nearly 3x from a low base to $1.6m, bolstered by FX gain of $1.9m from its sterling loans. Revenue grew 1.6% to $3.1m as gains from investment (+41.6%) were pared by a decline in rental (-13.2%). Gross margin dropped to 62% (-4.5ppt) from increased business rates for its Eagle House property. NAV/unit at $0.2981.

*Mapletree Industrial Trust: Completed Phase One (825,400 sf gfa) of the build-to-suit development for Hewlett-Packard, with Phase Two on track for completion in 2Q17.

*Cordlife: Appointed Myanmar-based Bio Secure Company as its marketing agent in Myanmar to offer cord blood, cord lining and cord tissue banking services, as well as other services to local expectant families.*Straits Trading: Disposing its 26-storey office building with NLA of 21,010.8sqm in Melbourne, Australia, to AFIAA Australia 4 for A$161.5m ($171.8m) . Straits Trading expects to book a disposal gain of A$27.5m.

*Halcyon Agri/GMG Global: Halcyon has extended the closing date of its 0.9333 Halcyon share for every GMG share offer to 8 Nov. The group has garnered 88.64% controlling interest in GMG.

*CapitaLand: AI concierge chatbot “Sparkle”, which seeks to improve the consumer retail experience, will be embedded in CapitaLand’s CapitaStar app on 1 Nov.

*Hoe Leong: 49% owned Semua International will cease operations and will dispose its vessels, thereby terminating a previous non-binding term sheet with R&A Telecommunication signed in May ’16.