SG Market (04 Nov 16)

The market is likely to remain jittery as investors stay away from riskier assets ahead of a looming US election that is too close to call and possible interest rate hike next month.

Regional bourses opened lower again this morning in Tokyo (-0.9%), Seoul (-0.1%) and Sydney (-0.5%).Technically, STI is hovering just above its near-term support at 2,800, with the next line of defence at 2,740.

Stocks to watch:
*Genting SP: Lucky 3Q16 net profit spiked to $106.9m (3Q15: $37.2m, 2Q16: $10.5m loss), brought 9M16 earnings of $107.2m (+29%) to 50% of full year street estimate. Revenue of $581.5m (-9% y/y, +21% q/q) was boosted by higher VIP win rate of 3.3%, increased visitation to RWS and improved hotel occupancy. EBITDA margin of 40.2% (2Q16: 24.1%, 3Q15: 32.9%) was the highest in nine quarters, and came on the back of cost control and reduced bad debt provisions. Surprise interim DPS of 1.5¢ announced. MKE upgrades to Hold with TP of $0.71.

*SIA: Disappointing 2QFY17 with net profit diving 70% to $64.9m as the 22% drop in fuel costs failed to cushion the 5.1% slump in revenue, which was hurt by lower passenger load factor of 80.4% (-3.3ppts) and yield (-3.8%) at the parent airline. However, low cost carriers Scoot and Tiger Airways registered improvements. Interim DPS cut to SGD0.09 (2QFY16: SGD0.10). Outlook remains challenging amid excess capacity and intense competition by rival airlines. MKE last had a Hold with TP of $9.70.

*Hyflux: 3Q16 results beat as net profit leapt 234% to $21.5m, on record revenue of $295.9m (+122%), with key contributions from TuasOne WTE and Oman projects. Bottom line was further buttressed by a turnaround in JV/associate contributions to $1.7m (3Q15: $9.4m loss). NAV/share at $0.388.

*Hi-P: 3Q16 net profit grew 26.3% to $30.7m despite a slip in revenue to $387.3m (-1.7%) on the subdued economic environment. Gross margin expanded to 14.1% (+0.5ppts) on lower cost of sales (-2.3%), while bottom line was further lifted by cost control measures which brought down selling & distribution (-34.8%), admin (-18.7%) and financial (-29%) expenses. Interim DPS raised to 0.4¢ (3Q15: 0.3¢). NAV/share at $0.674.

*Secura: 3Q16 net profit plummeted to $0.3m (-64.6%) on a surge in operating expenses and a sharp drop in government grant, despite higher revenue of $9.1m (+69.8%) from acquisition of its security printing business and more contracts clinched from the security guarding segment. Gross margin widened 5.9ppt to 20.6%. NAV/share at $0.1129.

*Yanlord: Achieved sellout on the launch of residential project Yanlord Yangtze Riverbay Town (Phase 4). 214 apartment units were sold at an average price of Rmb45,000/sqm, implying total contracted pre-sales of ~Rmb2.13b..

*GSS Energy: Entered into a cooperation agreement with Indonesia’s PT Pertamina to produce petroleum in the Trembul Operation Area for 15 years. Under the agreement, GSS will get recovery from Pertamina for the cost of production, and be entitled to receive 23.5% of petroleum and 31.4% of the natural gas produced, after accounting for operating costs. The 47.6 sq km area holds an estimated ~24.3m bbl of resources and will require a total commitment of ~US$7.9m over the initial three year period.

*New Toyo: Malaysia-listed subsidiary Tien Wah Press Holdings is acquiring 100% stake in PT Bintang Pesona Jagat (BPJ) from Indonesia-listed PT Bentoel International Investama for 304b rp ($32.4m). The deal includes an agreement whereby the vendor will appoint BPJ as the exclusive supplier to British American Tobacco for its packaging print supply needs for six years from 1 Jan '17. Pro-forma FY15 EPS for New Toyo is expected to increase by 11.7% to 3.73¢.

*Swissco: SE83 rig has been ordered to be placed under judicial auction on 21 Nov in Texas, US. Group is currently consulting its legal advisers about the order and will provide further updates.

*Vallianz: Intends to fully redeem its $60m notes that will be maturing on 22 Nov through internal funds as well as advances from Rawabi.