The market could encounter some resistance after rallying in eight out of nine past trading days although the gains were not broad-based.
Regional markets opened mixed, with Seoul (+0.4%) higher, and Sydney (-0.4%) weaker.Technically, the STI is likely to lose momentum as it approaches overbought territory. Topside resistance is seen at 3,250, while immediate support is at 3,190.
Stocks to watch:
*Sembcorp Industries: 1Q17 net profit grew 11% to $119.1m on revenue of $2.14b (+13%) but stripping out the $46.8m gain on disposal of its 30% stake in Cosco Shipyard Group, the results would have missed. Utilities earnings shrank 27% to $55.3m, hurt by lower power tariffs for its thermal power plant in India, while marine earnings of $24.1m (-28%) was eroded by weaker rigbuilding contributions and costs associated with a floater project. In contrast, earnings from urban development business soared more than 30x to $37m from recognition of land sales in Nanjing. The group is undertaking a strategic review under a new CEO. NAV/share at $3.78.
*StarHub: 1Q17 net profit slumped 21.3% to $73.1m, meeting street estimates. Service revenue dipped 1% to $537m as declines in mobile (-0.6%), which was hit by lower ARPU, and Pay TV (-6.8%), which is suffering from a shrinking customer base, was partially offset by bright spots in in enterprise (+2.9%) and broadband (+0.5%). EBITDA margin narrowed 3.9ppts to 29.9%. Interim DPS was cut to 4¢ (1Q16: 5¢). Management maintained EBITDA margin of 26-28% and DPS guidance of $0.16 this year but would not commit to dividend sustainability beyond FY17. MKE reiterates Sell with TP of $2.36.
*BreadTalk: 1Q17 net profit surged 337.2% to $10.7m, as restructuring efforts pay off. While revenue fell 4.5% to $147.6m, dragged by bakery and food atrium sales, group EBITDA margin improved 4.9ppt to 17.8%, on the back of food atrium recovery across China, and strong performance in Singapore. NAV/share at $0.581.
*GLP: Acquired the remaining 50% interest in CLH Chongqing Logistics Property from JV partner for Rmb81.6m, valuing the entity at 1.36x P/B. Separately, it announced 275,000 sqm of new leases in China with two e-commerce leaders and two auto-parts companies.
*Heeton/Ryobi Kiso/KSH/Lian Beng: 60%/20%/10%/10% owned Luma Concept Hotel in London has commenced operations, after the consortium acquired a freehold building in 2015 for $31m, and and redeveloped it into a 89-room hotel, now managed by Heeton's hospitality division.
*mm2 Asia: Entered binding MOU to acquire 19.68% of Cinema Pro for HK$4m. Cinema Pro provides all-in-one cinema management service in Hong Kong and China. The deal comes with an undisclosed profit and buyback guarantee from Cinema Pro and its majority shareholder Kbro Media.
*TTJ Holdings: Acquiring a 4,931-ha leasehold land in Mukim, Johor, Malaysia with tenure expiring in 23 Mar '71, along with built-up factories, office, canteen, 22 overhead cranes and other heavy equipments from Air Products Specialised Process Equipment for RM38m. The property and equipment will be used for the group's structural steel business.
*PACC Offshore: Disclosed that it is taking legal advice over an additional $24.5m in legal claims concerning a tussle over a property it failed to acquire. This brings claim amount to $30.5m, or 3.5% of its NTA as at 31 Dec ’16.