Investors will be digesting a slew of results that were released last Fri, as well as the Silk Road summit with China pledging US$124b on the ambitious project, and Singapore's trade data on Wed for fresh direction.
Regional markets opened mostly lower in Tokyo (-0.6%), Seoul (+0.1%) and Sydney (-0.2%).The STI appears overextended, with immediate resistance at 3,290, with underlying support at 3,212.
Stocks to watch:
*Genting SP: 1Q17 net profit soared to $181.1m (1Q16: $10.8m), above expectations, bolstered by $96.3m gain on sale of 50% stake in Jeju resort. Revenue slipped 4% to $586.6m on lower gaming and non-gaming takings, but gaming turnover grew 8% q/q on strong VIP and premium mass business. Core EBITDA margin surged to 47% to $192.5m as operating margins improved from lower bad debt provisions and cost efficiency initiatives. MKE last had a Buy with TP of $1.25.
*ComfortDelGro: 1Q17 net profit of $82.5m met expectations, buttressed by special dividend from Cabcharge Australia. However, revenue dipped 2.4% to $972m, dragged mainly by FX translation losses and weak taxi business (-5.7%). EBITDA margin improved to 20.9% (+0.3ppt) from change to bus contracting model as well as lower costs. On its outlook, revenue from Singapore bus (new contracting model) and rail (increased ridership) and Australia bus are expected to pick up, while UK bus business will dip from weaker and China bus station business will face greater competition from China's growing high speed rail network. MKE has a Hold, cuts TP to $2.64 from $2.68.
*SingPost: 4QFY17 net loss of $65.3m (4QFY16: $105.4m profit) was crushed by $208.6m of impairment charges, including $185m from struggling US e-commerce firm TradeGlobal, partially offset by $108.7m fair value gain from SingPost Centre. Excluding one-offs, core earnings declined 32.8% to $21.4m. Revenue edged up 2% to $324m as a 30.9% rise in e-commerce revenue was eroded by a 7.7% drop in logistics. Core logistics operating profit crumbled 78% to $2.6m on intense competition, while e-commerce loss widened three-fold to $15.1m. Final DPS slashed to 0.5¢, bringing full year payout to 3.5¢ (FY16: 7¢).
*UOL: 1Q17 net profit edged 4% higher to $80.3m or 22% of FY17 forecast. Revenue rose 6% to $350.7m, lifted by stronger property development sales (+12%) arising from residential projects Principal Garden and Botanique at Bartley. Hospitality operations stood pat as improved performance by Australian hotels was offset by lower takings from PARKROYAL Penang due to ongoing refurbishment. Gross margin contracted to 33% (-2ppts) on a shift in sales mix. Plans to launch three development projects in 2018, consisting two residential projects in Singapore and a mixed-use project in London. Trading at 0.69x P/B. MKE reiterates Buy and raised TP to $5.30 from $7.68.
*SIA Engineering: 4QFY17 net profit grew 10.9% to $45.9m, in line with expectations, on higher associate contribution (+64.2%). Revenue improved marginally to $295.4m (+0.4%), while operating margin narrowed to 8.1% (-1.2ppt) on higher staff costs (+12.4%). Raised final DPS by 1¢ to $0.09 and dished out special DPS of $0.05, giving total FY17 payout of $0.18 (FY16: $0.14). MKE last had a Hold with TP of $3.70..
*United Engineers: 1Q17 net profit from continuing operations slid 12% to $8.3m, on lower revenue of $101.4m (-30%) from weak property development sales. While gross margin expanded 8.5ppt to 44.1% from a shift in sales mix, the gains were erased by lower associate/JV contribution (-66%). NAV/share at $3.06.
*Wheelock Properties: 1Q17 net profit fell 9.8% to $10m despite higher revenue of $93.7m (+2.1%), driven by sales in residential development Ardmore Three, although offset by slower sales at The Panorama and lower interest income from quoted securities. The bottom line was dragged by higher opex and lower associate contribution. NAV/share at $2.52.
*UMS: 1Q17 results beat as net profit spiked 230% to $11.2m, on the back of a 105% jump in revenue to $41.8m, underpinned by strong sales in semiconductor integrated system (+192%) and components (+47%). However, gross margin shrank 8.8ppt to 51.3% on a change in sales mix, while bottom line was buttressed by a drop in FX losses (-46%). NAV/share at $0.4651.
*Jumbo: 2QFY17 net profit of $5.8m (+0.3%) brought 1HFY17 net profit to $8.5m (+7.1%) missing estimates. For the quarter, revenue inched 0.6% lower to $39.4m, on lower takings from Singapore, which offset higher sales from the Shanghai outlets. Gross margin expanded 3.5ppt to 63.9%. Declared interim DPS of 0.5¢/share (1HFY16: nil). MKE keeps HOLD with TP of $0.75.
*Sunningdale: In line 1Q17 as net profit surged to $7.7m (+115%), partly lifted by a $0.4m disposal gain. Revenue improved 6.5% to $171.8m, on higher takings in automotive (+14.7%), consumer/IT (+10.7%), and healthcare (+15.9%) units, which helped expand gross margin to 15% (+1.4ppt). NAV/share at $1.86.
*Midas: 1Q17 missed despite a 187.6% surge in net profit to Rmb28.7m, boosted mainly by associate CRRC Nanjing Puzhen Rail Transport (+359%). Revenue leapt 31% to Rmb398.4m from maiden contribution arising from the aluminium alloy stretched plates segment (+Rmb76.6m), while the core aluminium alloy extruded products segment rose 6%. However, gross margin narrowed 3.1ppt to 27.9% from the shift in sales mix. NAV/share Rmb2.36.
*Sapphire: 1Q17 net profit rose 3.2% to Rmb9.9m, despite a 9.1% drop in revenue to Rmb187.8m as certain major infrastructure projects were still in initial stages with lower sales recognised. The bottom line was lifted by the expansion in gross margin to 14.2% (+2.2ppt), as well as a 55.7% jump in other income. NAV/share at Rmb1.44.
*Ying Li: 1Q17 net profit slumped 36.1% to Rmb10.7m, despite a 121.3% spike in revenue to Rmb202.1m led by continued handover of residential units at San Ya Wan Phase 2 and bespoke units at Ying Li Intl Electrical & Hardware Centre Phase 1A. However, gross margin more than halved to 27% (-42.3ppt) from an increase in sales mix towards lower profitability sale of properties segment, while bottom line was buttressed by reduced admin expenses (-22.7%). NAV/share stable at Rmb1.94.
*Cogent Holdings: 1Q17 net profit climbed 5% to $8.1m on firmer revenue of $35m (+7%), bolstered by transportation management (+8%) and container depot (+42%) segments, while automotive logistics (+1%) and warehouse & property management (-1%) arms remained muted. Operating margin ticked 1ppt lower to 30.5% on higher subcontracting costs for container repair & trucking, as well as rising fuel prices. NAV/share at $0.2809..
*Avi-Tech: 3QFY17 net profit rose 10.5% to $1.6m, as revenue jumped 22.5% to $10.8m, led by broad-based improvements across burn-in board manufacturing and PCBA services (+40%), burn-in services (+15%) and engineering services (+3.6%). Gross margin narrowed 1.6ppt to 30.4% on a shift in sales mix. NAV/share at $0.2732.
*Sunpower: 1Q17 net profit jumped 60.1% to Rmb25.7m, while revenue rose 17.8% to Rmb343.2m, lifted by higher contribution from environmental equipment manufacturing, but mitigated by lower sales from engineering procurement construction integrated solutions. Gross margin rose 1.2ppt to 25.3%, while bottom line was aided by a 74.6% drop in other operating expenses due to lower impairment of receivables. NAV/share at Rmb1.553.
*GSS Energy: 1Q17 net profit jumped 58.5% to $1m, while revenue rose 28.3% to $21.7m, driven by stronger performance in the precision engineering arm. Gross margin was stable at 23.5% (-0.3ppt), while bottom line was buttressed by cost control efforts. NAV/share at 7.84¢.
*UG Healthcare: 3QFY17 net profit fell 43.5% to $0.9m, despite increased revenue of $17.6m (+16.8%) due to higher volume of gloves produced and sold. However, a rise in raw material costs caused gross margin to narrow 3.6ppt to 18.7%, while the bottom line was further weighed by an 82.2% jump in admin expenses. NAV/share at $0.1928.
*Cordlife: 3QFY17 net loss contracted to $0.4m (3QFY16: $2m loss), mainly due to the absence of professional fees (3QFY16: $3.1m). Revenue slipped 4.8% to $14.2m on higher discounts, while gross margin contraction to 64.8% (-0.5ppts) was also weighed by lower profitability at Stemlife. Consequently, group swung into an operating loss of $0.4m (3QFY16: $1.4m profit). NAV/share at $0.4774.
*Hong Leong Asia: 1Q17 net loss narrowed to $9.8m (1Q16: $16.5m loss), on the back of a 19.1% jump in revenue to $1.13b, led by strong performance from diesel engine unit China Yuchai (+30.3%), which translated to higher gross margin of 19.4% (+1ppts). Bottom line was also lifted by FX gain of $1.9m (1Q16: $1.8m loss) and a disposal gain of $0.9m (1Q16: $1.9m loss), but was erased by higher non-controlling interests of $44.7m (1Q16: $15.5m). NAV/share at $1.7903.
*CNMC Goldmine: 1Q17 net profit dived 98.7% to a paltry US$54,834, below estimate. Revenue slumped 43.8% to US$4.7m as production dived 49.5% to 3,669.9oz, although partially mitigated by higher gold ASP (+11.4%). Recorded operating loss after all-in margin contracted to 24% (-34ppts), further weighed by lower FX gain (-82.8%), while bottom line was buttressed by higher finance income (+13.2%). NAV/share at US$0.0975.
*Spackman Entertainment: 1Q17 net profit spiked from a low base to US$4.8m (1Q16: US$1m), constituting 97% of full-year estimate. Stemming from the premiere of Master, revenue jumped 108% to US$8m on higher takings in film production (+123%) and distribution (+100%), while gross margin expanded to 48% (1Q16: US$0.7m loss). NAV/share at US$0.056..
*Singapore O&G: 1Q17 net profit of $2m (+2.8%) rose at a slower pace compared to revenue of $7m (+6.1%), which was due to improved takings from O&G and cancer-related segments. This was due to lower operating margin of 34.2% (-1.6ppts) from higher wage expenses (+11.3%) and depreciation (+55%). NAV/share at $0.1831.
*Sino Grandness: Dismal 1Q17 as net profit crashed 85.3% to Rmb52.8m, weighed by a negative Rmb165m swing into fair value loss of Rmb7.1m on its convertible bonds. Revenue slumped 12.2% to Rmb635.1m due to lower overseas sales for canned products (-5.8%) and beverage (-15.4%). Further, gross margin contracted 1.9ppt to 39.1% on higher raw material costs and a shift in sales mix. NAV/share at Rmb2.832.
*Mewah Int'l: 1Q17 net profit jumped 35.8% to US$3.9m, on higher revenue of US$727.9m (+2.3%) led by stronger consumer pack business (+35.5%), but offset by tepid sales volume from the bulk segment (-7.9%). Gross margin inched up 1.3ppt to 4.8%, but bottom line was pared by a sharp drop in FX gains (-77%). NAV/share at US$0.3295.
*Pacific Radiance: 1Q17 net loss deepened to US$14.7m (1Q16: US$4.6m loss), missing estimates. Revenue sank 24% to US$13.9m on weak utilisation and depressed vessel charter rates. The bottom line was further dragged by a spike in finance expenses (+33%). NAV/unit at US$0.387.
*Marco Polo Marine: 2QFY17 net loss deepened to $8.2m (2QFY16: $1.1m loss). Despite an 8% rise in revenue to $12.8m due to higher takings in ship building and repair (+17%), ship chartering (-9%) slumped from lower utilisation and charter rates. Group could not contain its cost of sales (+81%) and swung into a gross loss of $1.3m (2QFY16: $4.1m profit). Further, the bottom line was weighed by increased finance costs (+26%). No new developments have been made in relation to the group's proposed debt restructuring. NAV/share at $0.461.
*Civmec: 3QFY17 net profit plummeted 65.5% to $0.8m on a sharp drop in JV contribution following project completion. Revenue inched up 1.6% to $74.1m, but gross margin inched down 0.2ppt to 9.4%. NAV/share at $0.3507.
*800 Super: 3QFY17 net profit slumped 16.7% to $6.3m, as revenue inched 2.1% lower to $39.5m following the completion of certain cleaning contracts. Pretax margin contracted 3.1ppt to 18.5%, mainly from increased employee benefits (+9.3%) as a result of lower government grant. NAV/share at $0.4395.
*TA Corp: 1Q17 net profit tumbled 31.4% to $1.6m from the absences of reversal for 1) doubtful debt allowance (1Q16: $1.6m) and 2) impairment from property development (1Q16: $3m). Revenue leapt 70.1% to $61m, driven by property development (+313%), property investment (+28%), construction (+29%) and lubricant and tyre distribution (+20.3%) businesses, which lifted gross margin higher to 19.8% (+1.9ppt). NAV/share at $0.437.
*PCI: 3QFY17 net profit surged 230% to US$2.5m, on improved revenue of US$45.1m (+15.8%) amid increased demand from existing and new customers. Gross margin improved 3.7ppt to 12.6%. Net cash position improved to US$38.9m (FY16: US$27.9m), which translates to 51.3% of market cap. NAV/share at US$0.4169..
*Procurri: 1Q17 net profit leapt 74.5% from a low base to $0.2m, as revenue rose 47.2% to $38.3m, lifted by growth in IT distribution (+49.9%) and lifecycle services (+36.9%). Gross margin expanded to 33.6% (+2.6ppts) on the shift in revenue mix, but bottom line was hit by higher FX loss of $0.4m (1Q16: $40,000 loss) and increased provision for obsolescence. NAV/share at $0.2386.
*Declout: 1Q17 net loss narrowed to $2.7m (1Q16: $4.6m loss), on higher revenue of $63.1m (+11.4%), from broad-based growth in IT infrastructure sales & services (+7.3%) and vertical domain cloud (+39.9%). Gross margin expanded to 26.3% (+2.5ppts) on the shift in sales mix, although bottom line was weighed by higher admin expenses (+22.9%). NAV/share at $0.1721.
*Alliance Mineral: Sank to a deeper 3QFY17 net loss of A$1.7m (3QFY16: A$0.6m), undermined by a A$0.9m option paid to its corporate advisor, as well as A$0.4m in operating costs to maintain the Bald Hill mine site, which was previously capitalised. There was no revenue as commercial production has not commenced. NAV/share at A$0.032.
*Jadason: 1Q17 net profit crept higher to $0.3m (+7%), lifted mainly by higher FX gain of $0.5m (1Q16: $0.1m). Revenue slumped 10% to $13.8m as higher takings from manufacturing & support services of $8m (+3%) could not fill the drop in equipment & supplies of $5.2m (-24%). While gross margin remained flat at 20%, bottom line was buttressed by reduced finance costs (-64%) and absence of associate loss (1Q16: $0.1m loss). NAV/share $0.0682.
*Keppel Corp: News reports cited that the group could bag its first box ships order from Pasha Hawaii, after being selected to construct two 2,525 TEU LNG-fuelled box ships for an undisclosed sum, which comes with the option for an additional two vessels.
*Yanlord: To acquire a majority stake in Wuhan Shan Ling Investment Management, an entity that holds the land use rights for a prime residential development project with gfa of 144,000 sqm. Yanlord has injected an initial investment of Rmb5.54m for a 1% stake, as a precursor for an eventual 55% interest.
*Cityneon: CEO Ron Tan and several Chinese parties, including HKEx-listed Jin Bao Bao, have launched a pre-conditional mandatory general offer at $0.90/share, following a buyout of majority shareholder Star Media’s 52.51% stake. The parties currently do not intend to privatise the company.
*DiSa: Group’s point-of-sales digital asset protection solution will be adopted by E FUN’s Nextbook Tablets from 13 May onwards. E FUN has been marketed as one of the top five tablet brands by sales volume in 2016.
- Tat Hong