Oil-related stocks may find some support as oil rebounded above US$50 a barrel, but broader market will look to 1Q economic growth and Apr industrial production data due on Fri for further direction.
Regional bourses are higher in Tokyo (+0.4%), Seoul (+0.6%) and Sydney (+0.5%).Technically, the STI is likely to be range-bound after bouncing off the 3,190 support last week with topside resistance at 3,275.
Stocks to watch:
*IHH Healthcare: 1Q17 net profit doubled to RM470m, bolstered mainly by a disposal gain of RM313.4m from the sale of 6.1% stake in Apollo Hospital Enterprise. Otherwise, core earnings of RM201.8m (-15.3%) missed estimates. Revenue of RM2.68b (+8%) was lifted by recent acquisition Tokuda and City Clinic, but EBITDA margin contracted to 21.1% (-3.8ppts) on start-up costs at Gleneagles Hong Kong Hospital and Acibadem Altunizade Hospital. MKE maintains Hold but cuts TP by 6% to RM5.62.
*Vallianz: Swung to 5QFY17 net loss of US$173.2m (1QFY17 net profit: US$4.9m), hit by US$212.9m of impairments. Quarter revenue sank 21.5% to US$38.7m, from lower utilisation amid challenging market conditions. Gross margin contracted 5.5ppt to 23.8%. NAV/share at US4.12¢. The group has requested for a trading halt pending the release of an announcement.
*mm2 Asia: In discussions with ASX-listed Village Roadshow to buy over its 50% JV stake in Golden Village Cinema in Singapore. Golden Village operates 11 multiplexes with 92 screens, and the acquisition could help mm2 scale up in the downstream segment.
*Top Glove: Acquiring two factories from A1 Globe and Titi Globe for a combined RM60.7m, or 0.8x and 0.7x P/B, respectively, to boost production capacity and market share.
*Koh Brothers: Marked foray into South Korean real estate with the acquisition of a freehold site in Gangnam-gu for KRW95.8b ($119m) via its 45% JVCo. The 17.798.5 sqm gfa site will be developed into a mixed-use project, comprising 380 luxury residential units and 2,700 sqm of retail space, and construction is expected to complete in 2020.
*Pacific Radiance: Set up 51:49 JV with Allianz Offshore Middle East to own, manage, charter and lease offshore support vessels, particularly in the Gulf and Egypt.*Nordic Group: 1Q17 net profit jumped 21% to $2.8m, helped by reduced operating expenses (-24.5%). Revenue held steady at $19.9m (+1%) on higher sales from maintenance services (+17%) and sales of carbon emission allowances of $1.4m (1Q16: nil), but was pared by a 14% slump in project services. Gross margin stood pat at 31%. NAV/share at $0.177.
*Global Yellow Pages: Divesting 80% stake in marketing services firm eFusion Solutions back to the founder Lim Kok Eng for $1.2m. Including a $1.1m loan owed to eFusion to be written-off, the disposal will result in a loss of $2.6m. Post-divestment, eFusion will pay Global Yellow Pages a management fee of $1.5m for use of its office facilities and support services over three years.
*AA Group: Acquiring a 95% stake in W&P Precast from Poh Huat Heng for $2.1m, to position itself for a pick-up in the construction industry.
*SGX: Welcomed the inaugural rupee-denominated bond listing of National Highways Authority of India, which raised Rs30b at 7.3% per annum over the five-year tenor.