SG Market (30 Aug 17)

MARKET OVERVIEW
- Likely to see technical rebound following yesterday's decline after US President Trump's measured response to North Korean missile launch eased fears of further geopolitical escalation.
- Technical outlook remains weak with STI trading below its 20 and 50-dmas. Downside risk lies at 3,220, while topside resistance is at 3,275.

CORPORATE RESULTS
*Cordlife
- Dipped into FY17 net loss of $2.6m from $12.3m profit last year, due to absence of FX, fair value and disposal gains.
- Revenue was muted at $59.9m (+0.6%) despite the inclusion of Malaysian-based Stemlife.
- Gross margin narrowed 1.4ppt to 64.8% on lower profitability of Stemlife, and new offering of cord tissue banking, which has lower price point to cater to the mass-market.
- Proposed final DPS of 0.5¢ (FY16: nil)
- NAV/share at $0.4831.

*DiSa
- 4QFY17 net loss narrowed to $4m (4QFY16: $7.7m) in absence of impairment loss, bringing FY17 loss to $16m (+48.3%).
- Last quarter revenue slumped 76.6% to $146,000 due to negligible sales generated from its energy management services (-94.2%), while its anti-theft systems brought in maiden contributions of $46,000 in the technology segment.
- The group burned through more operating cash outflow of $1.6m (4QFY16: -$242,000).
- NAV/share at 0.25¢.

*Dukang Distillers
- FY17 net loss swelled to Rmb112.4m (FY16: Rmb10.7m), battered by impairment loss of Rmb31m.
- Revenue fell 46.3% to Rmb464.5m on overall weaker sales volumes (-42.5%) and ASPs (-6.5%).
- Gross margin contracted to 26.1% (-8.7ppt).
- Bottom line was further hit by revaluation loss on non-current assets (Rmb4.9m), production suspension costs (Rmb6.8m) and compensation on purchases returns (Rmb8.8m).
- NAV/share shrank to Rmb16.42 (-8%).

POSITIVE NEWS
*DBS
- Launched its digibank in Indonesia that uses technology such as biometrics and AI to serve banking customers.
- Among other benefits, its customers will be able to open an account with no minimum balance and earn 3% interest.
- Its other digibank which was set up in India, has secured more than 1m customers.
- MKE last had a Hold with TP of $21.50.

*StarHub
- Partnering with tech giant Google to offer its mesh networking device, Google Wifi exclusively in Singapore.
- Mesh networking systems will allow users to enjoy coverage across various rooms and is more effective than routers.
- Customers will be able to buy a three-pack Google Wifi 24-month bundle at $15/month on selected StarHub broadband plans from 31 Aug.
- StarHub will hope the tie-up will improve its broadband segment, which last suffered a 3% decline in service revenue on a drop in subscribers (-1.3%) as well as ARPU (-2.7%) in 2Q17.

*ISOTeam
- Secured 15 projects worth a total of $24.2m, and are slated to complete progressively between 2H17 and Aug '19.
- Bulk of the contracts are for its addition & alteration ($16.8m), mechanical & electrical ($3.2m), and repair & redecoration (R&R) segments.

NEGATIVE NEWS
*Swiber
- Lodged a statutory declaration of its subsidiary, Swiber Engineering's inability to continue business.
- Meetings between the company and its creditors will begin on 8 Sep.
- Appointed KPMG as interim liquidators of the subsidiary.

NEUTRAL NEWS
*ST Engineering
- Injected $10.2m into LeeBoy India Construction Equipment, which designs and manufactures construction equipment for the infrastructure and coal industries.
- Separately, the group is also partnering Alpha Ori Tech to build two IT-based platforms to 1) consolidate smart data and apply analytics to improve fleet management for ship owners and operators and 2) provider machine learning solutions and anti-collision capabilities.
- Both partners will also look to strengthen cyber security for shipborne systems.

*Z-Obee
- Delisting from the SGX in order to save on admin and compliance costs.
- The group will keep its primary listing on the HKEx.