Wednesday, October 4, 2017

SG Market (04 Oct 17)

- Market is still not showing any clear direction although the STI appears to have broken out of its downtrend channel formed since Jul.
- Investors may position in MKE's preferred picks ahead of the 3Q results season, such as UOB (TP: $26.40), UOL (TP: $9.43), GuocoLand (TP: $2.75), CapitaLand Commercial Trust (TP: $1.81), Ascendas REIT (TP: $2.90), Genting Singapore (TP: $1.35).
- Technically, immediate topside for the STI is capped at 3,270 with support at 3,190.

- Entered into a 70:30 JV with Singland Homes, a subsidiary of 49.8% owned UIC, to explore business opportunities and take advantage of the upturn in home prices.
- Trading at 26% discount to RNAV/share of $11.03.

*SIA Engineering
- Entered into 51:49 JV with US-based Moog Inc to provide maintenance, repair and overhaul services for Moog-manufactured flight control systems fitted on new generation aircraft, including B787 and A350.
- The JVCo intends to market its component repair services to customers in Asia Pacific and beyond.
- With this addition, SIAEC will have 26 JVs across nine countries with leading OEMs and other strategic partners.
- Last traded at 22.6x forward P/E.

*Singapore O&G (SOG)
- Signed a three-year commercial collaboration with KL Fertility & Gynaecology Centre (KLFGC), a subsidiary of Australian-based Monash IVF Group.
- The three-year service agreement will enable KLFGC to provide Assisted Reproductive Technology (ART) services such as in-vitro fertilisation and intracytoplasmic sperm Injection procedures to SOG's patients in Singapore.
- Trades at forward P/E of 24.5x.

*Sembcorp Marine
- Terminated three rig contracts costing a total of US$625m with Mexican oil driller Oro Negro.
- Delivery of the jack-up rigs have been deferred since 2015.
- Last traded at 46.3x forward P/E.

*Genting HK
- Proposed a voluntary delisting from the SGX to consolidate the trading of its shares on HKSE.
- This is in line with the group's plans to focus its efforts in North Asia and reduce admin and compliance costs.
- Arrangements will be made for shareholders to transfer their shares to its primary listing on HKSE.
- The cruise ship operator is loss-making and trades at 0.44x P/B.

- 70:30 JV with parent Guoco Group has been awarded the land tender for the 21,027 sqm plot of land at Beach Road for $1.62b or $1,706 psf ppr.
- The mixed-development will consist of office, retail and residential elements.
- MKE maintains Buy with RNAV-based TP of $2.75.

*800 Super
- Acquiring Iwash Laundry from Fairly Jewellers and three individuals for $5m (2.97x P/B).
- Iwash is in the business of laundry and dry cleaning laundries and owns a leasehold property with gfa of 2,600 sqm at 80 Senoko Drive.
- Acquisition is part of its strategy to venture into alternative growth areas and opportunities.
- Trades at 13.1x forward P/E.

*Addvalue Technologies
- In response to the SGX trading query, the group replied that it is not aware of specific factors that can explain its recent unusual share price surge.
- But it shared a disclosure made in Apr '17 that it remains keen on working towards a spinoff and listing of its subsidiary, Addvalue Solutions, which handles the Inter-satellite Data Relay System (IDRS) airtime business.
- Further, the group disclosed that it is in talks with various parties on possible corporate exercises and transactions, including its IDRS-related business.

*Samurai 2K
- Developed two new ranges of two-component aerosol spray-on paint for the automotive industry.
- The products aim to reduce the chances of health hazards associated with regular aerosol spray-on paints.
- It will also participate at the upcoming Specialty Equipment Market Association Show in Las Vegas, US to showcase the new range of products.

*Top Global
- Acquiring a 6,103 sf NLA freehold strata-titled office unit at Tong Building for $24.9m.

*Cache Logistics Trust
- 18-for-100 rights issue at $0.63 apiece has been subscribed by 1.87x.
- The $102.7m rights proceeds will be used to pare debt, with aggregate leverage expected to be lowered from 43.4% to 35.5%.
- Pro forma FY16 DPU will be diluted to 6.882¢ from 7.725¢ from the 18% increase in unit base.

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