Thursday, October 12, 2017

SG Market (12 Oct 17)

- Positive sentiment could spillover to the SG market following the release of slightly dovish Sep Fed minutes, and bolstered by easing tensions in Spain.
- Technically, the STI see immediate support at 3,275, with upside resistance pegged at 3,320.

- FY17 net profit grew 32% to $350.1m, mainly lifted by a $149.7m divestment gain arising from a 33% stake sale in online classified site 701Search.
- Otherwise, full-year core earnings of $200.4m (-24.5%) missed street forecasts.
- Operating revenue of $1.05b (-8.8%) continued to be pressured by the core media business (-13%).
- EBIT margin contracted to 19.5% (-7ppt), on impairment charges totalling $60.6m.
- Final and special DPS shaved to 9¢ (4Q16: 11¢), bringing FY17 DPS to 15¢ (FY16: 18¢).
- Group reducing headcount further and expects to incur retrenchment costs of $13m in 1QFY18.
- Last traded at 19.1x forward P/E and 2.7% dividend yield.

*Duty Free International
- 2QFY18 net profit crept 1.6% higher to RM14.1m, lifted by a RM1.6m fair value gain on option.
- This brought 1HFY18 earnings to RM29.1m (-13.6%), or 45% of full-year street estimate.
- Quarter revenue slipped 5.5% to RM148.3m, on lower demand due to the GST imposition at border outlets and duty free zones.
- Declared second interim DPS of 0.5¢ (2QFY17: nil).
- Trades at 13.9x forward P/E.

*TEE International
- Slumped into a 1QFY18 net loss of $0.9m (1QFY17: $0.6m profit) on gross margin compression.
- Revenue rose 9.6% to $70.1m from higher progressive sales from ongoing development properties, but gross margin contracted to 10.1% (-1.2ppt).
- Bottom line was further impacted by a 221.3% spike in selling & distribution expenses on promotional activity, as well as absence of tenant compensation (1QFY17: $0.4m) and FX gain (1QFY17: $0.2m).
- NAV/share at $0.189.

*TEE Land
- 1QFY18 net profit dived 96.3% to $22,000.
- Revenue surged 88.4% to $26m on higher progressive revenue from development projects Hibre 28, 183 Longhaus and Have Avenue project.
- But gross profit narrowed to 16.3% (-12.1ppt) on a shift in sales mix.
- Earnings fizzled on a 225% spike in selling & distribution costs from promotional expenses incurred and lower associate contribution (-20.3%).
- NAV/share at $0.352.

- 32.5% owned Nanjing Puzhen Rail Transport secured three metro train car supply contracts worth Rmb2.37b.
- The contracts are slated for delivery between Jun '18 and Mar '21.
- The counter is a beneficiary of China's push to develop and expand urban rail transit systems to meet the needs of urbanisation.
- Last traded at 11.9x forward P/E.

- Proposed placement of 500m new shares (8.7% enlarged share capital) at 0.8¢ to two parties.
- The placees include management consultancy firm, Summit Planners Advisory Group, and non-exec director, Liu Song.
- Net proceeds of $3.9m intended to support M&A of WE Crowdfunding and working capital.

- Proposed 11% investment in a cross-platform Malaysian B2B commerce solution provider, Boostorder, for RM2.5m.
- The investment is synergistic to the group's existing proprietary software and customer base.
- Last traded at 1.2x trailing P/E.

- Entered into an agreement to dispose a 60-year leasehold, underutilised cold storage and office at 5 Second Chin Bee Road for $7.8m.
- The sale price is at a 6% discount to a market valuation done back in 2015, and the group estimates a disposal gain of $4.2m.
- Net proceeds from the disposal will be used to pare debt and for working capital.

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