Wednesday, October 25, 2017

SG Market (25 Oct 17)

- The market could take a breather as it digests the 3.6% rally since start of Oct but oil-related counters may get a lift from firmer crude prices following a pledge from Saudi Arabia to help balance the global oil market.
- Technically, the STI could pull back from overbought levels to near term support at at 3,320. overhead resistance remains at 3,355.

*Mapletree Industrial Trust
- 2QFY18 DPU of 3¢ (+6%) met expectations.
- Revenue spiked 9.9% to $92.6m and NPI jumped 11.1% to $70.7m, driven by its build-to-suit project for HP Singapore and pre-termination compensation of $3.1m from Johnson & Johnson.
- However, portfolio occupancy slipped 2.6ppt q/q to 90.4%, while aggregate leverage ticked 0.2ppt q/q higher to 30.0%.
- Last traded at an annualised 2QFY18 yield of 6.1% and 1.4x P/B.

*Frasers Centrepoint Trust
- 4QFY17 DPU rose 5.5% to 2.97¢, in line with estimates.
- Revenue and NPI jumped 8.1% and 10% to $48.2m and $34.6m, respectively, from higher rental income and improved occupancy at Northpoint City North Wing.
- Occupancy improved to 92% (+4.9ppt q/q), while aggregate leverage contracted slightly to 29% (-1ppt q/q).
- Trades at an annualised 4Q yield of 5.3% and 1.1x P/B.

*Cache Logistics Trust
- 3Q17 DPU dropped 12.8% to 1.541¢ on an enlarged post-right unit base (+19%) but was still in line.
- Gross revenue slipped 2.2% to $27.4m, impacted by divestment of Cache Changi Districentre 3 and lower income from 51 Alps Ave due to ongoing legal issues.
- NPI fell 3.3% to $21.3m on increased expenses arising from the conversion of properties to multi-tenancies.
- Portfolio occupancy contracted to 97.3% (-1ppt q/q), while aggregate leverage contracted 7.7ppt to 35.7%.
- Trading at an annualised 3Q yield of 7.3% and 1.09x P/B.

*SP Corporation:
- 3Q17 net profit slumped 57% to $0.3m despite higher revenue of $33.3m (+17%).
- The stronger top line was lifted by increased contribution from commodities trading (+28%), but was partially pared by lower sales in tyre distribution (-53%).
- Accordingly, gross profit contracted from 4.5% to 2.7% on the shift in sales mix.
- Last traded at 23.4x trailing P/E.

*Mapletree Industrial Trust (MINT)
- Formed a 40:60 JV with parent Mapletree Investments to acquire 14 US data centres, totalling 2.3m sf, for US$750m.
- Correspondingly, MINT launched a private placement of 82m new units at an issue price of $1.90 each.
- Net proceeds of $152.7m earmarked to part-fund of the US data centre portfolio.

*ST Engineering
- Electronics arm secured $585m worth of contracts in 3Q17 (2Q17: $490m, 1Q17: $464m).
- These comprise work in rail electronics & intelligent transportation ($125m), satellite & broadband communications ($101m) and advanced electronics and ICT solutions ($359m).
- Trading at 21.1x forward P/E, at the upper end of its 13-24x historical range.

*First Resources
- 3Q17 FFB harvest jumped 7.6% to 832,364 tonnes despite a slight dip in yield to 4.8 tonnes/ha (-0.1ppt).
- CPO production rose 6.3% to 194,014 tonnes, but extraction rate narrowed to 22% (-0.2ppt).
- MKE last had a Hold with TP of $2.04.

*Singapore eDevelopment
- US biomedical subsidiary, Global BioLife, has developed Laetose, a low-calorie, low glycemic index, natural, modified sugar.
- Group entered collaboration with top US candy manufacturer, Quality Candy, to develop, manufacture and distribute the alternative sugar product.

*Far East Orchard
- Entered into a binding term sheet with Fontaine Investment to be the sole and exclusive operator of three new hotels located in Sentosa.
- The hotels with a total of 839 rooms are targeted to open in mid-2019.
- Last traded at 0.54x P/B.

*Keppel T&T
- Subsidiary Keppel Logistics has launched UrbanFox, an omni channel logistics and channel management solutions provider.
- The debut follows the group's strategic acquisition of Courex, a B2C last-mile fulfilment start-up.
- Last traded at 15.5x forward P/E and 1.04x P/B.

*NetLink NBN
- Fined $10,000 by IMDA for the fibre service disruption in Tanjong Rhu last Dec.
- Further investigations relating to service restoration within the stipulated timeframe are still being assessed.

*Marco Polo Marine
- Asking holders of its $50m 5.75% notes due in 2016 to accept close to a 30% hair cut for a redemption to be made in Jan 2018.
- The redemption will amount to $71,736, comprising cash of $35,868 and an equivalent amount in shares to issued at 3.5¢ each.
- EGM for noteholders will be scheduled on 15 Nov.

*Keong Hong Holdings
- Acquired 49% interest in Keong Hong-MK for VND9.8b.
- The move is intended to help the group expand its presence in Vietnam and ramp up its overseas investment portfolio.

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