Wednesday, November 29, 2017

SG Market (29 Nov 17)

- Positive sentiment could spill over to the SG market following approval to advance the US tax bill by the Senate Budget Committee. This brings the bill a step closer to a floor vote, expected to take place on Thu.
- The STI sees immediate upside resistance at 3,460, with underlying support at 3,390.

*Keong Hong
- 4QFY17 net profit leapt 213.5% to $53.4m, shored by a $49.8m revaluation gain.
- Revenue soared 70.9% to $97.7m on increased construction revenue from existing projects and variation orders, as well as final billings for completed projects.
- However, gross margin shrank 5.9ppts to 11.6% on higher cost of sales (+83.2%).
- Order book shrank to $344m (FY16: $351m).
- Lowered final DPS to 1.75¢ (4Q16: 3¢), bringing FY17 total DPS to 2¢ (FY16: 8¢)
- Trades at 2x trailing P/E.

*CapitaLand Retail China Trust (CRCT)/ CapitaLand
- Formed a 51:49 JV to acquire shopping mall Rock Square in Guangzhou, China, at market value of Rmb3.36b ($688.9m).
- The five-storey mall with NLA of 53,107 sqm has committed occupancy of 96.4%.
- To fund the deal, CRCT issued 64.4m new units at $1.612 and raised aggregate gross proceeds of $103.8m.
- CRCT's pro-forma FY16 DPU is expected to dip 0.3% to 10.02¢, implying a distribution yield of 6%.

*Lian Beng
- Won a $136.8m contract from UVD Projects to develop a condominium.
- Contract period is for 38 months and works will commence in Dec '17.
- Group expects the new contract to contribute positively to FY5/18 results.
- Construction order book lifted to $836m (Aug '17: $661m).
- Last traded at 7.5x trailing P/E.

- Opened its fifth Jumbo Seafood outlet in China, located in downtown Shanghai at the upscale L'Avenue Mall in Hongqiao.
- The outlet has a floor space of 820 sqm and seating capacity of 212 pax.
- Last traded at 20.9x forward P/E.

*Wee Hur
- Acquiring a 1,038 sqm freehold site with an existing heritage building at 183-189 A'Beckett Street, Melbourne, Australia, for A$35m.
- Group plans to redevelop the property into a 900-bed purpose-built student accommodation, as the location is just a 10-minute walk away from Uni. of Melbourne, and Royal Melbourne Institute of Technology.
- Construction expected to commence in 4Q18.
- Trades at 17.9x trailing P/E.

- Successfully closed its private fund, Centurion US Student Housing Fund, with an aggregate committed capital of US$89.5m and has been fully drawn down.
- The fund was raised to acquire 6 student accommodation in the US to mainly cater to first-tier universities.
- The proposed acquisition is slated to complete by end-2017 and will be accretive to earnings.
- The fund marks Centurion's maiden foray into the US and is in line its asset-light strategy.
- Last traded at 9.7x forward P/E.

- In another attack, Iceberg Research cited that Noble's balance sheet is still unreliable, despite making billions in impairment.
- An open letter to the commodity trader's creditors warned that Noble's restructuring plan would not work as the group will continue to burn cash, and does not address the fundamental weakness that led to its collapse.
- Further, Iceberg requested creditors to further investigate Noble's recent $25m investment in Toronto-listed Mkango Resources, given its market cap of $11.6m and seemingly residential premise as its head office.
- Separately, Noble proposed a sale of four dry bulkers just slightly above book cost at US$95m.
- The counter last traded at 0.15x P/B.

*Sabana REIT
- Entered into a facility agreement with UOB for a $30m secured four-year term loan facility.
- The loan facility will be utilised to repay existing borrowings and for working capital purposes.
- Offers 7.7% yield and valued at 0.72x P/B.

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