Monday, January 15, 2018

SG Market (15 Jan 18)

- The market could push higher, powered by Wall Street's record showing last Fri as well as prospect of rosy global growth. Key data to look out for this week include S'pore's NODX for Dec and China's 4Q GDP.
- Technically, the STI sees support at 3,470 and topside resistance at 3,550.

- 1QFY18 operating results met estimates, with net profit of $60.4m (+32%) boosted by divestment gains.
- Revenue of $258.8m (-7%) was weighed by weak core media business (-13.9%) amid falling takings from ads and circulation, although cushioned by property (+1.2%) and other businesses (+48.2%).
- This was mitigated by slightly improved operating margin of 26.2% (+0.8ppt) from lower expenses including newsprint, staff bonuses, depreciation, retrenchment costs, as well as gains from an associate's IPO.
- Bottom line was also helped by lower taxes, helped by prior over-provision.
- Trades at 19.9x forward P/E.

*Lian Beng
- 2QFY18 net profit slumped 43.2% to $3.2m, bringing 1HFY18 earnings lower to $12.2m (-33.7%).
- This came on the back of reduced 1HFY18 revenue of $87.6m (-27%), as increased contribution from investment holdings was offset by the weakness in the construction segment.
- Gross margin contracted 2.2ppt to 22.3% on a shift in sales mix.
- Bottom line was dragged by higher distribution expenses (+74.5%) and finance costs (+70.7%), as well as income from associates/ JVs (-31.6%).
- Construction order book surged to $972m (1QFY18: $661m), providing sales visibility through FY2022.
- Last traded at 8.1x trailing P/E and 0.64x P/B.

- 2QFY18 net loss sank deeper to $7.9m (2QFY17: $0.6m loss), mainly hurt by a $6.2m impairment loss of a JV-owned liquefied gas carrier vessel.
- Revenue surged 51.8% to $18.1m on new takings at port operations from recently-acquired TNS Ocean Lines and higher contribution from freight forwarding business and sale of ready-mix concrete.
- Gross margin widened 1.3ppt to 16.3%.
- Loss-making and trades at 0.98x P/B.

- Clinched a Rmb107m contract to provide EPC services for a flare gas recovery system to Zhejiang Petrochemical.
- Work is expected to complete by end FY18.
- Trades at 7.1x trailing P/E.

*800 Super
- Awarded a public waste collection contract worth $193.5m by NEA.
- Work involves the collection of refuse from domestic and trade premises in Pasir Ris-Bedok precinct.
- The contract will take effect from 1 Jul '18 to 31 Oct '25.
- Last traded at 13.8x trailing P/E.

*Hong Leong Asia
- 40.2% owned China Yuchai launched 14 new engines compliant with China's more stringent National VI emission standards.
- The move is in line with its key strategy for the group to create a technological edge and market leadership for commercial vehicle engines in China.
- Last traded at 0.67x P/B.

*RHT Health Trust
- Extended the exclusivity period for talks with controlling unitholder, Fortis Healthcare, in relation to the proposed disposal of its entire asset portfolio, by 60 days.
- The proposed Rs46.5b sale would translate to at least $0.90/unit (post-debt), subject to completion of fund-raising by Fortis and regulatory approval.

- Disposed property at 42 Tech Park Crescent for $3.4m.
- The non-core property sits on a land area of 926.4 sqm.
- Proceeds from the disposal will be used to repay bank borrowings and improve overall cash position.
- Trades at 15.4x trailing P/E.

*Tiong Seng
- Raised its effective stake in Tianjin Zizhulin Guangang Property by 5.5ppts to 69.5% for Rmb38.4m, representing 1.76x P/B.
- Last traded at 7.1x trailing P/E.

*k1 Ventures
- Proposed voluntary liquidation and subsequent delisting, following the disposal of substantially all its assets and property.
- The liquidation will require 75% shareholders' approval at an EGM.

- Issued 665,490 new shares in relation to a warrant exercise at US$1.09 each.
- 29.1m outstanding warrants remains, which expires on 29 Jan 2018.

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