Thursday, January 18, 2018

SG Market (18 Jan 18)

- The market is likely to to be swept up by bullish sentiment after Wall Street continued to break new records with the rally sustained by a confluence of positive factors.
- Technically, STI could test its upside resistance is at 3,550, while downside support remains at 3,470.

*Soilbuild REIT
- 4Q17 DPU fell 11.9% to 1.383¢, bringing FY17 DPU of 5.712¢ (-6.2%) in line with estimates.
- For the quarter, revenue declined 4.3% to $20.7m due to lower contribution from 72 Loyang Way, but partially mitigated by higher takings from NK Ingredients, KTL, Solaris and West Park BizCentral.
- NPI slid 6% to $17.6m on higher property expenses incurred at 72 Loyang Way.
- Completed 120,000 sf of renewals and secured 90,000 sf of new leases in 4Q17 despite soft leasing environment but suffered negative rental reversions of 15.7% for new and renewal leases.
- Occupancy rate weakened to 92.7% (-1.4ppt), while aggregate leverage stayed at 40.6% (3Q17: 37.9%).
- Trades at 8.1% FY17 yield and 1.1x P/B.

*First REIT
- 4Q17 DPU inched up 0.9% to 2.15¢, bringing FY17 distribution to 8.57¢ (+1.2%), meeting estimates.
- Gross revenue of $28.6m (+5.8%) and NPI of $28m (+4.9%) was lifted by full contribution from three recently acquired hospitals in Buton, Yogjakarta and Labuan Bajo, as well as from existing properties.
- Aggregate leverage stood at 33.6% (+1ppt q/q) with interest cover of 5.5x.
- Trades at annualised 4Q17 yield of 6.1% and 1.38x P/B.

*ST Engineering
- Aerospace unit clinched new contracts worth $510m in 4Q17 (3Q17: $530m).
- New contracts involve services ranging from airframe maintenance and landing gears repair to pilot training.
- This brought FY17 aerospace orders to $2.8b (FY16: $2.57b).
- Trading at 21.2x forward P/E and 4.5% dividend yield.

- Bought another 22% stake in SGX-listed precision machining firm JEP Holdings after earlier purchase of 7.5% stake to bring its overall shareholding to 29.5% for $28.2m or 6.55¢ each.
- The move is aimed at diversifying beyond semiconductors into the aerospace industry.
- UMS trades at 11.7x forward P/E and 4.9% yield.

- Updated that its suspended coal-mine methane power plant in Shanxi, China, has resumed its operations to supply electricity to the power grid in Jan '18.
- Trades at 8.7x trailing P/E.

- Group's Super X-Fi technology was awarded the "Best of CES 2018 Award" at the world's largest consumer electronics show.
- Many audiophiles were blown away by the game-changing product, which brings audio from a high-end multi-speaker system to a headphone.

*Vashion Group
- Group's HK subsidiary received three arbitration orders pertaining to guarantee agreements it allegedly entered with two private individuals.
- The guarantees were made, unknown to management, on Rmb25m worth of loans.

- Disposing its entire 35% stake in Malaysia-based Trackplus for $1m, or 35% below book value as at 31 Dec '16.
- Trackplus engages in commercial and residential property development for a 7,863 sqm land plot in Shah Alam, Selangor.
- Post disposal, FY16 pro forma loss per share is expected to widen 12.5% to 0.09¢.

- Acquired an additional 18.51% interest in Maxwealth Fund Management Company for Rmb61.5m.
- The deal was priced at book value and lifted OCBC's stake from 10% to 28.51%.
- The remaining 71.49% interest is held by Bank of Ningbo, which is also an associate of OCBC.
- Trades at 1.48x P/B.

*Food Empire
- Spending US$41.3m to expand its coffee manufacturing facility in India.
- Funds comprise internal resources (27%) and debt (73%).

*Soo Kee
- Terminated the MOU to set up a 55:45 JV with major Chinese gold jewellery manufacturer and distributor Global Crown, to make inroads into the HK and China market.
- Instead, Soo Kee is acquiring 100% interest in Diamond Avenue, a dormant entity from Global Crown, for HK$0.105m, representing 0.08x P/B.
- Group believes the new acquisition will still help to pave way into the growing bridal jewellery market in China.
- Last traded at 13.3x trailing P/E.

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