Tuesday, January 30, 2018

SG Market (30 Jan 18)

- Market could pull back after US stocks suffered worst one-day fall in five months as Treasury yields hit their highest levels since 2014 and a gauge of investor anxiety spiked nearly 25% ahead of President Trump's official State of the Union address, Fed's monetary policy meeting and a host of earnings from high profile tech companies.
- Technically, the STI is expected to range trade between 3,510 and 3,640 in the near term.

*Starhill Global REIT
- 2QFY18 DPU slid 7% to 1.17¢ (-7%), dragging 1HFY18 DPU to 2.37¢ (-7.4%), below estimates.
- For the quarter, revenue and NPI of $52.5m (-3%) and $40.5m (-2.2%) fell on weaker contributions from offices and Myer Centre Adelaide, AEI disruption at Plaza Arcade in Perth due to AEI and higher witholding taxes for its Malaysian and Australian properties.
- Portfolio occupancy rose 0.7ppt q/q to 94.1%, while aggregate leverage dipped 0.1ppt to 35.3%.
- Trading at annualised 2Q yield of 6% and 0.85x P/B.

*Ascendas India Trust
- 3QFY18 DPU of Rs0.79 (1.64¢, +15%) brought 9MFY18 payout to Rs2.10 (4.45¢, 7%), meeting estimates.
- Property income of Rs2.22b (+18%) and NPI of Rs1.56b (+23%) were buoyed by new acquisitions BlueRidge 2, aVance 4 and Atria at the V, incremental leasing at Victor, as well as positive rental reversion.
- Portfolio occupancy expanded 1ppt to 94%, while aggregate leverage ticked up 1ppt q/q to 31%.
- Trades at annualised 3QFY18 yield of 5.8% and 1.11x P/B.

*Ascendas Hospitality Trust (AHT)
- To divest Novotel Sanyuan and Ibis Beijing Sanyuan for Rmb1.16b, or a NPI yield of 3.3%.
- The sale price of the hotels exceeds the latest independent valuation of Rmb574m by 101.5% and AHT is estimated to net a divestment gain of $112.7m.
- Proceeds earmarked to repay debt, which will significantly reduce aggregate leverage from 32.2% to 23.6%.
- Following sale completion expected in 1H18, AHT will no longer have any properties in China.
- Post-sale pro forma NAV expected to be lifted by 10.9% to $1.02/unit.

*Noble Group
- Reached an in-principle agreement with several senior creditors representing 30% of its total US$3.4b senior debt instruments, for a debt restructuring deal that could reduce the borrowings by half.
- The deal involves swapping existing debt for a combination of new debt instruments and equity in the restructured group.
- This will result in senior creditors owning a 70% stake in the new holding co., while management will own 20%. Existing shareholders' stake will be diluted to 10%.
- Existing perpetual holders for the US$400m securities will need to take a 96.25% haircut to exchange their existing perps for an aggregate of up to US$15m in value.
- Senior creditors in agreement will also support a three-year committed trade finance and hedging facility of up to US$700m on competitive market terms for Noble's commodity trading business.
- The proposed restructuring is subject to other senior debt holders voting in favour as well as regulatory and shareholder approval.

- Received an undisclosed amount of grant from Spring Singapore in connection with its incubation programme.
- The programme aims to support startups in the energy technology, life and agricultural sciences, nanotechnology and/or industrial IT sectors.
- Trades at 0.51x P/B.

*Marco Polo Marine
- Completed its debt restructuring exercise ahead of its 1H18 targeted schedule.
- 3,183.6m new shares, representing 90.44% of enlarged share capital, were allotted, with the bulk (60.87%) to nine investors at 2.8¢ apiece, and the remaining to entitled creditors and noteholders at 3.5¢ each.
- Trading remains suspended until further notice.

*Raffles United
- Expects a turnaround into profitability for FY17 (FY16: net loss) due to higher revenue and lower operating expenses, as well as non-recurring losses from assets disposal.
- Last traded at 0.62x P/B.

*New Wave Holdings
- No sale agreement has been reached with any shortlisted potential purchasers after the close of the en-bloc public tender exercise for Jalan Besar Plaza on 10 Nov '17.
- Another tender could be launched again in Apr '18.

*Sapphire Corp.
- Ceased the potential stake sale by substantial shareholders Li Xiaobo (17.33%) and Wang Heng (27.96%) to HK-listed Hong Kong International Construction Investment Management.

- Divested its 50%-stake in loss-making Swiwar Offshore to Warden marine for $1.
- Group expects to record divestment loss of $5.6m.

*Profit warnings
- Procurri
- Gaylin Holdings

*China Kangda Food
- Divesting Jilin Kangda Foods and Laiwu Kangda Feeds for Rmb41m.
- The deal is expected to record a gain of Rmb3.5m, with proceeds for working capital.

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