Friday, February 2, 2018

SG Market (02 Feb 18)

- Stocks could face some volatility following another choppy session on Wall Street on unease over the prospect of higher interest rates as US treasury yields jumped to 2.79%, its highest since Apr 2014
- However, but sectors that will benefit from the economic upturn, such as banks and property, will continue to remain resilient.
- Technically, the STI is expected to range trade between 3,640 and 3,510.

*Sing Post
- Headline 3QFY18 net profit jumped 37.2% to $43m, boosted by asset disposal gain ($3m) and deferred tax adjustment ($6.9m) arising from US tax reform.
- Stripping out one-off items, core quarterly profit of $35.2m (+11.9%) brought 9MFY18 core earnings to $89.7m (-4.8%), meeting 78% of full year consensus forecast.
- Revenue grew 11.7% to $412.8m on the back of growth across postal (+15.8%) on stronger international mail, logistics (+1.5%) on increased last-mile deliveries, and e-commerce (+19.7%) from higher volumes and new customers.
- Core operating profit jumped 23.7% to $46.1m, driven by lower e-commerce losses and better performance at TradeGlobal, rental income from SingPost Centre retail mall (re-opened on 9 Oct), but partially offset by slimmer logistics margin and lower contributions from Quantium Solutions
- Interim DPS maintained at 0.5¢.
- Trades at 26x forward P/E.

- 2QFY18 net profit slid 25% to $42.9m due to 79% drop in FX gain to $3.3m and absence of divestment gain by an associate.
- This brought 1HFY18 earnings to $208.5m (+152%), within expectations.
- Revenue for the quarter surged 60% to $370.6m on stronger sales and higher progressive recognition from Singapore residential projects.
- Gross margin expanded 4.3ppt to 24.7%.
- Bottom line was also weighed by higher admin costs (+97%) from increased sales activities and the opening of two new hotels, as well as 60% spike in finance expenses.
- Trades at significant 39% discount to RNAV/share.
- MKE maintains Buy with TP of $2.95.

*Ascendas Hospitality Trust
- 3QFY18 DPS slumped 14% to 1.41¢, impacted by higher trust expense and retention sum, as well as absence of one-off gain.
- This brought 9MFY18 distribution payout to 4.14¢ (-3.9%), in line with latest adjusted estimate.
- For the quarter, revenue and NPI fell to $58.1m (-1.8%) and $25.2m (-4.7%) on weaker performance of the Australia portfolio, and further dragged by weakening JPY, CNY and AUD against SGD.
- RevPARs of A$160 (+1.9%) in Australia and Rmb349 (+0.9%) in China were driven by higher average daily rate, while Japan RevPAR rose 5.9% to ¥10,970 on more guests and events.
- Aggregate leverage crept up 0.6ppt q/q to 33.2%.
- Trades at annualised 3Q yield of 6.3% and 1.0x P/B.

*Jumbo Group
- 51:49 JVCo, JBHG F&B Services (Beijing), will establish a new branch office and its first restaurant in Xi'An, China.
- Trades at 23x forward P/E.

*Spackman Entertainment
- "The Outlaws", co-presented by the group's 51% owned subsidiary Novus Mediacorp, exceed KRW11b in VOD sales, breaking all-time highest sales record in Korea.
- Novus owns the distribution rights of the film for the ancillary market in Korea.

*Wee Hur
- Secured a construction project worth $43m from The Diocese of Singapore and St Andrew Mission Hospital.
- The project will commence on 12 March and is slated to complete on 25 May '20.
- Trades at 18.2x trailing P/E.

- Secured 4 contracts totalling $22.9m for Singapore projects.
- One of which involves structural steelwork for Health City Novena, an integrated healthcare master plan development in Singapore, with the contract expected to be completed in early 2019.
- The other three consists of works for Bright Hill, Keppel and Cantonment Station, which are slated to complete between 2018 and 2023.
- Loss-making and trades at 0.58x P/B.

- Signed an MOU with Malaysia-based Green Energy Resources to explore opportunities in the renewable energy segment.
- It intends to contribute expertise in the controlled environment engineering space and together, will be looking to participate in building renewable energy plants on a Build-Own-Operate basis.

*Noble Group
- Proposed disposal of vessels had been void after buyers failed to obtain approval from their respective board of directors.
- Had the disposal been completed, net proceeds post-debt repayment would have amounted to approximately US$30m.
- Group updated that the market value for the dry bulk vessels has increased by 3% since then to US$95m.

- Defaulting on its coupon payment due today.
- Coupon payment was for its $150m 6.5% trust certificates due 2018 comprising Series 001 issued under its US$500m Multicurrency Islamic Trust Certificates Issuance Programme.

- Received a letter of demand from Damodara Hazra for outstanding director's fees amounting to $55,000.

*OKH Global
- Signed a 3-year strategic cooperation agreement with China-based financial services and insurance giant Ping An Group to collaborate in developing and managing logistics facilities in China.
- OKH and its associate, Pan Asia Logistics Investments, will provide expertise in design, development, build-to-suit, leasing, asset management and client network.
- Ping An will contribute real estate resources, asset management expertise, as well as financial services such as insurance and supply chain financing to tenants of the relevant logistics facilities.
- Loss-making and trades at 0.48x P/B.

- Macquarie Futures joined its derivatives trading and clearing membership.
- Following the addition, the exchange operator now has 58 trading and 24 clearing members for its derivatives market.
- SGX is looking to grow the derivative division, especially bulk commodities space, to Macquarie's client network in Australia and beyond.
- Last traded at 23.7x forward P/E.

- Inked a licensing agreement with Japan's leading publishing and elderly care company, Gakken Cocofump to develop elderly care education in the region.
- Gakken produces educational content in medical, nursing and elderly care training, which have been adopted in 1,300 hospitals and old age homes in Japan.

- Entered into a MOU with PhDsoft Technology to provide mentorship, equipment, co-working space, and networking opportunities under its MIC Incubation Programme.
- PhDsoft involves engineering technology and creates advanced visualization software, C4D®, for the maintenance of critical assets during their operational lifecycle.
- C4D® is a solution to predict the degradation, anomalies and corrosion of complex assets using predictive analytics and AI to avoid failures, reduce accident and downtime, and attain longer asset life and a safer and cost-effective maintenance process.

*Marco Polo Marine
- Will resume trading today following since eight months of suspension since 1 May 2017.
- The group has completed its debt restructuring and recently saw the capital injection of $60m (2.1b new shares at $0.028/share) from nine strategic investors.

- 30% owned C&I Singapore Renewable and Innovation Tech entered into strategic cooperation agreement with Nasdaq-listed The9 which has a market cap of US$56.6m.
- The9 will provide C&I with services, solutions, and operational advice relating to blockchain technology and its application on the distribution of solar generated energy.
- The9 is a China-based developer of content for virtual communities.

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