Wednesday, February 21, 2018

SG Market (21 Feb 18)

- The market could struggle for further gains after the quick recovery of the STI as investors look to a resumption of 4Q earnings from several index stocks for near-term direction.
- Technically, the STI has bounced off the key 200-dma to reach the 50-dma and the next move is to fill the breakdown gap at 3,520. Immediate support is now at 3,460 level.

*PACC Offshore
- 4Q17 net loss narrowed to US$193m (4Q16: US$345.4m loss), partly on lower vessel (-46% to US$108.3m) and goodwill (-49% to US$57.1m) impairments.
- This dragged FY17 net loss to US$230.3m (FY16: US$371.4m loss).
- Revenue for the quarter surged 71% to US$62.7m from the continued charter of POSH Arcadia accommodation vessel to Shell, and firmer contribution from OSV segment.
- Gross loss shrank to US$1.3m (4Q16: US$9.5m loss) on the back of POSH Arcadia's contribution and better utilisation in the transportation & installation division.
- Bottom line was partly shored by lower doubtful and bad debts, as well as reduced JV loss.
- Net gearing ballooned to 1.63x from 1.13x in 3Q17 as a result of the impairments.
- Trading at 1.15x P/B.

- 4Q17 net profit fell 19.3% to $8.2m, taking FY17 earnings to $32m (-14.3%), which was above estimates.
- For the quarter, revenue declined 17.6% to $15.1m due to reduced patient visits.
- Operating overheads kept pace with the drop, with reduced staff costs of $3.5m (-19.1).
- Slashed final DPS to 1.37¢ (-40%), bringing full year dividend payout to 2.131¢ (FY16: 2.283¢).
- Trades at 28.1x forward P/E.

*Lee Metal
- 4Q net profit slumped 40.5% to $2m, dragging FY17 earnings to $7.5m (-43.6%).
- Revenue for the quarter grew 13.4% to $92.5m on higher steel prices.
- But, gross margin compressed 7.8ppt to 13.9% due a fewer sales of higher-margin value-added components.
- Bottom line was weighed by FX loss of $1.7m and higher tax expense of $1.7m (+212.6%).
- Trades at 26x trailing P/E.

*Global Investments
- 4Q17 net profit surged 6-fold from a low base to $21.8m, lifting FY17 earnings to $39m (+128%).
- For the quarter, revenue soared 255% to $21.4m on higher net gain on sale of investments of $16.8m.
- Bottom line was buttressed by a $6.1m write-back (4Q16: $2.5m impairment).
- Declared a final DPS of 0.6¢ (-13.3%), bringing total dividend payout to 1.25¢ (-16.7%).
- NAV/share of 20.95¢ (+9.8%).

- Guided for a significant increase in net profit for 4Q17 and FY17 due to higher steel ASP, amid tighter supply following production cuts and increased infrastructure and construction activities in China.
- However, top line growth is partially offset by reduced contribution from Laiyuan County Aoyu Steel, which had ceased steel-making operations in Aug '17.
- Last traded at 1.5x trailing P/E.

*Profit Warnings
- Fuji Offset Plates Manufacturing
- China Environmental Resources

*Singapore Medical Group
- Spent $0.8m of placement proceeds on the purchase of medical equipment and renovation.
- The balance $2m is earmarked for M&A opportunities.

*Koh Brothers
- Subscribing 25% of the enlarged share capital of Global KB Venture (GKV) at Rm1/share.
- GKV will subsequently acquire a 99-year leasehold site in Pulai, Johor Bahru, for Rm36m.
- The site has a gross floor area of 449,539 sf and GKV intends to develop the plot into a mixed-used property.
- Trades at 9.7x trailing P/E.

*Keppel REIT
- Obtained a $350m loan facility from RBC Investor Services Trust Singapore, bringing aggregate loan facilities to $3.76b.

*Chaswood Resources
- Extended a moratorium for 120 days until 15 Jun to facilitate the finalisation of its proposed debt restructuring in Malaysia.

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