SG Market (16 Mar 18)

MARKET OVERVIEW
- The SG market could remain lacklustre amid ongoing concerns of trade protectionism, as investors pare risk exposures prior to the weekend.
- Technically, the STI sees near-term support at 3,470, with topside resistance at 3,575.

CORPORATE RESULTS
*Datapulse Tech
- Turned around to 2QFY18 net profit of $38.1m, boosted by a property disposal gain of $44.6m.
- Revenue jumped 58% to $4.5m from a one-off special project worth $1.3m, as well as new contribution from recently-acquired Wayco Manufacturing (Dec '17).
- Improvement to bottom line was pared by higher opex (+165.5%), arising from a spike in staff costs (+307.6%) and increased raw material expenses (+202.9%).
- Trades at a trailing 2.2x P/E.

POSITIVE NEWS
*SIA
- Feb passenger load factor marginally improved to 80.9% (+0.2ppt) as traffic growth (+4.2%) inched out capacity expansion (+4%).
- Cargo load factor ticked up 0.6ppt higher to 62% as increase in loads (+11.8%) outstripped capacity (+10.8%).
- Parent airline load factor fell 0.7ppt to 79.9% on weakness in East Asia (-1ppt), Europe (-1.8ppt), and West Asia & Africa (-2.1ppt).
- Load factors for subsidiary carriers SilkAir and Scoot grew to 74.1% (+1ppt) and 86.9% (+2.7ppt), respectively.
- Trades at 0.93x P/B.
- Maybank KE has a Hold with TP of $10.95.

*Chip Eng Seng
- Proposed to dispose a commercial site at 150 Queen Street, Melbourne, for A$55m.
- The property was purchased in Sep '11 for redevelopment into a 71-storey residential apartment skyscraper dubbed as Tower Melbourne.
- However, legal action brought about by the adjoining site owner in 2013 had halted the project indefinitely.
- The sale is expected to complete by 3 Jul '18, and may contribute positively to the NTA and earnings of the group for FY18.
- Trades at 0.75x P/B.

*Memtech Intl
- Established a new subsidiary, Kunshan Taitech Automation, that will undertake research and manufacturing of automation equipment, robots, electrical and other intelligent or hi-tech equipment and parts.
- Trades at 15.1x forward P/E.

*Spackman Entertainment
- Distribution rights to its Korean fantasy melodrama film, Be With You, has been sold to 17 countries worldwide.
- The film is scheduled to open in Taiwan, Vietnam and Singapore on 30 Mar, 6 Apr and 19 Apr, respectively.
- Trades at 7x forward P/E.

*Lorenzo Intl
- Disposing two properties located in Kuala Lumpur, Malaysia for RM4.6m ($1.6m) to reap a disposal gain of RM2.6m.
- Intends to use proceeds for general working capital purposes.
- Trades at 3.26x P/B.

NEUTRAL NEWS
*OCBC
- Extended the long stop date of the 33.33% stake sale in Hong Kong Life Insurance to 30 Sep '18.
- To recap, the HK$2.37b ($425.9m) deal is priced at 2.98x P/B, and subject to regulatory approvals.
- Trades at 1.44x P/B.

*Yanlord Land
- Acquired property development company, Hainan Jinzhonghong Industrial Development, for Rmb10m, or 3.33x P/B.
- The group will be injecting an additional Rmb22m into the newly-acquired entity.
- Trades at 0.72x P/B.

*Oxley
- Proposed placement of 156.8m new shares (4.03% share capital) at $0.51/share to joint placement agents Credit Suisse, DBS and Maybank Kim Eng.
- Net proceeds of $78.1m earmarked for working capital, including project development.

*DeClout
- 50.01% owned vCargo Cloud (VCC) will be implementing a pilot National Single Window e-trade project in Djibouti, Africa.
- The pilot project will showcase VCC's capabilities to execute seamless cross-border trade in developing countries through its CamelONE e-trade platform, which will significantly reduce cross-border risks and costs incurred by shippers and companies.
- Djibouti has been recognised as a key location in China's Belt and Road Initiative, with the country importing more than US$1.98b worth of goods from China.
- With the addition of Djibouti, CamelONE is currently connected to 13 custom nodes globally, including Eastern Africa - Burundi, Kenya, Rwanda, Tanzania and Uganda.
- In 2017, CamelONE platform facilitated more than US$117b gross merchandise value across 12 countries.
- Trades at 0.63x P/B.