Wednesday, April 18, 2018

SG Market (18 Apr 18)

MARKET OVERVIEW
- Stocks could follow Wall Street higher as technology stocks remain in play ahead of 1Q18 earnings releases although growth momentum could ease from the high base last year.
- Technically, the STI is facing some resistance near the topside of downtrend channel at 3,520, with support at 3,375.

CORPORATE RESULTS
*Ascott Residence Trust
- 1Q18 DPU missed estimates despite rising rights-adjusted 15.4% to 1.35¢.
- Excluding one-off FX gains, DPU would be up 9.4% to 1.28¢.
- Revenue (+1%) and gross profit (+3%) was shored by a New York hotel and two German serviced residences, acquired in 2017.
- Portfolio RevPAU improved 1% to $129 on better operational performances in Belgium, China, UK and Indonesia.
- Aggregate leverage rose to 36.1% (+1.6ppt q/q).
- Trading at an annualised 1Q yield of 4.8% and 0.93x P/B.

*First REIT
- 1Q18 DPU ticked up 0.5% to 2.15¢, meeting estimates.
- Gross revenue of $28.7m (+5.8%) and NPI of $28.4m (+5.8%) was lifted by full contribution from Buton and Siloam Hospitals Yogjakarta acquired in 4Q17, as well as higher rental income from existing properties in Indonesia and Singapore.
- Aggregate leverage narrowed marginally to 33.5% (-0.1ppt q/q).
- Trades at annualised 1Q17 yield of 6.3% and 1.35x P/B.

*Keppel T&T
- 1Q18 net profit tumbled 16.3% to $9.4m, making up 18% of full year estimate.
- Revenue climbed 5.1% to $42.8m, as stronger contribution from data centre division was outweighed by weakness in logistics.
- Operating loss doubled to $3.4m (1Q17: $1.7m loss) amid higher overheads and manpower employed to support new developments.
- Bottom line was buttressed by $16m (-3.6%) of profits from associates and JVs.
- Trading at 16.9x forward P/E.

*Keppel-KBS US REIT
- 1Q18 (9 Nov '17 - 31 Mar '18) DPU of US$0.0232 beat IPO forecast marginally by 0.4% while distributable income of US$14.6m came in line.
- Gross income of US$36.1m (forecast: US$35.5m) was higher than expected due to higher rental income attributable to a one-off compensation of US$1m from a tenant at Westmoor Centre.
- NPI of US$22.3m (forecast: US$21.2m) also came ahead of expectations, bolstered by lower-than-anticipated property expenses.
- Portfolio committed occupancy stood at 89.8% (Jun '17: 88.1%), while aggregate leverage was at 33.6% (Post-IPO: 36%).
- Trades at annualised yield of 6.7% and 1x P/B.

POSITIVE NEWS
*Spackman Entertainment
- Wholly-owned subsidiary, Frame Pictures, won contracts to supply camera systems and equipment for three upcoming major Korean drama series, SUITS, MISTRESS and LIFE.
- The total contract value for the three sets is tentatively at 580m won (US$0.5m), subject to changes in the filming schedule.
- Frame Pictures continues to secure top-quality projects to its healthy pipeline and is expected to contribute positively to the group's FY2018.
- Trades at 6.25x P/E and 1.56x P/B.

NEGATIVE NEWS
*Midas
- Informed by the Jilin Province branch of both China Development Bank and The Export-Import Bank of China that Midas' former chairman Chen Wei Ping was suspected by Chinese police to be involved in fraudulent loans.
- Chen Wei Ping, who resigned on 2 Apr '18, did not disclose to Midas board that he was assisting in police investigation.
- Counter remains suspended.

*Declout
- 50.01% owned subsidiary, vCargo Cloud (VCC), will acquire a 60% stake in the enlarged share capital in Indonesian integrated logistics player PT Gatotkaca Trans Systemindo (GTS) for US$0.9m.
- The group intends to accelerate its efforts to automate customs declaration in Indonesia via GTS, which provides a suite of logistics services including trucking and freight and forwarding.
- Indonesia marks the third point of presence that VCC has established since the start of the year, enlarging its footprint to 14 countries globally, including three in ASEAN.
- Trades at 0.67x P/B.

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