Cordlife

Cordlife: Cordlife entered into a licensing agreement with its 31.8%-owned associate StemLife, to jointly explore and develop umbilical cord tissue-related services based on cellular technology in Malaysia. In relation, StemLife will obtain a 3-year sub-licence from Cordlife for an upfront sum of $1m to use Cordlife's CRC technology to collect, store and exploit umbilical cord tissue for its Malaysian clients, with additional fees attached for each of the three services used. For instance under the sub-licensing agreement, Cordlife will receive: - $120-240 for each tissue verification and biomarker testing service - 15% royalty fee on revenue received for cord tissue storage - $1,400-5,900 for each cord tissue culturing service The cooperation with StemLife should further stem Cordlife's footprint in Malaysia and extract economies of scale and intensify revenue generation by cross selling new products.

Hankore

Hankore: Announced that the exclusivity period for the M&A in which HanKore will acquire all water assets of China Everbright (CEI) will be extended to 31 May 2014 (original expiry date was 29 Apr 2014). DMG views the one-month extension of exclusivity period as reasonable. Reckons the extension is necessary for both parties to finalize the details of the merger, i.e. due diligence process and the consideration price for China Everbright’s array of 22 projects with 1.98m tonnes/day capacity. Believes there is minimal downside risks, given that there is strong incentive for the CEI merger to come through: i) strong synergies – both have a foothold in Jiangsu and Shandong region, owning key large-sized water treatment plants in the areas; ii) HanKore will gain state-backing that will enable it to significantly lower financing costs – from 7.5% to under 4% – and thus improving IRR on its projects; and iii) CEI will gain access to a strong management team in HanKore DMG assumes the CEI merger will go through. Maintains Buy with TP $0.161.

PLifeReit

PLifeReit: 1Q14 DPU rose 6.9% to 2.82¢ while distributable income rose by the same quantum to $17.1m. Revenue and NPI rose 6.8% and 6.9% to $24.6m and $23m, with higher revenue primarily due to rental income contributed from Japan properties acquired in Jul and Sep’13, offset by the depreciation of Yen. Revenue was also driven by higher rent from the SG properties. Aggregate leverage increased 2ppt to 35%, with a debt headroom of $131.1m before hitting 40%. In 1Q14, 3 acquisitions in Japan and 3 AEIs were completed. While management is cognizant of an interest rate hike, it expects demand momentum for better quality private healthcare services to continue. It had indicated 11.3% of Asia- Pac’s population will be above 65 years old over the next few years. NAV at end Mar was $1.63, translating to P/B of 1.54x, while annualized 1Q14 yield is 4.5%.

Fragrance

Fragrance: 1Q14 net profit increased 37.6% y/y to $24.3m while revenue increased 12.9%, contributed by Property segment (+15.6%) at $111.5m from projects like Urban Vista, Kensington Square and Suites @ Bukit Timah. This was offset by a reduction of Hotel revenue which fell 5.4% to $13.8m. In the resi property sector, buyer’s sentiments continued to be gloomy, but as interest rates are still low, demand from genuine buyers should remain stable. The hotel sector is expected to fare better than last year, with demand likely underpinned by events such as the World Club 10s Rugby in Jun and WTA Championships in Oct. Fragrance trades at 1.4x P/B

Cosco

Cosco: 1Q14 results missed slightly although net profit rose 48% y/y to $23m, while revenue rose 42% to $1b, from higher revenue contribution from ship repair and marine engineering, offset by decline in ship building. Gross margins fell from 10.72% to 9.2%, but could have been lower around 8% if not for the lower depreciation charge. Pre-tax profit saw a $9.4m boost from the reduction in depreciation charge from a change in the estimated useful life of some fixed assets. YTD orderwins totaled US$210m, with net orderbook of US$7.6m. Cosco is targeting US$2b in new orders this year, although Maybank KE does not expect commercial shipbuilding orders to return in a big way. Meanwhile, Cosco’s weak execution of offshore contracts remains the key drag on profitability. Maybank KE maintains Sell with TP of $0.65

SMRT

SMRT: SMRT's 4QFY14 results beat estimates, as net profit turned around to $16.9m from loss of $11.9m, mainly from the absence of a $17.3m goodwill impairment in associate- Shenzhen Zona, as well as a 34% increase in other operating income attributed to the government's bus service enhancement programme grant. Meanwhile, revenue increased 3% y/y to $289.5m, driven by rental (+11%) and advertising (+12%) segments, on an increase in lettable space from the redevelopment of Woodlands Xchange and rental uplift, as well as more advertising on trains, buses and stations. The top line was partially mitigated by an 8% decline in LRT from lower ridership and less external fleet maintenance, which caused the other services segment to fall 15%. Although losses narrowed for its fare businesses in the quarter to $3.8m (from loss of $11.4m), SMRT recorded a full-year operating loss of $25m in the core transport segment, the first time in history, amid higher operating costs to meet ridership demands and regulatory standards. Deutsche notes various positive trends in the 4th quarter, including fairly stable revenue growth and operating margin recovery, and is evidence of stabilization in SMRT's service enhancement efforts, with potential further operational improvements going forward. The fare adjustment that went effective in Apr should offer an additional boost to SMRT next set of results. SMRT proposed final DPS of 1.2¢, bringing FY14 total to 2.2¢, translating to a 1.8% yield on the current price of $1.21.

SG Market (02 May 14)

US Market: US stocks ended mixed as investors digested a slew of economic releases ahead of Fri’s closely-watched monthly jobs report. The Dow eased back from its record high set a day earlier, while gains in Internet shares helped lift the Nasdaq. Economic data showed encouraging signs for consumer spending and maufacturing activity but construction spending and jobless claims missed forecasts. Consumer spending accelerated in Mar by the most in almost five years, while the ISM factory index expanded Apr at the fastest pace since end of last year in Apr. But construction spending rose just 0.2% in Mar and jobless claims climbed to a nine-week high last week. In corporate results, cosmetics seller Avon (-10%) tumbled after earnings trailed estmates and ExxonMobil (-1%) slipped after revenue missed expectations. T-Mobile (+8.1%) rallied after adding more subscribers last quarter and Yelp (+9.8%) jumped after raising its 2014 revenue forecast. GM (+1.2%) rose after US car sales rebounded in Apr but Ford (-1.5%) slid as sales declined and its CEO stepped down. Among Internet and tech gainers, Facebook (+2.3%), TripAdvisor (+3.4%) and Netflix (+4.5%) rose. Linkedin climbed 5.1% in the regular session but sank 2.7% in extended trading after it gave a 2Q sales forecast that was below expectations. In Asian markets, both Nikkei (-0.3%) and Kopsi (-0.1%) opened softer in early morning trades. S’pore shares are likely to be flatlined tracking both Wall Street and regional bourse. Near term upside for STI will be capped at 3,285 with underlying support at 3,230, followed by 3,206. Stocks to watch: *UOB: 1Q14 net profit of $788 (+2% q/q, +9% y/y) surpassed expectation, though largely lifted by unusually low taxes from write-back of prior years’ taxes. Underlying earnings quality however, was weaker than expected and against peers, due to a q/q contraction in net interest margin (-1 bps) and reduction in fee and trading income (-4.8% q/q, -8.6% y/y), dragged by loan-related and fund management fees. NAV per share at $15.90. *Venture: 1Q14 net profit rose 9.8% y/y to $30.8m, while revenue increased 11.4% to $591m, driven by new customers and new programmes with existing customers. Growth was broad based across its business segments, mainly led by Test & Measurement (+24% to $182.4m). EPS of $0.112 and NAV per share of $6.745. *Jardine C&C: 1Q14 net profit fell 6% y/y to US$218m, as revenue declined 10% to US$4.7m, primarily due to a weaker rupiah. Key subsidiary, Astra Int’l posted earnings that grew 10% in rupiah terms, driven by improvements in its agribusiness and contract mining operations, offset by a decline in earnings from automotive and financial services business. *SMRT: 4QFY14 swung to a net profit of $16.9m from a loss of $11.9m a year ago, thanks to the absence of a $17.3m goodwill impairment of its interest in associate Shenzhen Zona, and boost from a government bus service enhancement programme grant. Revenue edged up 3% y/y to $289.5m, driven by rental (+11%) and advertising (+12%), but mitigated by an 8% decline in LRT due to lower ridership. Proposed final DPS of 1.2¢, bringing FY14 total to 2.2¢. *ParkwayLife Reit: 1Q14 DPU rose 6.9% y/y to 2.82¢. NPI increased 6.9% to $23m, boosted by higher rent from the SG properties and new rental income from Japan properties acquired in Jul and Sep ’13, though offset by the depreciation of Yen. NAV per unit at $1.63. *Fragrance: 1Q14 net profit jumped 38% y/y to $24.3m. Revenue increased 13% to $125.3m, mainly driven by the property segment (+15.6% to $111.5m) thanks to contribution from ongoing development projects such as Urban Vista, Kensington Square and Suites @ Bukit Timah. Hotel revenue fell 5.4% to $13.8m. NAV per share at $0.179. *Soilbuild Construction: 1Q14 revenue jumped 28% y/y to $87.3m, driven by progressive recognition of projects such as the Lavendar mixed-used development project, Ang Mo Kio HDB project, and Bukit Batok BizHub project. Net profit however, rose at a slower 4% clip to $3.9m, as gross margins fell to 7.2% (from 8.8%) mainly due additional costs incurred from the extension of construction period for additional works. *Creative Technology: Fifth consecutive quarter in the red. 3QFY14 revenue slumped 26% to US$25.1m, due to the uncertain and difficult market conditions which continued to affect product sales. Net loss narrowed to US$8.8m from US$10.4m a year ago, due to lower SG&A (-11%) and an absence of FX losses booked in 3QFY13 (US$2.8m). NAV per share at US$1.98. #HL Global Enterprises: 1Q14 net loss widened y/y to $1.6m from $0.4m, due to the absence of tenant deposit forfeiture and higher finance cost on the revaluation of Rmb assets. Revenue deteriorated 22% to $1.4m due to lower sales of apartment units at Cameron Highlands. Separately, HL Global announced that the group is in the midst of discussions to increase its equity stake in Augustland Hotel Sdn Bhd, which owns Copthorne Hotel Cameron Highlands, from 45% to 100%. *GuocoLand: Awarded a $530.9m tender by HDB for a residential site at Sims Drive, which can be developed into a condo with more than 850 units. The 99-year leasehold land parcel has a site area of 23,900 sqm, and gross plot ratio of 3.0. *Cordlife: Entered into a 3-year licensing agreement with StemLife Bhd to jointly explore and develop new umbilical cord tissue-related services in Malaysia. In exchange for a sub-license to be granted to StemLife, Cordlife will receive $1m upfront, and royalty fees payable every quarter. *Ausgroup: Awarded service and maintenance works under an existing Multi-Discipline Services Agreement contract, to support Woodside Energy’s Karratha Gas Plant in the North West Shelf Project in Australia. *HanKore: Extended the deadline for the acquisition of China Everbright Water Investments to 31 May 2014. *ITE Electric: Received notices from Commercial Affairs Department to provide information of the company for the period from Jan ‘11 to Mar ‘14.