Insider Trades: Asia Insider notes that director activity rebounded, although buyers outweigh sellers in the holiday shortened week ending 13 Nov.
Purchases: 9 companies saw 14 transactions worth $7.9m, vs. seven firms, 17 purchases worth $0.77m the week before.
Sales: Three firms saw seven disposals worth $0.61m, vs one disposal worth $0.68 the week prior.
Buybacks: 11 firms had 35 repurchases worth $7.53m, vs seven firms, 13 transactions worth $9m.
Notable transactions:
Trek 2000: Resumed buybacks with 42,000 shares purchased at 31¢, after announcing a 27.6% drop in 3Q15 earnings. The buybacks were also done on the back of a 12% drop in share price since 29 Oct.
Valuetronics: First buyback since 2008 with 100,000 shares bought at 42.5¢, on the back of a 21% rebound in share price since 35¢ in Aug. The buyback was done after an 11.3% drop in 2QFY16 earnings to HK$32.2m
PACC Offshore: Bought 600,000 shares at average of 34.1¢, accounting for 30% of the stock’s trading volume. This was on the back of a 16% drop in share price since October. The buyback prices were sharply lower than the IPO price of $1.15
Parkway Life REIT: Independent director Tan Bong Lin made his maiden on-market trade since the REIT’s 2007 listing, with 80,000 units sold on 12 Nov at $2.31, on the back of a 16% drop in unit price since May ’13.
Biosensors: UBS Group AG emerged as a substantial shareholder on 5 Nov following the purchase of 3.89m shares at 81¢ each, with deemed holdings of 5.09% of issued capital. The filing was made on the back of a 25% rebound in share price since Aug.
Monday, November 16, 2015
Q&M
Q&M: 3Q15 results came in line as net profit grew to $2.7m (+17% y/y), bringing 9M15 earnings to $9.3m (+84%), 74% of street’s full year estimates.
For the quarter, revenue of $30.6m (+7.6%) was boosted by the dental supplies manufacturing segment (+83%) due to the acquisition of Qinhuangdao Aidite in Aug ’14, as well as new contribution from six dental outlets acquired in Sep ’15 and Shenyang Aoxin in China. However, this was partially mitigated by lower sales from its distribution business (-35%) from the absence of a government contract in Malaysia.
From a change in sales mix, gross margin expanded to 82.9% (+1.4ppt).
Meanwhile, bottom line got boosted by other gains ($0.9m) mainly from a PIC cash payout, but partially mitigated by increased finance costs of $0.8m (+357%) due to accruals of interest payable relating to a medium term note issue.
Going forward, Q&M will continue to widen its network of dental clinics, currently at 65 outlets, in Singapore organically and through acquisition, to meet the rising demand for primary and higher value specialist dental healthcare services.
Malaysia remains one of the key markets where the group will look for future growth and acquisition opportunities. It current operates four dental clinics in Johor, one dental centre and two dental clinics in KL and one dental clinic in Malacca.
In China, Q&M continues to seek opportunities to acquire larger and established dental institutions and dental supplies manufacturers, to develop a new and sustainable growth pillar for long term value.
Maybank-KE maintains its Buy rating with TP of $0.97.
For the quarter, revenue of $30.6m (+7.6%) was boosted by the dental supplies manufacturing segment (+83%) due to the acquisition of Qinhuangdao Aidite in Aug ’14, as well as new contribution from six dental outlets acquired in Sep ’15 and Shenyang Aoxin in China. However, this was partially mitigated by lower sales from its distribution business (-35%) from the absence of a government contract in Malaysia.
From a change in sales mix, gross margin expanded to 82.9% (+1.4ppt).
Meanwhile, bottom line got boosted by other gains ($0.9m) mainly from a PIC cash payout, but partially mitigated by increased finance costs of $0.8m (+357%) due to accruals of interest payable relating to a medium term note issue.
Going forward, Q&M will continue to widen its network of dental clinics, currently at 65 outlets, in Singapore organically and through acquisition, to meet the rising demand for primary and higher value specialist dental healthcare services.
Malaysia remains one of the key markets where the group will look for future growth and acquisition opportunities. It current operates four dental clinics in Johor, one dental centre and two dental clinics in KL and one dental clinic in Malacca.
In China, Q&M continues to seek opportunities to acquire larger and established dental institutions and dental supplies manufacturers, to develop a new and sustainable growth pillar for long term value.
Maybank-KE maintains its Buy rating with TP of $0.97.
SG Market (16 Nov 15)
Singapore shares are set for a soft opening as the deadly Paris attacks are likely to deal another blow to weak sentiment already undermined by the weak US retail sales data, China’s margin tightening and poor 3Q corporate results in Singapore.
Investors will also look out for Singapore’s Oct NODX tomorrow and 3Q GDP reports out on Wed.
Regional bourses are seeing some bloodshed this morning in Tokyo (-1.3%), Seoul (-1.1%) and Sydney (-0.6%).
From a chart perspective, the STI is likely to breach the 2,920 support, with the next downside risk at 2,850.
Stocks to watch:
*ComfortDelGro: 3Q15 results slightly beat expectations as net profit grew 5.4% y/y to $85.2m on revenue of $1.04b (+1%) driven by most segments, in particular, bus (+3.4%), taxi (+2.4%), and rail (+7.3%), but weighed by automotive engineering business (-15.1%). Operating margin edged higher to 12.3% (+0.5ppt) on FX gains of $1.9m as well as lower fuel and electricity (-8.1%) costs, partially offset by higher staff (+3.1%) costs and depreciation (+9.7%) . NAV/share at $1.05.
*SIIC Envirotech: 3Q15 results in line with bullish estimates, as net profit advanced 33.4% y/y to Rmb89.3m on revenue of Rmb502.1m (+38%), with all five key segments registering growth, namely construction (+85.4%), operating and maintenance income (+10.9%), financial income from concessions (+33.5%), service income (+34.2%) and others (+118%). Gross margin remained constant at 37.9%. Bottom-line led by an almost 2x rise in associate and JV contributions. NAV/share at Rmb2.41.
*OUE: 3Q15 results in line, with net profit down 8.9% y/y to $15m, on a softer revenue of $98.9m (-6.9%), undermined by absence of property development income from OUE Twin Peaks and a marginally weaker hospitality division (-1.5%), but partially cushioned by greater contribution from property investment division (+15%). Gross margin shrank by 3.1ppt to 37.7%. Bottom line was further hit by higher finance expenses and fair value losses, but partially negated by newly acquired equity-accounted investees. NAV/share at $4.35.
*Q&M Dental: 3Q15 results in line, with net profit advancing 16.7% y/y to $2.7m on revenue of $30.6m (+7.6%), backed by dental clinic (+6%) acquisitions and dental supplies manufacturing (+83%), but partially offset by dental supplies distribution (-35%) due to absence of an one-off equipment supply to the Malaysian government in 3Q14. Bottom line aided by non-operating gains from PIC cash payout and enhanced special employment credit. NAV/share at $0.102.
*Cordlife: 1QFY16 results in line, turning around to net profit of $7.6m (1QFY15: -$3.6m) on firmer revenue of $14.5m (+9.7% y/y), boosted by higher number of client deliveries. Operating margin narrowed 0.6ppt to 12.2%, mainly pressured by an increase in staff cost due to a larger workforce. Bottom line was buttressed by a stronger USD, but partially weighed by net fair value losses from financial assets and derivatives. Special interim DPS of $0.13 declared. NAV/share at $0.65.
*Midas: 3Q15 results in line, with net profit soaring more than 9x to RMB13.9m on a 27.2% jump in revenue to RMB412.2m with its aluminium alloy extruded products division contributing to its entire top line growth. However, gross margin was crimped 1.1ppt to 25.9% due to the change in product mix. Bottom line was further buttressed by other operating income (+78.6%) and contributions from associate NPRT (+650.3%). NAV/share at Rmb2.50.
*Ying Li: Missed expectations as 3Q15 net profit dived 73.6% to RMB2.9m on revenue of RMB111.9m (-57.1%) due to lower property sales (-73.7%) but partially mitigated by stronger rental income (+11.6%). Gross margin expanded 16ppt to 55.2% on stronger rental margins. Bottom-line was further pressured by a jump in selling (+60.5%) expenses, but mitigated by a jump in interest income (+623.4%). NAV/share at Rmb1.93.
*Wheelock: 3Q15 results missed expectations as net profit edged 2.4% higher to $11.3m on revenue of $83.9m (+268.6%) mainly due to property sales partially offset by lower rental income. Gross margin collapsed 51.1ppt to 23% on a change in revenue mix. Bottom line was weighed by other operating (+303.9%) and tax (+401.6%) expenses, partially mitigated by a $22.1m gain on disposal of its financial assets. NAV/share at $2.53.
*Swiber: 3Q15 swung into a net profit of US$3.2m (3Q14: -US$27.5m), with revenue more than doubling to US$215.7m due to a significant recognition of revenue for a Latin American project and execution of new projects in South Asia, which translated into higher gross margin of 11.1% (+10.3ppt). Net gearing grew to 153% (+8ppt). Order book stood at US$1.5b. NAV/share at US$1.09.
*Mermaid Maritime: 3Q15 net profit climbed 19.1% to US$16.5m, while revenue was up 10.1% to US$96.6m, largely led by the subseas division, which saw higher contract value of cable lay projects and higher utilization rate of vessels, offset by zero drilling revenue from the drilling segment, following management’s decision to cold stack its rigs. NAV/share at US$0.40.
*KS Energy: 3Q15 net loss widened to $38.1m from $0.6m a year earlier, while revenue slumped 60.3% to $23.2m, largely driven by a slump in drilling business due to reduced deployment of rigs in the quarter. Gross margin fell 2ppt to 27.2%. Bottom line was dragged by a more than 26x surge in other operating expenses and JV losses of $16.0m. NAV/share at $0.63.
*Dukang Distillers: 1QFY16 net loss narrowed to Rmb0.8m (1QFY15: -Rmb29.4m), although revenue dropped 21% y/y to Rmb164m, as the group continue to be affected by China’s austerity measures on luxury gifts and spending. Gross margin expanded to 32.5% (+ 14.1ppt) on a change in sales mix, while bottom line was boosted by lower selling and distribution expenses (-31.4%) on reduced television commercials. NAV/share at Rmb1.80.
*Spackman: 3Q15 net loss narrowed to US$1.0m (3Q14: -US$5.0m), while revenue fell 21% y/y to US$2.9m, as there were no films under production. The group registered a gross margin of 28.4% as compared to a gross loss the previous year, due to two newly acquired subsidiaries Novus Mediacorp and UAA Korea.
Investors will also look out for Singapore’s Oct NODX tomorrow and 3Q GDP reports out on Wed.
Regional bourses are seeing some bloodshed this morning in Tokyo (-1.3%), Seoul (-1.1%) and Sydney (-0.6%).
From a chart perspective, the STI is likely to breach the 2,920 support, with the next downside risk at 2,850.
Stocks to watch:
*ComfortDelGro: 3Q15 results slightly beat expectations as net profit grew 5.4% y/y to $85.2m on revenue of $1.04b (+1%) driven by most segments, in particular, bus (+3.4%), taxi (+2.4%), and rail (+7.3%), but weighed by automotive engineering business (-15.1%). Operating margin edged higher to 12.3% (+0.5ppt) on FX gains of $1.9m as well as lower fuel and electricity (-8.1%) costs, partially offset by higher staff (+3.1%) costs and depreciation (+9.7%) . NAV/share at $1.05.
*SIIC Envirotech: 3Q15 results in line with bullish estimates, as net profit advanced 33.4% y/y to Rmb89.3m on revenue of Rmb502.1m (+38%), with all five key segments registering growth, namely construction (+85.4%), operating and maintenance income (+10.9%), financial income from concessions (+33.5%), service income (+34.2%) and others (+118%). Gross margin remained constant at 37.9%. Bottom-line led by an almost 2x rise in associate and JV contributions. NAV/share at Rmb2.41.
*OUE: 3Q15 results in line, with net profit down 8.9% y/y to $15m, on a softer revenue of $98.9m (-6.9%), undermined by absence of property development income from OUE Twin Peaks and a marginally weaker hospitality division (-1.5%), but partially cushioned by greater contribution from property investment division (+15%). Gross margin shrank by 3.1ppt to 37.7%. Bottom line was further hit by higher finance expenses and fair value losses, but partially negated by newly acquired equity-accounted investees. NAV/share at $4.35.
*Q&M Dental: 3Q15 results in line, with net profit advancing 16.7% y/y to $2.7m on revenue of $30.6m (+7.6%), backed by dental clinic (+6%) acquisitions and dental supplies manufacturing (+83%), but partially offset by dental supplies distribution (-35%) due to absence of an one-off equipment supply to the Malaysian government in 3Q14. Bottom line aided by non-operating gains from PIC cash payout and enhanced special employment credit. NAV/share at $0.102.
*Cordlife: 1QFY16 results in line, turning around to net profit of $7.6m (1QFY15: -$3.6m) on firmer revenue of $14.5m (+9.7% y/y), boosted by higher number of client deliveries. Operating margin narrowed 0.6ppt to 12.2%, mainly pressured by an increase in staff cost due to a larger workforce. Bottom line was buttressed by a stronger USD, but partially weighed by net fair value losses from financial assets and derivatives. Special interim DPS of $0.13 declared. NAV/share at $0.65.
*Midas: 3Q15 results in line, with net profit soaring more than 9x to RMB13.9m on a 27.2% jump in revenue to RMB412.2m with its aluminium alloy extruded products division contributing to its entire top line growth. However, gross margin was crimped 1.1ppt to 25.9% due to the change in product mix. Bottom line was further buttressed by other operating income (+78.6%) and contributions from associate NPRT (+650.3%). NAV/share at Rmb2.50.
*Ying Li: Missed expectations as 3Q15 net profit dived 73.6% to RMB2.9m on revenue of RMB111.9m (-57.1%) due to lower property sales (-73.7%) but partially mitigated by stronger rental income (+11.6%). Gross margin expanded 16ppt to 55.2% on stronger rental margins. Bottom-line was further pressured by a jump in selling (+60.5%) expenses, but mitigated by a jump in interest income (+623.4%). NAV/share at Rmb1.93.
*Wheelock: 3Q15 results missed expectations as net profit edged 2.4% higher to $11.3m on revenue of $83.9m (+268.6%) mainly due to property sales partially offset by lower rental income. Gross margin collapsed 51.1ppt to 23% on a change in revenue mix. Bottom line was weighed by other operating (+303.9%) and tax (+401.6%) expenses, partially mitigated by a $22.1m gain on disposal of its financial assets. NAV/share at $2.53.
*Swiber: 3Q15 swung into a net profit of US$3.2m (3Q14: -US$27.5m), with revenue more than doubling to US$215.7m due to a significant recognition of revenue for a Latin American project and execution of new projects in South Asia, which translated into higher gross margin of 11.1% (+10.3ppt). Net gearing grew to 153% (+8ppt). Order book stood at US$1.5b. NAV/share at US$1.09.
*Mermaid Maritime: 3Q15 net profit climbed 19.1% to US$16.5m, while revenue was up 10.1% to US$96.6m, largely led by the subseas division, which saw higher contract value of cable lay projects and higher utilization rate of vessels, offset by zero drilling revenue from the drilling segment, following management’s decision to cold stack its rigs. NAV/share at US$0.40.
*KS Energy: 3Q15 net loss widened to $38.1m from $0.6m a year earlier, while revenue slumped 60.3% to $23.2m, largely driven by a slump in drilling business due to reduced deployment of rigs in the quarter. Gross margin fell 2ppt to 27.2%. Bottom line was dragged by a more than 26x surge in other operating expenses and JV losses of $16.0m. NAV/share at $0.63.
*Dukang Distillers: 1QFY16 net loss narrowed to Rmb0.8m (1QFY15: -Rmb29.4m), although revenue dropped 21% y/y to Rmb164m, as the group continue to be affected by China’s austerity measures on luxury gifts and spending. Gross margin expanded to 32.5% (+ 14.1ppt) on a change in sales mix, while bottom line was boosted by lower selling and distribution expenses (-31.4%) on reduced television commercials. NAV/share at Rmb1.80.
*Spackman: 3Q15 net loss narrowed to US$1.0m (3Q14: -US$5.0m), while revenue fell 21% y/y to US$2.9m, as there were no films under production. The group registered a gross margin of 28.4% as compared to a gross loss the previous year, due to two newly acquired subsidiaries Novus Mediacorp and UAA Korea.
Friday, November 13, 2015
Super
Super: (S$0.87) Weak 3Q15 with possible turnaround in 1H16
Super Group’s 3Q15 results trailed expectations as net profit slumped 25.6% y/y to $7.4m. 9M15 net profit stood at $31.6m, attaining just 60% of the street’s full year forecast.
Revenue slid to $121m (-6.6%) as both its branded consumer and food ingredients segments saw contributions declined.
Its branded consumer segment recorded revenue of $78.9m (-3.8%) dragged down by poor performance from Southeast Asia (-10.8%) with Malaysia, Thailand, and the Philippines leading declines mitigated from stronger performance from Myanmar and Singapore. Sales in East Asia (+37.7%) as well as other markets (+58.7%) such as Mongolia and the Pacific Islands also helped to pare declines.
Coffee continued to be Super’s major revenue generator (79%) even though product sales fell to $62m (-3.9%). Sales of Cereals and Tea remained relatively stable at $7.1m (no change) and $3.4m (+3%) respectively while sales of other products fell to $6.4m (-9.9%).
Its food ingredients segment slumped 11.5% to $42m on lower sales from Indonesia due to the weak IDR and soft economy there, mitigated by growth in sales in the Taiwan market.
Non-dairy creamer revenue tumbled to $26.2m (-28.2%) more than covering growth in its soluble coffee to $15.5m (+42.2%) and other products to $0.3m (3Q14: $0.1m).
Gross margin was flat at 32.6% (+0.6ppt) while bottom line was weighed on by:
1. Higher selling and distribution expenses of $15.7m (+3.3%) on sponsorship and promotional activities carried out for SG50 promotions as well as the launch of its Charcoal Roasted White Coffee.
2. General and admin expenses of $14.8m (+3.3%) due to higher depreciation charges on expansion project completion
3. Higher net other income of $1.5m (+193.4%) on higher government grants received
4. Higher taxes of $2.9m (+7.3%) despite poorer operating profit on the expiry of tax incentives enjoyed by some overseas subsidiaries as well as withholding tax expenses on dividend remittances.
Despite the poor headline performance, cash generated from operations increased to $15.3m (+3.2%) showcasing the group’s cash generative business model.
Maybank-KE maintains its Buy rating on the counter with a TP of $1.42 while expecting Super to catch up with stronger performance in the upcoming quarters particularly with new products rolling out across all of its markets by 1H16.
Positive catalysts to the stock could come in the form of an FY16 performance recover, M&A, and improving dividends.
Super Group’s 3Q15 results trailed expectations as net profit slumped 25.6% y/y to $7.4m. 9M15 net profit stood at $31.6m, attaining just 60% of the street’s full year forecast.
Revenue slid to $121m (-6.6%) as both its branded consumer and food ingredients segments saw contributions declined.
Its branded consumer segment recorded revenue of $78.9m (-3.8%) dragged down by poor performance from Southeast Asia (-10.8%) with Malaysia, Thailand, and the Philippines leading declines mitigated from stronger performance from Myanmar and Singapore. Sales in East Asia (+37.7%) as well as other markets (+58.7%) such as Mongolia and the Pacific Islands also helped to pare declines.
Coffee continued to be Super’s major revenue generator (79%) even though product sales fell to $62m (-3.9%). Sales of Cereals and Tea remained relatively stable at $7.1m (no change) and $3.4m (+3%) respectively while sales of other products fell to $6.4m (-9.9%).
Its food ingredients segment slumped 11.5% to $42m on lower sales from Indonesia due to the weak IDR and soft economy there, mitigated by growth in sales in the Taiwan market.
Non-dairy creamer revenue tumbled to $26.2m (-28.2%) more than covering growth in its soluble coffee to $15.5m (+42.2%) and other products to $0.3m (3Q14: $0.1m).
Gross margin was flat at 32.6% (+0.6ppt) while bottom line was weighed on by:
1. Higher selling and distribution expenses of $15.7m (+3.3%) on sponsorship and promotional activities carried out for SG50 promotions as well as the launch of its Charcoal Roasted White Coffee.
2. General and admin expenses of $14.8m (+3.3%) due to higher depreciation charges on expansion project completion
3. Higher net other income of $1.5m (+193.4%) on higher government grants received
4. Higher taxes of $2.9m (+7.3%) despite poorer operating profit on the expiry of tax incentives enjoyed by some overseas subsidiaries as well as withholding tax expenses on dividend remittances.
Despite the poor headline performance, cash generated from operations increased to $15.3m (+3.2%) showcasing the group’s cash generative business model.
Maybank-KE maintains its Buy rating on the counter with a TP of $1.42 while expecting Super to catch up with stronger performance in the upcoming quarters particularly with new products rolling out across all of its markets by 1H16.
Positive catalysts to the stock could come in the form of an FY16 performance recover, M&A, and improving dividends.
OUE Hospitality Trust
OUE Hospitality Trust’s 3Q15 results met expectations, as DPU climbed 4.9% y/y to 1.72¢. This brought 9M15 DPU to 4.85¢ (-2.2%) or 74% of full-year consensus estimate.
Gross revenue rose 14.6% to $32.7m, mainly driven by its hospitality segment (+21.8% to $23.3m), as growth for the retail segment (-0.1% to $9.3m) comprising Mandarin Gallery was muted.
The stronger hospitality business was largely due to a $4m contribution from Crowne Plaza Changi Airport Hotel (CPCA), which was acquired in Jan ’15, while Mandarin Orchard Singapore (+0.5% to $19.3m) improved marginally on a slightly higher RevPAR of $243 (+0.8%).
Consequently, NPI was lifted to $28.8m (+13.5%), but distributable income grew at a slower pace to $23m (+5.8%), dragged by higher finance expenses from borrowings used to fund the acquisition of CPCA and fixed rate hedging.
Retail portfolio occupancy inched 0.1ppt q/q to 98% with a weighted-average-lease-to-expiry of 2.9 years.
Aggregate leverage stood at 42.1%, with average debt cost and tenor of 2.5% and 2.7 years respectively. As at Oct ’15, 83% of the trust’s borrowings were hedged on fixed interest rates.
Moving forward, management expects the hospitality sector will continue to face headwinds from excess supply and a tepid tourism industry given the uncertain global economic environment and relatively strong SGD. Nevertheless, OUE-HT will continue to refurbish the remaining 270 out of the 430 Mandarin Orchard rooms in phases throughout 2016.
The retail segment is also expected to remain challenging but management plans to continue leveraging Mandarin Gallery’s position as a high-end mall to attract quality tenants and shoppers. The mall will be adding Michael Kors and Victoria’s Secret to its premium list of tenants in FY16 for seven and 10 years respectively.
OUE-HT currently offers an annualised distribution yield of 8.6% and trades at 0.89x P/B.
Gross revenue rose 14.6% to $32.7m, mainly driven by its hospitality segment (+21.8% to $23.3m), as growth for the retail segment (-0.1% to $9.3m) comprising Mandarin Gallery was muted.
The stronger hospitality business was largely due to a $4m contribution from Crowne Plaza Changi Airport Hotel (CPCA), which was acquired in Jan ’15, while Mandarin Orchard Singapore (+0.5% to $19.3m) improved marginally on a slightly higher RevPAR of $243 (+0.8%).
Consequently, NPI was lifted to $28.8m (+13.5%), but distributable income grew at a slower pace to $23m (+5.8%), dragged by higher finance expenses from borrowings used to fund the acquisition of CPCA and fixed rate hedging.
Retail portfolio occupancy inched 0.1ppt q/q to 98% with a weighted-average-lease-to-expiry of 2.9 years.
Aggregate leverage stood at 42.1%, with average debt cost and tenor of 2.5% and 2.7 years respectively. As at Oct ’15, 83% of the trust’s borrowings were hedged on fixed interest rates.
Moving forward, management expects the hospitality sector will continue to face headwinds from excess supply and a tepid tourism industry given the uncertain global economic environment and relatively strong SGD. Nevertheless, OUE-HT will continue to refurbish the remaining 270 out of the 430 Mandarin Orchard rooms in phases throughout 2016.
The retail segment is also expected to remain challenging but management plans to continue leveraging Mandarin Gallery’s position as a high-end mall to attract quality tenants and shoppers. The mall will be adding Michael Kors and Victoria’s Secret to its premium list of tenants in FY16 for seven and 10 years respectively.
OUE-HT currently offers an annualised distribution yield of 8.6% and trades at 0.89x P/B.
Genting Singapore
Genting Singapore: 3Q15 results were appalling. Net profit plunged 62% to $37.2m, as FX gains ($113m) were offset by fair value losses of investments of $71.7m, and record bad debt charges of $92.5m (2Q15: $56.6m).
Consequently, adjusted EBITDA fell 18% to $209.2m, with EBITDA margin at 32.9% (-0.6 ppt q/q).
Revenue fell 1% to 636.1m, as gaming ($451.8m, -5%) weakness was offset by non-gaming revenue ($183.9m, +10%)
In gaming, VIP volumes halved y/y (-7ppt q/q), contrary to expectations that volumes would pick up at RWS, based on the MBS read through. This was as RWS did not extend much credit to Chinese VIPs. Win-rate, however, improved to 2.8% (2Q: 2.1%). VIP market share was 40%, flat q/q
Mass GGR fell 6% y/y (-1% q/q) despite Genting Jurong Hotel room inventory growing by 36% since opening seven months ago. In fact, the hotel might be boosting non-gaming revenue instead, which saw 17% increase in visitations. Mass market share fell 3ppt q/q to 40%.
Looking forward, management will be less generous in extending credit to Chinese VIPs, while expects provisions to remain high until 2Q16. On that end, GENS reiterates its aim to drive visitations from ASEAN.
Soil works has begun in Jeju, the soft opening of the Resorts World Jeju is expected at end 2017. Meanwhile, management also cited its optimism for the passage of the gaming bill in Japan.
GENS is currently trading at 8.9x EV/EBITDA.
Latest broker ratings:
Credit Suisse maintains Outperform with TP of $1.00
Nomura maintains Neutral with TP of $0.89
Morgan Stanley maintains Overweight with TP of $0.85
CIMB maintains Hold with TP of $0.81
Maybank-KE downgrades to Hold from Buy, cuts TP to $0.78 from $0.82
JP Morgan maintains Underweight, cuts TP to $0.70 from $0.77
Consequently, adjusted EBITDA fell 18% to $209.2m, with EBITDA margin at 32.9% (-0.6 ppt q/q).
Revenue fell 1% to 636.1m, as gaming ($451.8m, -5%) weakness was offset by non-gaming revenue ($183.9m, +10%)
In gaming, VIP volumes halved y/y (-7ppt q/q), contrary to expectations that volumes would pick up at RWS, based on the MBS read through. This was as RWS did not extend much credit to Chinese VIPs. Win-rate, however, improved to 2.8% (2Q: 2.1%). VIP market share was 40%, flat q/q
Mass GGR fell 6% y/y (-1% q/q) despite Genting Jurong Hotel room inventory growing by 36% since opening seven months ago. In fact, the hotel might be boosting non-gaming revenue instead, which saw 17% increase in visitations. Mass market share fell 3ppt q/q to 40%.
Looking forward, management will be less generous in extending credit to Chinese VIPs, while expects provisions to remain high until 2Q16. On that end, GENS reiterates its aim to drive visitations from ASEAN.
Soil works has begun in Jeju, the soft opening of the Resorts World Jeju is expected at end 2017. Meanwhile, management also cited its optimism for the passage of the gaming bill in Japan.
GENS is currently trading at 8.9x EV/EBITDA.
Latest broker ratings:
Credit Suisse maintains Outperform with TP of $1.00
Nomura maintains Neutral with TP of $0.89
Morgan Stanley maintains Overweight with TP of $0.85
CIMB maintains Hold with TP of $0.81
Maybank-KE downgrades to Hold from Buy, cuts TP to $0.78 from $0.82
JP Morgan maintains Underweight, cuts TP to $0.70 from $0.77
SG Market (13 Nov 15)
SG Market: Singapore shares are likely to be weighed down by the overnight rout on commodities and increased likelihood of an interest rate hike next month, with disappointing 3Q results from several bellwether stocks City Dev, Genting S’pore, Noble and Olam adding to the market gloom.
Regional bourses are trading lower this morning in Tokyo (-1.2%), Seoul (-0.6%) and Sydney (-1.8%).
From a chart perspective, the STI is likely to breach the 2,950 support and head towards the next downside at 2,920.
Stocks to watch:
*Genting SP: 3Q15 results missed, with adjusted EBITDA down 18% y/y to $209.2m. Net profit plunged 62% to $37.2m on revenue of $636.1m (-1%), with top-line weighed by a 5% fall in gaming revenue to $451.8m. Gaming weakness was offset by a 10% increase in non-gaming revenue, from a 17% increase in visitations to attractions. EBITDA margin fell 6.5ppt to 32.9%. Bottom line aided by FX gains of $113m, but offset by fair value losses of investments of $71.7m, and bad debt charges of $92.5. NAV/share at $0.60.
*Noble: 3Q15 results missed, as core net profit tumbled 43.2% y/y to US$92.0m on revenue of US$18.7b (-20%). Operating income rose 3% to US$272.3m, led by the Energy segment (+245%), but partially offset by the Gas & Power segment (-12%) and the Mining and Metals segment which fell into an operating loss of US$44m (3Q14: +US$65m). Overall operating margin rose 0.34ppt to 1.51%. Bottom-line further weighed by supply chain asset losses of US$24.4m versus gains of US$74.7m, while associate and JV losses widened to US$66m from US$20m, largely attributable to Noble Agri. NAV/share at US$0.78.
*Olam: 3Q15 results missed estimates on core net profit of $34.2m (+6.2% y/y) and revenue of $4.47b (+4%), driven by elevated prices of almonds and cashews, but partially mitigated by lower contribution from volumes in industrial raw materials (fertiliser trading, cotton, wood). EBITDA margin fell to 4.4% (-0.7ppt), while headline net profit fell to $31m (-30%) on an absence of net exception gain of $12.1m. NAV/share at $1.85
*City Dev: 3Q15 results missed. Net profit fell 16.4% y/y to $106.4m, while revenue plunged 38.8% to $809.3m, as property ($228m, - 70%) slumped from the absence of recognition from Blossom Residences EC (TOP Sep ’14), partially offset by contribution from Coco Palms, Jewel@Buangkok, and D’Nest. Hotel revenue fell 1.5% to $437.8m, as contribution from new hotels were offset by oversupply and weak tourism in Singapore. Bottom line also impacted by absence of $10.9m gain recognized last year. Interim DPS of 4¢ maintained. NAV at $9.53.
*Golden Agri: 3Q15 core results above estimates, with core net profit up 137.5% y/y to US$61.0m even as revenue slipped 14.6% to US$1.6b on broad based decline across its segments. Top-line was weighed by lower sales from the plantation and palm oil mills (-20.4%), palm & laurics and oilseeds (-39%) segments. Overall EBITDA margin improved 3.2ppt to 4.9%, largely led by improved downstream margins in the palm and lauric segment. Bottom line was shaved by FX losses (+54.9%) as well as fair value losses, mitigated by a tax credit of US$12.8m (3Q14: tax charge of US$5.9m). NAV/share of US$0.69.
*China Everbright water: 3Q15 results below bullish estimates, despite net profit up 25.3% y/y to HK$88.8m on robust revenue of HK$410.1m (+62.7%), underpinned by higher construction revenue from expansion and upgrades of several waste water treatment plants. Gross margin narrowed 5ppt to 47% due to higher contribution from construction which yield lower margins. Bottom line further hit by a spike in admin expenses (+148%) arising from the consolidation of HanKore Group post RTO, and higher deferred tax. NAV/share at HK$2.73.
*OUE Hospitality Trust: 3Q15 results in line, with DPU up 4.9% y/y to 1.72¢, as revenue and NPI rose to $32.7m (+14.6%) and $28.8m (+13.5%) respectively, mainly driven by contribution from Crowne Plaza Changi Airport Hotel (CPCA), which was acquired in Jan ’15. Distributable income grew slower to $23m (+5.8%), dragged by higher finance expenses. Retail portfolio occupancy inched 0.1ppt q/q to 98% with WALE of 2.9 years. Aggregate leverage stood at 42.1%, with average debt cost and tenor of 2.5% and 2.7 years. NAV/unit at $0.90.
*Cosco: Sank into the red with 3Q15 net loss of $82.1m vs $7.1m net profit y/y as revenue slipped 18.1% to $949.6m on lower shipyard (-17.8%) and shipping (-34.9%) revenue. Losses from both segments resulted in a $10.7m gross loss (3Q14: +$56.7m). Bottom line was further eroded by a provision charge of $75.9m on doubtful debts, lower scrap sales (-56.5%), and interest income (-40%), partially mitigated by a $16.5m tax credit. NAV/share at $0.60.
*Super: 3Q15 results missed estimates as net profit slumped 25.6% y/y to $7.4m, with revenue slipping 6.6% to $121m on lower branded consumer sales (-3.8%) and food ingredient sales (-11.5%). Gross margin was flat at 32.6% (+0.6ppt). Bottom line weighed by higher operating (+3.3%) and finance expenses (+197.5%), partially mitigated by government grants of $1.2m. NAV/share at $0.46.
*Yoma: 2QFY16 results missed, as net profit plummeted 97.2% to $0.3m on a 51.7% tumble in revenue to $19.9m, weighed by lower sales of residences and land development rights (-79.1%) and real estate services (-34.6%). The group fell into an operating loss of $0.5m on higher operating expenses (+70.6%) and absence of an $8.1m fair value gain recognised in 2QFY14. Bottom line further weighed by $0.2m in tax expenses (2QFY15 credit of $0.4m). NAV/share at $0.37.
*Silverlake: 1QFY15 results in line, as net profit climbed 15% to RM68.6m, while revenue grew 13% to RM131m, driven by increases in maintenance and enhancement services (+23%) and software project services (+109%), offset by a slump in software licensing sales (-42). The appreciation of SGD and USD against the RM had a +7% effect on revenue. Gross margin fell 5ppt to 60%. Bottom line boosted by RM13.5m unrealized FX gains. Interim DPS of 0.6¢ announced (1QFY16: 0.8¢). NAV/share at RM0.27.
*Valuetronics: 2QFY16 results in line, with net profit down 11.3% y/y to HK$32.2m on revenue of HK$526.5m (-16.1%), weighed by consumer electronics (-40.6%) weakness due to the slowdown in the LED business, although this was partially offset by a 27.7% increase in industrial revenue. Gross margin improved 1.5ppt to 14.6%. NAV/ share at HK$2.12.
Regional bourses are trading lower this morning in Tokyo (-1.2%), Seoul (-0.6%) and Sydney (-1.8%).
From a chart perspective, the STI is likely to breach the 2,950 support and head towards the next downside at 2,920.
Stocks to watch:
*Genting SP: 3Q15 results missed, with adjusted EBITDA down 18% y/y to $209.2m. Net profit plunged 62% to $37.2m on revenue of $636.1m (-1%), with top-line weighed by a 5% fall in gaming revenue to $451.8m. Gaming weakness was offset by a 10% increase in non-gaming revenue, from a 17% increase in visitations to attractions. EBITDA margin fell 6.5ppt to 32.9%. Bottom line aided by FX gains of $113m, but offset by fair value losses of investments of $71.7m, and bad debt charges of $92.5. NAV/share at $0.60.
*Noble: 3Q15 results missed, as core net profit tumbled 43.2% y/y to US$92.0m on revenue of US$18.7b (-20%). Operating income rose 3% to US$272.3m, led by the Energy segment (+245%), but partially offset by the Gas & Power segment (-12%) and the Mining and Metals segment which fell into an operating loss of US$44m (3Q14: +US$65m). Overall operating margin rose 0.34ppt to 1.51%. Bottom-line further weighed by supply chain asset losses of US$24.4m versus gains of US$74.7m, while associate and JV losses widened to US$66m from US$20m, largely attributable to Noble Agri. NAV/share at US$0.78.
*Olam: 3Q15 results missed estimates on core net profit of $34.2m (+6.2% y/y) and revenue of $4.47b (+4%), driven by elevated prices of almonds and cashews, but partially mitigated by lower contribution from volumes in industrial raw materials (fertiliser trading, cotton, wood). EBITDA margin fell to 4.4% (-0.7ppt), while headline net profit fell to $31m (-30%) on an absence of net exception gain of $12.1m. NAV/share at $1.85
*City Dev: 3Q15 results missed. Net profit fell 16.4% y/y to $106.4m, while revenue plunged 38.8% to $809.3m, as property ($228m, - 70%) slumped from the absence of recognition from Blossom Residences EC (TOP Sep ’14), partially offset by contribution from Coco Palms, Jewel@Buangkok, and D’Nest. Hotel revenue fell 1.5% to $437.8m, as contribution from new hotels were offset by oversupply and weak tourism in Singapore. Bottom line also impacted by absence of $10.9m gain recognized last year. Interim DPS of 4¢ maintained. NAV at $9.53.
*Golden Agri: 3Q15 core results above estimates, with core net profit up 137.5% y/y to US$61.0m even as revenue slipped 14.6% to US$1.6b on broad based decline across its segments. Top-line was weighed by lower sales from the plantation and palm oil mills (-20.4%), palm & laurics and oilseeds (-39%) segments. Overall EBITDA margin improved 3.2ppt to 4.9%, largely led by improved downstream margins in the palm and lauric segment. Bottom line was shaved by FX losses (+54.9%) as well as fair value losses, mitigated by a tax credit of US$12.8m (3Q14: tax charge of US$5.9m). NAV/share of US$0.69.
*China Everbright water: 3Q15 results below bullish estimates, despite net profit up 25.3% y/y to HK$88.8m on robust revenue of HK$410.1m (+62.7%), underpinned by higher construction revenue from expansion and upgrades of several waste water treatment plants. Gross margin narrowed 5ppt to 47% due to higher contribution from construction which yield lower margins. Bottom line further hit by a spike in admin expenses (+148%) arising from the consolidation of HanKore Group post RTO, and higher deferred tax. NAV/share at HK$2.73.
*OUE Hospitality Trust: 3Q15 results in line, with DPU up 4.9% y/y to 1.72¢, as revenue and NPI rose to $32.7m (+14.6%) and $28.8m (+13.5%) respectively, mainly driven by contribution from Crowne Plaza Changi Airport Hotel (CPCA), which was acquired in Jan ’15. Distributable income grew slower to $23m (+5.8%), dragged by higher finance expenses. Retail portfolio occupancy inched 0.1ppt q/q to 98% with WALE of 2.9 years. Aggregate leverage stood at 42.1%, with average debt cost and tenor of 2.5% and 2.7 years. NAV/unit at $0.90.
*Cosco: Sank into the red with 3Q15 net loss of $82.1m vs $7.1m net profit y/y as revenue slipped 18.1% to $949.6m on lower shipyard (-17.8%) and shipping (-34.9%) revenue. Losses from both segments resulted in a $10.7m gross loss (3Q14: +$56.7m). Bottom line was further eroded by a provision charge of $75.9m on doubtful debts, lower scrap sales (-56.5%), and interest income (-40%), partially mitigated by a $16.5m tax credit. NAV/share at $0.60.
*Super: 3Q15 results missed estimates as net profit slumped 25.6% y/y to $7.4m, with revenue slipping 6.6% to $121m on lower branded consumer sales (-3.8%) and food ingredient sales (-11.5%). Gross margin was flat at 32.6% (+0.6ppt). Bottom line weighed by higher operating (+3.3%) and finance expenses (+197.5%), partially mitigated by government grants of $1.2m. NAV/share at $0.46.
*Yoma: 2QFY16 results missed, as net profit plummeted 97.2% to $0.3m on a 51.7% tumble in revenue to $19.9m, weighed by lower sales of residences and land development rights (-79.1%) and real estate services (-34.6%). The group fell into an operating loss of $0.5m on higher operating expenses (+70.6%) and absence of an $8.1m fair value gain recognised in 2QFY14. Bottom line further weighed by $0.2m in tax expenses (2QFY15 credit of $0.4m). NAV/share at $0.37.
*Silverlake: 1QFY15 results in line, as net profit climbed 15% to RM68.6m, while revenue grew 13% to RM131m, driven by increases in maintenance and enhancement services (+23%) and software project services (+109%), offset by a slump in software licensing sales (-42). The appreciation of SGD and USD against the RM had a +7% effect on revenue. Gross margin fell 5ppt to 60%. Bottom line boosted by RM13.5m unrealized FX gains. Interim DPS of 0.6¢ announced (1QFY16: 0.8¢). NAV/share at RM0.27.
*Valuetronics: 2QFY16 results in line, with net profit down 11.3% y/y to HK$32.2m on revenue of HK$526.5m (-16.1%), weighed by consumer electronics (-40.6%) weakness due to the slowdown in the LED business, although this was partially offset by a 27.7% increase in industrial revenue. Gross margin improved 1.5ppt to 14.6%. NAV/ share at HK$2.12.
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