SG Market (13 May 13)

SG Market: S’pore shares may push higher after Wall Street closed at fresh all-time highs ahead of the G7 meeting over the weekend where finance ministers of the advanced economies pledged balance austerity measures with support for economic growth and agreed not to engage in competitive currency devaluation. The STI has gained 160 points or 5% over three weeks and technical indicators are approaching overbought territory, suggesting a short term pullback to its immediate support at 3,400 may be on the cards with overhead resistance capped at 3,480. Stocks to watch out for: *F&N: Headine 2QFY13 net profit came off 45% y/y to $47.1m but earnings before fair value adjustments and a $72m charge related to its takeover deal was 53% higher at $103m. F&B posted strong earnings growth from both beverages and dairies, while property earnings were underpinned by strong rental income and progressive profit recognition of pre-sold residential projects. End Mar NAV jumped 65% to $8.80. Management is proposing a 3.5¢ interim DPS and capital payout of $4.7b or $3.28/share. *Biosensors: Acquires assets from Spectrum Dynamics, a leader in technologies that can evaluate patients for cardiac interventions for US$51.1m vs book value of US$7.3m. Minimal impact expected for FY14 results, with potential to be moderately accretive to earnings in FY15. *UOL: 1Q13 net profit fell 15% y/y to $71.7m, dampened by FX losses ($3.1m) and lower hotel earnings arising from opening costs of Parkroyal on Pickering. Revenue slid 17% to $247.8m following the completion of Meadows@Pierce and Double Bay Residences in 2012 and near completion of Waterbank at Dakota in 2Q13. NAV rose 2% to $8.08. *Pan Pacific Hotels Group: UOL is seeking a voluntary delisting of PPHG, its 81.6% hotel subsidiary by way of an exit offer at $2.55 or 62% above its NAV of $1.57. Currently UOL and UOB own 81.6% and 8% of PPHG, implying a free float of 10.4%. This means that the concert parties only require another 2.64m PPHG shares to raise their stakes above 90% in order to exercise the right of compulsory acquisition. *Amtek Engrg: 3QFY13 missed estimates as net profit deteriorated 47% y/y to $4.1m, while revenue slid 11% to $147.8m amid challenging business conditions with many industry segments registering declining sales. Consequently, earnings and revenue for 9MFY13 fell 36% and 7% to $16m and $465.2m respectively as anti-Japanese protests over Diaoyu Islands together with the sovereign debt crisis in Europe dampened end market demand. No interim DPS was declared vs 2.3¢ in previous period. *Silverlake: Booked a 3QFY13 net profit of RM47.4m (+8% y/y), in line with 8% revenue growth to RM108.7m, which was derived from higher software licensing sales (+112%) but offset by declines in software project services (-48%) and product sales (-82%) due to completion of a few major contracts. 9MFY13 net profit of RM136.2m (+17%) accounted for 71% of full year consensus estimate. *Raffles Education: Posted 3QFY13 revenue of $31.4m (-13% y/y) and net profit of $4.2m vs $0.2m loss a year earlier. The weaker top-line performance was due mainly to a decline in PRC revenue, which was partially offset by an increase in Asia-Pacific sales. Pretax profit of $5.6m was more than covered by other operating income of $9.5m, comprising a $7.3m government grant and $1.2m FX gain plus a $1m fair value gain. Balance sheet is sound with net gearing at 0.28x. *Guocoleisure: Reported 3QFY13 net loss of US$6.5m vs a net profit of US$19.4m previous year. Revenue was 7.3% lower due to a seasonal slowdown in the hotel segment and volatility in the gaming sector. Little change in NAV at $0.833. *Yamada: 3Q13 revenue slied 0.9% yoy at Rmb240.7m, while net profit fell 37% to Rmb51.3m due to lower gross margin attributable to rising cost of raw materials, which the average selling price of shiitake mushrooms did not keep pace. *Hupsteel: 3QFY13 net profit plummet 66% y/y to $0.5m, while revenue slumped 32% to $46.7m, mainly due to the sharp drop in the sale volume of structural steel products. With fewer projects and weaker margins, 9MFY13 revenue fell 38% to $114.2m, dragging earnings down 71% to $1.6m. However, its healthy net cash position f $44.8m has enabled the group to propose an interim DPS of 0.5¢. *Chuan Hup: 3Q13 net profit slumped 90% to US$1.3m as revenue slid 27% to US$40.9m, dragged by a slowdown in electronics manufacturing business, as well as higher manufacturing costs, staff expenses, in addition to a provision of restructuring costs. *PEC: Muted 3Q13 results with net profit at $1.3m, +2% y/y. Revenue rose 26% to $134.1m, mainly due to an increase from project works in S’pore. However bottom-line was weighed by a 29% surge in other operating expenses to $10.3m, mainly due to increase in costs associated with more headcount, accommodation, transport expenses, and others. *Hanwell: Posted 1Q13 results, with net profit at $298k, -74% y/y due largely to a reversal of finance expenses to $933k vs a $1.7m income y/y. Revenue was muted at $93.7m, -2.3% y/y. The muted set of revenue was largely due to lower turnover generated by distribution business in both Singapore and Malaysia, due to cessation of stockist business from Clarks in Feb12 and termination of distributorship. *Sapphire Corporation: Registered a 1Q13 net loss of $2.0m, a 72.8% y/y improvement versus a net loss of $7.2m, which was largely due to a 98.4% improvement in a losses from associates to -97k. Revenue at $23.5m, +8% y/y, mainly due to the newly acquired subsidiary, Longwei, which contributed from the sales of cold-rolled coil. The increase was partly offset by lower revenue from sale of vanadium products. *Uni-Asia: Strong 1Q13 results as net profit surged 477% to US$2.7m, while total income at US$20,3m, +9% y/y, contributed by an increase in fee income and higher investment returns, which was partially offset by a decline in hotel income. Strong bottom-line was led by reduced operating expenses, as operating margins rose to 17% vs 6% y/y. *Chang Jiang Fertilizer: Very weak 1Q13 results, as the group slumped into a net loss of Rmb 13.3m vs a net profit of Rmb 23.3m y/y. Drop was in tandem with an 88% drop in revenue to Rmb 18.0m, due mainly to lower demand from farmers for group's products, arising from a change in trend in the farming industry to prefer compound fertilizers. *Straco: 1Q net profit jumped 201% y/y to $5.5m as revenue improved 25% to $11.3 on higher visitors to all its three attractions in China – two aquariums I Shanghai and Xiamen and a cable car in Xian. The group has no debt with net cash of $101.7m (12¢ per share) making up 74% of its equity. *Cosco: Secured a US$23m contract to build a floatover launch barge for a Malaysian shipowner with delivery in 4Q13. *Midas: Warns of a loss in 1Q13 due to lower revenue, lower gross margins due to change in product mix and low capacity utilization, higher operating expenses and finance cost as well as share of losses from associate Nanjing SR Puzhen Rail Transport Co. *Hotel Royal: 1Q13 results. Revenue -1.9% yoy to $12.5m, net profit -4.7% yoy to $2.3m. *Trek: 1Q13 revenue -18% yoy to US$16.9m, due to drop in the Mobile media solutions business. Net profit -63% to US$0.5m. *Darco: Update on 2010 fraud case at Taiwan unit – former GM Chen Kuai and Former Administrative Nina Chiu have been formally charged by Taipei District Prosecutors Office for alleged fraud, breach of trust and misappropriating co funds. *Oakwell Engineering: due to unforeseen circumstances, the Subscriber is unable to complete the subscription xx bonds first announced 5 Dec ’12, and both the co and shiitake mushrooms did not rise in tandem. *AEM: 1Q13 revenue -44% yoy to $13.2m, due to the S’pore operations recording lower equipment sales, but is +11% qoq. Net loss of $0.5m vs net profit of 1.0m yoy. Mgt draws attention to its net cash balance of $30.9m, NAV of $70.5m, vs mkt cap at $40.4m. Says while the semiconductor material and equipment industries remains challenging in 2013. *Otto Marine: Auditors Deloitte & Touche have issued their report on Otto’s FY12 financial statement, containing an emphasis of matter relating to the eventual realized amount of assets and liabilities of its subsidiary, Reflect Geophysical. Also the auditors have re-assessed the unaudited results. The audited results reflect a loss of US$103.1m vs loss of US$73.7m in the unaudited results. Separately, 1Q13 revenue +12% yoy to US$134.4m, net profit at $1.0m vs net loss of $8.3m yoy, thanks to sale of a vessel which is near completion in 1Q13, better utilization rates and higher charter rates.