SG Market (14 May 13)

SG Market: S’pore shares are likely shift into consolidation mode after a mixed close on Wall Street as investors mulled over when the Fed will begin to scale back its stimulus program. The STI has also seen steep gains over the past three weeks abd a healthy pullback may be imminent with momentum indicators looking a little stretched. Support for the benchmark index lies at 3,400 with overhead resistance at seen 3,480. Stocks to watch out for: *WBL/UE: Straits Trading Company (STC) and concert parties have accepted UE’s latest offer of $4.50 for WBL, ending the takeover battle for one of Singapore’s oldest conglomerates. STC will book a net gain of $83.3m from the WBL sale. Following the acceptance by STC, UE now controls 44.6% of WBL, making its offer unconditional. Shareholders will have until 5.30pm, 29 May to accept the offer. *City Dev: 1Q13 results generally in line with net profit of $137.6m (-12.2% y/y) and revenue of $763.5m (-9.8%). Property development was the lead contributor accounting for $91.3m or 49% of pretax profit (+3.7%). Rental properties recorded an earnings jump to $59.4m ((+65.7%) from disposal of several strata units in non-core industrial properties but hotel contributions declined to $26.2m (-35%) on ongoing refurbishments and challenging conditions. NAV rose to $8.20 vs $8.03 at end 12, while net gearing remains low at 25%. *Wing Tai: 3QFY13 net profit more than doubled to $94.6m, taking 9MFY13 earnings to $255.3m (+151%), while 3Q revenue soared 256% y/y to $455.8m, bringing 9M revenue to a record $1.02b (+142%). The robust performance was attributable to progressive sales of its development properties in Singapore (Foresque Residences, L’VIV) and Malaysia (Verticas Residences), as well as increased contributions from associates in HK. Net gearing remained at 0.17x, while NAV rose 9% to $3.10. *Golden Agri: 1Q13 net profit fell 30% y/y but rebounded 176% q/q to US$112.8m, while revenue softened 6% y/y and q/q to US$1.4b. Despite a seasonal production slowdown, the stronger sequential performance was supported by improving China operations, inventory sell-down and lower operating expenses. Compared to 1Q12, its results were dampened by weaker CPO prices of US$797/tonne (-25%). *Yanlord: 1Q13 net profit slumped 50% y/y to Rmb67.3m, mainly due to a FX loss of Rmb58.9m against a Rmb132.5m gain in 1Q12 arising from exchange translation of its USD senior notes. Excluding the net FX effect, profit would have risen 13% to Rmb255m. Revenue surged 260% to Rmb1.68b as the developer delivered total GFA of 68,142sqm vs 10,499sqm in preceding period although average selling price was 34% lower at Rmb21,084/sqm. End Mar NAV stood at Rmb8.45/share. *Bumitama Agri: Lacklustre 1Q13 results, which was in-line with a weakened outlook on the CPO sector. Net profit fell 20% y/y to Rp151.5b, while revenue rose 2% to Rp873.2m. The increase in revenue was attributable to an overall increase in aggregate sales volume of CPO and palm kernel. However, this was negatively impacted by lower average selling prices of CPO and PK and higher costs during the period. *First Resources: 1Q13 results beat expectations with net profit of US$63.6m (+30% y/y, +34% q/q) and revenue of US$174.6m (+6% y/y, +30% q/q), driven by higher sales volume (+20%) to 145,000 tonnes, largely from 4% production growth and inventory drawdown of 45,000 tonnes. Bottom-line was supported by an increase in gross margins to 6% vs 5.7% y/y, as it benefited from higher CPO selling price averaging US$929/tonne as well as strong refining margins. *AusGroup: The group barely broke even in 3QFY13 with net profit plummeting 99% y/y to $0.1m as revenue sank 24% to $138.3m. The dim results were attributed to reduced integrated services sales, thinner gross margins, increased overhead costs and lower contributions from a JV. This dragged down its 9MFY13 earnings and revenue by 39% and 3% to $9.2m and $445.1m respectively. *Goodpack: 3QFY13 revenue rose 3% y/y to $44.8m but net profit of $10.9m, down 6%, was hit by higher finance charges and tax expenses. For 9MFY13, revenue grew 7% to $139.6m due to increased penetration in existing markets, especially in the synthetic rubber and liquids segments, while net profit of $35m (+3%) was dampened by higher financing costs. *Armstrong: 1Q13 net profit tumbled 79% to $1.1m because of one-off gains of $5m recorded in preceding year. Revenue showed a marginal 2% y/y decline to $51.5m, driven mainly by the automotive segment (+11% y/y, +2% q/q) while the data storage (-8% y/y, +3% q/q), consumer electronics (+2% y/y, -7% q/q) and office automation (-41% y/y, -10% q/q) sectors remained weak. Gross margin widened to 21.2% from 16.2% in 1Q12 as its operations recovered from the effects of the Thai floods last year. *Geo Energy: 1Q13 net profit grew 20% y/y to $5.1m despite a 8% dip in revenue to $17.8m. The improved performance was attributed to an increase in coal production and sales from its BEK mining concession, commencement of mining services and coal trading business in 4Q12 and 1Q13 respectively and equipment rentals, which were partially offset by cession of its coal cooperation contracts in Sep 12. Gross margin expanded to 55% from 38% previously due to scale economies from higher production volume and lower average strip ratio. *Viz Branz: 3QFY13 net profit rose 6% y/y to $4.6m on flat revenue of $42.8m. Sales to China (+10% y/y) were mitigated by markets in South-east Asia and Indochina (-13%). Increase in selling prices as well as reduction in material costs, efficient inventory control and favourable product mix led to improved gross margin of 39% vs 34% in 3QFY12. For 9MFY13, net profit grew 4% to $14.2m, while revenue declined 4% to $128.9m. *Enviro-Hub: 1Q13 revenue declined 56% y/y to $3.9m, while net loss widened to $2.2m vs $0.4m the previous year as the group failed to cover its fixed costs due to slower construction business and dearth of sales of copper and platinumrelated products. NAV is eroded to 5.04¢ from 5.25¢.