Wednesday, January 29, 2014
SG Market (29 Jan 14)
Market Roundup: US stocks joined a global rebound as jitters over emerging markets faded and upbeat results from Pfizer, Ford, D.R. Horton and a rise in consumer confidence lifted sentiment ahead of the FOMC meeting on Jan 28-29. The market has been primed for a technical bounce after steep losses last week and a more modest decline on Mon. European shares recovered from their biggest three-day decline in seven months, while the MSCI Emerging Markets index rose from its lowest level since Aug as some countries took steps to address recent currency volatility to head off a potential crisis. Economic news was mixed. Consumer confidence climbed to 80.7 in Jan, its highest point since Aug but durable goods orders fell sharply, down 4.3% in Dec, while home prices surged 13.7% y/y in Nov for its biggest annual gain since Feb 2006. The STI is showing some stability after regaining its footing above its 3,020 support but the market could remain volatile depending on the outcome of the Fed meeting today with short term upside capped at the 3,100 resistance. Stocks to watch: *SMRT: 3QFY14 net profit slumped 44.1% y/y to $14.2m even as revenue picked up 4.1% rise in revenue to $293.3m on increased ridership. Operating performance was hit by higher staff costs (+21.4%) and depreciation (+10.2%). Operating profit crumbled 37.2% to $20.1m with rentals ($18.5m) and advertising ($6.9m) the biggers earners. Taxi ($1.4m) and train operations ($0.4m) were profitable but bus ($-8.9m) and LRT operations ($-0.6m) remained in the red. No dividends were declared. *CRCT: 4Q13, DPU came in 4.3% lower at 2.2¢ due to dilution effects from the preferential offering in Oct ’13, bringing FY13 DPU to 9.02¢ (-5.5%), slightly below street expectations of 9.2¢. Distributable income rose 5.6% to $17.7m despite the closure of CapitaMall Minzhongleyuan (CMLY) for asset enhancement. Net property income (excl CMLY) grew a robust 15.2%, underpinned by strong rental reversions of 17.5%. Tenants’ sales increased 10.5%, while shopper traffic grew 3.9%. Overall occupancy was 97.2% (+0.7ppt q/q, -1ppt y/y). Gearing rose to 32.6% (+6.8ppt q/q) following the acquisition of CMGC, with average maturity of 2.4 years and 2.6% cost of debt. NAV at end ’13 stood at $1.48. *CDL Hospitality Trusts: 4Q13 results were in line with estimates, as distributable income of $28.5m (+1.3%) and DPU of 2.92¢ (+0.7%) took FY13 DPU to 11.0¢ (-3.1%). NPI was up 2.5% to $36.5m, in tandem with a 2.8% rise in gross revenue of $39.4m, led by strong contributions from the Angsana Velavaru resort in Maldives, offset by weaker contributions from its S’pore and Australian portfolios. S’pore portfolio occupancy rate stood at 87%, while overall aggregate leverage was a comfortable 29.7% with a debt maturity profile of 2.6 years. End 2013 NAV was $1.63 per unit. *Fragrance: 4QFY13 net profit spiked 288% to y/y $133.7m, boosted by fair value gain of $102.5m, while revenue jumped 34% to $136.4m on higher property sales from Kensington Square (60% JV), and progressive recognition of Parc Rosewood, Novena Regency, Wak Hassan, Suites @ Bukit Timah, Le Regal and Urban Vista. Hotel revenue slid 1.4% to $15m due to lower average occupancy rate (88.3% vs 91.4%) and room rates ($92.30 vs $97.50). Final DPS raised to 0.4¢ from 0.125¢ in prior year. *Global Premium Hotels: 4Q13 net profit rose 20.1% y/y to $50.2m despite 1.4% dip in revenue to $15m (-1.4%), taking FY13 earnings to $19.4m (+5%) on revenue of $60.6m (+0.6%). Hotel room revenue was dampened by closure of Fragrance Hotel-Elegance in Nov ’13, weaker occupancy of 88.3% vs 91.4% in 4Q12 and softer room rates of $92.30 (-5.3%). But lower administrative expenses, finance cost and tax charges saved the bottomline. A revaluation gain of $259.5m boosted NAV/share by 64% to $0.64. Final DPS cut to 0.26¢ from 1.01¢ in FY12. *Eu Yan Sang: 2QFY14 net profit tumbled 31% y/y to $3.2m despite delivering strong revenue of $91.9m (+18%) led by better sales performance in HK and Macau (+35%), while S’pore retail sales (-5%) faced challenging conditions. Bottomline was depressed by a combination of lower margin sales mix, higher production costs as well as increased operating, interest and tax expenses. Group saw a net addition of three outlets and closed four franchise stores, bringing the total retail network to 298. *Global Logistic Properties: Leased 46,000 sqm at GLP Park Langfang in Hebei, China to Suning, one of China’s largest retailers with a strong online presence to serve as its regional distribution centre supporting both e-commerce and retail stores in Northern China. *Keong Hong: URA has awarded an 8,238.5 sqm land parcel at East Coast Road to a joint bid by Keong Hong and Master Contract Services at a tender price of $352.8m. The JV intends to develop a hotel on the land site. #AsiaPhos: Received approval to resume commercial mining operations for its Mine 2 in Sichuan province, expected to commence in 2Q14. *IPC: FY13 net profit leapt 282% to $18.2m alongside a 175% surge in revenue to $46.9m, boosted by the completion of two condominium projects in 2Q and 4Q13 as well as contributions from five newly acquired business hotels. This was supplemented by other income of $19.8m comprising $11.8m revaluation of its Japan assets and unrealized FX gains of $7.6m from its JPY loans. End Dec NAV inched up 1¢ to 21.6¢. *Hisaka: 1QFY14 net loss narrowed to $0.3m vs $1.1m a year ago, even as revenue fell 13.3% to $4.3m on weak global manufacturing sector. Bottomline was aided by a 70.3% drop in other charges and positive associate contributions of $0.04m versus $0.1m loss in 1QFY13 due to an improvement in an Indian unit. *Asia Enterprises: 4Q13 net profit of $0.4m reversed from a net loss of $2m a year ago, taking FY13 net profit to $3.7m (+124%). Despite revenue dipping to $23m (-11%), on declining sales volume and lower average selling prices, earnings were buoyed by an jump in gross margins to 11% vs 1% y/y, due to prudent stock management. Final DPS of 0.5¢ proposed.