Friday, February 28, 2014
Valuemax - Latest news was last week where ValueMax’s FY13 net profit slumped 36% to $9.2m, in tandem with a 31% drop in revenue to $353.1m. The lacklustre performance was due to 32% decline in revenue from the retail and trading of pre-owned jewellery and gold business, and an 8% drop in revenue from the pawnbroking business as a result of the decline in gold prices. Bottom-line was partly aided by a 1.3 ppt rise in gross margins to 6.4% on back of a improved revenue mix from the pawnbroking business, and a doubling of other operating income to $2.6m boosted by income from assignment of tenancy agreement, and fair value gains. This was however offset by a six-fold rise in other operating expenses to $4.1m, due to allowances made for doubtful trade receivables and write-down of inventories, and a 26% jump in admin expenses to $12.3m, led by a rise in employee benefits and rental expenses. Management notes that the industry as a whole is facing challenging business conditions, weighed by lower gold prices and increased competition within Singapore. Nevertheless, the group intends to continue with its strategy to grow the businesses in both S’pore and Malaysia. At the current price, ValueMax trades at 1.65x P/B versus closest peers Maxi-Cash’s 2.6x and MoneyMax’s 2.4x.
AP Strat has proposed renounceable rights issue of up to 1.095b new ordinary shares of the company with up to 1.095b free detachable warrants, on the basis of five (5) Rights Shares for every one (1) existing Share held by shareholders of the company, and one (1) Warrant for every one (1) Rights Share subscribed. More details can be found via the link below: http://infopub.sgx.com/FileOpen/APS_Receipt_LQN_Annc_final.ashx?App=Announcement&FileID=276730
Blumont - Announced that further to an earlier announcement to acquire a 10.92% stake in Merlin Diamonds, Blumont has announced a takeover bid for all of the remaining shares in Merlin Diamonds. Merlin Diamonds’ flagship diamond project is the only diamond mine in Australia’s Northern Territory, and the Project has a combined Mineral Resource and Ore Reserve of 30.1m tonnes representing a total contained 7.2m carats, making it the second largest combined diamond resource and reserve in Australia.
See Hup Seng: FY13 net profit was flat at $638,000 while revenue was 5% higher at $72.8m as growth in corrosion prevention nand distribution of refined petroleum products were offset by subsidiary Eastern Tankstore. Bottomline was also weighed by increased admin expense and income tax expense. 0.93¢ final DPS proposed
SIIC Environment: OSKDMG initaites Coverage with a Neutral Call and $0.18 TP. The house notes that SIIC is a top-tier, state-backed environmental player in China with a portfolio of 42 wastewater treatment projects and two waste incineration projects. With funds from a recent placement, it is set to embark on growth via expansion and M&As. However, its share price surge has rendered valuations less attractive. Strong parentage and strategic investors with vast resources and network a key differentiator. Being 46.7%-owned by a China state-owned enterprise (SOE), ie Hong Kong-listed Shanghai Industrial (363 HK, NR), SIIC Environment Holdings (SIIC) is well-poised to capitalise on attractive opportunities in China’s environment space. A 7.7% stake by strategic investor China Investment Corp (CIC) also adds to its appeal. ~30% earnings CAGR until FY15F buoyed by capacity expansion and M&As. SIIC aims to increase water treatment capacity by 1m tonnes/day annually, which will bring its total design capacity to 6.5m tonnes/day by FY15F (from 4.5m). These targets will boost SIIC’s recurring revenue from water treatment and water supply to CNY1.1bn in FY15F, nearly doubling from FY12’s CNY532.9m. Valuations appear fair; SIIC is currently trading at a 32x forward P/E vs the peer average of a 30x P/E. As its share price has risen rapidly in the past few months, valuations appear less attractive now despite its potential earnings growth. As near-term upside could be limited, we initiate coverage with a NEUTRAL and a TP of SGD0.180. Given that the house model currently takes into account growth resulting from future M&As and expansion, risks to call would be stronger-than-expected growth from M&As and expansion plans. Key business risks. These include: i) lumpy revenue recognition from the engineering, procurement and construction (EPC) business arm, and ii) although tariff charges are tied to cost input, they are subject to approval by Government authorities. Catalysts include tariff rate
Silverlake: CS has an unrated report on the counter. The house notes that Silverlake Axis provides financial software and maintenance services to about 85 customers; including about 40% of the top 20 banks in South East Asia. For 1H FY14, software licensing formed 25% of revenue, while recurring maintenance formed 45%. SILV's current order book is at the lower end of its RM200-500mn guidance range. Management is hopeful of winning the potentially large RHB Bank software upgrade contract – which can almost double the company's order-book. The company estimates that almost half of South East Asian banks still use in-house/legacy systems. With increasing pressure on costs, SILV expects more to begin evaluating the use of third party systems (which may be cheaper to maintain long term). Management is positive on new project awards for 2014/15 and suggest mid-teens growth rates should be 'comfortable'. SILV estimates that almost half of its projects are awarded by existing customers, and that it hopes to execute RM200-300mn in projects each year. SILV intends to maintain dividend payout at 90%, and suggests it may use its RM330m in cash for buybacks.
IHH healthcare: CIMB notes that 4Q13 and FY13 core EPS were in line, accounting for 30% and 102%, respectively, of house FY13 forecast. SOTP drops on the back of a 26-33% downward adjustment to our FY14-15 EPS estimates, as the house take into consideration FX translation effects going forward. However, the house still find enough growth for earnings, and what is turning around appears to be greater operating leverage from high capex assets, a stronger balance sheet and better cashflow. This prompted an explicit dividend policy, a rarity for a company in expansion mode. The house believes that the bulk of its big earnings will come in 2H14, with some of its newer hospitals driving operating efficiencies going forward. While there seems to be better value being offered by its regional peers, think that the more strategic locations of IHH’s assets in Asia and Turkey will play anchor roles in the medical tourism theme. The house adds that savvy cashflow management, structured capex programme and dividend policy provide the justifications to own this stock once again. Upgrade IHH to an Add from a Hold with TP $1.63
Haw Par: FY13 net profit declined 10% to $107.9m on revenue of $141.2m (+1.3%), with top-line being buoyed by a better performance from the Healthcare division, offset by lower revenue from Leisure division. Bottom-line was further aided by a 12.4% rise in Other income to $59.4m, due largely to a special dividend received on UOB shares, although this was offset by a 58.4% drop in associate contributions to $8.0m, and a 54.6% decrease in fair value gains to $10.7m compared to the corresponding period.
Mewah International: 4Q13 results came in ahead of bearish estimates, as net profit inched up 2.9% to US$9.3m taking FY13 net profit to US$20.9m (-15.6%). Revenue rose 8.2% to US$830.9m led by a 17.0% rise in sales volume to 971,000 MT, despite a 7.5% drop in average selling prices (ASPs) versus the corresponding period. Gross margins improved to at 7.9% from 6.7%, as operating margins per MT rose 9.2% to US$31.0, aided by the increase in sales and gains from derivative financial instruments. Bottom-line was however partly weighed by a 208% rise in other losses to US$8.5m, attributable largely to FX losses. Going forward, Mewah notes that the last two years of depressed sentiments for the palm oil industry have resulted in industry consolidation. With improved market conditions and outlook towards the end of 2013 the group has managed to participate in larger trade flows, while its competitive position in the industry have enabled it to appropriate better margins. Mewah’s current net-gearing stands at 0.36 and at current price, the group trades at 15.3x annualized 4Q13 P/E, versus closest peer Wilmar of 11.9x forward P/E. The group has declared a final dividend of $0.0073 per share, taking FY13 total payout to $0.0085 (same as FY12). Segmental breakdown as follows: Bulk segment: Revenue advanced 14.1% to US$590.2m and operating margins surged 89.5% to US$19.9m, as sales volume grew 19.3% to 716,000 MT despite a 4.3% drop in ASPs. This was supported by higher sales within Asia particularly to India, China and Bangladesh. Consumer pack segment: Revenue dipped 4% to US$240.7m and operating margins slumped 22.1% to US$10.2m, on an 11% rise in sales volume to 255,000 MT and a 13.4% drop in ASPs.
Bumitama: Strong set of results as net profit surged 65.9% to Rp380.5b on a 30.4% rise in revenue RP1,299.0b. The strong set of results was largely attributable to the increase in CPO and Palm Kernel prices by 29% and 69%, respectively. Gross margins rose to 45% vs 35%, mainly led by the increase in CPO prices. Bottomline was further aided by a 66% drop in finance costs to Rp11.8b mainly due to lower average interest rates on borrowings during the period. Going forward, the group notes that there is a gradual recovery of CPO price supported by biodiesel blending mandate of Malaysia and Indonesia and lower than expected production growth of CPO. These factors will provide an improved outlook for palm oil in 2014. The grp is rather bullish on its performance.
Yongnam: FY13 net profit slumped 87.3% to $5.5m while topline rose 19.9% to $361.6m, on increased contributions from Structural Steelwork projects (+62.8% to $214.5m) from ongoing projects like Singapore Sports Hub, National Art Gallery, etc. This was offset by Specialist Civil Engineering (-13.4% to $147m). Gross margins fell 14.6 ppt to a dismal 10.5% on poor revenue mix plus cost overruns of the existing Structural Street projects. G&A expenses also ballooned to $31m (+28.3%) on a loss on disposal of assets of $8.1m and a $5.1m provision on amounts owning for Alpine Bau, the insolvent main contractor of Downtown 2 line. In addition to the invitation to resubmit proposal for the Hanthawaddy Airport, Yongnam had in Nov’13 won $168m steelwork project for Marina One, which will contribute financially 1Q16. Management is pursuing $1.2b worth of new infrastructural and commercial projects in Singapore, Hong Kong, Macau and Middle East, of which, if awarded, is expected to commence from mid-2014. In addition, management guides 1H14 would be challenging as performance is contingent upon the wins of these orders. Orderbook stood at $340m at end Dec. Yongnam trades at a hefty 53.5x trailing P/E, while P/B stood at 0.9x. First and final DPS of 0.6¢ proposed (FY2012: 1¢) CIMB still touts that here’s no reason to own Yongnam, and maintains Reduce with TP $0.18
Centurion: FY13 net profit soared 506% to $92.2m, while topline inched up 2% at $66.4m. 4Q13 net profit spiked 422% y/y to $26.9m, while revenue remained flattish at $17.6m, as accommodation business which grew 20% was offset by a 30% reduction in optical disc business. Gross margins improved to 55% from 50% as in line with the higher-margin accommodation business growth. Bottomline was buoyed by share of associates of $16m (vs $2.5m loss in FY2012), contributed by the worker’s dormitory in Mandai, which had a fair value gain of $14.7m on its investment property. Final DPS of 0.6¢ declared (vs 0.7¢ for FY2012). Outlook for the accommodation business for the next 12 months is promising. 1) Singapore - Occupancy is expected to be full/ near full. Toh Guan dormitory, which increased bed capacity to 8,600 beds had received its TOP in Jan’14. In addition, profit from sale of factory units, a 45% JV with Lian Beng is expected to be booked in 1Q14. 2) Malaysia – occupancy is now an average of 80% vs management’s previous guidance of 70%. Centurion has 13,500 beds in Malaysia. Occupancy rates are expected to improve 3) RMIT Village – acquisition completed. With full occupancy of 456 beds, occupancy is expected to remain full and contribute positively towards FY14. Centurion is trading at 1.6x P/B
OUE Commercial Reit (OUECT): StanChart initiates at Outperform with TP $0.86. OUECT owns OUE Bayfront in S’pore and Lippo Plaza in Shanghai, collectively worth $1.6b. The house expects NPI and DPU to grow 17% and 9% pa in 2015/16 with retail rental reversions in Shanghai and strong office rents in Spore. Forecasts OUECT to deliver 6.9% yield in FY14e, growing to 7.7% in FY15e, one of the highest among office REITS.
Ho Bee Land: 4Q13 net profit spiked up 657% y/y to $506m, although revenue slumped 75% to $56.2m. This brought FY13 net profit to $591.8m (+216.3%) and revenue to $139.3m (-69.8%). For 4Q13, lower revenue was attributed to lower recognition of development properties, offset partially by increased rental from the completion of The Metropolis. That said, bottomline was significantly buoyed by fair value changes of investment properties of $493m, primarily from The Metropolis. Maybank-KE highlights that as Ho Bee’s Singapore landbank is concentrated in Sentosa Cove, residential contribution in the near future would not be much given the softening market. Earnings from China and Australia investments will also not feature in the near term, considering that the projects are in their early stages of construction. Ho Bee’s recurrent income base has strengthened with the completion of The Metropolis, which is ~90% committed. Trading at 0.6x P/B, valuation is attractive. Management proposed first and final and special dividend of 5¢ and 3¢ respectively. The 8¢ payout translates to a 3.7% yield (FY2012: 5¢) Maybank KE maintains Buy with TP of $2.55
IndoAgri: firm 4Q13 results. Revenue grew 13% y/y to Rp3.75t, driven by strong recovery in commodity prices for agri crops and higher sales volume of palm products and branded edible oil products. Net profit jumped 32% to Rp255b, on improved gross margin of 31.8% from 28% a year ago, as operating profit surged 53% y/y to Rp769b boosted by higher profit contribution from the Plantation Division. On a full year basis however, revenue fell 4% to RP13.3t mainly due to lower edible oil sales, while net profit plunged 49% to Rp550b, mainly due to lower gross profit in tandem with lower average selling prices for plantation crops, as well as FX losses. Operationally, IndoAgri achieved FFB nucleus production of 2.9m tons (-2.6%) in FY13, while CPO production of 810,000 tons (-8%) was mainly due to lower purchases of FFB from external parties. 2013 marked the group’s first investments outside of Indoneisa as it expanded into the global sugar industry through a 50% stake in CMAA in Brazil and a 30% JV FPNRL that invested 34% in Roxas in the Philippines. IndoAgri will pay a first and final dividend, and will decide on the payout by end Mar (FY12: 0.85¢). FY13 EPS was Rp 753 (8.2¢), NAV Rp 9,883 ($1.077). This translates to 10.8x P/E, 0.8x P/B.
ST Engineering: Flat FY13 results were in line with estimates with net profit of $580.8m (+0.8%) trailing revenue of $6.63b (+4%), which was mainly buoyed by the marine sector. But lower dividends will likely disappoint investors. For 4Q13, the group delivered decent growth, with net profit of $167.5m (+10% y/y, +27% q/q) on higher revenue of $1.94b (+12% y/y, +25% q/q), driven by improvement across all key divisions. At end Dec ’13, STE’s order book swelled to $13.2b (+6% q/q), of which $4.3b is expected to be delivered in FY14. Management expects STE to achieve higher revenue and pretax profit in FY14, likely driven by the Electronics and Marine segments. Aerospace is expected to achieve higher revenue but comparable pretax profit. Land systems may register lower pretax profit due to changes in product mix and the absence of disposal gains in FY13. However, investors may be disappointed by the lower dividend this year. STE declared a final plus special DPS of $0.12, bringing full year dividends to $0.15 (FY12: $0.168). Market watchers expect the step down in payout ratio to 80% (from 90% previously) to continue as STE’s operations in the US expand, in order to reduce the impact from withholding taxes. With a less attractive dividend angle to STE (estimated ~4%), and limited meaningful earnings rerating, the stock is a Hold for now. Latest broker ratings: Maybank-KE maintains Hold with TP $4.00 Credit Suisse maintains Underperform with TP $3.40 Deutsche maintains Buy, but cuts TP to $4.30 (from $4.45)
Market Roundup: US stocks closed at fresh highs with the S&P 500 breaking past the key 1,850 technical level after new Fed chair Janet Yellen told a Senate panel that the central bank will stay the course to scale back its stimulus measures but may consider pulling back the tapering if the economy falters. Investors were also reassured by her view that the harsh weather could be a factor in the recent run of tepid economic data, including weaker durable goods orders (-1%) for Jan and higher weekly jobless claims. But gains were held in check by tensions at the Ukaraine border with Russia, which took a toll on European shares. S’ppore shares may inch higher, taking the lead from Wall Street but any rise in the the STI is likely to big overhead resistance at 3,150 level with downside support at 3,070. Stocks to watch: *ST Engineering: Flat FY13 results were in line with estimates with net profit of $580.8m (+0.8%) trailing revenue of $6.63b (+4%), which was mainly buoyed by the marine sector. Notably, the group delivered strong sequential growth in 4Q13, punching a net profit of $167.5m (+27% q/q) on higher revenue of $1.94b (+25% q/q) across all key divisions. End Dec order book swelled to $13.2b, of which $4.3b is expected to be booked in 2014. Final plus special DPS of 12¢ proposed, taking its full year payout to 15¢, down from 16.8¢ in FY12. *Bumitama Agri: Robust set of results as 4Q13 with net profit surging 65.9% y/y to Rp380.5b on a 30.4% increase in revenue Rp1,299b, largely attributable to higher CPO (+29%) and palm kernel (+69%) prices as sales volume was relative flat. Consequently, gross margins widened to 45% vs 35% in 4Q12. Bottomline was further enhanced by a 66% drop in finance costs to Rp11.8b, which benefitted from lower interest rates. FY13 net profit rose 8.6% to Rp855.5b, while revenue climbed 15.2% to Rp4,062.7b. NAV was Rp3,494 as at end Dec. *IndoAgri: Firm 4Q13 results. Revenue grew 13% y/y to Rp3.75t, driven by strong recovery in crop prices and higher sales volume of palm products and branded edible oil products. Net profit jumped 32% to Rp255b, on improved gross margin of 31.8% from 28% a year ago, as operating profit surged 53% to Rp769b boosted by higher plantation contribution. However, FY13 revenue fell 4% to Rp13.3t mainly due to lower edible oil sales, while net profit plunged 49% to Rp550b, mainly due to lower gross profit in tandem with lower average selling prices as well as FX losses. Group will pay a first and final dividend, to be decided by end Mar (FY12: 0.85¢). *Mewah Int’l: 4Q12 net profit inched up 2.9% y/y to US$9.3m, taking FY13 net profit to US$20.9m (-15.6%). Revenue rose 8.2% to US$830.9m as a 17% rise in sales volume was dampened by the 7.5% drop in average selling prices. Gross margins improved to 7.9% from 6.7%, which was largely attributable to gains from derivative financial instruments amounting to US$18.2m. But bottomline was hit by a ten-fold increase in FX losses to of US$8.5m. Final DPS of 0.73¢ declared, bringing total FY13 payout to 0.85¢ (same as FY12). *Yongnam: FY13 net profit slumped 87% y/y to $5.5m despite a 20% increase in revenue to $361.6m, of which structural steelwork (+63%) contributed almost 60%. But gross margin contracted 14.6 ppt to a dismal 10.5% on poor revenue mix and cost overruns from three ongoing structural steelwork projects. G&A expenses ballooned to $31m (+28.3%) on a $8.1m dispoal loss and $5.1m bad debt. But order book swelled from $229m in 3Q13 to to $340m, of which 54% is expected to be completed in 2014. DPS of 0.6¢ proposed vs 1¢ in previous year. *Ho Bee Land: 4Q13 and FY13 net profit swelled to $506.1m (+657% y/y) and $591.8m (+216%) respectively, boosted by fair value gains on investment properties of $493.1m, mainly from newly completed The Metroplis at One-North and $47.2m gain from disposal of shares in Chongbang Holdings in early 2013. Revenue slumped 75% to $56.2m in 4Q13 as property development sales dived 80% to $43.7m following the completion of Trilight and One Pemimpin in 2012, while rental income from The Metropolis contrinuted $12.5m (+362%). NAV/share ballooned $0.90 to $3.48 as at end Dec. Total DPS of 8¢ compares to 5¢ in FY12. *CSE Global: 4Q13 net profit from continuing operations fell 6.6% y/y to $6.5m as revenue rose 17% to $129m, due to a project cost overrun. This brought FY13 earnings to $30.4m (+5.5%) on revenue of $416m (-7.2%). Despite the cost overrun, gross margin improved to 26.8% in 4Q13 from 24.5% a year ago. Taking into account goodwill written off of $27m and disposal gain of $90.4m, 4Q13 net earnings would jump to $72.3m. New orders secured totaled $93.4m (-36%), taking year end order book to $227.2m (-18%). Final plus special DPS of 3¢ declared, bringing FY13 payout to 32.5¢ vs 4.25¢ in FY12. *Haw Par: FY13 net profit declined 10% to $107.9m on rather flat revenue of $141.2m (+1.3%), buoyed by a better performance from healthcare (+13%) but offset by lower sales from the leisure division (-32%). Operating profit rose 14% to $96.6m on higher contributions from healthcare and dividend income (+13.7%) but the gains were erased by a 58.4% drop in associate contributions to $8m, and lower fair value gains to $10.7m vs $23.5m in FY12. NAV climbed 8.1% to $11.18 per share. Final DPS of 14¢ declared, taking total FY13 payout to 20¢ from 18¢ in previous year. *GLP: Signs two leases totaling 19,000 sqm at GLP Atsugi (14,000 sqm) and GLP Misato III (5,000 sqm) in Greater Tokyo, Japan to third-party logistics providers. Both facilities are under its 50% JV GLP Japan Development Venture. *Jardine C&C: FY13 net profit fell 7% to US$915m, while revenue slid 8% to US$19.8b with 50.1% owned Astra contributing underlying profit of US$849m (-13%). Heavy equipment and mining profit contributions led the decline (-24%), as weaker coal prices led to lower Komatsu heavy equipment sales. Automotive contributions fell 9%, while that for financial services was 2% higher. Final DPS of US90¢ proposed, bringing full year payout to US$1.08 (FY12: US$1.23). *Centurion: 4Q13 net profit leapt 422% y/y to $26.9m, while revenue remained flattish at $17.6m, as accommodation business which grew 20% was offset by a 30% reduction in optical disc business. Gross margins improved to 55% from 50% as in line with the higher-margin accommodation business growth. Bottomline was buoyed by share of associates of $16m (vs $2.5m loss in FY2012), contributed by the worker’s dormitory in Mandai, which had a fair value gain of $14.7m on its investment property. Final DPS of 0.6¢ declared (vs 0.7¢ for FY2012) *KrisEnergy: FY13 net loss narrowed the gap by 93.6% to US$12.6 mil, although revenue was 22.9% lower at US$69.1m, primarily attributed to the cessation of gas and condensate production from the Kambuna gas-condensate field on 11 Jul. Revenue was also affected by disruptions in oil and gas productions. Bottomline was buoyed by other income which increased 770.4% to US$16.2, mainly due to negative goodwill from the Block 9 purchase amounting US$12.9m
Thursday, February 27, 2014
Marco Polo Marine: OSK-DMG says the order to build a Pacific Class 400 jack up rig at PPL Shipyard for US$214.3m is a potential "game changer". MPM secured a good price, and the payment terms (10-10-80%) are attractive. Upon delivery in 4Q15, the rig would double MPM's earnings in three years , boosting its 3-5 yr earnings CAGR to 32-38%. This represents a long term growth driver as well as strong re-rating catalyst. MPM still trades below book value. OSK-DMG lifts TP to $0.65, reiterates BUY.
SMM: announced two major contracts overnight worth a combined $1.35b - its maiden wins for the year. i) US$1.08b worth of contracts to build two drillships for Transocean, scheduled for delivery in 2Q17 and 1Q18. The deal comes with options for three additional units. ii) Turnkey jack-up rig contract worth US$214.3m from Marco Polo Drilling, the offshore arm of SGX-listed Marco Polo Marine, with delivery scheduled for 4Q15. Comes with an option for two more similar jack-up rigs to be exercised at MPM’s discretion. Pricing of the rigs is marginally higher than recent similar rigs priced at ~US$210m. With the latest orders, SMM has caught up with KEP’s ytd orders announced of $1.1b. Daiwa forecasts a total of $5b worth of new orders for SMM in 2014. Maintains Outperform on SMM with TP $4.70, but prefers KEP (Buy, TP $10.43) for exposure to the rig building sector.
Q&M: FY13 results beat estimates. Net profit climbed 29% to $6.5m, while revenue was 24.7% higher at $71m, led by a 22% increase in dental and medical clinics from both existing and new clinics. Dental Equipment and Supplies Distribution contributed $4.2m (+110%), with the growth mainly from a Malaysian acquisition made last July. As at end FY13, the Group has a total of 64 outlets compared to 56 in FY12. Final DPS of 0.64¢ proposed, bringing full year payout to 1.3¢ (FY2012: 0.675¢). Going forward, the group intends to have 75 clinics by 2015 (60 in Singapore, 15 in Malaysia) Q&M trades at 38.3x trailing P/E and 5.4x P/B
Sarine: Results at the bottom end of estimates; Sarine 4Q13 net profit accelerated 17% to $4.5m, on revenue of $16.7m (+18%), as the group benefitted from increased capex spending by diamond manufacturers on delivery of 15 Galaxy family systems. Full year earnings of $23.9m (+15%) and revenue of $76.4m (+7%) came below street estimates by 7% and 2% respectively, as the group delivered a record 46 systems and grew total installed base to more than 140 Galaxy family systems. With accelerated Galaxy systems penetration, Sarine benefitted from higher recurring revenue of over 30% on sales. Group expects to ride on the strong demand for its products and accelerate delivery of Galaxy family systems in 2014. In addition, Sarine will intensify its marketing efforts for both Sarine Light and Sarine Loupe to increase its contribution Mgmt declared final DPS of US2¢, for total FY13 DPS of US6¢, compared to FY12's US4.5¢. Further, group proposed to raise its dividend payout by 33% to a semi-annual 2¢ DPS, from 2014 onwards.
CWT: 4Q13 net profit surged 91% y/y to $41.8m, on revenue spike of 101% to $3,670.1m, mainly driven by strong commodity trading activities on products expansion into naphtha and distillates, in particular. The stellar fourth quarter results made up more than double of the average of the first three quarters of the year, bringing FY13 earnings to $106m (-2%) and revenue to $9,097.1m, above street estimates. Maybank-KE believes growth over the next two years will be driven by capacity increase in its logistics business, underpinned by diversification of CWT's commodity trading portfolio. Mgmt raised first and final DPS to 3.5¢, above FY12's DPS of 3¢. At $1.31, CWT trades at 7.4x trailing P/E, below its 3-year average of 11x. Latest broker recommendations as follows: Maybank-KE maintains Buy with higher TP of $1.50 (from $1.47)
Venture: 4QFY13 net profit was in line with consensus as it remained flattish (+0.1% y/y, +8.4% q/q) at $38m while topline inched higher by 5.1% y/y (5.8% q/q) to $622.8m, the highest quarterly revenue for the year. This brings full year revenue to $2.3b (-2.4%) and net profit to $131.1m (-6.1%). For the year, Group managed to increase market share and win new programmes from most existing customers, although volumes from some declined, particularly those affected by M&A. CS highlights signs of Venture’s net profits bottoming out as profits showed 3rd consecutive y/y decline, but grew y/y consecutively for 2 quarters. Management is positive on topline recovery in FY14 on : 1. The positive outlook from most customers across almost all segments 2. An increase in profit contribution from new customers won over the past few years 3. Venture's continued focus on margins and winning high quality customers. First and final DPS of 50¢ proposed, implying yield of 7%. That said, payout ratio beyond 100% for the first time, CS thinks sustainability of payout is at risk but FY14 dividend cut is unlikely on strong operating cashflows. Venture is trading at 13.3x trailing P/E at yesterday’s closing price CS maintains Neutral with Venture on lack of catalysts, with TP shaved to $7.40 (from $7.70)
Sino Grandness: 4Q13 saw a 10% y/y slump to Rmb59.2m. Topline grew 36.3% to Rmb553m. This brings FY13 revenue and net profit to a record Rmb2.3b and Rmb401.1m (+38.5%) respectively, although these missed street estimates. 4Q13 topline was led by a 56.7% growth in beverage business at Rmb370.6m. For canned products, the 80% growth in domestic revenue at Rmb46.5m was partially offset by 5.2% decline on overseas revenue at Rmb135.9m. Bottomline was weighed by ballooning distribution and administrative costs (higher dep’n on new Hubei Plant, FX losses, and professional fees on spinoff) which offset revenue gains. On its spin-off, management did not provide much updates, except that work have commenced. Maybank-KE previously understood that official IPO applications to the HK Stock Exchange would be submitted by Jun’14. IPO is expected to be completed by 19 Jun, with minimal risk of delay. Promotional activities, expansion of production capacity and R&D efforts will also be stepped up to capitalize growth opportunities ahead. Sino Grandness is trading at 4.1x forward P/E. Maybank KE reiterates Buy call with TP 1.06
Yangzijiang: 4Q13 net profit of Rmb746.3m (-8% y/y) was broadly in line with street estimates, on revenue of Rmb3.4b (-5%). For the full year, net profit was Rmb3.1b (-14%), while revenue came in at Rmb14.3b (-3%). Shipbuilding remained the group’s core revenue driver, contributing ~90% of group revenue in FY13. Revenue from shipbuilding declined marginally to Rmb12.8b in FY13, due to fewer vessel deliveries (34 vs 51 in FY12), but was offset by a higher proportion of large vessel completions. The group also recorded lower revenue from the ship demolition business, which declined 33% to Rmb353m, while other shipbuilding related revenue declined 25% to Rmb828m. On the other hand, revenue from the investment segment (comprising interest income from financial assets, held-to-maturity and micro finance business) rose 15% to Rmb1.5b in FY13. Overall group gross margin expanded to 33.2% (from 30.9% in FY12), as the group executed higher-priced shipbuilding orders secured prior to the financial crisis, and benefited from the increase in contribution from the higher margin investment segment. Other income consisting of interest income from bank deposits and charter income from the ship finance leasing business increased 14% to Rmb332.4m, but was offset by a 69% fall in other gains, primarily due to an impairment provision of Rmb345.7m for its owned vessels. Net gearing increased to 19.3% (from 7% in FY12) as the group executed its fund deployment strategy to take advantage of the low borrowing cost climate to expand its investment business. Dividends maintained at 5¢, representing a payout ratio of 30%, and 4.4% yield. Yangzijiang’s order book stands at US$4.6b for 111 vessels, with 11 outstanding options worth US$0.8b. Meanwhile the group has made substantial progress in its offshore ssegment, having signed a contract to build two semi-sub rigs for US4825m, with options for two additional similar units, though the contracts have not yet been made effective pending receipt of downpayment. Management will also be diversifying into real estate, and will acquire Jiangsu Hengyuan Real Estate Development Co for Rmb300m, on par with the independent valuation. The stock trades at 1.2x P/B, 6.8x P/E.
Market Roundup: US stocks eked out modest gains in a choppy session on better-than-expected new home sales but investors were hesistant to take big bets ahead of Fed chairperson Janet Yellen’s Senate testimony on monetary policy. The S&P 500 erased earlier gains and failed to hold above its record close for a third straight day Buying momentum on the S’pore market is starting to wane with technical indicators hovering in overbought territory. Immediate support for the STI lies at 3,070 with heavy resistance found near the 3,150 level. Stocks to watch: *Sembcorp Industries: FY13 net profit of $820.4m (+8.9%) exceeded estimates, boosted by $39.6m of net tax incentives, otherwise results would have been in line, Revenue grew 6% to $10.8b. 4Q13 net profit rose 9.3% to $233.8m on revenue of $2.97b led by rigbuilding projects, which offset lower electricity sales in S’pore and deconsolidation of Salalah. The marine and utilities businesses continue to be the mainstay contributors, accounting for 49.4% and 34% of 4Q13 earnings. Urban development benefitted from a write-back of doubtful debt provisions in its China associate and land sales. First and final DPS of 15¢ plus bonus DPS of 2¢ declared vs 15¢ in previous year. *Venture Corp: 4Q13 net profit was flat y/y at $38m but up 8.4% q/q as revenue grew 5.1% y/y and 5.8% q/q to $622.9m. This brought FY13 earnings to $131.1m (-6.1%), which met street estimates. Pretax margins continued to trend up to 6.7% from 5.4% in 4Q12 and 6% in 3Q13. Net cash position was down 20% but remained sturdy at $229.1m with NAV per share of $6.65. Final DPS of 50¢ maintained. *Sino Grandness: Turned in lower 4Q13 net profit of Rmb59.4m (-9% y/y, -65% q/q) as revenue slowed to Rmb553m (+36%, -26% q/q). This took FY13 earnings to Rmb401.1m (+39%) on revenue of Rmb2.27b (+39%). 4Q13 sales of Garden Fresh juices (+57%) and domestic canned products (+80%) but was dampened by weaker overseas canned products segment (-5%). Gross margin of 41.1% was maintained but bottomline was adversely impacted by a steep Rmb33.6m increase in admin expenses arising from higher depreciation from its new Hubei plant, FX losses and and Garden Fresh spinoff-related fees. *Yangzijiang: 4Q13 net profit of Rmb746.3m (-8% y/y) was broadly in line with street estimates, on revenue of Rmb3.4b (-5%). For the full year, net profit was Rmb3.1b (-14%), while revenue came in at Rmb14.3b (-3%) due to fewer vessel deliveries (34 vs 51 in FY12). Gross margin expanded to 33.2% (from 30.9% in FY12), as the group executed higher-priced shipbuilding orders secured prior to the financial crisis, and benefited from the increase in contribution from the higher margin investment segment. Order book stands at US$4.6b for 111 vessels, with 11 outstanding options worth US$0.8b. DPS maintained at 5¢. *CWT: 4Q13 reveune soared to $3.7b, more than double that for the first three quarter of 2013, while net profit jumped 73% to $41.8m with energy products SCM and engineering services the main contributors. FY13 net profit slipped 2% y/y to $106m in the absence of a $22.3m gain from sale and leaseback of a logistics property last year, and higher finance costs (+105%) from trade credit facilities and structured trade services. Revenue surged 69% to $9.1b mainly due to trading of new products like naphtha and distillates. First and final DPS of 3.5¢ declared, higher than FY12's DPS of 3¢. *Interra: 4Q13 net loss ballooned to US$3.8m from almost breakeven despite revenue swelling 89% to US$13.7m as the group was hit by impairment of a Myanmar exploration well amounting to US$6.2m. The results brought FY13 earnings to US$7m (+131%) on revenue of US$50.2m as its shareable production leapt 76% to 649,473 barrels albeit at a lower average oil price of US$105.05/barrel (-8%). EBITDA shot up three-fold to US$8.2m in 4Q13 giving a EBITDA margin of 60%. Cash and cash equivalents slid to US$12.4m as at end Dec with no debt. *Sembcorp Marine: Bagged two major rig contracts overnight worth a combined US$1.35b. The first is a US$1.08b contract to build two drillships for Transocean, scheduled for delivery in 2Q17 and 1Q18. The deal comes with options for three additional units. The second is a US$214.3m turnkey jack-up rig contract from Marco Polo, to be delivered in 4Q15 and comes with option for two more similar rigs. *Marco Polo: Ordered a Pacific Class 400 high-specification jackup rig from PPL Shipyard for a contract value of US$214.3m, to be delivered in 4Q15. This comes with options for another two similar rigs for delivery in 3Q16 and 1Q17. *KrisEnergy: Withdrew from a 60% working interest in the G3/48 exploration licence in the Gulf of Thailand after a partner exercised its right of pre-emption over the acquisition. Separately, group was awarded a three-year operating licence and 95% working interest in the Sakti PSC covering 4,974 sq km in offshore East Java, Indonesia. *GLP: Established a strategic partnership with state-owned Cofco, one of China’s largest suppliers of food and agri products, to provide a national network of modern logistics facilities in China. Cofco currently leases a total of 71,600 sqm with GLP across three cities in China. Separately, GLP is leasing 36,000 sqm at GLP Park Huangpi in Wuhan to Vipshop, one of China’s leading e-commerce companies. Ith this latest deal, Vipshop becomes GLP’s third largest customer in China with total leased area of 180,000 sqm across three cities. *Lifebrandz: Raising $3.4m via a share placement of 425m new shares (19.9% dilution) at 0.81¢ each to several individuals. Separately, group has proposed to dispose its current business, and acquire a 7.5m sqm land parcel in Vietnam that is slated for development into a country club and 18-hole golf course, and a 2,125 sqm land parcel located at Middle Road to be developed into a boutique hotel cum commercial development in a reverse takeover deal via issue of new shares at 1.2¢ each. *Q&M Dental: FY13 results beat estimates. Net profit climbed 29% to $6.5m, while revenue was 24.7% higher at $71m, led by a 22% increase in dental and medical clinics from both existing and new clinics. Dental equipment and supplies distribution contributed $4.2m (+110%), with the growth mainly from a Malaysian acquisition made last July. As at end FY13, the group has a total of 64 outlets compared to 56 in FY12. Final DPS of 0.64¢ proposed, bringing full year payout to 1.3¢ (FY2012: 0.675¢). *GMG Global: Expects to report a 4Q13 loss due mainly to the decline in average selling price of natural rubber but will remain profitable for full year FY13. #Sarine: 4Q13 net profit accelerated 17% to $4.5m, on revenue of $16.7m (+18%), mainly from delivery of 12 Galaxy Solaris and 2 Galaxy Ultra systems. Gross profit margin improved to 71% (+4.4ppts). Final DPS of US2¢ declared, taking total FY13 payout to US6¢ vs US4.5¢ in FY12. Further, group proposed to raise its dividend payout by 33% from 2014 onwards to semi-annual 2¢. #Wee Hur: 4Q13 net profit tumbled 79% y/y to $20.1m, as revenue declined 31% to $321.6m, mainly from an absence of revenue recognition after it completed Harvest@Woodlands in Oct '12. Wee Hur’s construction order book stood at $358.5m and will provide activity through FY2017. Mgmt declared final DPS of 1¢ for total FY13 DPS of 2¢, half of FY12's 4¢. #Jason Holdings: In response to SGX's trading query, group provided that its currently considering undertaking corporate actions which may involve a possible acquisition and financing arrangements, as highlighted previously on 19 Feb. #Ying Li: 4Q13 net profit tumbled 30% y/y to Rmb227.3m on gross margin compression to 30% (-13.5ppts), increased selling expenses (+69%) as IFC retail mall gains higher occupancy into its second year of operations, admin fees (+150%) for a loan facility, a 31% drop in fair value gain and higher finance cost upon completion of the IFC project. Revenue spiked 163% to Rmb417.6m on recognition on property handover (+193%) and rental income (+18%) from higher occupancy in IFC's office space. NAV of Rmb1.57¢. No dividends declared. #Allied Technologies: 4Q13 net profit turned around y/y to $10.3m from loss of $4.1m, mainly from a gain on property disposal of $15.3m and lower finance cost (-67%) from reduced debt. Revenue dropped 13% to $22.4m led by lower contribution from its Suzhou subsidiary due to relocation and declining orders on products reaching its end-of-life, as well as delays for new projects. This was partially offset by Shanghai, Vietnam and Malaysia subsidiaries. Mgmt declared first and final DPS of 0.5¢, compared to nil in FY12. #Auric Pacific: 4Q13 net loss of $22.4m from profit of $13.8m, mainly due to costs incurred from closure of non-performing restaurants ($6.7m), adjustment to depreciation of fixed assets ($1.1m), one-off provision for impairment loss on Delifrance ($10m), allowance for impairment loss on unquoted investment ($3m) and provision for a regulatory claim ($0.8m). Revenue improved marginally to $102.2m (+2.3% y/y) on contributions from new restaurants (+11.6%) and manufacturing (+11.4%), offset by a reduction of interest income and absence of disposal gain from quoted investments. Mgmt declared first and final DPS of 2¢, compared to FY12's 3¢. #G. K. Goh: 4Q13 net profit spiked 274% y/y to $9m, mainly due to a $6.5m maiden contribution from 47.6% associate- Australian aged care operator Domain Principal Group (DPG), including a one-off gain of $3.1m. Revenue dipped 6% to $8.1m on a substantial decline in activity for futures and forex broking, offset by a 82% spike in investment income from mark-to-market gains in equities and redemption. Mgmt maintained first and final DPS of 4¢.
Wednesday, February 26, 2014
Transcu: Entered into a non-binding memorandum of understanding to acquire Straits Construction Group Pte Ltd, which would result in a RTO upon completion. Straits Construction is one of the bigger construction companies in Singapore, with an A1 grade contractor for general building and can tender for public sector projects without any limits on value.
Pacific Radiance: 4Q13 net profit was up 7 fold at US$16.7m while revenue climbed 43%, mainly attributable contribution growth in the Offshore Support Services Business (+29% to US$26.5m) and Subsea Business (+69% to US$7.2m), on improved utilization and charter rates. Gross margins crept up 3ppt to 33.7%. The spike in bottomline was buoyed by a 33% increase in share of JV’s profits to US$3.5m, while share of associates saw a reverse US$6.2m loss to a US$1m gain. Management expects charter and utilization rates to stay strong, in line with rising E&P production spending in Asia, Africa, Australia and South and Central America, fueling demand for offshore support services in these regions. Final DPS of 2¢ proposed, bringing full year dividend to ~20¢ (US14.19¢ interim DPS announced previously), implying yield of ~20%. The stock currently trades at 9.6x trailing P/E.
Advance SCT: made an update on the settlement of bulk sale claims and litigation claims that is expected to have a material positive impact on EPS and NTA of the group for FY14. Also the group has proposed to sell its entire 100% equity interest in New Tsingyi , a metal recycling business for $1.5m. This is in line with Adv SCT 's strategy to move up -stream and focus on manufacturing of copper ball and demolition works instead of dealing in recycling locally.
Fraser Centrepoint: Following DBSV initiation highlighted yday, Daiwa also initiates at Buy with TP $1.84, pegged at 30% discount to SOTP. Likes that FCL mgt has shown astute reading of the local mkt over the past few yrs, focusing on the mass and mid tier segments where sales have been very strong. Believes shares of property developers have discounted the negative risks in the physical market and now offer strong value. FCL's discount of 44% to SOTP valuation of $2.62 is wider than that of other developers, even though FCL has pre-sold most of its projects under development and does not have a sizeable landbank in S'pore . Further 62.4% of its GAV is backed by commercial hospitality assets which provides good recurring income. TCC Group holds 87.9% stake in FCL and an eventual release of greater free float would draw more investor interest in FCL. The next phase of growth could also come from possible tie-ups with the TCC Group.
Yoma: CLSA initiated on Yoma, touting the group as a Jardine-in-the-making, has a BUY rating with $0.97 TP. The rejuvenation of Myanmar both politically and economically has set the wheel in motion for significant asset reflation, while the liberalisation of the banking sector are further catalysts for property demand. The Thilawa SEZ is the centre piece for development and growth which will boost demand for Yoma’s Star City project. With more than 90% of earnings from property sales in Myanmar and securing another major integrated development in downtown Yangon, Yoma is the clear beneficiary of the most exciting frontier markets in ASEAN. Further, Yoma’s strong relationship with SPA group and FMI offers unique access to new businesses in Myanmar, given the strategic need of strong local partners for business development.
Olam: Barclays reiterates Overweight , TP $2.00 from $1.80, notes earnings tailwinds in both the short and long term. Says the turnaround story for Olam seems to be coming together with some idiosyncratic upside from weather patterns. The dry weather in California and Brazil has led to an increase in prices for almonds, coffee and tomatoes, and will provide tailwinds to Olam’s earnings, while commissioning of agri terminal in Australia should also contribute to earnings. The house revises FY14-16E earnings to reflect a higher exit rate for 1H14 earnings, but the events of the past two months could lead to c15-20% upside from these levels as well.
MoneyMax: 4Q13 net profit slumped 33% y/y to $0.9m, despite 15% growth in revenue to $22.1m, due to lower gross profit margin of 29.3%(-2.1ppts), higher employee benefits expense (+51%) from increased headcount on the addition of new outlets and one-off IPO expense. The topline was boosted by higher sales of pre-owned jewellery and watches from the refurbished retail outlets. Group intends to add more stores to its current network of 31 outlets to achieve higher economies of scale, and remains on the lookout for alliances or opportunities with potential partners to leverage on its strengths and track record. Management proposed maiden final dividend of 0.3¢/share.
Courage Marine: 4Q13 net profit turned around to US$0.4m from loss of US$1.3m in 4Q12, on revenue growth of 81% to US$9.6m, due to higher utilisation rate on its drybulk fleet. For the full year, net loss narrowed to US$1.8m from a loss of US$10.7m in FY12, while revenue grew 33% to US$25m. The bottomline eased by the absence of disposal and impairment losses recorded in FY12, which amounted up to US$5.5m. Going forward, the Group remains cautious on the outlook for 2014, given the low demand for commodities in Greater China and over-supply of vessels led to more pressure on freight rates. Subsequently, group gave notice that it has recorded pre-tax losses for three consecutive years and may be placed on SGX Watch-List. At the last closing price of $0.078, Courage trades at 0.97x P/B.
NSL: FY13 net profit spiked 218% to $148.6m following a net gain of $121.7m from the sale of Bangkok Synthetics in Nov'13, NSL's 22.83% petrochemical associate in Thailand. Otherwise, NSL pretax profit gained 13% to $27.2m, on the back of higher sales volume and revenue from its precast operations in Singapore and the regional dry mix business under construction products division, as well as higher spreader deliveries and improved product mix from its engineering division. Subsequently, revenue grew 21% to $507.7m. Group declared a dividend of $0.50/share, comprising a final dividend of $0.10 and special dividend of $0.40, compared to FY12's total of $0.10/share. At the last closing of $1.78, NSL trades at a 4% discount to NAV, while P/E (ex-cash) stands at 7.1x.
OUEHT: Maiden 4Q13 results posting DPU of 1.67¢, 2.5% higher than forecast, while distributable income was 2.3% higher than forecast at $21.9m. Gross revenue and NPI of $29m and $25.5m were marginally better than forecast, on better performance from F&B revenue from the Mandarin Orchard hotel, offset by slightly lower room revenue relative to forecast. RevPAR achieved was $249 vs forecast of $252. WALE by NLA: 1.76 yrs. Gearing was 32%. Management is expecting a modest recovery this year, on US and Europe recovery and a bumper MICE schedule, both which might bode well for the Singapore Hotel industry. At NAV of $0.92, OUEHT trades at 0.96x P/B at yesterday’s closing price.
Del Monte: FY13 and 4Q13 results missed consensus. FY13 net profit halved to $16.1m, while top line climbed 7% to US$492.2m. 4Q13 swung to a net loss of US$1.7m, compared to a net profit of US$13.5m a year earlier, mainly due to a one-off transaction fee of US$22.7m related to the acquisition of US-based DMF. Adding back the one off fees, core net profit would have been US$13.2m (-2%), keeping pace with the 2% decline in turnover to $157.8m, dragged by weakness in the Philippines market. Del Monte’s gearing jumped 19 ppt to 65.7% due to the DMF acquisition; management will be beefing up its balance sheet subsequently through equity raising (ie. preference share and rights issues). Still, the street is likely to view this set of results as a non-event. Having completed the DMF acquisition on 18 Feb, investors will likely focus next on Del Monte’s integration of DMF. If successful, Del Monte’s sales is projected to quadruple to US$2b from FY15. Management guided while on a recurring basis 1Q14 earnings should be higher, the one-off transaction fees in the closing of the transaction will result in lower non-recurring net income. No final dividend declared as the Board maintains a prudent stance following its US acquisition. Given the “game changing” nature of the DMF acquisition, forward-looking valuations may be more appropriate. Using Maybank KE’s post-deal FY15e EPS of US4.3¢, Del Monte trades at 10.2x FY15e P/E at yesterday’s closing price of $0.61.
Market Roundup: US stocks slipped, easing from record territory as weak economic data on housing and consumer confidence offset upbeat earnings reports from Home Deport and other retailers. Gains in US home prices slowed in Dec, while the consumer confidence index fell more-than-expected in Feb. The selling picked up slightly in late sessionas the S&P 500 failed to break about its record high of 1,858 for the second time. The S’pore market may open on a nervous note after the US market struggled to head higher and on concerns of another credit crunch developing in China after the PBOC drained more liquidity from the money markets. The STI is also looking tired as it approaches a key resistance at 3,150,, which represents the intersection of the top end of a broad downward channel and its 200-dma. Technical indicators are also overstretched. Stocks to watch: *GLP: Forms strategic alliance with state-owned Guangdong Holdings to jointly develop logistics and industrial facilities on a 3m sqm site at the Guangdong GDH Equipment Technology Industrial Park in Dongguan, China. *Chemoil: Majority shareholder, Glencore (89.6% stake) has proposed an exit offer of US$0.40 each to privitise and delist Chemoil shares. *SingHaiyi: Acquiring a parcel of waterfront land along the San Francisco Bay, California, for US$24.4m, and further invest US$600m to redevelop the site into a 528-unit high-end retirement community for seniors. *Nam Cheong: FY13 net profit of RM206m (+51%) soundly beati street estimates. Revenue surpassed the billion mark to reach RM1.3b (+43%). Similarly in 4Q13, the group achieved record revenue of RM406.1m (+7%) attributable to increased shipbuilding and vessel chartering activity. 4Q13 net profit surged to RM70.2m (+43%), further boosted by a RMB12.4m tax write-back and RM4m allowance write- back. Final DPS of 0.5¢ plus special DPS of 0.5¢ declared (FY12: 0.5¢ final). Order book stands at a healthy RM1.5b. *Dyna-Mac: 4Q13 revenue declined 11% y/y to $65.9m, while net profit edged up 4% to $9.1m on better gross margins and lower admin costs. For the full year, revenue grew 25% to a record $269.4m driven by higher project volume, however net profit was flat at $28.7m (+1%). First and final DPS of 2¢ maintained. The group believes 2014 will be another busy year, backed by an order book of $324m. *Del Monte: Dipped into a 4Q13 net loss of US$1.7m, erasing profits of US$13.5m a year earlier and taking FY13 earnings to US$16.1m. The profit decline was due to one-off transaction fees of US$22.7m relating to the US$1.67b acquisition of US Del Monte Food in 4Q13. Otherwise, net profit would have been US$13.2m (-2%), in tandem with the 2% slippage in sales to US$156.8m on weakness in the Philippines market (-8%), partially offset by growth in the S&W business (+18%), led by fresh segment (+34%), new products and markets in Mid-East and Asia. Recurring operating margin was stable at 12.1%, while net gearing rose to 66% from 47% in 4Q12. No final dividend was declared. *OUE Hospitality Trust: 4Q13 distributable income of $21.9m was 2.3% higher than forecast, raising DPU to 1.67¢. Net property income of $25.5m and revenue of $29m also beat estimates by 0.6% and 0.9% respectively due to better performance from Mandarin Orchard hotel as higher income from banquet sales and corporate meetings more than compensated for slightly lower room revenue. RevPAR achieved was $249 vs forecast of $252. Leverage stood at 32% with average tenor of 2.5 years, while NAV was $0.92 per security. *Breadtalk: 4Q13 net profit jumped 33% to $5.6m as revenue climbed 23% to $147.1m. This brings FY13 earnings to $13.6m (+13%) on revenue of $536.5m (+20%), on better performances across all three divisions despite cost pressures on food, labour and rental expenses. Bakery division grew 16% mainly due to higher contribution from China, food atrium division turned around, while restaurant sales rose 19%, boosted by Din Tai Fung in S’pore and Thailand as well as Ramen Play following its repositioning. Final DPS of 1.3¢ proposed, taking FY13 payout to 1.8¢ vs 1.5¢ in FY12. *Courage Marine: 4Q13 net profit turned around to US$0.4m y/y from loss of US$1.3m. Revenue soared 81% to US$9.6m, supported by higher utilisation of its drybulk fleet. For FY13, net loss narrowed to US$1.8m from US$10.7m loss in absence of disposal losses and impairment losses recorded in FY12, while revenue grew 33% to US$25m. NAV stayed flat at US6.36¢. Group has warned of being placed on SGX Watch List after recording three consecutive years of pre-tax losses. *MoneyMax: 4Q13 net profit slumped 33% y/y to $0.9m, crimped by lower gross profit margin of 29.3% (-2.1ppts), higher staff cost (+51%) due to addition of new outlets and one-off IPO expense. Revenue grew 15% to $22.1m on higher sales of pre-owned jewellery and watches from refurbished retail outlets. Maiden first and final DPS of of 0.3¢ proposed. *NSL: FY13 net profit spiked 218% to $148.6m following a net gain of $121.7m arising from the sale of Bangkok Synthetics, its 22.83% petrochemical associate in Thailand. Otherwise, pretax profit would have risen 13% to $27.2m on higher revenue of $507.7m (+21%), driven by higher sales volume from its precast operations in S’pore and the regional dry mix business, as well as higher spreader deliveries and improved product mix from its engineering division. Group declared a DPS of $0.50, comprising a final DPS of $0.10 and special DPS of $0.40 vs FY12's total payout of $0.10. *NOL: Warns that it may be placed on SGX Watch List after recording three consecutive years of losses. *Sino Construction: Chalked up 4Q13 net profit of Rmb10.6m and whopping FY13 loss of Rmb131.7m, of which Rmb106.8m was attributable to discontinued activities in construction, concerte products and heating services. Group had no revenue in in 4Q13, hence recurring loss of Rmb1.4m came wholly from expense items. Net gearing was an elevated 81%, while NAV crumbled to Rmb0.04 from Rmb0.22 in Dec ‘12. Group warned that it may be placed on SGX Watch List. *YHI Int’l: FY13 net profit was halved to $8.8m while revenue fell 6% to $508.9m mainly due to lower sales in the distribution and manufacturing businesses. Gross margin fell 1.3 ppt to 22%. Bottomline was weighed by lesser fair value gains on derivatives and a lower share of associate’s profits. *Nordic Group: 4Q13 net profit soared 195% to $2.8m while revenue was 55% higher at $19.8m, from higher revenues across all business segments, in particular systems Integration and scaffholding services. Along with the increased revenue, admin expenses rose 28.3% to $4.2m. *WE Holdings: Lodged OIS for its renounceable non-underwritten rights cum warrants issue, with the commencement of trading of nil-paid rights from 27 Feb - 7 Mar and commencement of trading of warrants on 24 Mar.
Tuesday, February 25, 2014
Del Monte: 4Q13 results due today after market. Consensus estimates : Sales $125m Net profit $14m Nevertheless, focus will likely be on the recently completed US$1.7b acquisition of the consumer food business of US-based DMF. If Del Monte can integrate the new business successfully, it is expected to be a "game changer" for the group, and could quadruple Del Monte's sales to over US$2b.
Overseas Education: FY13 results in line. Net profit rose 9.5% y/y on higher tuition fees (+8% y/y) and well-managed costs (+5%) which grew less than top line (+7%). The school's fees are still 17-30% below peers. The group has proposed a final dividend of 2.75¢ which translates to 50.5% payout. Going forward, OEL's new campus will be ready for the Aug '15 school year. Dev costs are not expected to exceed the $233.5m budget. The group will be conducting a fundraising exercise in 1H14 through debt, equity or a mix of both. UOBK projects FY14e net profit to increase 9% y/y driven by higher tuition fees. Maintains Buy with TP $0.98
Viva Industrial Trust: 4Q13 DPU of 1.08¢ on distributable income of $6.4m, came largely in-line with IPO forecast. Gross revenue of $9m and NPI of $6m beat IPO forecasts by 3% and 6% respectively. The better than expected results were due mainly to higher rental income derived from UE BizHub EAST and lower marketing expenses incurred for Technopark@Chai Chee. Gearing at 38.1%. At current price of $0.78, Viva trades at 5.5% distribution yield and 1.04x P/B.
SMM: ($4.09) 4Q13 results beat, but street has reservations on outlook Sembcorp Marine posted strong 4Q13 results which beat street expectations. Revenue soared 23% y/y to $1.69b, and net profit climbed 9% to $182.4m, boosted by four projects achieving initial recognition milestone and a lower than expected tax rate. For the full year, net profit rose 3% to $555.7m, on the back of a 25% jump in revenue to $5.53b, as the group delivered a total of eight jack ups last year. Driven by the $4.2b in contract orders secured in 2013, SMM’s net orderbook now stands at $12.3b, with deliveries stretching into 2019. Management proposed a final dividend of 6¢ and special dividend of 2¢, bringing full year payout to 13¢ (unchanged from FY12). The group sees demand remaining strong for its big docks, including its new 73.3ha Sembmarine Integrated Yard@ Tuas Phase 1 facility that commenced operations in Aug last year. Construction of SMM’s Brazil yard continues to progress well and is on track to commence operations in 2H14. Still, some market watchers note potential execution risks for SMM as the group ramps up activity at its new yards, and scales the learning curve for its new drillship orders. Any slip-ups may potentially impact margins. Meanwhile, observers flag declining dayrates in the deepwater market and intense competition from the Chinese yards in the shallow water market, that could result in slower rig orders materializing in 2014. SMM trades at 15.4x core P/E, 3.1x P/B. Latest broker ratings: Deutsche maintains Sell with TP $3.65 CLSA maintains Underperform with TP $4.55 Credit Suisse maintains Neutral with TP $4.00 Daiwa keeps at Outperform, lowers TP to $4.70 (from $5.10) Maybank-KE reiterates Buy, trims TP to $5.04
AusGroup: said that its proposed acquisition of shares in Kebun Sedenak Sdn Bhd and Tropik Sentosa Sdn Bhd have been terminated. Last May, the company had agreed to purchase 100% of both companies - which at the time own ~410 ha of freehold land in Iskandar Malaysia, with plans to buy more - in a proposed RTO deal which would land AusGroup a listing on the ASX.
Raffles Medical: Raffles Medical 4Q13 net profit came in at S$22.8 mn (64% QoQ, 13% YoY), while operationally in line with CS' expectation, the headline beat was driven by revaluation gains and lower tax. Overall, management remains confident of showing atleast low teens top-line growth and maintain margins in the near term. The newly announced government subsidies on healthcare are potentially a positive for the private hospital sector. Latest broker recommendations: CS upgrades to Neutral and raised TP to $3.20 (from $2.80) StanChart maintains Outperform and raises TP to $4.09 (from $4.05)
Super Group: StanChart maintains In-Line rating and increases TP to $4.17 (from $3.94), after the group reported its 4Q13 results yesterday. Super’s 2013 revenue and core net profit rose 7%, while core EBIT grew 12%, but a $2.4m loss related to an associate company hurt its core net profit growth. Performance of the branded-consumer segment varied by geography, with healthy sales growth in Thailand, Malaysia and China but muted growth in Myanmar and Singapore. In the food-ingredients segment, the non-dairy creamer business suffered in China, due to weak demand and competition, but sales in Southeast Asia were robust. Management believes that the food ingredients segment can sustain mid-teens growth, as the company continues to penetrate the Southeast Asian market, moves into higher value-added products and improves its operations in China.
Jaya: Proposed to dispose all its subsidiaries for $625m cash to Mermaid Marine, Australia's largest marine services provider, priced at a 5% discount to book value. Including cash that the group had at the end of Dec'13, this translates into a gross implied value of $0.826/share. Post-disposal of its two core businesses- offshore support services and offshore engineering services, Jaya Holdings will become a shell company. The bulk of the proceeds will be distributed to shareholders by way of a special dividend, after utilizing a portion for its daily expenses till completion and an incentive bonus paid out to Jaya's executives, including its CEO.
CNMC: Phenomenal 4Q13 results despite a 26% y/y fall in average gold price; Net profit turnaround to US$1.6m from US$150k loss in 4Q12, as revenue spiked 76% to US$7.4m, on the back of the significant increase in the sales volume of fine gold and operational leverage. This brought FY13 earnings to US$2.7m (+260%) and revenue to US$16.6m (-1%). For the quarter, production at Sokor mine expanded 336% to 5,813.3oz from new facilities and increased productivity at the two leaching yards. With the operational leverage, group's all-in cost shrank 70% y/y (-2% q/q) to US$761/oz, on lower mining cost (-80%) and capex (-92%). CNMC declared final dividend of 0.1¢, bringing FY13 total to 0.2¢. At last closing of $0.26, CNMC trades at 12.9x P/E and 5.9x P/B.
Rickmers Maritime: FY13 net profit fell 15% to US$23.5m, while revenue was shaved 1% to US$143.5m. 4Q13 net loss was US$8m vs a net profit of US$2.2m in 4Q12. Topline saw no growth at US$36.4m. Bottomline was heavily weighed by goodwill impairment of US$18.4m for 3 vessel owning subsidiaries, and US$2.4m impairment for the vessel Kaethe C. Rickmers. This was slightly offset by the reduction of finance expenses from reduction of outstanding loans. Excluding effects of impairment, 4Q13 profit would have been US$12.7m (4Q12: US$8.8m on a like for like basis). Management guided that charter rates and vessel values are only expected to begin recovering in late 2014, a result of supply of new ships growing at a faster clip than demand and scrapping. Rickmers presently has US$338.7m of secured revenue with latest charter expiry in 2019. The fleet is 85% employed for 2014, with majority till 2015. NAV at end Dec was US$0.62, translating to P/B of 0.6x Quarterly DPS of US0.60¢ declared, bringing full year payout to US2.40¢
Cosco: FY13 results missed. Net profit slumped 71% to $30.6m, while topline slid lower by 6% to $3.5b, mainly due to lower contribution from the ship repair and ship building sources which more than offset marine engineering growth. Gross margin fell from 13% to 9.2% mainly due to higher inventory write-downs, specifically $8m in 4Q13 (FY13: $23.7m), and a $51m provision for losses in the same quarter (FY13: $85.7m). Operating expenses fell 2% to $370m, as distribution cost which fell 19% on less marketing was offset by 10.9% increase in interest expense on higher bank borrowings. Balance sheet wise, total debt decreased by $146m q/q which brought down net gearing from a high of 1.68x in 3Q13 to 1.31x in 4Q13. As at 31 Dec, orderbook stood at US$7.8b with progressive deliveries up to 2016. 1¢ DPS proposed (FY2012: 2¢) Operating conditions remain difficult, and new entrants may pressure margins further. Particularly, CS expects further cash outflow in following quarters s Cosco works on projects with backend-loaded payment terms. Deutsche highlights that potential financial impact on the drillship contract termination arbitration also appears murky. Latest broker ratings as follows: Maybank KE – Maintains Sell with TP cut to $0.65 from ($0.70) CS: Maintains Neutral with TP $0.80 Deutsche: Maintains Hold with TP $0.75
First Resources: Posted FY13 underlying net profit of US$217m (+3%), above consensus estimates, on sales of US$626.5m (+4%). The resilient performance was primarily due to higher sales volumes as well as the realisation of some forward sales during the year. EBITDA rose 5% to US$338.9m. During the yr, the group increased its total planted area under mgt by 16.5% to 170.6k ha. FFB pdtn grew 4.5% to 2.3m tonnes, as FFB yield declined to 18.7 tonnes per ha (FY12: 23 tonnes per ha) largely due to biological tree stress and the combined dilutive effective from the newly mature and acquired plantations. The group’s financial position remained healthy with cash of US$272.2m and a low gearing ratio of 0.21x as at end ’13. Final DPS of 3.25¢ takes FY13 payout to 4.5¢ from 4¢.
Stocks to watch: *Sembcorp Marine: 4Q13 results beat street estimates. Revenue soared 23% y/y to $1.69b and net profit climbed 9% to $182.4m, boosted by four projects achieving initial recognition milestone and lower than expected tax rate. For the full year, net profit edged up 3% to $555.7m, on the back of a 25% jump in revenue to $5.53b, as the group delivered eight jack ups rigs. Driven by the $4.2b in contract orders secured in 2013, net orderbook now stands at $12.3b, with deliveries stretching into 2019. Final DPS of 6¢ and special DPS of 2¢ proposed, bringing full year payout to 13¢. *First Resources: Posted FY13 underlying net profit of US$217m (+3%), above consensus estimates, on sales of US$626.5m (+4%). The resilient performance was primarily due to higher sales volumes as well as the realisation of some forward sales during the year. EBITDA rose 5% to US$338.9m. During the yr, the group increased its total planted area under mgt by 16.5% to 170.6k ha. FFB pdtn grew 4.5% to 2.3m tonnes, as FFB yield declined to 18.7 tonnes per ha (FY12: 23 tonnes per ha) largely due to biological tree stress and the combined dilutive effective from the newly mature and acquired plantations. The group’s financial position remained healthy with cash of US$272.2m and a low gearing ratio of 0.21x as at end ’13. Final DPS of 3.25¢ takes FY13 payout to 4.5¢ from 4¢. *Vard: 4Q13 revenue grew 23% y/y to NOK3.1b, underpinned by delivery of five vessels during the quarter. Net profit of NOK113m quadrupled y/y and doubled q/q, albeit from their respective low bases, and was below consensus. The improved bottom line was aided by absence of associate losses (NOK100m) from a year ago, and an income tax write back of NOK19m. EBITDA margin halved to 5.1% during the quarter, from 11.4% in 4Q12. The financial performance of the group continued to be negatively impacted by further delays and cost overruns at its Niteroi yard in Brazil. At end 2013, Vard’s order book stood at a record NOK19.4b (+28% y/y), boosted by its strongest full year order intake of NOK14.2b during the year. *Cosco: FY13 results missed as net profit slumped 71% to $30.6m, while revenue slid 6% to $3.5b, mainly due to lower contribution from the ship repair and shipbuilding, which more than offset marine engineering growth. Gross margin sharnk from 13% to 9.2% mainly due to higher inventory write-downs, specifically $8m in 4Q13 (FY13: $23.7m) and a $51m loss provision (FY13: $85.7m). As at Dec, orderbook stood at US$7.8b with progressive deliveries up to 2016. DPS halved to 1¢. *Rex Int’l: 4Q13 net loss widened to US$4.8m from US$0.4m a year ago, mainly from admin fees of US$3.1m, of which US$2m was related to staff, office costs and consultancy fees, while US$1.1m was attributed to the CEO's bonus payment. As the group has not yet commenced production, no revenue has been accounted for 4Q13 and the full year. Group plans to drill four to six offshore wells and up to 10 onshore wells over 2014 and aims to increase its portfolio to 30 licences by end 2014. End Dec NAV was US16.15¢ per share. *Jaya: Proposed to dispose all its subsidiaries for $625m to Mermaid Marine, Australia's largest marine services provider. This translates to a gross implied value of $0.826/share, including Jaya's cash at the end of Dec'13. The subsidiaries make up Jaya's two core businesses, offshore support services and offshore engineering services, and were priced at a 5% discount to book value. Proceeds from the disposal will be distributed to shareholders, after utilizing a portion for its daily expenses till the completion of the disposal, and an incentive bonus to Jaya's executives including its CEO. *CNMC: Phenomenal 4Q13 results despite a 26% y/y fall in average gold price, net profit turnaround to US$1.6m from US$150k loss in 4Q12, with a 76% spike in revenue to US$7.4m, mainly due to the significant increase in the sales volume of fine gold, after production at Sokor mine expanded by 335.6% to 5,813.26oz on the back of new production facilities and higher productivity from the two leaching yards. With the operational leverage, group's all-in cost shrank significantly to US$761/oz, from US$2,502 in 4Q12. CNMC declared final dividend of 0.1¢, bringing FY13 total to 0.2¢. *Rickmers Maritime: Sank into 4Q13 net loss of US$8m vs US$2.2m net profit in previous period. This took FY13 earnings to US$27.6m (-15%). 4Q13 revenue was stable at US$36.4m, while FY13 revenue dipped 1% to US$143.5m due to the reduction in charter rates earned by vessel Kaethe C Rickmers. Bottomline was impacted by impairment charge on vessel and goodwill of US$20.8m. Excluding the impairment loss, profit would have been US$12.7m in 4Q12.7m in 4Q13. Quarterly DPU of US0.6¢ maintained, bringing FY13 payout to US2.4¢. End Dec NAV was US$0.62 per unit. *Wheelock: 4Q13 net loss plunged to $91.3m from $30.8m loss a year ago on revenue of $29m (+3%). This resulted in a 37% drop in FY13 earnings to $40m. Revenue for FY13 fell 44% to $117m as sales of Scotts Square were much lower than the revenue recognized from Orchard View and Scotts Square in FY12. Earnings was impacted by a $94.5m gain on disposal of SC Global’s shares but this was wiped out by a $110m provision set aside for its 99-year Panorama condominium project in Ang Mo Kio. First and final DPS of 6¢ maintained. NAV stood at $2.51. *Yongnam: The Yongnam-led consortium is among four shortlisted bidders which were invited to resubmit tender by 22 Apr, for the design, construction, operation and maintenance of the Hanthawaddy International Airport after talks with previous winner Incheon Int’l Airport Corp broke down. The consortium was named back-up tenderer for the airport in Aug last year. *Linc Energy: Acquiring the entire Underground Coal Gasification (UCG) business and all its coal tenements from Wildhorse Energy for A$4m via issue of new Linc shares. The transaction will add 87.850 acres of coal licences in Hungary to its current resource base. *CNA: Together with Master System Integrator, group has entered into an MOU with Mitsui Knowledge Industry (MKI) to bring in MKI’s IT cloud-based energy management solution “Green energy Management” (GeM2) into S’pore. The system is intended to maintain comfortable indoor environment by directly controlling heating, ventilation and air conditioning of the premise. *Auric Pacific: Expects to report a loss for FY13 due to provisions for impairment of goodwill and fixed assets in its food retail division. *Sino Construction: Expects loss for FY13 due to deteriorating business environment.
Monday, February 24, 2014
Far East Hospitality Trust: FEHT is a pure-play domestic hospitality REIT with 78% of GAV exposure in Singapore hotels. Sector fundamentals remain challenging from flat demand growth and continued supply of mid/mass hotel segments. Catalyst is group’s ability to stabilize declining RevPAR in the Hotels segment, while trying to ramp up proportion of the corporate room stays (higher margin). JPM maintain U/W on FEHT, TP $0.80
SIA: Sector aircraft deliveries are moderating and improving industry supply/demand balance should alleviate fare pressure, while rising premium traffic (45% of revenue) should lift yields. JPM forecasts a pick up in US/EU travel (42% of passenger revenue), and a turnaround in SIA Cargo (14% of revenue). Jet fuel is also down 6% y/y. Valuations have fallen to 0.8x P/B, historical trough valuations and a 19% discount to Cathay Pacific (vs. a 9% discount historically). Net cash is 35% of market cap, JPM expects SIA’s “liquidation value” at $13.30 per share. JPM maintains O/W on SIA, with TP $13.00
Ying Li - Share price was most probably impacted by news from China, after Property heavy weights China Vanke Co. (000002) and Poly Real Estate Group Co., plunged more than 5% after the Shanghai Securities News reported Industrial Bank Co. and other banks have curbed lending to the property sector. Industrial Bank led declines for lenders with a 3.3% loss.
Super Group: 4Q13 net profit climbed 6% y/y to $22.6m, driven by better gross margins of 38% (+4ppts), FX gain and gain on disposal of leasehold land in China. Revenue came in flat at $153.3m, due mainly to lower food ingredients sales (-7%) as a result of lower sales in China after the restructuring of its distribution network, partially offset by higher branded consumer sales (+3%) which came on the back of higher sales into the Southeast Asia, China and Mongolia markets. For FY13, net profit of $99.9m (+26%) beat estimates by 22%, while topline of $557m (+7%) were at the lower end of consensus estimates. On outlook, management expects market conditions to remain competitive over the next 12 months, and anticipates raw material costs and currency fluctuations to impact the group’s operating performance. As such, the group will continue to build its brands, consolidate its product lines, innovate and add new product variants to better capture market share in Asian markets. Super Group has also embarked on cost saving initiatives, such as streamlining its distribution network in China, manufacturing of LGSS, as well as the upcoming production of botanical herbal extracts in Malaysia. Management declared a final dividend of 7¢, bringing full year payout to 9¢ (FY12: 7.1¢), implying a 2.4% yield. Separately, the group proposes a 1-for-1 bonus issue. Group’s balance sheet remains debt-free with cash of $98.5m. At $3.70, Super Group trades at a hefty 21.6x forward P/E compared to global peers at 16x. While valuations are not cheap, this can be justified by the group's consensus estimate of an average growth rate of 12% each year till 2016. The counter will resume trading at 2.15pm.
Haw Par: is another member of the UOB stable of companies. The counter is on a strong uptrend and has been hitting new all time highs, since the active corporate action undertaken by its other sister companies - UIS: voluntary liquidation - Pan Pacific: privatisation - Sing Land: on-going privatisation
Sing Land: 4Q13 results were a non event. Highlight is the voluntary unconditional cash offer by UIC for Sing Land shares at $9.40 each. UIC currently controls 80.4% of Sing Land. UIC does not intend to preserve the listing status of Sing Land, and accordingly when entitled , intends to exercise its rights of compulsory acquisition of Sing Land (ie. when UIC gets control over more than 90% stake)
SG Budget: Maybank KE expects budget to have no material impact on the stock market. Healthcare - is a marginal winner, with private sector to gain from the enhancement of subsidies in the Community Healthcare Assist Scheme (CHAS) scheme. 3 stocks under MKE coverage should gain as majority of their clinics are CHAS registered. Increase in CPF will be channeled to Medisave account, which will also benefit private healthcare providers. MKE has Top Buys for 2 healthcare stocks: Q&M: TP $0.48. FY14e P/E of 27x should fall to 22x as acquisitions in China propels earnings. China-listed peers at 35x Raffles: TP $3.80. Defensive earnings with organic expansion with estimated capacity growth of 30%. Expansion plans well on track, should help drive mid-term growth. Telco – Under the $500m program, 50% of monthly recurring cost of fiber subscription plan will be subsidized, capped at $120/month for 24 months. Building owners will be subsidized for up to 80% of new in-building fibre broadband infrastructure, capped at $200m/ building. Telcos are expected to gain the most from the both these initiatives, as fiber growth has been slow. Subsidies should accelerate both demand and supply sides of the equation. M1 is MKE’s Top telco Buy with TP $3.86, the biggest beneficiary of tiered data with fastest earnings growth, and potential to improve payout to 100% from 80%, raising yield to 6% at current price.
Kim Heng: FY13 net profit was flattish (-1%) was $17.1m while topline was shaved 2% to $84.8m. The decrease was mainly due to decreased revenue from Vessel Sales and Newbuild segment, offset by Offshore Rig Service and Supply Chain Management. Gross margins held up at 43%. Other income fell 63.6% to $0.8m on the absence of gains of sale from fixed assets booked last year. However, operating expenses fell alongside a credit of $1.6m on the reversal of allowances for inventory obsolescence of $4m. Excluding listing expenses, FY13 PBT would have been 3.1% higher at $21.7m Net gearing is a low 8.1%, versus 40.6% a year earlier. Management cited outlook should remain robust as oil prices should continue driving offshore E&P activities, underpinning Kim Heng’s rig and supply chain management services. Expansion plans are also in place to improve yard facilities and to expand its fleet, following its recent listing. Final DPS of 0.5¢ proposed, implying yield of 1.8%. The stock trades at 8.7x trailing P/E
Raffles Medical Group unveiled FY13 results which came in ahead of estimates, fuelled by exceptional items, as net profit surged 49% to $84.9m on a 9.4% rise in revenue to $341.0m. Revenue from Hospital Services and Healthcare Services expanded at 12.4% and 6.2% respectively, as the group continued to grow its revenue from medical services with more specialist consultants, higher patient load and greater patient acuity, increased contributions from overseas operations as well as provision of more healthcare insurance services. Revenue from Investment Holdings was lower in 2013 as the tenancy leases for the property at 30 Bideford Road were progressively ended prior to the disposal of the subsidiary, Raffles Medical Management on 31st Oct’13. Bottom-line was propelled by a more than six-fold jump in Other Operating income to $24.3m, led by a $20.4m gain.
UIC: FY13 net profit declined 19% to $316.1m on a 14% decline in revenue to $609.6m. The decrease in revenue was attributable mainly to lower sales of trading properties (-56%), partially offset by higher revenue from the hotel operations (+53%) following the re-opening of Pan Pacific Singapore Hotel. Fair value gain on investment properties was down 21% to $196.0m versus $247.3m in the prior period.
ValueMax’s FY13 net profit slumped 35.8% to $9.2m, in tandem with a 31% drop in revenue to $353.1m. The lacklustre performance was dragged by a 31.6% decline in revenue from the retail and trading of pre-owned jewellery and gold business, and an 8.1% drop in revenue from the pawnbroking business as a result of the decline in gold prices. Bottom-line was partly aided by a 1.3 ppt rise in gross margins to 6.4% on back of a higher revenue mix from the pawnbroking business, and a 112.7% rise in other operating income to $2.6m due to income from assignment of tenancy agreement, and fair value gains on consideration paid for interest in a subsidiary and measurement gains of investment in its associate. This was however offset by a 525.5% rise in other operating expenses to $4.1m due to allowances made for doubtful trade receivables and write-down of inventories, and a 25.7% jump in admin expenses to $12.3m led by a rise in employee benefits and rental expenses. Going forward, the group notes that the industry as a whole is facing challenging business conditions, weighed by lower gold prices and increased competition within the Singapore. Nonetheless, aims to continue with its strategy to grow its businesses both in Singapore and Malaysia. Fundamentals for the group remain strong with a relatively low net gearing at 0.19x. At current price, ValueMax trades at 1.65x P/B versus closest peers Maxi-Cash’s 2.6x and MoneyMax’s 2.4x. ValueMax has declared a first and final dividend of 0.88¢ per share for FY13 (no dividend declared in FY12)
Swissco: 4Q13 net profit doubled to $12.9m (+102% y/y), on revenue spike of 87% to $79.3m. The topline came on the back of higher recognition upon delivery of vessels under its maritime services segment (+103%), an increased number of vessels owned and operated as a result of its fleet renewal and expansion program (+29%) and more third party repair and maintenance jobs. (+100%). Gross margin lowered 6.7ppts to 23.3% as margins for the maritime services segment that made up 83% of revenue are relatively lower compared to the other segments. Swissco declared a first and final dividend of 0.5¢/share, as well as a 0.5¢ special dividend. This is compared to the 0.8¢ paid out in FY12. At $0.40, Swissco trades at 7.5x trailing P/E and 1.2x P/B.
Asiaphos: 4Q13 net loss of $1.2m despite revenue spike of 185% to $2.7m, on the back of higher sales from both upstream and downstream segments. However, operational costs spiked (59%) with the group's ramp up of operations for expansion, coupled with one-off listing expenses. At $0.152, Asiaphos trades at 2.4x P/B.
Figtree: FY13 net profit accelerated 126.5% to $8.6m, on 70% revenue spike to $101.8m. The better topline came from two major projects with Tech-Link Storage Engineering and Seo Eng Joo Frozen Food, awarded in Apr and May '12, partially offset by a project completion with Second Development. Gross profit margin grew 4.6ppts to 14.2% on better efficiency, which covered the increase in admin expenses (+184%) from the group's listing and higher headcount to support the group's activities. Going forward, Figtree continues to explore and negotiate new potential industrial design and build projects, as well as development opportunities in Singapore, China and the region. The group’s order book stood at $249.7m, a significant increase from $91.9m since its IPO in Oct'13. Figtree declared a first and final dividend of 1.2¢. At $0.33, Figtree trades at 10.6x trailing P/E and 3.9x P/B.
Heeton Holdings: 4Q13 net profit dived 85% y/y to $6.1m, while revenue deteriorated 44% to $13.2m. This brings FY13 earnings to $18.4m (-65%) and revenue to $60.4m (+15%), on the back of higher contribution from residential projects- Lincoln Suites and the Britton in London. Bottomline for the year was mainly boosted by increased share of profits from associates (+2568%) due to higher dividend income, forfeiture of deposit, increased progressive profit recognition from The Boutiq, revaluation gain on 223 Mountbatten and a gain from asset disposal. This was partially offset by lower fair value gain (-88%) at the group level. Group declared first and final dividend of 1.3¢/share, equivalent to last year. At $0.64, Heeton trades at 8.3x trailing P/E and 0.57x P/B.
Kitchen Culture: FY13 net profit turnaround of $1.3m (from $0.4m loss) on a 52% growth in revenue to $33m, from the recognition of 13 new projects and 26 ongoing ones under its residential segment, which contributed $26.2m (+91%) and offset by a decline in its distribution and retail segment of $6.8m (-15%) from a slow-down in Singapore and Malaysia. Overall gross profit margin decreased 5.4ppts to 43.5% from higher cost for certain residential projects. The kitchen equipment distributor is expected to commence operations in Jakarta by 1H14 and is exploring to establish a presence in Chengdu, China. Orderbook stood at $43.7m as at 31 Jan 14, expected to be fulfullied over the next 2-3 years. At $0.34, Kitchen Culture trades at 26.2x trailing P/E and 2.5x P/B.
AEM Holdings: 4Q13 net loss widened to $3.2m from loss of $2.5m in 4Q12, despite revenue growth to $12.4m (+4.4% y/y), on the back of higher equipment sales in Singapore. Meanwhile, staff costs increased 11.2% on higher headcount in its engineering team, new product R&D and new substrates program. Although the semiconductor industry remains very challenging in 2014, the group expects higher sales from purchase orders of $7.2m from its equipment business and a ramp up in volume for moulded interconnect substrates. At $0.077, AEM Holdings trades at 0.53x P/B.
Rowsley: 9MFY14 net loss deteriorated to $226.3m (from $5.9m), on revenue of $22.5m (from $0.2m), mainly due to a $221.2m impairment loss from the purchase of RSP Architects Planners & Engineers (RSP). Otherwise, Rowsley announced a net loss of $5m. While RSP met its profit target of $25m for 2013, Rowsley's bottomline was marred by professional fees incurred for RSP ($4.4m) and the vacant land in Iskandar, as well as higher project expenses ($5.7m), partially mitigated by FX gain ($2.1m) and wages reimbursement ($2.9m). Rowsley's other substantial acquisition, a 9.23 hectare land in Iskandar to be developed into an integrated wellness and lifestyle hub called Vantage Bay, is expected to draw strong demand upon its launch, although the group did not release any indicative timelines. Market observers hypothesize a launch for the first phase of Vantage Bay to be in Apr'14. The group has no debt on its balance sheet, as it continues to look out for more investment opportunities in the region. At the last closing price of $0.29, Rowsley trades at 2.7x P/B.
Noble: 4Q13 results were broadly in line. Revenue was flat at US$24.4b, while net profit jumped 28% y/y to US$116.5m, posting its best bottom line performance since 2Q12. On a full year basis however, core net profit shrank 32% to US$309m, even after adjusting for the US$79m accounting loss from Yancoal Australia in 3Q. Mgt slashed full year dividend by 50% to US 0.91¢ from US 1.81¢ in FY12. Operationally, the agri segment remained weak, while energy performed well during the quarter. Agri gross profit remained weak in absolute terms, despite improving slightly from US$14m in 3Q13 to US$24m in 4Q13. Agri volumes declined 24% y/y to 13m tons. Noble’s sugar mills experienced a modest shortfall in crush throughput due to heavy rains, further impacted by the continued decline in sugar prices. Meanwhile, the better crush margins in China were offset by more challenging conditions in Argentina. Energy gross profit expanded 5% y/y to US$299m, driven by 18% y/y volume growth with an expanding origination and marketing network. Going forward, Maybank-KE notes the extreme drought that Brazil is facing has become a cause of grave concern, as the country provides Noble a key source of grains, coffee and other agri-commodities, and could indirect affect Noble’s soybean crushing business in Argentina. The house sees a higher risk of earnings miss in the next few quarters and a delay in earnings recovery to FY15e. Latest broker ratings: Maybank-KE maintains Hold, trims TP to $1.04 (from $1.07) CIMB maintains Hold, lowers TP to $1 (from $1.04) HSBC upgrades to Neutral (from Underweight), raises TP to $1.08 (from $0.94) Noble maintains Underperform, with TP $0.90
Market Roundup: US stocks ended on a session low on futures and options expiration and a drop-off in existing home sales. The market had a positive start on upbeat earnings from HP and Priceline as investors shrugged off a 5.1% decline in Jan home sales to an 18-month low of 4.62m annual pace. But equities erased gains after influential Fed officials Richard Fischer of Dallas and James Bullard of St Louis indeciated that the central bank is unlikely to slow the pace of stimulus cuts. The Spore may struggle after last Fri’s Budget 2014 did not offer much relief for the corporate sector with labour costs expected to rise further following hikes in CPF rates and foreign worker levies. Topside resitance for the STI is seen at 3,150 with support at 3,070. Stocks to watch: *Noble: FY13 net profit of US$243.5m (-48%) missed estimates but 4Q13 net profit of US$116.5m (+28% y/y, +409% q/q) was its best quarterly showing since 2Q12. 4Q13 revenue was flat at US$24b but dipped 5% sequentially on higher sales volume of 69.1m MT (+20% y/y, +28% q/q), led by metals, minerals & ores (MMO) and energy markets offset by weaker selling prices (-16% y/y, -26% q/q) especially in hard commodity prices. While overall gross margin was stable at 1.5%, the agriculture and MMO segments benefitted from significant margin improvements. Adjusted net gearing dipped marginally to 48.9%, while NAV was US$0.79. *Mencast: 4Q13 net profit improved 25% y/y to $6.5m on flat revenue of $28m (+1%). This brought FY13 earnings to $15.7m (+19%) in tandem with revenue of $99.2m (+18%)., mainly driven by increased orders in offshore and engineering services (+40%) but dampened by slower marine sales in sterngear repair and diving services (-10%). Bottomline was shored up by a negative goodwill gain from its S&W acquisition. End Dec order book climbed 41% to $33.5m. First and final DPS of 1¢ plus special DPS of 2¢ declared vs total 1.2¢ in FY12. Hanwell: Swung to a FY13 net profit of $6.6m from $27.2m loss as FY12 results were impacted by provisions for doubtful receivables ($2.4m), impairment of financial assets ($10.6m) and amounts due from associates ($9.1m). Revenue rose 6.6% to $403.3m, mainly contributed by the packaging business (+20%) but partially offset by lower turnover from the consumer business (-5%). Gross margin widened to 21.3% vs 19.9% in FY12. *Ntegrator: Incurred FY13 net loss of $3.6m vs net profit of $0.4m in previous year even as revenue soared 47.6% to $48.4m on increased project sales (+34.5%) and project management and maintenance services (+75.2%). But earnings were hit by a development project write-off in Indochina ($2.8m) and cost overruns ($1.9m). *ValueMax: FY13 net profit slumped 35.8% to $9.2m, in tandem with a 31% drop in revenue to $353.1m. Revenue from the retail and trading of pre-owned jewellery and gold declined by 31.6%, while pawnbroking sales fell 8.1% due to drop in gold price. Gross margin improved from 5.1% to 6.4% due to higher revenue mix from pawnbroking business, although this was offset by a 526% jump in other operating expenses, arising from provisions for doubtful trade receivables and inventory write-down. *UIC: FY13 net profit declined 19% to $316.1m on a 14% fall in revenue to $609.6m, which was attributable to lower sales of trading properties (-56%), partially offset by higher revenue from the hotel operations (+53%) following the re-opening of Pan Pacific hotel. Fair value gain on investment properties was down 21% to $196m versus $247.3m in the prior period. *Rowsley: 9MFY14 net loss deepened to $226.3m from $5.9m, on revenue of $22.5m, mainly due to a $221.2m non-cash goodwill writedown on the purchase of RSP Architects. Bottomline was also marred by higher professional fees and project expenses ($14.3m). Balance sheet has no debt, while NAV tripled to 10.87¢ per share. *GSH Corp: Tipped into a FY13 net loss of US$1.2m from a net profit of US$4.3m in FY12 as revenue declined 12.9% to US$89.4m amid consolidation and stiff competition in its distribution business, while its property projects have yet to commence development. Gross margin came under pressure, dipping to 5.2% from6% previously. Bottomline was also impacted by a US$1.4m expense relating to the recent acquisition of Sutera Harbour in Kota Kinabalu. Post rights NAV strengthened to 3.21¢ per share. *QAF: FY13 net profit fell 13% to $30.2m while revenue rose 4% to $1b, mainly contributed by bakery and primary production segments which grew at the same rate. Bakery segment grew on new products, increased production capacity and increased market share, while primary production was mainly attributed to higher sales volume. Expenses weighed on bottomline, primarily higher input prices and an FX loss of $5.4m due to the weakening of AUD. *OCBC: Extended the exclusitivity period for deal talks with regards to the terms of a takeover offer for HK’s Wing Hang Bank till end Mar, pushing back the deadline for the second time. *RH Petrogas: Updated that it will make combined write-offs and goodwill impairment totalling US$52.6m in 4Q13. This compares with the group’s net assets of US$167m at end 3Q13. *Geo Energy: Expecting to report a loss for 4Q13 and FY13 due to the downward trend in global coal prices and weak demand for coal with low calorific values. *Q&M Dental: Update to proposed acquisition of specialized dental materials manufacturer Qinhuangdao Aidite High Technical Ceramic. Total consideration of Rmb80m comprises of Rmb38m to be paid in cash and Rmb42m to be injected as capital into Aidite for expansion. For FY12, Aidite reported NTA of Rmb30m, revenue of Rmb23.8m and net profit of Rmb8.1m. Q&M will fund the purchase with internal resources, an IFC loan facility granted in Apr ’11, and /or issue of new shares. *Intraco: Reversed its losses for the past two years to report an FY13 net profit of $1.1m. Although revenue decreased 21% to $127.9m, bottomline was boosted by a series of one-off gains. The group continues to boast a healthy balance sheet, with cash of $51.3m vs an asset base of $81.5m. NAV of $0.63 compares with the counter’s last close of $0.42. *AEM Holdings: 4Q13 net loss widened to $3.2m from loss of $2.5m in 4Q12, despite revenue growth to $12.4m (+4.4% y/y), on the back of higher equipment sales in Singapore. Meanwhile, staff costs increased 11.2% on higher headcount in its engineering team, new product R&D and new substrates program. Although the semiconductor industry remains very challenging in 2014, the group expects higher sales from purchase orders of $7.2m from its equipment business and a ramp up in volume for moulded interconnect substrates. No dividends declared. *Kitchen Culture: FY13 net profit turnaround of $1.3m (from $0.4m loss) on a 52% growth in revenue to $33m, due to the recognition of 13 new projects and 26 ongoing ones under its residential segment, which contributed $26.2m (+91%). This was offset by a decline in its distribution and retail segment of $6.8m (-15%) due to a slowdown in Singapore and Malaysia. Overall gross profit margin eased 5.4ppts to 43.5% from higher cost for certain residential projects. The kitchen equipment distributor is expected to commence operations in Jakarta by 1H14 and is exploring to establish a presence in Chengdu, China. Orderbook stood at $43.7m as at 31 Jan 14, expected to be fulfullied over the next 2-3 years. *Hengyang Petrochemical Logistics: Expects loss for FY13 due to a one-off expense of Rmb7.9m in professional fees, FX loss of Rmb4.8m, on top of lower revenue from its storage business. Group expects to release its results on or before 28 Feb. *Hiap Hoe: 4Q13 net profit slumped 48% y/y to $7.2m despite revenue growth of 101% to $49.1m from progressive revenue recognition on the sale of residential project, Waterscape at Cavenagh. The bottomline was hit by an absence of fair value gains (-76%), higher acquisition costs from Melbourne properties and property tax and maintenance fees for unsold units of completed projects. NAV grew 23% to 79.59¢. Group declared final dividend of 0.8¢/share (from 0.5¢ in FY12), bringing FY13 total dividend to 2¢/share. *Heeton Holdings: 4Q13 net profit dived 85% y/y to $6.1m, while revenue deteriorated 44% to $13.2m. This brings FY13 earnings to $18.4m (-65%) and revenue to $60.4m (+15%), on the back of higher contribution from residential projects- Lincoln Suites and the Britton in London. Bottomline for the year was mainly boosted by an increased share of profits from associates (+2568%) due to higher dividend income, forfeiture of deposit, increased progressive profit recognition from The Boutiq, revaluation gain on 223 Mountbatten and a gain from asset disposal. This was partially offset by lower fair value gain (-88%) at the group level. First and final dividend of 1.3¢/share maintained. *Figtree: FY13 net profit accelerated 126.5% to $8.6m, on 70% revenue spike to $101.8m. The better topline came from two major projects with Tech-Link Storage Engineering and Seo Eng Joo Frozen Food, awarded in Apr and May '12, partially offset by a project completion with Second Development. Gross profit margin grew 4.6ppts to 14.2% on better efficiency, which covered the increase in admin expenses (+184%) from the group's listing and higher headcount to support the group's activities. Order book rose to $249.7m from $91.9m since its IPO in Oct'13. First and final dividend of 1.2¢ declared *Asiaphos: 4Q13 net loss of $1.2m despite revenue spike of 185% to $2.7m, on the back of higher sales from both upstream and downstream segments. However, with the group's ramp up of operations for expansion, related operational costs spiked, coupled with one-off listing expenses, translating into a 59% cost increase.