SG Market (28 Jan 15)

Singapore shares could pull back to consolidate recent gains following the selldown on Wall Street as investors wait for the policy statement from the FOMC meeting today. From a chart perspective, the STI support is tipped at the breakaway gap at 3,377 with overhead resistance at 3,465, set in May 2013. Stocks to watch: *CDL HT: 4Q14 DPU rose 7.2% y/y to 3.13¢, taking full year DPU to 10.98¢ (+0.1%). Gross revenue for the quarter was at $45.1m (+14.4%) and NPI at $38.6m (+6.0%), led by the recognition of full hotel revenue of Jumeirah Dhevanafushi and rental boost from Angsana Velavaru in the Maldives. This was however partially offset by reduced rent contribution from the Singapore Hotels, loss of rental income from Claymore Link Mall and lower contributions from Australia properties due to the weakened AUD. The group’s Singapore hotels achieved occupancy of 90% in the quarter but RevPAR dipped 1.1% to $185. Aggregate leverage increased 1.5ppt to 31.7%, with average debt cost of 2.3%. NAV/unit at $1.645. *Starhill Global: 4Q14 DPU rose 4.9% y/y to 1.29¢, taking FY14 DPU to 5.05¢ (+5.0%). Although gross revenue slipped 0.4% to $48.9m due mainly to the softening retail market in China and reversal of provision for rental arrears in Japan, NPI improved 3.9% to $26.5m, led by higher rental reversions at Wisma Atria Retail (17%), Singapore offices (+3.1%) and the David Jones Building (Australia). In addition, lower operating expenses incurred by the overseas properties except for the Malaysia portfolio contributed to the higher NPI. Portfolio occupancy remained steady at 99.6%, with WALE of 5.7 years, while leverage ratio lowered 0.5ppt to 28.6%, with average debt cost of 3.16% and tenor of 3.3 years. NAV/unit at $0.94. *OUE Hospitality REIT: 4Q14 DPU rose 6.6% y/y to 1.78¢, taking FY14 DPU to 6.74¢ (+2.6% ahead of group's forecast). Gross revenue was at $30.4m (+4.8%) and NPI at $27.0m (+5.5%), as Mandarin Orchard posted a higher RevPAR of $255 during the quarter compared to $249 in 4Q13, led by both higher occupancy and room rates, while the hotel also recorded better F&B sales from higher patronage. Meanwhile, Mandarin Gallery saw its average rental psf increasing to $23.60 compared to $23.10 in 4Q13, with an occupancy rate at 98.2%. Portfolio WALE stood at 1.85 years, with leverage ratio maintained at 32.7%, while average debt cost was at 2.2% and tenor of 2.7 years. NAV/unit at $0.90. *Mapletree Greater China Commercial Trust: 3QFY15 DPU rose 9.5% y/y to 1.66¢ taking 9MFY15 DPU to 4.82¢ (+10.6%). Gross revenue for the quarter was at $73.6m (+12.0%) led by strong rental reversions in Festival Walk and Gateway Plaza, while NPI came in at $59.3m (+10.2%), due to a 20.5% rise in property operating expenses to $14.3m. Gearing ratio was maintained at 37.9% with average debt cost at 2.1%, while portfolio occupancy was at 99.4% with WALE at 2.4 years. NAV/unit at $1.06. *Cache Logistics Trust: 4Q14 DPU was flattish at 2.15¢ (+0.4% y/y), taking FY14 DPU to 8.57¢ (-0.8%). 4Q14 gross revenue was also flattish at $20.6m (-0.4%), while NPI fell 1% to $19.4m, as a result of the decrease in revenue from vacancies and tenant rent free period, and higher property expenses incurred for property maintenance and lease management. Portfolio occupancy stood at 97.9% with WALE of 4.1 years. Aggregate leverage was at 31.2% with average debt cost at 3.3% and tenor at 4.1 years. NAV/unit at $0.98. *Parkway REIT ($2.43): 4Q DPU rose 2.9% y/y to 2.90¢, taking FY14 DPU to 11.52¢ (+7.1%). 4Q revenue rose 1.5% to $25.1m due to new contribution from Japan properties acquired in 2H13 and 2H14, and rental growth from the Singapore properties, offset partially by a weaker JPY. NPI was at $23.5m (+1.3%), as property expenses rose 4.5% to $1.6m. Portfolio occupancy at 100% with WALE of 9.42 years. Leverage ratio rose 2.2 ppt to 35.2%, while average debt cost was at 1.4%, with tenor of 3.7 years. NAV/unit at $1.68. *Tritech: Received conditional non-binding expression of interest to commit up to US$3b over five years for water and environment projects in China and Asia Pacific region *CDW: Entered into agreement with six other parties to acquire 8.33% interest in Suzhou Pengfu Photoelectric Technology from Mr Deng Changguo and subsequently inject Rmb10m into Pengfu. *Intraco: Expecting FY14 loss due to low margins from the trading segment, which is partially offset by the newly acquired KA Group *UE E&C: Regarding the voluntary conditional offer, the 90% threshold to delist the company has been met, and it will be suspended from 9am, 29 Jan ‘15