SG Market (26 Feb 15)

Singapore shares are expected to open flatfish, following the lackluster close in Wall Street overnight, following mixed corporate earnings and Fed Chair Janet Yellen’s reiteration that a rise in interest rates are not imminent.

From a chart perspective, the STI is expected to consolidate within the 3,450-3,390 trading band.

Stocks to watch:
*StarHub: 4Q14 results in line. Net profit rose 10.1% y/y to $94.2m, while revenue increased 5.1% to $647.4m, primarily from iPhone 6 sales, with sale of equipment up 56.8% to $78.2m. Service revenue meanwhile increased 0.5% to $569.2m, with increases in mobile (+2.6%) and fixed network (+3.7%) offset by decreases in broadband (-15.9%), while Pay TV revenue was flat. Mobile ARPU increased $2 both q/q and y/y to $71, driven by new 4G tiered data plans and higher data usage. Broadband ARPU fell $8 y/y to $34, while number of customers up 4.8%. Final DPS of 5¢ maintained, bringing full year DPS to 20¢ (FY13: $0.20).

*First Resources: 4Q14 results slightly above expectations. Core net profit declined 10.7% to US$57.4, taking FY14 core net profit to US$171.6m (-20.9%). Revenue inched down 1.4% to US$176.7m, due to lower average selling prices of CPO and refined products, partially offset by higher sales volumes from the refinery and processing segment (+40%), on processing capacity expansion. EBITDA margin slipped 0.2 ppt to 53.6%. Proposed final DPS of 2.3¢, bringing FY14 DPS to 3.55¢ (FY13: 4.5¢). NAV/share at US$0.67.

*Yanlord: 4Q14 net profit fell 2% y/y to Rmb1.0b, taking FY14 net profit to Rmb1.4b (-8%). Revenue for the quarter was up 59% to Rmb7.5b, mainly attributable to increase in GFA delivered and higher ASP per sqm achieved. Gross margin fell 10.6ppt to 27.6% due to the change in composition of product mix. Bottom-line was aided by a 57% rise in other operating income, due to fair value gains on investment properties and a rise in interest income. First and final DPS of 1.3¢ maintained. NAV/share at Rmb9.84.

*Sheng Siong: 4Q14 results in line. Net profit rose 26.5% y/y to $11.8m taking FY14 net profit to $47.6m (+22.3%). Revenue for the quarter was up 4.7% to $178.4m, with 2.7% of the growth contributed by stores opened in 2012, while the balance 2% growth was from old stores. Gross margin inched up 1.1ppt to 24.3%, aided by lower input costs from the distribution centre and better sales mix. Proposed final DPS of 1.5¢, bringing full year DPS to 3¢ (FY13: 2.6¢).

*Centurion: FY14 results above estimates. 4Q14 net profit soared 171% y/y to $72.9m, bringing full year to $111.2m (+21%). Revenue for the quarter rose 74% y/y to $26.1m as both workers and student accommodation grew, while gross margin improved 4.3pp to 65.7%. Associate and JV contributions jumped 49% to $23.9m, largely as a result of fair value gains, while the group’s investment properties also recorded a more than 6x jump in fair value gains to $40.3m. Proposed final DPS of 1¢ taking full year DPS to 1.5¢ (FY13: 0.6¢).

*Riverstone: 4Q14 results above estimates. Net profit jumped 39.7% y/y to RM22.4m taking FY14 net profit to RM71.0m (+22.4%). Revenue for the quarter rose 20.8% to RM112.0m, buoyed by higher demand for its cleanroom and healthcare gloves. Gross margin fell 2.3ppt to 26.4%. Bottom-line was aided by a more than 99% decline in tax expenses to RM0.05m, due to higher tax incentives claimable by the group. Proposed DPS of RM4.55c, taking FY14 payout to RM6.9¢ (FY13: RM6.8¢). NAV/share at RM1.003.

*Pacific Radiance: 4Q14 results below expectations. Net profit plunged 69% to US$5.1m, as revenue fell 12% to US$37.2m, mainly weighed by lower utilisation of diving support vessels, partially offset by an increase in revenue from the offshore support services business. Gross margin crashed from 36% to 9%, weighed by the subsea business and offshore support services segment, on softer market conditions. Bottom line was also weighed by FX loss (US$0.2m), partially offset by a lower provision for doubtful debts (US$3.6m) and finance expenses (-24%). Proposed first and final DPS of 3¢ (FY13: 2¢).NAV/share at US$0.595.

*Rotary Engineering: 4Q14 net profit doubled to $11.8m taking FY14 net profit to $50.1m (+141.5%). Revenue for the quarter fell 31% to $125.7m, as the group reached completion on some of its major projects, while gross margin rose 8ppt to 18%, as a result of smooth project execution and the group's productivity improvement efforts. Bottom-line was further aided by a 26% drop in admin expenses to $10.2m. Proposed first and final DPS of 2.5c (FY13: 1.5c). NAV/share at $0.452.

*Mencast: 4Q14 net profit rose 10% to $7.1m taking FY14 net profit to $17.5m (+11%). Revenue for the year was up 32% to $130.6m, led by its three main segments of offshore & engineering (+56%), Marine (+33%) and energy services (+11%). Gross margin decreased 2 ppt to 29% mainly due to lower margin for the offshore & engineering segment due to materials and subcontractors' cost. Proposed first and final DPS of 1¢ (FY13: 3¢). NAV/share at $0.354.

*SBI Offshore: FY14 net profit fell 38% to US$0.6m on revenue of US$14.1m (-66%). The fall in revenue was weighed by a 20% decline in its market and distribution segment at US$8.7m and a 82% decline in the projects segment at US$5.4m. Gross margin jumped to 41.3% from 13.1%, mainly due to higher margin from a design and engineering project. Bottom-line was further weighed by a 12% decline in admin and other expenses to US$5.5m. DPS of 0.2¢ declared. NAV/share at US$0.121.

*Tiong Seng: FY14 net loss was at $15.3m versus a net profit of $9.3m from the previous year. Revenue was up 2% to $668.8m, supported by contributions from the construction (+9%) and rental income (+18%) segment, offset by lower contributions from development properties (-53%) and sales of goods (-11%) segment. Bottom-line was weighed by a 68% decline in other income at $5.2m and a 7% rise in otal operating expenses to $696.4m. First and final DPS of 0.2c declared (FY13: 0.6c). NAV/share at $0.273.

*Kingsmen: FY14 net profit fell 3.3% y/y to $17.2m, on revenue rose of $336.4m (+13.6%). Top-line was led by improved performance across Exhibitions & Museums (+31.9%, $136.4m), Retail & Corporate (+4.6%, $174.3m) and Research & Design (+13.5%, $12.9m), offset partially by a small drop in Alternative Marketing (-14.4%, $12.7m). Bottom-line was weighed by a 13.4% rise in employee expenses and a 30.2% rise in other expenses, following the inclusion of KME as a subsidiary of the group. Final DPS of 2.5¢ proposed, taking FY14 payout to an unchanged 4¢. NAV/share at $0.497.