SG Market (24 Feb 16)

Short term rally likely to falter from overbought levels in face of falling oil price and further cut in 2016 domestic inflation by MAS to between -1% and 0% from earlier forecast of -0.5% to 0.5%.

Singapore's 4Q GDP grew 1.8% y/y, taking 2015 growth to 2%, the slowest rate since 2009. MTI maintains its 2016 forecast at 1-3%.

Regional bourses opened negative territory in Tokyo (-1.8%), Seoul (-0.4%) and Sydney (-1.7%).

From a chart perspective, downside support for the STI is at 2,600 (20-dma), followed by the triple bottom at 2,530.

Stocks to watch:
*Super: 4Q15 results met estimates as net profit sank to $15.7m (-39.4% y/y) on absence of disposal and liquidation gains, while revenue slipped 8.2% to $141.1m on weak sales in branded consumer (-1.2%) and food ingredient (-20.2%). Operating profit grew 3.3% on lower cost of sales and selling expenses, but bottom line was pressured by increased tax (+89.5%) arising from withholding taxes and the expiry of tax incentives. Final DPS of 1.2¢ brought FY15 DPS to 2.2¢ (FY14: 3.1¢).

*NOL: 4Q15 net loss narrowed to US$77.3m (4Q14: -US$122.3m) as revenue sank to US$1.3b (-28.5% y/y) on lower shipment volume (-12%), freight rates (-22%), and utilisation rates of 90% (-3ppt). Core liner registered operating losses despite reduced cost of sales per FEU (-17%) from lower bunker costs. NAV/share at US$0.95.

*Sheng Siong: 4Q15 results in line, with net profit of $14.6m (+23.9% y/y) on revenue of $187.1m (+4.9%) mainly boosted by contributions from five new stores, although pared by a lower same store sales (-1.7%). Gross margin widened to 25% (+0.7ppt), while bottom line was further boosted by increased rental income (+342.2%), government grants (+165.1%), and one-off advertising income (+44.8%). Final DPS of 1.75¢ brought FY15 total to 3.5¢ (FY14: 3¢).

*Sheng Siong: Group awarded TOP for a new outlet in Yishun with minimum span of 10,500 sf, expected to commence operations in 2Q16.

*Lippo Malls Indo Trust: 4Q15 DPU of 0.81¢ (+14.1% y/y) in line. Gross revenue and NPI rose to $44.6m (+23.9%) and $40.2m (+23.9%), on contribution from new acquisition Lippo Mall Kemang in Dec '14, and Lippo Plaza Batu and Palembang Icon in 3Q15, as well as positive rental reversion at existing malls, partially offset by the weaker IDR. Occupancy slipped to 94% (+0.1ppt q/q), with WALE of 4.91 years, while aggregate leverage remained at 35% with average debt tenor of 2 years. NAV/unit at $0.38.

*OUE/ OUE Commercial REIT: OUE to purchase 203.1m units in OUE Commercial REIT from significant shareholder Gordon Tang for $166m ($0.817/unit), thereby raising its stake from 46.6% to 65%.

*Chip Eng Seng: Highest bidder for a residential land parcel at New Upper Changi Road for $419.4m. The development is estimated to yield a maximum gfa of 51,228 sf and ~720 apartment units.

*Envictus: 72.3% owned Envictus Dairies will dispose its core dairy and juice manufacturing business for NZ$20m. Proceeds intended to repay debt and potential expansion opportunities.

*GLP: Leased 157,000 sf in Ohio, USA, to CEVA Logistics, an existing third-party logistics customer.

*Healthway Medical: 4Q15 net loss narrowed 68% y/y to $0.9m on firmer revenue of $23.3m (+9.7%) due to increased contributions from both primary healthcare and specialist & wellness segments. Bottom line was supported by lower allowances for doubtful loans and receivables, but offset by absence of gains from available-for-sale financial assets. NAV/share at 8.31¢.

*China Kunda Tech: Will transfer to Catalist on 29 Feb ’16. PrimePartners Corporate Finance appointed as its continuing sponsor.

*Profit warning:
Advanced Integrated Manufacturing
Hiap Hoe
Aztech Group
LH Group
Auric Pacific
Oriental Group