Monday, August 15, 2016

SG Market (15 Aug 16)

SG Market: The market likely to trade sideways following disappointing US economic data on Fri and lacklustre 2Q results, as investors look to US consumer prices and Fed minutes, Japan’s 2Q GDP figures and S’pore NODX this week for direction.

Regional bourses opened lower in Tokyo (-0.3%), while Sydney is flat. Seoul market is closed for public holiday.

From a chart perspective, STI could be range bound between 2,830 and 2,900.

Stocks to watch:
*ST Engineering: 2Q16 results broadly met expectations. Net profit of $127.3m (+1.8% y/y) was boosted by a one-off divestment gain and increased government grants. Revenue grew to $1.62b (+5.1%) thanks to aerospace (+20%) and electronics (+8%) segments, but EBIT margin slipped 1.3 ppt to 8.4% on higher acquisition expenses. Order book remained at $11.6b (1Q16: $11.5b), but management guided for a muted 2H outlook with weaker contributions from aerospace and land systems. Interim DPS of 5¢ was maintained. MKE has a Hold with TP of $3.17.

*ComfortDelGro: 2Q16 results met street estimates as net profit of $85.2m (+5.3%) was bolstered by lower fuel and power costs. Revenue slid 1.4% to $1.02b largely from a FX translation loss and lower average bus fares (-4.6%), although mitigated by a larger taxi fleet and higher ridership in the rail segment. Interim DPS raised by 0.25¢ to 4.25¢. NAV/share at SGD1.081.

*Jumbo: 3QFY16 net profit doubled to $3.4m (+101%), bringing 9MFY16 earnings to $11.3m (+55.8%) or 68% of full year consensus forecast. Revenue rose 13.8% to $32.7m on maiden contribution from two outlets in Shanghai and increased takings at the remaining outlets, while gross margin remained stable at 62.9 (+0.1ppt). However, valuations have caught up and MKE downgraded the stock to a Hold with TP of $0.69.

*Pacific Radiance: Reversed into a 2Q16 net loss of US$57.7m (2Q15: US$2.2m profit) after it was hit by an impairment charge (US$42.2m). This took 1H16 net loss to US$64.5m (2Q15: US$4.7m profit) vs full year loss estimate of US$7.6m. Revenue sank 42% to US$20m, dragged by lower utilisation and charter rates for offshore support vessels due to the weak environment. NAV/share at US$0.477.

*CWT: 2Q16 missed as net profit slumped 48% y/y to $13.6m, on lower revenue of $2.37b (-15%) due to a drop in both commodity prices and trading volume. EBIT margin narrowed 0.3ppt to 1% on higher unrealised marked-to-market losses of commodity contracts and impairment on trade receivable. No interim DPS declared (1H15: 3¢). Negotiation on potential stake sale by controlling shareholder C&P to China's HNA Group remains on-going. NAV/share at $1.347.

*United Engineers: 2Q16 net profit fell 25% y/y to $8m on absence of a divestment gain at its JV. Revenue slid 46% to $142.2m due to weaker contributions from its property rental & services (-2%), property development (-82%), and manufacturing (-11%), partially mitigated by growth in its engineering & distribution (+13%) segments. Gross margin improved to 31.9% (+15.4 ppt) on a shift in sales mix. NAV/share at $2.84.

*Haw Par: 2Q16 net profit plunged to $48.4m (-58.3%) on sharp drop in investment income (-29.4%) and associate contribution (-99.8%) due to the absence of disposal gains and the reclassification of HK-listed Hua Han as an available-for-sale asset. Revenue edged higher to $52.6m (+3%) from improvement in property and leisure segment, but gross margin narrowed 1.9ppt to 59.4%. NAV/share at $10.67.

*Ho Bee Land: 2Q16 in line; net profit jumped 2.5x to $42m, as revenue soared to $175.5m (+464.2%) on sales recognition of two completed residential development projects in Australia. Operating margin collapsed 48.7ppt to 29.5% on a $11m FX swing to $8m loss, but partially negated by a turnaround in associates and JVs contribution to $8.2m (2Q15: $1.3m loss). NAV/share at $4.13.

*Halcyon Agri: 2Q16 results swung to a net loss of US$8m (2Q15: US$3.2m) as revenue fell 33.4% to US$198.6m on lower selling prices and volumes (-21.3%), partially due to a self-impose rubber export restriction by the government of various ASEAN nations in Mar '16. Bottom line was also weighed by one-off professional fees amid on-going merger with Sinochem and GMG Global. NAV/share at US$0.1971.

*UMS: 2Q16 missed; net profit slid 22% to $6.5m on a softer revenue $23.6m (-24%), weighed by lower semiconductor integrated system sales (-15%) in Singapore, and weaker component sales (-64%) in US. Interim DPS maintained at 1¢. NAV/share at $0.4467.

*Tat Hong: 1QFY17 met although it recorded a net loss of $3.6m (1QFY16: $2.8m profit) on absence of PPE disposal gain. Revenue fell 16% y/y to $116.7m, undermined by subdued crane rental (-23%) and crane distribution (-21%) businesses. NAV/share at $0.91.

*Tianjin Zhong Xin: 2Q16 net profit climbed to Rmb139.1m (+16%) on a turnaround in associate contribution to Rmb36.3m (2Q15: Rmb26.8m loss). Revenue slipped 8% to Rmb1.6b, which gross margin lowered by 3.5ppt to 28.9%. NAV/share at Rmb5.27.

*Wheelock Properties: 2Q16 net profit doubled to $35.3m, as revenue surged to $300.9m (+275.5%) on increased unit sales at Ardmore Three and The Panorama. Gross margin shrank 15.2ppt to 15.8%. NAV/share at $2.48.

*First Resources: 2Q16 missed with net profit of US$5.3m (+4.2%). While revenue rose 14% to US$135.4m due to better sales from refinery and processing (+51%), this was partly offset by reduced production volume (-15.6%) and yield from adverse effects of El Nino. Accordingly, gross and EBITDA margins contracted to 41.7% (-4.7ppt) and 39% (-7ppt). Interim DPS cut to 0.625¢ (1H15: 1.25¢). NAV/share at US$0.51.

*Indofood Agri: 2Q16 swung into core net loss of Rp11.6b (2Q15: Rp24.6b profit), as revenue slumped 13.7% y/y to Rp3.57t, weighed by lower palm production arising from the impact of the El Nino in 2H15. Gross margin expanded to 20.2% (+1.4ppt) on a shift in sales mix towards the more profitable downstream segment. NAV/share at Rp8,193.

*Ying Li: 2Q16 below estimates as net profit tumbled 43.7% y/y to Rmb5m, dragged by higher share of profit attributed to non-controlling interest of Rmb3.3m (2Q15: negative Rmb0.3m). Revenue spiked 73.1% to Rmb169.3m due to progressive recognition of residential units at Sa Yan Wan Phase 2, while gross margin slid 25.8ppt to 40.5% on a shift in sales mix towards less profitable units handed over, as well as the absence of a one-off consultancy income. NAV/share at Rmb1.94.

*Midas: 2Q16 net profit of Rmb18.7m (+61.8%) below expectations, boosted by a 53.5% surge in associate contribution. Revenue edged higher to Rmb$382.8m (+2.3%) on higher sales for its aluminium alloy extruded products, while gross margin was stable at 27.8% (+0.1 ppt). No interim DPS was declared (2Q15: 0.25¢). Management remains sanguine on industry tailwinds.

*SIIC Environment: 2Q16 missed; net profit of Rmb101.2m (+21.8%) was lifted mainly by a VAT refund, while revenue (Rmb556.3m, +33.5%) was lifted by more construction activities. Gross margin contracted to 34.5% (-9ppt) due to a shift in mix. NAV/share at Rmb2.56.

*Cogent: 2Q16 net profit jumped to $7.9m (+35%) on a firmer revenue of $33.8m (+6%), driven by warehousing, automotive logistics, and container depot operations. Operating margin widened 5.9ppt to 30.8% on lower rental, fuel costs, as well as crane hiring expenses. NAV/share at $0.2307.

*Boustead Singapore: 1QFY17 net profit expanded 11% y/y to $7m, boosted by FX gain of $0.5m (1QFY16: $2.4m loss). However, revenue fell 3% to $113.7m primarily dragged by a 24% decline in its energy-related engineering division. NAV/share at $0.59.

*Japfa: 2Q16 net profit surged to US$44.6m (2Q15: US$3m), buoyed by higher revenue (US$782m, +11%) and gross margin expansion (24.4%, +7.1ppt), thanks to a better pricing environment in the Indonesian animal protein segment, as well as lower feed costs. NAV/share at US$0.42.

*BHG Retail Trust: 2Q16 DPU of 1.35¢ was 3.8% higher than IPO forecast, although revenue of $15.4m (-4.2%) fell short, due to VAT reforms and weaker CNY against SGD. Portfolio occupancy fell 0.4ppt q/q to 97.9%, with WALE of 9.2 years. Aggregate leverage stood at 29.4%. NAV/unit at $0.80.

*Food Empire: 2Q16 net profit dived 74.2% y/y to US$1.8m on slump in operating margin (-5.3 ppt to 0.6%). Revenue dropped 5.5% to US$53.4m on declines in Russia (-12.9%), Ukraine (-19.6%), and Central Asia (-12.3%), partially mitigated by growth in its IndoChina (+40.1%) markets.

*Macro Polo Marine: 3QFY16 swung into net loss of $6.4m (3QFY15: $0.3m profit), as revenue fell to $9.1m (-59%) on lower fleet utilisation and charter rate due to weakened shipping demand. Gross margin crashed to 2.14% (-26ppt), while a $2.9m FX loss dragged operations into losses of $6.6m (3QFY15: $1.8m profit). NAV/share at $0.499.

*Vallianz: 2Q16 net profit slid 12.9% y/y to US$4m due mainly to a one-off impairment charge of US$1.6m in relation to Swiber. Revenue of US$63.7m (-2.1%) was dragged by absence of contributions from ship management projects in Latin America and lower charter rates, while gross margin contracted to 25%. NAV/share at US6.91¢.

*Swissco: 2Q16 results fell to a net loss of US$2.1m (2Q15: US$13.2m profit) after revenue dived to US$5m (-72.8%), as there was zero contibution from drilling business, and OSV segment (-35%) deteriorated on lower charter rates and utilisation. NAV/share at US$0.3480.

*Nordic: 2Q16 net profit grew 19% y/y to $3.1m, on revenue of $21.8m (+4%), due to contribution from Austin Energy acquired in Jun ’15, which offset lower sales in maintenance services (-20%). Gross margin improved to 31% (+5 ppt) on a change in sales mix. Interim DPS increased to 0.5372¢ was declared (2Q15: 0.4¢). NAV/share at $0.156.

No comments:

Post a Comment