Tuesday, January 24, 2017

SG Market (24 Jan 17)

Focus will be on the protectionist trade policies being rolled out by the new Trump administration and local corporate earnings.

Regional bourses opened mixed in Tokyo (-0.2%), Seoul (-0.2%) and Sydney (+0.5%).Technically, the STI remains in overbought territory with underlying support at 2,968 and topside resistance at 3,040.

Stocks to watch:
*Keppel DC REIT: 4Q16 results missed estimates as DPU of 1.31¢ (-20.1%) was diluted by an enlarged unit base arising from the acquisition of Keppel DC Singapore 3. This brought FY16 DPU to 6.14¢ (-5.7%). For the quarter. revenue grew 4.2% to $26.8m from increased contributions from Cardiff and Milan data centres, as well as higher variable income at its Singapore properties. NPI of $24.9m (+14.1%) was further lifted by lower property tax and expenses. Portfolio occupancy rose to 94.4% (+1.7ppt q/q) with WALE of 9.6 years (3Q16: 8.6 years), while aggregate leverage eased to 28.3% (-1.1ppt). NAV/share at $0.954.

*Mapletree Logistics Trust: Flat 3QFY17 of 1.87¢ was in line with estimates. Revenue of $95.5m (+7.4%) and NPI of $79.9m (+7.7%) were boosted by acquisitions/AEIs, as well as stronger performance in Hong Kong. However, distributable income of $46.8m (+0.8%) was crimped by a negative tax adjustment, while DPU was further diluted by increased distribution to perps holders. Occupancy slipped 0.3ppt q/q to 96.1% with WALE of 4.1 years. Aggregate leverage climbed 1.1% to 38.7%. NAV/unit at $1.03.

*Frasers Commercial Trust: Flat 1QFY17 DPU of 2.51¢ met expectations, while distributable income of $19.9m (+12%) was shored by capital distribution. Revenue of $39.7m (+0.1%) and NPI of $29.2m (-0.6%) stayed relatively flat as higher contribution from 357 Collins Street and a stronger AUD were offset by lower occupancy rates at China Square Central and Central Park due to redevelopment works and tenant adjustments. Overall portfolio occupancy was stable at 93% with WALE of 3.8 years, while aggregate leverage was unchanged at 36%. NAV/unit at $1.55.

*Ascott REIT: In line 4Q16; DPU slipped 1% y/y to 2.04¢, although distributable income rose 6% to $33.9m, which included a FX gain ($2m) arising from repayment of foreign currency bank loans with the divestment proceeds from Fortune Garden Apartments, and repayment of shareholders’ loan. Revenue grew 6% on increased contribution from recently-acquired Sheraton Tribeca New York Hotel in Apr '16, which lifted overall RevPAU by 2% to $148. However, excluding the acquisition, same-store-RevPAU tumbled 6% on weaker performances from China and UK assets. Aggregate leverage narrowed to 39.8% (-1.5ppt), and group remains on the lookout for accretive M&A opportunities in key gateway cities of Australia, Japan, Europe and the US. NAV/unit at $1.33.

*Cache Logistics Trust: 4Q16 results missed expectations as DPU tumbled 10.8% to 1.85¢ on a higher unit base, while distributable income fell 5.2% to $16.6m from increased finance costs and reduced capital distributions. Revenue and NPI rose to $27.3m (+13.5%) and $21.3m (+11.3%), respectively, driven by increased contribution from DHL Supply Chain Advanced Regional Centre and three Australian properties acquired in 4Q15. Portfolio occupancy remained stable at 96.4% with WALE of 3.9 years, while aggregate leverage crept up 1.9ppt q/q to 43.1%. NAV/unit at $0.78.

*Keppel Infra Trust: 4Q16 results met expectations although DPU was flat at 0.93¢, bringing FY16 DPU to 3.72¢ (+40.9%), post-merger of Keppel Merlimau Cogen in Jun '15. Quarter revenue fell to $152.2m (-5.2%) on lower tariffs at City Gas (-6.9%), reduced concessions (-27.9%) due to lower construction revenue following boiler upgrades in 4Q15, although partially offset by higher contribution from Basslink (+47.4%). NAV/share at $0.325..

*Soilbuild REIT: 4Q16 results in line despite a 2.7% slip in DPU to 1.57¢, which brought FY16 total payout to 6.091¢ (-6.1%), as an enlarged unit base offset the 4.1% growth in distributable income to $60.3m. Quarter revenue and NPI rose to $21.7m (+6.1%) and $18.9m (+8%), thanks to higher takings from Loyang Way, Bukit Batok Connection, Solaris and Eightrium properties. Overall portfolio occupancy slid to 89.6% (-5.2ppts q/q) with WALE of 3.4 years, while aggregate leverage stood at 37.6% (1.6ppts q/q). NAV/share at $0.72.

*UOL: Granted an option to purchase a residential freehold site at 45 Amber Road for $156m. The site currently holds a horticultural and gardening retail centre, which sits on a land area of 69,858 sf and plot ratio of 2.1, equating to a potential gfa of 146,702 sf ($1,063 psf ppr ex development charges).

*Genting HK: Expects to record a FY16 net loss in the range of US$500m-US$550m (FY15: US$2.1b net profit), mainly due an absence of a one-off accounting gain of US$1.57b and divestment gain of US658.6m, both arising from the partial stake sale in associate Norwegian Cruise Line (NCL) in 2015. Additionally, an impairment loss of ~US$300m will be taken on its remaining stake in NCL from a decline in fair value in late-2016. Further, group incurred a one-time start-up and marketing costs, as well as additional depreciation expenses related to its premium liner Crystal cruise brands and newly acquired German shipyards.

*Banyan Tree: Established 50:50 JVCo with China Vanke, via an asset injection of Banyan Tree's China properties to be determined by an independent valuation. The current book value of these assets is ~Rmb720m. In association with the JV, China Vanke will take a 5% equity take in Banyan Tree through a private placement at $0.60/share.

*IHC: EGM to remove current board members has been approved. Separately, OUE purchased 208.1m IHC shares on 23 Jan for $0.077 apiece, and has emerged as a substantial shareholder with a 12.5% stake.*Swing Media: Proposed placement of 8.5m new shares (19.1% share capital) at $0.60 each to seven individuals, to raise net proceeds of $5.1m intended for working capital (20%) and inorganic growth (80%).

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