Investors are also looking for longer term direction from the upcoming Committee on Future Economy report, which is likely to focus on building new capabilities, entrepreneurship and skills to take the economy up the next phase of growth.Regional bourses edged higher today in Tokyo (+0.8%), Seoul (+0.3%) and Sydney (+0.4%).Technicals for the STI are deteriorating, with topside resistance at 3,110 and underlying support at 3,025.
Stocks to watch:
*StarHub: 4Q16 net profit slumped 33.2% to $54m, dragging FY16 earnings of $341.4m (-8.3%) below estimates. For the quarter, service revenue held steady at $567.1m (+0.7%) as growth in enterprise (+9.5%) and broadband (+3.9%) was offset by a drop in mobile (-0.4%) segment, hurt by declining ARPU, as well as dimmer Pay TV (-6.1%) due to a shrinking customer base. Consequently, EBITDA margin narrowed to 23.9% (4Q15: 27.9%, 3Q16: 32.8%). Final DPS of 5¢ is maintained, bringing 2016 total payout to $0.20, but management guided for lower EBITDA margin of 26-28% (FY16: 31.2%) in 2017, and cut its DPS forecast to $0.16. Downgraded by MKE to a Sell with TP of $2.49.
*SIA Engineering: 3QFY17 results in line, as net profit climbed 6.5% to $52.6m, lifted by a $2.3m disposal gain on partial disposal of an associate, a positive $6.9m FX swing, as well as an absence of provisions for closure and impairment costs. Revenue dipped 1% to $272.3m, dragged weaker fleet management and airframe and component overhaul segments, while operating margin narrowed 1.3ppt to 9.3% on a spike in staff costs (+7.5%). The counter offers an indicative yield of 3.4%. MKE maintains Hold with TP of $3.70.
*Frasers Logistics & Industrial Trust: 2QFY17 DPU of 1.74¢ was 6.1% higher than its IPO forecast, while distributable income of A$24.9m exceeded by 5.1%. mainly from interest savings. However, revenue of A$39.7m (-1.5%) and NPI of A$30.7m (-0.6%) were below estimates, due to a delay in acquiring the Marin Brower property. Occupancy steadied at 99.3% (+0.1ppt q/q) with WALE of 6.9 years, while aggregate leverage stood at 29.7% (+1.5 ppt q/q) with average interest cost of 2.8%. NAV/unit at A$0.88. Trades at 7.3% 2Q annualised yield and 1x P/B.
*GLP: Updated that it has received a number of non-binding proposals and disclosed that CEO Ming Z Mei, as well as non-executive and non-independent director Fang Fenglei, have recused themselves from board discussions relating to GLP's strategic review, as both individuals have interests in separate parties, which have submitted proposals. Notably, Mei was previously the MD of Prologis China, while Fang is the founding partner of Hopu Investments. The counter trades at a 14% discount to its consensus RNAV/share of $3.06.
*UOL: Exercised its option to acquire the 45 Amber Road property for $156m ($1,063 psf ppr), with the intention to build a 190-unit residential development.
*Profit warning:
- GS Holdings
- Manufacturing Integration Technology
- GRP- Starland
- First Ship Lease Trust
- Yamada Green
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