SG Market (24 Feb 17)

*China Aviation Oil: 4Q16 net profit surged 57% to US$17.9m, bringing full year net profit to US$88.9m (+45.1%), beating street estimates. For the quarter, revenue grew 65.2% to US$3.3b from the increase in volume traded, while gross profit rose at a slower clip to US$10.6m (+32.3%). Further, bottom line was lifted by lower other operating expenses of $0.8m (-57%), as well as a spike in associate contribution (+36.7%) led by Shanghai Pudong International Airport Aviation Fuel Supply Company. Hiked first and final DPS to 4.5¢ (FY15: 3¢).

*Hyflux: FY16 net profit crashed 91% to $4.8m, despite revenue more than doubling to $987m (+121.7%), from contributions by TuasOne waste-to-energy project, Qurayyat Independent Water Project and Oman Tuaspring power plant. However, profits generated by the higher EPC projects were substantially wiped out by losses from the weak Singapore power market and electricity prices. Slashed final DPS to 0.25¢, bringing full year DPS to 0.45¢ (FY15: 1.7¢). NAV/share at $0.451.

*Far East Orchard: FY16 net profit surged to $65m (+123%), boosted by the development completion for commercial property project, SBF Center, as well as increased JV contribution. However, revenue fell 31.7% to $184.9m, on lower takings in both property development and hospitality. Gross margin widened 6ppts to 32.1% on a shift in mix, while the bottom line was also supported by the absence of a $4.9m goodwill impairment and positive FX swing of $11.1m. Maintained first and final DPS of 6¢. NAV/share at $2.91.

*ISEC: 4Q16 net profit spiked from a low base to $1.5m (4Q15: $0.1m), bringing FY16 earnings to $6.5m (+136%), slightly below forecast. For the year, revenue jumped 15% to $30.8m, from contribution of recently-acquired Southern Specialist Eye Centre and increased patient visits in Malaysia, but mitigated by the closure of loss-making International Specialist Eye Centre in Singapore. Accordingly, gross margin expanded 3.3ppts to 47.9%. Final DPS of 0.11¢ declared, bringing FY16 payout to 0.99¢ (FY15: 0.44¢). MKE last had a Buy with TP of $0.42.

*Memtech: 4Q16 net profit climbed 5.9% to US$4m, as revenue rose 25.5% to US$47.9m, led by improvements from consumer electronics and automotive segments, which outweighed weakness from telecommunication. Pretax margin narrowed 2ppt to 8.6% on higher staff and goods transportation costs, as well as an absence of a write-back of doubtful trade receivables. Healthy net cash of US$24m accounts for 39% of market cap. However, group cut its first and final DPS to 2.5¢ (FY15: 3.3¢).

*Frencken: 4Q16 net profit surged 5x to $4.4m, lifted mainly from the absence of an impairment loss. Revenue climbed 7.8% to $111.2m on stronger sales in mechatronics (+15%), but partially weighed by lower contribution from IMS (-2.3%). However, a 2.5ppt dip in gross margin to 14.6% negated the sales uplift. Higher first and final DPS of 1.2¢/share declared (FY15: 0.75¢). NAV/share at 0.5229.

*Q&M: Undertaking an independent strategic review and has appointed Religare Capital Markets as financial adviser. MKE last had a Buy with TP of $1.00.

*Global Premium Hotels: Received conditional privatisation offer at a final price of $0.365/share, representing 14% premium to last traded price, from Chairman Dr. Koh Wee Meng, who has secured undertakings for 71% of shares. The offer values the group at 0.53x P/B.

*Tritech: Awarded a Rmb10.5m contract to design, install and construct a waste water treatment plant in Hebei, China, with a capacity of 2,500 cubic meters per day.