SG Market (27 Apr 17)

The market may consolidate its gains, taking cue from the muted reaction on Wall Street as investors assess the implications of Trump’s radical tax plan and question how it will be funded and whether it will pass muster with Congress.Regional bourses in Tokyo (-0.4%), Seoul (-0.2%) and Sydney (-0.1%) opened lower.Technically, immediate support for STI is 3,140 (50-dma) with topside resistance at 3,190.

Stocks to watch:
*Economy: If US President Trump’s proposed tax bill is passed, Singapore’s role as a regional HQ and top investment destination could be affected; the government may have to lower corporate tax rate but raise other taxes such as GST to make up for the reduced corporate tax revenue.

*Mapletree Greater China Commercial Trust: 4QFY17 DPU of 1.969¢ (+1.9%) brought full year payout to 7.32¢ (+1%), at the higher end of estimates. Revenue and NPI rose 7.9% and 6.1% to $94.7m and $77.5m on higher rental income across its portfolio and from the reversal of VAT at Gateway Plaza. Occupancy steadied at 98.6%, while aggregate leverage fell 1.3ppt q/q to 39.2%. Trading at 6.9% annualised 4Q yield and 0.8x P/B.

*Duty Free Int'l: 4QFY17 net profit of RM17.8m (-14.9%) brought FY17 headline earnings to RM72.7m (+17.8%), ahead of consensus estimate. However, the beat was largely due to one-off gains on FX (RM9.9m) and fair value of option (RM4m) during the year. For the quarter, revenue fell 7.4% to RM150m, weighed by the recent flood in Thailand and the after-effect from the demise of Thai King Bhumibol, as well as the imposition of GST at its border outlets and duty free zones from 1 Jan '17. Gross margin narrowed by 1.4ppt to 34.7%. Cash position ballooned to RM272.2m (FY2/17: RM49.3m) or S$0.071/share. NAV/share at RM0.4488

*AIMS AMP: 4QFY17 DPU fell 5.8% to 2.78¢ (-5.8%), translating to FY17 payout of 11.05¢, which met expectations. Gross revenue edged up 1.1% to $30.6m on maiden contributions from 30 Tuas West Road and higher rentals from 27 Perjuru Lane. But NPI slipped 2% to $20m due to higher maintenance and costs arising from the conversion of 20 Gul Way to multi-tenant building. Occupancy improved 0.6ppt q/q to 94.6%, while aggregate leverage rose to 36.1% (+1.5 ppt q/q). Currently trades at FY17 yield of 7.9% and 1x P/B.

*AsiaPhos: Broke even in 1Q17 with net profit of $0.1m (1Q16: $0.9m loss). Revenue surged 512% to $12.1m, largely attributable to its downstream contributions of $10m (1Q16: $0.3m) on sales volume of 3,700 tonnes (1Q16: nil). Gross margin slipped to 14% (-11ppts), mainly from the change in sales mix. Bottomline was shored by lower general & admin costs (-9%). NAV/share at $0.0974.

*Rowsley: Slumped to 1Q17 net loss of $1.6m (1Q16: $4.8m profit), dragged by a 68% decline in fair value gains on purchase consideration payable. Revenue grew 10% to $22.6m mainly due to consolidation of its M&E arm, Squire Mech, which was previously an associate, but this was partially offset by a weaker GBP. NAV/share at $0.085.

*SBS Transit: Entered MOU with ST Kinetics to collaborate and strengthen maintenance and engineering capabilities for its rail operations, through the use of automation, robotics solutions and data analytics to improve operational productivity and efficiency.

*ST Engineering: ST Kinetics signed its first agreement to provide expertise and services to refurbish electronics components used in SBS Transit's trains on the North East Line and light rail vehicles on the Sengkang-Punggol LRT systems. This marks the group's entry into rail MRO and engineering.

*Civmec: Commenced construction of a 53,470 sf purpose-built ship and module construction, ship repair, and maintenance facility. This will be Australia's largest undercover shipbuilding facility, and its construction plan requires the daily removal of 90-120 truckloads of earth over six months from a 7-ha site.

*YuuZoo: Signed framework agreement with Harbin Municipal Government, to set and run an eSports college and sSports development park in Harbin, China.

*Z-Obee: Expects to record a significant increase in net profit due to growing purchase orders from its customers.