Friday, May 5, 2017

SG Market (05 May 17)

Commodity and oil-linked counters may face downward pressure as oil tumbled almost 5% and gold/silver retreated to 6-week lows on Chinese deleveraging. Interest appeared to have has shifted from blue chips to penny stocks although revived merger speculation could continue to hold up Keppel Corp and SembMarine. Sydney edged 0.1% lower in early trading, while bourses in Japan and Korea are closed for a public holiday. Technically, the overbought STI may close the breakup gap at 3,212, with further support at 3,190. Upside resistance is at 3,250.

Stocks to watch:
*OUE Hospitality: 1Q17 DPU of $0.013 (+18.2%) met 26% of full year expectations as distributable income rose 19.1% to $23.5m on income support for Crowne Plaza Changi Airport (CPCA). Gross revenue and NPI rose to $32.1m (+6.4%) and $27.4m (+4.3%), mainly underpinned by higher master lease income from enlarged 563-room CPCA, better occupancy at Mandarin Gallery and lower interest expenses, while performance of Mandarin Orchard Singapore deteriorated. Aggregate leverage stood at 38.1%. Last traded at 7.3% annualised yield and 0.9x P/B.

*Riverstone: 1Q17 net profit of RM33.6m (+23.7%) beat estimates. Revenue of RM205.7m (+38.9%) was bolstered by higher glove demand and additional 1b gloves production capacity from phase 3 expansion. Gross margin shrank 3.9ppt to 25.2% on a spike in raw material prices. Net cash position strengthened to RM123m (FY16: RM103m) on operating cash flow of RM40.4m (1Q16: RM13.3m). MKE upgrades to Buy from Hold and hikes TP to $1.05 from $0.83.

*Lippo Malls Indo Retail Trust: 1Q17 DPU rose 7.2% to 0.89¢, in line with estimates, on distributable income of $25.1m (+8.4%). Revenue and NPI grew 6.7% and 12.9% to $48.6m and $46.1m respectively, boosted by the Kuta mall acquisition and positive rental reversions of 7.5%. Occupancy slipped 0.5ppt q/q to 93.8%, while aggregate leverage stood at 32.2% (+0.7ppt q/q). Trading at 8.5% annualised yield and 1.1x P/B.

*Frasers Logistics & Industrial: 2QFY17 DPU of 1.75¢ met street estimates, and came in 6.7% ahead of IPO forecast on distributable income of A$25.1m (+5.9% above IPO) amid interest savings, lower trust expenses and FX gains. Gross revenue of A$40.9m (+1.6%) and adjusted NPI of A$30.9m (+0.3%) were largely in line with projections. Portfolio occupancy stood at 99.3%, with WALE of 6.7 years. Aggregate leverage at 28.9%, with average debt cost of 2.8%. Trading at 2Q annualised yield of 6.8% and 1.08x P/B.

*Hi-P: Swung to a 1Q17 net profit of $8.4m (1Q16: $12.4m loss) even as revenue slid 11.4% to $244.2m on fewer high component content assembly product sales. Despite this, gross profit margin more than doubled to 13.7% (+6.9ppts) mainly due to 1) better product mix, 2) improved operational efficiencies, and 3) lower inventory provision and scrap expenses. Bottomline was also supported by a FV gain on derivatives of $1.4m (1Q16: $0.7m loss). NAV/share at $0.7174..

*Hyflux: 1Q17 net profit plunged 89% to $0.8m, dragged by $27m (+46%) loss from up for sale Tuaspring plant due to weak Singapore power market. Excluding Tuaspring, it would have recorded a 8% increase in earnings to $27.8m, boosted by a $16.5m gain related to the disposal of its 50% stake in Galaxy Newspring. Revenue fell 59% to $91.5m due to lower EPC activities in its TuasOne WTE project and the Qurayyat Independent Water Project. The group continued to bleed operating cash outflow of $86.2m (+157%), resulting to a 15.7% drop in NAV/share to $0.38.

*Chip Eng Seng: 1Q17 net profit surged 68% to $6.1m, albeit from a low base as revenue soared 63% to $181.9m across all divisions, namely property developments (+116%), construction (+33%), hospitality (+12%) and property investments & others (+17%). Gross margin contracted to 16.1% (-2.4ppts) on the change in revenue mix. Bottomline was further supported by $4.9m gain (1Q16: nil) on disposal of investment securities, FX gain of $1.6m (+117%) as well as lower legal and professional fees (-77%). NAV/share at $1.2423.

*Chip Eng Seng: Awarded a $110.8m 42-month contract by the HDB for construction of nine blocks of residential buildings and other community facilities at Toa Payoh Bidadari.

*NeraTel: 1Q17 net profit jumped 50.6% to $2.9m on stronger revenue of $44.1m (+44.3%), which was in turn driven by growth across its network infrastructure (+62.1%) and wireless infrastructure network (+15.8%) segments. However, gross margin contracted 7.2ppts to 25.7% on change in sales mix. NAV/share at $0.19.

*PACC Offshore: Dived to 1Q17 net loss of US$18.4m from net profit of US$4.5m a year ago as revenue tumbled 42% to US$34.3m, dragged by its offshore accommodation (-65%) and OSV (-31%) segments on lower charter rates and utilization. Consequently, the group incurred a US$5m gross loss, reversing from US$14m profit in 1Q16. Bottomline was further pressured by higher finance cost of US$4.7m (+63%). NAV/share at US$0.3697.

*Secura: Swung to $0.3m 1Q17 net loss from $0.1m net profit a year earlier. Revenue rose 9.8% to $9.5m, driven by higher contributions from security guarding, cyber security, as well as systems integration and homeland security segment. Although gross margin improved 5ppt to 19.4%, this was not enough to offset a 76.5% jump in admin expenses, due to acquisitions of subsidiaries RSPL and Soverus, as well as increased staff costs. NAV/share at $0.1177

*CapitaLand: Serviced residence business unit, The Ascott has acquired the 125-unit Hotel Central Fifth Avenue New York and will invest close to US$50m in renovating and rebranding the property into Ascott’s first Citadines serviced residence in the US in 2018. The investment boosts Ascott’s portfolio in the Americas to over 1,100 units across five properties.

*CDL Hospitality Trusts: Acquired a 165-room luxury hotel in Manchester, UK for £52.5m. The acquisition is expected to be yield accretive with DPS accretion of 2.7% although net gearing would rise to 39.1% (+2.3ppts).

*Noble: Going ex 1-for-10 consolidation on 5 May. Based on last close, theoretical ex price is SGD1.31.

*SingPost: Reprimanded by the SGX for breaches of listing rules for the lack of robust internal controls as well as inaccuracies related to the F.S. Mackenzie acquisition announcement. The SGX has further referred the various breaches to the relevant authorities.

*Yuuzoo: Its group financial controller, Thai Youn Fatt who was hired in Jan ’15 has left the company and is the latest in a string of key executives leaving the company, many of them from the finance fnction.

No comments:

Post a Comment