SG Market (18 Jul 17)

MARKET OVERVIEW
- Market will likely stay range-bound ahead of corporate 2Q results.
- Technically, STI remains bounded within its 3,190-3,275 trading range.

POSITIVE NEWS
*Keppel DC REIT
- 2Q17 DPU of 1.74¢ (+4.2%) met expectation despite a larger unit base (+27.6%).
- Surge in revenue to $34.5m (+38.8%) and NPI to $31.4m (+41.9%) was led by recent acquisitions of Milan DC, Cardiff DC, and 90% stake in KDC SGP 3.
- However, portfolio occupancy dipped 2ppt to 93.1%, while aggregate leverage ticked 0.2ppt lower to 27.7%.
- Trading at 2Q annualised yield of 5.3% and 1.36x P/B.

*SIA
- Positive Jun operating stats, with improved group passenger load factor of 82.1% (+4.6ppt), as traffic (+8.6%) outpaced capacity growth (+2.7%).
- Load factor for parent on routes to Americas (+5.1ppt), Europe (+7.5ppt), West Asia and Africa (+9.6ppt) improved the most.
- Load factors at subsidiaries SilkAir (+5.7ppt to 73.8%) and budget carrier (+2.3ppt to 85.8%) were also better.
- Further, cargo load factor grew 4.5ppt to 65.6%.

*STE
- Acquiring US-based autonomous mobile robots manufacturer Aethon for US$36m.
- The robots are capable of delivering goods such as materials, meals, medication, etc, up to a load of 635kg per robot.
- Globally, 164 units have been deployed in the industrial, healthcare, hospitality and other commercial environments.

*GLP
- Signed build-to-suit agreement with Adidas to develop their largest distribution centre in Asia.
- The 83,000 sqm facility in Suzhou, Eastern China will support strong demand from the growing domestic consumption.

*Sunpower
- Awarded contract worth Rmb65.9m from Qinghai Damei Coal Industry to provide EPC services.
- Project located in Ganhe Industrial Park Development Zone, Qinghai, China.

*Tiong Seng
- 60:40 JV with Ocean Sky to acquire two freehold residential sites at Jervois Road for $21m ($1,118 psf ppr).
- The combined site has a land area of 13,415 sf with gross plot ratio of 1.4 and will be redeveloped.

*Elec & Eltek
- Positive profit alert for 1H17, with a significant increase of not less than 250% in net profit.
- Due to increased sales in higher margin products, improved profit margin of laminates manufactured and sold, as well as an absence of provision for impairment (1HFY16: US$5m).

NEUTRAL NEWS
*Keppel Infrastructure Trust
- Flat 2Q17 DPU of 0.93¢, on a slightly lower-than-expected rise in distributable cash flow (+1.9%) due to timing differences in the adjustment of gas tariffs at City Gas.
- Revenue jumped 15.6% to $158.8m, on stronger contribution from City Gas (+13.6%), Basslink of A$21.7m (2Q16: A$5.2m) on service resumption, but partially offset by weakness in concessions (-17%).
- Aggregate leverage stood at 39.1% (+0.4ppts q/q).
- Trades at 6.5% 1H17 annualised yield and 1.9x P/B.

*First REIT
- 2QFY17 DPU inched up 1.4% 2.14¢, in line with estimates.
- Gross revenue and NPI rose to $27.5m (+3.3%) and $27.2m (+3.2%), mainly on contribution from Siloam Hospitals Labuan Bajo acquired in Dec '16.
- Aggregate leverage remained at 31%
- NAV/unit at $1.0041.

*Cityneon
- The successful management-led buyout of Star Media's 52.5%-stake at $0.90/share in the company has triggered an unconditional mandatory general offer.
- Management intends to maintain the listing status of the company and does not intend to exercise any right of compulsory acquisition.

*Olam
- Secured 3-year term loan worth ¥25b (US$222m) for refinancing existing loans and general corporate purposes.