SG Market (06 Sep 17)

MARKET OVERVIEW
- Sentiment could be weighed by the continuing geopolitical fallout from North Korea's latest nuclear test, US policy uncertainty and lack of fresh leads.
- Technically, the STI is trading below its 20 and 50-dmas, suggesting near term weakness, with immediate support at 3,220 and overhead resistance at 3,275.

POSITIVE NEWS
*CapitaLand
- First integrated development in Indonesia, The Stature Jakarta (50% owned), is on track for completion by end 2020 at total development cost of $220m.
- Jointly developed with local developer Credo Group, The Stature will spans a total floor area of 55,500 sqm and comprise a luxurious 94-unit residential tower (Stature Residences), a 24-sorey premium serviced residence tower (Ascott Menteng), a 20-storey office building (Stature Tower) and lifestyle retail units.
- Separately, the group is acquiring a 192-unit serviced residence, Ascott Sudirman Jakarta, for $74.3m through wholly owned Ascott's global serviced residence fund with Qatar Investment Authority. Slated to open in 2018, it is Ascott's sixth serviced residence in Jakarta.
- In addition, Ascott has secured a contract to manage the 230-unit Citadines Canggu Bali that is scheduled to open in 2020.
- CapitaLand trades at a 28% discount to its RNAV/share of $5.25 and 0.9x P/B.

*SATS
- Launching augmented reality smart glasses in its ramp handling operations to reduce baggage and cargo loading times.
- The smart glasses could improve efficiency by 25%, thereby shortening waiting and transit times for passengers and airfreight.
- The new technology is expected to be implemented within the next six to nine months.
- Trades at 21.6x forward P/E with 3.6% dividend yield.

*Ziwo
- 65% owned BM Mobility has signed a dealership agreement to sell electric scooters from HK-listed Yadea Group to commercial users in Malaysia.
- Targeted commercial users include food delivery companies and third-party logistics service providers.

NEGATIVE NEWS
*Yamada Green
- Requested for trading suspension after fire in a truck destroyed certain financial documents and IT/computer hardware being transported.
- Consequently, the group applied for a time extension to release its FY17 results and hold its AGM.
- The shiitake mushroom farmer had earlier flagged a loss for 4QFY17 and FY17, blaming unfavourable factors such as bad weather, rising labour costs and slowdown in China's economy.
- This is not the first time S-chip companies reported such incidents. In one case, the truck transporting financial files went missing and in another case, the finance department mysteriously caught fire.

NEUTRAL NEWS
*Wilmar
- 50:50 JV with KL-listed Three-A Resources acquired Three-A (Qinhuangdao) Food Industries for Rmb5m.
- Last traded at 13.3x forward P/E.

*Emerging Towns & Cities
- Proposed acquisition of an additional 17% stake in Uni Global Power for US$11.9m or 2.2x P/B.
- Funding will be via an issue of 179.2m new shares (18.6% share capital) at $0.09 each.
- Uni Global Power owns 70% in GL, which in turn owns the US$400m Golden City project in Myanmar.
- The deal will lift its ownership stake in Uni Global Power from 70% to 87%.

*LHT
- Accepted a $11.6m offer from JTC to surrender its property lease at 44 Sungei Kadut Street 1, which expires on 31 Mar '25.
- With a land area of 35,281 sqm, the property is being used for the group's wood-related manufacturing operations, and it will be leased back to the group until 31 Dec '20.
- The deal is expected to result in a gain of $4.78m, which includes relocation compensation of $2.88m.