Tuesday, October 31, 2017

SG Market (31 Oct 17)

- The market could pull back on some profit-taking ahead of a slate of economic data and appointment of a new Fed chief.
- Apple component supplier, Hi-P could be supported by the strong demand for iPhone X.
- Technical indicators suggest the STI is overbought with downside support at 3,320 and immediate resistance at 3,380.

*Ascendas REIT
- 2QFY18 DPU inched up 1.1% to 4.059¢, meeting estimates, despite a larger unit base (+3.9%).
- Gross revenue and NPI rose 5.1% and 5.3% to $215.8m and $160.5m, respectively, benefitted from new Singapore and Australia acquisitions, higher portfolio occupancy and positive rental reversion of 3.1% across all segments.
- Occupancy rate ticked up 0.4ppt q/q to 92%, while aggregate leverage stood at 33.1%.
- Trading at annualised 2Q yield of 6% and 1.27x P/B.

*Hutchison Port
- 3Q17 net profit sank 37.1% to HK$270.4m, missing expectations, dragged by a 37% spike in finance cost and share of loss at newly acquired Huizhou port.
- Revenue slipped 1.3% to HK$3.2b as higher container throughput voume (+12.8%) were eclipsed by lower average revenue per TEU in both HK and China terminals on more concessions offered and revision on tariffs following consolidation of some liners.
- Trades at 6.3% FY18 forward yield and 0.74x P/B.

- 3Q17 net profit dived 82% to $1.5m, amid lower revenue of $60.2m (-34%) from a broad-based reduction across property development (-39%), hotel ownership (-5%) and property investment (-11%).
- However, gross margin widened 9ppt to 29% on a write-back of an over-provision of development cost.
- Bottom line was also weighed by a $3.5m provision to be written off from the sale of Goulburn Street building in Sydney, as well as a $3.5m drop in associate profit.
- Net gearing crept up q/q from 0.95x to 0.98x.
- Adjusted NAV/unit at $0.8231.

- Received TOP for the greenfield build-to-suit development at 51 Marsiling Road.
- The 231,738 sf gfa property will be fully leased to Beyonics Intl in 1QFY19 for 10 years, with annual rental escalations and first year NPI of $3.5m.
- MKE last had a Buy with TP of $1.60.

*Singapore Myanmar Investco
- Entered into an exclusive 3-year dealer agreement with Sanya Intl, to distribute heavy equipment in Myanmar.
- Counter is loss-making and trades at 3.7x P/B.

- In response to the SGX trading query, group cited it is exploring potential exits of some of its portfolio companies.
- Separately, group will adopt a dividend payout policy, consisting 90% of dividend payments received from "Most Valuable Portfolio Company".
- Further, the policy will provide a 40% payout ratio of net proceeds received in FY18/19 from exit events.

*Luzhou Bio-Chem
- Expects to report a 3QFY17 loss.
- Results slated to be released on or before 14 Nov.

- Proposed JV with AirAsia to provide airport services and ground handling services in Malaysia.
- The deal will consist of a share swap agreement between their subsidiaries, namely Ground Team Red Holdings (GTRH) and SATS Ground Services (SGS).
- In addition, SATS would acquire another 38.6% equity stake in GTRH for $119m.
- Upon completion, SATS will effectively hold 60% stake in SGS and 49% stake in GTRH.
- Last traded at 21.2x forward P/E.

*Halcyon Agri
- Acquired a 25% stake in transportation company Jadeblue Connection for US$1.8m.
- The deal gives Halcyon Agri the right to use Jadeblue's principal asset, a 2010 Citation Sovereign 680 aircraft, for 75 days/year.
- Last traded at 7.8x trailing P/E.

*Spackman Entertainment
- Recently-acquired film production firm, Studio Take, will commence production on a new film, Damaged.
- Filming is expected to be completed by end Dec '17 with expected release by 2H18.
- Damaged joins a growing pipeline of films (currently includes Zip Cinema-produced Sovereign Default) that Spackman will be releasing in 2H18.

*Hong Leong Asia
- Undertaking a restructuring exercise of the consumer products unit Xinfei.
- The exercise will include the cessation of manufacturing and production activities at Xinfei, and explore strategic opportunities with business partners using Xinfei's trademark and intellectual property.

*Nam Cheong
- Granted a six-month moratorium extention by the Singapore High Court on certain legal proceedings against the group.
- This allows Nam Cheong to proceed with debt restructuring under a scheme of arrangement.

Monday, October 30, 2017

SG Market (30 Oct 17)

- Investors will anticipate the choice of the next Fed chair this week, which will have policy implications on Trump's economic agenda, as well as a slate of Asian PMIs and 3Q corporate earnings for direction.
- Key results set for release this week include Sembcorp Marine (31 Oct), StarHub (2 Nov), UOB and SIAE (3 Nov).
- Oil-related counters could see an uplift after Brent hit past its two-year high above US$60/bbl, stoked by Saudi and Russian support for extending OPEC-led output cuts.
- Technically, STI has broken above the 3,380 resistance and now appears headed towards the next congestion level at 3,470.

- Passenger traffic at Changi Airport is set for a record high this year (2016: 58.7m) as airlines ramp up flights to existing and new destinations for the year-end peak travel season.
- Close to 130 new flights a week, the highest number in four years, will be progressively added from now till end of the year as compared to 90 flights added for the same period last year.
- For 8M17, the airport handled 41m passengers, up 5.7%, with the bulk of the growth coming from routes within Asia, particularly to secondary cities in China and SE Asia.
- This could be a boon for airport services related counters such as SATS and SIA Engineering.

*Starhill Global
- 1QFY18 DPU fell 7.7% to 1.2¢, in line with estimates.
- Gross revenue and NPI of $53m (-4.1%) and $41.4m (-3.5%) were mainly dragged by absence of a pre-termination rental compensation at Wisma Atria (which has since been filled), lower office occupancy in Singapore and weaker overseas contributions in Malaysia.
- Portfolio occupancy slipped 2.1ppt to 93.4%, while aggregate leverage held at 35.4% (+0.1ppt).
- Trades at an annualised 1Q yield of 6.2% and 0.84x P/B.

*Frasers Hospitality Trust
- 4QFY17 DPS rose 7.2% to 1.2763¢, but FY17 payout slipped 3.5% to 5.05¢ following the rights issue in Oct '16, meeting 97% of street forecast.
- Gross revenue for the quarter jumped 24.2% to $41.6m, on the addition of Novotel Melbourne on Collins and strong growth in Malaysian assets.
- NPI rose at a slower 9.8% to $31.5m as RevPAR of the Australian portfolio fell 4.9% on refurbishment works, while rising wage pressure in the UK limited operating profit.
- Aggregate leverage eased to 32.1% (-2ppt q/q).
- Last traded at annualised 4Q yield of 6.6% and 0.95x P/B.

*Raffles Medical
- 3Q17 net profit of $16.4m (+1%) took 9M17 earnings of $48.7m to just 70% of full-year consensus estimate.
- Revenue was flat at $119.6m (+0.3%), as higher patient load was offset by lower renewal of healthcare plans by foreign patients.
- Operating margin narrowed to 15.4% (-0.2ppt) on increased staff costs (+2.1%) in preparation for opening of Raffles Hospital extension in 4Q17.
- Trades at 28.8x forward P/E.

- 3Q17 net profit rose 21.5% to $2.3m, bringing 9M17 earnings of $6.5m (+51.9%) to 78% of full year estimate.
- Revenue jumped 24.9% to $26.2m, underpinned by a 21.1% increase in assets under administration to $6.81b.
- Operating margin expanded 1.1ppt to 9.9% as expenses grew at a slower clip to $9.9m (+19.2%), with the increase mainly stemming from the new Shanghai office.
- Raised interim DPS by 10% to 0.75¢.
- Trades at FY18 P/E of 23.5x.

*Falcon Energy
- FY17 loss deepened US$121.2m (FY16: US$5m), mainly ditched by US$153.1m of impairments.
- Revenue sank 56% to US$106.8m on reduced workload in the oilfield and drilling services division and lower utilisation and charter rates in the marine division.
- Gross margin contracted 8.8ppt to 11.7%.
- NAV/share at US$0.1624.

- 4QFY8/17 net profit surged 81% from a low base to $1.3m, lifting FY17 earnings to $2.2m (+91%).
- For the quarter, revenue climbed 6.5% to $13.4m on increased orders from automotive customers.
- Gross margin expanded 9.3ppt to 45.4%.
- Bottom line was further boosted by tax credit, albeit partially dragged by lower other income and higher other expenses.
- Maintained first and final DPS of 0.4¢.
- NAV/share at 11.55¢.

- Secured contracts to manage two serviced apartment properties in Raffles Place and Rochor, Singapore's new growth area and CBD extension.
- Both properties will operate under the Citadines brand and add 619 units to its portfolio, bringing total units to 2,300.
- The properties are slated to open in 2020 and 2021.
- Last traded at 18.1x forward P/E.

*SIA Engineering
- Divested it's entire 24.5% stake in JVCo Asian Compressor Technology Services Company (ACTSC) for $14.7m.
- ACTSC provides repair and overhaul of compressor stators, shrouds and honeycomb seals and segments.
- The disposal is in line with group's restructuring initiatives to focus on growth areas and build next-generation aircraft capabilities, and will result in a net gain of $14.3m.
- Last traded at 22x forward P/E.

*Profit warnings
- CSC Holdings
- Healthway Medical
- OUE Lippo Healthcare (former IHC)

*Keppel Corp
- Divested its entire interest in Kepwealth Property Phils for $21m, or 2.13x P/B.
- Kepwealth owns the majority of a mix office and residential building in Cebu, Philippines.
- Trades at 16.3x forward P/E.

*Noble Group
- Acquired 14.5% stake in Mkango Resources for £0.5m.
- Mkango is a mineral exploration and development firm, dual listed on Alternative Investment Market of London Stock Exchange and TSX Venture Exchange.
- Expects post 3Q17 P/B of 0.26-0.3x.

*Colex Holdings
- Acquiring 80% stake in Vemac Services for $2.2m, or 10x FY16 P/E.
- Vemac provides repair and maintenance of refrigerating, air-conditioning and ventilation machinery and equipment.
- Last traded at 10.4x trailing P/E.

Friday, October 27, 2017

SG Market (27 Oct 17)

- The market could extend its blue-chip rally on positive momentum as the 3Q earnings season gets underway, with robust Sep industrial production data providing more ballast to the economy.
- Technically, STI is hovering at its 3,355 resistance level with the next objective at 3,380 and downside support seen at 3,320.

*Suntec REIT
- 3Q17 DPU of 2.483¢ (-2.1%) was in line despite dilution from an enlarged unit base (+4.6%) arising from its bond conversion.
- Revenue (+10.6%) and NPI (+11.6%) were lifted mainly by full-quarter contribution from 177 Pacific Highway office building in Sydney, which opened in Aug '16.
- Occupancy at its office (98.6%, -0.1ppt q/q) and retail (98.8%, -0.2ppt q/q) portfolios slipped slightly.
- Aggregate leverage dipped 0.7ppt q/q to 35.4%.
- Trades at annualised 3Q yield of 5.1% and 0.91x P/B.

*Viva Industrial Trust
- 3Q17 DPU rose 5% to 1.9¢ despite a larger unit base (+11.7%). This brought 9M17 distribution to 5.615¢ (+8%), coming in at the higher end of estimates.
- For the quarter, gross revenue and NPI leapt to $28.3m (+16.8%) and $20.6m (+18.3%) on contribution from recently-acquired 6 Chin Bee Avenue, as well as higher takings at two business parks.
- Portfolio occupancy ticked up by 0.3ppt q/q to 90.9%, while aggregate leverage crept 0.5ppt q/q higher to 39.6%.
- Last traded at annualized 3Q yield of 7.9% and 1.2x P/B.

*CDL Hospitality Trusts
- Post rights 3Q17 DPS of 2.29¢ (-3%) came in below expectations.
- Revenue and NPI jumped to $54.8m (+20.7%) and $40.4m (+15.9%), mainly from maiden contributions from recently-acquired The Lowry Hotel in UK and Pullman Hotel Munich in Germany.
- But domestic RevPAR of $166 (-1.4%) remained under pressure from the competitive environment.
- Aggregate leverage fell to 33.3% (-5.4ppt q/q).
- Trades at annualised 3Q yield of 5.6% and 1.12x P/B.

*Sheng Siong
- 3Q17 net profit jumped 25.7% to $19.7m on better operating leverage. Excluding an one-off tax impact, its results would have met expectations,
- Revenue rose 4.2% to $210.9m on higher same store sales growth (+1.7%) and contribution from new stores.
- Operating margin widened to 10% (+0.6ppt) on lower distribution (-2.9%) and admin (-0.5%) expenses.
- Bottom line benefitted from a tax refund of $2.2m (3Q16: nil).
- Last traded at 21.1x forward P/E.

*Indofood Agri
- 3Q17 core net profit slumped 25.3% to Rp97b, in line with estimates.
- Revenue inched 4.6% higher to Rp3.72t on improved sales volume of palm products but offset by lower average selling prices in CPO (-3%) and palm kernel (-16%).
- EBITDA margin declined 4.5ppt to 21.2% due to higher fertilizer application and increased operating expenses (+24.3%).
- Bottom line was dragged by a negative Rp61.7b swing into FX loss, although partly mitigated by a spike in JV income of Rp70.5b (+51.9%) and lower associate loss of Rp2.6b (3Q16: Rp18.5b loss).
- NAV/share at $0.875.

- 2QFY18 net profit tumbled 56.8% to $3.7m, bringing 1HFY18 earnings of $6.4m to just 23% of FY18 street estimate.
- Quarter revenue jumped 32.9% to $33.1m, lifted by a spike in automotive & heavy equipment sales (+109.9%) and the consumer segment (+20.1%), while sale of residences & land development rights (-0.6%) and real estate rental and services (+0.9%) remained flattish.
- Gross margin improved 3.3ppt to 44.7% due to higher profitability achieved in StarCity Zone C and Zone B.
- Bottom line was partly weighed by absence of fair value gain (2QFY17: $14.7m), although partly offset by lower JV/ associate loss of $0.9m (2QFY17: $1.9m loss).
- NAV/share at $0.3789.

- 3Q17 results came below estimates as core net profit dived 71% to US$12.1m.
- Revenue grinded 3% higher to US$814.3m, bolstered by Indonesia animal protein (+5.8%), dairy (+26.7%), and consumer food (+10.5%) segments, but was doused by the continued decline in swine selling prices in Vietnam.
- Operating margin collapsed 6.5ppt to 6.9% due to weaker margins from poultry and beef businesses, absence of one-off gain from disposal of beef cattle business, and Vietnam swine prices remained below costs.
- Bottom line was further impacted by a US$2.9m jump in finance cost.
- Net gearing jumped to 0.68x from 0.45x in Dec '16.
- NAV/share at US$0.44.

*Tuan Sing
- 3Q17 net profit declined 9% to $5.9m, partially due to a $3.6m spike in finance cost.
- Revenue rose 12% to $101m, underpinned by stronger property (+18%) and industrial services (+16.1%) segments.
- Gross margin shrank 6.8ppt to 16.7% amid a shift in sales mix.
- Bottom line was also hurt by higher distribution cost stemming from the launch of Kandis Residence.
- Last traded at 0.57x P/B.

*Samudera Shipping
- 3Q17 results turned around to net profit of US$0.5m (3Q16: US$3.8m loss).
- Revenue jumped 14.2% to US$69.7m as improvement from container shipping (+18%) led by higher volume handled was outweighed by weakness in bulk & tanker business (-13.8%) due to a shrinking fleet.
- Gross profit margin expanded to 5.8ppt from breakeven, amid higher container freight rates and tanker charter rates.
- Bottom line was also helped by absence of a US$2.4m provision.
- Net gearing was pared 0.11x from 0.12x in Dec '16.
- Last traded at 0.38x P/B.

- Awarded a contract worth $6.6m in the Middle East to undertake ballistic protection works to a firearm training facility.
- Work is expected to begin in Jun '18 and be completed in Sep '19.
- Last traded at 3.2x P/B.

*Ley Choon
- Secured contracts worth $2.6m for closed-circuit television survey of sewers and resurfacing of roadworks.
- Trades at 2.1x trailing P/E and 1.46x P/B.

- Signed letters of intent with RINGLING Bros and Feld Entertainment to jointly present 48 "Disney On Ice" shows across South Korea and Taiwan.
- 12 "Disney on Ice "Let's Party" shows may take place in Oct 18, while 36 "Disney On Ice 'Frozen'" shows may take place in 3Q19.

*Spackman Entertainment
- Completed acquisition of South-Korean based motion picture production start-up Take Pictures, via the issue of 54.1m shares.

*Samudera Shipping
- Disposing two vessels for US$9.2m, and expected to result in a net gain of US$0.8m.
- Proceeds will be used for working capital and future business expansion.

-Issued 10m drawdown shares at $0.058 each to GEM Global Yield Fund, which has committed $30m capital earlier.
- Proceeds earmarked for business development and growth.

Thursday, October 26, 2017

SG Market (26 Oct 17)

- The overbought market is likely to consolidate recent gains as investors await details of ECB's taper plan today, which could commence in Jan '18 following a decade-long easy monetary policy.
- Technically, the STI could pull back from overbought levels to near term support at 3,320. Overhead resistance remains at 3,355.

- 3Q17 net profit of $1.06b (+12%) topped expectations.
- Net interest income spiked 12% to $1.38b, driven by 11% loan growth and improved NIM of 1.66% (3Q16: 1.62%, 2Q17: 1.65%).
- Non-interest income was relatively flat at $978m (+1%), as strong wealth management fees (+32%) and life insurance profits (+23%) and net gain from investment securities (+55%) was offset by weaker trading gains.
- Provisioning fell 6% to $156m on lower general allowances, with NPL ratio at 1.3% (3Q16: 1.2%, 2Q17: 1.3%) and Tier 1 CAR at 13.1%.
- NAV/share of $8.76 translates to 1.31x P/B.

- 1QFY18 net profit jumped 9.2% to $90.7m, meeting estimates.
- Revenue grew 7% to $204.5m spurred by increased takings from securities trading and clearing (+9%) as well as derivatives (+14%).
- Operating margin inched up 0.9ppt to 51.8% despite incurring higher expenses related to Baltic Exchange.
- Interim DPS of 5¢ maintained.
- Expects momentum in market activity to return to higher levels of past years, with IPOs to reach high-20s by end Dec from 18 ytd.
- Last traded at 21.8x FY18 P/E.

*Mapletree Commercial Trust
- 2QFY18 results met expectation with higher DPU of 2.24¢ (+9.3%).
- Gross revenue and NPI spiked to $107.2m (21.7%) and $84.4m (23.4%), respectively, thanks to full quarter contribution from Mapletree Business City I and increased takings from Vivocity.
- For 1HFY18, VivoCity achieved 1.1% growth in tenant sales, while shopper traffic held steady following AEI works.
- However, portfolio occupancy dipped 0.5ppt q/q to 97.6%, while aggregate leverage held steady at 36.4%.
- Last traded at annualised 2QFY18 yield of 5.3% and 1.2x P/B.

- 2QFY18 DPU slumped 7.3% to 2.55¢, at the lower end of expectations.
- Gross revenue slipped 1.3% to $29.5m due to lower rental and recoveries from 20 Gul Way as four phases of the property reverted to multi-tenancy leases.
- On a flip side, NPI inched up 0.7% to $19.4m on lower property tax and land rent expenses on certain properties.
- Occupancy contracted to 88.8% (1QFY18: 91%), while aggregate leverage expanded to 37.3% (1QFY18: 36.3%).
- Currently trades at annualised 2QFY18 yield of 7% and 1.08x P/B.

*Keppel Corp
- Divesting its entire 100% stake in Keppel China Marina, which has a 80% JV that owns and develops an integrated residential cum marina development in Zhongshan, China, for Rmb2.9b.
- The sale is expected to yield a net gain of $290m and raise its NAV/share by 2.5% to $6.50.
- Trades at 16.5x forward P/E.

*Sembcorp Industries
- Developing and operating two grid-tied rooftop solar energy systems in Changi and Seletar for a combined project cost of $5.4m.
- Both photovoltaic systems have capacity of 4.1MW, with construction targeted for completion by Feb and Apr next year.
- Last traded at 15.3x forward P/E.

*Sino Grandness
- Disclosed that the group's Garden Fresh loquat juices have been procured by China Southern Airlines and will be served at its premium lounge for business and first class travellers at Shenzhen airport.
- Group's Grandness-branded canned fruits have also been procured for a third consecutive year for Air China, China Southwest Airlines and Sichuan Airlines.
- Last traded at 3.4x trailing P/E.

*Tung Lok Restaurants
- Profit warning for 1HFY18 due to a drop in sales as a result of the challenging economic environment.
- Results slated to be released on or before 14 Nov.
- Counter is loss-making and valued at 4.05x P/B.

- Acquired 30% stakes in two property development/ management firms for a combined Rmb1.64b.
- The firms are Hangzhou Kesheng Property (Rmb515.6m) and Hangzhou Keyi Property Development (Rmb1,124m).
- Trades at 5.7x forward P/E and 0.85x P/B.

*Hong Leong Asia
- In response to the SGX trading query on the recent share price surge, the group cited reasons include:
1) The disposal of 60% interest in Copthorne Hotel Qingdao by subsidiary HL Global Enterprises; and
2) CIMB's coverage on group's subsidiary China Yuchai with an Add recommendation on 20 Oct.
- Counter trades at 0.7x P/B.

- Advised by legal advisors that recent originating summons from noteholder Ravi Murarka, requesting for his notes to be redeemed, is without basis.
- Ezion will thus apply to the High Court to strike-out the originating summons.

*Anchor Resources
- Entered into a MOU with Beijing Fuhaihua Import & Export Corp to sell 300-500 tonnes of semi-processed gold concentrated ore per month.
- Trades at 2x P/B.

*Jubilee Industries
- Terminated the agreement to acquire Pioneer Venture, Yumei Tech and Yumei REIT from Seah Chong Hoe for $6m.
- This came on the back of unsatisfactory results following its due diligence.

*Regal International
- Completed the acquisition of Malaysia-based Wisma Majuniaga for $3.7m, via the issuance of new shares.
- To recap, Wisma Majuniaga holds the development rights for a 1.35ha land consisting 515 residential/retail units in Samarahan District in Sarawak, Malaysia.
- Trades at 18.8x forward P/E.

Wednesday, October 25, 2017

SG Market (25 Oct 17)

- The market could take a breather as it digests the 3.6% rally since start of Oct but oil-related counters may get a lift from firmer crude prices following a pledge from Saudi Arabia to help balance the global oil market.
- Technically, the STI could pull back from overbought levels to near term support at at 3,320. overhead resistance remains at 3,355.

*Mapletree Industrial Trust
- 2QFY18 DPU of 3¢ (+6%) met expectations.
- Revenue spiked 9.9% to $92.6m and NPI jumped 11.1% to $70.7m, driven by its build-to-suit project for HP Singapore and pre-termination compensation of $3.1m from Johnson & Johnson.
- However, portfolio occupancy slipped 2.6ppt q/q to 90.4%, while aggregate leverage ticked 0.2ppt q/q higher to 30.0%.
- Last traded at an annualised 2QFY18 yield of 6.1% and 1.4x P/B.

*Frasers Centrepoint Trust
- 4QFY17 DPU rose 5.5% to 2.97¢, in line with estimates.
- Revenue and NPI jumped 8.1% and 10% to $48.2m and $34.6m, respectively, from higher rental income and improved occupancy at Northpoint City North Wing.
- Occupancy improved to 92% (+4.9ppt q/q), while aggregate leverage contracted slightly to 29% (-1ppt q/q).
- Trades at an annualised 4Q yield of 5.3% and 1.1x P/B.

*Cache Logistics Trust
- 3Q17 DPU dropped 12.8% to 1.541¢ on an enlarged post-right unit base (+19%) but was still in line.
- Gross revenue slipped 2.2% to $27.4m, impacted by divestment of Cache Changi Districentre 3 and lower income from 51 Alps Ave due to ongoing legal issues.
- NPI fell 3.3% to $21.3m on increased expenses arising from the conversion of properties to multi-tenancies.
- Portfolio occupancy contracted to 97.3% (-1ppt q/q), while aggregate leverage contracted 7.7ppt to 35.7%.
- Trading at an annualised 3Q yield of 7.3% and 1.09x P/B.

*SP Corporation:
- 3Q17 net profit slumped 57% to $0.3m despite higher revenue of $33.3m (+17%).
- The stronger top line was lifted by increased contribution from commodities trading (+28%), but was partially pared by lower sales in tyre distribution (-53%).
- Accordingly, gross profit contracted from 4.5% to 2.7% on the shift in sales mix.
- Last traded at 23.4x trailing P/E.

*Mapletree Industrial Trust (MINT)
- Formed a 40:60 JV with parent Mapletree Investments to acquire 14 US data centres, totalling 2.3m sf, for US$750m.
- Correspondingly, MINT launched a private placement of 82m new units at an issue price of $1.90 each.
- Net proceeds of $152.7m earmarked to part-fund of the US data centre portfolio.

*ST Engineering
- Electronics arm secured $585m worth of contracts in 3Q17 (2Q17: $490m, 1Q17: $464m).
- These comprise work in rail electronics & intelligent transportation ($125m), satellite & broadband communications ($101m) and advanced electronics and ICT solutions ($359m).
- Trading at 21.1x forward P/E, at the upper end of its 13-24x historical range.

*First Resources
- 3Q17 FFB harvest jumped 7.6% to 832,364 tonnes despite a slight dip in yield to 4.8 tonnes/ha (-0.1ppt).
- CPO production rose 6.3% to 194,014 tonnes, but extraction rate narrowed to 22% (-0.2ppt).
- MKE last had a Hold with TP of $2.04.

*Singapore eDevelopment
- US biomedical subsidiary, Global BioLife, has developed Laetose, a low-calorie, low glycemic index, natural, modified sugar.
- Group entered collaboration with top US candy manufacturer, Quality Candy, to develop, manufacture and distribute the alternative sugar product.

*Far East Orchard
- Entered into a binding term sheet with Fontaine Investment to be the sole and exclusive operator of three new hotels located in Sentosa.
- The hotels with a total of 839 rooms are targeted to open in mid-2019.
- Last traded at 0.54x P/B.

*Keppel T&T
- Subsidiary Keppel Logistics has launched UrbanFox, an omni channel logistics and channel management solutions provider.
- The debut follows the group's strategic acquisition of Courex, a B2C last-mile fulfilment start-up.
- Last traded at 15.5x forward P/E and 1.04x P/B.

*NetLink NBN
- Fined $10,000 by IMDA for the fibre service disruption in Tanjong Rhu last Dec.
- Further investigations relating to service restoration within the stipulated timeframe are still being assessed.

*Marco Polo Marine
- Asking holders of its $50m 5.75% notes due in 2016 to accept close to a 30% hair cut for a redemption to be made in Jan 2018.
- The redemption will amount to $71,736, comprising cash of $35,868 and an equivalent amount in shares to issued at 3.5¢ each.
- EGM for noteholders will be scheduled on 15 Nov.

*Keong Hong Holdings
- Acquired 49% interest in Keong Hong-MK for VND9.8b.
- The move is intended to help the group expand its presence in Vietnam and ramp up its overseas investment portfolio.

Tuesday, October 24, 2017

SG Market (24 Oct 17)

- Focus to remain centred on 3Q earnings of REITs, OCBC and some mid-cap property counters, as well as Sep industrial production data and 3Q private home prices.
- Technical indicators for the STI are in overbought territory and could take a breather towards its support at 3,320. Topside resistance at 3,355.

*Mapletree Logistics Trust
- 2QFY18 DPU grew 1.5% to 1.887¢, meeting expectations.
- Revenue and NPI rose 2.3% and 1.5% to $93.7m and $78.7m from stronger performance of its HK and China portfolios and accretive acquisitions completed last year, as well as a stronger AUD.
- Occupancy improved to 95.8% (+0.3ppt q/q), while aggregate leverage lowered to 33.7% (-5.3ppt q/q).
- Trades at annualised 2Q yield of 5.9% and 1.2x P/B.

*CapitaLand Retail China Trust
- 3Q17 missed estimates; DPU crept 0.4% higher to 2.37¢ as distributable income of $21.4m (+4.2%) was diluted by an enlarged unit base.
- Revenue jumped 10.5% to Rmb275m mainly on contribution from recently-acquired CapitaMall Xinnan in Sep '16 and rental growth from multi-tenanted malls.
- NPI rose at a slower pace to Rmb176.6m (+9.5%) on inclusion of property expenses at the new mall.
- Occupancy slipped slightly to 95.6% (2Q17: 96.2%), while aggregate leverage remained stable at 35.4% (+0.1ppt q/q).
- Trades at annualised 2Q yield of 5.6% and 1.03x P/B.

*Ascott REIT
- 3Q17 results in line even as DPU slumped 28% to 1.69¢ on an enlarged unit base (+30%) following the rights issue in Apr '17.
- Revenue inched up 2% to $126.9m from new acquisitions, namely, DoubleTree by Hilton Hotel New York - Times Square South and two serviced residence properties in Germany.
- On a same store basis, RevPAU held steady at $146 (+1%).
- Aggregate leverage reduced to 31.9% (-0.5ppt q/q).
- Trading at annualised 9M17 yield of 5.5% and 0.99x P/B.

*Sabana REIT
- 3Q17 DPU tumbled 25.5% to 0.79¢, from the enlarged unit base (+42%) and payment of management fees in cash.
- Gross revenue slid 9.4% to $20.8m amid conversion of 39 Ubi Road 1 from single to multi-tenanted, non-collection of revenue at two properties and weaker contribution from four properties.
- NPI saw a smaller decline to $13.4m (-3.7%) due to lower property tax, land rent, utilities, and marketing expenses, as well as lower impairment at 1 Tuas Avenue 4.
- Portfolio occupancy rose 1.1ppt q/q to 88.4%, while aggregate leverage reduced slightly to 36% (-1ppt q/q).
- Offers 3Q17 annualised yield of 6.7% and trades at 0.82x P/B.

*Wing Tai
- 1QFY18 net profit spiked 676% from a low base to $8.2m, boosted by a $16.7m disposal gain arising from Huai Hai project in Shanghai.
- Revenue slipped 4% to $67.1m on lesser units sold at Le Nouvel Ardmore in Singapore, Le Nouvel KLCC and Verticas Residences in Malaysia.
- Gross margin improved 4.3ppt to 49.2%.
- NAV/share at $4.05 translates to 0.57x P/B.

*Sing Investments
- 3Q17 net profit improved 25.9% to $5.2m, bringing 9M17 earnings to $16.8m (+73.4%).
- For the quarter, net interest income rose 17.7% to $11.3m despite a lower loan base, as funding costs lowered by 32.3%.
- Bottom line was marginally offset by lower fees and commissions (-21.9%).
- NAV/share at $2.10; last traded at 0.75x P/B.

*Silverlake Axis
- Implementing its PROFIT retail automation solution for AEON Hong Kong.
- PROFIT offers end to end solution to the retail industry enabling retailers to significantly increase efficiency and improve customer service.
- The contract is expected to contribute positively to the financial results in the current and following financial years.
- Last traded at 19.3x forward P/E.

- Guided for a significant jump in 3Q17 net profit, mainly due to a sharp increase in average selling prices of its steel products and tighter supplies in China.
- Results will be announced on 3 Nov '17.

- Clinched several contracts worth $5.1m from new and repeat customers in the oil & gas, infrastructure and petrochemical industries.
- Work scope includes the provision of labour and materials, service and maintenance.

*ST Engineering
- Aerospace arm clinched lesser new contracts worth $530m in 3Q17 (2Q17: $650m, 1Q17: $1.11b).
- Scope of work includes heavy airframe & engine maintenance, component repair & overhaul, freighter conversion.
- Trading at 21.1x forward P/E, above its 7-year historical average of 19.1x.

*Profit warnings
- MMP Resources
- Soilbuild Construction Group

- Formalised order for 39 Boeing aircraft worth US$13.8b.
- The 20 777-9s and 19 787-10s will support growth and fleet modernisation over the next decade.
- Additionally, the agreement includes six options for each aircraft type, which if exercised will enlarge the deal to as many as 51 aircraft.
- Last traded at 0.91x P/B.

*Lippo Malls Indonesia Retail Trust
- Confirms media reports that the trust manager is seeking views of investment banks on fund raising options, including a rights issue.
- Additionally, the manager is considering other means of equity fund raising and is still at a preliminary stage.

- Entered into a conditional agreement to acquire a freehold residential site at Dunearn Court for $36.3m.
- Total land area of 19,203sq ft and has a gross plot ratio of 1.4.

*IX biopharma
- Granted a European patent for its WaferiX drug delivery technology, allowing the group to obtain validation and coverage in the EU.
- Apart from EU, it has also secured patents from nine other countries namely Singapore, Australia, New Zealand, Malaysia, Indonesia, South Korea, Japan, Canada and South Africa.
- The patent will expire in Oct 2030.

*Gaylin Holdings
- Proposed placement of 1.36b new shares at $0.05 apiece to a PE fund investor ShawKwei Asia Value Fund 2017.
- The new shares represent 75.64% of the enlarged share base and the investor intends to apply for a whitewash waiver to be exempted from a takeover offer.
- Proceeds of $68m intended for working capital and strengthening of capital base.

Monday, October 23, 2017

SG Market (23 Oct 17)

- Likely to trade higher as Wall Street continues on its second longest bull run in US history on hopes over President's Trump's tax cut plan.
- Focus this week will also be centred on 3Q results of REITs, OCBC and some mid-cap property counters, industrial production and property data.
- Technically, STI could make another attempt at scaling the 3,355 objective although some momentum indicators are approaching overbought levels. Underlying support is at 3,320.

- 2QFY18 in line as DPU jumped 5.8% to 1.868¢, bringing 1HFY18 DPU to 3.714¢ (+2.9%).
- Gross revenue and NPI grew to $88.1m (+6.1%) and $70.9m (5.4%) from higher rental rates at Festival Walk in HK and Gateway Plaza in Beijing, lower accrued revenue for Gateway Plaza last year due to uncertainty in VAT rate, as well as stronger HKD and RMB against SGD.
- Portfolio occupancy slid 0.6ppt to 98.2%, while aggregate leverage was steady at 38.5% (-0.9ppt q/q).
- Last traded at annualised 2Q annualised yield of 6.3% and 0.96x P/B.

*CapitaLand Mall Trust
- Flat 3Q17 DPU of 2.78¢ on par with estimates.
- Revenue dipped 0.2% to $169.4m on lower rental achieved for Bedok Mall, Plaza Singapura and Junction 8, while NPI rose 1.6% to $121.4m from lower property tax and utilities expenses.
- 9M17 shopper traffic crept up 0.2% (1H17: +0.4%), while tenant sales held steady.
- Portfolio occupancy improved 0.4ppt q/q to 99%, while aggregate leverage was steady at 34.7%.
- Trades at annualised 3Q yield of 5.5% and 1.05x P/B.

*Sembcorp Industries
- 45.2% owned Vietnam-based JVCo, VSIP JSC, entered a conditional 30:70 JV with Tokyo-listed Nishitetsu Group, to jointly develop a residential project in Hai Phong City, Vietnam.
- The proposed development is subject to a planned revision to the master plan of VSIP Hai Phong Integrated Township and Industrial Park by mid-2018.
- VSIP JSC is the master developer behind the 1,600-hectare VSIP Hai Phong, where the proposed residential development will be located.
- Trades at 15.1x forward P/E.

- Announced progress update on its strategic review and sale of its global oil liquids business, Noble Americas Corp, to Vitol for US$1,418m, which will bring in net proceeds of US$582m after repayment of credit facility.
- The group also guided for a 3Q17 loss of US$1.1b-1.25b as it continues to be hurt by capital constraints and non-cash losses related to the certain asset disposals and impairment.
- Further, discussions with lenders remains ongoing.
- Expects post 3Q NAV/share in the range of $0.99-1.14.

*Silverlake Axis
- Proposed acquisition of three related entities for a base consideration of RM154.9m and a variable-based earn-out consideration.
- The interested party transaction for Silverlake Digital Economy (RM93.9m), Silverlake Digitale (RM46.6m) and Silverlake One Paradigm (RM14.4m) are majority-owned (70%) by Executive Chairman Goh Peng Ooi.
- Funding for the acquisition will be via an issue of up to 70.1m new shares at $0.71 apiece.
- The deal is expected to provide the group with a significantly larger fintech platform with scope, scale and operating leverage to for strategic expansion.
- Pro forma FY17 EPS post-deal is expected to slip 0.3% to RM0.3198.
- Last traded at 19.6x forward P/E.

- To open Marvel's AVENGERS S.T.A.T.I.O.N World Tour in Melbourne, Australia, in Mar 2018.
- IP owner Disney will exclusively stage and promote the exhibition in Australia.
- Additionally, Disney also has an option to stage the exhibition in New Zealand, to be exercised prior to 31 Dec 2018.

*TEE Intl
- Secured $56.5m worth of projects from LTA for the implementation of noise barriers at rail viaduct phase 2.
- Work scheduled to be completed by 2020.
- The new contracts brought order book to $252.8m.
- Last traded at 1.02x P/B.

*Mirach Energy
- Awarded RM20.5m construction and development project of 213 units of single-storey terrace house in West Malaysia.

- Proposed 1-for-10 bonus share issue.
- Last traded at 10.8x forward P/E and 1.85x P/B.

*Tat Hong
- Updated that discussion since Sep '17 relating to a potential transaction remains ongoing.
- Last traded at 0.5x P/B.

- Commenced drilling of East Mayura-1 exploration well in G10/48 contract area of 1,677 sq km in Thailand.
- The potential eight-well program would take 125 days to complete and KrisEnergy is the operator of G10/48 with 89% working interest.

*Darco Water
- Proposed placement of up to 30.3m new shares (29.5% enlarged share capital) at $0.65 each to Wang Zhi @ Robert Wang.
- Wang is currently the Chairman of Future Investment Enterprise, a HK firm involved in the investment and management of water supply and wastewater treatment.
- Net proceeds of $19.4m earmarked for investment in environmental related infrastructure projects (70%) and working capital (30%).

*SMJ Intl
- Proposed disposal of SMJ Furnishings, which engages in the carpet business, to the group's CEO and deputy CEO for $13.8m, implying 1x P/B.
- The group intends to focus its resources on developing its property business.

*Federal Intl
- Signed a procurement agreement with an Indonesian-based company to co-operate exclusively to execute a gas pipeline project in Kalimantan, Indonesia.
- Federal will undertake the project management and provide the expertise for materials and consumables supply.
- The construction would take 10 months to complete.

Friday, October 20, 2017

SG Market (20 Oct 17)

- The market could be spurred by upbeat 3Q results from Keppel Corp, GuocoLand and CCT as well as the quick reversal in US market from an early pullback on news that President Trump is leaning towards a dovish Fed chair pick.
- Technically, STI could make another attempt at scaling the 3,355 objective although some momentum indicators are approaching overbought levels. Underlying support is at 3,320.

- URA has put the Former Zouk site at Jiak Kim Street up for tender at the minimum bid price of $689.4m ($1,250 psf ppr).
- The 13,482 sqm site is expected to draw strong interest, given the record $1,239 psf ppr land price paid by GuocoLand for Martin Modern site in Jun '16.
- MKE remains Positive on property developers. Preferred picks are City Dev (TP $13.60), UOL (TP $9.80) and GuocoLand (TP $2.90).

*Keppel Corp
- 3Q17 net profit of $291.8m (+30%) beat estimates.
- Revenue was higher at $1.62b (+10.8%) on increased higher contributions from China and Vietnam property trading, power and gas, and asset management businesses as well as project/land sales made up for the shortfall from O&M, which managed to break even despite lower workload and rig deferments.
- Management does not expect a V-shape recovery in O&M although order book grew 15% q/q to $3.9b.
- Starting new unit to capture opportunities in integrated urban development in the Asia-Pacific region.
- Trades at 14.9x trailing P/E.

- 1QFY18 net profit soared more than 6-fold to $165.5m, meeting 60% of full year forecast.
- Revenue surged 79% to $362m from higher sales and progressive revenue recognition from Singapore's residential projects.
- Notably, JV contribution of $170.5m (1QFY17: $0.1m loss) was bolstered by completion of Changfeng Residence in Shanghai.
- Trades at 34% discount to RNAV/share of $3.64.

*CapitaLand Commercial Trust
- 3Q17 DPU of 2.36¢ (+2.6%) came in above estimates.
- Gross revenue slipped 0.4% to $74.1m following the divestments of Golden Shoe Car Park and Wilkie Edge, but NPI climbed 2.7% to $58.6m on lower property operating expenses (-10.4%).
- Portfolio occupancy improved to 98.5% (+0.9ppt q/q), while aggregate leverage was lowered to 33.9% (-2.1ppt q/q).
- Despite indications that office rents may have bottomed out, management guided for lower NPI in FY18 for some properties due to negative rent reversions of leases committed in 2017.
- NAV/unit at $1.84.

*Frasers Commercial Trust
- 4QFY17 DPU of 2.41¢ was in line with estimates.
- Revenue slipped 3% to $38.3m on lower occupancy rates for Alexandra Technopark, China Square Central and Central Park, but partly offset by a stronger AUD.
- NPI slumped 9% to $26.7m on higher repair and maintenance expenses for Caroline Chisholm Centre and lower occupancy rates for Alexandra Technopark, China Square Central and Central Park.
- Portfolio occupancy lowered to 85.9% (-6.7ppt q/q), while aggregate leverage improved to 34.7% (-1.2ppt q/q).
- Trades at 4QFY17 annualised yield of 6.9% and 0.88x P/B.

- 1Q17 net profit jumped 58% to US$17.4m, meeting 35% of full-year estimate.
- Revenue ticked 0.2% higher to US$98m as higher contribution from hotel was pared by reduced sales from gaming and oil & gas royalty income.
- Gross margin slipped 1.6ppt to 60.1%.
- Bottom line was mainly lifted by the absence of a one-off provision of US$8.5m stemming from a legal claim against a UK subsidiary, but was partly pared by higher net financing cost (+36%).
- Management remains cautious on the outlook of the UK hotel industry. Refurbishment of The Cumberland Hotel and Hard Rock Hotel London will impact rooms available for rent.
- NAV/share at US$0.841.

*Creative Technology
- Turned around to a 1QFY18 net profit of US$22.8m (1QFY17: US$6.2m loss), mainly shored by US$31.2m proceeds from settlement of patent lawsuits.
- Revenue declined 7% to US$16.1m due to difficult market conditions for its products.
- Gross margin narrowed 0.2ppt to 27.8%.
- NAV/share at US$1.39.

*SIIC Environment
- 60% owned Ranhill (Wanzai) Water was awarded the Wanzai Industrial Park BOT wastewater Expansion project for an undisclosed investment sum.
- The BOT project will add a capacity of 7,500 tpd for a concessionary period of 29 years, with base tariff of Rmb2.52/ton.
- Separately, 60% owned Ranhill Water (Hong Kong) was awarded two BOT projects at Yongfeng Industrial Park and Wanzai Industrial Park, with concession of 29 years.
- The Yongfeng plant will have a capacity of 10,000 tpd and base tariff at Rmb1.91/ton, while the Wanzai plant has 7,500 tpd and base tariff of Rmb2.52/ton.
- Last traded at 12.6x forward P/E.

*Manulife US REIT:
- 41-for-100 rights issue at US$0.695 each has been 1.34x subscribed.
- To recap, gross proceeds of US$208m will be used to part-finance the acquisition of its flagship office building in New Jersey.

*Alliance Mineral
- Disclosed that it has been approached by several parties who are interested in exploring potential transactions involving the group's ordinary shares.
- Group highlighted that such discussions are preliminary and non-binding in nature.

Thursday, October 19, 2017

SG Market (19 Oct 17)

- The market is likely to trade in range, as investors await 3Q earnings releases from Keppel Corp tonight, as well as CapitaLand Commercial Trust and Frasers Commercial Trust tomorrow.
- Technically, the STI sees the next upside resistance at 3,355, with support at 3,280.

*Keppel REIT
- Weak 3Q17 as DPU slumped 12.5% to 1.4¢, taking 9M17 DPU of 4.27¢ (-12.7%) below street FY17 estimate.
- Distributable income fell 10.4% to $47m on reduced rental support (-22.4%), lower interest income (-2.6%), higher borrowing cost (+6%) and a drop in associate income (-17.1%).
- Gross income inched 2.3% higher to $40.4m from increased takings at 8 Exhibition Street (+20.4%), but was pared by a 0.7% slip in income from Ocean Financial Centre.
- However, NPI was flat at $31.7m (+0.3%) as property expenses jumped 10.3% from a 28% spike in property tax.
- Portfolio occupancy slipped 0.2ppt q/q to 99.6%, while aggregate leverage ticked higher to 38.8% (+0.3ppt q/q).
- Trades at 3Q17 annualised yield of 4.7% and 0.84x P/B.

*Keppel T&T
- 3Q17 net profit crashed 81.7% to $12.8m, mainly dragged by the absence of divestment gains (3Q16: $55.8m).
- Otherwise, core 3Q17 net profit slumped 27%, as revenue slipped 3% to $45m due to weak warehousing turnover in the logistics division and zero contribution from Keppel DC Singapore 3 and Keppel DC Reit Management following the sale.
- Bottom line was also impacted by higher operating expenses (+7.8%) from increased transportation costs, contract labour and subcontract costs in the logistics division.
- Net gearing reduced 8ppt to 38%.
- NAV/share at $1.45.

*ESR-REIT (former Cambridge REIT)
- 3Q17 DPU dipped 2.3% to 0.964¢, taking 9M17 DPU of 2.924¢ (-8.0%) to 73% of FY17 estimate.
- For the quarter, gross revenue slipped 1.9% to $27.1m amid income loss during the transition of properties from single-tenanted to multi-tenanted.
- NPI of $19.6m (-1.6%) also fell on higher expenses and increased maintenance cost.
- Portfolio occupancy narrowed 4.3ppt q/q to 91.1%, while aggregate leverage contracted 1.2ppt q/q to 36.7%.
- Separately, the REIT proposed to acquire an industrial property at 8 Tuas South Lane for $95m, 17% below market valuation.
- Pro forma FY16 DPU post-deal is expected to jump 8.5% to 4.527¢.
- NAV/unit at $0.633.

- Launched SGX America in Chicago to better serve the growing demand for North American investors who are looking East for growth opportunities across asset classes.
- Separately, SGX established a collaborative listing agreement with Nasdaq to tap corporate demand for a concurrent or sequential listing on both exchanges.
- Trades at 21.9x forward P/E.

- Entered agreement with Turkish Airlines (THY) to provide in-flight catering services to THY and other airlines at Istanbul New Airport.
- As a gauge, THY has a fleet of 329 (passenger and cargo) aircraft.

- Served an originating summons taken by Ravi Murarka, one of the noteholders for its $120m 3.65% notes due in 2020.
- The noteholder is requesting the group to redeem his notes on the basis that shares have ceased trading and could be in violation of the terms of the notes.
- Ezion believes otherwise, citing that its shares are merely suspended on its own request, and is currently seeking legal advice on the summons.

*Lippo Malls Indonesia Retail Trust
- Leasing 67,261 sqm of retail space to a party related to its sponsor for three years upon the expiry of existing leases on 18 Nov '17.
- Aggregate rental of $21.4m is in line with market rates, but will result in a 4.5% drop in 1H17 pro forma DPU to 1.71¢.
- Based on last close, this reduces 1H17 annualised yield from 8.2% to 7.9%.

- Guided for 3Q17 loss due to continued poor performance within the precast & PBU division.
- This was compounded by losses suffered by waste management services following a fire incident in Mar '17.
- Trades at 0.9x P/B.

- Investing $81.5m to acquire and refurbish a freehold hotel in Silicon Valley.
- The 136-unit hotel, The Domain Hotel, will be rebranded to Citadines Cupertino Sunnyvale in 4Q18.
- This will be Ascott's second Citadines-branded property in the US following the acquisition of Hotel Central Fifth Avenue New York in May '17.
- Trades at 17.9x forward P/E.

- Book will close on 26 Oct for its 1-for-4 bonus share issue.

Tuesday, October 17, 2017

SG Market (17 Oct 17)

- The market will likely stay relatively subdued ahead of the commencement of the China Communist Party congress tomorrow.
- Technically, the STI sees upside resistance at 3,355, with support at 3,275.

- Sep new home sales slowed sequentially to 657 units (Aug: 1,246) due to seasonal factors, but still above 509 homes sold last year.
- Maybank KE expects slower sales in the coming months as developers raise prices to maximise returns.
- Remain POSITIVE on the sector with preferred picks being City Dev (TP $13.60), UOL (TP $9.80) and GuocoLand (TP $2.90).

- 3Q17 net profit of $32.7m (-4.8%) met estimates, dragged by higher depreciation (+2.5%) and interest costs (+52.6%).
- Operating revenue rose 3.4% to $251.6m despite a 13.6% slump in handset sales, as service revenue improved to $206.7m (+4.9%) on a greater number of customers in postpaid (+3.2%) fibre (+20%).
- However, EBITDA margin narrowed 1.3ppt to 36.5%.
- Management maintains its guidance for a decline in FY17 net profit in view of increased competition.
- Last traded at 12.9x forward P/E.

*Keppel Infrastructure Trust
- Flat 3Q17 DPU of 0.93¢ came in line with street estimates.
- Revenue stagnated at $160.3m as stronger takings from City Gas (+13.4%) due to higher gas tariffs was offset by weakness in concessions (-22.4%) and Basslink (-10.7%), while Keppel Merlimau Cogen remained stable.
- Aggregate leverage increased slightly to 39.7% (+0.6ppt q/q).
- Separately, group confirmed it is reviewing a possible divestment of Basslink.
- Trades at 6.8% 9M17 annualised yield and 1.8x P/B.

*Keppel DC REIT
- 3Q17 results met forecasts as DPU spiked 16.8% to 1.74¢, boosted by acquisitions.
- Gross revenue jumped 56.4% to $35.5m on new contribution from four recently-acquired data centres, as well as higher variable income from KDC SGP 1.
- Portfolio occupancy inched 0.3ppt q/q to 93.4% with WALE of 9.2 years, while aggregate leverage expanded 4.4ppt q/q to 32.1%.
- NAV/unit at $0.96.

- Signed 173,000 sqm of leases with 3PL service providers globally.
- Privatisation offer via scheme of arrangement at $3.38/share is pending.

*Hiap Seng
- Secured three contracts worth $52m.
- This comprises EPC of new pipelines for Sembcorp Project Engineering in Singapore, as well as supply of modular pipe racks and mechanical packages for Evonik in Thailand.

- Fined $0.5m for a fibre broadband outage last Dec.
- The disruption was triggered by a planned maintenance on its highly utilised DHCP servers, where a security patch resulted in overloading.
- The group was penalised for not exercising due diligence and greater caution on its servers.
- Last traded at 15.5x forward P/E.

- Invested US$60,000 in a medical device startup, which develops a urological catheter to address the problem of catheter-associated urinary tract infection.
- Separately, Trendlines signed an MOU with Haier Hai Chuanghai Incubator and Ventures to explore possible collaborations to support Trendlines' China portfolio and Haier HCH's entrepreneurs in Israel.

Monday, October 16, 2017

SG Market (16 Oct 17)

- Key highlight this week is the commencement of the China CPC on 18 Oct (Wed), where investors will focus on the direction to be set by top leader Xi Jinping for the country over the next five years.
- Technically, the STI sees immediate upside resistance at 3,320, with the next objective at 3,355. Downside support is at 3,275 followed by 3,250.

*Soilbuild REIT
- 3QFY17 DPU dipped 1.8% to 1.374¢, bringing 9MFY17 DPU to 4.329¢ (-4.2%).
- Quarter revenue grew 4.1% to $20.5m on higher takings from Bukit Batok Connection, West Park BizCentral, Solaris, Tuas Connection and Tellus Marine, but was partially offset by reduced income from 72 Loyang Way.
- NPI rose at a slower clip to $17.8m (+3%), on higher property expenses (+11.3%) at Loyang Way and Bukit Batok Connection.
- Occupancy rate improved 1.5ppt to 94.1%, while average debt cost was slightly lowered to 3.32% (2QFY17: 3.37%).
- NAV/unit at $0.71.

*Transit Mixed Concrete
- 1H17 net profit crashed 93% to $0.8m, alongside by a 27% fall in revenue to $8.6m on keen competition and slowdown in construction activities in Singapore and Malaysia.
- Consequently, gross margin slumped to 11.1% (-9.6ppt), while bottom line was further dragged by a 77% dive in other income to $0.6m.
- Management expects weak demand and stiff competition to persist.
- Slashed interim DPS to 1¢/share (1H16: 1.5¢).
- Last traded at 19.4x trailing P/E.

- Guided for higher FY17 pretax operating profit of at least $32m from $24m previously.
- The raise was due to higher sales, better profit margin, and improved operational efficiency.
- AEM is under-researched with only one broker coverage with a Buy and TP of $3.43.
- Last traded at 8.2x forward P/E prior to the 33% earnings upgrade.

*Lippo Malls Indonesia Retail Trust
- To acquire Lippo Plaza Jogja and Kediri Town Square for $98.1m.
- The slightly accretive deal will boost its portfolio to 30 properties in Indonesia with a valuation of over $2b and NLA of 921,026 sqm.
- Pro forma FY16 DPU of 3.43¢ (+0.6%) translates to an implied yield of 7.9%.

- Exploring the sale of property assets on Molokai Island in Hawaii.
- The assets are listed for sale at US$260m, consisting of 55,000 acres of land and operations which provides water and wastewater services.
- Last traded at 16.7x trailing P/E.

- Invited to further negotiate with the Norway government for the construction of three new coast guard vessels.
- Tender for the project is scheduled for approval by the Norwegian Parliament in 2018 and the first vessel is slated for delivery in 2022.
- Last traded at 0.77x P/B.

*Ocean Sky
- Formed a 70:20:10 JV with Progen Industrial and Seacare Property Development.
- The JVCo will undertake the redevelopment of the properties at 17 Balmoral Road.

- Group's judicial management has been extended to 31 Oct '18.
- Judicial managers have also been granted an extension to 31 Mar '18 to send proposals to creditors for its debt restructuring.

- Secured a revolving credit facility worth US$1.75b from a consortium of banks.
- Proceeds to be used towards refinancing of existing loans.

Friday, October 13, 2017

SG Market (13 Oct 17)

- The STI could be boosted by strong economic data with a preliminary 3Q GDP growth reading at 4.6% (est: 3.8%, prior: 2.9%). MAS sprung no surprises and maintained its neutral stance for the S$NEER policy band.
- The expansion was led by manufacturing (+15.5%) and services (+2.6%), but partly offset by construction (-6.3%).
- Technically, the STI sees upside resistance pegged at 3,320, with support at 3,275.

- Aug retail sales growth of 3.5% came above expectations and marks the sixth straight month of growth, following Jul's 1.7%.
- Excluding motor vehicles (+2.8%), sales was higher at 3.7%, led by petrol (+9.5%), recreation (+8.3%), medical goods & toiletries (+7.6%).
- However, growth was partially pared by weakness in optical goods & books (-4.1%), food retailers (-2.1%), mini-marts & convenience stores (-1.1%) and watches & jewellery (-0.4%).

*Lian Beng
- 1QFY18 net profit slumped 29.4% to $8.9m, alongside a 47.5% dive in revenue to $37.2m (-47.5%) on weak contribution in construction.
- Gross margin improved 7.2ppt to 33.4% on a shift in sales mix.
- Bottom line was lifted by $10.5m in disposal gain on investment property in Melbourne, Australia, although partly offset by reduced JV/associate income to $3.2m (-60.5%).
- Construction order book at $661m to provide activity through FY2020.
- Separately, group is exploring a spin-off of the property development business on the Catalist Board, in a bid to attain better valuations.
- Last traded at 6.6x trailing P/E.

- Swung into a 1QFY18 net loss of $1.1m (1QFY17: $0.1m profit), dragged mainly by associate/JV loss of $0.7m (1QFY17: $0.5m profit).
- Revenue jumped 53.1% to $17.4m on new contribution from port operations service provider TNS Ocean Lines, and higher sales from the ready-mix concrete manufacturing plant in China.
- However, gross margin contracted to 19.1% (-4.2ppt) on the change in sales mix.
- Separately, GKE updated it is no longer in discussions on a possible transaction.
- NAV/share at $0.1198.

*Keppel T&T
- 30:70 JVCo, Keppel Data Centres, has partnered with Canada Pension Plan Investment Board to invest up to US$350m in the Alpha Data Centre Fund.
- The investment includes the option to invest an additional US$150m, which would lift the fund AUM to US$1b, double its initial target.
- When fully leveraged, Alpha Data Centre Fund is estimated to have an AUM of US$2.3b.
- Last traded at 15.2x forward P/E and 1.04x P/B.

- Secured two contracts for municipal metro and rail transit lines in China totalling Rmb856m ($176m).
- This will lift order book to a record high of Rmb3.4b and the new contracts are expected to positively impact FY18 and FY19 financials.
- Last traded at 8.7x trailing P/E.

*Ley Choon
- Secured a $3.9m PUB contract for water main repairs and other contract work for network services.

*Raffles Education
- Second largest shareholder, Oei Hong Leong (12.88% stake) has called for an EGM to oust chairman Chew Hua Seng (33.58% stake).
- Oei is reportedly seeking the placees of the recent placement of 95m new shares (8.96% share capital) at $0.30 apiece. - Counter is loss-making and trades at 0.6x P/B.

- To place out 22.7m treasury shares at $0.59/share via Maybank KE as its placement agent.
- Net cash proceeds of $13m to be used for working capital.
- Last traded at 1.8x P/B.

*Tee International
- To form a 51:49 JVCo with Malaysian Solar Resources, a solar solutions and services provider, for future solar tenders in Singapore.
- Both companies would also jointly explore solar investment opportunities in Southeast Asia.
- Last traded at 1.05x P/B.

*Poh Tiong Choon
- The $1.30/share buyout offer has been declared unconditional after the offeror received 67.24% valid acceptances.
- Together with open-market acquisitions, the consortium currently holds a 67.76%-stake in the company.
- Offer deadline has been extended from 6 Nov to 20 Nov.

*AnAn International (former CEFC)
- Entered JV agreement with CITIC Construction, Beijing Construction Engineering, Beijing Yintai Investment.
- The JVCo will undertake import and and export factoring, onshore and offshore factoring, as well as provide consultancy services to commercial factoring.
- Last traded at 30x trailing P/E.

- Collaborated with a portable navigation consumer electronics company to integrate DiSA's digital asset protection technology and PoS activation solution into their products.
- Units are available in US retail stores with retailers benefitting from an overall price reduction.

Thursday, October 12, 2017

SG Market (12 Oct 17)

- Positive sentiment could spillover to the SG market following the release of slightly dovish Sep Fed minutes, and bolstered by easing tensions in Spain.
- Technically, the STI see immediate support at 3,275, with upside resistance pegged at 3,320.

- FY17 net profit grew 32% to $350.1m, mainly lifted by a $149.7m divestment gain arising from a 33% stake sale in online classified site 701Search.
- Otherwise, full-year core earnings of $200.4m (-24.5%) missed street forecasts.
- Operating revenue of $1.05b (-8.8%) continued to be pressured by the core media business (-13%).
- EBIT margin contracted to 19.5% (-7ppt), on impairment charges totalling $60.6m.
- Final and special DPS shaved to 9¢ (4Q16: 11¢), bringing FY17 DPS to 15¢ (FY16: 18¢).
- Group reducing headcount further and expects to incur retrenchment costs of $13m in 1QFY18.
- Last traded at 19.1x forward P/E and 2.7% dividend yield.

*Duty Free International
- 2QFY18 net profit crept 1.6% higher to RM14.1m, lifted by a RM1.6m fair value gain on option.
- This brought 1HFY18 earnings to RM29.1m (-13.6%), or 45% of full-year street estimate.
- Quarter revenue slipped 5.5% to RM148.3m, on lower demand due to the GST imposition at border outlets and duty free zones.
- Declared second interim DPS of 0.5¢ (2QFY17: nil).
- Trades at 13.9x forward P/E.

*TEE International
- Slumped into a 1QFY18 net loss of $0.9m (1QFY17: $0.6m profit) on gross margin compression.
- Revenue rose 9.6% to $70.1m from higher progressive sales from ongoing development properties, but gross margin contracted to 10.1% (-1.2ppt).
- Bottom line was further impacted by a 221.3% spike in selling & distribution expenses on promotional activity, as well as absence of tenant compensation (1QFY17: $0.4m) and FX gain (1QFY17: $0.2m).
- NAV/share at $0.189.

*TEE Land
- 1QFY18 net profit dived 96.3% to $22,000.
- Revenue surged 88.4% to $26m on higher progressive revenue from development projects Hibre 28, 183 Longhaus and Have Avenue project.
- But gross profit narrowed to 16.3% (-12.1ppt) on a shift in sales mix.
- Earnings fizzled on a 225% spike in selling & distribution costs from promotional expenses incurred and lower associate contribution (-20.3%).
- NAV/share at $0.352.

- 32.5% owned Nanjing Puzhen Rail Transport secured three metro train car supply contracts worth Rmb2.37b.
- The contracts are slated for delivery between Jun '18 and Mar '21.
- The counter is a beneficiary of China's push to develop and expand urban rail transit systems to meet the needs of urbanisation.
- Last traded at 11.9x forward P/E.

- Proposed placement of 500m new shares (8.7% enlarged share capital) at 0.8¢ to two parties.
- The placees include management consultancy firm, Summit Planners Advisory Group, and non-exec director, Liu Song.
- Net proceeds of $3.9m intended to support M&A of WE Crowdfunding and working capital.

- Proposed 11% investment in a cross-platform Malaysian B2B commerce solution provider, Boostorder, for RM2.5m.
- The investment is synergistic to the group's existing proprietary software and customer base.
- Last traded at 1.2x trailing P/E.

- Entered into an agreement to dispose a 60-year leasehold, underutilised cold storage and office at 5 Second Chin Bee Road for $7.8m.
- The sale price is at a 6% discount to a market valuation done back in 2015, and the group estimates a disposal gain of $4.2m.
- Net proceeds from the disposal will be used to pare debt and for working capital.

Wednesday, October 11, 2017

SG Market (11 Oct 17)

- Market sentiment is expected to remain subdued as traders awaiting key data from US (inflation), China (trade)and Singapore (3Q GDP, MAS policy) this Fri.
- But support could come from the latest IMF update, which bumped up its global growth forecasts as an upswing in the world economy is expected to gather pace into next year.
- Technically, the STI is approaching overbought territory with upside resistance pegged at 3,320 and underlying support at 3,275.

- According to news reports, CapitaLand is holding back sales of two residential projects (57% sold Marina Blue, 81% sold Sky Habitat).
- This comes as other developers, Landlease, Qingjian Realty and GuocoLand have also postponed the next phase of their sale launches for projects launched earlier this year, possibly in the hope of raising prices next year.
- Top picks are UOL (TP: $9.43), GuocoLand (TP: $2.75) and City Dev (TP: $12.05).

*Sunpower Group
- Clinched a Rmb94.8m contract to provide four cold hydrogenation fluidized bed reactors to Chinese conglomerate Inner Mongolia Tongwei.
- Delivery is slated by 1H18 and will be positive for the group's FY18 results.
- Last traded at 15.7x trailing P/E.

*Spackman Entertainment
- Korean film, The Outlaws, distributed by 51%-owned subsididiary, has taken the top spot in the Korean box office for two consecutive days.
- Separately, the group raised its stake in 26.17% owned talent agency, Spackman Media Group, to 29.12% for US$2.7m. This will be funded via issue of by 28.5m new shares (6.1% of share capital) at $0.13 each.
- Proposed to acquire a development stage motion picture production firm, Take Pictures, for $3.9m, via cash ($0.6m) and 25.7m new shares (5.6% of share capital) at $0.13 each.
- Last traded at 8.6x forward P/E.

- Completed acquisition of Sengkang Pawnshop for $3.58m.
- The acquisition will provide an additional revenue stream and is in line with group's expansion plan.
- Last traded at 9.6x trailing P/E against 10.1x for peer Maxi-Cash'.

*Sarine Technologies
- Guided for a 3Q17 operating loss of several hundred thousand dollars.
- Forecast revenue for 3Q17 will just exceed US$11m (-33%).
- The lacklustre quarter was due to excess inventories of polished diamonds, which prompted manufacturers to slow down production and hold off capex, and imitation products that impaired the sales of its capital equipment.
- Last traded at 14.2x forward P/E.

- Proposed a slew of changes to encourage new remisiers to join the industry in bid to improve trading activity on the local bourse.
- These proposed changes include removing the minimum $30,000 security deposit in order to allow broking houses to set their own credit limit, and giving brokers more flexibility to operate off-premises and their own non-trading businesses.
- Last traded at 21.5x forward P/E.

*Frasers Centrepoint
- Acquiring two warehouse facilities in Moosthenning, Bavaria/Germany, for €42.4m ($67.8m).
- The properties with a combined gross lettable area of 72,558 sqm are leased on a long-term basis to a leading German car manufacturer for the warehousing of automotive spare parts.

*SUTL Enterprise
- Secured its second management contract in China for an upcoming integrated marine located at Sanshan Island, Suzhou.
- The contract will be for a 10-year term, with no further financial details provided.
- Separately, the group inked an MOU with Hainan Cruise & Yacht Association to exchange ideas regarding the development and expansion of Hainan Island's leisure marina industry.

- Proposed placement of 100m new shares (19.7% existing share capital) at $0.1403 (10% discount to last close) to placement agent PrimePartners Corporate Finance.
- Net proceeds of $13.3m to be used for general working capital (30%) and investments into new, prospect or existing portfolio companies (70%).

- Proposed interested party transaction for a 51% acquisition of investment holding company, which owns Malaysian incorporated travel agency, YC Travel & Tours, for $15m.
- Funding will be via 117.2m new shares at $0.128 apiece to be issued to Executive Chairman and CEO, Chu Sau Ben, and will lift his stake from 50.002% to 74.752%.

*Samurai 2K Aerosol
- Signed an MOU with Genesis GD for the latter to be the sole and exclusive distributor of Samurai's line of products in Cambodia.

*YHI International
- Entered into a JV agreement with a privately-owned automobile parts importer in Myanmar.
- The JVCo will develop and establish a marketing business for automobile and industrial products in Myanmar.
- YHI has the option to increase its shareholding to a maximum of 51% from its current stake 19%.
- Last traded at 26.7x trailing P/E and 0.97x P/B.

Tuesday, October 10, 2017

SG Market (10 Oct 17)

- The market may take a pause as traders stay on the sidelines ahead of the 3Q GDP growth estimate and MAS policy meeting this Fri amid the absence of upside catalysts.
- Technically, the STI has broken clear of its short term downward trend and above its 3,275 resistance and appears headed for the next upside objective at 3,320.

- 4QFY17 DPU inched up 0.7% to 1.42¢, bringing FY17 DPU to 5.53¢ (+0.5%), at the lower end of consensus forecast.
- Quarter's gross revenue grew 1.3% on positive rental reversion from Paragon and The Clementi Mall, while NPI s bumped up 3.9% due to lower expenses.
- Tenant sales at Paragon rose 2.1% with steady footfall, while that for The Clementi Mall fell 5.8% as visitor traffic slowed 0.3%.
- Its two properties continued to enjoy full occupancy despite mounting competition from shifting shopping trends.
- Trades at 5.5% yield and 1.06x P/B.

*City Dev
- Announced a possible cash offer of 552.5p (21% premium to last close) for remaining 34.8% stake in UK-listed hotel arm Millennium & Corpthorne Hotels (M&C)
- This values the global hotel group at £1.79b or fairly attractive 12x EV/EBITDA and 0.67x P/B.
- While CDL intends to maintain M&C's current business model, MKE believes the asset-rich company offers potential to unlock value in in the medium term.
- MKE maintains Buy with TP of $13.60.

*Boustead Projects
- Secured three contracts totalling $56m, comprising the design and building of an industrial management complex ($27m) and two other contracts ($29m) for additions & alternations and fit outs for repeated customers.
- Order book backlog lifted to $217m.
- Management stated its intention to grow further in the waste management sector.
- Last traded at 16.3x trailing P/E.

- Guided for a significant increase in 1H17 net profit stemming from:
1) Higher demand for energy saving and automotive applications
2) Improved gross profit margin on a shift in sales mix
3) FX gain arising from the appreciation of the yuan

*Jason Marine
- Expects to incur a net loss in 1HFY18 due to softer demand caused by depressed oil prices and intense market competition.

- Received SGX approval-in-principle for the proposed privatisation at $3.38/share via a scheme of arrangement.
- Full details of the scheme, including the IFA opinion, will be sent to shareholders by 1 Dec '17.
- If successful, GLP intends to complete the scheme on or before 14 Apr '18.

- Launched four thematic indices with FactSet to support growing investor demand to track technology, cybersecurity, robotics and healthcare industries within the region and globally.
- Separately, it reported Sep securities turnover of $21.8b (+5% y/y, -16% m/m), with daily average of $1.1b (+11% y/y, -8% m/m).
- Total derivatives volume expanded to 16m contracts (+19% y/y, +1% m/m), while commodities derivatives volume totalled 1.7m contracts (+44% YoY, -11% MoM).
- There was one mainboard listing raising $58.2m and 164 new bond listings, raising $67.4b.
- Last traded at 24.1x trailing P/E.

*Viva Industrial Trust
- Declined the right of first refusal to acquire an industrial building in Ang Mo Kio for $300m.
- The REIT manager cited that the acquisition would require a major equity fund raising exercise and would not be DPU accretive to unitholders.

*Nam Cheong
- Filed a scheme of arrangement and 6-month moratorium with the High Court to restructure its debts, which will be heard on 12 Oct.
- Intends to convene a meeting with scheme creditors within three months.
- Trading in counter has been suspended since 21 Jul.

*Samko Timber
- Proposed to dispose two land parcels in Tangerang, West Java in Indonesia for Rp70b ($7m).
- The plots totalling 53,200 sqm is currently being utilised for the operation of one of its factory engaged in the production plywood and other wood products.
- The sale is in line with its strategy to streamline its operations and is expected to result in a disposal gain of $3.4m.

- Terminated the non-binding term sheet for the RTO of Maxz Universal Development Group.
- Maxz manages resorts and its assets include Movenpick Heritage Hotel Sentosa.

Monday, October 9, 2017

SG Market (09 Oct 17)

- Attention will likely turn towards Fri's 3Q GDP growth estimates, which could hit a 3-year high of >5%, China's manufacturing and services PMI readings, a slew of US data, FOMC meeting minutes as well as start of US corporate earnings season.
- Technically, the STI has broken clear of its short term downward trend and above its 3,275 resistance and appears headed for the next upside objective at 3,320.

*Sembcorp Marine (SMM)
- Singed agreements to sell nine Pacific Class 400 drilling rigs to Borr Drilling for US$1.3b ($1.77b) plus a market-based fee.
- The rigs include all six rigs from previously-terminated contracts, and will be delivered over a 14-month period from 4Q17 to 1Q19.
- While the transaction will result in a loss of $15m, it will significantly improve SMM's liquidity position.
- Last traded at 45.7x forward P/E.

*Keppel Corp
- Acquiring a 50% stake in the proposed manager of Keppel-KBS US REIT, for US$27.5m.
- The move is in line with its plans to carry out an IPO for its portfolio of US commercial assets on SGX, comprising 11 office assets, with a mandate to invest in a diversified portfolio of income-producing assets in the US.
- Last traded at 14.8x forward P/E and 1x P/B.

*SIA Engineering
- Collaborating with Air India Engineering Services to provide MRO services in India.
- Last traded at 20.9x forward P/E.

- Proposed placement of 221.6m new shares (25% share capital) to prominent investor Sam Goi at 5¢ each.
- Net proceeds of $11m earmarked for business development.

*Sen Yue
- Completed disposal of property at 16 Tuas Avenue 20 to JTC for $3.1m.
- The disposal will result in a disposal gain of $1.6m.
- Last traded at 14.9x trailing P/E.

*AA Group
- Entered into a conditional agreement to dispose loss-making subsidiary, Toko Construction, for $1m.
- The divestment is undertaken as part of a restructuring and will result in a disposal gain of $1m, to be used for working capital.

Friday, October 6, 2017

SG Market (06 Oct 17)

- The market could chalk up further upside gains on growing confidence after IMF chief Christine Lagarde siad that the long-awaited global economic recovery is taking hold and urged policy makers to seize the opportunity to create a more inclusive economy and broader, lasting prosperity.
- Technically, the STI is likely to break out of its tight 3,230-3,265 range bounded by the 20 and 50-day moving averages.

- MKE estimates flash 3Q GDP to be near 4%, with strong manufacturing (+20%) leading a broadening recovery in the services sector.
- Full-year GDP growth could well exceed the government's 2-3% and MKE's 3% forecasts, with 8M17 core inflation creeping higher to 1.5%.
- This could prompt the MAS to normalize and tighten its neutral stance at its upcoming semi-annual policy meeting this month.

- Normanton Park has been sold en bloc to Chinese firm Kingsford Huray Development for $830.1m or 4% above its reserve price.
- Inclusive of development charges, this works out to a land price of $969 psf ppr for the 667,368 sf site, which can yield a total gfa of 1.4m sf accommodating 1,200 new homes.
- This is the 12th residential collective sale sealed this year, reflecting the mad scramble among land-hungry developers.
- Top picks are UOL (TP: $9.43), GuocoLand (TP: $2.75) and City Dev (TP: $12.05).

*Soilbuild Construction
- Awarded a contract from Soilbuild Group to erect a 7-storey single-user general industrial factory development for $50.4m.
- Works expected to be completed by 3Q19 and will lift order book to $574.2m.

*Croesus Retail Trust
- Scheme of arrangement to take the Japanese mall landlord private at $1.17/unit has been sanctioned by the Court.
- Last day of trading will be on 10 Oct, with expected payment to unitholders will be no later than 26 Oct. Counter will be delisted on 27 Oct.

- Enlists CIMB Securities to place out 47.5m new shares representing 10% of its existing share capital at $0.255 apiece or 5.6% discount to the last close,
- Net proceeds of $11.9m will be used to for general working capital purposes.
- The steel engineering group is loss-making and trades at 0.44x P/B.

*ABR Holdings
- Acquiring a second land plot, adjacent to its previous purchase, in Kuala Lumpur, Malaysia, for RM4.95m.
- The 99 year-leasehold site has an area of 1,533.5 sqm.
- Last traded at 35.81x trailing P/E.

*United Food
- Proposed acquisition of 80% stake in each of Hebei Xingrun Shengwu Keji Gufen, Chengde Purun Shengwu Zhiyao and Benchmark Trade, for Rmb120m ($24.5m) or 25% below independent valuation.
- The three firms are involved in the development, manufacture and sale of animal feed and related products in China.
- The move will help the group expand and strengthen its foothold in the agribusiness and food industry in China.
- The pig farmer and pork processor has been loss-making for the past two years.

- Signs MOU with Temasek Polytechnic to collaborate on training and R&D, relating to aquaculture and biomedical sciences.

Thursday, October 5, 2017

SG Market (05 Oct 17)

- Range-bound trading could persist despite records highs achieved in the US market, as investors position away from sectors facing headwinds such as telecoms and transport.
- Technically, the STI sees support at 3,190 with topside resistance capped at 3,270.

- Global offshore rig rental appears to be recovering, led by oil firms' growing demand for harsh-environment exploration.
- Market watchers opine that the nascent pick-up for harsh-environment rigs, particularly for North Sea drilling, could lead to higher day rates as soon as 2018, and translate into increased capex spending by oil majors.
- Notable firms that build harsh-environment rigs include Sembcorp Marine (47.2x forward P/E, 1.43x P/B), Keppel Corp (14.5x, 1x P/B) and Vard (0.75x P/B).

*Keppel Corp
- Secured a major FPSO conversion contract from SBM Offshore for an undisclosed sum.
- Following conversion from a Very Large Crude Carrier, the FPSO will be subsequently deployed to the Liza field in offshore Guyana in South America.
- Last traded at 14.5x forward P/E and 1x P/B.

*United Global
- Proposed 40:60 JV with Japan-based M-TechX to manufacture oil absorbing nano-fibre materials for various industrial and commercial industries in Japan, Indonesia and Singapore.
- The JVCo will leverage on United Global's extensive distribution channels across 30 countries for the super-absorbent nano-fibres produced by M-TechX, which owns the proprietary technology for mass production of nano-fibres.
- United Global will provide US$4m interest-free loan to the JVCo for working capital.
- Trades at 12x trailing P/E.

*Addvalue Tech
- Two days following a share price spike, group announced a new partnership to offer its maritime product and data solutions bundle for deep-sea fishing vessels.
- Addvalue and the undisclosed partner hope to capture a market size of at least 500 vessels for a two-month trial for its communication product from Nov '17, followed by a commercial rollout.

*SIA Engineering
- Share price plunged as much as 9% yesterday after JPMorgan reportedly sold its entire stake of 38.9m shares (3.5% share capital) at the low end of its marketed $3.11-3.30 range.
- Based on the last closing price of $3.20, counter is valued at 21x forward P/E, still above its 10-year historical average of 18x.

- JV set up with Panthera, a holding company representing two Vietnamese locals, to invest in real estate projects in Ho Chi Minh, Hanoi and Da Nang.
- The first development project is located in the CBD of Da Nang and sited on a land plot of 1,562.7 sqm, which will be developed into a hotel with retail component.
- Trades at 4x trailing P/E.

- In response to a SGX trading query following a 10.2% surge in share price, group cited it was looking to finalise a certain corporate exercise.

Wednesday, October 4, 2017

SG Market (04 Oct 17)

- Market is still not showing any clear direction although the STI appears to have broken out of its downtrend channel formed since Jul.
- Investors may position in MKE's preferred picks ahead of the 3Q results season, such as UOB (TP: $26.40), UOL (TP: $9.43), GuocoLand (TP: $2.75), CapitaLand Commercial Trust (TP: $1.81), Ascendas REIT (TP: $2.90), Genting Singapore (TP: $1.35).
- Technically, immediate topside for the STI is capped at 3,270 with support at 3,190.

- Entered into a 70:30 JV with Singland Homes, a subsidiary of 49.8% owned UIC, to explore business opportunities and take advantage of the upturn in home prices.
- Trading at 26% discount to RNAV/share of $11.03.

*SIA Engineering
- Entered into 51:49 JV with US-based Moog Inc to provide maintenance, repair and overhaul services for Moog-manufactured flight control systems fitted on new generation aircraft, including B787 and A350.
- The JVCo intends to market its component repair services to customers in Asia Pacific and beyond.
- With this addition, SIAEC will have 26 JVs across nine countries with leading OEMs and other strategic partners.
- Last traded at 22.6x forward P/E.

*Singapore O&G (SOG)
- Signed a three-year commercial collaboration with KL Fertility & Gynaecology Centre (KLFGC), a subsidiary of Australian-based Monash IVF Group.
- The three-year service agreement will enable KLFGC to provide Assisted Reproductive Technology (ART) services such as in-vitro fertilisation and intracytoplasmic sperm Injection procedures to SOG's patients in Singapore.
- Trades at forward P/E of 24.5x.

*Sembcorp Marine
- Terminated three rig contracts costing a total of US$625m with Mexican oil driller Oro Negro.
- Delivery of the jack-up rigs have been deferred since 2015.
- Last traded at 46.3x forward P/E.

*Genting HK
- Proposed a voluntary delisting from the SGX to consolidate the trading of its shares on HKSE.
- This is in line with the group's plans to focus its efforts in North Asia and reduce admin and compliance costs.
- Arrangements will be made for shareholders to transfer their shares to its primary listing on HKSE.
- The cruise ship operator is loss-making and trades at 0.44x P/B.

- 70:30 JV with parent Guoco Group has been awarded the land tender for the 21,027 sqm plot of land at Beach Road for $1.62b or $1,706 psf ppr.
- The mixed-development will consist of office, retail and residential elements.
- MKE maintains Buy with RNAV-based TP of $2.75.

*800 Super
- Acquiring Iwash Laundry from Fairly Jewellers and three individuals for $5m (2.97x P/B).
- Iwash is in the business of laundry and dry cleaning laundries and owns a leasehold property with gfa of 2,600 sqm at 80 Senoko Drive.
- Acquisition is part of its strategy to venture into alternative growth areas and opportunities.
- Trades at 13.1x forward P/E.

*Addvalue Technologies
- In response to the SGX trading query, the group replied that it is not aware of specific factors that can explain its recent unusual share price surge.
- But it shared a disclosure made in Apr '17 that it remains keen on working towards a spinoff and listing of its subsidiary, Addvalue Solutions, which handles the Inter-satellite Data Relay System (IDRS) airtime business.
- Further, the group disclosed that it is in talks with various parties on possible corporate exercises and transactions, including its IDRS-related business.

*Samurai 2K
- Developed two new ranges of two-component aerosol spray-on paint for the automotive industry.
- The products aim to reduce the chances of health hazards associated with regular aerosol spray-on paints.
- It will also participate at the upcoming Specialty Equipment Market Association Show in Las Vegas, US to showcase the new range of products.

*Top Global
- Acquiring a 6,103 sf NLA freehold strata-titled office unit at Tong Building for $24.9m.

*Cache Logistics Trust
- 18-for-100 rights issue at $0.63 apiece has been subscribed by 1.87x.
- The $102.7m rights proceeds will be used to pare debt, with aggregate leverage expected to be lowered from 43.4% to 35.5%.
- Pro forma FY16 DPU will be diluted to 6.882¢ from 7.725¢ from the 18% increase in unit base.

Tuesday, October 3, 2017

SG Market (03 Oct 17)

- Market is off to a good start in 3Q with positive momentum supported by a robust showing in Sep factory activity. Focus will be on banks, property and technology counters.
- However, oil-related firms could see some minor profit-taking after recent outperformance, as the stronger greenback weighs on crude prices.
- The STI has broken out of its downtrend channel and looks to test the 50-dma at 3,270, underpinned by rising momentum indicators. Downside support at 3,190.

- Manufacturing continued to expand in Sep, with the PMI hitting a new high of 52.0 (Aug: 51.8) for the 13th straight month
- This came on the back of strong performance in the electronics sector, which posted its highest reading of 53.6 (+0.4ppt MoM) since Jul '10.
- The latest data should push 3Q17 GDP growth to 3.8% and lift full year forecast above 3%.

- Received licence from the State Bank of Vietnam to establish a foreign owned subsidiary bank in Vietnam.
- UOB (BUY, TP $26.40) remains as MKE's preferred pick for its better pricing discipline and sensitivity to re-pricing intervals.
- Last traded at 1.22x P/B.

- Completed second informal meeting to update holders of $425m Series 3-8 notes and $150m 7% perpetual securities on its refinancing proposals.
- - The group has met with several interested funds and strategic investors. A strategic investor is keen to work with the group but would like to see the refinancing of lenders and MTN completed first.
- It is awaiting final approval for a 6-year refinancing deal that include additional working capital line of up to US$100m.
- Currently, it is actively engaging noteholders and has appointed SIAS to lead an informal steering committee for security holders.
- The group is looking to complete refinancing discussions with lenders before Nov 2017.

- Independent financial advisor Ernst & Young Corporate Finance are of the view that the $2.33/share offer price from HNA Group is fair and reasonable.
- Accordingly, shareholders are advised to accept the offer.
- Closing date for the offer is on 2 Nov 2017.

- Acquiring freehold residential sites at Guillemard Lane for $33.5m.
- The sites have a total land area of 14,030 sf with an existing gross plot ratio of 2.8.
- Together with earlier acquisitions, its combined site at Guillemard Lane (2, 6, 12 and 14) now encompasses 25,601 sf.
- Last traded at 15.6x trailing P/E and 1.27x P/B.

*Rotary Engineering
- Proposed exit offer of $0.46/share by Orochem (64.7% owned by controlling China family, 34.3% by Oman Investment Fund) to delist its shares from SGX.
- The offeror has received irrevocable undertaking to accept the offer and vote in favour of the delisting resolution from several shareholders representing 60.63% of share capital.
- The exit price is at 21% premium over the last traded price prior to day of trading halt and 62% premium to its NAV/share.
- Orochem does not intend to revise the exit offer price.

*SUTL Enterprise
- Fulfilment of conditions under the 60:40 JV agreement with UEM Land has been extended to 31 Dec 2017.
- To recap, the agreement is for the development of an existing marina in Puteri Harbour into a private yacht club.
- Last traded at 16.6x forward P/E.

- Entered into a 70:30 JV with Silver Bullion to retail and trade previous metals.
- No further financial details were disclosed.
- Last traded at 1.53x P/B.

- Expanded its board and senior management team with an addition of two board members and five top management members.
- The move is to strengthen corporate governance and to establish Yuuzoo's business, technology, distribution and partnership platforms.
- Yuuzoo is also in a midst of searching for a new CEO.

- Terminated the proposed acquisition via RTO of Heduru Moni.
- An extension of time has not been given by SGX to comply with listing rules, and the group will need to provide an exit offer no later than 1 Nov.
- Currently trading above its NAV/share of 2.78¢.

*Changjiang Fertilizer
- To acquire a 2.23 ha plot of vacant land in Johor, Malaysia for RM12m (3.9m).
- It intends to develop the land into fourteen units of 2.5-storey detached light industrial units with total saleable floor area of 147,830 sf.
- Acquisition is part of its strategy to expand into real estate development.

- Expanding its existing HQ located on 16A Joo Koon Circle to the adjacent plot on a land area of 3,672 sqm.
- The new 20-year lease from JTC will require a committed investment of at least $5m on fixed assets.

Monday, October 2, 2017

SG Market (02 Oct 17)

- No major news flow to drive the market this week apart from URA 3Q flash estimates, which might show a rebound in home prices for the first time in four years.
- Momentum indicators are improving but the STI needs to move above 3,250 to break out of its downtrend channel.

- Acquiring leading European logistics platform Gazeley, which owns logistics facilities across four countries in Europe totalling 32m sf of gross leasable area, for US$2.8b.
- These are located in UK (57%), Germany (25%)< France (14%) and Netherlands (4%). 17m sf of its existing assets are leased, while 16m is in the development pipeline.
- The acquisition will be funded via cash, existing credit facilities and new debt. This is no need for additional equity funding.
- GLP intends to syndicate its stake in the target portfolio as part of its long-term strategy of growing its fund management platform.
- Post-acquisition, pro forma FY17 EPS is expected to rise 0.7% to US$0.1643.
- The transaction will not affect the timeline of its privatisation offer via scheme of arrangement at $3.38/share.

- Proposed to acquire a minimum 70% stake in Xintai Zhengda Thermoelectric, which provides steam and heat to industrial enterprises and residents, as well as supply electricity to local grid in Xintai City, Shandong, China.
- Consideration amount is pending an independent valuation report, and will be updated in due course.
- The target has been ordered by local government to relocate to Xintai Economic Development Zone.
- There will be relocation compensation from the government, and the new facilities will be constructed in phases, mainly comprising a 130t/h biomass boiler and three units of 130t/h coal-fired boilers, with electricity generators and steam distribution pipelines.
- Last traded at 15.5x trailing P/E.

*China Star Food
- Commenced operations at its Zilaohu factory in Fujian, China.
- Production at the 30,000-tonne capacity factory is in time to capture peak season demand.

*Yamada Green
- External auditor BDO has filed a report with Ministry of Finance, pointing to inconsistencies in the group's financial records, which may involve fraud or dishonesty.
- The group is seeking legal advice on the matter but has drawn attention to a formal notice issued by MoF China and China Securities Regulatory Commission suspending BDO China from undertaking securities-related work in May this year.
- Latest setback follows a mysterious fire that destroyed a vehicle transporting key financial documents relating to its FY17 and FY18 accounts.
- Counter has been suspended since 31 Aug.

*Frasers Centrepoint (FCL)
- Acquired 6.1m shares in Thai-listed TICON Industrial Connection via the open-market at an average price of Bt15.88 each.
- The Bt97.2m ($3.95m) acquisition lifted FCL's stake in TICON to 40.95% from 40.61%.
- Last traded at 12.3x forward P/E.

*Straits Trading
- Acquired a 98.5% stake in the distribution of a freehold 6-storey rental residential apartment in Tokyo, Japan for ¥448m ($5.4m).
- The building comprises 96 apartments with an occupancy rate of 99% as at 31 Aug.
- Last traded at 17.1x forward P/E and 0.7x P/B.

*ST Engineering
- Injected US$10.5m into its 50% owned Keystone Holdings to expand its aircraft leasing business.
- This would bring its total investment into Keystone to US$20m.
- Last traded at 21.4x forward P/E.

*Noble Group
- Completed the disposal of its North American gas and power business after Mercuria Energy made with final US$185m payment.
- Sale of its global oil liquids business is in progress and is expected to be completed by year end.
- Last traded at 0.23x P/B.

*Ziwo Holdings
- Proposed a renounceable non-underwritten 2-for-1 rights issue of warrants at $0.0033 each.
- Each warrant is exercisable within a 3-year period for a new share at $0.01.
- This translates to $0.0133 for each new share, or a 39.5% discount to its last close at $0.022.

- Deadline for the RTO of SHC Capital for its tourism assets has been further extended to 31 Dec.

- Acquiring a 5-storey building in Osaka, Japan, for ¥575m ($6.9m), or a 6.8% discount to its market valuation on 1 Aug.
- The property has total floor area of 427.78 sqm, which will be used for the group's foray into Japan for its food business.
- Last traded at 15.5x trailing P/E and 0.6x P/B.

- Disposing its leasehold property at 2 Kwong Min Road to Tong Tar Transport Service for $4.4m.
- The deal is expected to net a gain of $3m.

*Loreno Bio-Chem
- Attempting its third RTO with a new deal to acquire Knit Textile and Apparel for $26.4m, via the issue of 2.64b shares at $0.01 apiece.
- Knit Textile is a contract manufacturer of clothing in Malaysia and Cambodia.
- The group is in the process of expanding upstream into knitting, dyeing, printing and finishing of fabric.