SG Market (24 Nov 17)

MARKET OVERVIEW
- Reduced liquidity and profit-taking activity ahead of the weekend could lead to a dip on the STI, particularly after deleveraging concerns in China unsettled investors in Asia yesterday.
- Technically, underlying support for the STI is at 3,390, with topside resistance at 3,460.

CORPORATE RESULTS
*Thai Beverage
- FY17 core earnings climbed 4.6% to Bt26.2b, in line with expectations.
- Revenue was flat at Bt190b as improved sales in spirits (+2.6%) were doused by weakness in beer (-4.7%) and non-alcoholic beverages (-0.9%) segments.
- Core EBITDA margin widened to 19.3% (+0.7ppt) amid a turnaround in the non-alcoholic beverages segment to positive EBITDA margin of 1.2% (FY16: -4.1%).
- Headline net profit jumped 38% to Bt34.5b, mainly boosted by fair value gain arising from its stake in Vinamilk.
- Raised final DPS to Bt0.47 (4QFY16: Bt0.40), bringing full-year payout to Bt0.67 (FY16: Bt0.60).
- Trades at 19.9x forward P/E.

NEGATIVE NEWS
*Natural Cool
- To dispose a property with land area of 2,091.5 sqm at 38 Lok Yang Way for $4.2m.
- The property was previously used for operations prior to the relocation of manufacturing activities to Malaysia.
- The sale will incur a disposal loss of $1.95m, while net proceeds of $4.1m will be used to reduce bank borrowings.
- Last traded at 0.89x P/B.

*Dukang Distillers
- Expects a significant decrease in production by 60%-70% for 2QFY18 and 3QFY18.
- This is due to targeted stop-work orders from the government amid the winter-heating season, to cut emissions of industrial pollutants in various industries.
- Baijiu production is expected to gradually recover from 15 Mar '18.

NEUTRAL NEWS
*Keppel Corp
- Entered conditional JV agreement with KPN Land to acquire two prime sites in Bangkok's CBD for Bt2.2b ($90m).
- Subsequently, the 49:51 JV partners plan to develop two premium freehold condominiums projects with an estimated total cost of $233m.
- Construction for both developments is expected to commence around 3Q18.
- Trades at 16.1x forward P/E.

*MindChamps
- Trading debut at 9am today for the operator and franchisor of premium preschool centres.
- IPO of 30.45m shares, comprising 28.45m placement and 2m public shares, at $0.83 each were 21.4x subscribed (excluding reserved shares of 2.4m).
- Notable investors with >5% enlarged share base include ICH Capital, Island Asset Management, JF Asset Management and SUTL Holdings, while cornerstone investors include CFCG Investment Partners, Hillhouse Funds and Target Asset Management.
- IPO net proceeds of $46.2m will be used to fund expansion plans, partial repayment of an acquisition loan and working capital.
- At $0.83, the counter trades at a pro forma FY16 P/E of 32.2x.

*Ascendas India Trust
- Proposed acquisition of six warehouses at the Arshiya Free Trade Warehousing Zone near Mumbai, India, for $112.5m.
- The warehouses with total leasable area of 832,249 sf have a future redevelopment potential of 2.8m sf.
- Properties are close to full occupancy, with tenants that include DHL Logistics, Huawei and Cisco Systems.
- Upon completion, pro forma FY3/17 DPU is expected to rise 3.5% to 5.89¢, implying distribution yield of 5.1%.

*Olam
- Issued 524,847 new shares in relation to a warrant exercise at US$1.09 each.
- 57.7m outstanding warrants remains, which expires on 29 Jan 2018.
- Last traded at 15.7x forward P/E and 1.3x P/B.

*ValueMax
- Injected an additional $1m in subsidiary ValueMax Pawnshop (JP), lifting its paid-up capital to $5m.
- Trades at 0.94x P/B.

*QT Vascular
- Issued 21.6m new shares to GEM Global at $0.0108 each, representing a 10% discount to last closing price of $0.012.
- Fund raised will be used for working capital purpose.

*Fuji Offset Plate Manufacturing
- To sell a vacant industrial land in Taman Gembira, Johor Bahru in Malaysia, for RM3.5m (1.59x P/B)
- The sale is expected to net disposal gain of $0.4m.