SG Market (28 Nov 17)

MARKET OVERVIEW
- Oil-related counters will be in focus over the next two days ahead of the OPEC meeting in Vienna this Thu, with the oil production alliance anticipated to announce its decision whether to extend production cuts beyond Mar '18.
- Technically, underlying support for the STI is at 3,390, with topside resistance at 3,460.

CORPORATE RESULTS
*IHH Healthcare
- 3Q17 missed as net profit slumped 53% to RM82.1m, bringing 9M17 core net profit to RM413.4m (-36%), dragged by start-up costs and depreciation from the opening of two new hospitals.
- However, quarter's revenue grew 15% to RM2.8b on organic growth from existing operations and ramp-up of recently-opened hospitals, as well as new contributions from Tokuda and City Clinic in Bulgaria.
- EBITDA margin narrowed 2.3ppt to 20.1% on higher start-up, operating and staff expenses.
- MKE believes start-up costs, particularly at Gleneagles HK, have stabilised and new hospitals are gaining traction on patient visits.
- Hence, the house has upgraded to a BUY with higher TP of RM6.30 from RM6.08.

*Cogent Holdings
- 3Q17 net profit slipped 6% to $7.4m, bringing 9M17 earnings of $23.7m (+1%) to 73% of estimates.
- Quarter's revenue climbed 4% to $35.3m on higher volume handled within the container depot and transportation segments.
- But, operating margin narrowed 1.7ppt to 28.1% amid a shift in sales mix towards the lower margin container segment and higher fuel costs.
- Bottom line was also dragged by higher taxes (+14%).
- Stock supported by buy-out offer price of $1.02.
- NAV/share at $0.2823.

POSITIVE NEWS
*Ying Li
- Proposed divestment of Ying Li International Commercial Centre project in Chongqing to China Evergrande Group for Rmb3.29b ($672m).
- The consideration includes the transfer of a separate land parcel that Ying Li is still in progress of acquiring.
- The 320,000 sqm gfa mixed development is located in Chongqing's CBD of Jiefangbei and is priced at 2.04x P/B.
- Proceeds earmarked to pursue new ventures and/or investment opportunities in Tier 1 and fast-growing Tier 2 cities in China.
- Upon completion, Ying Li will net a disposal gain of Rmb343m ($70m) and pro forma NTA/share is expected to jump 6.6% to Rmb2.09.
- Trades at pro forma P/B of 0.35x.

*Boustead Projects
- Secured two contracts from repeat clients worth $67m.
- The first contract involves the design and building of a logistics facility in Singapore, slated to complete by 2019.
- Second contract requires the design and building of a power solutions manufacturing facility expansion in Vietnam, with expected completion in 2018.
- Group's order book lifted to $242m from $175m as at 8 Nov '17.
- Last traded at 7.8x forward P/E.

*Vard
- Secured contracts from Nowegian food producer Cermaq Norway for the design and construction of two offshore fish farming operation platforms.
- The platforms are scheduled for delivery in 2Q and 3Q18.
- Counter is loss-making and trades at 0.8x P/B.

*UnUsUal/ Imperium Crown
- Imperium signed non-binding MOU with concert & entertainment event organiser UnUsUal, to commence discussions on possible collaborations for the former's Wonder Stone Park (WSP).
- Imperium has a 50-year operating right to WSP, as well as a hotel in the park, which is located in commercial precinct in Feixian County, Linyi City, Shandong, China.

NEUTRAL NEWS
*Soilbuild REIT
- Expanding investment mandate from being Singapore-centric to business space and industrial properties in Australia.
- Offers indicative yield of 8.6% and trades at 0.9x P/B.

*Wilmar
- Converting a portion of its existing revolving credit facility of US$150m with ING Bank into a sustainability performance-linked loan.
- If performance milestones across environmental, social and governance aspects are met, interest rate for the loan will be reduced in the following year.
- Progress on the milestones will be measured by Sustainalytics.
- Last traded at 13.7x forward P/E and 0.96x P/B.

*Samurai 2K Aerosol
- Proposed placement of 10m new shares (9.1% enlarged share capital) at $1.008 apiece to placement agent UOB Kay Hian.
- Net proceeds of $9.6m are intended for business development and expansion.
- Pro-forma 1HFY3/18 EPS would be reduced by 9% to 5.86sen.

*QT Vascular
- Entered into an agreement with four individual bondholders to partially repay a sum of US$1.36m in cash and shares.
- These bondholders will accept a cash payment of US$0.34m and 42.2m new shares at an issue price of 1.08¢.
- The remaining outstanding amount of US$1.02m will be payable by 31 Jan 2018, bearing interest of 8% p.a from 1 Oct 2017.
- The group will continue to negotiate for settlement with other bondholders holding the remaining par value of US$2.555m.