Wednesday, December 6, 2017

SG Market (06 Dec 17)

- Stock prices are expected to drift amid a lack of fresh leads as traders close off their positions in typically quiet year end trading.
- Recent price action on the STI suggests the index has reached a near-term top and could consolidate lower towards the underlying support at 3,390, while topside resistance remains at 3,460.

- Two 99-year leasehold sites on the reserve list of the Government Land Sales programme were snapped up.
- Frasers Centrepoint beat 9 other bidders for the former Zouk site at Jiak Kim Street with an aggressive bid of $955.4m, or $1,732.55 psf ppr, topping the Martin Modern site won by GuocoLand in Jun last year by 40%.
- Allgreen Holdings trumped 6 others to a residential plot at Fourth Avenue in Bukit Timah with a top bid of $553m or $1,540 psr ppr.
- MKE remains bullish on property developers and tags UOL (TP $9.80) as its top pick, along with City Dev (TP $13.60) and GuocoLand (TP $2.90).

*Del Monte
- Swung into 2QFY18 net loss of US$2.8m (2QFY17: US$20m profit), dragged by one-off expenses arising from shutdowns and divestment of $13.1m.
- Excluding the one-offs, net profit of US$10.2m (2QFY17: US$20.8m) still missed estimates.
- Revenue dipped 1.8% to US$624.7m on weaker sale in US due to unfavourable pricing in foodservice and USDA.
- Gross margin shrank to 20.6% (-2.5ppt) due to higher trade promotion spending, while underlying EBITDA slumped 26.7% to US$52.2m from higher capex spending.
- Expects to remain profitable for 2HFY18 on a recurring basis.
- Trades at 13.1x forward P/E.

*Sembcorp Marine
- Signed a Letter of Intent with Shell for the construction of hull and topside as well as the integration of the Vito floating production unit.
- Final contract award will be dependent on Shell and its partners the sanctioning of the project.
- Last traded at 43.4x FY18 P/E.

*Mapletree Logistics Trust
- To divest warehouse Senai-UPS in Johor, Malaysia for Rm28m ($9.2m), 37% premium over the latest valuation as at 31 Oct '17.
- The property has a gfa of 11,494 sqm and was under-occupied at 51% since early-2015.
- Offers 5.3% indicative yield and valued at 1.24x P/B.

- To dispose commercial investment property, The Woodgrove, for $55.9m.
- The property with a strata floor area of 5,144 sqm has an unexpired lease term of 78 years.
- Net gain upon disposal of $22m is expected to lift pro forma EPS to 10.95¢ from 3.84¢.
- Trades at 3.2 trailing P/E and 0.46x P/B.

- Received Letter of Award for the redevelopment of freehold property at 38 Genting Lane.
- The site with land area of 2,103sqm will be redeveloped into an 8-storey industrial building with a gfa of 5,259 sqm.
- Project cost is estimated at $9.3m and construction will take 24 months to complete.
- Last traded at 19.8x trailing P/E and 0.65x P/B.

*Lippo Malls Trust
- National Land Authority has extended the strata ownership titles for four units at Mall WTC Matahari for 20 years until Apr '38.
- Offers 8.3% indicative yield and valued at 1.17x P/B.

- Established a $500m multicurrency debt issuance programme.
- Net proceeds arising from the programme will be used for general corporate purposes, including M&A, refinancing of borrowings and working capital and capex requirements.
- Trades at 31.3x forward P/E.

*Alliance Mineral Assets
- Updated that 40m shares (7.2% share capital) belonging to CEO Tjandra Pramoko and his wife were seized on court order, following non-payment of a $5.5m personal debt owed to Jonathan Lim Keng Hock.
- This is the second time shares have been seized following the first incident in Jul '17, and would create a major overhang in the stock.
- Separately, group announced positive exploration results at Bald Hill Project, its joint project with Tawana Resources.

*Debao Property Development
- A subsidiary received a winding-up petition, presented by Gabungan Tiasa to Malaysia High Court, in relation to Rm14.6m allegedly owed.
- Petition is scheduled for case management and hearing on 12 Dec '17 and 25 Jan '18.

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