Thursday, March 15, 2018

SG Market (15 Mar 18)

- Rising worries on heightening trade tensions could result in a jump in volatility for the SG market, as investors steer clear of potential downside risks arising from increased protectionism.
- Technically, the STI sees its next objective at 3,575 with near-term support at 3,470.

- Private-sector economists have raised Singapore's 2018 GDP growth forecast to 3.2%, against an earlier estimate of 3% made in Dec '17, and falls within the MTI's range between 1.5% and 3.5%.
- GDP growth is anticipated to moderate to 2.8% in 2019.

*Vibrant Group
- 3QFY4/18 net profit dived 89% to $0.15m amid higher attribution to minority interest.
- Revenue surged 231% to $177.3m from new contribution from recently-acquired Chinese coal producer Blackgold International.
- However, gross margin crumbled to 7.7% (-21.2ppt) due to the temporary shutdown of mining activities for maintenance work.
- Bottom line was boosted by $6.8m (3QFY17: nil) write backs on impairments partially pared by a 165.9% surge in net finance costs to $5.6m.
- Trades at 0.59x P/B.

*Khong Guan
- 1HFY18 net profit soared 733.68% to $0.8m albeit from a low base of $95,000.
- Revenue inched up 0.3% to $28.8m as declines in contributions from its Sabah operations (-1.6%), others (-18.3%) and investment trading (-52.3%) was mitigated by strength in its Penang operations (+15%).
- Bottom line was further boosted by a positive change to short-term investments to $0.6m (1HFY17: -$0.8m).
- Trades at 24.6x trailing P/E.

*Keppel DC REIT
- Acquiring the remaining 999-year leasehold interest in Keppel DC Dublin 1 located at Dublin 24 for €30m ($48.1m).
- The longer tenure will allow the REIT to be more agile in its investment strategy and provide longer term certainty to its clients.
- Post-acquisition, the REIT will own leasehold interest in the data centre until end 2998, up from Apr 2041 currently.
- Transaction is slated to take place within 1H20.
- Offers an indicative yield of 5% and trades at 1.45x P/B.

*Spackman Entertainment
- Korean fantasy melodrama film, Be With You, grossed US$805.5k on the first day of its release, capturing 34.6% market share of Korea's box office revenue.
- The group is one of the major investors in the film and is co-presented by associate company Spackman Media Group.
- Potential income is expected from a multitude of direct and indirect channels including investment return, artists fees, and co-presenting fees.
- Trades at 6.9x forward P/E.

*Keong Hong
- Awarded a contract to erect a a building for the National Skin Centre.
- Also, group will reconstruct an existing 5-storey building for the National Healthcare Group Offices.
- No financial details were provided.
- Last traded at 2.2x trailing P/E.

*AA Group Holdings
- Charged with an offence under the Workplace Safety and Health Act for failure to ensure safety of workers from contractor Poh Huat Heng Corp. in carrying out painting works at a factory at 60 Benoi Road.
- Potential fine is expected to be $0.13m.
- Next court hearing is scheduled on 10 May '18.

*China Kangda Food Company
- Guided for FY17 loss due to an increase of mortality rate of chickens resulting from bad weather and higher admin cost arising from increased professional fees and employees' cost.

*Yanlord Land
- Credit rating firm S&P Global has upgraded Yanlord's long-term corporate credit rating to BB from BB-, due to its improving financial position, stemming from substantial margin expansion and prudent growth strategies.
- Last traded at 0.73x P/B.

- Proposed placement to fund project developments, working capital and general corporate purposes.
- Counter has requested for a trading halt.

*Straits Trading
- Acquiring an 86.8% economic interest in the pre-tax distributions from SIM Residence 2 GK through a silent partnership agreement for ¥989m ($12.2m).
- SIM is acquiring a 134-unit rental residential apartment in Saitama, Japan. The property has an NLA of 6,957 sqm and has secured a 5-year master lease.
- Trades at 0.62x P/B.

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