SG Market (28 Jun 18)

MARKET OVERVIEW
- Market is likely to hang in the balance as traders assessed the confusing messages out of the White House on trade and possible crackdown on Chinese investments in US tech companies.
- But oil-linked counters could see a resurgence as crude rallied past USD72 a barrel as US stockpiles fell.
- Technically, the STI could head towards the crucial support level at 3,200, while upside will be capped by former support-turned-resistance of 3,280.

POSITIVE NEWS
*Oxley
- Its first project in 2018, The Verandah Residences, has achieved 100% sales of the within three months since its official launch on 7 Apr.
- All 170 units were sold at an ASP of $1,795 psf, booking in a revenue of $248.8m for the entire project.
- To recap, the 89,620 sf freehold site in Pasir Panjang was acquired for $121m, or $964 psf ppr in Jul 2017.
- Trades at 1.3x P/B.
- MKE has a Buy with TP of $0.56.

*M1
- Acquiring AsiaPac Distribution for $20m, of which $8m is payable upfront, with another $12m of earn-out payments based on AsiaPac's net profits up to FY6/19.
- AsiaPac is a provider of IT devices and services to enterprise and public sector customer in Singapore.
- It also has expertise in enterprise solutions, system integration and cloud related services.
- The proposed acquisition will fast track the group's entry into the ICT segment, enhancing its proposition as an integrated corporate ICT solution provider.
- Offers an indicative dividend yield of 7.1%.

*Y Ventures
- Signed distributor agreement with Beast Kingdom Co as the exclusive online distributor for Disney products in Southeast Asia for three years.
- The tie-up with major Disney licensee in Asia adds line of official Disney products to the group's portfolio of brands.
- It also has the right to retail Beast Kingdom's products on its online webstores and marketplaces in Southeast Asia.
- Range of products available on its online stores include official Disney, Pixar, Marvel and Star Wars merchandise.
- Trades at 25.1x forward P/E.

NEUTRAL NEWS
*Mapletree Industrial Trust
- Concludes acquisition of 7 Tai Seng Drive for $68m.
- The 7-storey property will be upgraded into a high-spec building, expected to be completed in 2H19.
- Upon completion, the property will be fully leased to an established ICT company for an initial term of 25 years with annual rental escalations.
- Total cost of acquisition and upgrading works is expected to be $95m.
- Post-acquisition, the trust's portfolio will comprise 86 industrial properties in Singapore and 14 data centres in US.
- Trades at 6.2% yield and 1.3x P/B.

*BreadTalk
- Entered into a 30-70 JV agreement with Ge Ying.
- The JVco will operate BreadTalk brand of bakeries in Chongqing, China and potentially expand across the south-western market like Yunnan and Guiyang provinces.
- Under the agreement, the group retains the right to appoint exclusive partners to operate the BreadTalk brand in major transportation hubs.
- Trades at 33.6x forward P/E.

*EpiCentre
- Inked a MOU for a $400m reverse takeover of investment holding company MacroCap Asia Capital (owns Thai property developer Asia ThaiYuan) and Chinese hotel manager Gloria Int'l.
- The group would pay $375m for MacroCap and $25m for Gloria by issuing 1.74b new shares at $0.23 each.
- Separately, the group has scrapped a proposed renounceable rights issue and replaced it with a conditional placement agreement to issue up to 79.7m new shares (33.3% of enlarged capital) at $0.12 each, representing a premium of 145% above last close.
- Counter is loss making.

*Vallianz
- Trade creditors agreed to set-off aggregate trade payables of $3.1m in exchange for 196.7m new shares at $0.016 each, a 60% premium above last close.
- The new shares represent approximately 1.2% of the group's enlarged share capital.
- Trades at 0.55x P/B.

NEGATIVE NEWS
*Ipco Int'l
- Expects to report a net loss for FY18, mainly due to the impairment of intangible assets and FX translation effect.
- It is in the process of preparing and finalising its FY4/18 results, which will be released on or before 30 Jun.
- Trades at 0.12x P/B.