Broadway Industrial

Broadway Industrial: FY13 net profit slumped 93.3% to $1.6m on revenue of $178.4m (+4.7%), with top-line driven by higher sales from both the foam plastics divisions and non-HDD segments in the components division. Gross margins grew to 8.7% from 8.2% primarily due to the improved sales performance of the non-HDD segment. Bottom-line was however weighed by a 63.7% drop in other income to $13.3m, and tax expenses of $4.2m versus a tax credit of $0.7m in FY12 due to a significant reduction in deferred tax credit and provision for the previous year.

UMS Holdings

UMS Holdings: 4Q13 net profit of $11m (+806% y/y, 128% q/q) came ahead of consensus estimates, while revenue spiked to $34.5m (+59% y/y, 36% q/q) mainly due to higher semiconductor component and integrated system sales attributed to strong customers demand in the global semiconductor market. Gross margin improved 22ppts to 54% mainly due to better product mix and inventory provisions. UMS appears to have a healthy growth trajectory ahead, given the robust revenue guidance from dominant customer- Applied Materials, which accounts for >90% of revenue, after releasing its above-consensus results last week. UMS declared final and special DPS of 2¢ and 1.5¢, bringing FY13 total to 6.5¢, translating into an attractive 10% dividend.

Golden Agri

Golden Agri: 4Q13 core net profit of US$113m (+212% y/y, 199% q/q) came ahead of consensus expectations, mainly attributable to exceptional China soybean crush margins and 18% higher crude palm oil (CPO) prices. Meanwhile, revenue grew 25% to US$1,901.8m. Golden Agri plans to expand palm oil plantations by 20,000-30,000ha (+4-6%) and expects sustained production growth of 5-10% each year to support the increasing demand from Indonesia on the back of higher biodiesel mandates. Market observers also warn of a potential emergence of El Nino in 2H14, which may cause CPO production to decrease, supporting average selling prices. Group proposed final DPS of 0.515¢, bringing FY13 total to 1.1¢. The distribution translates into a 35% payout ratio, ahead of its policy of up to 30% on underlying profits. At $0.56, Golden Agri trades at 13.3x forward P/E, compared to SGX-listed peers average of 12.3x. Latest broker recommendations: DB maintains Buy with TP $0.75 CLSA upgrades to Outperform with TP $0.63 BNP Paribas maintains Buy with TP $0.68 Credit Suisse maintains Outperform and raises TP to $0.68 (from $0.66) CIMB maintains Hold with TP $0.60 OCBC maintains Hold and raises TP to $0.515 (from $0.50)

Midas

Midas: FY13 results came in largely in line as net profit surged 71.3% to Rmb47.7m on a 32% rise in revenue to Rmb1.1b. Top-line was led by the group’s Aluminium Alloy Extruded Products Division which saw revenue rising 32.4% to Rmb1.0b, due to an increase in business volumes, buoyed largely by the Transport industry. Overall gross margins dipped slightly to 24.5% from 28.9% due to a change in product mix, which included sales of aluminium alloy extrusion profiles for freight wagons, that typically command lower processing fees. Notably, bottom-line was aided by a turnaround from its associate company, Nanjing Puzhen Rail Transport (NPRT), which saw positive contributions at Rmb13.6m vs losses of Rmb5.7m in the previous year, due mainly to higher train cars deliveries made by NPRT during the year. Going forward, Midas notes that the outlook for the PRC rail transportation industry is expected to remain vibrant over the mid to long-term, adding that the PRC’s government’s continued support to grow China’s transportation network will see the China Railway Corporation (CRC) making ~Rmb630.0b in railway fixed-asset investment in 2014. Maybank-KE believes that the worst may be over for Midas as the strong order win momentum seen in FY13 (Rmb812.5m worth of orders), especially from the high-speed rail sector, should spark an earnings rebound from FY14 onwards, with the house forecasting a three-year EPS CAGR of 73.0%. Midas currently trade at 0.9x P/B, and the group has declared a first and final dividend of 0.25¢ per share (same as FY12). Latest broker ratings as follows: Maybank-KE maintains Buy with TP $0.75 CIMB maintains Add with TP $0.71 OCBC maintains Buy with TP $0.67

Straco

Straco Corporation: 4Q13 results came in at the higher end of estimates, as net profit surged 79% to $5.6m taking FY13 net profit to $34.1m (+73%). Revenue for the quarter grew 32% to $14.6m, led by increased visitation to its two aquariums, where combined visitation grew 17.1% to 0.59m visitors. Bottom-line was buoyed by other income which jumped 21.2% to $1.3m, due to higher retail concessionaire income and certain government subsidies and cash awards received by the group's two aquariums. Overall operating margins grew further to 59.0% vs 45.8%. Going forward, Straco guides that domestic tourism is expected to continue growing with the nation’s increasing affluence and accessibility, which augurs well for the Group. The first China Tourism Law, which came into effect in Oct’13, is reshaping the domestic travel industry, and has increased the number of higher-yielding free independent travellers (FITs) to Straco’s attractions since its implementation. Overall, the group’s fundamentals remain solid with a whooping net-Cash of $108.1m (12.8c per share), representing 26.4% of market cap. At the current price, Straco trades at just 8.8x FY13 ex-cash P/E. The group has declared total dividends (First and final + special) of 2c per share (FY12: 1.25c per share) Latest broker ratings as follows: CIMB maintains Add with TP $0.61

SG Market (03 Mar 14)

Last Friday saw a strong Feb finish for US stocks. The S&P500 ended 4.3% higher for the month, extending to a fresh record of 1,859.53, amid improving US consumer confidence gleaned from Feb data. Expectations for the Fed to continue supporting the economy also buoyed markets, after Janet Yellen strongly indicated that the Fed is “by no means stuck to a firm taper”, and may change its strategy for reducing asset purchases should the economy weaken. Nevertheless, rising tensions in Ukraine have cast a dampener on Asian markets this morning. At 8.32am, Japan’s Nikkei is down 2%, and Korea’s Kospi is down 0.8%. As the 4Q13 corporate reporting season comes to an end, S’pore stocks may take a breather. While the rising RSI and positive MACD indicators suggest further upward momentum in the near term, gains in the STI may be capped by the big overhead resistance at the 3,150 level. Downside support at 3,070. Stocks to watch: *Golden Agri: 4Q13 core net profit of US$113m (+212% y/y, 199% q/q) came ahead of consensus, mainly attributable to exceptional China soybean crush margins and an 18% rise in CPO prices. Revenue grew 25% y/y to US$1,901.8m, driven by the expansion of the downstream business. Final DPS of 0.515¢, brings FY13 total payout to 1.1¢ (FY12: 1.19¢). *Midas: FY13 net profit spiked 71% to Rmb47.7m, as associate Nanjing SR Puzhen Rail Transport reversed last year’s loss to post a profit of Rmb13.6m. Group revenue accelerated 32% to Rmb1.15b, driven by higher sales volume of aluminium extrusion products. Gross margin however, dipped to 24.5% (-4.4ppts) due to a change in product mix. Final DPS of 0.25¢, brings FY13 payout to 0.5¢, similar to FY12. *UMS: 4Q13 net profit ballooned nine-fold y/y (+128% q/q) to $11.0m, as revenue spiked 59% (+36% q/q) to $34.5m, mainly due to higher semiconductor component and integrated system sales. Gross margin improved 22ppts to 54% on better product mix and lower inventory provisions. Management sees strong demand for semi equipment to continue into 2014. Final and special DPS of 2¢ and 1.5¢, lifts FY13 total payout to 6.5¢ (FY12: 5¢). *Sunvic: 4Q13 net profit spiked 81% y/y to Rmb135.4m, while revenue accelerated 33% to Rmb1.84b. This lifted FY13 earnings to Rmb369.9m (+282%) and revenue to Rmb6.33b (+46%), driven by higher ASP and sales volume of acrylic acid & acrylate esters (AA & AE). Full year gross margin expanded to 14.8% (+2.5ppts). Management expects the long term sales contracts signed with certain major customers to underpin the high utilisation at its plants over the next few years. No dividends declared. *Straco: 4Q13 net profit surged 79% y/y to $5.6m, taking FY13 net profit to $34.1m (+73%). 4Q13 revenue grew 32% to $14.6m, led by increased visitation to its two aquariums (+17% to 0.59m visitors). Other income jumped 21.2% to $1.3m mainly due to higher retail concessionaire income and certain government subsidies and cash awards received by the group's two aquariums. Final and special of 1.25¢ and 0.75¢ respectively, brings full year payout to 2¢ (FY12: 1.25c). *GMG Global: Swung into a 4Q13 net loss of $6.9m, versus a net profit of $5.1m a year ago, dragged by lower gross margin (-3.6ppts to 9.7%) and loss from associates ($7.4m) and FX adjustment loss ($4.8m). Revenue grew 15% y/y to $280.2m on higher tonnage sold (+32%), which helped offset a 13% decline in ASP. First and final dividend 0.1¢ (FY12: 0.135¢). *Loyz Energy: marking its first foray into producing concessions, Loyz has signed an agreement with ASX-listed E&P company, Carnavon Petroleum, to acquire a 20% stake in three onshore concessions located in Thailand’s Phetchabun Basin for US$65m. Currently the three concessions are producing at a rate of around 1,200-1,400bopd in total. Production is expected to rise to 3,000bopd by Jun ’14 and 5,000bopd by Dec ’14. *Swissco: Proposed to acquire Scott and English Energy (S&E), which is in the business of owning and leasing mobile offshore drilling units and service rigs, and majority-owned by Kim Seng Holdings. Consideration of $285m will be satisfied by the issue of 452.4m consolidated Swissco shares at issue price of $0.63 each, post a 2-into-1 share consolidation exercise. *AP Strategic: will acquire Coeur Gold Armenia for ~$500m in a reverse take-over transaction from a 51/49 JV between China Global Energy & Resources and businessman George Richmond. Coeur holds the mining explorations rights in the Azatek and Sofi Bina Mineral Deposits , Armenia in respect of gold, silver, antimony and copper. The consideration shall be satisfied by the issue of 1.35b new shares at $0.371 a piece. *GLP: signed a strategic partnership with Bank of China (BOC). BOC will provide supply chain financing to GLP’s customers, and work with GLP to develop solutions to lower logistics costs for customers. *Cordlife: signed a strategic alliance agreement with CellResearch Corp and US-listed China Cord Blood Corporation to provide umbilical cord tissue storage services to certain territories in the PRC, on an exclusive basis. *Q&M Dental: to acquire 70% of NGDC, a M’sian private dental practice, for cash consideration of RM0.5m.

Valuemax

Valuemax - Latest news was last week where ValueMax’s FY13 net profit slumped 36% to $9.2m, in tandem with a 31% drop in revenue to $353.1m. The lacklustre performance was due to 32% decline in revenue from the retail and trading of pre-owned jewellery and gold business, and an 8% drop in revenue from the pawnbroking business as a result of the decline in gold prices. Bottom-line was partly aided by a 1.3 ppt rise in gross margins to 6.4% on back of a improved revenue mix from the pawnbroking business, and a doubling of other operating income to $2.6m boosted by income from assignment of tenancy agreement, and fair value gains. This was however offset by a six-fold rise in other operating expenses to $4.1m, due to allowances made for doubtful trade receivables and write-down of inventories, and a 26% jump in admin expenses to $12.3m, led by a rise in employee benefits and rental expenses. Management notes that the industry as a whole is facing challenging business conditions, weighed by lower gold prices and increased competition within Singapore. Nevertheless, the group intends to continue with its strategy to grow the businesses in both S’pore and Malaysia. At the current price, ValueMax trades at 1.65x P/B versus closest peers Maxi-Cash’s 2.6x and MoneyMax’s 2.4x.