Genting SP: Nomura downgraded Genting SP to Neutral after the disappointing 1Q15 results, citing the lack of earnings visibility and catalysts.
Near-term headwinds like weakness in Chinese traffic, high impairments, and a strong SGD deterring tourist arrivals imply that FY15F EBITDA will be down over 2014.
House now value the Singapore business at a FY16F EV/EBITDA of 9x, closer to mature market peers in the US, UK and Australia, and at a 40%, discount to Macau names, translating to a TP of $1.00
In addition, Nomura thinks more downside might be limited, supported by share buybacks, as well as a zero-terminal growth DCF implied valuation.
Monday, May 18, 2015
SG Market (18 May 15)
Singapore shares are expected to stay in consolidation mode given the mixed close on Wall Street and a very lacklustre local corporate earnings season, marked by more misses than hits.
Investors will also eye a slew of US housing data (Tue/Thu), Fed meeting notes (Wed) key China manufacturing PMI (Thu) as well as Singapore’s trade figures due today for fresh clues on the market direction.
From a chart perspective, the STI is still trying to hold its ground above the 50-dma support at 3,450 with topside resistance at 3,520. Looking at technical indicators, the RSI appears neutral, while the MACD ould be gearing up for a bullish crossover.
Stocks to watch:
*Property: URA data showed that developer sales of private homes ex ECs surged in Apr to an 11 month high of 1124 units (+47.5% y/y, +83.4% m/m), due to 2 large project launches. Developers launched 1344 units in Apr, more than 3x m/m. Consultants highlight that while there has been an improvement in primary market activity, it is premature to say that market confidence is returning, expecting May volume to moderate to 300-700 units as launches slow down.
*StarHub: 1Q15 results below estimates. Net profit fell 12.4% to $73.7m, while revenue increased 8.1% to $617.9m, driven by an 180.9% surge in equipment sales to $77.5m from strong demand for smartphones. Meanwhile, total service revenue inched down 0.6% to $540.4, as mobile revenue fell 0.2% on weaker prepaid, while broadband revenue fell 10.8% as a result of higher price competition. Bottom-line how however weighed by EBIDTA margin which fell 2.6ppt to 30%, due largely to a spike in cost of equipment sold (+79.6% to $157m). Interim DPS of $0.05 maintained. NAV/share at $0.131.
*Amtek: 3QFY15 results in line. Net profit soared to US$10.1m (3QFY14: US$1.9m), while revenue surged 65% to US$242.6m, from the consolidation of Interplex, which drove sales in the Automotive and Industrial Products segments. Bottom line surge also buoyed by a 4.5ppt expansion in gross margins, due to improved operating efficiencies existing operations as well as contributions from higher-margin product mix. This was partly offset by a 78% increase in admin expenses and finance cost that grew 2.9x to $4.9m as a result of the Interplex consolidation. NAV/share at US$0.31.
*United Engineers: 1Q15 net profit surged 215% to $25m, while revenue fell 24% to $515.3m, as corporate services revenue crashed 92.7% to $22.7m, offset by progressive recognition of Eight Riversuites (property development), and contributions from MFLEX (technology and manufacturing). Bottom line aided by a 6.2ppt expansion in gross margin from MFLEX’s contributions, and from an overall reduction in operating expenses. This was partially mitigated an absence of disposal gain from last year and a share of loss from associates and JVs. NAV/share at $3.00
*Ying Li: 1Q15 results below estimates, as it swung into a 1Q15 net loss of Rmb0.5m (1Q14 net profit: Rmb33.7m), while revenue tanked 64.2% Rmb100.2m from lower recognition from ongoing projects, partially cushioned by increase in rental income. Gross margin improved 16.2ppt to 55%, as sales of properties mainly comprised of office units that tend to have higher margin. The increase in other income was offset by a spike in admin expenses attributable to FX losses that arose from adverse movements in the USD/SGD. NAV/share at Rmb1.96.
*Tiong Seng: 1Q15 net profit spiked 94% y/y to $3.2m, despite a 41% drop in revenue to $97.9m, mainly due to a lesser amount of construction work done. Meanwhile, bottom line was boosted by lower cost of construction (-44%), net finance income of $0.4m from FX gain compared to loss ($0.9m) in 1Q14, as well as JV contributions of $0.5m (1Q14: nil). Order book stands at $1.2b, stretching revenue visibility till 2020. NAV/share at $0.29.
*Mermaid: 1Q15 results below estimates, with net loss of US$15.8m versus a net profit of US$5.2m. Revenue fell 4.6% to US$60.8m, largely as a result of lower service income. The group reported gross loss of US$11.0m versus gross profit of US$6m from the previous year, due to three high performing vessels were off-hire for dry docking almost throughout the period and low utilization of charter-in vessels. NAV/share at US$0.38.
*YuuZoo: Swung to 1Q15 net profit of $3.2m (1Q14 net loss: $1.1m), while revenue surged 56% to US$9.6m from the phased recognition of the sale of franchise licenses in Turkey and South Korea, offset by decreased payment revenue from the discontinuation from AmEx agreement. Cost of sales decreased in line with lower payments revenue, offset by increased staff expenses, FX loss and increase in amortization of intangibles. NAV/share at US7.2¢
*Mencast Holdings: 1Q15 net profit fell 10% to $2.2m on revenue of $27.3m (-11%). Top-line was largely weighed by a 22% decline in revenue from the offshore & engineering segment, offset by the growth in energy services segment of 33%. Gross margin was relatively flat at 8.1%. Bottom-line partially aided by lower admin expenses of $4.6m (-12%). NAV/share at $35.85.
*Hong Fok: 1Q15 net profit crashed 88% y/y to $0.9m, as revenue tumbled 71% to $15.6m due to the absence of sales from residential units at Concourse Skyline. Bottom line was further weighed by lower associate contributions (-93%), but partly offset by absence of cost of sales of development properties (-70%). NAV/share remained at $2.11.
*EMS Energy: Proposed 88m new shares (5.5% enlarged share capital) placement at $0.023 apiece to seven separate parties. Net proceeds of $1.9m is intended for the funding of order book and working capital.
Investors will also eye a slew of US housing data (Tue/Thu), Fed meeting notes (Wed) key China manufacturing PMI (Thu) as well as Singapore’s trade figures due today for fresh clues on the market direction.
From a chart perspective, the STI is still trying to hold its ground above the 50-dma support at 3,450 with topside resistance at 3,520. Looking at technical indicators, the RSI appears neutral, while the MACD ould be gearing up for a bullish crossover.
Stocks to watch:
*Property: URA data showed that developer sales of private homes ex ECs surged in Apr to an 11 month high of 1124 units (+47.5% y/y, +83.4% m/m), due to 2 large project launches. Developers launched 1344 units in Apr, more than 3x m/m. Consultants highlight that while there has been an improvement in primary market activity, it is premature to say that market confidence is returning, expecting May volume to moderate to 300-700 units as launches slow down.
*StarHub: 1Q15 results below estimates. Net profit fell 12.4% to $73.7m, while revenue increased 8.1% to $617.9m, driven by an 180.9% surge in equipment sales to $77.5m from strong demand for smartphones. Meanwhile, total service revenue inched down 0.6% to $540.4, as mobile revenue fell 0.2% on weaker prepaid, while broadband revenue fell 10.8% as a result of higher price competition. Bottom-line how however weighed by EBIDTA margin which fell 2.6ppt to 30%, due largely to a spike in cost of equipment sold (+79.6% to $157m). Interim DPS of $0.05 maintained. NAV/share at $0.131.
*Amtek: 3QFY15 results in line. Net profit soared to US$10.1m (3QFY14: US$1.9m), while revenue surged 65% to US$242.6m, from the consolidation of Interplex, which drove sales in the Automotive and Industrial Products segments. Bottom line surge also buoyed by a 4.5ppt expansion in gross margins, due to improved operating efficiencies existing operations as well as contributions from higher-margin product mix. This was partly offset by a 78% increase in admin expenses and finance cost that grew 2.9x to $4.9m as a result of the Interplex consolidation. NAV/share at US$0.31.
*United Engineers: 1Q15 net profit surged 215% to $25m, while revenue fell 24% to $515.3m, as corporate services revenue crashed 92.7% to $22.7m, offset by progressive recognition of Eight Riversuites (property development), and contributions from MFLEX (technology and manufacturing). Bottom line aided by a 6.2ppt expansion in gross margin from MFLEX’s contributions, and from an overall reduction in operating expenses. This was partially mitigated an absence of disposal gain from last year and a share of loss from associates and JVs. NAV/share at $3.00
*Ying Li: 1Q15 results below estimates, as it swung into a 1Q15 net loss of Rmb0.5m (1Q14 net profit: Rmb33.7m), while revenue tanked 64.2% Rmb100.2m from lower recognition from ongoing projects, partially cushioned by increase in rental income. Gross margin improved 16.2ppt to 55%, as sales of properties mainly comprised of office units that tend to have higher margin. The increase in other income was offset by a spike in admin expenses attributable to FX losses that arose from adverse movements in the USD/SGD. NAV/share at Rmb1.96.
*Tiong Seng: 1Q15 net profit spiked 94% y/y to $3.2m, despite a 41% drop in revenue to $97.9m, mainly due to a lesser amount of construction work done. Meanwhile, bottom line was boosted by lower cost of construction (-44%), net finance income of $0.4m from FX gain compared to loss ($0.9m) in 1Q14, as well as JV contributions of $0.5m (1Q14: nil). Order book stands at $1.2b, stretching revenue visibility till 2020. NAV/share at $0.29.
*Mermaid: 1Q15 results below estimates, with net loss of US$15.8m versus a net profit of US$5.2m. Revenue fell 4.6% to US$60.8m, largely as a result of lower service income. The group reported gross loss of US$11.0m versus gross profit of US$6m from the previous year, due to three high performing vessels were off-hire for dry docking almost throughout the period and low utilization of charter-in vessels. NAV/share at US$0.38.
*YuuZoo: Swung to 1Q15 net profit of $3.2m (1Q14 net loss: $1.1m), while revenue surged 56% to US$9.6m from the phased recognition of the sale of franchise licenses in Turkey and South Korea, offset by decreased payment revenue from the discontinuation from AmEx agreement. Cost of sales decreased in line with lower payments revenue, offset by increased staff expenses, FX loss and increase in amortization of intangibles. NAV/share at US7.2¢
*Mencast Holdings: 1Q15 net profit fell 10% to $2.2m on revenue of $27.3m (-11%). Top-line was largely weighed by a 22% decline in revenue from the offshore & engineering segment, offset by the growth in energy services segment of 33%. Gross margin was relatively flat at 8.1%. Bottom-line partially aided by lower admin expenses of $4.6m (-12%). NAV/share at $35.85.
*Hong Fok: 1Q15 net profit crashed 88% y/y to $0.9m, as revenue tumbled 71% to $15.6m due to the absence of sales from residential units at Concourse Skyline. Bottom line was further weighed by lower associate contributions (-93%), but partly offset by absence of cost of sales of development properties (-70%). NAV/share remained at $2.11.
*EMS Energy: Proposed 88m new shares (5.5% enlarged share capital) placement at $0.023 apiece to seven separate parties. Net proceeds of $1.9m is intended for the funding of order book and working capital.
Friday, May 15, 2015
P-life REIT
P-life REIT - Latest news was its 1Q15 results, which were in line, with both distributable income and DPU rising 14% y/y to $19.5m and 3.21¢ respectively, largely buoyed by divestment gains ($2.3m) from seven Japanese properties in Dec ’14. Excluding the one-off gains, distributable income would have edged up just 0.7%.
Gross revenue and NPI inched up to $24.8m (+0.7%) and $23.2m (+0.8%), underpinned by stepped-up rents from Singapore properties. The five Japan properties acquired on 23 Mar ’15 contributed just nine days of rental income which was not significant.
The trust booked a FX gain of $1.5m, arising from net income hedge ($0.7m) and capital repatriation from Japan, which unlocked the gains in the foreign currency translation reserve.
Going forward, P-Life expects its recent acquisitions in Mar ‘15 to start contributing to the group’s results, and believes the long-term prospects of the healthcare industry will continue to be healthy given the rising demand for better quality private healthcare services.
The REIT’s enlarged portfolio of 47 high-quality healthcare and healthcare-related assets places it in a good position to benefit from the resilient growth of the industry in Asia-Pacific.
Occupancy rate stood at 100%, reflecting good demand. Aggregate leverage dipped to 34.4% (4Q14: 35.2%) with low average cost of debt of 1.5% and comfortable tenor of 3.6 years.
At the current price, the hospitality REIT trades at 1.4x P/B and a forward yield of 5.3%, versus closest peer First REIT’s 1.4x P/B and 6.2% yield.
Gross revenue and NPI inched up to $24.8m (+0.7%) and $23.2m (+0.8%), underpinned by stepped-up rents from Singapore properties. The five Japan properties acquired on 23 Mar ’15 contributed just nine days of rental income which was not significant.
The trust booked a FX gain of $1.5m, arising from net income hedge ($0.7m) and capital repatriation from Japan, which unlocked the gains in the foreign currency translation reserve.
Going forward, P-Life expects its recent acquisitions in Mar ‘15 to start contributing to the group’s results, and believes the long-term prospects of the healthcare industry will continue to be healthy given the rising demand for better quality private healthcare services.
The REIT’s enlarged portfolio of 47 high-quality healthcare and healthcare-related assets places it in a good position to benefit from the resilient growth of the industry in Asia-Pacific.
Occupancy rate stood at 100%, reflecting good demand. Aggregate leverage dipped to 34.4% (4Q14: 35.2%) with low average cost of debt of 1.5% and comfortable tenor of 3.6 years.
At the current price, the hospitality REIT trades at 1.4x P/B and a forward yield of 5.3%, versus closest peer First REIT’s 1.4x P/B and 6.2% yield.
Midas
Midas: 1Q15 results below estimates. Net profit fell 5.3% to Rmb10.9m despite achieving higher revenue of Rmb320.6m (+8%), driven by its aluminium alloy extruded products division (+7.8%), which accounted for 90% of total turnover.
Gross margin widened to 28.8% (+4.8ppts), led by higher gross margin from the aluminium alloy extruded products division.
Operating profit was however hit by higher admin (+20.2% to Rmb40.4m), selling and distribution (+20.1% to Rmb16.5m) and finance costs (+53.2% to Rmb35.2m).
Associate contributions from Nanjin SR Puzhen Railway fell 27.6% to Rmb9.4m due to different project mix in the respective periods. Bottom-line was partially aided by lower tax expenses of Rmb1.4m (-71.1%), mainly due to recognition of deferred tax asset of Rmb2.9m in Luoyang Midas and JMLA during the quarter.
Going forward, Midas remains positive on its outlook, highlighting that for 2015, the PRC government has announced plans to invest Rmb800b into domestic railway construction, while the recent draft plan of the National Railway Administration, highlights additional plans to invest RMB2.8t over the next five years on railway spending.
Net gearing remains high at 94.8%, partially mitigated by current ratio of 1.36x and interest coverage of 1.35x.
At the current price, Midas trades at 26.3x forward P/E.
Latest broker ratings:
OCBC maintains Hold but places TP of $0.375 under review
Gross margin widened to 28.8% (+4.8ppts), led by higher gross margin from the aluminium alloy extruded products division.
Operating profit was however hit by higher admin (+20.2% to Rmb40.4m), selling and distribution (+20.1% to Rmb16.5m) and finance costs (+53.2% to Rmb35.2m).
Associate contributions from Nanjin SR Puzhen Railway fell 27.6% to Rmb9.4m due to different project mix in the respective periods. Bottom-line was partially aided by lower tax expenses of Rmb1.4m (-71.1%), mainly due to recognition of deferred tax asset of Rmb2.9m in Luoyang Midas and JMLA during the quarter.
Going forward, Midas remains positive on its outlook, highlighting that for 2015, the PRC government has announced plans to invest Rmb800b into domestic railway construction, while the recent draft plan of the National Railway Administration, highlights additional plans to invest RMB2.8t over the next five years on railway spending.
Net gearing remains high at 94.8%, partially mitigated by current ratio of 1.36x and interest coverage of 1.35x.
At the current price, Midas trades at 26.3x forward P/E.
Latest broker ratings:
OCBC maintains Hold but places TP of $0.375 under review
SG Market (15 May 15)
Singapore shares are expected to open higher today, following the positive close in Wall Street, as strong gains in tech companies and a weakened USD propelled the S&P 500 to a new all-time high.
Regional bourses are trading higher this morning in Tokyo (+0.8%), Seoul (+0.3%) and Sydney (+0.4%).
From a chart perspective, support is tipped at around the 50-dma of 3,450 with resistance seen at 3,520.
Stocks to watch:
*Olam: 1Q15 results missed estimates, with net profit down 92% y/y to $31.3m mainly weighed by absence of a revaluation gain and asset sale and leaseback in 1Q14 ($293.9m), and an exceptional loss from its bond buyback ($97.2m). Otherwise, group's core net profit improved 25.7% to $128.5m. Revenue dropped 10.7% to $4.3b as sales volume slumped 33.2% from reduced sales volume of lower margin or discontinued businesses, but partly offset by higher prices of almonds, pepper and hazelnuts. EBITDA margin inched up to 7.6% from 6.9%, as all business segments except the food staples and packaged goods achieved higher EBITDA. Net gearing lowered to 1.85x (4Q14: 1.83x). NAV/share at $1.666.
*Genting Singapore: 1Q15 badly missed.Net profit crashed 73% to $62.7m, while adjusted EBITDA fell 43% to $228.1m. Revenue slumped 23% to $639.2m. Gaming revenue fell 26% to $494.9m, held up by mass market volumes (1Q15 mkt share: 41%, 1Q14: 45%). VIP segment was weak from a steep fall in China VIP players, lower average spend and lower win rate of 2.5% (1Q14: 3%). Non-gaming revenue fell 8% to $156.4m on lower RevPAR and lower average spend at attractions. EBITDA margin fell to 35.7% from 48.3%, as a result of weak hold rates and Chinese VIP plays. Bottom-line weighed by FX losses on financial instruments of $118.0m (1Q14: $15.0m gain) but offset by other operating income of $135.0m (+546%). NAV/share at $0.614.
*SIA: FY15 results in line. Net profit jumped 46.7% to $39.6m taking FY15 net profit to $367.9m (+2.3%). Excluding tiger airways which became a subsidiary on Oct '14, full year revenue was down marginally to $15.2b (-0.2%). Passenger revenue rose 0.9%, as group passenger carriage and yields saw slight improvement. Cargo revenue fell 0.9%, notwithstanding a higher load factor (+0.8% points) and yield (+0.3%), due to capacity reduction (-2.4%). Engineering services revenue declined with reduced overhaul activities, and lower incidental revenue recorded. Overall operating margin rose to 2.6% from 1.7%, aided by a 2.1% drop in fuel costs and 1.9% decline in other operating expenses. Bottom-line weighed by impairments of $14.3m (FY14: $1.9m gain), associate losses of $129.1m (FY14: $45.2m) and lower JV contributions of $52m (-44.7%). Final DPS of 17¢ declared, taking FY15 payout to 22¢ (FY14: 46¢). NAV/share at $10.66.
*NOL: 1Q15 results below estimates. Net loss narrowed 71% to $36.2m, while revenue fell 16% to US$1.58b, on a 15% slump in volume on planned capacity cuts and US West Port congestion, and lower average freight rates (-8%). Logistics division has been discontinued post divestment. Gross margin advanced 7.6ppt to 8.6% on lower bunker costs and increased operational efficiencies. Nevertheless, this was partially offset by a reduction in other gains (-64%), increased finance expenses (+30%), and other operating expenses of $26.7m (1Q14: US$3.1m gain). NAV/share at US$0.66.
*Thai Beverage: 1Q15 net profit rose 10% to THB6.58b on revenue of THB45.7b (+11%). Top-line led by an increase in sales revenue of spirits business (+9.9%), beer business (+17.5%), non-alcoholic beverages business (+7.9%) and food business (+8.2%). Gross margin was flat at 30%. Bottom-line weighed by higher selling (+15%) and admin (+14%) expenses and lower other income (-30%), but partially offset by higher FX gains of THB57.9m (+818%). NAV/share at THB4.22.
*CWT: 1Q15 results below estimates. Net profit fell 16% to $29.2m, while revenue declined 59% to $1.9m due to lower naphtha trading volume and a significant drop in commodity prices. Bottom line slump was mitigated by gross margin that improved 2.6ppt to 4.5%, and a $4.7m gain on sale of REIT units, partially offset by a $4.9m write-off on intangible assets/ goodwill and other foreign assets. NAV/share at $1.338
*Midas: 1Q15 results below estimates. Net profit fell 5.3% to Rmb10.9m on revenue of Rmb320.6m (+8%). Topline was largely led by higher revenue from the Aluminium Alloy Extruded Products Division (+7.8%), which contributed to 90.1% of total revenue, and was also key in improving overall gross margin to 28.8% from 24.0%. Bottom-line weighed by higher selling and distribution expenses (+20.1%), admin expenses (+20.2%) and finance costs (+53.2%). Associate contributions from Nanjin SR Puzhen Ralway fell 27.6% due to different project mix in the respective periods. NAV/share at Rmb2.49.
*Silverlake: 3QFY15 results in line. Net profit increased 22% to RM76.2m, while revenue climbed 5% to RM143.3m, driven by a 38% increase in maintenance and enhancement revenue following the completion of GST enhancement projects, and increased software licensing sales, offset by weakness in software project services. Gross margin expanded 10ppt to 68% on better product mix. Other income soared to RM5m, from RM0.3m a year earlier, in part driven by FX gains. However, bottom line growth was partially negated by an 87% swell in admin expenses to RM17.2m. Third interim DPS of 1.1¢ declared (3QFY14: 1¢). 1-for-5 bonus issue announced. NAV/share of RM0.281.
*Hyflux: 1Q15 net profit crashed 85% to $5.6m, while revenue fell 32% to $60.4m, mainly from lower engineering, procurement and construction activities. Gross margin improved 6.2ppt to 65.5%. The bottom line slump came from a slump in other income (-53% to $27.0m), which included a $15.8m gain from disposal of a leasehold building, versus a $54.1m gain from sale of financial asset last year. Associate and JV losses also doubled to $7.9m. NAV/share at $0.557.
*Haw Par: 1Q15 net profit increased 10.6% to $13.5m, while revenue increased 18.6% to $45.6m, from increased healthcare sales (+29%) in key markets. This was offset by leisure segment (-28.5%) on lower visitations at Underwater World Singapore and Pattaya. Property segment revenue fell 7.6 on lower occupancy rates. Bottom line boosted by gross margin expansion of 0.6ppt to 60.5%, but partially offset by share of associate’s profits which tanked 90% to $0.2m. NAV/share at $12.63
*Otto Marine: 1Q15 net loss narrowed 8% to US$13.2m, despite a 92% surge in revenue to US$148.1m, mainly from a vessel sale, partially offset by lower utilisation and rates for its chartering operations. Bottom
Regional bourses are trading higher this morning in Tokyo (+0.8%), Seoul (+0.3%) and Sydney (+0.4%).
From a chart perspective, support is tipped at around the 50-dma of 3,450 with resistance seen at 3,520.
Stocks to watch:
*Olam: 1Q15 results missed estimates, with net profit down 92% y/y to $31.3m mainly weighed by absence of a revaluation gain and asset sale and leaseback in 1Q14 ($293.9m), and an exceptional loss from its bond buyback ($97.2m). Otherwise, group's core net profit improved 25.7% to $128.5m. Revenue dropped 10.7% to $4.3b as sales volume slumped 33.2% from reduced sales volume of lower margin or discontinued businesses, but partly offset by higher prices of almonds, pepper and hazelnuts. EBITDA margin inched up to 7.6% from 6.9%, as all business segments except the food staples and packaged goods achieved higher EBITDA. Net gearing lowered to 1.85x (4Q14: 1.83x). NAV/share at $1.666.
*Genting Singapore: 1Q15 badly missed.Net profit crashed 73% to $62.7m, while adjusted EBITDA fell 43% to $228.1m. Revenue slumped 23% to $639.2m. Gaming revenue fell 26% to $494.9m, held up by mass market volumes (1Q15 mkt share: 41%, 1Q14: 45%). VIP segment was weak from a steep fall in China VIP players, lower average spend and lower win rate of 2.5% (1Q14: 3%). Non-gaming revenue fell 8% to $156.4m on lower RevPAR and lower average spend at attractions. EBITDA margin fell to 35.7% from 48.3%, as a result of weak hold rates and Chinese VIP plays. Bottom-line weighed by FX losses on financial instruments of $118.0m (1Q14: $15.0m gain) but offset by other operating income of $135.0m (+546%). NAV/share at $0.614.
*SIA: FY15 results in line. Net profit jumped 46.7% to $39.6m taking FY15 net profit to $367.9m (+2.3%). Excluding tiger airways which became a subsidiary on Oct '14, full year revenue was down marginally to $15.2b (-0.2%). Passenger revenue rose 0.9%, as group passenger carriage and yields saw slight improvement. Cargo revenue fell 0.9%, notwithstanding a higher load factor (+0.8% points) and yield (+0.3%), due to capacity reduction (-2.4%). Engineering services revenue declined with reduced overhaul activities, and lower incidental revenue recorded. Overall operating margin rose to 2.6% from 1.7%, aided by a 2.1% drop in fuel costs and 1.9% decline in other operating expenses. Bottom-line weighed by impairments of $14.3m (FY14: $1.9m gain), associate losses of $129.1m (FY14: $45.2m) and lower JV contributions of $52m (-44.7%). Final DPS of 17¢ declared, taking FY15 payout to 22¢ (FY14: 46¢). NAV/share at $10.66.
*NOL: 1Q15 results below estimates. Net loss narrowed 71% to $36.2m, while revenue fell 16% to US$1.58b, on a 15% slump in volume on planned capacity cuts and US West Port congestion, and lower average freight rates (-8%). Logistics division has been discontinued post divestment. Gross margin advanced 7.6ppt to 8.6% on lower bunker costs and increased operational efficiencies. Nevertheless, this was partially offset by a reduction in other gains (-64%), increased finance expenses (+30%), and other operating expenses of $26.7m (1Q14: US$3.1m gain). NAV/share at US$0.66.
*Thai Beverage: 1Q15 net profit rose 10% to THB6.58b on revenue of THB45.7b (+11%). Top-line led by an increase in sales revenue of spirits business (+9.9%), beer business (+17.5%), non-alcoholic beverages business (+7.9%) and food business (+8.2%). Gross margin was flat at 30%. Bottom-line weighed by higher selling (+15%) and admin (+14%) expenses and lower other income (-30%), but partially offset by higher FX gains of THB57.9m (+818%). NAV/share at THB4.22.
*CWT: 1Q15 results below estimates. Net profit fell 16% to $29.2m, while revenue declined 59% to $1.9m due to lower naphtha trading volume and a significant drop in commodity prices. Bottom line slump was mitigated by gross margin that improved 2.6ppt to 4.5%, and a $4.7m gain on sale of REIT units, partially offset by a $4.9m write-off on intangible assets/ goodwill and other foreign assets. NAV/share at $1.338
*Midas: 1Q15 results below estimates. Net profit fell 5.3% to Rmb10.9m on revenue of Rmb320.6m (+8%). Topline was largely led by higher revenue from the Aluminium Alloy Extruded Products Division (+7.8%), which contributed to 90.1% of total revenue, and was also key in improving overall gross margin to 28.8% from 24.0%. Bottom-line weighed by higher selling and distribution expenses (+20.1%), admin expenses (+20.2%) and finance costs (+53.2%). Associate contributions from Nanjin SR Puzhen Ralway fell 27.6% due to different project mix in the respective periods. NAV/share at Rmb2.49.
*Silverlake: 3QFY15 results in line. Net profit increased 22% to RM76.2m, while revenue climbed 5% to RM143.3m, driven by a 38% increase in maintenance and enhancement revenue following the completion of GST enhancement projects, and increased software licensing sales, offset by weakness in software project services. Gross margin expanded 10ppt to 68% on better product mix. Other income soared to RM5m, from RM0.3m a year earlier, in part driven by FX gains. However, bottom line growth was partially negated by an 87% swell in admin expenses to RM17.2m. Third interim DPS of 1.1¢ declared (3QFY14: 1¢). 1-for-5 bonus issue announced. NAV/share of RM0.281.
*Hyflux: 1Q15 net profit crashed 85% to $5.6m, while revenue fell 32% to $60.4m, mainly from lower engineering, procurement and construction activities. Gross margin improved 6.2ppt to 65.5%. The bottom line slump came from a slump in other income (-53% to $27.0m), which included a $15.8m gain from disposal of a leasehold building, versus a $54.1m gain from sale of financial asset last year. Associate and JV losses also doubled to $7.9m. NAV/share at $0.557.
*Haw Par: 1Q15 net profit increased 10.6% to $13.5m, while revenue increased 18.6% to $45.6m, from increased healthcare sales (+29%) in key markets. This was offset by leisure segment (-28.5%) on lower visitations at Underwater World Singapore and Pattaya. Property segment revenue fell 7.6 on lower occupancy rates. Bottom line boosted by gross margin expansion of 0.6ppt to 60.5%, but partially offset by share of associate’s profits which tanked 90% to $0.2m. NAV/share at $12.63
*Otto Marine: 1Q15 net loss narrowed 8% to US$13.2m, despite a 92% surge in revenue to US$148.1m, mainly from a vessel sale, partially offset by lower utilisation and rates for its chartering operations. Bottom
Thursday, May 14, 2015
SATS
SATS: (S$3.21) Better-than-expected 4QFY15 on good cost control and associates gains
SATS' 4QFY15 results beat estimates as net profit swelled 21.1% y/y to $51.6m, bringing FY15 earnings to $195.7m (+8.5%) or almost 5% above consensus estimates.
For the quarter, revenue slipped 2.2% to $425.1m, mainly caused by lower contribution of $250.9m (-5.8%) from its food solutions segment (-5.8%), which was affected by weaker performance of its Japanese unit TFK, and the divestment of an Australian subsidiary, Urangan Fisheries in Jul '14. This was partially mitigated by higher sales of $173m (+3.5%) from its gateway services.
Operating margin improved to 10.5% (+0.9ppt), benefitting from lower cost of raw materials (-8.5%), depreciation charges (-9.4%) and other costs (-16.5%), while bottom line was further boosted by a 32.3% surge in share of profits from associates/joint ventures to $13.1m.
Balance sheet remains sturdy with net cash position rising from $226.6m to $305.6m, backed by continuous operating cash flow of $263m.
Proposed final DPS of 9¢ takes its FY15 dividend payout to 14¢ (FY14: 13¢).
At current price, SATS is trading at a forward P/E of 18.2x and offers a 4.4% yield, relatively more attractive compared to other aviation support services peers of 21.3x and 4.1%, respectively.
SATS' 4QFY15 results beat estimates as net profit swelled 21.1% y/y to $51.6m, bringing FY15 earnings to $195.7m (+8.5%) or almost 5% above consensus estimates.
For the quarter, revenue slipped 2.2% to $425.1m, mainly caused by lower contribution of $250.9m (-5.8%) from its food solutions segment (-5.8%), which was affected by weaker performance of its Japanese unit TFK, and the divestment of an Australian subsidiary, Urangan Fisheries in Jul '14. This was partially mitigated by higher sales of $173m (+3.5%) from its gateway services.
Operating margin improved to 10.5% (+0.9ppt), benefitting from lower cost of raw materials (-8.5%), depreciation charges (-9.4%) and other costs (-16.5%), while bottom line was further boosted by a 32.3% surge in share of profits from associates/joint ventures to $13.1m.
Balance sheet remains sturdy with net cash position rising from $226.6m to $305.6m, backed by continuous operating cash flow of $263m.
Proposed final DPS of 9¢ takes its FY15 dividend payout to 14¢ (FY14: 13¢).
At current price, SATS is trading at a forward P/E of 18.2x and offers a 4.4% yield, relatively more attractive compared to other aviation support services peers of 21.3x and 4.1%, respectively.
CDL
CDL: 1Q15 results in line, with net profit of $123.0m (+2.8%) on revenue of $814.9m (+11%). Top-line was led by contributions from property development projects (+16% to $298.6m), Hotel operations (+6.2% to $376.0m) and rental properties (+4.3% to $99.2m).
Meanwhile, overall Gross margin fell to 45.5% from 48.3%.
Key projects contributing to the property development segment during the quarter included Coco Palms, D’Nest, H2O Residences, Jewel @ Buangkok, HAUS@SERANGOON GARDEN, The Palette and UP@Robertson Quay. Pre-tax (PBT) margin for the segment inched down to 4.3ppt to 32.7% due to lower profit margins achieved for projects launched recently.
Hotel operations was led by a 5.8% increase in global RevPar at Millenium & Copthrone, as well as 5 new hotels acquired in 2014 and better performance from refurbished hotels. PBT margin for the segment was stable at 9.0%.
Meanwhile, the rental properties segment remained relatively steady with PBT margin stable at 37.2% (1Q14: 39.4%).
Bottom-line was weighed by 13.8% rise in admin expenses to $128.1m, as a result of higher salaries and related expenses and depreciation arising from the acquisition of 5 hotels by the group.
Additionally, other operating expenses rose 15.5% to $97.8m, due to higher professional fees and property tax and insurance incurred.
JV profits more than doubled to $38.5m, mainly due to full profit recognition from executive condominium, The Rainforest which obtained TOP in Mar ’15.
Going forward, CDL guided that in light of the subdued domestic property market, the group is accelerating its diversification strategy across two dimensions – firstly, expanding its core real estate development business overseas and secondly by developing an unlisted funds management business.
Yet, even as the group expands overseas and works actively to develop new platforms, its investment in Singapore will remain the mainstay of its business.
Going forward, Maybank-KE believes that Singapore’s property market is past tightening and expect cooling measures to be lifted in the year ahead. As one of the largest developers in CDL is a good proxy to benefit from such a move. Further plans to diversify geographically could also underpin its medium-term growth.
CDL currently has a net gearing of 27% trades at a 25% discount to its RNAV of $13.41.
Latest broker ratings:
Maybank-KE maintains Buy with TP of $11.40
CIMB maintains Hold with TP of $10.90
CS maintains O/p with TP of $12.25
DBS Vickers maintains Buy with TP of $11.54
Deutsche maintains Buy with TP of $12.40
UBS maintains Buy with TP of $10.45
Meanwhile, overall Gross margin fell to 45.5% from 48.3%.
Key projects contributing to the property development segment during the quarter included Coco Palms, D’Nest, H2O Residences, Jewel @ Buangkok, HAUS@SERANGOON GARDEN, The Palette and UP@Robertson Quay. Pre-tax (PBT) margin for the segment inched down to 4.3ppt to 32.7% due to lower profit margins achieved for projects launched recently.
Hotel operations was led by a 5.8% increase in global RevPar at Millenium & Copthrone, as well as 5 new hotels acquired in 2014 and better performance from refurbished hotels. PBT margin for the segment was stable at 9.0%.
Meanwhile, the rental properties segment remained relatively steady with PBT margin stable at 37.2% (1Q14: 39.4%).
Bottom-line was weighed by 13.8% rise in admin expenses to $128.1m, as a result of higher salaries and related expenses and depreciation arising from the acquisition of 5 hotels by the group.
Additionally, other operating expenses rose 15.5% to $97.8m, due to higher professional fees and property tax and insurance incurred.
JV profits more than doubled to $38.5m, mainly due to full profit recognition from executive condominium, The Rainforest which obtained TOP in Mar ’15.
Going forward, CDL guided that in light of the subdued domestic property market, the group is accelerating its diversification strategy across two dimensions – firstly, expanding its core real estate development business overseas and secondly by developing an unlisted funds management business.
Yet, even as the group expands overseas and works actively to develop new platforms, its investment in Singapore will remain the mainstay of its business.
Going forward, Maybank-KE believes that Singapore’s property market is past tightening and expect cooling measures to be lifted in the year ahead. As one of the largest developers in CDL is a good proxy to benefit from such a move. Further plans to diversify geographically could also underpin its medium-term growth.
CDL currently has a net gearing of 27% trades at a 25% discount to its RNAV of $13.41.
Latest broker ratings:
Maybank-KE maintains Buy with TP of $11.40
CIMB maintains Hold with TP of $10.90
CS maintains O/p with TP of $12.25
DBS Vickers maintains Buy with TP of $11.54
Deutsche maintains Buy with TP of $12.40
UBS maintains Buy with TP of $10.45
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