There is a cryptocurrency craze going on. Everyone is excited, fund houses are setting up new departments, countries setting up think tanks to consider all the possibilities.And with all the hype around, the uninitiated will ask the eventual question: …
Category: SG Stocks And Shares
Morning!Sending to all my friends for reference. You are receiving this email because you have a trading account with me. As im in the office at 7am today, I decided to compile some straightforward thoughts, along with some research materials, and sha…
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I found the article below by chance.To a certain extent, I do agree with most of the points. The current client relationship wants nothing but low trading fees. Of which, this is perfectly understandable. Mind you, I want low fee for my trades, who doe…
a) continued volatility in Europe with rising anti-globalization sentiment post Brexit,
b) depressed growth prospects in mature Asian markets like Japan, where interest rates are only marginally positive, and
c) slowing growth in China, with its 2017 GDP growth target lowered to 6.5%, from 6.5-7% in 2016. These could create a feedback loop in the US economy, especially as foreign contributions make up about 44% of S&P 500 companies’ sales figures in 2015, according to S&P Dow Jones.
· Muted response seen in the past two rate hikes, third unlikely to deviate much. The REITs share price performance was in line with the market in the weeks of the past two rate hikes. REITs outperformed the market by 5-7% post the 3- to 6-month period after the first rate hike on 16 Dec 15, and underperformed by 0.5-3% in the 1- to 3-month period post the second rate hike in 14 Dec 16. The muted response reflects the pricing in of the rate hike ahead of the actual move.
PERFORMANCE POST PAST TWO RATE HIKES
· Best of both worlds – Yield play on downturn and growth play on upturn. In light of a potentially depressed global growth outlook hampering further interest rate acceleration, we opine that REITs could continue to be an attractive asset class. However, if the recent share price rally turns out to be a precursor to the cyclical recovery going forward, REITs will transition from being viewed as yield vehicles to growth vehicles and continue to deliver strong performances unlike traditional yield plays. Yield compression to upcycle spread implies. We prefer deep value and diversified REITs with exposure to the industrial business park and hospitality spaces. Our top picks are AREIT, FLT, FHT and CCT.
REITs Yield SPREAD
INDIVIDUAL REIT MANAGER’S SENSITIVITY ANALYSIS (FACTORS IN THE DEBT REFINANCING SCHEDULE)
FTSE US NAREIT Index (RHS) and FFTR (LHS)
NetLink NBN Trust (NetLink SP)
Buy | Price/Tgt: S$0.805/S$0.93 | Mkt Cap: S$3,137.1m
Unassailable Foundation Of Next Gen NBN
NetLink NBN Trust operates the only passive fibre infrastructure to provide wholesale dark fibre services for ultra-high-speed fibre connections in SIngapore. It has a dominant market share of 81.7% for residential and 30.8% for non-residential connections, where growth is projected at 5-year CAGR of 7.2% and 10.1% respectively for 2016-21. The Smart Nation initiative also provides numerous opportunities for growth. Initiate coverage with BUY. Target price: S$0.93.
· Futile to replicate NetLink’s extensive passive infrastructure. NetLink NBN Trust (NetLink) is the sole network company for Next Gen NBN. Its extensive nationwide coverage acts as a barrier to entry. To date, NetLink has received aggregate grants of S$732m for the construction of passive fibre infrastructure. Without similar support from the government, it would be almost impossible for any potential competitor to provide a viable alternative or meet current regulated wholesale pricing.
· Defensive and regulated cash flows. NetLink possesses resilient, predicatable, transparent and regulated revenue streams. Competition or churn among retail service providers does not affect the number of fibre connections provided by NetLink. NetLink’s customers are established players in the telecommunications industry in Singapore.
· Growth from Smart Nation initiative. The Smart Nation platform is a government initiative to build a pervasive network of sensors and probes deployed to collect real-time environmental information, process it and share it among government agencies and private sector participants. Smart Nation would have a positive impact on demand for NetLink’s NBAP connections.
· Growth propelled by migration from ADSL and HFC to fibre connections. Independent industry consultant Media Partners Asia (MPA) estimated the penetration for legacy ADSL and HFC-based connections at 17.9% as of Mar 17. MPA expects all ADSL subscribers to migrate to fibre connections by Dec 19, and HFC-based services to cease by Dec 21. As such, residential fibre broadband subscribers are projected to increase at a 5-year CAGR of 7.2% in 2016-21.
· SMEs drive demand for non-residential connections. Growth drivers for the non-residential segment include SMEs and cloud-based applications. To encourage the adoption of fibre broadband among SMEs, the government has provided a 50% subsidy capped at S$120/month for up to 24 months for SMEs subscribing to fibre broadband plans with speeds of at least 100Mbps. MPA projects non-residential fibre broadband subscribers to grow at a 5-year CAGR of 10.1% in 2016-21.
· Initiate coverage with BUY. Our target price of S$0.93 is based on DCF methodology (cost of equity: 6.5%, terminal growth: 2.0%). The stock provides attractive distribution yield of 5.2% (annualised) and 6.0% for FY18 and FY19 respectively.
– Investors will have plenty of US and China economic data to chew this week but the biggest risk issues would be Trump’s renewed threat to scrap Nafta and his long-awaited tax reform agenda.
– Yellen and Draghi Both Defend Post-Crisis Financial
– Technically, the STI remains in oversold territory with immediate resistance at 3,275 and underlying support at 3,220.
– Maybank KE believes that a resurgent
– Over $3b worth of deals have been concluded so far and another 30 properties are in various stages of the collective sale process.
– Together with six confirmed sites in 2H17 GLS, we see potential 12,400 units added to Singapore’s residential pipeline.
–Enbloc sales also front-load demand with displaced households looking out for new properties and could potentially reduce the 16,900 unsold inventory.
– MKE is positive on property developers. UOL (Buy, TP: $9.43) and City Dev (Buy, TP: $12.05) are its top large-cap picks, while GuocoLand (Buy, TP: $2.75) offers compelling relative value.
– 4QFY17 net profit surged to $244.8m (4QFY16: $39.8m) and brought FY17 earnings to $357.2m (-41%), meeting expectations. The slide was due to
– For the quarter, revenue soared 90% to $407.4m on faster-than-expected sale recognition from Singapore residential projects.
– Gross margin widened 4.6ppt to 24.4%.
– Bottom line was boosted by $254.5m (4QFY16: $14.6m) fair value gain from revaluation of Guoco Tower at Tanjong Pagar Centre.
– Net gearing eased to 0.84x from 1x in Mar ’17.
– Proposed final DPS of 7¢ (FY16: final 5¢, special 4¢).
– Last traded at 0.72 P/B. Maybank KE has a Buy with TP of $2.75
– 4QFY17 net profit tumbled 58% to RM32.7m as it incurred wider losses from associates/JVs of RM5.3m (4QFY16: -RM0.08m). This brought FY17 core earnings to RM160.7m (-41.3%), which missed estimates.
– For the quarter, revenue fell 25% to RM124.9m, hurt by lower contributions from software licensing (-88%), maintenance and enhancement services (-11%),
– Gross margin contracted 20ppt to 46% amid weaker software licensing business.
– Drop inbottom line was pared by a positive RM10.7m FX swing.
– Proposed final DPS of 0.3¢ (4QFY16: 1¢) and special DPS of 1¢ (4QFY16: nil), bringing full-year payout to 4.5¢ (FY16: 3¢).
– Trades at 20.1x forward P/E
– FY17 net profit fell 28% to US$49m on revenue of US$350.2m (-11%).
– RevPAR declined 10% due to the weaker GBP.
– Bottom line was further hit by a legal settlement in the UK, US$3.7m write-off on property and equipment as well as a 38% jump in net financing cost.
– Maintained first and final DPS of 2.2¢.
– NAV/share at US$0.808
– Turned around to 4QFY17 net profit of A$2.4m (4QFY16: A$165.1m loss) in absence of A$130.9m impairment on fixed assets and intangibles.
– This swung FY17 results to a net profit of A$4.7m (FY16: A$258.9m loss).
– Quarterly revenue rose 18% to A$121.2m on increased work on core projects in the energy and process sector.
– Gross margin slipped to -0.9ppt to 7.8%.
– Bottom line was also buttressed by
– NAV/share at A$0.017
– Acquired rig repair assets adjacent to its existing yard, VT Halter Marine in Pascagoula, Mississippi, US from World Marine of Mississippi for US$25m.
– These assets comprise a purpose-built facility of 94 acres for heavy marine fabrication, and offshore oil and gas rig upgrades, repairs and conversions.
– SG Bike, a 51:27:22 JV with Sean Tay and Andy Tay, has launched a bike sharing scheme at Bukit Panjang, which is expected to broaden group revenue base.
– The JV aims to address
– Secured a PUB contract worth $1.4m relating to trial trenching works for water projects.
– Proposing to divest 19.3m shares (~40% stake) in Mediacorp Press and 18m shares (20% stake) in Mediacorp TV to Mediacorp for $9.4m and $8.6m respectively.
– The group expects to record a write-down of $31m due to the transaction.
– UOL exercised
– This will increase UOL’s stake in UIC to about 48.94%from 44.71%.
– The transaction is expected to be completed by early Sep ’17
*Tiong Seng/Ocean Sky
– 60:40 JV to acquire Sloane Court Hotel and adjacent plot of land at Balmoral Road for $80.5m or $1,292
Singapore Stocks to Watch
* First Resources (FR SP): New outperform at Daiwa, PT S$2.11
*Golden Agri (GGR SP): New
* GuocoLand (GUOL SP): 4Q net income S$244.8m vs S$39.8m year ago
* Indofood Agri Resources (IFAR SP): New underperform at Daiwa, PT S$0.40
*Marco Polo Marine (MPM SP): Co., unit filed 2 further applications to Singapore high court for leave to convene a meeting to consider 2 schemes of arrangement
* Singapore Press Holdings (SPH SP): Mediacorp buys SPH stakes in two units for S$18m
* Singapore Technologies Engineering (STE SP): Co. buys rig repair assets in U.S. for $25 million
*Wilmar (WIL SP): New buy at Daiwa, PT S$3.82
News for today 28/8/2017:
– It pays to not profit from someone else’s miseryhttp://www.straitstimes.com/business/invest/it-pays-to-not-profit-from-someone-elses-misery?xtor=CS3-18
– Traders watching US and China this week http://www.straitstimes.com/business/companies-markets/traders-watching-us-and-china-this-week?xtor=CS3-18
– US stocks end higher; oil shares boosted by hurricane http://www.straitstimes.com/business/companies-markets/us-stocks-end-higher-oil-shares-boosted-by-hurricane?xtor=CS3-18
– Financial rules have made economy stronger, changes should be modest: Yellen http://www.straitstimes.com/business/economy/financial-rules-have-made-economy-stronger-changes-should-be-modest-yellen?xtor=CS3-18;
Post-recession financial rules have made economy stronger, not slower: Yellen
– Multi-decade triple top points to decline in US equities http://www.businesstimes.com.sg/companies-markets/multi-decade-triple-top-points-to-decline-in-us-equities?xtor=CS3-25
– Amazon to slash prices on upscale US grocer’s products http://www.straitstimes.com/business/companies-markets/amazon-to-slash-prices-on-upscale-us-grocers-products?xtor=CS3-18
– Toronto property market in chaos as prices slide http://www.straitstimes.com/business/property/toronto-property-market-in-chaos-as-prices-slide?xtor=CS3-18
– Euro hits 2-1/2-year high after Draghi refrains from talking down currency http://www.businesstimes.com.sg/banking-finance/euro-hits-2-12-year-high-after-draghi-refrains-from-talking-down-currency?xtor=CS3-25
– China industrial profits keep paceas factory inflation holds up http://www.businesstimes.com.sg/government-economy/china-industrial-profits-keep-pace-as-factory-inflation-holds-up
– Japan’s core consumer prices up for 7th month http://www.straitstimes.com/business/economy/japans-core-consumer-prices-up-for-7th-month?xtor=CS3-18
– Electronics powers 21 per cent jump in factory output http://www.straitstimes.com/business/economy/electronics-powers-21-jump-in-factory-output?xtor=CS3-18;
Singapore factory output outperforms with 21% surge in July as electronics manufacturing soars http://www.straitstimes.com/business/economy/singapore-factory-output-outperforms-with-21-surge-in-july-as-electronics?xtor=CS3-18;
Singapore factory output for July sizzles with 21% growth http://www.businesstimes.com.sg/government-economy/singapore-factory-output-for-july-sizzles-with-21-growth?xtor=CS3-25
– STI ends lower with profit-taking by investors http://www.straitstimes.com/business/companies-markets/sti-ends-lower-with-profit-taking-by-investors?xtor=CS3-18
– Short-sellers caught short in S’pore http://www.straitstimes.com/business/short-sellers-caught-short-in-spore?xtor=CS3-18
– Govt studying plan to sell large land plots in Jurong Lake District http://www.businesstimes.com.sg/government-economy/govt-studying-plan-to-sell-large-land-plots-in-jurong-lake-district?xtor=CS3-25
– Call to pace development of Jurong Lake District http://www.businesstimes.com.sg/real-estate/call-to-pace-development-of-jurong-lake-district?xtor=CS3-25
– HSBC ‘back in growth mode’ in Singapore http://www.straitstimes.com/business/banking/hsbc-back-in-growth-mode-in-singapore?xtor=CS3-18
– Sun Rosier condo off Bartley Road up for en bloc sale http://www.straitstimes.com/business/property/sun-rosier-condo-off-bartley-road-up-for-en-bloc-sale?xtor=CS3-18
Stocks to watch today 28/8/2017:
– Tiong Seng, Ocean Sky unit to buy Sloane Court Hotelhttp://www.businesstimes.com.sg/companies-markets/tiong-seng-ocean-sky-unit-to-buy-sloane-court-hotel?xtor=CS3-25
* Ocean Sky last close $0.076, 52wk high/low $0.149/$0.06
* Tiong Seng last close $$0.295, 52wk high/low $0.38/$0.21
– Comfortdelgro last close $2.28, 52wk high/low $2.98/$2.13 – Analysts upbeat on possible tie-up between Comfort and Uber http://www.straitstimes.com/business/companies-markets/analysts-upbeat-on-possible-tie-up-between-comfort-and-uber?xtor=CS3-18
– Guocoland last close $2.29, 52wk high/low $2.31/$1.78 – Q4 profit soars to $245m for GuocoLand http://www.straitstimes.com/business/companies-markets/q4-profit-soars-to-245m-for-guocoland?xtor=CS3-18
– GL Ltd last close $0.75, 52wk high/low $0.83/$0.69 – Company’s profit hit by declines in hotel, property development http://www.straitstimes.com/business/companies-markets/gls-profit-hit-by-declines-in-hotel-property-development?xtor=CS3-18
– ICP last close $0.008, 52wk high/low $0.011/$0.006 – Company’s FY earnings still mired in red ink with S$2.7m loss; revenue expands 6.8% to S$2.1m http://www.businesstimes.com.sg/companies-markets/icps-fy-earnings-still-mired-in-red-ink-with-s27m-loss-revenue-expands-68-to-s21m?xtor=CS3-25
– Imperium Crown last close $0.109, 52wk high/low $0.128/$0.057 – Company’s FY results still bogged in red ink with S$6.7m loss http://www.businesstimes.com.sg/companies-markets/imperium-crowns-fy-results-still-bogged-in-red-ink-with-s67m-loss?xtor=CS3-25
– Mary Chia last close $0.11, 52wk high/low $0.121/$0.044 – Company set for makeover after buyout http://www.straitstimes.com/business/companies-markets/mary-chia-set-for-makeover-after-buyout?xtor=CS3-18; Mary Chia shares shoot up 70% on mandatory general offer http://www.straitstimes.com/business/companies-markets/mary-chia-shares-shoot-up-70-on-mandatory-general-offer?xtor=CS3-18
– Metech International last close $0.003, 52wk high/low $0.004/$0.001 – Company’s Q4 profit rockets to S$391,000 from loss in previous year http://www.businesstimes.com.sg/companies-markets/metech-internationals-q4-profit-rockets-to-s391000-from-loss-in-previous-year?xtor=CS3-25
– POSH last close $0.275, 52wk high/low $0.405/$0.265 – PACC Offshore plots steady course in rough seas http://www.straitstimes.com/business/pacc-offshore-plots-steady-course-in-rough-seas?xtor=CS3-18
– Silverlake Axis last close $0.605, 52wk high/low $0.71/$0.50 – Company’s Q4 profit down 58% http://www.businesstimes.com.sg/companies-markets/silverlake-axiss-q4-profit-down-58?xtor=CS3-25
– ST Engineering last close $3.55, 52wk high/low $3.86/$3.03 – Company picks up rig repair assets in the US for US$25 million http://www.businesstimes.com.sg/companies-markets/st-engineering-picks-up-rig-repair-assets-in-the-us-for-us25-million?xtor=CS3-25;
Sunseap, ST Kinetics ink solar energy agreement http://www.businesstimes.com.sg/investing-wealth/sunseap-st-kinetics-ink-solar-energy-agreement?xtor=CS3-25
– SPH last close $2.76, 52wk high/low $3.84/$2.75 – Company to divest stakes in Mediacorp TV and Press while Today newspaper will cease print edition and go fully digital http://www.straitstimes.com/business/companies-markets/sph-to-divest-stakes-in-mediacorp-tv-and-press-while-today-newspaper-will?xtor=CS3-18;
SPH divesting stakes in Mediacorp entities http://www.businesstimes.com.sg/companies-markets/sph-divesting-stakes-in-mediacorp-entities?xtor=CS3-25
– Tan Chong last close HK$2.37, 52wk high/low HK$2.50/HK$2.25
– Company’s half-year net profit up 177%
– Thakral last close $0.58, 52wk high/low $0.67/$0.155 – Company accepts bid of $74m for Hong Kong warehouse properties http://www.straitstimes.com/business/companies-markets/thakral-accepts-bid-of-74m-for-hong-kong-warehouse-properties?xtor=CS3-18
– Trendlines last close $0.141, 52wk high/low $0.205/$0.136 – Company builds war chest; eyes combined markets of Israel, Singapore, China http://www.businesstimes.com.sg/companies-markets/trendlines-builds-war-chest-eyes-combined-markets-of-israel-singapore-china?xtor=CS3-25
Options and Considerations For Privatisations in Singapore
LUCIEN WONG – Allen & Gledhill LLP
LEE KEE YENG – Allen & Gledhill LLP
– The market may succumb to profit-taking as 2Q results season winds to an end and investors await FOMC minutes for clues on the Fed’s interest rate path.
– With the current US and NK disputes, USD continue to remain flat.
– Of the >100 companies tracked, 22% surpassed 2Q earnings estimates, while 32% missed, down from 28% and 36% respectively in 1Q17.
– Technically, STI exhibited a bearish engulfing candlestick yesterday, which points to near term weakness. Support for the index is at 3,275, with topside resistance is at 3,360.
– If possible please avoid Wilmar.
– Dipped into 1QFY18 net loss of $0.5m (1QFY17: $0.5m profit), weighed by a surge in finance costs (+163.1%) and income tax (+134.5%).
– Revenue slid 6.2% to $23.2m on declines across primary healthcare (-$1.1m) and specialist & wellness healthcare (-$0.4m) segments.
– Gross margin held steady at 81% (1QFY17: 79.6%) but operating cash flow deteriorated to negative $4.2m.
– While the operating environment continues to be challenging, the group is well-capitalised following the $60m issuance of convertible notes in Apr.
– SGX has requested it to appoint an independent reviewer to look into loan extensions to related parties.
– Trades at 0.7x P/B.
– Jul operating statistics showed higher group passenger load factor of 83.6% (+1.5ppt) as traffic (+4.1%) outpaced capacity growth (+2.2%).
– Cargo load factor rose 2.5ppt to 63.2%.
– Parent load factor improved for routes to Americas (+3ppt), Europe (+4.5ppt), West Asia and Africa (+2.4ppt), although South West Pacific (-2ppt) deteriorated, while East Asia was muted (+0.5ppt).
– Load factor for SilkAir (+4.5ppt to 76.6%) was also better but that budget carrier (-0.2ppt to 84.7%) weakened slightly.
– Trades at 0.94x P/B.
– Maiden hotel development at Stevens Road has received TOP on 3 Aug and will likely open end 2017.
– The $900m project will have two hotels – 254-room Novotel and 518-room Mercure and includes some commercial space.
– Trades at 1.73x P/B.
– Secured three projects worth $42m.
– Works include the erection of a 5-storey residential building with scheduled completion in 2018, a sub-contract for architectural works at Lentor Station (completion: 2020) and a sub-contract for architectural works at Stevens Station (completion: 2020).
– Trades at 21.8x trailing P/E.
– Entered a joint marketing agreement with NEC Asia Pacific for sale of a high-performance face-recognition surveillance related product in Singapore, Malaysia and other Asia Pacific region.
– NEC’s NeoFace® Watch with real-time facial recognition will be integrated with Miyoshi’s wireless audio/video wearable solution.
– The upcoming product will offer on-ground security officers with instant analysis of what they see and enable them to provide actionable intelligence to commanders.
– Trades at 18.1x trailing P/E.
– Explained that it has yet to convert its business to direct selling in China after its shares and other similar MLM firms slumped amid a government crackdown on
– All its products are currently sold at outlets and workshops under the export model and the clampdown will have little impact on its China business.
– For now, MKE is keeping its Buy rating and TP of $1.88.
*Parkson Retail Asia
– Expected to report
– Independent financial adviser SAC Capital views a takeover bid led by Perennial Real Estate and Yanlord Land as fair and reasonable.
– The consortium triggered the mandatory takeover offer at $2.60/share after buying
– Trades at 1.03x offer price and 0.89x P/B.
– Entered into a 50:25:25 JV with Myanmar MarcoPolo and Bulox Power to manufacture and/or assemble transformers, generator sets and power solution products in Myanmar.
– It will invest an initial US$0.5m in the JVCo.
– Disclosed that discussions with a potential investor are still ongoing.
– Collaborating with US-based Chemia Corp to develop specialised fragrances to counter mosquito-borne diseases and stress and anxiety, as well as anti-viral medical applications.
News for today 16/8/2017:
– Oil prices little changed as dollar gains, China demand weakhttp://www.businesstimes.com.sg/energy-commodities/oil-prices-little-changed-as-dollar-gains-china-demand-weak
– US retail sales post biggest gain in seven months http://www.straitstimes.com/business/us-retail-sales-post-biggest-gain-in-seven-months?xtor=CS3-18
– UK inflation holds steady in July as price pressures ease http://www.straitstimes.com/business/uk-inflation-holds-steady-in-july-as-price-pressures-ease?xtor=CS3-18
– IMF forecasts faster Chinese growth as rising debt adds to risks http://www.straitstimes.com/business/imf-forecasts-faster-chinese-growth-as-rising-debt-adds-to-risks?xtor=CS3-18
– Singapore bank stocks battered by more O&M bad news http://www.businesstimes.com.sg/companies-markets/singapore-bank-stocks-battered-by-more-om-bad-news?xtor=CS3-25
– Buying momentum buoys July sales of private and EC homes http://www.businesstimes.com.sg/real-estate/buying-momentum-buoys-july-sales-of-private-and-ec-homes?xtor=CS3-25; Executive condos chalk up bumper sales http://www.straitstimes.com/business/executive-condos-chalk-up-bumper-sales?xtor=CS3-18
– Indonesia’s oil and gas sector slumps, falling to 3% of nation’s GDP http://www.straitstimes.com/business/indonesias-oil-and-gas-sector-slumps-falling-to-3-of-nations-gdp?xtor=CS3-18
– We are not done building Singapore yet: Lawrence Wong http://www.straitstimes.com/business/we-are-not-done-building-singapore-yet-lawrence-wong?xtor=CS3-18; Major infrastructure projects over next decade will put Singapore economy on stronger footing: Lawrence Wong http://www.straitstimes.com/business/economy/major-infrastructure-projects-over-next-decade-will-put-singapore-economy-on?xtor=CS3-18
– Property agents may get tech boost http://www.straitstimes.com/business/property/property-agents-may-get-tech-boost?xtor=CS3-18
– Tampines Court gets $970m collective sale offer http://www.straitstimes.com/business/tampines-court-gets-970m-collective-sale-offer?xtor=CS3-18; Sim Lian tipped to have bid S$970m for Tampines Court http://www.businesstimes.com.sg/real-estate/sim-lian-tipped-to-have-bid-s970m-for-tampines-court?xtor=CS3-25
– Sales of new private homes and ECs almost double in July from June http://www.straitstimes.com/business/sales-of-new-private-homes-and-ecs-almost-double-in-july-from-june?xtor=CS3-18
Stocks to watch today 16/8/2017:
– Best World last close $1.355, 52wk high/low $1.62/$0.59 – Share price slumps on China crackdown news http://www.straitstimes.com/business/companies-markets/best-world-shares-slump-on-china-crackdown-news?xtor=CS3-18
– China Jinjiang last close $0.79, 52wk high/low $0.99/$0.765 – Company posts higher earnings for Q2 http://www.straitstimes.com/business/jinjiang-posts-higher-earnings-for-q2?xtor=CS3-18
– Healthway Medical last close $0.044, 52wk high/low $0.059/$0.026 – Company in the red for Q1 http://www.businesstimes.com.sg/companies-markets/healthway-medical-in-the-red-for-q1?xtor=CS3-25
– Noble Group last close $0.435, 52wk high/low $2.80/$0.285 – Company hit by ‘loss of confidence’ as ratings cut again http://www.straitstimes.com/business/companies-markets/noble-group-hit-by-loss-of-confidence-as-ratings-cut-again?xtor=CS3-18; Noble hit by ‘loss of confidence’ as ratings cut again http://www.businesstimes.com.sg/companies-markets/noble-group-hit-by-loss-of-confidence-as-ratings-cut-again?xtor=CS3-25
– Oxley last close $0.55, 52wk high/low $0.615/$0.38 – Company’s Stevens Rd hotels likely to open by end-2017 http://www.straitstimes.com/business/property/oxleys-stevens-rd-hotels-likely-to-open-by-end-2017?xtor=CS3-18
– XMH Holdings last close $0.35, 52wk high/low $0.42/$0.25 – Company enters into Myanmar joint venture http://www.straitstimes.com/business/companies-markets/xmh-holdings-enters-into-myanmar-joint-venture?xtor=CS3-18
– YuuZoo Corp last close $0.055, 52wk high/low $0.187/$0.05 – Company back in the black; posts Q2 net profit of S$8.4 million http://www.straitstimes.com/business/companies-markets/yuuzoo-corp-back-in-the-black-posts-q2-net-profit-of-s84-million?xtor=CS3-18
Gearing fell marginally to 0.87x (2Q17) from 0.88x (2Q17). This was primarily due to net debt repayment of c.SGD19.2m (repayment of the SGD50m BTHSP 6.25% 05/2017 bond on maturity) while equity declined due to
6M17 revenues -3%yoy to c.SGD160.3m, while EBIT climbed to c.SGD5.2m (vs 6M16 of SGD217K). On a standalone 2Q17 basis, total revenues expanded +6%yoy to c.SGD69.8m while EBIT loss narrowed to c.-SGD6.6m.
Overall, credit metrics remained stable in 2Q17 considering that 2Q and 3Q performance tend to be seasonally weaker for the group. The agreements pertaining to the Vanke partnership and alliance with Accor have completed post-2Q17 close. We are now focused on how these strategic partnerships will pan out for BTH, through potential new revenue streams and cost efficiencies. Additional liquidity from the Accor's CD issuance/Share Placement could also aid BTH in its deleveraging intent and strengthen its balance sheet position. Given that the hospitality business is susceptible to factors such as the macro environment and geopolitical/ terrorism risks, we remain watchful of the operating performance of the group. Moreover, as the group pursues an asset light approach, we would be watchful of its contingent liabilities. BTHSP bonds have performed very well YTD rallying by c.7-18%. Barring a macro shock event and despite the strong rally, we continue to like BTHSP bonds for carry and believe the recent developments will continue to strengthen the business profile over the long term.
Green shoots of growth
Please see attached our update on Banyan Tree's 2Q17 financial results. This report is suitable for distribution to end clients. This report is not for distribution into Hong Kong.net loss in 2Q17.
Agreement with China Vanke Co Ltd ("Vanke") in relation to the strategic partnership completed. BTH's NTA is expected to increase to SGD546.8m and pro-forma 2Q17 gearing is estimated to reduce to c.0.83x given the equity base expansion.
Completion of an irredeemable convertible debenture issuance of SGD24m ("CD") and grant option by Accor to acquire up to 10% of the share capital ofBTH.
Unrecognized property sales backlog of SGD154m, which represents c.3 years of property sales revenue.
Areas to Watch:
(i) Share Placement with Vanke/ conversion of Accor's CD, (ii) overall demand for tourism (growth vs geopolitical risks), (iii) buyer defaults on property sales and (iv) contingent liabilities.
EBITDA positive but OCF remains in the red. 2Q17 revenue was +c.25%qoq to c.
Credit metrics deteriorated for PACRA as EBIT continued into its eighth quarter of losses while gearing spiked further. We noted marginal improvement in utilisation across the OSV and Subsea, coupled with new contracts secured, however day rates continue to remain weak. Fundamentally, a significant turnaround of industry parameters has yet to be seen whilst PACRA continues to rationalize costs to manage cash burn. Given the impending restructuring news and uncertainty around the terms to be proposed, we have downgraded the bond to FV. Based on current bond price, our assessment suggests that the current implied discount on the fleet stands at c.20-31%.
Restructuring plan in the works
Please see attached the update on Pacific Radiance's 2Q17 financial results. This report is suitable for distribution to end clients. This report is not for distribution into Hong Kong.USD17.5m, boosted mainly by higher utilisation rates of OSV vessels (56% this quarter vs. 30+% in 1Q17). EBITDA was positive for the first time in over a year, though negative OCF - for the seventh consecutive quarter - of c.USD10.4m continued to be a strain on cash flows.
Restructuring plan on the horizon. PACRA announcedin its 2Q17 results that it has appointed advisors to assist in "reviewing the overall capital structure and developing a feasible restructuring plan...". This appears to be a precursor to an all-encompassing financial restructuring, which we think would likely include bondholders should it occur.
Gearing (D/E) continued to rise from c.1.83x (1Q17) to c.1.97x (2Q17), and could rise further due to slower debt amortisation, additional debt drawdown and potential asset impairments.
Higher 2Q17 unrestricted cash balance of c.USD27.8m. PACRA reported higher 2Q17 unrestricted cash balance primarily due to the partial drawdown of the IFS loan.
Asset divestments continue; c.USD2.2m raised in 2Q17. Although the cash quantum raised from the divestments are arguably small, we view this as credit-positive given the divestments are made on non-core, idle vessels
c.USD35.8m of firm charters secured for 10 vessels, which is positive from a utilization perspective. Day rates or length of contract were not disclosed though at this point rates are likely to still be depressed.
Areas to Watch: (i) OSV utilisation and day rate trends, (ii) asset sales and (iii) details on potential restructuring
Anticipate Stronger 2H17
We expect 2H17 results to be better than 1H17. This will be mainly driven by higher FFB production and resumption of biodiesel delivery. Management has revised up FFB production growth guidance to +25% yoy from +15% yoy for 2017 as anticipation stronger yield recovery. However, we maintain our FFB production growth forecast of +18.3% yoy for now. We project 2H17 core net profit of Rp892b vs 1H17’s of Rp551b. Maintain BUY. Target price: S$1.03.
The key takeaways from 2Q17 results briefing are: a) expect production continued to be strong in 2H17 and a peak in 4Q17, b) management is revising FFB production guidance upwards to +25% Key takeaways from 2Q17 results briefing. · yoy from +15% yoy for 2017, c) about 73% of the fertiliser costs were booked in 1H17, the remaining fertiliser application is likely to complete in 3Q17 and, d) biodiesel take-up rate has returned to normal since end-Jun 17.
· 1H17 FFB nucleus production registered a record high and surpassed 1H15’s level. For 1H17, FFB nucleus production was 891,693 tonnes, higher than 1H15’s FFB production of 696,155 tonnes, which also represents a record high production for BAL. This is mainly supported by increase in mature areas and yield recovery. However, we noticed that FFB yield in 1H17 has yet to recover to 1H15’s level as still affected by lagged impact from severe drought. We understand that the lagged impact from severe drought is waning and anticipate FFB production continued to be strong in 2H17 and to register a peak in 4Q17.
· Upwards revision of FFB production growth guidance. Management is now more positive and revised FFB production growth guidance upwards to +25% yoy from +15% yoy for 2017. The production ratio is expected to be 48%:52% for 1H17:2H17. Nevertheless, we are maintaining our FFB production growth forecast of +18.3% yoy for now. Should we adjusted our FFB production growth to +25% yoy, it will increase our 2017 earnings forecast by 2.8%.
· Most of the fertiliser costs were booked in 1H17, suggesting a record earnings in 4Q17. We gather that about 73% of fertiliser costs were booked in 1H17, while the remaining fertiliser application is likely to complete in 3Q17. Coupled with the expectation of strong production and low operating costs, we are anticipating another record quarter in 4Q17.
· Biodiesel delivery has retuned to normal. We understand that the biodiesel delivery has been delayed in May-Jun 17 due to some logistics issues in Pertamina. Nevertheless, biodiesel delivery volume has returned to normal levels since end-Jun 17. The volume that did not delivered in May-Jun 17 is not recoverable. Meanwhile, the biodiesel subsidy has been reduced to a pricing formula of CPO base price + US$100/tonne from CPO base price + US$125/tonne. This will affect the operating margin, but it is still profitable for BAL which is about 2% net margin.
· We are maintaining our net profits forecasts of Rp1,443b, Rp1,337b and Rp1,504b for 2017-19 respectively for now.
· Maintain BUY and target price of S$1.03, based on 13x 2018F PE. We like BAL for its young tree age profile, which spells strong production, as well as its hands-on estate management which has allowed BAL to consistently deliver a high oil extraction rate (OER).
– market is expected to turn risk-off on renewed geopolitical worries; US and NK
– Technically, MACD or the STI has exhibited a bearish crossover.
– Underlying support for the index lies at 3,275 with topside resistance at 3,360.
– Raffles Medical to watch for parital entry at 1.150 and below.
– DBS is impressive, came back from a low of 20.85 on tues. Today 21.32. the 30 cents dividend will XD this friday.
– If looking to buy Capitaland, a good entry to consider will be $3.65 where it coincides with the 50day average.
feel free to share with me any info or insights that you may have.
– 3QFY17 net profit surged 59.9% to $60.7m mainly from increased associate income arising from its 18.74% stake in Vinamilk.
– This brought 9MFY17 net profit to $87m (+15.8%) or 76% of the FY17 consensus estimate.
– However, revenue in the quarter slipped 8.6% to $483.1m on weaker contributions across beverages (-17.1%) and dairies (-3.3%) on competitive pricing pressures, as well as reduced contribution from printing & publishing (-9.2%).
– Bottom line was weighed by increased FX loss of $4.6m (3QFY16: $0.9m loss) although mitigated by higher investment income of $33.4m (+107.3%).
– NAV/share at $1.98.
– 3QFY17 results missed estimates on a 1.1% slip in net profit to $3.4m, as operating expenses rose at a faster pace from business expansion.
– Revenue grew 6.4% to $34.8m on increased contributions across Singapore and China outlets.
– Gross margin held at 62.7% (-0.2ppts).
– Opened its fourth China outlet in Beijing last month and first franchised restaurant in Ho Chi Minh City in May.
– Trades at trailing P/E of 24.6x.
– 2Q17 net profit of $1.9m (+12%) came in at the low end of estimates.
– Revenue climbed 12% to $9.2m, bolstered by new contributions from four recently-acquired general clinics in Singapore.
– Gross margin held relatively steady at 47.3% (-0.2ppt).
– Interim DPS raised to 0.5¢ (2Q16: 0.22¢).
– Last traded at 20x FY17e P/E.
*Hong Leong Finance
– 2Q17 net profit soared 89% to $20.9m, mainly helped by lower interest expense (-30.2%) and reduced staff costs (-6.4%).
– However, on the back of a smaller loan base of $9.56b (-4.8%), net interest income declined 10.1% to $54.8m.
– Proposed higher interim DPS of 4¢ (2Q16: 3¢).
– NAV/share at $3.85.
– 2Q17 net profit slumped 72% to $8.1m in absence of a $9.7m disposal gain booked last year from sale of its 20% stake in the KL business.
– Revenue edged 1% higher to $209.8m from rise in bakery operations (+5%) on strength in Philippines, but was pared by weakness in primary production (-2%) on lower ASPs.
– Bottom line was hit by higher distribution costs due to higher fuel prices.
– Maintained interim DPS at $0.01.
– NAV/share at $0.934.
*BHG Retail REIT
– 2Q17 DPU was flat at 1.35¢ despite a larger unit base (+4.7%).
– Revenue rose 3.2% to $15.8m on positive rental reversion and improved occupancy, although pared by a weaker yuan, while NPI rose at a faster clip to $10.9m (+5.7%) from favourable tax in China.
– Portfolio occupancy edged up 0.3ppt q/q to 98.9%, while aggregate leverage ticked 0.1ppt lower to 32.4%.
– Trades at 2Q annualised yield of 7.3% and 0.88x P/B.
– 2Q17 net profit climbed 3.1% to $3.8m, on 14% rise in revenue to $34.9m.
– Top line benefitted from higher property development contribution from City Gate project, improved occupancy in investment properties, and newly acquired The Imperial Hotel in UK.
– Gross margin expanded 5.9ppt to 41.6%, bolstered by its new UK hotel.
– Bottom line was dragged by an absence of tax credit.
– NAV/share at $0.157.
– 1QFY18 net profit slipped 5% to $5.8m as revenue dropped 25% to $45.7m.
– The decline in sales was due to weakness in the design-and-build segment (-28%) on reduced work progress and less contracts secured, while leasing (-7%) was impacted by AusGroup’s early lease termination of the 36 Tuas Road property.
– Gross margin expanded to 32% (+10ppts) from improved productivity and cost savings from projects.
– NAV/share at $0.736.
– 2Q17 net profit jumped 20% to $1.7m on lower taxes.
– Revenue leapt 37% to $41.1m on stronger pawnbroking business, as well as retail and trading of pre-owned items.
– However, gross margin of 26.4% (-3.6ppt) was squeezed by higher material costs.
– Bottom line was alsoy weighed by increased operation costs due to the business expansion in Singapore and Malaysia, as well as higher finance costs.
– NAV/share at $0.1844.
– 2Q17 net profit tumbled 43% to $1.2m, from contraction in gross margin to 22% (-7.1ppts) and FX loss of $0.3m (2Q16: $0.3m gain).
– Revenue grew 21% to $62.8m on newly secured projects.
– NAV/share at $0.285.
– Swung to 2Q17 net loss of US$5.6m (2Q16: US$15.2m profit) in absence of a US$24.1m write-back for legal liability.
– Revenue jumped 47.8% from a low base to US$3.5m on increased sales of chocolate® PTA Balloon Catheter to Medtronic.
– However, gross margin compressed 19.5ppt to 26.6% following the termination of distribution agreement with Cordis.
– Net liability value at US$0.01/share.
News for today 10/8/2017:
– US stocks fall on North Korea worrieshttp://www.straitstimes.com/business/companies-markets/us-stocks-fall-on-north-korea-worries?xtor=CS3-18; What War Between North Korea and the U.S. Might Look Like https://www.bloomberg.com/news/articles/2017-08-09/what-u-s-north-korea-hostilities-might-look-like-quicktake-q-a; Tillerson Seeks to Calm Tension in Asia After Trump’s Korea Remarks https://www.bloomberg.com/news/articles/2017-08-09/tillerson-calms-north-korea-tensions-after-trump-rattles-markets; What the U.S. Military Does on Guam and Why North Korea Cares: Q&A https://www.bloomberg.com/news/articles/2017-08-09/q-a-what-does-the-us-military-do-on-the-island-of-guam
– Evans sees Sept Fed balance-sheet move, tech sapping prices http://www.businesstimes.com.sg/government-economy/evans-sees-sept-fed-balance-sheet-move-tech-sapping-prices
– Swiss franc up the most against euro since 2015 http://www.businesstimes.com.sg/companies-markets/swiss-franc-up-the-most-against-euro-since-2015
– China factory inflation holds up on steady demand http://www.straitstimes.com/business/economy/china-factory-inflation-holds-up-on-steady-demand?xtor=CS3-18
– Hong Kong’s crowded currency trade enters dangerous territory http://www.straitstimes.com/business/hong-kongs-crowded-currency-trade-enters-dangerous-territory?xtor=CS3-18
– Normanton Park to be put up for en bloc sale at a minimum S$800m http://www.businesstimes.com.sg/real-estate/normanton-park-to-be-put-up-for-en-bloc-sale-at-a-minimum-s800m
– Amazon’s Singapore play a precursor to S-E Asia e-commerce battle http://www.businesstimes.com.sg/companies-markets/amazons-singapore-play-a-precursor-to-s-e-asia-e-commerce-battle
– Reits generate average total return of 17.6% year-to-date http://www.straitstimes.com/business/reits-generate-average-total-return-of-176-year-to-date?xtor=CS3-18
Stocks to watch today 10/8/2017:
– Aspial Corp last close $0.255, 52wk high/low $0.325/$0.24 – Company’s Q2 loss widens to $6.5m http://www.straitstimes.com/business/companies-markets/aspial-corps-q2-loss-widens-to-65m?xtor=CS3-18
– Asiaphos last close $0.099, 52wk high/low $0.122/$0.072 – AsiaPhos says no casualty at its mines and facilities from Sichuan quake http://www.businesstimes.com.sg/companies-markets/asiaphos-says-no-casualty-at-its-mines-and-facilities-from-sichuan-quake
– Centurion last close $0.545, 52wk high/low $0.545/$0.305 – Centurion to buy 160-unit student housing in the US for US$70m http://www.businesstimes.com.sg/companies-markets/centurion-to-buy-160-unit-student-housing-in-the-us-for-us70m
– GuocoLand last close $2.02, 52wk high/low $2.05/$1.78 – Company looks to rise in private home prices http://www.straitstimes.com/business/guocoland-looks-to-rise-in-private-home-prices?xtor=CS3-18
– M1 last close $1.75, 52wk high/low $2.81/$1.75 – Company rolls out S-E Asia’s first commercial nationwide IoT network http://www.straitstimes.com/business/m1-rolls-out-s-e-asias-first-commercial-nationwide-iot-network?xtor=CS3-18
– Pan-United last close $0.57, 52wk high/low $0.75/$0.52 – CEO: Change in mindset key to staying ahead http://www.straitstimes.com/business/companies-markets/pan-united-ceo-change-in-mindset-key-to-staying-ahead?xtor=CS3-18
– Top Glove last close $1.81, 52wk high/low $1.88/$1.48 – Remove obstacles to encourage investment: Top Glove founder http://www.straitstimes.com/business/companies-markets/remove-obstacles-to-encourage-investment-top-glove-founder?xtor=CS3-18
– UOB last close $24.27, 52wk high/low $24.60/$17.51 – The way forward is digital, says UOB’s Wee Ee cheong http://www.straitstimes.com/business/banking/the-way-forward-is-digital-says-uobs-wee-ee-cheong?xtor=CS3-18