LIM & TAN SECURITIES 16 COLLYER QUAY #15-00 INCOME @ RAFFLES SINGAPORE 049318 TEL: 65330595 www.limtan.com.sg RCB REG NO. 197301030W

DAILY REVIEW | 11 MAY 2015 FINANCIAL MARKETS

MAJOR MARKET INDICES 1D (%)

MTD (%)

3452.0

0.6

-1.0

2.6

18191.1

1.5

2.0

2.1

CLOSE FSSTI Dow Jones

YTD (%)

S&P 500

2116.1

1.3

1.5

2.8

NASDAQ

5003.5

1.2

1.3

5.6

FTSE (UK)

7046.8

2.3

1.2

7.3

Nikkei

19379.2

0.5

-0.7

11.1

Hang Seng

27577.3

1.1

-2.0

16.8

4205.9

2.3

-5.3

30.0

12.9

-15.0

-11.6

-33.0

Shanghai Composite VIX

SG MARKET SUMMARY

US stocks rose 1.2-1.4% after a rebound in hiring last month bolstered optimism that economic growth is accelerating, but not fast enough to warrant higher interest rates in June’15. Raw-material shares rallied to a two-month high after a jump in construction jobs. Visa rose 4.3% amid a report that it ’s in talks to buy its former European subsidiary for as much as US$20 billion. The 223,000 net increase in April came in about in line with expectations and the jobless rate fell to 5.4%, the lowest since May 2008. A rally in UK stocks pushed European shares to their biggest gain of 2015 after a surprise election victory for the Conservatives kept David Cameron on course to return as Britain’s prime minister. The Stoxx Europe 600 Index climbed 2.9%. China’s move over the weekend to cut its lending and deposit rates for a 3rd time by another 25 basis points will also benefit stocks in Asia.

IDEA OF THE DAY Daily Market Value (S$ 'm)

998.8

Daily Market Volume (mln)

2139.2

52-week STI High

3549.9

52-week STI Low

3149.9

KEY INTEREST RATES CLOSE

1D (%)

MTD (%)

YTD (%)

3 Mth SGD SIBOR

0.9

0.0

0.1

96.1

3 Mth Swap Offer Rate

0.8

-12.8

-3.9

13.0

SG 10 YR Bond Yield

2.4

-2.9

7.3

5.7

US 10 YR Bond Yield

2.1

-1.5

5.7

-1.1

US FUTURES As at 8.00am SG time

CLOSE

Dow Jones

1D (%)

MTD (%)

YTD (%)

18121.0

1.3

2.0

2.6

S&P 500

2110.0

0.1

1.5

3.2

NASDAQ

4448.8

1.1

0.9

5.4

CLOSE

1D (%)

MTD (%)

YTD (%)

1190.1

0.1

0.5

0.4

59.4

0.8

-0.4

11.5

574.0

0.2

-2.9

-26.6

8130.0

-1.0

2.1

-4.4

COMMODITIES

Gold Crude Oil Baltic Dry Crude Palm Oil

FSSTI INDEX 3600 3500

52-week price chart

3400 3300 3200 3100 3000 2900 2800 05/14 06/14 07/14 08/14 09/14 10/14 11/14 12/14 01/15 02/15 03/15 04/15

Source: Bloomberg

Ascendas Hospitality Trust ($0.71, up 0.5 cent) posted 4Q FY14/15 gross revenue of S$54.5 mln (+1.6% yoy) while net property income also rose 2.8% yoy to S$22.6 mln, largely in line with the improvement in revenue. We note that the growth was mainly driven by the contribution from Osaka Namba Washington Hotel Plaza though it was partially offset by continued weakening of the AUD and JPY against the SGD. Income available for distribution for 4Q FY14/15 increased by 12.0% yoy to S$14.0 mln due to the improvement in net property income and that there was no cost incurred in relation to the unwinding of the AUDSGD cross currency swaps in 4Q FY14/15. This resulted in an improvement of 3.3% yoy in DPS to 1.25 cents for 4Q FY14/15 (but down 8.3% yoy to 5.06 cents for the full year). On its assets performance, the Australia portfolio capped an effective year with a RevPAR growth of 5.5% yoy in 4Q FY14/15, led by the hotels in Sydney, which saw better performance due to stronger demand and conferencing events. Courtyard by Marriott North Ryde (Sydney) also benefitted from the closure of a competing hotel. For the full year, the Australia portfolio recorded a RevPAR growth of 5.1% over FY13/14. However, the China portfolio recorded a decline in RevPAR of 0.7% yoy in 4Q FY14/15, attributable to more intense competition even though RevPAR for the Beijing hotels improved slightly by 2.2% yoy on a full year basis. Oakwood Apartments Ariake Tokyo continued its strong performance as RevPAR for 4Q FY14/15 more than doubled compared to 4Q FY13/14, which was a transition period as the new operator took over operation of the serviced apartments in Jan 2014. RevPAR of Oakwood Apartments Ariake Tokyo for the full year was up by 57.7% yoy. As at end-Mar 2015, A-HTRUST ’s balance sheet remained healthy with a gearing ratio of 37.2% and 88.9% of total borrowings on fixed rates. The effective interest rate remained at 3.2% while weighted average tenor was about 2.5 years. In April 2015, A-HTRUST also issued its first series of stapled notes amounting to S$75 mln, with an interest rate of 3.3% per annum, on a 5-year tenor. Looking ahead, we expect the hospitality sector in Singapore to remain challenging for the rest of 2015, with the number of visitor arrivals falling by 5% yoy in the first two months of 2015 due in part, to the relatively stronger SGD and new supply of hotel rooms, compounded by the labour crunch which results in higher operating costs. The mitigating factor is the master lease contract for Park Hotel Clarke Quay which provides a steady stream of rental income. While the Australia and Japan tourism sector remains buoyant, we reckon that the continual weakening of AUD and JPY against SGD will continue to impact A-HTRUST ’s earnings in SGD terms. Despite the potential headwinds, we maintain Hold as valuation appears reasonable at 1x P/B with distribution yield of about 7%.

Singapore Research Team Tel: 6533 0595 Email: [email protected] Please see research disclaimer on last page

Page

1

OTHER HIGHLIGHTS Chip Eng Seng ($0.855, down 2 cents) saw 1Q15 revenue drop 15.5% to S$167.2mln as net profit also declined by 15.5% to S$18.2mln. The lower top-line was a ributed to a dismal performance from the property development business, which had decreased 30% to S$87.6mln due to the absence of revenue from 100 Pasir Panjang which was recognised on a comple on of construc on method in 1Q14. Moving in-line with the lower turnover, bo om-line also moved south. However, cash flows con nued to be healthy as the company generated net opera ng cash flows of S$83.5mln. Going forward, the company noted that the property market in Singapore is expected to remain challenging in the current year as it shows signs of further weakening amid raising interest rates. However, its new headquarters, CES Centre, has seen sa sfactory takeup rate by new tenants. The company con nues to carry on its ac ve marke ng efforts to lease out the remaining vacant units at CES Centre and CES Building in 2Q15. For its construc on business, its external order book is now S$801.9mln. For its hospitality segment, the company expects a steady growth in its hospitality revenue as the hotel team ramps up its sales and marke ng efforts as its first hotel, Park Hotel Alexandra, has obtained TOP in Apr-15. Net gearing is 78%. At $0.855, market cap is S$532.7mln, P/B is 0.7x and dividend yield is 4.7%. Having gone ex-div of 6 cents a share at end Apr’15, its current valua on is s ll reasonable, hence we maintain our BUY recommenda on. Trek 2000 ($0.45, up 1.5 cents) saw revenue increase 79.7% to US$26.8mln while net profit was just up by 18.3% to US$0.5mln. We view this set of numbers to be below forecasts as 1Q15 net profit amounted to less than 6% of analysts’ average es mate of US$9mln for FY15 net earnings. Going forward, the company is targe ng growth in three key areas in the next genera on of consumer mobile technologies with its development focus on Consumer Wearable, Medical and Cloud Technologies. At $0.45, market cap is S$134.1mln, trailing P/E is 37.6x, P/B is 2.4x, dividend yield is 1.1% and price-to-sales is 0.8x. O o Marine ($0.031, down 0.10 cent) has issued a profit warning that it is expected to report a net loss for the 1Q FY15, primarily due to 1) Decrease in vessel u liza on and lower charter rates amidst the current challenging market condi ons par cularly for the O&G industry; and 2) Provision and impairment. The company has since the beginning of this year taken steps and is con nually implemen ng cost cu ng measures across the group in response to the market condi ons.

Wee Hur ($0.345, up 0.5 cents) saw 1Q15 revenue jump 51% to S$117.3mln while net profit increased 91% to S$13.6mln. The higher topline was mainly due to higher contribu ons from its fully-sold 65%-owned residen al property development project, Parc Centros, while overall gross profit was also boosted due to the property development business, thus boos ng bo omline. However, the company had registered a net cash ou low of S$38.6mln from opera ng ac vi es, although its balance sheet remained healthy with a net cash posi on of S$59mln which translates to 18.6% of current market cap. Going forward, for its property development business, the company has completed the acquisi on of the three parcels of land in Brisbane, Australia. Currently, it is seeking the development approval from the relevant local authori es before commencing the proposed development comprising a mix of residen al, retail and office components. For the company’s construc on business which comprises of residen al and commercial projects, its order book is approximately S$302.5mln as at end-1Q15. For the dormitory business, Phase 1 of its Tuas View Dormitory, comprising 8,400 beds, has commenced opera on in Aug-14, while Phase 2, comprising the remaining 8,400 beds, has commenced in Feb-15. At $0.345, market cap is S$317.1mln, trailing P/E is 2.7x, P/B is 1.1x, dividend yield is 5.8% and price-to-sales is 0.4x. Starhill Global REIT ($0.86, up 1.0 cent) announced that its acquisi on of Myer Centre Adelaide for A$288 mln has been approved by the Australian Foreign Investment Review Board. Comple on is expected to take place this month. Meanwhile, an A$145 mln three-year secured term loan facility and a S$250 mln three-year unsecured term loan facility have been entered into to fund the purchase of Myer Centre Adelaide and for refinancing of an exis ng S$100 mln loan facility maturing in Sept 2016. We note that the Australian dollar denominated loan facility will match approximately half of the purchase considera on of Myer Centre Adelaide, thereby reducing the impact of vola lity arising from the fluctua on of the Australian dollar against the Singapore dollar. Following the comple on and the refinancing, the gearing of SGREIT is expected to increase from 28.7% to approximately 35.3%.

FSSTI STOCK SELECTION HIGHEST CONSENSUS FY15E DIV YIELD (%)

LOWEST TRAILING P/B (X)

1 HUTCHISON PORT-U

7.04

1 GOLDEN AGRI-RESO

0.45

2 ASCENDAS REIT

6.30

2 HONGKONG LAND

0.68

3 CAPITAMALL TRUST

5.28

3 JARDINE STRATEGIC

0.89

4 KEPPEL CORP

5.09

4 CAPITALAND LTD

0.89

5 SPH

5.08

5 NOBLE GROUP

0.90

LOWEST CONSENSUS FY15 P/E (X)

LOWEST TRAILING EV/EBITDA (X)

1 NOBLE GROUP LTD

7.60

1 SIA

5.78

2 KEPPEL CORP

9.82

2 JARDINE C&C

7.90 8.77

3 SEMBCORP INDUSTRIES

10.02

3 SEMBCORP MARINE

4 OLAM INTERNATIONAL

10.29

4 COMFORTDELGRO

8.89

5 OCBC

10.64

5 NOBLE GROUP

9.16

Source: Bloomberg Estimates (FSSTI Universe)

Please see research disclaimer on last page

Page

2

30 APRIL - 08 MAY

SHARE TRANSACTIONS

Buy

Sell

Transacted Price* ($)

Market Price ($)

New Balance

Stake (%)

Kewk Leng Peck Ong Kay Eng EPF Mohamed Abdul Jaleel Goh Bak Heng

167,000 80,000 2,255,400 171,900 324,000

-

1.33 0.32 ND 0.22 0.181

2.22 -

1,913,300 50,444,134 721,344,400 41,221,900 349,551,698

0.51 7.72 8.78 7.24 39.02

CWT Advanced Oppor Fund BlackRock Inc

-

258,300 33,000,000 709,800

1.175 0.002 1.42

-

46,741,720 21,085,141 191,361,840

5.97 3.09 4.99

Company

Party

ACQUISITIONS Hong Leong Asia Hwa Hong IHH Healthcare Manha an Resources Serial System

DISPOSALS Cache Logis cs Trust Infinio Group Ltd Yangzijiang * ND: Not Disclosed

SHARE BUYBACK

Company

Chosen Indofood Agri Resources Osim USP

Please see research disclaimer on last page

No. of shares

Price ($)

CumulaƟve Purchases

Of Maximum (%)

175,400 878,800 3,232,900 1,060,000

0.162 0.74 1.67 0.088

1,912,400 2,878,800 9,019,200 53,452,300

6.7 2.1 11.8 79.8

Page

3

DIVIDENDS (LIST IS NOT EXHAUSTIVE) Company

Amount

Mun Siong SHS Holdings World Precision Machinery Zhongmin Baihui Retail Manufacturing Integra on Tech Super Group Wheelock Proper es Cogent Holdings Ho Bee Land Megachem Poh Tiong Choon CitySpring Infrastruct Trust Jardine C&C Keppel Infrastructure Trust Zagro Asia Kingsmen Crea ves Yanlord Land Innovalues Haw Par Corpora on TPV Technology Koh Brothers Low Keng Huat Shangri-La Asia Dynamic Colours

0.15¢ final / 0.35¢ special 0.93¢ final Rmb10¢ final 1.5¢ final 0.5¢ final 2.1¢ final 6¢ final 2.58¢ final / 1.18¢ special 5¢ final 0.7¢ final 1.75¢ final 0.82¢ quarterly / 1.98¢ special / 0.4235¢ pre-comple on stub distribu on US67¢ final 2.93¢ special 1¢ final 2.5¢ final 1.3¢ final 0.6¢ final / 0.8¢ special 14¢ final US0.128¢ final 0.5¢ final / 0.3¢ special 3¢ final / 2¢ special HK6¢ final 1.5¢ final

SMRT

1.75¢ final

Please see research disclaimer on last page

Last Day Cum-Dividend

First Day Ex-Dividend

Date Payable

07 May 07 May 07 May 07 May 08 May 08 May 08 May 11 May 11 May 11 May 11 May

08 May 08 May 08 May 08 May 11 May 11 May 11 May 12 May 12 May 12 May 12 May

28 May 20 May 02 Jun 22 May 28 May 22 May 28 May 25 May 29 May 29 May 29 May

12 May 12 May 12 May 14 May 14 May 18 May 20 May 22 May 25 May 27 May 27 May 03 Jun

13 May 13 May 13 May 15 May 15 May 19 May 21 May 25 May 26 May 28 May 28 May 04 Jun

25 Jun 26 May 29 May 29 May 05 Jun 03 Jun 04 Jun 09 Jun 16 Jun 11 Jun 11 Jun 19 Jun

13 Jul

14 Jul

31 Jul

Page

4

WHAT’S AHEAD

Sun

Mƒù 2015

Mon

3

Tue

4

Wed

Thu

5

6

Fri

7

Sat 1

2

8

9

Ascendas Hospitality Aspial CorporaƟon Fortune REIT Frasers Centrepoint Lt IFS Capital Perennial Real Estate Straco Corpora on

10

11

12

ASL Marine Best World Challenger Tech ChangƟan PlasƟc Kingsmen Li Heng SIA Engineering Sinarmas Land Singapore Post Sino Grandness Super Group Thakral Corp UOL

CSE Global LH Group OKP Holdings Vallianz Holdings Vicom Ltd

13

Amara Holdings City Developments CNMC Goldmine ComfoŌ Delgro Ezion Holdings First Ship Lease Trust Global Investments Parkson Retail Asia Saizen Reit ST Engineering Vard Holdings Yamada Green

14

Croesus Retail Trust CWT Gen ng Singapore GLP Proper es Haw Par Corp Hotel Royal HTL Interna onal Mewah Interna onal O o Marine SATS SIA Singapore Telecom Swiber Telechoice Intl

15

16

Amtek Engineering China InternaƟonal Dukang DisƟllers Olam Starhub United Engineers

17

18

19

20

21

22

23

24

25

26

27

28

29

30

Biosensors Int Grp

Tat Hong Holdings

31

Please see research disclaimer on last page

Page

5

RESEARCH DISCLAIMER This report is intended for clients of Lim & Tan Securities Pte Ltd [herein after termed as LTS] only and no part of this document may be – i.

Copied, photocopied, duplicated, stored or reproduced in any form by any means or

ii. Re-distributed or disseminated, directly or indirectly, to any other person in whole or in part, for any purpose without the prior consent of LTS. This research report is prepared for general circulation. It does not have regard to the specific investment objectives, financial situation and particular needs of any specific recipient of this research report. You should independently evaluate particular investments and consult your independent financial adviser before making any investments or entering into any transaction in relation to any securities or investment instruments mentioned in this report. The information, tools and material presented herein this report are not directed at, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any jurisdiction where such distribution, publication, availability or use would be contrary to applicable law or regulation or which would subject LTS to any registration or licensing requirement within such jurisdiction. The information and opinions presented in this research report have been obtained or derived from sources believed by LTS to be reliable. Their accuracy, completeness or correctness is, however, not guaranteed. Opinions and views expressed in this report are subject to change without notice, and no part of this publication is to be construed as an offer, or solicitation of an offer to buy or sell securities, futures, options or other financial instruments or to provide investment advice or services. Therefore, LTS accepts no liability for loss arising from the use of the material presented in this report where permitted by law and/or regulation. LTS may have issued other reports that are inconsistent with the assumptions, views and analytical methods of the analysts who prepared them. LTS, its directors, its connected persons and employees may, from time to time, own or have positions in any of the securities mentioned or referred to in this report or any securities related thereto and may from time to time add to or dispose of or may be materially interested in any such securities. LTS’s research analysts are primarily responsible for the content of this report, in part or in whole, and certifies that the views about the companies expressed in this report accurately reflect his personal views. LTS prohibits the research analysts who prepares this report from receiving any compensation (excluding salary and bonuses) or oth er incentives and benefits receivable in respect of this report or for providing specific recommendation for, or in view of a particular company or companies mentioned in this report. LTS-SPECIFIC / REGULATORY DISCLOSURE 1. LTS does not have a proprietary position in the company / companies as recommended in this report as at the close of 08/05/15. 2. The research analysts do not have an interest in the company / companies as recommended in this report as at the close of 08/05/15.

*

Includes direct or indirect ownership of securities or Futures Contracts (excluding the amount of securities or Futures Contracts owned), directorships or trustee positions.

Page

6

DailyReview (110515).indd

their biggest gain of 2015 after a surprise election victory for ... flows connued to be healthy as the company generated net operang cash flows of S$83.5mln. .... 80,000. -. 0.32. -. 50,444,134. 7.72. IHH Healthcare. EPF. 2,255,400. -. ND. 2.22. 721,344,400. 8.78. Manhaan Resources. Mohamed Abdul Jaleel. 171,900. -. 0.22.

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