SINGAPORE STOCKS MARKET MOVEMENTS OF THE DAY
Investors will anticipate the choice of the next Fed chair this week, which will have policy implications on Trump’s economic agenda, as well as a slate of Asian PMIs and 3Q corporate earnings for direction.
1. Key results set for release this week include Sembcorp Marine (31 Oct), StarHub (2 Nov), UOB and SIAE (3 Nov).
2. Oil-related counters could see an uplift after Brent hit past its two-year high above US$60/bbl, stoked by Saudi and Russian support for extending OPEC-led output cuts.
3. Technically, STI has broken above the 3,380 resistance and now appears headed towards the next congestion level at 3,470.
Singapore Equities Group Watch
1. Passenger traffic at Changi Airport is set for a record high this year (2016: 58.7m) as airlines ramp up flights to existing and new destinations for the year-end peak travel season.
2. Close to 130 new flights a week, the highest number in four years, will be progressively added from now till end of the year as compared to 90 flights added for the same period last year.
3. For 8M17, the airport handled 41m passengers, up 5.7%, with the bulk of the growth coming from routes within Asia, particularly to secondary cities in China and SE Asia.
4. This could be a boon for airport services related counters such as SATS and SIA Engineering.
Singapore Stock Market Corporate Analysis
STARHILL GLOBAL REIT
1. 1QFY18 DPU fell 7.7% to 1.2¢, in line with estimates.
2. Gross revenue and NPI of $53m (-4.1%) and $41.4m (-3.5%) were mainly dragged by absence of a pre-termination rental compensation at Wisma Atria (which has since been filled), lower office occupancy in Singapore and weaker overseas contributions in Malaysia.
3. Portfolio occupancy slipped 2.1ppt to 93.4%, while aggregate leverage held at 35.4% (+0.1ppt).
4. Trades at an annualised 1Q yield of 6.2% and 0.84x P/B.
FRASERS HOSPITALITY TRUST
1. 4QFY17 DPS rose 7.2% to 1.2763¢, but FY17 payout slipped 3.5% to 5.05¢ following the rights issue in Oct ’16, meeting 97% of street forecast.
2. Gross revenue for the quarter jumped 24.2% to $41.6m, on the addition of Novotel Melbourne on Collins and strong growth in Malaysian assets.
3. NPI rose at a slower 9.8% to $31.5m as RevPAR of the Australian portfolio fell 4.9% on refurbishment works, while rising wage pressure in the UK limited operating profit.
4. Aggregate leverage eased to 32.1% (-2ppt q/q).
5. Last traded at annualised 4Q yield of 6.6% and 0.95x P/B.
RAFFLES MEDICAL GROUP LTD
1. 3Q17 net profit of $16.4m (+1%) took 9M17 earnings of $48.7m to just 70% of full-year consensus estimate.
2. Revenue was flat at $119.6m (+0.3%), as higher patient load was offset by lower renewal of healthcare plans by foreign patients.
3. Operating margin narrowed to 15.4% (-0.2ppt) on increased staff costs (+2.1%) in preparation for opening of Raffles Hospital extension in 4Q17.
4. Trades at 28.8x forward P/E.
IFAST CORPORATION LTD
1. 3Q17 net profit rose 21.5% to $2.3m, bringing 9M17 earnings of $6.5m (+51.9%) to 78% of full year estimate.
2. Revenue jumped 24.9% to $26.2m, underpinned by a 21.1% increase in assets under administration to $6.81b.
3. Operating margin expanded 1.1ppt to 9.9% as expenses grew at a slower clip to $9.9m (+19.2%), with the increase mainly stemming from the new Shanghai office.
4. Raised interim DPS by 10% to 0.75¢.
5. Trades at FY18 P/E of 23.5x.
FALCON ENERGY GROUP LIMITED
1. FY17 loss deepened US$121.2m (FY16: US$5m), mainly ditched by US$153.1m of impairments.
2. Revenue sank 56% to US$106.8m on reduced workload in the oilfield and drilling services division and lower utilisation and charter rates in the marine division.
3. Gross margin contracted 8.8ppt to 11.7%.
4. NAV/share at US$0.1624.
1. 4QFY8/17 net profit surged 81% from a low base to $1.3m, lifting FY17 earnings to $2.2m (+91%).
2. For the quarter, revenue climbed 6.5% to $13.4m on increased orders from automotive customers.
3. Gross margin expanded 9.3ppt to 45.4%.
4. Bottom line was further boosted by tax credit, albeit partially dragged by lower other income and higher other expenses.
5. Maintained first and final DPS of 0.4¢.
6 NAV/share at 11.55¢.
1. Secured contracts to manage two serviced apartment properties in Raffles Place and Rochor, Singapore’s new growth area and CBD extension.
2. Both properties will operate under the Citadines brand and add 619 units to its portfolio, bringing total units to 2,300.
3. The properties are slated to open in 2020 and 2021.
4. Last traded at 18.1x forward P/E.
SIA ENGINEERING COMPANY
1. Divested it’s entire 24.5% stake in JVCo Asian Compressor Technology Services Company (ACTSC) for $14.7m.
2. ACTSC provides repair and overhaul of compressor stators, shrouds and honeycomb seals and segments.
3. The disposal is in line with group’s restructuring initiatives to focus on growth areas and build next-generation aircraft capabilities, and will result in a net gain of $14.3m.
4. Last traded at 22x forward P/E.
1. Divested its entire interest in Kepwealth Property Phils for $21m, or 2.13x P/B.
2. Kepwealth owns the majority of a mix office and residential building in Cebu, Philippines.
3. Trades at 16.3x forward P/E.
1. Acquired 14.5% stake in Mkango Resources for £0.5m.
2. Mkango is a mineral exploration and development firm, dual listed on Alternative Investment Market of London Stock Exchange and TSX Venture Exchange.
3. Expects post 3Q17 P/B of 0.26-0.3x.
1. Acquiring 80% stake in Vemac Services for $2.2m, or 10x FY16 P/E.
2. Vemac provides repair and maintenance of refrigerating, air-conditioning and ventilation machinery and equipment.
3. Last traded at 10.4x trailing P/E.
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