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
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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$100 mln loan facility maturing in Sept 2016. We note that the Australian dollar denominated loan facility will match approximately half of the purchase considera on of Myer Centre Adelaide, thereby reducing the impact of vola lity arising from the fluctua on of the Australian dollar against the Singapore dollar. Following the comple on and the refinancing, the gearing of SGREIT is expected to increase from 28.7% to approximately 35.3%.
FSSTI STOCK SELECTION HIGHEST CONSENSUS FY15E DIV YIELD (%)
LOWEST TRAILING P/B (X)
1 HUTCHISON PORT-U
7.04
1 GOLDEN AGRI-RESO
0.45
2 ASCENDAS REIT
6.30
2 HONGKONG LAND
0.68
3 CAPITAMALL TRUST
5.28
3 JARDINE STRATEGIC
0.89
4 KEPPEL CORP
5.09
4 CAPITALAND LTD
0.89
5 SPH
5.08
5 NOBLE GROUP
0.90
LOWEST CONSENSUS FY15 P/E (X)
LOWEST TRAILING EV/EBITDA (X)
1 NOBLE GROUP LTD
7.60
1 SIA
5.78
2 KEPPEL CORP
9.82
2 JARDINE C&C
7.90 8.77
3 SEMBCORP INDUSTRIES
10.02
3 SEMBCORP MARINE
4 OLAM INTERNATIONAL
10.29
4 COMFORTDELGRO
8.89
5 OCBC
10.64
5 NOBLE GROUP
9.16
Source: Bloomberg Estimates (FSSTI Universe)
Please see research disclaimer on last page
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30 APRIL - 08 MAY
SHARE TRANSACTIONS
Buy
Sell
Transacted Price* ($)
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
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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
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WHAT’S AHEAD
Sun
Mù 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
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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
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*
Includes direct or indirect ownership of securities or Futures Contracts (excluding the amount of securities or Futures Contracts owned), directorships or trustee positions.
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