26 January 2014

Singapore Stock Market Weekly Summary - Year 2014 Week #4

STI index experienced a downtrend and dipped to 3,075.99  in Week #4, causing Year-To-Date performance of -2.89%. China Manufacturing Index was the main root cause as the index fell below 50 point, indicating a weaker performance on manufacturing sector. Dow Jones Index dipped by nearly 2% and closed at below 16,000 point which may make things worse.

Some of the S-REITs announced quarterly report on this week, as we would see some REIT managers still manage it well, although we saw a weaker consensus view on property & construction sector this year, as US. FED decided to start reducing number of bond purchases in near future, depending on U.S. economy especially unemployment data.

My personal opinion is that, there maybe more opportunities for us to grab good quality counters at better price. What we should do now in the market is be patient and wait for better opportunities to come. So far, some counters still experience a positive YTD performance such as Sarin Technology, Osim etc. It implies that as long as we would select right counters at right time, we could still performance better than overall market.

Below is news of some of the counters:

Asecendas REIT: 3Q13 distributabble income rose 4.9% y/y to $85.1m but DPU slipped 2.2% to 3.54¢. Gross revenue grew 6.4% to $154.4m, lifting NPI 3.7% higher to $108.6m on positive rental reversions of 9.7% across all segments of its portfolio. Occupancy dipped to 89.7% from 90.1% in preceding quarter due to addition of new sapce following AEI completions at 1 Changi Business Park Ave 1 and Techplace II. Aggregate leverage stood at 30.1% with average debt maturity of 3.2 years. NAV/share was $1.98 as at Dec ’13.

*First REIT: 4Q13 distributable income jumped 26.2% y/y to $14m and lifted DPU to a record 1.97¢, taking FY13 DPU to 7.52¢, up 14.3% (excluding divestment gains) of an Adam Road property). Gross revenue and NPI surged 48.2% and 41.6% respectively on contribution from two newly acquired hospitals in Bali and Simatupang. Gearing ratio stood at 32.3% with no financing needs till 2016. NAV/share was 96.64¢ as at Dc ’13

Guocoleisure: 2QFY14 net profit rose 12.3% y/y to US$13.7m on a 7.3% increase in revenue to US$106.7m, which was generated by improved room rates and land disposal by its hotel and property segments respectively. But volatility in the gaming sector and reduction in Bass Strait oil and gas oil and gas royalties (-18.8%) due to lower oil prices and production tempered its overall performance. NAV/share climbed to US$0.90 from US$0.839 in Jun ’13

OUE: Launched OUE Commercial REIT on SGX Main Board, offering 208m units (151.8m placement, 56.3m public) at $0.80 each, which translates to forecast DPU yields of 6.8% for 2014 abd 5.89% for 2015 and a 24% discount to NAV. IPO portfolio comprises OUE Bayfront and Lippo Plaza (Shanghai) with total valuation of $1.6b. Offer closes 12 pm on 23 Jan and trading will commence 2pm on 27 Jan.

Osim: Raised stake in TWG Tea to 70% from 53.7%, after TWG undertook a rights issue to raise $25m. Investment expected to be earnings accretive for the group this financial yr. TWG has ~27 stores as at end' 13 spread across S’pore, Hong Kong, Indonesia, Dubai, London, and plans to launch ~20 tea boutiques and shops in Asia and Mid-East this year

M1: 4Q13 results broadly in line with net profit up 7.1% y/y to $40.5m but revenue slumped 14.9% to $278.6m owing to a 46.3% drop in handset sales. The 6.6% growth in service revenue to $207m was driven by postpaid and fixed customer base and higher data usage. Non-voice services contributed 43.4% (+5.4 ppt) of service revenue. EBITDA margin slid to 38.2% vs 41.6% in 4Q12 and 37.7% in 3Q13 amid higher staff costs. Mobile customer base stayed at 2.11m but fibre customers saw an 8,000 addition to 85,000 in 4Q. For FY13, M1 rang in net profit of $160m (+9.4%) on revenue of $1b (-6.4%). Final DPS of 7.1¢ + special DPS of another 7.1¢ will take its full year payout to 21¢.

Keppel REIT: 4Q13 distributable income gained 5.9% y/y to $54.9m, while DPU was flat at 1.97¢, giving an annualized yield of 6.6%. Both revenue and NPI rose 13% and 16.4% to $47.5 and $37.4m respectively due to better performance from Ocean Financial Centre and additional income from newly acquired 8 Exhibition Street in Melbourne. Associates also saw higher contributions from MBFC Phase 1 and One Raffles Quay. Portfolio attained occupancy of 99.8% with weighted lease to expiry of 6.5 years. Aggregate leverage stood at 42.1% with all-in interest rate of 2.15% and average maturity of 3.6 years. End Dec ’13 NAV was $1.40 vs $1.32 in FY12

Mapletree Logistics Trust: 3QFY14 distributable income climbed 7.7% y/y to $45m along with the 7% rise in DPU to 1.84¢ (including 0.025¢ from the partial distribution of a divestment gain from 30 Woodlands Loop). Gross revenue inched up 0.9% to $78.1m, while NPI stayed relatively flat at $67.4m as positive rental reversions from its S’pore and HK properties and contributions from two new acquisitions were negated by a weaker JPY from its Japan portfolio and higher expenses associated with conversions of its single user buildings into multi-tenanted ones and higher property taxes in S’pore. Occupancy slipped slightly to 98.4% from 98.7% in 2QFY14 with weighted lease to expiry of 4.8 years. Aggreate leverage maintained at 33.9% with average term of debt at 3.4 years and effective cost of 1.9%. End 2013 NAV was $0.93 per unit

K-Green: FY13 net profit dipped 4% to $14.2m, while revenue declined 12% to $67.1m due to the absence of construction sales and lower operations and maintenance income arising from the lower output of its waste-to-energy and NEWater plants. Excluding the impact of the flue gas treatment upgrade, which was completed in 2012, results for FY13 would have been 2% weaker. DPU of 7.82¢ maintained, which continued to eat into its NAV/unit of $0.95.

Centurion: Officially launched Westlite Johor Technology Park, its fifth dormitory in Malaysia, with a capacity of 5,800 beds. Centurion established its first worker accommodation in Tebrau, Johor, in 2011 with an initial bed capacity of 2,500, which has now grown to 14,400 beds. Two more facilities are currently undergoing development in Tampoi and Senai. Group plans to expand its dormitory bed capacity in Johor to more than 25,000 beds by 2015.

SATS: 3Q13 operating data show number of flights handled growing 10.2% y/y to 34,920, unit services +6.6% and cargo throughput +1.9%. Passenger handled rose 4.8% to 11.25m on stronger traffic from budget carriers. Gross and unit meals produced however declined 8% and 5.7% respectively due to loss of Qantas' flights to Europe following the relocation of its base to DubaiSATS: 3Q13 operating data show number of flights handled growing 10.2% y/y to 34,920, unit services +6.6% and cargo throughput +1.9%. Passenger handled rose 4.8% to 11.25m on stronger traffic from budget carriers. Gross and unit meals produced however declined 8% and 5.7% respectively due to loss of Qantas' flights to Europe following the relocation of its base to Dubai

Mapletree Industrial Trust: 3QFY14 distributable income of $42.2m (+12% y/y) and DPU of 2.51¢ (+8.2%) continued its uptrend since 1QFY11 as gross revenue (+9.3%) and NPI (+12%) benefiDespite the slight cheertted from better average passing rental rate of $1.73 (+7.5% y/y, +1.8% q/q) and positive rental reversions achieved across all property segments, higher occupancies in its flatted factories and lower utilities expenses. But portfolio occupancy dipped to 92.5% upon completion of K&S Corporate HQ with weighted average lease expiry of 2.5 years. Aggregate leverage remained at 36.3% with average debt tenor of 2.8 years. End Dec NAV/unit stood at $1.11.

CMT: 4Q13 DPU up 15% y/y to 2.72¢, bringing FY13 DPU to 10.27¢ (+9%), implying a 5.7% yield. NPI expanded 11% y/y to $125.5m, driven by positive rent reversions and continued high occupancy rate of 98.5%. For FY13, tenants’ sales psf increased 2.5% and shopper traffic grew 3.1% y/y. End ’13 aggregate leverage stood at 35.3% with NAV/unit of $1.74.

Ascott Residence Trust: 4Q13 distributable income rose 15% y/y to $26.3m but DPU dropped 34% to 1.33¢. Excluding the dilutive effect from its rights issue in Dec ’13, DPU would have been 2% lower at 1.96¢. Revenue grew 11% to $83.9m due to additional contributions from properties acquired in Nov ’12 and Jun ’13 and stronger performance from Belgium and France. But RevPAU dipped 7% to $129/day amid weakness in Philippines and Japan (arising from depreciation of JPY) and lower room rates from its newly acquired China properties. Aggregate leverage improved to 34% from 41.1% in Sep and average debt maturity extended to 4.2 years. NAV/unit of $1.37 was supported by a revaluation surplus of $74.1m

Frasers Centrepoint Trust: 1QFY14 distributable income gained 4.3% y/y to $20.6m, leading to a 4.2% rise in DPU to 2.5¢. Both revenue and NPI rose 5% and 4.4% to $40m and $28.3m respectively, due mainly to improved performance from Causeway Point. Portfolio occupancy stood at 96.7%, -1.7 ppt from preceding quarter, while leverage was a comfortable 29.7%. End '13 NAV/unit was unchanged q/q at $1.77.

Cache Logistics: 4Q13 distributable income of $16.6m (+9.6% y/y, +0.6% q/q) and DPU of of 2.126¢ (-0.8% y/y, +0.5% q/q) delivered FY13 DPU of 8.644¢ (+3.3%). Gross revenue and NPI grew 8.2% and 7.1% y/y to $20.7m and $19.6m on built-in rental escalation and contributions from Precise Two, acquired in Apr ‘13. Portfolio occupancy was maintained at 100% with weighted lease to expiy of 3.1 years and very low renewal risk for 2014. Aggregate leverage remained at a conservative 29.1% with all-in financing cost of 3.48% and average debt maturity of 1.9 years. Inclusive of a $6.7m revaluation gain, NAV/unit ended at $0.98.

Jaya: Turned in 2QFY14 net profit of US$7.6m (-24% y/y) on revenue of US$29.6m (-24%) but excluding vessel sales, charter revenue would have been 31% higher from improved fleet utilization of 83% vs 80% a year ago and higher charter rates. Stripping out one-time charges and gains from vessel sales, bottomline was 16% stronger than previous year. Future revenue stream is backed by a robust chartering order book of US$327m (+82%). Higher interim DPS of 1¢ declared.

Keppel T&T: FY13 net profit rose 13.9% to $63.2m on the back of the 17.6% growth in revenue to $161.7m with higher sales coming from both data centre and logistics operations. But the gain in operating profit, whuc surged 32% to $33.3m was largely derived from the data centre division as its China logistics operations reported lower earnings due to start-up and implementation costs of newly developed projects. Final DPS of 3.5¢ is maintained

Keppel Land: Acquired 3ha residential site in West Jakarta for Rp400.8b ($42m) to develop a high-rise condo with >1,200 units and 60 ancillary shophouses. First phase, which targets the mid-income segment, is expected to be launched in 1Q15.

Courts Asia: First and largest 170,000 sf Big-Box Megastore in Bekasi, Indonesia, is expected to be completed in Jun and open ahead of schedule by Sep ’14. Meanwhile, the group has seen a successful start for its second Big-Box Megastore (66,000 sf) in Subang Jaya, Malaysia, which opened this month.

Stamford Land: Lodged an application to redevelop its Sir Stamford Circular Quay hotel in Sydney into a 19-storey residential and commercial building. With a GFA of 14,835 sqm, the proposed building will comprise 104 residential apartments and 1,331 sqm of retail and commercial space

Kim Heng: Based on the total invitation size of 174m shares (171m placement, 3m public), the IPO is 5.8x subscribed. Among its new investors allotted placement shares include Havenport Asset Management (16m) and Chew Thiam Keng (9m), CEO of Ezion Holdings. Trading will commence at 9am on 22 Jan

First Resources: reported FY13 production numbers in line with estimates. FFB nucleus grew 6.5% YoY. FFB plasma decline was compensated by a jump in external FFB purchases. Total FFB processed was recorded up 13.1% YoY. CPO production reached 588,792 t (+12% YoY), in line with estimates (100% of FY13E).
In terms of productivity, in 2013, FR recorded lower yield (FFB yield and CPO yield at 18.7 and 4.3 tons/ha), contributed by the dilutive effect from higher percentage of young trees and the lower yielding newly acquired plantations. Mgt expects yield to return to 20- 22 tonnes/ha level in 2014 following the recovery of tree stress

Keppel Land: Turned in FY13 and 4Q13 net profits of $885.9m (+6%) and $567.3m (+8% y/y) on record revenues of $1.5b (+6%) and $505.7m (+7%). Excluding fair value gains of $331.1m (-11%), FY13 and 4Q13 earnings of $583.7m (+22%) and $265.1m thrashed street estimates. This was driven by mainly by its China projects (8 Park Avenue, The Botanica The Springdale), property investments (MBFC Tower 3, Keppel REIT) and sale of stakes in Jakarta Garden City and Hotel Sedona Manado, which yielded divestment gains of $151.8m. Overseas profits rose 64% to $141.1m and contributed 33% to the core bottomline. End ’13 NAV climbed 13% to $4.52. Final DPS of 13¢ (+1¢) declared.

Mapletree Commercial Trust: 3QFY14 distributable income jumped 24.2% y/y to $38.7m, while DPU rose 11.9% to 1.865¢. NPI swelled 24.9% to $49.4m, in tandem with gross revenue growth of 22.4% to $68.4m. VivoCity maintained its robust operating performance, while PSA Building delivered strong earnings growth. Mapletree Anson, acquired in Feb '13, also contributed an additional income stream. Overall portfolio occupancy improved to 98.7% with weighted average lease to expiry of 2.2 years. Aggregate leverage remained stable at 40.8% with average term maturity of 2.7 years at an average cost of 2.18%. End Dec NAV stood at $1.07.

CapitaCommercial Trust: Delivered gross revenue of $386.9m (+3%) in FY13, driven by improved performance from most properties, notably Six Battery Road, Raffles City Singapore, HSBC and full year contribution from Twenty Anson. Accordingly, distributable income rose to $234.2m (+2.5%), and DPU edged up to 8.14¢ (+1.2%), implying a yield of 5.5%. Portfolio occupancy climbed to 98.7% (+1.5ppt) from a year ago. CCT ended Dec ’13 with aggregate leverage of 29.3% and NAV per unit of $1.71.

Frasers Commercial Trust: 1QFY14 distributable income surged 33% y/y to $13.7m driving DPU up 30% to 2.05¢, aided by lower interest costs arising from capital management initiatives and conversion of Series A CPPUs. Gross revenue dipped 3% to $28.8m and NPI declined 4% to $22.1m on the back of a weaker AUD and slightly lower occupancy for Central Park, which offset by the improved performances of S'pore properties. Average portfolio occupancy rate slid marginally to 97.1% with weighted average lease to expiry of 4.4 years. Aggregate leverage stayed at 37.9% with effective interest cost of 2.7%. End Dec NAV was $1.54.


Soilbuild REIT: Posted DPU of 1.51¢ for 4Q13, exceeding its IPO forecast by 3.4%. From listing date (16 Aug ’13) to end ’13, actual DPU amounts to 2.27¢, implying an annualized yield of 7.8%. For the quarter, the REIT delivered net property income of $13.7m, supported by new take up and lease renewals. As at end ’13, portfolio occupancy stood at ~100%, aggregate leverage was 29.3%, and NAV per unit was $0.80.

Global Logistic Properties: Signed nine new leases totalling 180,000 sqm across multiple locations in Japan, of which six are first-time customers. These are to third-party logistics providers or wholesale distributors catering to domestic consumption. Four of the facilities are under its 50% owned GLP Japan Development Venture, and have reached 82% occupancy.

Aspial: Acquired 28,255 sf freehold site in downtown Melbourne for A$42.3m ($47.6m) and plans to redevelop into the city's tallest building at 312m with >1m GFA of residential and commercial space.

Cordlife/Asia Medic: Cordlife has launched a lawsuit against AsiaMedic’s JV, Cryoviva Singapore for breaches including use of Cordlife’s proprietary information and intellectual property without its knowledge and consent. The application has been fixed for hearing on 24 Jan ’14.

Keppel Corp: FY13 and 4Q13 results missed estimates with core net profit of $1.41b (-26%) and $332m (+9%) on revenue of $12.4b (-11%) and $3.6b (+20%) respectively. While the O&M and property segments performed well, further large provisions in infrastructure were a drag on bottomline. For 4Q13, the O&M segment reported a sharp 35% q/q jump in revenue to $2.1b, as more jackup projects reached recognition milestones. O&M operating margin slipped 2.3 ppt q/q to a still healthy 14.2% due to fewer rig deliveries and change in revenue mix. End Dec order book was $14.2b, with visibility till 2019. Infrastructure incurred a $11m loss from large provisioning charges of ~$150-200m arising from cost overruns and other costs at its Doha and Manchester EPC projects. Property earnings were about flat. Final DPS of 30¢ brings FY13 payout to 49.5¢ (inclusive of Keppel REIT distribution-in-specie).

Tiger Airways: Turned in a 3QFY14 net loss of $118.5m reversing from $2m net profit in same period last year, quadrupling 9MFY14 net loss to $127.5m. Bottom-line was dragged largely by exceptional charges of $88.3m, including a $30.3m loss on the planned disposal of Tigerair Philippines and an $58m impairment on associates. Operating performance was also hit by industry overcapacity which led to lower yield and load factors. Tigerair S’pore came under pressure with revenue declining 3% to $168m and reported an operating loss of $170m vs $27m profit a year ago.

Suntec REIT: 4Q13 distributable income climbed 11% y/y to $58.2m alongside a 10.1% increase in DPU to 2.56¢ (including 0.175¢ from capital distribution support), taking FY13 DPU to 9.33¢. NPI surged 62.9% to $49.8m after gross revenue jumped 30.2% to $71.6m, boosted by the opening of Suntec City Mall (Phase 1) and Suntec Singapore following renovation works. Office portfolio occupancy was stable at 99.6% and retail portfolio at 97.3% with weighted lease to expiry of 2.4 years. Aggregate leverage stood at 38% with an average financing cost of 2.5%. End 2013 NAV was $2.13 per unit.

Mapletree Greater China Commercial Trust: 3QFY14 distributable income exceeded IPO forecast by 16.6% to $40.6m with DPU of 1.518¢. Gross revenue came 9.9% above estimates to $65.7m while NPI beat by 13.2% to $53.8m, on the back of better than expected rental uplift for both Festival Walk in Hong Kong (+20%) and Gateway Plaza in Beijing (+78%), new committed leases, as well as lower operating expenses. Overall portfolio occupancy dipped 1.1 ppts to 97.9% with weighted average lease expiry of 2.6 years. Aggregate leverage of 40.5% with debt maturity of 3.2 years at 2.0% cost of debt. End Dec NAV was $0.94.

Ezra: its subsea services division has been awarded projects worth a total of ~US$80m, including options. The scope of these projects cover a large spectrum of subsea work, including the decommissioning and towage of an FPSO in Asia and the deployment of an inspection, maintenance and repair vessel in the Americas. Work for a majority of the contracts is expected to commence by 1H14. The group’s subsea orderbook stands at more than US$1.4b, and is currently tendering for ~US$9b in projects worldwide.



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