SARINE TECHNOLOGIES LTD U77.SI Sarine Technologies (SARINE SP) - Diamond in the rough
Guided for 2Q16 revenue to exceed USD20m…
- Sarine guided that 2Q16 revenue could exceed USD20m due to positive midstream profitability that continued to drive manufacturing activities.
- The company delivered a record of 20 Galaxy-related machines in 2Q16 (1Q16: 18, 2Q15: 6), of which 10 were for the new Meteor, eight Solaris and two Galaxy Ultra. This development supports our views expressed on 25 May 2016, The Path to Normalcy, where we highlighted industry data points that suggest recovery remains on track.
QT VASCULAR LTD 510.SI QT Vascular (QTVC SP)
- QT Vascular (QTVC) is engaged in the the design, assembly and distribution of balloon catheters used in angioplasty.
- The company has been loss-making for at least the past 6 years due to a combination of high expenses (R&D, marketing, litigation) and sales volumes below break-even levels; it is now considering a sale of key assets.
- At 4.1x Price/Sales, the group trades at a c.27% premium to regional and global medical device makers.
MAPLETREE COMMERCIAL TRUST N2UY.SI Mapletree Commercial Trust (MCT SP) - Proposed acquisition of Mapletree Business City
- Proposed acquisition of Mapletree Business City (MBC) Phase 1 for S$1.78bn or 5.6% implied FY15/16 NPI yield.
- 3% accretion to proforma 6MFY17 DPU and 2% uplift to NAV per unit.
- New exposure to the business park segment and Singapore’s decentralisation theme.
MAPLETREE COMMERCIAL TRUST N2UY.SI Mapletree Commercial Trust (MCT SP) - Transformative Acquisition
Positive on major acquisition; U/G to HOLD
- MCT’s proposed SGD1.86b acquisition of Mapletree Business City Phase 1 (MBC1) will transform it to having 24% exposure to business parks — the real estate sub-sector with the best supply/demand outlook.
- Acquisition is at market price and estimated to be funded 53:47 equity/debt.
- DPU accretion raises FY3/17-19 estimates by 3.2-5.5%. U/G to HOLD with TP revised to SGD1.56 from SGD1.35.
CITY DEVELOPMENTS LIMITED C09.SI City Developments - Acquisition of remaining 50% stake in Nouvel 18
- City Developments (CDL) acquired the remaining 50% stake in Nouvel 18 from its JV partner Wing Tai Land Pte. Ltd. for an aggregate consideration of SGD411m.
- Nouvel 18 located at 18 Anderson road is a 156-unit freehold site and is within walking distance to Orchard road shopping belt. The site was acquired in 2007 for SGD477.7m (SGD1,650 psf ppr) and was completed in Nov 2014. No units has been sold till date.
Singpost SINGAPORE POST LIMITED S08.SI Singapore Post Ltd - If we were the new CEO...
- SPOST is in the process of searching for a new CEO. We outline the key priorities that we think he/she could focus on, especially coming on board in a tough year.
- We think impairment of goodwill for TradeGlobal (TG) could be on the cards, given aggressive growth assumptions, although Jagged Peak (JP) is likely to be spared.
- A cut in DPS from 7 Scts to 6.25 Scts makes sense amid high capex in FY17-18. It will run out of cash in FY3/17 if the share issuance and Alibaba JV fall through.
VIVA INDUSTRIAL TRUST T8B.SI Viva Industrial Trust: Initiate with BUY
- 58.1% of portfolio in business parks
- S$6.9m in additional NPI by FY18
- FY16F DPU yield of 9.8%
Business Park-focused REIT
- Viva Industrial Trust (VIT) is a Singapore- focused REIT which primarily invests in business parks and industrial real estate assets.
- Its current portfolio comprises eight industrial properties with a NLA of 3.0m sq ft.
SMRT CORPORATION LTD S53.SI SMRT Corporation Ltd: Defects on trains covered under warranty
- An article reported by Hong Kong media on Tuesday revealed that several of Singapore’s first China-made trains operated by SMRT Corporation Ltd (SMRT) are being shipped back to their manufacturers (i.e. CSR Qingdao Sifang and Kawasaki Heavy Industries) for structural defects.
Singapore PropertyWING TAI HLDGS LTDW05.SI CITY DEVELOPMENTS LIMITEDC09.SI Singapore Property - CityDev acquires Wing Tai’s 50% stake in Nouvel 18
CityDev assumes full ownership of Nouvel 18
- CityDev acquired Wing Tai’s 50% stake in Nouvel 18, a 156-unit high-end project in the prestigious Ardmore locale, for SGD411m.
- By acquiring its joint venture partner’s stake, CityDev has assumed full ownership of this project.
- With the streamlining of its shareholding structure, we expect CityDev to aggressively market this project as a bulk sale or build a structured product with it to avoid incurring significant Qualifying Certificate (QC) charges.
UG HEALTHCARE CORPORATION LTD 41A.SI UG Healthcare Corp - Execution is key
- Established Malaysian glove manufacturer with plans to grow its global distribution network
- Potential beneficiary of a greater shift in pricing and bargaining power to distributors as competition is expected to heat up ahead
- Further prospects ultimately a factor of the Group’s ability to bring plans to fruition
CHINA MERCHANTS HLDGS(PACIFIC) C22.SI China Merchants Holdings Pacific - Take the offer to steer clear of headwinds
- Major shareholder Easton Overseas has made a privatisation offer for the remaining 24.12% CMHP shares that it does not own.
- The offer price of S$1.02 represents 22-26% premium over the 1- and 3-month VWAP. It represents 15.9x CY16 core P/E and 1.07x trailing P/BV.
- We think the offer price is good and minority shareholders should accept the offer.
BREADTALK GROUP LIMITED 5DA.SI BreadTalk Group: Helped by gain from divestment
- S$8.5m gain from sale of 112 Katong
- Deeper losses from Food Atrium
- Significant increase in overall staff costs
NERATELECOMMUNICATIONS LTD N01.SI Neratel -1Q16 Results Flash Note
Highlights
- 1Q16 NPAT dropped 33.4% YoY, mainly due to sales declines in both Network Infrastructure and Payment Solutions business segments.
- Both top-line and profitability were also impacted by delays in a significant order from a customer and also a pull back in project implementation due to slow payment by a customer. However, all this will likely be completed and recorded in Nera's 2Q16 numbers.
SARINE TECHNOLOGIES LTD U77.SI Sarine Technologies (SARINE SP) - Another Step Forward
Missed but recovery growth intact. Maintain BUY
- Sarine continued to recover as 1Q16 net profit surged 240% YoY and 101% QoQ to USD3m, but was below our USD4-5m expectation.
- Nevertheless, Sarine could have met our estimate with just an incremental USD1.5- 2.0m in revenue due to operating leverage.
CHINA EVERBRIGHT WATER LIMITED U9E.SI China Everbright Water Limited - Trash to Treasure
- Waste water treatment (WWT) capacity expansion and the ongoing hike of water tariff are expected to improve the company performance.
- War chest funds are supportive of growth initiatives.
- Sponge City Project offers the group opportunities to gain experience in the industrial chain integration.
NOL NEPTUNE ORIENT LINES LIMITED N03.SI Neptune Orient Lines (NOL SP) 1Q16: Losses Mount As NOL Awaits CMA-CGM’s Eventual Acquisition
- NOL’s net loss widened to US$105m for 1QFY16, amid the weakening shipping environment.
- The poor results were led by declines in freight rates and volumes, which more than offset quarterly cost savings.
- Net gearing crept up to 117%.
- Shipping outlook remains gloomy, with no near-term recovery in sight.
CHIP ENG SENG CORPORATION LTD C29.SI Chip Eng Seng Corporation Ltd - Slow but not unexpected quarter
What’s the news?
- Chip Eng Seng (CES) reported its 1Q16 results on 5 May-16 after the market closed.
Revenue from property development projects recognised previously
- The sharp drop in Chip Eng Seng Corporation’s (CES) 1Q16 revenue was stemmed from lower recognition of revenue from the property development segment. This is because a bulk proportion of revenue has already been recognised in the two development projects, Nine Residences and Junction Nine.
NOL NEPTUNE ORIENT LINES LIMITED N03.SI Neptune Orient Lines: Stuck in the red
- Neptune Orient Lines Ltd’s (NOL) 1Q16 core earnings (liner business) remained in the red as net loss widened 190.5% YoY to US$105.1m.
- 1Q16 liner revenue fell 28.0% YoY to US$1.14b due to falling freight rates and weak container trade demand.
OUE HOSPITALITY TRUST SK7.SI OUE Hospitality Trust - Well located assets
- 1Q16 DPU of 1.1 Scts (-26%) y-o-y was below expectations.
- Drag from recent rights issue and weaker contribution from Mandarin Gallery.
- Hotel portfolio resilient with 1Q16 RevPAR up 1% y-o-y.
RIVERSTONE HOLDINGS LIMITED AP4.SI Riverstone Holdings (RSTON SP) 1Q16: Muted Growth; Downgrade To HOLD
- 1Q16 net profit came in flat yoy, largely attributable to softer cleanroom glove demand as well as forex impact.
- In view of the ongoing ASP pressure on healthcare gloves and tepid demand for cleanroom gloves, the short-term outlook is lacklustre and we have trimmed our 2016-18 net profit forecasts by up to 12%. Thus, we recommend investors HOLD through this challenging period.
- Nevertheless, we are confident about Riverstone’s long-term prospects.
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