13 November 2017

SG Counters

- Provisioning soared 87% to $815m (2Q17: $304m) on a spike in specific allowances to the O&G support service sector.
- NPL ratio ticked up to 1.7% (3Q16: 1.3%, 2Q17: 1.5%) but capital position remained strong with Tier 1 CAR at 14.0% (3Q16: 14.4%, 2Q17: 14.4%).
- Trading at 1.32x P/B.

- Stellar 3Q17 net profit surged 135% to $111.4m (+135%), blowing past estimates.
- Higher revenue of $1.06b (50.5%) was due to strong execution of customers' programmes and deeper collaboration with strategic clients.
- Pretax margin expanded 4.4ppt to 12.4% as there were more products that required design content.
- Cash continued to pile up giving scope for higher dividends.
- Last traded at 20.8x FY17e P/E.

- Revenue grew 3.7% to $274.7m on
- 2QFY18 net profit to $38.1m (+7.3%) missed forecasts.
*SIA Engineering
increased contribution from airframe & component overhaul and line maintenance revenue.
- But operating margin of 7.1% (-2.2ppts) was squeezed by higher staff costs.
- Last traded at 21.9x FY18e P/E.

- 3Q17 net profit tumbled 90% to $10.7m on
lower reversal of impairment losses for OUE Twin Peaks (-86.1%).
- This dragged 9M17 net profit to $33.2m (-76.6%), meeting just 41% of FY17 street estimate.
- Revenue slumped 56.6% to $181.9m on weaker development income (-86.9%) following completion of Crowne Plaza Changi Airport Extension and fewer unit sales at OUE Twin Peaks.
- Gross margin expanded to 38.6% (+5.6ppt) on a shift in sales mix.
- Bottom line was further weighed by increased net finance expenses (+19.8%) and a jump in non-controlling interests (+28.2%).
- NAV/share at $4.38.

*Chip Eng Seng
- 3Q17 net profit surged 145.8% to $14m, mainly boosted by a disposal gain from of 420 St Kilda Road in Melbourne, Australia, for $13.4m.
- Revenue jumped 37.8% to $209.2m on jump in contributions from property developments (+114.7%) and hospitality (+47.6%), but partly weighed by construction (-31.9%) and property investments (-7.7%).
- Gross margin dipped 1ppt to 16.8% on the shift in sales mix.
- Bottom line was partly weighed by increased administrative expenses (+36.1%) arising from pre-operating expenses for Grand Park Kodhipparu Maldives, depreciation charges and higher staff costs.
- Trades at 17.4x forward P/E.

- Declared interim DPS to 1¢ (3Q16:
- Bottom line was partly supported by lower interest costs (-25.8%) and distribution & selling (-7.1%) expenses, but pared by a swing into associate/ JV loss to $0.02m (3Q16: $0.6m profit).
- Gross margin slipped 1.1ppt to 55.2% on a change in sales mix.
- Revenue slipped 2% to $154.3m on weakness across bakery (-1.7%), food atrium (-4.5%), F&B incubator 4orth (-9.8%) and others (-2.5%), while restaurant takings improved 0.9%.
- 3Q17 results missed despite a 22.2% jump in net profit to $4m.
trades at 23.8x forward P/E.

- Gross margin expanded 3.6ppt to 7.4% on better margins from the processing segment and contribution from new
- For the quarter, revenue surged 157.7% to US$482.1m on improved rubber prices and higher sales volume from existing and newly-acquired operations, namely Sinochem and GMG Global.
- 3Q17 turned around to net profit of US$7.3m (3Q16 US$12.1m loss), bringing 9M17 net profit to US$20.1m (9M16: $26.7m loss).
*Halcyon Agri
acquisitions, but was partially offset by margin compression in the distribution segment.
- Bottom line was supported by
associate profit of $2.6m (3Q16: nil
- Last traded at 5.5x trailing P/E.

- 3Q17 reversed into
net loss of $9.8m (3Q16: $5.4m profit) due to a $7.9m fair value loss stemming from an acquisition which saw its consideration upwardly revised, and absence of $7.2m revaluation gain from a subsidiary.
- Revenue rose 6% to $26.2m, mainly contributed by Squire Mech, an associate turned subsidiary in Aug '16, and new acquisitions AC Consortium, and Ariva Hospitality.
- Post-adjustment of one-off items, EBITDA margin shrank 4.3ppt to 5.1% upon consolidation of Squire Mech, lower wage reimbursement from customers and higher project expenses.
- Net gearing crept higher to 0.23x from 0.21x in Jun '17.
- NAV/share at $0.0846.

*Metro Holdings
- Existing 90:10 JV with Lee Kim Tah Group has signed a master agreement with PT. Trans Corpora, to develop, market and sell five 32-storey residential towers in Bekasi, Jakarta, Indonesia.
- Total investment value will be at Rp1,987b ($200.4m).
- The residential towers are part of Trans Corpora's mixed development Trans Park Bekasi on a 4.5-ha site, which also comprises a hotel, school, office building and a Transmart mall.
- This allows Metro to expand beyond retail department store operations to include its core property business in Indonesia.

- The deal includes a net profit guarantee of RM4.5m for FY18.
- To acquire Eastern Press, a Malaysian printer and supplier of packaging materials, for RM46.3m.
*Top Glove
Acquisition will help improve its supply chain for better costs and quality control.

- Disposing entire 49% stake in Triumph Alliance to Prime Asia Corp for US$10m, which includes a repayment of
loan owed to Noble.
- The consideration in markedly below the JV's book value of US$44m, and hence will lead to an impairment loss.

*Dukang Distillers
- Warned of significantly lower 1QFY18 revenue and earnings.
- The negative profit alert was due to an inventory build-up at the distributors following a previous sales promotion for baijiu products.

*Profit warnings
- Tat Hong
- A-Sonic

*Frasers Centrepoint
- Hospitality arm marked the opening of a 354-unit Modena By Fraser Changsha in Hunan, China.
- The serviced residence is one of 14 properties slated to open over the next four years.
- The group currently has a global portfolio of 148 properties with 23,600 units.

- Land site is a 462sqm freehold property that is zoned residential with commercial at
- Exercised an option to purchase a vacant land along Tessensohn Road in Singapore for $14.5m.
1st storey.
- Trading at 11.6x forward P/E.

- The price translates to ~$2,080
- To acquire another 3.33%/ 5.49% in Perennial Chinatown Point for $5.1m/ $8.5m.
*SPH/ Perennial
psf NLA.
- The deal will raise SPH/ Perennial's stakes to 30.68%/ 50.64%.

- Secured a contract for the construction of one service vessel for integrated fish-farming group
Midt-Norsk Havbruk in Norway.
- The vessel is slated to deliver by 2Q18.
- Trading at 0.8x P/B.

*Keppel T&T
- 70:30 JV with Keppel Land partnered Singapore Internet Exchange (SGIX) to enhance network connectivity in Singapore.
- The partnership increases SGIX Internet peering points in Singapore to four, boosting its service coverage across the country.
- Customers of Keppel Data Centres that connect to SGIX stand to enjoy reduced latency and lower operating costs from the streamlining of Internet connections. 

- Entered into a Deed of Gift with its chairman to transfer his rights, title and interest in certain patents relating to the frame structure for a multi-level container handling and storage facility.

Proposed placement of 155m new shares (8.9% share capital) at $0.53 each to placement agent CLSA and RHB Securities.
- Net proceeds of $80.9m earmarked to fund growth and expansion for its real estate division (50%), with the remainder for the automotive and heavy equipment divisions, consumer and others.

- The properties have a combined strata floor area of 128,000
- Golden Bay owns 59 strata lots, of which 21 are shops and 38 are offices, located at Orchard Tower and 1 Claymore Drive in Singapore.
- Entered into a conditional agreement to buy property investment firm Golden Bay Realty for $162m.
*Hiap Hoe
sf and NLA of 89,000 sf.
- The acquisition will expand the group's property investment portfolio and strengthen its recurrent income stream.
- Trades at 8.2x trailing P/E.

- The 999-year property with
- To purchase a 3-storey conservation commercial shophouse for $26.5m.
*Top Global
gfa of 10,027 sf will be enhanced and leased to hostel operator 5Footway Founders.