Stocks to watch:
*Economy: 2Q GDP expanded 2.1% vs advance estimate of 2.2% on manufacturing and services growth of 1.1% (prior: -0.5%) and 1.4% (prior: 1.7%), respectively. 2016 growth forecast has be shaved to 1-2% (prior: 1-3%) on weaker outlook and downside risks associated with Brexit and potential debt defaults in China.
*Singtel: 1QFY17 results within expectations. Underlying net profit of $954m (+6.6% y/y) was boosted by improved EBITDA margin of 31.6% (+2.1ppt) and stronger contribution from regional mobile associates of $767m (+15.3%). However, revenue slid 7.1% to $3.91b due to a decline in mobile termination rates in Australia. FY17 growth guidance kept. NAV/share inched up to $1.59 (+1.3%). MKE last had a Buy with TP of $4.50.
*City Dev: 2Q16 results ahead of estimates although net profit of $133.8m (+0.2%), was weighed by lower EBIT margin of 19.6% (-3.5ppt) due to FX loss, as well as reduced interest income. Revenue rose to $1.09b (+32.4%), underpinned by revenue recognition from fully sold EC Lush Acres in Singapore, partially offset by lower contribution from M&C on weaker hotel performance in New York and Singapore. Special interim DPS of 4¢ maintained. NAV/share at $9.75.
*Ezion: 2Q16 results missed estimates as net profit of US$19.8m (-31.5%) was masked by disposal gain of US$14.6m. Revenue dipped 7% to US$83.7m on a smaller fleet, while gross margin eroded to 21.3% (-13.6ppt) on increased deployment cost of additional service rigs. NAV/share at US$0.8072.
*Nam Cheong: 2Q16 net profit RM3m (-71.5%) trimmed 1H16 net loss to RM37.1m against consensus full year loss estimate of RM1.35m. Revenue slumped 39% to 117.4m on slower progressive revenue recognition and reduced utilisation rate in the chartering business. NAV/share at 60.9 sen.
*Mermaid Maritime: 2Q16 net profit plunged 50.3% to US$7.7m on a sharply lower revenue of US$49.6m (-53.8%), as its subsea business continued to be hurt by the oil cycle downturn. Top line was mainly eroded by a reduction in cable lay projects and utilization of vessels. Net gearing improved to 6% from 15.6% in FY15. NAV/share at US$0.23
*Thai Bev: Ratings agency Fitch assigned investment grade ratings of BBB for the group's foreign borrowings, and AA+ for its domestic debt, with stable outlook.
*Straco: 2Q16 net profit slipped 11.6% y/y to $9.2m, on lower revenue of $27.9m (-5.2%) on a drop in visitation (-7.2%) at its Shanghai and Xiamen aquariums, partially offset by stronger takings from the Singapore Flyer. Operating margin narrowed to 51.8% (-3.5 ppt) on higher staff costs (+13.9%) and FX losses of $0.3m (2Q15: $0.3m gain). NAV/share at $0.2438.
*CNMC: 2Q16 net profit jumped 30.9% to US$4.7m, on the back of a 34.6% increase in revenue to US$12.6m, boosted by volume growth (+24.5% to 9,807.37 oz) and higher average realised gold price (+8% to US$1,287.22/oz). All-in cost of production fell 3.3% to US$500/oz. Interim DPS raised to 0.2¢ (1H15: 0.18¢). NAV/share at $0.1359.
*IREIT Global: 2Q16 results met; DPU surged 45.5% to 1.6¢, as gross revenue and NPI both jumped 57% to €8.5m and €7.6m, respectively, on contribution from Berlin Campus acquired in Aug '15. Portfolio occupancy held steady at 99.7%, with WALE of 6.4 years. Aggregate leverage was reduced to 41.8% (-1.3ppt q/q), with effective debt cost of 2% and tenor of 3.3 years. NAV/unit at €0.42.
*Metro: 1QFY17 net profit slumped 74.1% y/y to $9.7m mainly due to an 86.2% dive in JV contribution on the absence of disposal gains. Revenue fell 25.4% to $31.9m on weaker contributions from retail (-24.8%) and property (-33.6%), while gross margin was crimped 2 ppt to 4.8% on the cessation of rental contributions from its Frontier Koishikawa Building. NAV/share at $1.65.
*Trendlines: 2Q16 swung to a net loss of US$4.6m (2Q15: US$2.9m profit), as top line was negative at US$2.9m (2Q15: US$5.9m positive), mainly weighed by loss from a change in value of its portfolio companies of US$4.7m (2Q15: US$4.5m gain). Bottom line was hurt by a spike in admin costs (+76.8%) due to IPO listing expenses. NAV/share at US$0.16.
*Sapphire Corp: 2Q16 net profit soared 5.5x to $2.8m on a stronger revenue of $53.4m (+278%), driven by the acquisition of Ranken Infrastructure, an EPC business specialising in the China rail transit sector. This more than offset its deteriorating mining business (-53.4%). NAV/share at $0.2756.
*YuuZoo: 2Q16 net profit surged to $14.2m (2Q15: $1.3m), but would have been lossmaking stripping out the effects of non-cash revenue. Revenue surged 235% to $35.8m, of which $17m is non-cash franchise fees, while the balance $18.7m is from ecommerce segment that only broke-even. NAV/share at 18.6¢
*Frencken: 2Q16 net profit inched 0.5% lower to $4.1m, while revenue increased 3.1% to $120.5m, aided by both mechatronics (+3.1%) and IMS divisions (+3%). However, this was negated by gross margin compression (15.2%, -0.6ppt). NAV/share at 51.35¢.
*Q&M: Updated the proposed spin-off of its China manufacturing business Aidite on China's new third board. Its stake in Aidite will be diluted to 38.2% following new share subscription by management (51.8%) and a further issue of new shares comprising 5-10% of total capital. Post restructuring pro forma FY15 EPS is expected to fall to 1.39¢ (-4.8%), while net gearing will drop from 17% to 10%.
*Economy: 2Q GDP expanded 2.1% vs advance estimate of 2.2% on manufacturing and services growth of 1.1% (prior: -0.5%) and 1.4% (prior: 1.7%), respectively. 2016 growth forecast has be shaved to 1-2% (prior: 1-3%) on weaker outlook and downside risks associated with Brexit and potential debt defaults in China.
*Singtel: 1QFY17 results within expectations. Underlying net profit of $954m (+6.6% y/y) was boosted by improved EBITDA margin of 31.6% (+2.1ppt) and stronger contribution from regional mobile associates of $767m (+15.3%). However, revenue slid 7.1% to $3.91b due to a decline in mobile termination rates in Australia. FY17 growth guidance kept. NAV/share inched up to $1.59 (+1.3%). MKE last had a Buy with TP of $4.50.
*City Dev: 2Q16 results ahead of estimates although net profit of $133.8m (+0.2%), was weighed by lower EBIT margin of 19.6% (-3.5ppt) due to FX loss, as well as reduced interest income. Revenue rose to $1.09b (+32.4%), underpinned by revenue recognition from fully sold EC Lush Acres in Singapore, partially offset by lower contribution from M&C on weaker hotel performance in New York and Singapore. Special interim DPS of 4¢ maintained. NAV/share at $9.75.
*Ezion: 2Q16 results missed estimates as net profit of US$19.8m (-31.5%) was masked by disposal gain of US$14.6m. Revenue dipped 7% to US$83.7m on a smaller fleet, while gross margin eroded to 21.3% (-13.6ppt) on increased deployment cost of additional service rigs. NAV/share at US$0.8072.
*Nam Cheong: 2Q16 net profit RM3m (-71.5%) trimmed 1H16 net loss to RM37.1m against consensus full year loss estimate of RM1.35m. Revenue slumped 39% to 117.4m on slower progressive revenue recognition and reduced utilisation rate in the chartering business. NAV/share at 60.9 sen.
*Mermaid Maritime: 2Q16 net profit plunged 50.3% to US$7.7m on a sharply lower revenue of US$49.6m (-53.8%), as its subsea business continued to be hurt by the oil cycle downturn. Top line was mainly eroded by a reduction in cable lay projects and utilization of vessels. Net gearing improved to 6% from 15.6% in FY15. NAV/share at US$0.23
*Thai Bev: Ratings agency Fitch assigned investment grade ratings of BBB for the group's foreign borrowings, and AA+ for its domestic debt, with stable outlook.
*Straco: 2Q16 net profit slipped 11.6% y/y to $9.2m, on lower revenue of $27.9m (-5.2%) on a drop in visitation (-7.2%) at its Shanghai and Xiamen aquariums, partially offset by stronger takings from the Singapore Flyer. Operating margin narrowed to 51.8% (-3.5 ppt) on higher staff costs (+13.9%) and FX losses of $0.3m (2Q15: $0.3m gain). NAV/share at $0.2438.
*CNMC: 2Q16 net profit jumped 30.9% to US$4.7m, on the back of a 34.6% increase in revenue to US$12.6m, boosted by volume growth (+24.5% to 9,807.37 oz) and higher average realised gold price (+8% to US$1,287.22/oz). All-in cost of production fell 3.3% to US$500/oz. Interim DPS raised to 0.2¢ (1H15: 0.18¢). NAV/share at $0.1359.
*IREIT Global: 2Q16 results met; DPU surged 45.5% to 1.6¢, as gross revenue and NPI both jumped 57% to €8.5m and €7.6m, respectively, on contribution from Berlin Campus acquired in Aug '15. Portfolio occupancy held steady at 99.7%, with WALE of 6.4 years. Aggregate leverage was reduced to 41.8% (-1.3ppt q/q), with effective debt cost of 2% and tenor of 3.3 years. NAV/unit at €0.42.
*Metro: 1QFY17 net profit slumped 74.1% y/y to $9.7m mainly due to an 86.2% dive in JV contribution on the absence of disposal gains. Revenue fell 25.4% to $31.9m on weaker contributions from retail (-24.8%) and property (-33.6%), while gross margin was crimped 2 ppt to 4.8% on the cessation of rental contributions from its Frontier Koishikawa Building. NAV/share at $1.65.
*Trendlines: 2Q16 swung to a net loss of US$4.6m (2Q15: US$2.9m profit), as top line was negative at US$2.9m (2Q15: US$5.9m positive), mainly weighed by loss from a change in value of its portfolio companies of US$4.7m (2Q15: US$4.5m gain). Bottom line was hurt by a spike in admin costs (+76.8%) due to IPO listing expenses. NAV/share at US$0.16.
*Sapphire Corp: 2Q16 net profit soared 5.5x to $2.8m on a stronger revenue of $53.4m (+278%), driven by the acquisition of Ranken Infrastructure, an EPC business specialising in the China rail transit sector. This more than offset its deteriorating mining business (-53.4%). NAV/share at $0.2756.
*YuuZoo: 2Q16 net profit surged to $14.2m (2Q15: $1.3m), but would have been lossmaking stripping out the effects of non-cash revenue. Revenue surged 235% to $35.8m, of which $17m is non-cash franchise fees, while the balance $18.7m is from ecommerce segment that only broke-even. NAV/share at 18.6¢
*Frencken: 2Q16 net profit inched 0.5% lower to $4.1m, while revenue increased 3.1% to $120.5m, aided by both mechatronics (+3.1%) and IMS divisions (+3%). However, this was negated by gross margin compression (15.2%, -0.6ppt). NAV/share at 51.35¢.
*Q&M: Updated the proposed spin-off of its China manufacturing business Aidite on China's new third board. Its stake in Aidite will be diluted to 38.2% following new share subscription by management (51.8%) and a further issue of new shares comprising 5-10% of total capital. Post restructuring pro forma FY15 EPS is expected to fall to 1.39¢ (-4.8%), while net gearing will drop from 17% to 10%.
