Silverlake Axis - 2% ahead on earnings, better than expected dividends with yield of 4%.

Silverlake Axisreported FY13 (Jun YE) profit of RM196m, 2% ahead of our estimate due to slightly better gross margins coming in at 63.7%. Revenue of RM399m, flat yo-y, was inline. Gross margins improved significantly due to lower hardware sales and rise in software licensing and maintenance revenue. Better than expected dividends with payout ratio of ~80%. Proposed final dividend of Singapore 1.1 Scts, resulting in total FY13 DPS of 3.1 Scts, up 63% y-o-y, exceeded our 2.6S Scts forecast. The stock is trading at FY13 dividend of 4.1% now. We will provide more updates post discussion with management.

Cord blood bank CordlifeGroup saw its fiscal 2013 net profit rise nearly 95% to $13.5m from a year ago due to healthy revenue growth, strong margins and a $2.7m one-time gain from disposal of a stake in associate China Stem Cells (South) Co. The group continues to maintain a high, consistent level of gross profit margin of about 73%.

Tiong Woon Corpreported a net profit of $17.6m for FY Jun 13, reversing from a net loss of $4.85m last year. The improvement came on the back of a 36% growth in turnover to $200.5m. The higher turnover was attributed mainly to contributions from its heavy lift and haulage, engineering services and trading segments. The group expects business conditions to be challenging due to uncertainties in the world economy, higher labour and other operating costs.

CapitaLand'swholly-owned serviced residence business unit, The Ascott, has secured a contract to manage its first Citadines Apart'hotel in Hangzhou. Scheduled to open in late 2014, the 100-unit Citadines Intime City Hangzhou will be Ascott's 11th Citadines Apart'hotel in China.

KS Energy and PT Pertamina Drilling Services Indonesia (PDSI) are setting up a new joint venture company to own and operate drilling rigs in Indonesia. They jointly operated drilling rigs valued at around US$130m. The new joint venture company intends to take over the contracts held by the existing joint operations and tender for new contracts in Indonesia.

Singapore's manufacturing sector expanded 2.7% y-o-y in July, better than market expectations of a 1.2% rise, thanks to a continued improvement in electronics output. The higher export demand for semiconductors and computer peripherals - which grew 2.3% and 14.7% respectively - helped to offset a 1.3% contraction in biomedical output due to weak pharmaceuticals numbers.

However, on a m-o-m basis, overall factory output declined 1.9%. This marked a second consecutive month of sequential contraction; industrial production fell 2% in June. Both the electronics and biomedical sectors - which together account for over half of Singapore's manufacturing economy - saw lower levels of production in July than in June this year. Our economist highlighted that there are still external headwinds, so there is a very good chance to see pull-back in (factory output) in Q3. He also noted that emerging market risks from Singapore's key trading partners - such as Malaysia, Indonesia and India - could have a "significant impact" on Singapore.

US stocks gave up early session gains to end lower after the Secretary of State said America will hold the Syrian government accountable for using chemical weapons, which raised speculation of a retaliation strike. Oil price rose on the news. Stocks had start the session higher after a weaker-than-expected July durable goods orders (actual -7.3%, consensus -4%) raised speculation that the FED might delay tapering QE in September. The figure was the largest decline since August 2012.

Source: DBSV