Towards Financial Freedom
DBS Equity Research: Wired Daily 5 Feb 15
SATS - 3Q15 results ahead of expectations; slightly positive after outperformance in non aviation food. Upgrade to HOLD, TP higher at S$2.84
Singapore Post - Delivering despite cost challenges; maintain BUY and TP S$2.18
SATS' 3Q15 results were ahead of expectations on better than expected non-aviation food contribution and also, higher associate income. Non-aviation food business was stronger, on the back of higher sales to chains such as 7-Eleven, IKEA, institutions including corporates, hospitals and schools, while higher associate income was a result of higher meal volumes. We expect overall growth outlook to remain muted. However, we turn slightly positive on earnings outlook on better than expected results. Upgrade to HOLD, TP higher at S$2.84 (Prev S$ 2.70).
9M15 net profit of S$120.6m (+6.1%) for Singapore Post was in line. Rising labour costs in Singapore offset the benefits from regional growth. Business with Alibaba is not disclosed but some progress has been made. SPOST will be carrying Alibaba's deliveries to Indonesia going forward. Maintain BUY with TP of S$2.18. In addition to a double-digit earnings growth in FY16F, the stock offers FY16F (March Year End) yield of 3%.
3Q15 net profit for Global Logistics Properties, released this morning, came in at US$112m (-36% y-o-y). Excluding revaluation gains, 3Q15 core net profit stood at US$66m (-15% y-o-y) which was below expectations. For FY15, GLP revised down its Chinese development completions to US$1b (2.2m sqm) from US$1.1bn (2.4m sqm) due to delays in the completion permitting process. In Japan, the group is on track to meet its FY15 development starts of US$675m, with a new FY16 target of US$980m (+51% y-o-y). Brazil's FY16 target development starts and completions are at US$250m and US$140m (FY15 forecast of US$200m) respectively. More updates to follow.
PEC started the new year with a major contract award valued at approximately S$132m for a refinery project in the Middle East - where the Group has made inroads through its reputation for safety, quality, reliable execution and cost effective engineering solutions. Awarded by a leading MNC client, this latest win will require the Group to undertake an extensive fast-track project that is scheduled to be completed by April 2016.
Junma Tyre Cord expects to report a higher loss for 4Q14, compared to 4Q13, which will result in a corresponding increase in full year loss. The losses are mainly attributable to an overall poor business performance of the Group in 4Q14 coupled with the erosion of the profit margins caused by unfavourable market conditions.
TEE International expands into the energy business and makes maiden foray into the Philippines to invest and construct a 25 Megawatt (MW) green-field power plant and to supply electricity. In connection with this, TEE has entered into a Subscription Agreement to subscribe to a 21.05% stake in PowerSource Philippines Distributed Power Holdings, Inc. for a total cash consideration of 159.12m Philippine Peso (approximately S$4.87m), which will be funded through internal funds.
Technics Oil and Gas, a leading full service integrator of compression systems and process modules for the global offshore oil and gas sector, has been awarded contracts worth of S$7.2m to supply, fabricate, test, install and commission for SW and Ballast systems for a Singapore customer.
U.S. stocks erased earlier session gains to end lower after the ECB tightened the terms of Greece's bailout. The ECB said it will no longer suspend its own collateral rules for Greek government debt, citing doubt over the new government's commitment to previous reform pledges. The decision will force Greek lenders to seek funding from their own central bank at less-advantageous rates than was offered by the ECB. WTI crude retreated 8.7% to $48.45 pbl while Brent fell 5.9% amid an increase in American inventories. The Energy Information Administration said supplies in the US climbed 6.33mil barrels in the week ended Jan. 30 to the highest level since the data was started in 1982. It was almost double the increase projected by analysts surveyed by Bloomberg.
Source: DBS
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