DBS Equity Research: Wired Daily 6 Feb 2015

kiasutrader

Publish date: Mon, 09 Feb 2015, 10:52 AM

Global Logistic Properties - 3Q15 results slightly below; maintain BUY with lower TP of S$2.98

3Q15 results for Global Logistic Properties slightly below. The lower net profit of US$112m (-36% y-o-y) was mainly due to (i) lower fair value gains from associates and (ii) higher minority interests due to sale of a 33.8% stake in GLP China. The Group continues to see positive leasing momentum in core markets with robust development targets set for 2016. Maintain BUY but target price revised down to S$2.98 (Prev S$ 3.42). We remain positive on GLP, driven by its value creation from development projects in China and its growing recurring fee income business.

According to Bloomberg, Indonesia's energy commission together with the Ministry of Energy and Mineral Resources (ESDM) had agreed to increase subsidies for biodiesel to Rp4,000/litre (from Rp1,500 previously) and bioethanol to Rp3,000/litre (from Rp2,000 previously). These are subject to final approval by the parliamentary budget committee (possibly by mid- Feb). The proposal to increase biodiesel subsidies is positive for plantation companies; although we doubt stateowned enterprises (if any) have the capacity to meet the required mandates. We continue to see underperformance in government's targeted biodiesel mandate of 3.41m kl this year. Separately, the government may cut corporate income tax by 500-1000 bps to 15%-20% in 2016. We believe reducing corporate income tax would have a stronger impact.

CapitaMall Trust (CMT) has issued HKD1.104bn 2.77% fixed rate notes due 5 February 2027. The proceeds will be used to refinance the existing borrowings of the CMT Group, to finance investments, and for general corporate and working capital purposes.

Technics Oil and Gas has secured contracts worth S$6m to supply Process and Rotating Equipment to Malaysia customers.

YuuZoo Corporation has signed an exclusive partnership for the development of a social e-commerce network for the JW Lottedi Mega Malls in China. The partnership will offer Chinese consumers a unique Offline-to-Online (O2O) business model.

A-Sonic Aerospace proposes to undertake a share consolidation of every four (4) shares into one (1) consolidated share, to rationalise the share capital of the company. The proposed share consolidation would also facilitate compliance with the continuing listing requirement imposed by SGX-ST for issuers listed on the SGX Mainboard to have a minimum trading price per share of S$0.20.

Southern Packaging Group expects to report a loss for FY2014, mainly due to the share of loss arising from an associated company and the lower demand for packaging materials in China, coupled with higher operating costs.

The local bond market has slumped, with January sales not even reaching 30% of the volume achieved a year ago. Last month, Singapore dollar bond issuances from 11 deals raised a paltry S$638m, compared with S$2.2 bn in January 2014. For the whole of 2014, bond sales reached S$23.5 bn, up from 2013's S$19.8 bn. The high was S$31 bn in 2012.

US stocks rose following a USD$17bil deal by Pfizer Inc's and energy producers gained as oil price rebounded. Pfizer agreed to buy Hospira Inc., the biggest provider of injectable drugs and infusion technology. Attention turns to the release of the US January employment data tonight. Non-farm payrolls rose is expected to register 230k while the unemployment rate may remain at 5.6%.

Source: DBS

CapLand IntCom T (C38U)YuuZoo Networks (AFC)

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