Towards Financial Freedom
DBS Equity Research: Wired Daily 2 June 2015
Tat Hong - FY15 earnings below expectations; Cautious Australia outlook will be a key drag on growth prospects.
Tat Hong's FY15 earnings were below expectations on weaker revenue and higher than expected costs. Cautious Australia outlook will be a key drag on growth prospects. Our earnings and recommendation (current HOLD) under review.
Cache Logistics Trustdivests Kim Heng Warehouse for S$9.7m. Kim Heng Warehouse is a single-storey warehouse located within the Jurong industrial Estate with an approximate land area of 87,000 sf and a gross floor area (GFA) of 54,000 sf. The remaining land lease tenure is approximately 27 years. It was acquired in 2011 for S$8.9m and was valued at approximately S$9m as at 31 December 2014. The consideration sum represents a 9% premium over the original acquisition price. The proposed divestment is expected to complete by June 2015. The sale proceeds will be used to reduce existing debt, fund general and corporate working capital, and/or make distributions to unitholders.
Hyflux has been awarded a contract worth about US$48m from the state-owned Saline Water Conversion Corporation to design, build and supply a containerised desalination system with a total designed capacity of 30,000 cubic metres per day to the Kingdom of Saudi Arabia. The project is expected to be completed in approximately eight months.
Spackman Entertainment Group raises US$7m in cash from share subscription and capital injection. Proceeds will be used to fund investments into businesses that can diversify the Group's exposure in the Korean entertainment industry.
Trek 2000 International has entered into an agreement with Kiteboard Tour Asia (KTA) to be the organisation's official and exclusive channel for photo and video coverage at all of KTA's events. The association guarantees a minimum signup of 150,000 users on the Cloudstringers platform. Trek 2000 continues to forge strategic collaborations with regional partners to expand user base.
GSS Energy adds Oil Trading to its business portfolio, building a diversified model for multiple revenue streams. The Group has entered into an agreement to invest into a joint venture company with oil trading company AFCO Energy, a subsidiary of Netherlands-incorporated FinCo Fuel Holding BV.
Koyo International has been awarded a contract of up to approximately S$11.2m, for the term contract for air conditioning and mechanical ventilation services at various Ascendas Real Estate Investment Trust properties, for a period of two (2) years and, with an option to renew for another four (4) years. The contract value for the first 2 years is approximately S$3.4m. The date of commencement for the contract is 1 July 2015.
Bank lending in April fell for the fifth straight month, and more compared to a month earlier. Business lending was down sharply - with this level of contraction last seen during the global financial crisis - and consumer loans dipped for the first time since April 2006. Compared to a year ago, loan growth has also been decelerating for eight consecutive months. Loans through the domestic banking unit stood at S$594 bn in April. This was a deeper fall of 1.1% from S$601 bn in March, compared to the 0.4% dip in March. Business loans were down 1.8% to S$357 bn from a month ago - the biggest contraction since November 2008. Lending was hurt by weaker trade loans. There was also no growth in construction lending - the single-largest lending segment for business loans. Consumer lending dipped 0.1% to S$237 bn compared to March, hurt mainly by a deeper fall in card loans. This comes amid new regulations for unsecured lending to set in soon. From a year ago, bank lending in April was up just 0.5%, weaker than the 2.3%y-o-y gain posted in March.
China's official Purchasing Managers Index edged up to 50.2 from 50.1, while the PMI data compiled by HSBC and Markit was 49.2 from 48.9. It is not rare for the two monthly PMIs to diverge. The official PMI is more geared towards bigger state-owned enterprises which get more government support whereas the HSBC PMI surveys smaller private firms.
Source: DBS
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