DBS Equity Research: Wired Daily 5 Aug 2015

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Publish date: Wed, 05 Aug 2015, 10:30 AM

Perennial Real Estate Holdings - 4QFY15 results in line. Maintain BUY, TP S$1.32

Genting Singapore - Expect to report significant decline in net profits for 2Q15

4QFY15 operating net profit of S$8.7m for Perennial Real Estate Holdingsin line. Earnings were boosted by one-off acquisition fee for AXA. The Group has revealed its asset enhancement works at TripleOne Orchard and AXA Tower, which involves substantially redeveloping the retail areas and introducing medical suites in both assets. Maintain BUY, TPS$1.32.

Asian Pay Television Trust's2Q15 EBITDA of S$50.4m (+4% y-o-y and q-o-q) and 2Q15 DPU of 2.00 Scts were in line. Favourable foreign exchange movements helped revenues but higher finance cost dragged profitability. Maintain HOLD on revised TP of S$ 0.87 (Prev S$0.90). The counter offers an attractive yield of ~9%.

CapitaLand reported this morning that its net profit for 2Q15 rose 5.8% y-o-y to S$464m due to improved operating earnings, partially offset by an impairment for a development project in China. Revenue increased by 17.8% on higher contribution from development projects in China, partially offset by lower revenue from development projects in Singapore and Vietnam.

Genting Singaporeis expected to report a significant decline in net profits after tax for 2Q15. This is due mainly to fair value loss on derivative financial instruments as a result of unfavourable market conditions and unrealised foreign exchange translation losses. Notwithstanding the foregoing, on a theoretical normalised hold basis, the Group expects its adjusted EBITDA for 2Q15 to be comparable to the preceding quarter. Based on GENS' guidance, if the theoretical VIP win-rate for GENS is maintained at c.2.85% in 2Q15, we expect 2Q15 adjusted EBITDA to fall 14% y-oy, but rise 18% q-o-q. The win rate for 2Q14 and 1Q15 was 3% and 2.5% respectively. Going into 2H15, we expect GENS' earnings to face headwinds from the normalisation of its VIP high market share (54-61% over 2H14) back to 50% level, partially offset by extremely low win rates in 3Q14 (below 2%) and 4Q14 (2.2%).

Terratech Group has agreed to issue 4.0% convertible notes due 2018 in aggregate principal amount of up to S$30m comprising up to three tranches, of a principal amount of S$5m for the first tranche, S$10m for the second tranche and S$15m for the third tranche. The Notes will not be listed on Catalist and are convertible into new ordinary shares. The proceeds will be used for capital purposes of the Group and to fund potential acquisition expenses.

Swiberhas secured a US$80m Letter of Intent to install pipelines and supporting structures for a global energy company in Latin America. This contract will boost Swiber's order book to about US$1.9bn.

Sino Construction is expected to report a net loss for 2Q15. The expected loss was mainly attributable to administrative and operating expenses incurred by the Group in the midst of the Group's restructuring process. Hiap Hoe is also expected to report a loss for 2Q15.

US stocks fell moderately and bond yields rose amid speculation the Federal Reserve is close to raising interest rates. Federal Reserve Bank of Atlanta President Dennis Lockhart, a voting member of the FED, said the central bank is almost ready to raise borrowing costs. Meanwhile, among the S&P500 Index members that have reported results, about 74% beat analysts' profit estimates, while just 50% topped sales projections, this according to data compiled by Bloomberg.

Source: DBS

Genting Sing (G13)Asian Pay Tv Tr (S7OU)

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