Today’s Focus
Singapore Post - 3Q profit flat on higher costs
Singapore Post's 3Q net profit came in flat at $39.4m, about
0.2% lower y-o-y, despite a 30.2% jump in revenue to
$222.6m for the quarter ended Dec 31, 2013. The jump in
revenue was mainly boosted by contributions from General
Storage Company and Famous Holdings, which were
acquired early last year. SingPost's largest segment, mail, saw
a 12.8% increase in revenue which came in at $133.2m for
the quarter, driven by the increase in e-commerce package
volumes which in turn boosted domestic and international
mail revenue. Excluding contributions from acquisitions, the
growth in revenue stood at 9.3%, driven by growth in ecommerce
related activities. However, with the exception of
finance expenses, costs rose across the board for the group,
resulting in a flat bottom line.
According to a Bloomberg report, Jiangsu Yangzijiang has
reached an agreement subject to conditions, to build two
semi-submersible drilling platforms for Primepoint Drilling. An
option agreement on two additional semi-submersible drilling
platforms has also been agreed, subject to conditions. The
total value of the contract and options is about US$1.7b.
Delivery of such platforms takes around three years.
Del Monte Pacific is selling some stakes to boost its war-chest
to fund its purchase of a US food company. It had entered
into a subscription deal with Ace Profit Enterprise and Anatoli
Holdings, both of whom have agreed to invest US$37.25m
each for a "minority stake" in it. This will add to the
US$515m in financing Del Monte Pacific has obtained from
Banco de Oro Unibank and Bank of the Philippine Islands to
help fund its buyout of the consumer food business of US
corporation Del Monte Foods for US$1.675 bn.
SunMoon Food Company said it has signed an agreement to
acquire 62,500 stocks in Nevada-incorporated True Drinks
Holding at US$4 per stock, amounting to US$250,000 in all.
True Drinks sells beverages for children and has a distribution
network of 22,000 stores in the US. It also has licensing
agreements with major entertainment and media companies
for use of its characters on its proprietary, patented bottles.
US Indices Last Close Pts Chg % Chg
Dow Jones 15,440.2 (5.0) (0.0)
S&P 1,751.6 (3.6) (0.2)
NASDAQ 4,011.6 (20.0) (0.5)
Regional Indices
ST Index 2,960.1 (5.7) (0.2)
ST Small Cap 520.0 (0.9) (0.2)
Hang Seng 21,269.4 (128.4) (0.6)
HSCEI 9,470.6 (39.0) (0.4)
HSCCI 4,045.8 (4.0) (0.1)
KLCI 1,785.9 7.1 0.4
SET 1,280.3 3.4 0.3
JCI 4,384.3 32.1 0.7
PCOMP 5,908.4 22.4 0.4
KOSPI 1,891.3 4.5 0.2
TWSE 8,264.5 (198.1) (2.3)
Nikkei 14,180.4 171.9 1.2
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013 2014
100-Day MA
Index
STI
Total Market cap (US$bn) 544
Total Daily Vol (m shrs) 2,296
12m ST Index High 3,454
12m ST Index Low 2,960
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price (S$)
5 Feb
Target Price
(S$)
Hutchison Port Hldgs Trust (US$) Buy 0.650 0.80
Keppel Corp Buy 10.290 12.60
ST Engineering Buy 3.660 4.90
Yangzijiang Buy 1.100 1.32
Stock Picks – Small /Mid Cap
Rec’n Price (S$)
5 Feb
Target Price
($)
Ezion Holdings Buy 2.220 3.36
China Merchants Buy 0.890 1.20
Pacific Radiance Ltd Buy 0.930 1.05
Nam Cheong Buy 0.315 0.43
Source: Bloomberg Finance L.P., DBS Bank
Singapore
Wired Daily
Page 2
Hock Lian Seng Holdings has secured a $105.5m project
from Changi Airport Group for the construction of
taxiways, aircraft parking stands and other associated
works at former south end reservoir site. The project will
commence in March 2014 and is expected to complete by
September 2018.
Dukang Distillers Holdings expects its overall revenue and
earnings to be significantly lower for 2Q13 compared to
2Q12. This was mainly due to:
i) the decrease in average selling prices and sales volumes
of Luoyang Dukang and Siwu products as Chinese
austerity measures had affected the sales of wine and
spirit across the nation; and
ii) higher advertising and promotional expenses due to
intensified advertising and promotional activities.
Noel Gifts International expects to report a loss for 1H
2014 mainly due to the increase in operating costs and
lower Group’s turnover.
Singapore's manufacturing sector has got off to a
surprisingly strong start in 2014. The January's purchasing
managers' index (PMI) swung back to a reading of 50.5,
indicating that manufacturing expanded last month.
January's reading also beat the consensus market forecast
of 50.1, surprising economists who had expected the
Chinese New Year holidays to take some shine off
manufacturing's performance, as is usually the case. The
higher January PMI was mainly due to further expansion
in new domestic and export orders, as well as a return to
growth in output and imports. The electronics PMI also
leapt 1.9 points to a January reading of 52 - its largest
jump since January 2013. This too was due to more
widespread reports of rising new orders and export
orders. The electronics production sub-index in particular,
hit a reading of 55.2, the highest in more than a year.
In property news, the owner of Anson House is
understood to have put the 13-storey office block up for
sale, with an indicative pricing of $175-180m. That would
translate to $2,292-2,357 psf on net lettable area (NLA) of
76,362 sq ft for the building, which is on a site with about
82 years of remaining lease.
Keppel Reit is looking for a buyer for its 92.8% share of
Prudential Tower with an asking price of $2,400 psf of
NLA. Based on the 222,563 sq ft NLA that the Reit owns
in the 30-storey tower, the deal size would be around
$534.1m.
Meanwhile, Equity Plaza, jointly owned by Keppel Land
and a fund managed by Alpha Investment Partners, could
also be in the market. It is thought that the owners may
be open to offers of around $580m - translating to
around $2,300 psf on net lettable area of about 252,600
sq ft. Formerly known as The Exchange and The
Quadrant, the 28-storey office tower in Raffles Place is on
site with about 74 years remaining lease.
AXA Tower at 8 Shenton Way, is also said to be seeking
at least $2,000 psf on the existing NLA of 674,000 sq ft,
which would amount to $1.35 bn.
Westgate Tower, a 20-storey office block next to Jurong
East MRT Station that will be completed by year-end, is
back on the leasing market after a Sun Venture-Low Keng
Huat (LKH) tie-up recently exercised options to buy the
property from CapitaLand group.
In US, a weaker-than-expected ADP employment change
(actual 175k, consensus 185) offset stronger ISM nonmanufacturing
(actual 54, consensus 53.7) figure. Indices
were weaker but ended off session lows as investors await
the release of January employment numbers on Friday.
Non-farm payrolls figure is expected to come in at 183k
with the unemployment holding steady at 6.7%
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