Oct[9] - Market Update

Bright spots among results released last week:

[A] Starhill Global - Both distribution per unit and net property income improved.
[B] Global Logistics Properties - Earning leap 27% year on year.
[C] Fraser Hospitality Trust - Distribution per unit beat forecast from its IPO.

3Q2015 results announcement date for coming week:

Oct[8] - GLP (ride with steady ship)

COUNTER: Global Logistic Properties
 
OVERVIEW:
The modern logistics facilities provider is mainly owned by GIC (Government of Singapore Investment Co). It develops, owns and manages a 43 million square meters portfolio of logistic facilities across China, Brazil, Japan and US. It also involved property investment and management activities. Total portfolio assets amounted to US$29b as in latest record.

HIGHLIGHTS:
[1] The latest six months results saw earning from the counter leaped 42% year to year.

[2] In China, lease ratio achieved 89% with rent growth on renewal up 8.6%. In Japan, new leases jumped 208% year on year. It has achieved lease ratio to 94% since entering US in 2014. New and renewal leases jumped 27% quarter on quarter.

[3] Its fund management segment has hit $27.3b for the asset under management with compound annual grow rate (CAGR) ~ 96%. Latest quarter of fund management fee rose 41% year on year.

[4] Its financial position remain strong with cash position at US$3m and gearing ratio at 31%. 

INVESTMENT THEMES:[1] The counter has been steadily growing its portfolio of logistic assets across four countries. End users were well diversified into various sectors. E-commerce represents 26% of leased area in China, 12% in Japan, 18% and 10% in Japan and US respectively.

[2] On 30th Oct, the counter announced its largest development plan of logistic park in Japan which is its 2nd largest business area. Total investment is US$490m.


[3] At current price, the dividend yield is 2.5%. The counter has been rising its dividend at growth rate > 10% over past 3 years.

[4] From the chart, the counter retreated in price after recent surge. Latest result and announcement plan is worth of attention among investors.

ENTRY PRICE:Accumulate now   

 

*** Note: Same counter has been mentioned in Mar[6] ***  

Oct[7] - Marke Update

Bright spots among results released last week:

[A] M1 - Income is stable. Fiber broadband subscriber expanded 22.5% year on year.
[B] Triyard - Profit jumped 59% year on year. New record high of orderbook was achieved.
[C] SGX - Earning growth remained with derivatives business as major boost
[D] Capitaland Mall Trust -  Distribution per unit jumped 9% year on year
[E] Suntec REIT -  Distribution per unit jumped 8% year on year
[F] Fraser Commercial Trust -  Full year distribution per unit jumped 18%.

3Q2015 results announcement date for coming week:

Oct[6] - Keppel T&T (Buy on weakness)

COUNTER: KEPPEL TELECOMMUNICATION & TRANPORTATION LTD

OVERVIEW: 
The subsidiary of Keppel Corp, is a leading service provider in Southeast Asia and Europe with businesses in logistics and data center. In logistics, it offer one-stop, integrated solutions to help clients manage their entire supply chain. It owns and operates data centers across Asia Pacific and Europe, providing dedicated co-location suits with technical support. 

HIGHLIGHTS:[1] Its latest result saw revenue in last night month lower by 4% at $148m year on year. Operating profit was lower by $9.7m as well. It was mainly due to absence of revenue from two data center assets disposed last year to Keppel DC REIT in which the counter is having shares.

[2] As compared to same period last year, logistics division's revenue increased by 9% and data center drop 30%. Investment division achieved comparable results.

[3] The warehouse at Tampines Logistics Park commenced operations in 2Q2015 with occupancy rate > 60%. Tianjin Eco-city distribution center and Lu'An logistics park in China shall begin operation by early next year.

[4] The counter is on track to divest one of its data center asset to Keppel DC REIT in 2016. The disposal gain is projected to be ~S$65m.

INVESTMENT THEMES:[1] The counter is trading with P/E at 3.22x which is considered heavy discount. 

[2] When existing assets turn into fully operational, the income shall be rising significantly. Due to its growth prospect, CIMB rated the counter >1.9

[3] The price has been falling heavily since mid of the year but without any panic sell among major shareholders. Price movement is sable upon latest announcement of poor result. Most negative concern seems to have factored in price. Mid to long term investor could take position now. Harvest time shall be on 2016.

ENTRY PRICE:Accumulate now  

 
*** Note: Same counter has been mentioned in May[1] ***  

Oct[5] - Market Update

Bright spots among results released last week:

[A] SPH REIT - Consistent dividend yield with stable performance from existing assets portfolio.
[B] Soilbuild REIT - Revenue and distribution unit improved year on year.
[C] Keppel DC REIT - Result beating forecast in IPO prospectus.


3Q2015 results announcement date for coming week:

Oct[4] - CMPacific (Infrastructure in expansion)

COUNTER: CHINA MERCHANTS HLDGS (PACIFIC)

OVERVIEW:
The counter is a leading toll road company focused on investing in and managing toll roads in People's Republic of China (PRC). It invests in and operates five toll roads located in Zhejiang, Jiangxi, Guangxi Zhuang Autonomous Region and Guizhou with total distance at 415 kilometres. Its mother company, China Merchants Group is state owned corporation of PRC which has broad business footprint such as banking, logistics, marine, real estate, etc.

HIGHLIGHTS:
[1] On mid 2015, the counter announced acquisition of three tolls roads in Guangxi. The total distance amount to 160km. Together with existing portfolio, the counter would have an expressway network totalling 298km in Guangxi. 

[2] By 16 Oct, the counter has completed the acquisition. It was mainly funded by rights issue ($598m) and loan (US$350m) from external bank loan. Due to new shares issued, the EPS (Earning Per Shares) is expected to shrink ~30% excluding earning from newly acquired toll roads. Gearing ratio (Debt over Equity) would be doubled up to ~60%.

INVESTMENT THEMES:
[1] Generally, the latest move has been welcomed by research firms with BUY rating at target price > $1.1. The acquisition shall contribute to earning from 4Q2015 onward. Projected earning is 30~40% improvement by 2016. 

[2] The counter has proven itself as a well-growing counter with consistently increasing in earning and total asset over past 4 years. Its annual dividend is 0.068, equivalent to ~7% dividend yield.

[3] From the chart, price has been edging upward and breaking resistance ~0.93. Moving average of 10 and 20 days are crossing and pointing up. Buying interest could be gaining momentum.

ENTRY PRICE:
Accumulate now

*** Note: Same counter has been mentioned in May[2] *** 

Oct[3] - Market Update

The latest flash note by UOB highlights few important dates when market could get some hints on possibility of rate hike from US Fed Reserve:

Local listed company kicks off 3Q result announcement. Releases on coming week will be:

Oct[2] - Ezion [Ride on the trend of oil]

COUNTER: Ezion Holdings Limited

OVERVIEW:
The counter specializes in the development, ownership and chartering of strategic offshore assets and the provision of offshore marine logistics and support services to the offshore oil and gas industries. It owns one of the largest and most sophisticated class of liftboats in the world. The liftboats are mainly used for well-servicing, commissioning, maintenance of offshore platforms. Other offshore assets are:

HIGHLIGHTS:
[1] The counter has been delivering excellent results over past few years. Its EPS (earning per share) jumped from 0.051to 0.162 on 2014. Revenue contribution was diversified across geographical market. In FY2014, the contribution by Singapore, Australia, rest of Asia and Europe amounted to 6.4%, 14.5%, 38.9% and 33.4% respectively. Total revenue was ~USD360m.

[2] Due to plummeting of oil price, oil companies shift focus to maintain oil production from existing oilfield. This will involve repair and maintenance of existing production platforms. Liftboats and service rigs provide accommodation and deck space during platform maintenance. For the counter, four of five expiring contracts has been renewed. Operational vessels are 99% utilized.

[3] Recent $120m bond issue at 3.65% provides enough funding for the counter to cater higher operation cost and new project requirement.

INVESTMENT THEMES:
[1] Similar to other oil related counters, it has been experiencing heavy down falling in share price since 2H2014. Current shares price represents P/B (price to book) ~ 0.638 and P/E (price to earning) ~ 3.8x. The counter is trading with heavy discount now.

[2] A meeting is scheduled among OPEC (Organisation of Petroleum Exporting Countries) and non OPEC countries on 21 Oct. Market speculates that oil output from OPEC could be cut. As a result,  crude oil has been edging upwards even higher supply has been flooding the market.

[3] Recently, the counter price movement has been imitating oil price. It has been testing 0.74 three times. Shall price breaks up 0.74, it is forming a triple top break up. Higher price could be expected. Buyer has been rising significantly as well. Short term trader could take the opportunity.

[4] For investor who is long term bullish on oil price, the counter is one of the highly recommended proxies. It has been the favorite among research firms because of its healthy finance book as well as project visibility. General rating price is >1.

ENTRY PRICE:
Buy ~ 0.74.

 

Oct[1] - Summary

Let's review the following counters which have been discussed on previous posts.