23 Aug 2013~ Good Morning Singapore!
Central Execution Team - The Excellence of Execution
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Global Flash: While You Were Sleeping
Source: Marketwatch
Quote for the day : A prisoner of war is a man who tries to kill you and fails, and then asks you not to kill him.
- WINSTON CHURCHILL
Singapore: The Day Ahead
SINGAPORE DAYBOOK :Nasdaq market paralyzed by 3-hour shutdown
[NEW YORK] Trading in thousands of US stocks ground to a halt for much of Thursday after an unexplained technological problem shut down trading in Nasdaq securities, the latest prominent disruption in US markets.
Nasdaq resumed trading at around 3:25 p.m. EDT (1925 GMT), after a roughly 3-hour, 11-minute shutdown of trading in Apple, Google, Microsoft and more than 3,000 other U.S. companies. The shutdown was the longest in recent memory.
"Any brokerage firm gets paid by executing orders," said Sal Arnuk, co-head of equity trading at Themis Trading in Chatham, New Jersey. "So yes, we are frustrated, and this hurts us, it hurts the market and it hurts public confidence." All traffic through Nasdaq stopped abruptly at 12:14:03 pm (1614 GMT). Trading in a single stock resumed at 3 pm, and other stocks soon followed.
Nasdaq's own stock, which was up 0.8 per cent before the halt, closed down 3.4 per cent, after earlier trading down as much as 5.4 per cent. (Source: The Business Times)
MARKET SCOOP
Centurion's unit submits highest bid of S$80.8m for Woodland site
Hafary FY net profit jumps on S$22.7m gain
CPFIS-included Funds fell 1.45 per cent in June qtr
Vard wins new deal from Farstad
GIC said to be buyer of Broadgate stake
(Source: The Business Times) DBS Securities says... SEMBCORP INDUSTRIES | BUY | TP: S$5.60
SCI announced that its Oman JV, Sembcorp Salalah Power & Water Co will be listing the Salalah Independent Power and Water Plant (Salalah IWPP) on the Muscat Securities Market on Aug 28, 2013
Sembcorp Salalah will offer 33.41m existing shares, representing 35% of share capital
The shares will be priced at OMR1.59 (approx.S$5.17) per share
The IPO is expected to raise around OMR53m (approx. S$172.2m)
SCI currently owns 60% stake of Sembcorp Salalah
SCI is required to dispose 20% stake for this IPO
Post listing, Sembcorp will hold a 40% stake in Sembcorp Salalah
Based on 25% equity for the US$1b investment in Sembcorp Salalah, we estimated that SCI cost would be approximately S$188m
Based on Salalah IWPP guided market cap of OMR152m, we estimated that SCI will record 1) S$36m divestment gain from sale of 20% stake and 2) revaluation gain of S$73m for its remaining 40% stake. In total, SCI can look to book S$109m from this exercise
We are leaving our earnings forecast unchanged in the absence of financial details
However, as we revalue SCI's 60% stake in Salalah to its potential market value, our SOTP is lifted to S$5.60
Hence, upgrade to Buy for close to 14% potential upside
DMG OSK Securities says ...
PARKSON RETAIL ASIA | NEUTRAL | TP: S$1.28
PRA's 4Q13 recurring profit of SGD3.4m (-47% y-o-y, -65% q-o-q) was
below consensus' SGD13m estimate, mainly due to weak SSSG and
margin dips in Malaysia and Vietnam
We now expect FY14F-15F earnings to grow by 9%/33% to SGD41m/SGD55m, and switch to a DCF valuation to better reflect the company's cash-generative nature
and SGD177m net cash
Maintain NEUTRAL, with a lower SGD1.28 TP
Mere 1% y-o-y topline growth. Parkson Retail Asia (PRA)'s revenue was
relatively unchanged at SGD103m, mainly due to weak same-store-sales
growth (SSSG) in Malaysia and its store closure at The Mall, Kuala
Lumpur. 4Q13 SSSG was +0.6% for Malaysia, +1.1% for Vietnam and
+8.5% for Indonesia
The company attributed the slow momentum to soft consumer spending during the election quarter in Malaysia and economic slowdown in Vietnam
Meanwhile, Indonesia shined on improved traffic and selling prices
Malaysia remained the largest revenue contributor, accounting for 79% of total revenue and almost all its 4Q13 profit
Net margin contracts 3.0ppt
Excluding a SGD2.5m foreign exchange gain a year ago, recurring net margin fell 3.0ppts to 3.3% on intense price promotions in Malaysia to attract traffic, increased losses from new stores in Vietnam, and higher non-operational costs such as e-commerce start-up and head office expenses
Following the 4Q13 blip, we cut our FY14 profit estimates by 49% to SGD41m and project earnings to grow by 33% to SGD55m in FY15
The estimates are 33% and 26% below consensus forecasts respectively
In addition, we expect earnings to contract by 27% y-o-y to SGD8.5m in 1Q14, before recovering by 12% to SGD15m in 2Q, its traditional peak period
Maintain NEUTRAL, with lower SGD1.28 TP
To better reflect PRA's cash-generative characteristics and its SGD177m net cash position, we switch to a DCF valuation, deriving a lower TP of SGD1.28 (from
SGD1.77), based on an 11.3% WACC and a 3.6% terminal growth
UOB KAY HIAN says...
GENTING HONG KONG | HOLD | TP: US$0.42
GENHK's 1H13 results conference call clarified that the bulk of the higher-than-expected operating and SG&A costs at Star Asia in 1H13 were largely one-off charges pertaining to the inaugural deployments of ss Gemini and Genting World (GWO)
Also non-recurring was a US$9.6m tax charge, arising from withholding tax on dividends
received from Travellers
Recall that GENHK's 1H13 revenue grew 23% to US$257m - within expectations, but EBIT disappointed with a net operating loss of US$14.9m, on higher-than-expected costs
We are lowering our forecasts for Star Asia to account the lower-than-expected 1H13 results, but continue to expect a seasonally stronger 2H13 amid moderating growth in costs, as well as an improvement over 2H12, given additional contribution from ss Gemini, and assuming fewer weather disruptions (recall that 2012 had seen a record number of typhoons)
We also look forward to a stronger 2H13 at NCL, as the seasonally strong 3Q13 (which typically accounts for >40% of full-year EBITDA) will get an added lift from contribution from Norwegian Breakaway, which commenced deployment in May 13
We expect continued earnings momentum growth at NCL, backed by its capacity expansion programme
In addition to Norwegian Breakaway, NCL is poised to take delivery of three more vessels which will raise its capacity by over 50% by 2017 (vs 2012)
Management re-iterated that Resorts World Manila (RWM) has not been impacted by competition from Solaire Manila, and that Solaire's entry has actually served to grow the Philippines' casino gaming market
While we continue to anticipate eventual cannibalisation when Entertainment City Manila widens its appeal (as more casinos and non-gaming facilities are set up) and benefits from the planned NAIA Expressway Phase 2, we lift our outlook in view of RWM's
resilience, and in anticipation of a seasonally stronger 2H13, as continued
marketing programmes support visitation and growth
We gather that management is eyeing 20,000 visitors per day by year-end (1H13:
18,600), and also note that hotel occupancy is encouraging, at over 80% (noting that Remington's available rooms doubled to almost 700 rooms this year, from <390 rooms last year)
We trim our 2013-15 core net profit forecasts for GENHK by 3%, 7% and 7% respectively, as an upgrade at RWM is offset by lowered forecasts at Star Asia and adjustments to NCL's contribution on account of GENHK's lower effective stake in NCL
For Star Asia, we lower our 2013 EBITDA forecasts by 11% to US$130m to reflect the lower-than-expected EBIT 1H13
We also conservatively lower our 2014-15F EBITDA forecasts by 8% each, assuming more moderate top-line growth
While RWM's 1H13's annualised EBITDA was within our earlier forecast, we have raised our 2013F EBITDA by 15% in anticipation of a seasonally stronger 2H13
We have also raised our 2014-15 EBITDA forecasts by 11% each to impute the better (albeit still moderating) gaming revenue
We leave NCL's EBITDA largely unchanged, but raise its 2013-15 core net profit forecast by 10%, 4% and 4% respectively to impute lower interest charges
However, NCL's contribution to GENHK is reduced by almost 10% in each of 2014-15 following the sale of 11.5m shares on 14 Aug 13, which cuts GENHK's effective stake in NCL to 37.7% (from 43.4% previously)
Maintain HOLD while nudging up our target price to US$0.42 (previously US$0.41)
While we maintain our HOLD call in view of challenges at Star Asia and (in the future) RWM, and unclear status of its bid to raise its stake in Australian listed Echo Entertainment, GENHK's share price weakness presents an opportunity to accumulate the shares ahead of potential re-rating catalysts such as the eventual listing of Travellers
Our revised RNAV values Star Asia and RWM at 9x 2013F EV/EBITDA, and NCL at 9.5x 2014F EBITDA (see RHS), but our SOTP target price of US$0.42 assumes a higher 20% discount to our revised RNAV/share of US$0.53, to conservatively take into account current currency concerns in the region |
