Since our 22 May downgrade of the dry bulk shipping sector, share prices have sunk by 30% for STX Pan Ocean, reflecting leverage to a 14% decline in the Baltic Dry Index (BDI).
Outlook for the palm oil industry is still looking positive. We believe Indofood Agri Resources’ (IFAR) age profile of trees favourably positions it to enjoy the benefits of current high CPO prices.
SMB United (SMB) recorded 1Q08 net earnings of $2.7m, compared to a loss of $1m for 1Q07. The first quarter is traditionally SMB’s slow season, so we did not expect it to contribute much to our full-year forecast of $17.9m.
Allgreen is probably the closest proxy to the more resilient mass-market segment. Yet it is arguable whether its landed land bank (29%) is considered truly mass-market.
ASCENDAS REIT: We adjust for a higher rental base for the warehouse retail segment, increasing our FY09 DPU forecast to $0.153 (+2.9%) and FY10 forecast to $0.164 (+0.3%). Maintain OUTPERFORM.
The government has unveiled the parameters for means testing, which will be implemented in all public hospitals in Jan 09. Means testing is expected to reduce subsidies for the bulk of middle-income Singaporeans and permanent residents in public hospitals.
Following Evraz’s offer made in Feb 08 to purchase up to 51% of Delong, Evraz and Best Decade (Delong’s majority shareholder) have further agreed to a lock-up deal, which will become effective upon the final closing date of the offer i.e. 18 Aug 08.
SMRT reported strong ridership numbers for February 2008. Ridership grew 14% YoY. Sequentially ridership was down 10% from January mainly on the back of seasonality.
Cosco’s FY07 results came within our expectations. Revenue surged 86%, while net profit jumped 64% helped by a lower effective tax rate of 3.9%. Gross profit margins (GPM) came in at 27%, lower than our forecast for 30.5%.
China Yuanbang reported a 24.8% decline in revenue and net profit dipped 90.7% in 1H08 due to fewer units sold in the period. Despite lower revenue, the Group recorded a 17.8% increase in gross profit as the units sold were of a higher ASP.
