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Investor’s Corner (Mapletree Logistics Trust, Singapore Airlines, Genting Singapore, Singapore Exchange)
Investors' Corner | 24 October 2013
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By: Nicholas Tan
Articles (71) Profile

Mapletree Logistics Trust
Price – $1.09
Target – $1.11

Mapletree Logistics Trust (MLT) reported a 1.3% y-o-y drop in 2Q14 net property income (NPI) to $66.6m due to weaker translated income from its Japan portfolio caused by a depreciating yen. Excluding the foreign currency impact, NPI would have increased by 3.4% due to positive rental reversions and contributions from its past 3 acquisitions. Total amount distributable to unitholders grew at a faster pace of 7.5% to $44.5m, as MLT substantially hedged its income streams from Japan, benefitted from lower financing costs, and distributed $0.6m in divestment gains from 30 Woodlands Loop. The results were in line with our expectations, as 1H14 distribution per unit (DPU) of $0.0362 has met 49.9% of our FY14 DPU forecast. Looking ahead, the redevelopment of Mapletree Benoi Logistics is on track for completion in 3Q14, while pre-commitment is unchanged at 94%. After this, MLT will be embarking on its next redevelopment project at 5B Toh Guan Road in early FY15. Maintain HOLD. – OCBC Investment (21 Oct)

Singapore Airlines
Price – $10.32
Target – $10.20

Singapore Airlines (SIA) reported strong passenger load factor of 81.1% in 2Q14. But, we think that this upbeat figure was achieved under very weak yields in view of management’s guidance for continued downward pressure on yields. Hence, we expect core operating loss of $22m in 2Q14 for the parent airline. SilkAir’s 2Q14 load factors fell to a historical low of 69%, marginally below the breakeven load factor of 69.5% in 1Q14. Consequently, we expect the regional carrier to report a weaker operating profit of $9m. SIA’s freight business is expected to continue be weighed on by a sharp contraction in traffic and weak global cargo markets, thus we expect losses to widen to $65m in 2Q14. Overall, we expect the group to report core operating loss of $41m for 2Q14 when it releases its results on 12 Nov-13 and group earnings to be supported by its associates and the joint ventures of its profitable engineering arm – SIA Engineering. Maintain HOLD. – Maybank Kim Eng (21 Oct)

Genting Singapore
Price – $1.465
Target – $1.42

We expect Genting Singapore’s (GS) upcoming 3Q13 results to emulate MBS’ with volume growth across the board and potential normalisation of VIP win rate. RWS’ EBITDA margin should continue to recover as the Western Zone ramps up. Las Vegas Sands (LVS) and GS share the same view that Japan’s gaming liberalisation may take some time. New legislations are expected to be passed in Dec-13/Jan-14 with details a year later. While the bidding competition will be stiff (2016 at the earliest), GS and LVS are frontrunners due to their strong integrated resort track record. GS growth is under threat from cautious lending to VIPs, slower local visitation due to stricter restrictions, softer tourist arrival growth, rising cost pressures from restrictions on foreign labour and tight hotel room supply. Hence, we prefer Macau and Philippines gaming stocks given their stronger growth potential and lower regulatory risks. Maintain HOLD. – DBS Vickers (18 Oct)

Singapore Exchange
Price – $7.29
Target – $7.60

1Q14 net profit of $92.3m was 11% above our estimate, driven by better than expected clearing fees as lower number of trades were subject to the clearing fee cap due to higher small-cap trading. Excluding a $4m tax writeback, underlying net profit was 6% ahead of our estimate. The clearing fee of 6.4 basis points was at a 10-year high, but we expect it to drop slightly to 6.2 basis points in 2Q14 and to remain steady at that level through end-FY16, on reduced small-cap trading. We now expect earnings per share growth to slow from 25% during FY13 to 3% during FY14 as market activity growth slows, with projected average daily stock turnover of $1.5b and average daily derivatives volume of 441k contracts. We adjust for the higher clearing fee, lower activity levels quarter-to-date and higher guidance for FY14 operating expenses ($320m to $330m) and maintain our NEUTRAL rating with a FY14 price-to-earnings (P/E) ratio of 22 times, just below mid-cycle P/E since 2006 of 23 times. – Goldman Sachs (17 Oct)

Well trained in aspects of finance and business, Nicholas oversees the finance and manufacturing sectors at Shares Investment.

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Mapletree Logistics Trust  1.620 -0.010 -0.61%   
Business: Real Estate Invs Trust. Invs in logistics ppties. [FY19 Geographical] S'pore (36.2%), HK (24.7%), Japan (13.4%), Australia (8.1%), S.Korea (6.3%), China (5.8%), Malaysia (3.8%), Vietnam (1.7%).

Insight: Apr-19, FY19 revenue rose 15% due to higher revenu... Read More
Singapore Airlines  9.110 -0.13 -1.41%   
Business: Co provides air transportation services to destinations spanning a network spread over 6 continents. [FY19 Turnover] SIA (80%), Budget Aviation (10.5%), SilkAir (6.2%), SIAEC (3.1%), others (0.2%).

Insight: May-19, FY19 revenue edged up 3.3% to $16.3b. Pass... Read More
Genting Singapore  0.890 -0.015 -1.66%   
Business: Develops, operates & mkts casinos & IRs globally, including Australia, M'sia, Philippines & UK. [FY18 Turnover] Gaming (66.1%), non-gaming (33.8%), others & invs (0.1%).

Insight: May-19, 1Q19, despite Co's non-gaming business reg... Read More
Singapore Exchange  8.290 -0.11 -1.31%   
Business: [FY18 Turnover] Equities & fixed income (48.2%), derivatives (40.2%), mkt data & connectivity (11.6%).

Insight: Jan-19, 1H19 operating revenue increased 5.7% to $... Read More

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