Daily Morning Note – 14 January 2021

PHILLIP SUMMARY

Asian shares looked poised for a muted start. Treasuries saw strong demand for a second consecutive day at a government debt sale, helping to send yields down from the highest levels since March. Stock futures were little changed in Japan, Hong Kong and Australia. Technology shares led gains in the U.S., with the Nasdaq 100 outperforming the S&P 500.

The dollar edged higher. Elsewhere, oil fell as the stronger dollar and rising refined products supply offset shrinking U.S. crude inventories. Bitcoin gained and gold retreated.

BREAKING NEWS

Private equity fund Novo Tellus PE Fund 2 is set to take a 29.6 per cent stake in Grand Venture Technology’s enlarged share capital after the fund signed two separate agreements. In a bourse filing on Tuesday, manufacturing service provider Grand Venture said it has entered into a conditional placement agreement with placee NT SPV 12, a wholly-owned subsidiary of Novo Tellus PE Fund 2. Catalist-listed Grand Venture is proposing to issue 71.5 million new shares in the company at S$0.33 apiece to raise some S$23.6 million.

Catalist-listed logistics provider GKE Corp more than tripled its first-half net profit, on the back of a concrete production ramp-up, unaudited results on Wednesday showed. Earnings rose to S$6.52 million for the three months to Nov 30, 2020, up from S$1.81 million before. Revenue increased by 9.2 per cent year on year, to S$60.1 million. The higher profitability and turnover came as a plant in China churned out more ready-mixed concrete, which was at higher average selling prices, GKE said. The group also cited improved occupancy of its warehouses in Singapore, with rental rates rising on higher demand, thanks to stockpiling by some of its customers.

SPH REIT has declared a first-quarter distribution per unit (DPU) of 1.2 Singapore cents, down from 1.38 Singapore cents in the year-ago period. The lower DPU, down by 13 per cent year on year, was “in line with the gradual Covid-19 recovery in both Singapore and Australia”, said the manager in an interim business update on Wednesday. This came even as gross revenue rose by 10.8 per cent year on year to S$66.6 million, for the three months to Nov 30, 2020. Reit turnover was shored up by South Australia’s Westfield Marion, which was acquired in December 2019, as well as stable contributions from Figtree Grove in New South Wales.

Catalist-listed HC Surgical Specialists more than doubled its earnings in the first half-year, buoyed by a fair-value gain, its unaudited results indicated on Wednesday. Net profit rose to S$5 million for the six months to Nov 30, 2020, up from S$2.17 million before; revenue was up by 12.4 per cent year on year, to S$10.99 million. The colorectal clinic operator booked a fair-value gain of S$1.54 million on financial assets at fair value through profit or loss, reversing an earlier S$601,000 loss. This was attributed to an increase in the share price of medical support services provider Medinex, of which HC Surgical Specialists holds an effective stake of 32.4 per cent, and an increase in the fair value of its investment in Singapore Paincare Holdings, which was publicly listed last July.

Mainboard-listed hotel operator GL sank into the red in its first half-year, as the Covid-19 pandemic hit its British portfolio, unaudited results on Wednesday showed. GL, formerly known as GuocoLeisure, posted a net loss of US$19.8 million for the six months to Dec 31, 2020, against a profit of US$26.9 million previously. This was in spite of US$26.5 million in other operating income from insurance claims over the Covid-19 business interruption, as well as government pandemic relief schemes in both Britain and Singapore. Group revenue tumbled to US$19.5 million, down by 89.9 per cent from US$193.3 million in the year before, on lower turnover in both the hotel and oil and gas segments.

Source: SGX Masnet, The Business Times, Bloomberg, Channel NewsAsia, Reuters, PSR

TECHNICAL REPORTS

SATS Ltd

Analyst: Chua Wei Ren

Recommended Action: Technical SELL

SATS Ltd (SGX: S58) had witness the strongest rally in the last quarter of 2020 and despite SATS breaking out of the bullish flag, the momentum displayed gave us a hint that the upside momentum is slowing based on the technical shown.

>> Read more Technical reports

RESEARCH VIDEOS

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Market Outlook: (PSR) Fortress & Lendlease (Initiations), Phillip on The Ground updates, SG Weekly

Date: 14 December 2020

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Phillip Research in 3 minutes: #29 – Keppel Corporation; Initiation

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