Daily Morning Note – 28 July 2021
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Most Asian stocks look set to follow Wall Street lower Wednesday as rout in China spurs caution and U.S. megacap technology earnings receive a mixed response. Treasuries rallied. Equity futures fell in Japan and Australia. They rose in Hong Kong, but investors remain wary after stocks there plunged on a regulatory crackdown that’s stirring questions about how far Beijing will go to curb big companies. Chinese shares in the U.S. have succumbed to a record drop, the offshore yuan has weakened and China’s sovereign bonds have retreated.
Ecowise’s Malaysia operations will not be able to resume, after 61 out of 69 employees at its Malaysia subsidiary tested positive for Covid-19. The company said it is currently unable to quantify the financial impact of the infections to the group’s operations. Operations can only resume after the employees have tested negative for Covid-19 following the quarantine period.
Catalist-listed medical services provider HC Surgical Specialists has doubled its dividend, citing uplift from demand for colorectal procedures. Second-half net profit was up by 64.7 per cent year on year to S$3.0 million for the six months to May 31, 2021, according to unaudited financial statements released on Tuesday. That’s as revenue rose 78.0 per cent to S$12.4 million, which the group attributed to an increase in patients after the end of the year-ago “circuit breaker” semi-lockdown.
Keppel Reit on Tuesday reported a distribution per unit (DPU) of 2.94 Singapore cents for the first-half ended June 30, up 5 per cent from 2.8 cents a year ago. DPU comprised 2 cents, which will be paid on Aug 27, and advanced DPU of 0.94 cent that was paid on March 31 in connection with the private placement that was launched on Feb 18.
CapitaLand subsidiary Ascott Residence Trust (ART) on Tuesday reported a 95 per cent increase in its distribution per stapled security (DPS) to 2.05 Singapore cents for the first-half ended June 30, from 1.05 cents for the year-ago period. However, the increase was mainly due to one-off gains in distributable income.
Real estate developer Oxley Holdings on Tuesday announced that it obtained temporary occupation permits (TOP) for two more Singapore residential development projects, Sea Pavilion Residences and Sixteen35 Residences, last month. Including private condominium The Addition, which obtained its TOP in April, three out of the group’s 10 residential development projects in Singapore have obtained TOP.
Apple said Tuesday its profit in the just-ended quarter nearly doubled to US$21.7 billion on growth in iPhone sales and digital services. Revenue surged 36 per cent from a year ago to US$81.4 billion, the best ever for the tech titan’s fiscal third quarter.
Microsoft on Tuesday reported a jump in profits in the recently ended quarter, keeping strong momentum from accelerated gains in cloud computing during the pandemic. Profits for the fiscal fourth quarter rose 47 per cent to US$16.5 billion and revenue grew 21 per cent to US$46.2 billion.
Google parent Alphabet on Tuesday reported quarterly profit that had nearly tripled, as money poured in from ads on its search engine and YouTube video platform. The internet titan reported that profit nearly tripled from last year to US$18.5 billion on revenue that rose sharply to US$61.9 billion.
3M, which makes N95 face masks and Scotch-Brite home care products, reported a 16.7 per cent rise in quarterly profit on Tuesday, helped by a rebound in several of its key end markets as economies recover from the impact of the Covid-19 pandemic.
Coffee drinkers returned to Starbucks cafes in a big way last quarter, fueling a surge in sales and better-than-expected profits, according to results released Tuesday. The coffee chain, which has invested in improving its smartphone app to facilitate online orders, raised its full-year profit forecast on the heels of the strong results, with showed key benchmarks posting big gains in the quarter ending June 27.
Visa Inc beat estimates for quarterly profit on Tuesday, with domestic spending almost back to pre-pandemic levels and international travel on the road to recovery as rising vaccinations and reopening economies take effect. Visa reported a 34 per cent jump in third-quarter payment volumes on a constant dollar basis, while the number of transactions processed surged 39 per cent.
Source: SGX Masnet, The Business Times, Bloomberg, Channel NewsAsia, Reuters, CNBC, PSR
UG Healthcare Corp Ltd
Analyst: Chua Wei Ren
Recommended Action: Technical SELL
UG Healthcare Corp Ltd (SGX: 8K7) downside correction is set to continue after technical is showing a lack of bullish momentum
Sell stop: 0.540 Stop loss: 0.625 Take profit : 0.285
Keppel DC REIT – First beachhead in China
Recommendation: BUY (Upgraded), Last Done: S$2.59
Target Price: S$3.20, Analyst: Natalie Ong
– 1H21 DPU of 4.924 Scts, up 12.5% YoY, was in line, at 50% of our estimate. Earnings improved following acquisition of Amsterdam DC and completed AEI at KDC SG5, DC1 and KDC Dub 2.
– Acquisition of Guangdong Data Centre at 9% NPI yields expected to add 1.9% and 1.7% to DPU and NAV.
– Upgrade to BUY from Accumulate on the resilient data centre demand and new data centre pipeline. DDM-based TP unchanged at S$3.20 (COE 5.75%). Includes S$500mn of acquisition assumptions for FY21e
HK Reports – Read up on our Hong Kong reports here
Webinar Of The Week
Weekly Market Outlook: Koda Ltd, Frasers, CapitaLand, Dasin, Suntec REIT, SGX, SG Weekly
Date: 26 July 2021
Updates summarised in 3 minutes
The Highlights EP01: LHN Limited – Optimisier of real-estate trends
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