Daily Morning Note – 30 July 2021

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Asian stocks looked set for a muted start Friday as traders weighted megacap technology earnings and risks from China’s crackdown on private industries. U.S. shares edged up overnight while Treasuries fell. Futures dipped in Japan and Hong Kong but were steady in Australia. Nasdaq 100 contracts dropped as Amazon.com Inc. retreated in extended trading on signs its rapid growth through the pandemic is waning. On Thursday, Asia-Pacific shares jumped after Beijing tried to allay fears over regulatory curbs on private industries, but U.S.-listed Chinese stocks later resumed declines.


SG News

Singapore Airlines (SIA) narrowed its first-quarter net loss after a boost in passenger and cargo flown revenue, and the absence of non-cash impairment charges for the NokScoot liquidation. Net loss for the three months ended June 30, 2021 was S$409.2 million compared with S$1.1 billion a year ago. Loss per share amounted to 9.2 S cents compared with 50.8 cents a year ago.

Sembcorp Marine posted a loss of S$647.2 million for the first half of FY2021, widening from a loss of S$192.1 million in the corresponding year-ago period. But company executives said losses can be expected to narrow in H2, barring unforeseen circumstances.

Mainboard-listed supermarket operator Sheng Siong Group saw a more subdued first half, after the year-ago high base from a buying frenzy when the pandemic first hit. Net profit was down by 11.9 per cent to S$65.9 million, as revenue slipped 8.8 per cent to S$681.7 million, according to unaudited financial results released on Thursday for the six months to June 30.

Mainboard-listed conglomerate Keppel Corp is back in the black for the first half-year, with positive contributions from most units, its results indicated on Thursday. Keppel posted net profit of S$299.8 million for the six months to June 30, reversing the loss of S$537.1 million in the year-ago period from offshore and marine impairments. Operating profit was S$188.0 million, against a loss of S$149.4 million before.

The first-half earnings of Jardine-owned Asian retail giant Dairy Farm International tumbled on the back of seesawing shopper behaviour during the Covid-19 pandemic, prompting the company to warn on Thursday that the outlook for the year remained glum.

The Urban Redevelopment Authority (URA) on Thursday said has it awarded the tender for Lentor Central site to GLL D Pte Ltd. This comes nearly a week after the tender closed with nine bids. GLL D, an indirect subsidiary of GuocoLand, submitted the highest bid in the tender for the site – S$784.1 million or S$1,204 per square foot per plot ratio (psf ppr) – a bid that surpassed the expectations of property consultants polled by The Business Times before the tender closed.

Jardine Cycle & Carriage (Jardine C&C), known in Singapore as a Mercedes-Benz dealer, on Thursday reported that first-half underlying profits more than doubled on the back of looser Covid-19 restrictions in its regional markets. Its chairman Ben Keswick warned, however: “Although business conditions have since improved, the group remains cautious about performance in the second half of 2021, given the worsening Covid-19 situation in a number of countries across the region.”

Jardine Matheson Holdings (JMH) on Thursday reported a net loss of US$117 million for the first half ended June 30, 2021, narrowing from US$775 million a year ago

Frasers Hospitality Trust hotels’ performance generally picked up from the start of the financial year to end-June, the manager said in a third-quarter update on Thursday. Still, average daily rates and revenue per available room (RevPAR) were all lower year on year for the nine months to June 30, in local currency terms. Occupancy rates also remain depressed, as the coronavirus batters the global hotel industry.

OUE Commercial Real Estate Investment Trust (OUE C-Reit) will make a first-half distribution per unit (DPU) of 1.23 Singapore cents, after having held back on a payout the year before.

CapitaLand China Trust (CLCT) has announced a distribution per unit (DPU) of 4.23 Singapore cents for the first half ended June 30, up 40.1 per cent from a DPU of 3.02 cents in the year-ago period, despite an enlarged unit base.

US News

Qualcomm Inc on Wednesday predicted a rise in sales of chips for 5G phones, including Apple Inc’s iPhone, as the company said it had mitigated supply shortfalls that have contributed to a global chip shortage.

Scarlett Johansson is suing Disney over its decision to release superhero movie Black Widow on streaming at the same time as in theaters, alleging a breach of contract which cost the star millions of dollars.

Amazon said on Thursday second-quarter profit jumped 48 per cent from a year ago to US$7.8 billion, but shares in the tech and e-commerce giant fell on a disappointing revenue number. Total revenues increased 27 per cent to US$113.1 billion, below most Wall Street forecasts, sparking a slide of some 6 per cent in after-hours trading.

Credit Suisse on Thursday posted a 78 per cent fall in second-quarter net profit, as a steep drop in its investment banking revenues sharpened the blow from recent Archegos and Greensill scandals.

Johnson & Johnson contractor Emergent Biosolutions Inc plans to resume Covid-19 vaccine production at its Baltimore plant after getting approval from the US Food and Drug Administration (FDA), the Wall Street Journal reported late on Wednesday, citing a statement from the company and a FDA letter.

Robinhood had a rough start on Wall Street on Thursday, falling sharply in its Nasdaq debut after the fast-growing online trading app raised US$1.9 billion in an initial public offering.

Didi Global Inc shares surged as much as 49 per cent in pre-market trading after The Wall Street Journal (WSJ) reported the firm is considering going private to placate Chinese regulators and compensate investors for losses.

Royal Dutch Shell‘s second quarter profit jumped to US$5.5 billion, its highest in over two years as a sharp rise in oil and gas prices prompted the company to raise its dividend and launch a US$2 million share buyback programme.

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


Keppel DC REIT

Analyst: Chua Wei Ren

Recommended Action: Technical BUY

Keppel DC REIT (SGX: AJBU) despite a sell call that was not successful at achieving a target of $2.21 dated 17th June, we resume a bullish buy call based on the technical and price action

Buy stop: 2.67 Stop loss: 2.32 Take profit 1: 3.04 Take profit 2: 3.22

InnoTek Ltd

Analyst: Chua Wei Ren

Recommended Action: Technical BUY

InnoTek Ltd (SGX: M14) we still maintain our technical buy outlook based on our report on 16th July 2021 despite a bearish correction at $0.950 region. The recent technical also support further bullish outlook

Buy spot: 0.890 Stop loss: 0.800 Take profit 1: 1.175 Take profit 2: 1.250

Sarine Technologies Ltd

Analyst: Chua Wei Ren

Recommended Action: Technical BUY

Sarine Technologies Ltd (SGX: U77) bullish upside is set to continue based on the following technical and price action.

Buy spot: 0.715 Stop loss: 0.575 Take profit 1: 1.040 Take profit 2: 1.145

Geely Automobile Holdings Ltd

Analyst: Chua Wei Ren

Recommended Action: Technical BUY

Geely Automobile Holdings Ltd (HKEX: 175) rebound at HKD$17.50 was we sustained after it broke the downward channel from January 2021 – May 2021. Technical and price action also indicate that the upside will continue

Buy spot: 22.55 Stop loss: 20.00 Take profit 1: 34.16 Take profit 2: 35.50

Sunny Optical Technology Group Co Ltd

Analyst: Chua Wei Ren

Recommended Action: Technical BUY

Sunny Optical (HKEX: 2382) sell-off after reaching the high at HKD$248.00 region was nothing more than a corrective based on the technical indicated. As such, price action indicates a potential break to the upside

Buy stop: 240.00 Stop loss: 200.00 Take profit 1: 295.16 Take profit 2: 326.00

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