Daily Morning Note – 7 Aug 2020

PHILLIP SUMMARY

Asian stocks looked set for a mixed open Friday as investors weighed hopes for an agreement on a stimulus package from Washington against continued U.S.-China tensions. Shares closed higher on Wall Street and the dollar retreated.

Futures were little changed in Japan, dipped in Australia and pointed higher in Hong Kong. Contracts opened flat on the S&P 500 after the index gained for a fifth day, with Apple Inc. leading the charge as it reached a record. U.S. stocks got a lift Thursday afternoon as lawmakers pledged to keep working toward a coronavirus relief package and President Donald Trump said he could act unilaterally on some measures. Gold extended gains amid speculation interest rates will stay low for longer, while Treasuries edged higher. Oil ticked up.

BREAKING NEWS

The net profit of Penguin International, which builds high-speed aluminium craft, plunged 53.2 per cent to S$3.9 million for the six months ended June, hit by the double whammy of the Covid-19 pandemic and weak oil prices. The mainboard-listed company’s H1 revenue fell 26.1 per cent to S$50.1 million. Revenue from shipbuilding, ship repair and maintenance was down 28.8 per cent to S$39.2 million, due mainly to fewer stock vessels sold. Income from the chartering segment fell 15 per cent to S$10.9 million, given a decrease in chartering activities. Gross profit correspondingly fell 32.9 per cent to S$12.6 million.

The net profit of beverage maker F&N fell 8.2 per cent to S$118 million for the nine months ended June, as its top line took a hit from lower soft drink sales in Malaysia and printing-plant closures amid the Covid-19 pandemic. The mainboard-listed firm’s revenue for 9M FY2020 dipped 2.9 per cent to S$1.38 billion, due to lower contributions from the beverage and publishing and printing (P&P) segments, which offset a revenue improvement in its dairies business.

Property investor Thakral Corp saw its earnings fall 91 per cent to S$241,000 for the six months ended June, as its topline shrank from Covid-19 related closures and lockdowns. Including non-controlling interests, the mainboard-listed company posted a H1 net profit of S$2.4 million, lifted by a S$3.5 million one-off gain from the sale of Thakral Building in Osaka, Japan. Thakral’s H1 revenue fell 15 per cent to S$43 million. Contributions from the real-estate investment division stood at S$10.9 million, 15.7 per cent down from a year ago.

Yihai Kerry Arawana (YKA), the Chinese unit of Wilmar International, has progressed a step further towards its long-awaited initial public offering (IPO). In a bourse filing on Thursday, Wilmar disclosed that YKA has received confirmation from the listing committee of the Shenzhen Stock Exchange’s ChiNext Board that it meets the listing and disclosure requirements. Wilmar said that the listing committee had met with YKA and deliberated on the proposed IPO. YKA will next make a submission to the China Securities Regulatory Commission for final registration approval of the listing.

In its worst quarterly showing since the opening of its Singapore integrated resorts (IRs) a decade ago, Genting Singapore logged a S$163.3 million net loss for Q2 FY2020 ended June. Its Q2 numbers reverse a S$168.4 million net profit from a year ago and a S$46.6 million net profit from Q1 this year. Revenue for the quarter plunged 94 per cent year on year to S$41.3 million, Genting disclosed in a quarterly business review on Thursday evening. The firm had suspended all guest offerings at Resorts World Sentosa during the circuit-breaker period from April 6 to end-June.

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

TECHNICAL PULSE

Koufu Group Ltd

Analyst: Chua Wei Ren

Recommended Action: Technical BUY

Koufu Group (SGX: VL6) has made some modest recovery after the stock visit the low point at $0.550 in march 2020. Technicals suggest that the stock is making an attempt to carry on the rally despite a correction in June – July.

>> Read more technical reports

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Date: 06 July 2020

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