Daily Morning Watch - 27 July 2012

SINGAPORE

CapitaMalls Asia (CMA) posted 2Q net income up 40.7% YoY to S$232M and EBIT up 33.4% to S$284M on revenue of S$75M, up 18.8%. The Co declared an interim dividend of S$0.01625 per share, up 8.3% YoY. The Co said: "The outlook for our key markets of Singapore , China and Malaysia remains positive, with retail sales expected to continue to grow. In Singapore , we expect retail sales this year to be boosted by GDP growth of between 1.0% and 3.0%, and higher tourist arrivals of between 13.5M and 14.5M. In China , retail sales are expected to grow between 16.0% and 17.0%, driven by economic expansion of 8.0% forecast for the whole year. In Malaysia , retail sales are expected to increase 6.0% this year on the back of projected economic growth of 4.0% to 5.0%. (...) Based on the current outlook and growth momentum, the Board expects this year's total dividend payout to be at least equal to last year's S$0.03."

Hongkong Land Holdings (HKL) said 1H net income plunged 84% YoY to $626M and underlying profit declined 13% to $318M on revenue of $478M, down 36.6%. The Co declared an interim dividend of $0.06 per share, unchanged from 1H2011. The Co pointed out: "Operating profit from the Group's commercial property portfolio increased in the first six months of 2012, but this was more than offset by the decrease in residential profits. (...) While conditions remain uncertain, the Group's commercial portfolio in Hong Kong is well positioned due to the lack of new commercial space entering the market. The contribution from residential developments in the second half is expected to benefit from the completion of two projects in Singapore and additional profits in Hong Kong ."

Fraser & Neave Ltd (FNN) announced it has agreed with Heineken to extend the latter's offer for stakes in Asia Pacific Breweries Ltd (APB) by one week from 27 July 2012, adding: "The Co wishes to clarify that, save for the Heineken Offer, the Co has not received any other proposal for its direct and indirect interests in APBL."

Mapletree Logistics Trust (MLT) said CEO Richard Lai Tak Loi has resigned and been replaced by Ng Kiat, the former Chief Investment Officer (Southeast Asia) of Mapletree Investments Pte Ltd.

Dairy Farm International (DFI) unveiled 1H net income up 8% YoY to $245M sales of $4.8B, up 8%. The Co declared an interim dividend of $0.065 per share (1H2011: $0.06).

Mandarin Oriental International (MAND) posted 1H net income down 29% YoY to $31M on revenue of $619M, up 8%. The Co declared an interim dividend of $0.02 per share, unchanged from a year earlier.

Jardine Cycle & Carriage (JCNC), Jardine Matheson (JM), Jardine Strategic (JS): 1H results expected.

Singapore Exchange (SGX): FY results expected.

US indices jumped on Thursday boosted by consumer durables & apparel and telecommunication services sectors. On the US economic data front, initial jobless claims decreased by 35,000 to 353,000 (380K expected) in the week ended July 21st. Durable goods orders rose 1.6% MoM in June (+0.3% expected) after an upwardly revised 1.6% gain the previous month. Finally, pending home sales fell 1.4% MoM (+0.3% expected). Regarding US stocks, Zynga (ZNGA -37.48% to $3.18) announced 2Q revenue up 19% YoY to $332M. Non GAAP EPS was $0.01 vs $0.06 a year ago. Separately, Akamai Technologies (AKAM +24.04% to $35.04) reported 2Q adjusted EPS up 22.9% YoY to $0.43 ($0.37 expected) on revenue of $331M, up 19.6%. Western Digital (WDC +20.94% to $39.27) reported for its 4Q ended June 29, revenue of $4.8B vs $2.4B a year ago. After the US market close, Amazon.com (AMZN) posted a 2Q EPS of $0.01 vs $0.03 expected ($0.41 a year ago) on sales of $12.83B vs $12.90B expected, up 29% YoY. In other news, Facebook (FB) posted a 2Q adjusted EPS of $0.12 on revenue of $1.18B vs $1.16B expected.

In Europe, stocks made a strong rebound after Mario Draghi, ECB President, said that : "the ECB is ready to do whatever it takes to preserve the euro". In other economic news, Euro zone M3 was up 3% in June YoY (+2.7% expected) vs +2.9% in May. In Germany , GfK consumer confidence survey was up for August at 5.9 vs 5.8 in July. It was expected to be flat. German import prices dropped 1.5% in June (-0.9% expected) vs -0.7% in May. Among stocks, Unilever jumped as 2Q sales beat estimates. France Telecom gained ground on strong 2Q results. This morning, the Nikkei225 index opened higher, and is now posting a technical rebound.

CHINA - HK

China will use fiscal measures, such as preferential tax treatments promised to smaller firms and new strategic industries, to support growth and promote economic restructuring, according to Finance Minister Xie Xuren cited by Xinhua.

The Hong Kong Exchange Fund posted 1H net investment income of HK$38.1B vs HK$46.4B a year earlier, announced Hong Kong Monetary Authority.

AIA Group (1299) posted 1H net income up 10% YoY to $1.4B and operating after tax up 12% to $1.1B, adding: "VONB (Value of new business) grew by 28% to $512M net of tax compared with 1H2011. This excellent performance was driven by increases in both volume and margin. VONB margin increased by 6.6 percentage points to 42.6% and ANP (Annualised new premium) grew by 9% to $1,187M (...) All of our major markets shared this continued profitable growth momentum, with the exception of our Korean business, which as discussed previously, we continued to reposition. (...) EV (Embedded value) grew to $28,840M at 31 May 2012, an increase of 6% over the first half from $27,239M at 30 November 2011. EV operating profit grew by 9% to $1,655M compared with 1H2011. (...) The Board of Directors has declared an interim dividend of HK$0.1233 per share. If trading conditions continue in line with present expectations, the 2012 interim dividend will represent appx. one-third of the 2012 full-year dividend."

China Zhongwang Holdings (1333) announced it may post a substantial increase in 1H net income considering surging sales.

Huolinhe Opencut Coal Industry Corp (002128) posted 1H net income down 10.0% YoY to 733M on revenue of 3.3B yuan, down 2.9%.

Hangzhou Binjiang Real Estate Group (002244) reported 1H net income down 43.2% YoY to 85M yuan on turnover of 648M yuan, down 24.2%.

TBEA (600089) unveiled 1H net income down 20.7% YoY to 547M yuan on revenue of 9.8B yuan, up 19.9%.

UFIDA Software (600588) said 1H net income grew 10.4% YoY to 135M yuan on turnover of 1.7B yuan, up 17.3%.

Fangda Carbon New Material (600516), Beijing Haohua Energy Resource (601101): 2Q results expected.

Datang International Power Generation (601991): ex-div CNY0.11

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