Daily Morning Watch - 31 August 2012

SINGAPORE

City Developments Ltd (CIT) announced it is selling an industrial site in Singapore's northwestern Kranji area jointly with Hong Leong Investment Holdings to BS Capital Pte Ltd for S$240M.

US indices fell on Thursday pressured by technology hardware & equipment and semiconductors & semiconductor equipment sectors. On the US economic data front, initial jobless claims were unchanged at 374,000 (370K expected) in the week ended August 25th. Personal income rose 0.3% MoM as expected in July while personal spending increased 0.4 MoM (+0.5% expected). Regarding US stocks, Pandora Media (P US +14.29% to $11.52) announced its 2Q revenue was up 51% YoY to $101M with a LPS of $0.03 compared with a LPS of $0.04 a year ago. Separately, Gap (GPS +2.67% to $36.11) said August net sales increased 9% YoY to $1.2B. Comparable sales for August were up 9% compared with a 6% decrease for August 2011.

In Europe , in Euro Zone, the economic sentiment index declined to 86.1 in August from 87.9 in July. The consumer confidence fell to -24.6 in August from -21.5 in July. Confidence in services fell to -10.8 in August from -8.5 a month ago. In Germany , the unemployment increased 9,000 to 2.90 million in August from July. The jobless rate remained unchanged at 6.8% in August. Regarding stocks, WPP dropped after the company cut its sales-growth forecast. Carrefour and Vivendi climbed after earnings topped analyst estimates. This morning, the Nikkei225 index opened lower, and broke below its 20-day moving average.

CHINA - HK

Hong Kong 's July retail sales grew 3.8% YoY to HK$36.5B in value (+11.0% to HK$34.8B in June) and were up 1.3% in volume (+8.5% in June) according to the government.

ICBC (1398) posted 1H net income up 12.5% YoY to 123.2B yuan. Net interest income increased 16.9% to 204.0B yuan while net fee & commission income climbed 1.9% to 54.8B yuan. ROE declined to 24.31% from 25.12% a year earlier. Core capital adequacy ratio rose to 10.38% at end-June from 10.07% at end-December, while non-performing loans ratio declined to 0.89% from 0.94%.

Bank of Communications (3328) reported 1H net income up 17.8% YoY to 31.1B yuan. Net interest income grew 17.8% to 58.4B yuan and net fee & commission income was up 12.4% to 11.0B yuan. ROE rose 1.30 percentage points over the half year to 21.82%, core capital adequacy ratio climbed to 9.58% from 9.27%, while impaired loans ratio was down to 0.82% from 0.86%.

CITIC Securities (6030)'s 1H net income fell 24.4% YoY to 2.2B yuan on revenue of 6.4B yuan, down 23.2%.

China Railway Group (390) posted 1H net income down 2.2% YoY to 2.4B yuan on revenue of 190.9B yuan, down 11.0%. 1H net contracted signed amounted to 290.4B yuan, up 21.7%. Separately the Co said it has agreed with parent group China Railway Engineering Corp (CRECG) to jointly set up China Railway Finance "for the purpose of providing capital and financial management services to the CRECG Group". The Co will contribute 1.4B yuan, or 95% of total, to the JV's registered capital.

Huadian Power International Corp (1071) announced 1H net income surged 169.0% YoY to 284M yuan on turnover of 29.4B yuan, up 11.5%, citing "the increase in the power generation and the tail-raising effect of on-grid tariffs adjustments in 2011".

Zoomlion Heavy Industry Science and Technology Co (1157) said 1H net income rose 21.5% YoY to 5.6B yuan on turnover of 29.1B yuan, up 20.6%.

Metallurgical Corp of China (1618) swung to a 1H net loss of 186M yuan from a net income of 2.0B yuan in the previous year on revenue of 106.8B yuan, up 1.0%.

Weichai Power Co (2338)'s 1H fell 45.8% YoY to 1.9B yuan on revenue of 27.1B yuan, down 26.1%. The Co pointed out: "Affected by the downturn of the heavy-duty truck market, the Cos aggregate sales of heavy-duty truck engines amounted to 126,300 units during the Period, representing a YoY decrease of 39.9%."

China Eastern Airlines Corp (670) announced 1H net income plunged 64.6% YoY to 807M yuan and operating profit dropped 21.3% to 1.8B yuan on revenue of 40.2B yuan, up 5.6%.

Beijing Enterprises Holdings (392) posted 1H net income up 10.2% YoY to HK$1.8B on revenue of HK$18.2B, up 16.0%. Gas sales increased 21.4% to HK$10.3B while beer sales were up 13.5% to HK$7.7B.

Shanghai Industrial Holdings (363) reported 1H net income down 19.8% YoY to HK$2.5B on revenue of HK$6.2B, down 16.3%, citing "the continued slowdown in real estate sales against Chinas related policies".

Chow Sang Sang Holdings International Ltd (116) unveiled 1H net income down 11.5% YoY to HK$439M on turnover of HK$9.1B, up 9.8%. Jewellery retail was up 26.5% to HK$7.3B. The Co said: "Hong Kong and Macau accounted for 59% of the turnover from jewellery retail of which 52% might attribute to visitors from the Mainland. Same store growth in turnover was 16%."

Semiconductor Manufacturing International Corp (981) swung to a 1H net loss of $36M from a net income of $7M a year earlier on sales of $755M, up 4.4%.

Google Trend HK - popular searches: China Shipping Container Lines (2866)

Daily Market Watch - 29 August 2012

SINGAPORE

Olam International (OLAM) posted 4Q net income down 14.1% YoY to S$110M on sales of S$5.1B, up 12.7%. FY net income fell 13.7% YoY to S$371M and net income (excluding exceptional items) declined 4.6% to S$356M. Looking ahead the Co said: "The cyclical events experienced over the past year in the IRM (Industrial Raw Materials) and CFS (Commodity Financial Services) segments could have some continuing impact in FY2013. However, Olam remains positive about the long-term fundamentals of the industry, as well as the overall business model".

Thai Beverage (THBEV) said it has bought 36.76M shares in Fraser and Neave (FNN) for $316M raising its holding to 29.0%.

CapitaMalls Asia (CMA): ex-div S$0.01625

US indices were mixed on Tuesday. On the US economic data front, the S&P/Case-Shiller index of property values in 20 cities rose 0.5% YoY (-0.05% expected) in June. The conference Board's index slid to 60.6 (66.0 expected) in August from 65.4 the previous month while Richmond Fed Manufacturing index increased to -9 (-10 expected) from -17 in July. Stocks in the retailing and consumer durables & apparel sectors traded higher while shares in the insurance and transportation sectors were under pressure. Looking at some major US company news, Lexmark International (LXK +13.73% to $21.62) announced a restructuring plan comprising the exiting of the development and manufacturing of its remaining inkjet hardware. Separately, PVH Corp (PVH +4.84% to $92.77) reported for its 2Q an adjusted EPS of $1.25 ($1.21 expected) up 17% YoY with revenue flat YoY to $1.34B. In other news, Autodesk (ADSK +2.36% to $31.23) has acquired certain assets of Inforbix, LLC, a software Co focused on cloud-based SaaS solutions.

In Europe, German consumer confidence remains stable in September at 5.9, unchanged from August according last report released by GfK. Spain's gross domestic product contracted 0.4% in the second quarter, following a 0.3% drop in GDP in the first quarter. Regarding the stocks, Vestas Wind Systems surged after the Danish wind-turbine maker confirmed that is in dialog with Mitsubishi Heavy Industries that may lead to strategic cooperation. This morning, the Nikkei225 index opened slightly higher.

CHINA - HK

Hong Kong 's total value of goods exports fell 3.5% YoY in July (vs -4.8% in June) to HK$276.2B (value of re-exports down 3.5% to HK$271.1B) and value of imports was down 1.8% (vs -2.9% in June) to HK$316.3B, according to the government.

China Life Insurance (2628)'s 1H net income fell 25.7% YoY to 9.6B yuan on revenue of 208.6B yuan, down 8.3%. The Co pointed out: "Total assets reached 1,769,234M yuan, a 11.7% increase from the end of 2011; embedded value was 334,326M yuan, a 14.2% increase from the end of 2011; and new business value for the six months ended 30 June 2012 was 12,494M, a 2.5% increase YoY. (...) In the second half of the year, the external environment faced by the life insurance industry will remain tough and complicated, and the foundation of economic recovery is not solid. Impacts of wealth management products and bancassurance regulations will remain."

China Communications Construction (1800) released 1H net income down 13.9% YoY to 5.0B yuan on revenue of 124.7B yuan, down 10.2%. The Co added: "The value of new contracts in the six months ended 30 June 2012 amounted to 236.0B yuan, representing an increase of 2.9% (...) As at 30 June 2012, the backlog for the Group was 693.9B yuan, as compared with 532.2B yuan as at 30 June 2011."

Evergrande Real Estate Group (3333) said 1H net income edged down 1.1% YoY to 5.6B yuan and core net income (excluding the fair value gains on investment properties) fell 21.0% to 4.8B yuan on revenue of 32.1B yuan, up 15.5%.

BBMG Corp (2009) reported 1H net income down 15.2% YoY to 1.4B yuan on revenue of 14.7B yuan, up 12.8%.

GuangShen Railway (525) said 1H net income dropped 25.9% YoY to 678.4M yuan on revenue of 7.0B yuan, up 1.1%.

Shanghai International Port (600018) posted 1H net profit of 2.25B yuan, down 9.6% YoY while revenue rose 29% to 13.65B yuan.

Zhaojin Mining Industry (1818) announced it will subscribe for 100M shares, or 8.95%, in Australia-listed gold producer Norseman Gold Plc at A$0.04 per share through the latter's recently announced share placement.

Agricultural Bank of China (1288), China Citic Bank Corp (998), China Railway Construction (1186), China COSCO (1919), Jiangxi Copper (358), Dongfeng Motor (489), Air China (753), Hengan International Group Co (1044), Want Want China (151): 1H results expected.

Sino Land Co (83): FY results expected.

Chongqing Changan Automobile (000625), Yunnan Aluminium (000807), Inner Mongolian Baotou Steel Union (600010), SAIC Motor Corp (600104), Zhejiang Medicine (600216), Shanghai Chengtou Holding (600649), Tsinghua Tongfang (600100), Shanghai Oriental Pearl Group (600832), Shanghai Construction (600170), Ningbo Port Co (601018), China First Heavy Industries (601106), Pang Da Automobile Trade Co (601258), Sichuan Swellfun (600779), China Shipping Container Lines (601866), China International Travel Service Corp (601888): 1H results expected.

Daily Morning Watch - 28 August 2012

SINGAPORE

Asia Pacific Breweries Ltd (APB): Heineken said it bought 845K shares, or 0.33%, of the Co at S$53 per share through open-market purchases, raising its direct holding in the Co to 13.16%.

Olam International (OLAM): FY results expected.

US indices fell on Monday pressured by commercial professional services and transportation sectors. On the US economic data front, Dallas Fed Manufacturing Activity index improved to -1.6 in August (-6.5 expected) from -13.2 the previous month. Looking at some major US company news, Tiffany & Co (TIF +7.2% to $62.71) reported for its 2Q ended July 31 net income of $92M or $0.72 per diluted share compared to $111M or $0.85 per diluted share (ex-items basis) a year ago on sales up 2% YoY to $887M. In other news, Apple (AAPL +1.88% to $675.68): a US Jury awarded the Co $1.05B in a patent case against Samsung who will appeal the ruling. Separately, Hertz (HTZ +8.06% to $14.21) agreed to acquire Dollar Thrifty Automotive Group (DTG +7.51% to $87.08) for $87.50 a share in cash or $2.3B in total.

In Europe, IFO index regarding business climate in Germany dropped to 102.3 in August (102.7 expected) vs 103.2 in July. Still in Germany , import prices increased 0.7% in July (+0.9% expected) vs -1.5% in July. Regarding the stocks, Q-Cells jumped as Hanwha Group agreed to acquire the Co. This morning, the Nikkei225 index opened slightly higher, and is currently challenging the support of its 10-day moving average.

CHINA - HK

Hong Kong 's mortgage loans drawn down fell 20.0% MoM to HK$16.1B during July vs +3.6% in June according to the Hong Kong Monetary Authority. Mortgage loans approved in July dropped 8.1% MoM to HK$19.5B including HK$4.3B (+2.1% MoM) in primary market transactions and HK$12.7B (-9.9%) in secondary market transactions. The mortgage delinquency ratio remained unchanged at 0.01%.

Foxconn International Holdings (2038) said 1H net loss widened to $226M from $17M a year earlier on turnover of $2.5B, down 16.4%. The Co pointed out: "Market dynamics shifted drastically and created tough challenges for some industry players as well as the Group. Though we spent major efforts in soliciting new customers' businesses and streamlining our operations, it was clear that our total capacity was still over our demand level."

BYD Co (1211)'s 1H net income plummeted 94.1% YoY to 16M yuan on turnover of 21.4B yuan, down 0.4%. The Co forecast 9-month net income to drop 75-95%, pointing out: "The demand in China 's automobile industry is expected to remain weak with more intense market competition, (...) The performance of the handset components and assembly business is expected to decline (...) due to decline in sales at major customer."

Angang Steel (347) swung to a 1H net loss of 2.0B yuan vs a net income of 220M yuan a year before on turnover of 39.4B yuan, down 15.0%.

ENN Energy (2688) reported 1H net income up 16.1% YoY to 730M yuan on revenue of 8.8B yuan, up 21.8%. Piped gas sales rose 32.2% to 5.1B yuan while gas connection fee revenue was up 7.2% to 1.7B yuan.

Sinopec Yizheng Chemical Fibre (1033) posted 1H net loss of 215M yuan vs net income of 585M yuan a year earlier on turnover of 8.3B yuan, down 19.4%.

China Longyuan Power Group (916) announced 1H net income up 3.6% YoY to 1.5B yuan on revenue of 8.4B yuan, up 8.3%.

Hunan Nonferrous Metals (2626) swung to a 1H net loss of 70M yuan from a net income of 166M yuan in the previous year on revenue of 11.5B yuan, down 4.3%.

China Southern Airlines (1055) said 1H net income plunged 84.6% YoY to 424M yuan and operating profit dropped 30.0% to 1.8B yuan on revenue of 45.4B yuan, up 13.7%.

Guangzhou Automobile Group (2238) said 1H net income fell 13.7% YoY to 1.4B yuan and operating loss widened to 588M yuan from 308M yuan on revenue of 5.5B yuan, up 5.7%.

Shimao Property (813) unveiled 1H net income down 5.5% YoY to 3.1B yuan on turnover of 13.7B yuan, up 12.4%.

Parkson Retail Group (3368) announced the acquisition of 95.91% of Qingdao Parkson, 100% of Dalian Parkson and 100% of Shenyang Parkson from its parent group for 420M yuan.

Baoshan Iron & Steel (600019) announced plans to repurchase up to 5B yuan worth of shares at prices not exceeding 5.00 yuan per share.

Google Trend HK - popular searches: China Life Insurance-H (2628), Ping An Insurance (2318), ZTE Corp (763)

China Life Insurance-H (2628), China Communications Construction (1800), Guangshen Railway (601333) , China Life Insurance (601628): 1H results expected.

China Baoan Group (000009), Weifu High-Technology Group Co (000581), FAW CAR (000800), Bank of Ningbo (002142), Rongsheng Petro Chemical Co (002493), Shanxi Lu'an Environmental Energy Development (601699), Jiangxi Hongdu Aviation Industry Corp (600316), Shanghai Zhenhua Heavy Industry (600320), China Avic Avionics Equipment Co (600372), Zhongjin Gold (600489), Xiamen Tungsten (600549), Kingfa Sci & Tech (600143), China Sinoma International Engineering Co (600970), Daqin Railway (601006), Bank of Beijing (601169), Inner Mongolia Junzheng Energy & Chemical Industry Co (601216), expectedChina Shipbuilding Industry (601989): 2Q results expected.

Daily Morning Watch - 27 August 2012

SINGAPORE

Fraser and Neave Ltd (FNN) announced plans to distribute S$4.0B to shareholders if Heineken's offer to buy out the Co's entire 39.7% stake in Asia Pacific Breweries Ltd (APB) is approved, adding: "This represents appx. 84% of the gain on disposal of S$4.8B (after taking into account transaction costs) for the F&N Group, (...) The distribution to Shareholders will take place by way of a proposed capital reduction."

Jardine Cycle & Carriage (JCNC): 2Q results expected.

US indices closed higher on Friday helped by telecommunication services and consumer durables & apparel sectors. On the US economic data front, durable goods orders jumped 4.2% MoM in July (+2.5% expected). Regarding US stocks, Autodesk (ADSK -15.63% to $30.13) posted 2Q adjusted EPS up 9.1% YoY to $0.48 on revenue of $569M, up 4.1%. In other news, MICROS Systems (MCRS +7.01% to $51.59) posted for its 4Q revenue up 10% YoY to $303M and up 10% YoY to $1.11B for its FY. 4Q diluted EPS was $0.68 ($0.60 expected) up 17% YoY and $2.22 for FY up 16% YoY. Separately, Aruba Networks (ARUN +14.42% to $19.36) reported 4Q non-GAAP net income of $22.1M, or $0.18 a share, above estimates, vs a profit of $20.2M a year earlier.

In Europe , UK GDP fell 0.5% YoY (-0.6% expected) after a 0.8% decrease in 1Q. Regarding the stocks, NKT Holdings plunged as 2Q sales missed estimates. Ashmore Group lost ground as the stock, was downgraded to "sell" from "neutral" at Citigroup. This morning, the Nikkei225 index opened higher.

CHINA - HK

China 's central-government-controlled state-owned enterprises recorded combined profits of 459.4B yuan in January-July, down 16.1% YoY (vs -16.4% YoY to 387.0B yuan in January-June), according to the State-owned Assets Supervision and Administration Commission.

Zhejiang province announced plans to invite private investments in 441 major projects worth 1.18T yuan in 8 sectors, including energy, transportation, financial services and tourism.

China Construction Bank (939) posted 1H net income up 14.5% YoY to 106.3B yuan. Net interest income grew 16.5% to 169.7B yuan and net fee & commission income was up 3.3% to 49.2B yuan. ROE declined 0.42 percentage point to 24.56%. Core capital adequacy ratio climbed to 11.19% at end-June from 10.97% at end-December, while non-performing loan ratio declined 0.09 percentage point to 1.00%.

Sinopec (386) said 1H net income plunged 41.1% YoY to 23.7B yuan and operating profit fell 40.4% to 33.5B yuan, pointing out: "This was mainly due to the aggravated refining loss amid the substantial growth of crude oil cost compared with the regulated prices of gasoline and diesel. In addition, the Co's chemical segment swung to a half-year loss amid the slumping prices of chemical products."

Sinopec Shanghai Petrochemical (338) swung to a 1H net loss of 1.2B yuan from a net income of 1.4B yuan a year earlier.

United Co Rusal (486) said 1H net income plunged to $37M from $779M in the previous year and adjusted EBITDA fell 60.4% YoY to $564M on revenue of 5.7B, down 9.7%.

Chalco (2600) announced plans to increase the size of a private A-share placement to raise as much as 8.7B yuan, saying it will issue at maximum 1.45B new shares (equivalent to 10.72% of the total existing issued share capital), up from 1.25B shares announced previously, to 10 unidentified private investors. Meanwhile the Co said it expects a net loss in the January-September period considering sluggish aluminum prices.

China Aluminum International Engineering (2068) said 1H net income grew 25.4% YoY to 535M yuan on revenue of 6.9B yuan, up 55.9%.

China Shenhua Energy (1088) reported 1H net income up 17.2% YoY to 3.9B yuan and EBITDA up 5.4% to 46.2B yuan on revenue of 121.5B yuan, up 20.1%.

Yanzhou Coal Mining (1171) unveiled 1H net income up 1.4% YoY to 5.3B yuan on sales of 28.3B yuan, up 39.9%.

China Unicom (HK) Ltd (762) announced the issue of a 15B-yuan second tranche of super & short-term commercial paper for the year 2012.

Shanghai Electric Group (2727) posted 1H net income up 17.7% YoY to 1.9B yuan on revenue of 36.0B yuan, up 7.2%.

Great Wall Motor (2333) unveiled 1H net income up 29.9% YoY to 2.4B yuan on revenue of 18.3B yuan, up 28.8%.

Parkson Retail Group (3368) said 1H net income declined 10.4% YoY to 524M yuan on total gross sales proceeds of 8.8B yuan, up 7.7%. 1H same store sales growth was 2.9%.

Beijing Jingkelong Co (814)'s 1H net income fell 24.6% YoY to 78M yuan on revenue of 4.5B yuan, up 9.6%.

Sa Sa International (178) reported retail sales up 20.1% YoY in the July 1-August 19 period and Hong Kong & Macau same store sales growth was 15.3% YoY.

Shenyin Wanguo (HK) Ltd (218) announced 1H net income of HK$6M vs HK$27M a year earlier on revenue of HK$139M, down 26.8%.

Google Trend HK - popular searches: Uni-President China (220)

Cosco Pacific Limited (1199), Sinopec (386), Byd (1211), China Longyuan Power Group Corp (916), Angang Steel (000898), Byd Co (002594), China Petroleum & Chemical Corp (600028), China Southern Airlines (600029), Guangzhou Automobile (2238): 1H results expected.

Liaoning Huajin Tongda Chemicals (000059), Guangxi Liugong Machinery (000528), Jilin Aodong Medicine Industry Groups (000623), Guoyuan Securities (000728), GF Securities (000776), Henan Shuanghui Investment & Development (000895), Zhejiang NHU (002001), Xinjiang Zhongtai Chemical Group (002092), Beijing Tongrentang (600085), Baoshan Iron & Steel (600019), Shanghai Aerospace Automobile Electro Mechanical Co (600151), Beijing Tiantan Biological Products Co (600161), Youngor Group (600177), Zhejiang Hisun Pharmaceutical Co (600267), China CNR Corp (601299), GD Power Development (600795), Kangmei Pharmaceutical (600518), Baoding Tianwei Baobian Electric (600550), Heilongjiang Agriculture Co (600598), COFCO Tunhe (600737), Datong Coal Industry (601001), Shanghai Fosun Pharmaceutical Group (600196), China South Publishing & Media Group Co (601098), China Erzhong Group Deyang Heavy Equipment (601268), Sichuan Changhong Electric (600839), Sinovel Wind Group Co (601558), China State Construction Engineering Corp (601668): 2Q results expected.

Hang Lung Properties (101): ex-div HK$0.17 Li & Fung (494): ex-div HK$0.15