Value Investing For Singapore!

CapitaCommercial Trust (CCT) prides itself as Singapore’s first commercial real estate investment trust (REIT) when it went public in 2004.

Ask any foreigner which parts of Singapore they have visited, one would typically find ‘Orchard Road’ – the famed shopping district of Singapore where luxury brands such as Hermes, Louis Vuitton and Anne Fontaine reside – to be one of the most common answers.

Markets were weaker for most of the day ahead of key US non-farm payroll numbers, continued lethargic debt swap talks in Greece. Singapore was the exception, it stayed in positive territory for the majority of the session, however as the European open got closer trading turned around in Taiwan, Shanghai and Hong Kong. Japan earnings season treks on with most companies showing disappointing results putting an overall damper on the market.

Developed by American demographer Warren Thompson in 1929, the Demographic Transition Model illustrates the many phenomena seen in today’s developed countries.

It’s a common dilemma: You know you have the wrong mix of investments, but you cannot bring yourself to fix the mess. Why is it so difficult to change? At issue, and perhaps central to how investors think is a relatively new school of thought dubbed “Behavioural Finance”.

As chief executive officer (CEO) of a maker of spark plugs and wiper blades in the Detroit area, Jose Maria Alapont has struggled through the kind of collapse that few have experienced. His company, Federal-Mogul Corporation, spent six years in bankruptcy, slashing debt and jobs, to emerge just before auto sales plunged and some of its biggest customers, General Motors Corporation and Chrysler, also sought protection from creditors. With financial-services firms facing an upheaval of their own, Alapont says he can relate, yet he no longer shares the concern.

Singapore's manufacturing output rose 12.6% in December from a year earlier, topping expectations and suggesting the trade-dependent economy is showing resilience in the face of Europe's sovereign debt crisis. 

The rise was driven by a surge in production in the pharmaceutical industry and reversed a revised 8.0% drop in November, the Economic Development Board said. The increase beat all estimates in a poll of 12 economists by Dow Jones Newswires, which pointed to a median 7.3% rise.

It is a good thing Singapore's national pastimes are shopping and eating, since the petite island nation is bursting at its seams with malls. Lately, however, the country's mind-numbing malls seem to be under a bit of a cloud. Gadgets like iPads and smartphones still fly off the shelves, but retail sales have started to slow. Worried about a global recession, tempered tourism and government measures to cool the red-hot property market, Singaporeans are showing rare restraint in their competitive consumption.

Asian currencies were poised for the best start to a year since 2006 after investors poured money into the region to take advantage of higher interest rates and a faster pace of economic growth than in developed nations. Five-year benchmark bonds in Taiwan, Thailand and South Korea yielded 0.93%, 3.07% and 3.48%, respectively, compared with 0.75% for similar-maturity Treasuries. Malaysia’s central bank will probably leave borrowing costs at 3% on 31 January, according to all 15 economists surveyed by Bloomberg, more than the near-zero rates available in the US.

Revenue: +3% (2Q11) +12% (1H11)  Net Profit: -53% (2Q11), -31% (1H11) Press Release: The Group turnover increased by 3.5% to $996.0m.  Turnover from shipyard operations increased 6.3% to $981.8m on higher contributions from ship building and marine engineering projects. Turnover from dry bulk shipping & other businesses dropped 63.5% to $14.2m mainly due to lower charter-hire rates. Net profit attributable to equity holders of the Company slipped 53.4% to $31.9m on lower profit contributions from dry bulk shipping and shipyard operations, and higher income tax expense from a deferred tax benefit adjustment. The Group will continue to leverage on the strength of its diversified business to remain competitive and fortifies its strategic market position.  Outlook: As at 30 June 2011, the Group’s order book stood at US$7.0 billion with progressive deliveries up to first half 2014.  This o...

Revenue: +41.0% (1Q12)  Net Profit: -10.6% (1Q10)  Outlook: The Group’s principal ship-owning business is expected to be stable as its vessels are already locked in, on long-term charters to blue chip operators.  In addition, the Group is looking out to acquire additional vessels with long-term charters to expand the business of the Group. FINANCIAL RECORDS Revenue (USD '000) FY 1Q 2Q 3Q 4Q Total 2012 4,732 2011 3,355 4,090 4,083 4,141 15,6692010 2,113 2,145 2,378 1,336 7,972 Revenue (SGD '000) FY 1Q 2Q 3Q 4Q Total 2009 2,543 2,733 3,179 3,280 11,735 2008 3,281 3,242 3,139 3,001 12,663 2007 6,635 6,322 6,551 3,335 22,843 2006 12,621 7,560 8,133 8,541 36,855 2005 25,326 26,471 25,829 13,945 56,169 ----------------------------------------------------------- Earnings (USD '000) FY 1Q 2Q 3Q 4Q Total 2012 1,235 2011 558 1,760 1,813 1,675 5,601 2010 1,216 611 1,313 26 3,166 Earnings (SGD...

Revenue: +1% (2Q11), +6% (1H11) Net Profit: Profit (1H11), +564% (1H11) Press Release: Focused execution of strategy drives broad-based growth in business volumes and customer income Outlook: DBS CEO Piyush Gupta said, “DBS’ record first-half results are a validation of the bank’s Asian strategy and our ability to execute well. We have benefitted from our growth in China and India and the improved management of our businesses in Singapore and Hong Kong, our two largest markets. As we continue to build out and strengthen our Asian franchise, we will remain focused and vigilant in an increasingly uncertain macro-economic environment." FINANCIAL RECORDS Revenue (SGD 'MIL) FY 1Q 2Q 3Q 4Q Total 2011 1,909 1,838 2010 1,713 1,815 1,809 1,729 7,066 2009 1,662 1,792 1,577 1,572 6,603 2008 1,563 1,617 1,398 1,475 6,053 2007 1,542 1,551 1,537 1,533 6,163 2006 1,270 1,408 1,320 1,440 5,438 2005...

Revenue: +3.0% (1Q12) Net Profit: -3.5% (1Q12)  Press Release: Group revenue up 3% on better performance by Mail and Logistics Accelerating Regional Expansion and Diversification Interim quarterly dividend of 1.25 cents per share Outlook: The Group continues to face formidable challenges in the postal industry arising from esubstitution, competition and rising operating costs and is accelerating efforts to diversify and grow its businesses.  Over the last three months, the Group has made several acquisitions to expand and strengthen its regional network and businesses.  The strategic investment in ITL, an integrated logistics solutions provider in Vietnam, will give the Group a foothold into Vietnam and the Indo-china region.  The Group has signed a Memorandum of Understanding with Malaysia listed Efficient to jointly explore business opportunities in the region.  The strategic invest...

Revenue: +75% (2Q11), +78% (1H11)  Net Profit: +47% (2Q11), +35% (1H11) Press Release: Revenue climbed 75% year-on-year (“y-o-y”) to S$41.1 million in 2Q2011 due to new Engineering Services Division  Balance sheet remained in net cash position well supported by strong cash and cash equivalent balance of S$19.3 million as at 30 June 2011 The Group, boasting comprehensive product offerings and turnkey capabilities, is well-positioned to benefit from market recovery  Outlook: The Group is cautiously optimistic about its industry’s future prospects. Embarkation on the Group's new Engineering Services Division last financial year to diversify its business risk has seen revenue contribution from this division climb to approximately 51% of the Group’s total revenue in 2Q2011. To better respond to market demands, the Group will remain committed to enhance its product and service offerings th...

Revenue: +21.0% (4Q11), +46.7% (FY11) Net Profit: +73.8% (4Q11), +100.5% (FY11) Press Release: Revenue increased 46.7% to S$507.3 million from S$345.7 million in FY10  Cash and cash equivalents at a healthy S$149.9 million as at 31 May 2011, up 111.7% from S$70.8 million as at 31 May 2010 Proposed dividends of 1.6 cents per share for FY11 is 100% more than 0.8 cents per share in FY10 and represents a stellar 4.2% dividend yield Robust order book of S$839 million to contribute towards top line through FY14 Outlook: The Group was awarded two building contracts worth about $280 million for the construction of private residential developments, namely Waterfront Isle and Hedges Park. With the addition of these contracts, Group's order book to date stood at $839 million.  This should provide it with a constant flow of activities through FY2014. In July 2011, the Group has completed the sal...

Revenue: +3.2% (1Q12) Net Profit: -82.3% (1Q12) Outlook:  Advance bookings for travel in the next few months are almost flat compared to the same period last year. With the current economic uncertainties, significant challenges remain in the key markets of Europe and the United States In such an environment, the Company’s sound finances and low level of debt put it in a position of strength Management will monitor business trends closely and respond appropriately. FINANCIAL RECORDS Revenue (SGD ' MIL) FY 1Q 2Q 3Q 4Q Total 2012 3,577.6 2011 3,465.8 3,631.2 3,841.0 3,586.8 14,524.8 2010 2,871.4 3,082.1 3,418.0 3,335.8 12,707.3 2009 4,131.7 4,379.3 4,164.0 3,321.3 15,996.3 2008 3,622.1 3,967.1 4,276.1 4,107.2 15,972.5 2007 3,421.0 3,608.6 3,793.7 3,671.1 14,494.4 2006 3,044.4 3,350.3 3,557.0 3,389.4 13,341.1 2005 2,724.9 3,053.9 3,201.9 3,032.2 12,012.9 ------------------------------...

Revenue: +7.8% (1Q12) Net Profit: -8.9% (1Q12) Press Release: Net profit was lower due mainly to higher energy costs and staff and related costs Outlook: In the quarter ahead and next 12 months, Train and Bus operations are expected to face increasing cost pressures particularly in staff and related costs and energy costs. Staff and related costs will be higher due mainly to higher CPF rates and increased headcount.  The higher headcount is contributed mainly by increased train runs and the ramp-up for the remaining Circle Line stages.  Energy costs are expected to remain high with higher diesel and electricity prices.  The profitability of Train and Bus operations will be impacted by the higher operating expenses.  This will be partially mitigated by higher ridership and revenue contribution from the opening of all Circle Line stages from the second half of the year. Stronger con...

Revenue: +14.3% (2Q11), +14.5% (1H11) Net Profit: +10.1% (2Q11), +12.6% (1H11) Press Release: Profit Profit after tax grew 10.2% to S$11.7 million Group achieved 14.3% growth in revenue to S$67.0 million Revenue from Hospital Services Division increased by 14.5% Revenue from Healthcare Services Division grew 12.2% Outlook: The healthcare landscape remains competitive, with additional beds of new public and private hospitals coming onstream over the next few years.  Whilst adding more space to RafflesHospital, the Group continues to be vigilant and responsive to new opportunities that may arise.   Barring unforeseen circumstances, the Directors are optimistic that the Group will continue to grow in 2011. FINANCIAL RECORDS Revenue (SGD '000) FY 1Q 2Q 3Q 4Q Total 2011 64,433 66,963 2010 56,196 58,576 60,862 63,489 239,123 2009 51,016 53,910 55,411 58,273 218,610 2008 47,410 50,626 51,3...

Revenue: -28.8% (2Q11), -17.0% (1H11) Net Profit: +60.7% (2Q11), +55.6% (1H01) Press Release: Gross Order Book: S$381.6 million as at 25 July 2011 lasting till 2014 Cash & Cash Equivalents: S$98.6 million as at 30 June 2011 Outlook: The Group will continue to leverage its track record and financial strength to participate in tenders for larger civil engineering projects in order to generate higher profitability as well as to raise its business profile in the construction industry.  Apart from public sector works, it will also continue to look to extend its civil engineering capabilities into the Oil & Gas sector. Should the opportunity arise, the Group is open to expanding its business through acquisitions, joint ventures or strategic alliances that can complement its current business and that can potentially provide access to new markets and prospective clients. FINANCIAL RECORDS Re...

Revenue: -3.7% (1Q12) Net Profit: -3.8% (1Q12) Outlook:Prevailing global economic uncertainties and oil price volatility continue to impact the aviation industry. However, the Group expects demand for its maintenance, repair and overhaul services to be sustained. Productivity improvements and cost management will continue to receive close attention. FINANCIAL RECORDS Revenue (SGD 'MIL) FY 1Q 2Q 3Q 4Q Total 2012 277.6 2011 288.3 277.1 269.5 272.0 1,106.9 2010 244.2 248.1 241.5 272.6 1,006.4 2009 250.2 279.3 270.0 245.8 1,045.3 2008 270.1 265.8 248.6 225.1 1,009.6 2007 248.6 244.3 245.8 238.7 977.4 2006 223.5 240.0 235.3 260.3 959.1 2005 201.3 206.7 195.3 204.2 807.5 ----------------------------------------------------------- Earnings (SGD 'MIL) FY 1Q 2Q 3Q 4Q Total 2012 68.1 2011 70.8 66.5 60.3 60.9 258.5 2010 45.1 61.1 56.0 73.9 236.1 2009 58.7 73.4 63.0 65.5 260.6 2008 70.5 74.5 5...

Revenue: +22.1% (1Q12) Net Profit: -4.1% (1Q12) Outlook: In Japan, the continuing recovery from the March 11 disasters is expected to have a positive impact on TFK. While meal volumes remain below pre-disaster levels, they are improving month-on-month. The Group maintains that TFK is not expected to have a material effect on its performance in FY2011-12. The aviation sector on aggregate appears to be weakening but regional airlines have recently announced their expansion plans that will present organic growth opportunities for SATS. The announcement of further investments by the Changi Airport Group and its aspirations for higher passenger traffic through Singapore will also strengthen the industry’s fundamentals. FINANCIAL RECORDSRevenue (SGD 'MIL) FY 1Q 2Q 3Q 4Q Total 2012 466.5 2011 382.1 401.2 440.9 504.9 1,729.1 2010 351.7 362.3 434.3 390.6 1,538.9 2009 244.0 249.2 242.4 326...

Revenue: +6% (2Q11), +11% (1H11)Net Profit: +55% (2Q11), +118% (1H11)Press Release: Better product mix and higher productivity resulted in 10 consecutive quarters of growth and record half year profit before tax of S$53 millionBroad based sales growth driven by launch of new innovative productsGrowing cashflow with 1H EBITDA of S$59m +79%Celebrate and reward shareholders with 2nd interim dividendOutlook: Overall, the Group's focus is to continue to grow sales, build sustainable profits and positive operating cash flow.This will strengthen the Group's balance sheet and build long term value for all its stakeholders.FINANCIAL RECORDSRevenue (SGD '000)FY 1Q 2Q 3Q 4Q Total2011 148,866 138,5682010 128,643 130,746 116,731 132,618 508,7382009 96,049 117,147 122,622 140,909 476,7672008 115,588 115,920 114,739 110,414 456,6612007 121,336 137,286 137,110 127,941 523,6732006 155,222 183,345 138...

Revenue: +21.1% (2Q11), +4.2% (1H11)Net Profit: +23.5% (2Q11), Loss (1H11)Outlook: For the Group’s Electronic sector, the second half of Year 2011 will continue to be challenging as the global economy sees slightly lower growth and higher inflation trajectories, triggered by economic problems in many regions and recurring sovereign debt strain.High gasoline prices have undercut discretionary spending around the world.The supply chain aftershocks from Japan’s mid-March catastrophe have weakened manufacturing activity internationally.For the Group’s Materials Supply and Marine Logistics sector, the Group is working on potential projects and is cautiously optimistic of the performance for the second half of the year.FINANCIAL RECORDSRevenue (SGD '000)FY 1Q 2Q 3Q 4Q Total2011 43,775 57,2462010 49,702 47,284 63,659 50,691 211,3362009 67,644 86,730 75,329 50,564 280,2672008 68,970 61,474 74...

Revenue: +1.5% (2Q11), -3.7% (1H11)Net Profit: -63.9% (2Q11), -42.5% (1H11)Press Release: PATMI declined 63.9% yoy despite higher sales due to higher labour and manufacturing costExpects cost pressure to impact 2H2011 profitability despite expected higher salesRecommends interim dividend of 1 Singapore cent per shareOutlook: The Group believes that its HDD business will record higher shipments in 2H2011 compared to 1H2011 in line with seasonal trend.However, it will continue to face weaker operating margin in 3Q2011 due to higher labour cost and start-up expenses from the new Chongqing facility.The Group will continue to focus on its business development efforts to build its customer base in the semiconductor industry and penetrate into new industries to diversify its revenue stream.Sales from the foam plastics division are expected to continue growing.The Group believes that its sale...

Revenue: -3.7% (2Q11), -2.9% (1H11)Net Profit: +9.3% (2Q11), +7.0% (1H11)Press Release: Net profit improved 7% to S$696 million, compared to 1H 2010’s S$651 million (restated).Earnings Per Share of 39.2 cents, up 6% from 1H 2010’s 37.0 cents (restated).Annualised ROE of 19.5%.Economic Value Added of S$472 million.Cash outflow of S$697 million.Net gearing of 0.10x.Interim dividend of 17.0 cents per share.Outlook: Offshore & Marine Division secured $7.4 billion of new orders for the year-to-date which is a record high.The recent surge in orders has led to a healthy net order book which stands at $9.1 billion with deliveries extending into 2014.The Division will remain focused on strong project execution and efficient operations to ensure that secured orders are delivered timely, safely and within budget.The Division sees good prospects for its deepwater solutions with the projected incr...

Revenue: -67.2% (2Q11), +8.9% (1H11)Net Profit: -64.9% (2Q11), -33.7% (1H11)Press Release: Net profit lower at $133.8 million for the first half of 2011, mainly from decline in contribution from property tradingFall in property trading magnified due to revised accounting treatmentContribution from fund management grew 52% to $23.9 millionK-REIT Asia and Alpha Investment Partners made acquisitions and divestmentsOutlook: The Group will continue to monitor the market and time launches for new projects and new phases of existing developments.The Group will also seize opportunities to acquire good sites in Singapore and overseas, not just for residential projects, but also for commercial and mixed-use developments.FINANCIAL RECORDSRevenue (SGD '000)FY 1Q 2Q 3Q 4Q Total2011 357,892 104,1872010 106,475 318,018 149,179 281,463 792,2732009 145,711 249,935 227,768 300,455 923,8692008 273,084 1...

Revenue: +2.7% (2Q11), +3.3% (1H11)Net Profit: +5.1% (2Q09), -15.1% (1H11)Press Release: Improved performance of Ornamental Fish segment contributed towards a 40.2% jump in operating profit year-on-yearDirectors expect the second half of FY11 to remain profitableOutlook: The Group's business model remains robust and is diversified.The Group will continue to build a resilient balance sheet, work steadily on generating and maintaining a strong cash flow from operating activities and on reducing its bank borrowings.Barring any unforeseen circumstances, the Group expects to remain profitable in the 2nd half of 2011, despite possible fluctuations in its operating profit from quarter to quarter.FINANCIAL RECORDSRevenue (SGD '000)FY 1Q 2Q 3Q 4Q Total2011 24,154 23,3492010 23,237 22,734 22,953 22,239 91,1632009 23,152 23,718 23,874 23,867 94,6112008 23,014 23,576 23,613 22,859 93,0622007 21,9...

Revenue: +10.0% (2Q11), +6.5% (1H11)Net Profit: +5.0% (2Q11), +6.6% (1H11)Outlook: In June 2011, the Group launched Southeast Asia’s first live Long Term Evolution (LTE) mobile network, with initial coverage in the financial district.LTE is specifically designed for data carriage and will more efficiently support the growth in data traffic.Coverage is being progressively expanded and scheduled to be nationwide by the first quarter of 2012.Media Development Authority (MDA), in July 2011, announced the implementation of cross carriage of exclusive content in the pay TV market effective from 1 August 2011.This together with internet TV and common features set-top box will open up opportunities.Based on the current economic outlook and barring any unforeseen circumstances, the Group estimates growth in net profit after tax for the year 2011. FINANCIAL RECORDSRevenue (SGD 'Mil)FY 1Q 2Q 3Q ...

Revenue: +51% (3Q11), +39% (9M11)Net Profit: -75% (3Q11), -49% (9M11)Press Release: Revenue up 51% for the quarter, boosted by maiden contribution from AMC and higher sales from the Offshore Support Services and Marine Services DivisionsResults incorporate costs from the integration of AMCOverall orderbook expected to remain robust, underpinned by surging demand in subsea secto Outlook: The Group is cautiously optimistic that the outlook of the oil and gas industries will be positive in the next 12 months, barring any unforeseen circumstance that may arise to destabilise the current financial market and global economy. Deep water development and production is expected to drive the industry for the next few years.The Group remains committed to its strategy of operating a fleet of young and technological advanced vessels, which are capable of operating in the deep water segment to suppo...

Revenue: -20.4% (3Q11), -13.8% (9M11)Net Profit: -30.2% (3Q11), -30.8% (9M11)Outlook: The near-term outlook of the Singapore economy remains positive barring escalation of downside risks in the macro environment.The Group’s print advertisement revenue is expected to move in tandem with the performance of the Singapore domestic economy.Newsprint prices are expected to continue on an upward trend due to cost pressures and a tighter regional market.Cognizant of the inflationary environment, the Group is committed to containing costs to mitigate the challenging conditions.The Clementi Mall officially opened in May and is now 100 per cent leased.Positioned as a contemporary suburban mall, it is poised to enjoy good catchment from the surrounding residential areas and tertiary institutions. Paragon remains fully leased and both malls are expected to contribute a steady stream of rental inco...