ANALYSTS SAY: Buy, Sell, Hold (16 Mar 2017)

Centurion Corporation

Limited Lease Extension For Westlite Tuas

SINGAPORE | REAL ESTATE | UPDATE

What is in the news?

Centurion Corporation Limited has been offered by the Ministry of National Development to extend the lease of Westlite Tuas for 9 months from 29 April 2017, being the expiration date of the existing lease. How do we view this? The 9 months short term extension will expire on 29 January 2018 with no certainty of a renewal. We estimate the Westlite Tuas generates a quarterly gross revenue of c.SGD6mn per quarter so we have revised our FY17F revenue from SGD113mn to SGD131mn to reflect the additional three quarters of contribution by Westlite Tuas.

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Del Monte Pacific

3QFY17: DMFI continues to disappoint

■ 9MFY17 reported net profit was below expectations at 59% of our FY4/17 forecast due to sales decline in the US and higher-than-expected interest expense.

■ Gross margin contracted to 14.7% in 3QFY17 due to lower pricing in non-retail channels. DMFI incurred net loss of US$14.6m in 3QFY17 (3Q16: US$17.3m profit).

■ However, DMPL continued to gain strength with 3QFY17 net profit of US$21.2m, an 81% yoy gain.

■ Preference share issuance has been postponed again. We estimate the earliest that the issuance will take place is 2QCY17.

■ Maintain Hold with lower target price of S$0.35

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