• China XLX Fertiliser (CXLX) released its FY08 results today. Revenue grew by 35.3% to Rmb2,084.9m yoy however gross margins fell from 27.0% in FY07 to 23.4% in FY08 mainly due to lower margins from urea and methanol sales. Net profit increased by 9.2% to Rmb346.4m in FY08 led by higher average selling prices products such as urea, methanol and compound fertilizer. The company intends to propose a first and final exempt dividend of 1.6 Scts for the financial year ended 31-Dec 2008.
• Share price fell 0.5cts or 1.3% this morning to S$0.37.
• Maintain Outperform with a target price of S$0.47.
Venture Corp (VMS SP, S$4.51)
• Share price surged 9.5% or 39cts to S$4.51 despite a 94% fall in Venture’s quarterly net profit which was mainly attributed to mark-to-market losses. Many brokerages also posted Buy calls for the stock, spurring buying interest. In addition, Venture plans to maintain its dividend of 50cts a share. Due to the volatile nature of the market, we advise investors who are in for the punt to take profit this afternoon.
• Maintain Outperform with a target price of S$6.00.
Singapore Airport Terminal Services (SATS SP, S$1.12)
• SATS announced that it is going to make a mandatory cash offer, to acquire all the issued ordinary shares in the capital of Singapore Food Industries Limited (SFI) other than those already owned, controlled or agreed to be acquired by SATS.
• So far, SATS has reported an 84% acceptance rate.
• Given a rapidly deteriorating aviation industry with airlines continuing to cut capacity, we do not see near-term catalysts for the stock. Exposure to a weakening UK economy through SFI also poses downside risks.
• Maintain Underperform with a target price of S$1.25.
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