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MayBank KE Reports Sept 2013

 
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PostPosted: Tue Sep 03, 2013 10:21 am    Post subject: MayBank KE Reports Sept 2013 Reply with quote

China Minzhong: Don’t Mess With Bapak; Under Review
MINZ SP | Mkt Cap USD579.2m | ADTV USD2.4m

Ø Indofood (which nows 44.1% of Minzhong) launched a MGO for the remaining shares of Minzhong on 2 Sep 2013 following Minzhong’s rebuttal on 1 Sep 2013. This effectively supersedes fraud concerns although they still exist and will provide a floor to the stock.
Ø Given the still huge uncertainties, accepting the offer would be the easiest thing to do. As analysts however, we want to stay in the game. This will not be our last report as we will continue to dig into Glaucus’ accusations, Minzhong’s rebuttal, Glaucus’s rebuttal to Minzhong’s rebuttal and more rebuttals and rebuttals to the rebuttals to come.
Ø Officially, our rating is kept at UNDER REVIEW. For investors with a low risk threshold, take the offer and cash out and switch to Sino Grandness, but for investors with a higher risk appetite, we would like to remind them that Indofood’s offer price could look cheap after all uncertainties are removed.

Click here for full report weibin@maybank-ke.com.sg
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PostPosted: Fri Sep 06, 2013 10:36 am    Post subject: Reply with quote

CapitaMalls Asia: Staying The Course; Maintain Buy, TP $2.51
CMA SP | Mkt Cap USD5.5b | ADTV USD11.0m
Ø Reiterate BUY and SGD2.51 TP. CMA has fallen by 11.8% since Bernanke’s Congressional testimony on 22 May and we see this as an excellent buying opportunity. CMA continues to be our top-pick in the Singapore property sector.
Ø The two malls opening in Singapore in 4Q13, Bedok Mall and Westgate, are substantially pre-committed, with a number of new-to-market brands. By our estimates, these two malls will contribute ~SGD20m of NPI per annum on a stabilized basis.
Ø We remain sanguine on CMA’s prospects in China. Besides another 10 malls and two extensions in the construction pipeline, growth will also be aided by healthy rental reversions.
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PostPosted: Mon Sep 09, 2013 9:47 am    Post subject: Reply with quote

Yongnam Holdings: Healthy 17-year Work Pipeline, Maintain Buy, $0.295 - TP $0.40
YNH SP | Mkt Cap USD292.3m | ADTV USD3.3m

We believe Yongnam has hit the bottom of the cycle and is geared up and ready to replenish its orderbook. Yongnam is tendering for SGD670m of potential projects which would commence in 2H13. Reiterate BUY with a TP of SGD0.40.
Sixteen Thomson Line civil contracts have been placed out, with three already awarded to the main contractors. We expect subcontracts will be given out in late 2013 or early 2014.
We peg Yongnam to its closest peer, Malaysia-listed Eversendai at 11x forward PER. We keep our TP unchanged at SGD0.40, pegged at 11x FY13F-15F earnings.
Click here for full report alisonfok@maybank-ke.com.sg
The REIT Deal: for the week of 2 Sep 2013 - 6 Sep 2013 | UNDERWEIGHT


Awaiting the FOMC meeting on 17-18 Sep, the regional REIT market was once again directionless, with S-REITs flattish, HK-REITs down 1.7% WoW, while M-REITs is up 0.4% WoW.
Noticeably, the US risk-free rate hits 3.0% on 5 Sep, a two-year high since Jul 2011. All eyes were on the US employment report on Fri, with no further signal from the Fed on the timeline for QE tapering.
Weekly trading was especially weak in Singapore because of the lack of catalysts, with ADTV at US$61m (vis-a-vis US$74m prev). Regionally, we are still 12%-20% below water since Bernanke''s Congressional Testimony on 22 May and negative 17%-23% from 52-wk highs.
Click here for full report ongkianlin@maybank-ke.com.sg
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PostPosted: Tue Sep 10, 2013 8:58 am    Post subject: Reply with quote

Midas Holdings: The Catalyst Worth Waiting For Is Here; Buy, $0.475 - TP $0.75
MIDAS SP | Mkt Cap USD455m | ADTV USD3.2m

Last weekend, China Railway Corp (CRC) announced the result of its first high-speed train tender in past two years. A total of 159 train sets order have been split between CSR (108 train sets) and CNR (51 train sets).We believe this is just the beginning of a new train purchase cycle by Chinese government. Remain positive on Midas. Maintain BUY with TP SGD0.75.
We expect Midas to win around RMB250-300m supply contracts in high-speed train space this year. But it is very small compared to what we are likely to see in FY14/15. We expect Midas’ order book to reach RMB1.5b in FY15 onwards.
Historically Midas’ P/B closely followed its order book, which makes us believe that currently undemanding P/B multiples deserve a re-rating if order book could be substantially boosted to RMB1b or above.
Click here for full report weibin@maybank-ke.com.sg
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PostPosted: Wed Sep 11, 2013 9:20 am    Post subject: Reply with quote

Cordlife Group: Racing Ahead; Maintain Buy, $1.305 - TP $1.44
CLGL SP | Mkt Cap USD235m | ADTV USD1.4m

Cordlife’s acquisition of 19.9% of Stemlife for RM30m, the largest listed cord blood bank in Malaysia, brings a lot of long-term advantages. Margin enhancement, two new underpenetrated markets, tons of cash and undervalued property assets and a low cost platform to fight off price-oriented competitors in Singapore.
However, convertible bonds issued by associate China Cord Blood could introduce some short term volatility in earnings under the relevant IAS and IFRS accounting and disclosure standards, although core profits will still be intact. We urge investors to look beyond this issue.
We continue to like Cordlife in the long term as it continue to pursue strategically-sound expansion plans. Our TP of SGD1.44 (down slightly on dilution from acquisition) implies 25x FY14F, which is one point above its global peers and 16% discount to its local peers.
Click here for full report johncheong@maybank-ke.com.sg
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PostPosted: Thu Sep 12, 2013 10:54 am    Post subject: Reply with quote

ComfortDelGro: More Opportunities To Grow Down Under; Buy, $1.87 - TP $2.33
CD SP | Mkt Cap USD3.1b | ADTV USD8.3m
Maintain BUY and SGD2.33 TP pegged at 18x FY14F PER. Following the recent market correction, valuations are now below historical average multiples of 16x PER. With acquisition-led growth driving firm earnings over the coming quarters, we expect the stock’s valuation to trade higher.

New South Wales (NSW) Minister for Transport recently announced the award of new metropolitan bus service contracts. ComfortDelGro’s Australia bus unit CDCBus again won the contract to operate Region 4. This effectively removes investors’ earlier fears that CDG could lose the service contract to this route.

With the majority of the bus transport services still managed by the state, we believe there is significant scope for privatisation of bus routes in the future. This would represent a major revenue opportunity for private operators such as CDCBus. The NSW government has also stressed the importance of Sydney’s bus network to its public transport infrastructure and aims to increase bus services to satisfy the growing demand for bus travel. Hence, with expansion of the bus service market, we see room for CDG to increase its presence in the region.

Click here for full report derrickheng@maybank-ke.com.sg
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PostPosted: Fri Sep 13, 2013 9:15 am    Post subject: Reply with quote

Singapore Aviation Services- US Marketing Feedback; Overweight
On a recent marketing trip to the US, we shared with clients our views on the Aviation Services sector. They were generally receptive to our argument for a positive long-term trend. Some expressed concerns over valuation levels after the strong run-up in prices over the past year but most believed that the recent market correction has provided better entry points.

Overall, they were most excited about the recently announced plans to double Changi Airport’s capacity by the mid-2020s and believed that it is a good indicator of demand trends for the sector. Clients also highlighted the conservative balance sheets of the sector as a key feature of its defensiveness.

We remain Overweight on the aviation services sector and believe that SIAEC, SATS and STE will be winners of the positive long-term trend. The sector provides 19-34% upside to our valuation targets and offers dividend yield of 4.5-5.2% in the year ahead.

Click here for full report derrickheng@maybank-ke.com.sg
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PostPosted: Mon Sep 16, 2013 9:37 am    Post subject: Reply with quote

HanKore Environment - Cheaper Exposure to China Water Sector
BIOT SP | Mkt Cap USD209m | ADTV USD3.7m
Ø We recently met with Hankore's management and visited one of its water plants in Suzhou. We are impressed by the restructuring and progress that occurred in the past few years and think there are some improvements in company's fundamental.
Ø We identified three main growth drivers for the company: EPC revenue, capacity expansion and water tariff hike.
Ø Despite the risk such as interest rate risk, liquidity risk and credit risk, valuation seems attractive compared to peers at only 8.2x 12m trailing PER.
Click here for full report weibin@maybank-ke.com.sg
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PostPosted: Wed Sep 18, 2013 10:32 am    Post subject: Reply with quote

Sarin Technologies: HK NDR Feedback; Buy TP $1.89
SARIN SP | Mkt Cap USD411.7m | ADTV USD0.3m
Ø We hosted Sarin for a NDR in Hong Kong. Discussions were centred on addressable market size, competition, phase of adoption and IP protection. Maintain Buy, TP SGD1.89.
Ø We remind that that key investment case for Sarin is its ability to bring about a radical change in the practices of the diamond industry. We believe that it is still at an early growth stage.
Ø Recent volatility of Indian Rupee and credit tightness in India would depress 3Q13 results as Indian manufacturers may hold back on capital spending. However, this should not be a dampener on the long term potential. Share price pullback on weak 3Q13 would be a buying opportunity.
Click here for full report yeakcheekeong@maybank-ke.com.sg

Economics

Singapore Non-Oil Domestic Exports (NODX), August 2013
Weaker NODX, but Sustained Re-exports Growth
Ø NODX in August 2013 as it fell by -6.2% YoY (revised July 2013: -1.9% YoY; Maybank-KE: +1.9% YoY; consensus: +2.4% YoY) on account of lower shipments of bxoth electronics (Aug 2013: -9.2% YoY; Jul 2013: -11.1% YoY) and non-electronic (Aug 2013: -4.7% YoY; Jul 2013: +2.8% YoY) products.
Ø From the previous month, NODX fell for the first time in two months by -7.6% MoM (July 2013: +4.4% MoM). NODX in the first eight months of 2013 dropped by -7.7% YoY compared to +2.8% YoY increase reported over the corresponding period last year.
Ø Domestic manufacturing purchasing managers index (PMI) continues to paint a positive picture…for non-oil re-export (NORX). Singapore’s manufacturing PMI for new exports orders in Aug 2013 picked up to 53.4 (July 2013: 52.Cool with its sub-index of new exports order for electronics jumping to 54.0 (July 2013: 51.3). espite the fall in NODX, Singapore’s non-oil re-export (NORX) expanded for the fifth successive month at +14.4% YoY in Aug 2013 (July 2013: +8.1% YoY).
Click here for full report suhaimi_ilias@maybank-ib.com
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PostPosted: Wed Sep 18, 2013 10:39 am    Post subject: Reply with quote

Hi Guys and Gals,

With effect from 1 Oct 13, I will cease posting Stock market news and reports in this forum. All postings will be in www.redbeanforumsg.blogspot.sg.

Cheers.

Redbean
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PostPosted: Thu Sep 19, 2013 9:52 am    Post subject: Reply with quote

Asean F&B: Make Hay While the Sun Shines; Overweight
-Japan''s Suntory last week announced a deal to buy Lucozade and Ribena in a USD2.1b deal. We believe there are more of such deals to come, with the next target likely an ASEAN-centric brand. To add spice to the competition, rival brewers may also be on the prowl.
-We believe that complementary soft drink brands and instant coffee may represent some areas of interest. Heightened M&A activities will drive overall sector valuations higher.
-We think companies such as Del Monte Pacific, Yeo Hiap Seng, Super Group and Old Town are attractive targets.
Click here for full report jameskoh@maybank-ke.com.sg
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PostPosted: Tue Sep 24, 2013 9:44 am    Post subject: Reply with quote

Land Transport: Imminent Changes To Bus Operating Model | Neutral
Ø With stagnating bus fares and rising cost from inflationary pressure, the two existing operators have been running loss-making operations for years. Under a business model that is financially unviable, we believe that SMRT and SBS Transit, a subsidiary of ComfortDelGro, would be reluctant to renew their bus licences when they are due in 2016. Hence, a change to the bus model is imminent, in our view, in favour of a tender system to award packages of service contracts. We believe that the Land Transport Authority (LTA) is currently evaluating the merits of a tender system, as evident from the tender system used to award service contracts since the start of the year.
Ø In the near term, switching to a tender system will be positive for the Public Transport Operators (PTOs) as losses at their bus units will reverse. While competition from new entrants would pose a threat, we believe that the existing operators still have an edge over new entrants with their scale of operations. Even if the operators do concede market share, their profitability under a tender system would still be an improvement over their current loss-making operations.
Ø While switching to a tender system is positive for both PTOs, we maintain our preference for CDG over SMRT. We believe that our forecasts for significantly higher gearing at SMRT over the next few years will be reflected in lower stock valuations. Furthermore, PER valuations for CDG are relatively more attractive under various bus margin scenarios on a tender system. Reiterate BUY CDG, SELL SMRT.

Click here for full report derrickheng@maybank-ke.com.sg
Economics…
Singapore CPI, August 2013: Up Monthly, Moderate For The Year…
Ø Inflation rate picked up for the fourth successive month in Aug 2013 to +2.0% YoY (July 2013: +1.9% YoY) led by the “Housing” and “Food” components. Core inflation rate (CPI ex-accommodation and private road transport) also picked up to +1.8% YoY (July 2013: +1.6% YoY).
Ø From the previous month, inflation jumped by +0.8% MoM (July 2013: +0.3% MoM), the biggest sequential gain in six months.
Ø Year-to-date inflation rate averaged +2.6% YoY (Jan-Aug 2012:+ 4.8% YoY), but has been sliding from the high of 4.2% in Jan-Feb 2013. No change to our full-year estimate of +2.5% (2012: +4.6%), while the official forecast stays at 2%-3%.

Click here for full report suhaimi_ilias@maybank-ib.com
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PostPosted: Thu Sep 26, 2013 9:00 am    Post subject: Reply with quote

Singapore Daily

Super Group: Chinese Caffeine Fix; Maintain Buy TP $6.00
SUPER SP | Mkt Cap USD1.9b | ADTV USD1.5m

� Reiterate BUY and Street-high TP of SGD6. Super recently launched its coffee products in China, where it used to just sell instant cereals. China is a big potential market, with instant coffee expected to grow at 12% CAGR over the next five years, driven mainly by a younger audience influenced by the Starbucks Culture.
� A major marketing thrust is the introduction of a new instant cup format that will be sold mainly through convenience stores. As an early-mover, Super has the chance to generate significant brand equity from this.
� We believe this market has the potential to become a significant contributor in the next 2-3 years. We keep our DCF-based TP of SGD6.00 unchanged, implying 28.3x FY14F PER.

Click here for full report jameskoh@maybank-ke.com.sg
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PostPosted: Mon Sep 30, 2013 10:50 am    Post subject: Reply with quote

This will be the last report posted here. From tomorrow all reports will be posted www.redbeanforumsg.blogspot.sg.

Courts Asia: NDR Feedback; Maintain BUY, $0.755 - TP $1.06
COURTS SP | Mkt Cap USD336.6m | ADTV USD0.6m

Ø Maintain BUY at SGD1.06 TP (reduced from SGD1.15 on the lower FY14F forecast) pegged to 14x earnings.
Ø We hosted a NDR with Courts to confirm our views on the retail scene in Singapore and Malaysia. We believe the share price has already priced in overall weakness in demand. Barring a longer-than-expected closing of the JEM store, the trough should be seen in 2QFY14 (3QCY13).
Ø Going forward, things should improve on (1) a loosening in credit policy to improve sales, particularly in Malaysia, (2) a short-term boost in sales from iPhone 5S and (3) the maiden store opening by FY3/15 in Bekasi, Indonesia, to boost sales.
Click here for full report alisonfok@maybank-ke.com.sg
Rickmers Maritime: NDR Feedback; Not Rated
RMT SP | Mkt Cap USD192.2m | ADTV USD0.1m

Ø We hosted Mr. Thomas Preben Hansen and Mr. Gerard Low from Rickmers Trust Management, Trustee-Manager of Rickmers Maritime (RMT) on a one day road show, where they introduced their Trust and shared valuable insights on latest industry trends.
Ø While RMT’s gearing ratio had improved significantly following a recently completed Rights Issue, a recovery in charter rates over 2014/5 remains critical as a significant number of vessel charters will expire over that period of time. If forecasts by Maersk Broker for a significant recovery in charter rates materialize, we expect RMT to be a beneficiary.
Ø RMT is a leveraged play to a cyclical recovery in the container shipping sector, in our view. The stock offers an attractive yield of c.10%, assuming its DPU of USD0.024 a year is maintained. We do not have a rating on RMT.
Click here for full report derrickheng@maybank-ke.com.sg
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