Forum Index
this forum welcomes all forumers who appreciate decent and well thought out views and discussions. all forumers are encouraged to accept that different forumers have different views and often there is no absolutely right or wrong views.
Menu
 Forum IndexHome
FAQFAQ
MemberlistMemberlist
UsergroupsUsergroups
RegisterRegister
ProfileProfile
Log in to check your private messagesMessages
Log inLogin/Out

Quick Search

Advanced Search

Links
mysingaporenews
Singapore River Tour
Singapore Education
Singapore Orchids
littlespeck
ypapforum
Singapore Hosting
Sample Link 2
Sample Link 2

Who's Online
[ Administrator ]
[ Moderator ]


Google Search
Google

http://www.phpbb.com
OCBC Reports March 2013
Goto page 1, 2  Next
 
Post new topic   Reply to topic     Forum Index -> House Reports and Recommendations
View previous topic :: View next topic  
Author Message
admin
Site Admin


Joined: 01 Jan 1970
Posts: 1350

PostPosted: Fri Mar 01, 2013 9:35 am    Post subject: OCBC Reports March 2013 Reply with quote

KEY IDEA

Midas Holdings: Patience is a virtue
Midas Holdings’ (Midas) FY12 PATMI of CNY27.9m represented an 85.1% decline, but still strongly exceeded our CNY6.8m estimate, thanks to a one-off boost from its associated company NPRT. Its operating profit of CNY123.5m was actually 10.1% below our forecast. A final DPS of 0.25 S cent was declared, which was half of the preceding year, but in line with our forecast. Looking ahead, there is growing optimism that the resumption of high-speed railway contract tenders by China’s Ministry of Railways could happen soon. However, as there is still uncertainty over the timeline of these tenders and the subsequent delivery schedules, we adopt a more prudent approach and lower our FY13 PATMI forecast to CNY85.4m. Nevertheless, we maintain our BUY rating on Midas as we expect its share price to re-rate on order wins, despite near-term headwinds on its financial performance. Our fair value estimate is lowered marginally from S$0.60 to S$0.595. (Wong Teck Ching Andy)

MORE REPORTS

Venture Corp: PATMI beats, but DPS cut
Venture Corp (VMS) reported 4Q12 PATMI ofS$38.0m, which was flat YoY but above our forecast by 8.7%. This was aided by better-than-expected gross margin and share of profit of associates, but partially offset by higher-than-estimated tax expense. Surprisingly, VMS lowered its DPS from S$0.55 in FY11 to S$0.50 in FY12. However, this still represents a decent yield of 5.9%. As VMS ended the Dec-quarter with a healthy net cash of S$286.0m, we believe this move possibly reflects the higher capex and expansion plans of the group in order to capture future growth opportunities. Hence, looking at the broader scheme of things, we believe that it is still a sound strategic move by VMS to sacrifice some dividends in the near term in exchange for longer-term growth. But we trim our FY13 PATMI forecast slightly by 1.6% given the still uncertain near-term outlook. Despite our reduced fair value estimate of S$9.08, we maintain our BUY rating. (Wong Teck Ching Andy)

Noble Group Ltd: Still HOLD for now
Noble Group (Noble) reported FY12 revenue of US$94,045.1m, +16%, or around 2% above our estimate, Reported net profit rose 9% to US$471.3m, but we note that this was boosted by a tax credit of US$29.1m (versus tax debit of US$63.6m in FY11). Applying 12% tax rate, we estimate that its earnings would have come in around US$383m, some 8% below our forecast. Noble declared a final dividend of US$0.0181/share, versus US$0.0165 in FY11. While FY12 earnings were below our forecast, we believe that the worst may be over (or at least should not deteriorate much more from here). As such, we raise our FY13 estimates for revenue by 1.8% and earnings by 6.4%. Based on our conservative 10.5x FY13F EPS peg, our fair value inches up from S$1.12 to S$1.19. Maintain HOLD. (Carey Wong)

UOL Group: Strategic shift towards investment properties
UOL reported FY12 PATMI of S$808m, up 19% YoY mainly due to higher fair value gains on investment properties (bulk of which are from Novena Sq and United Sq). Excluding one-time gains, we estimate core PATMI at S$334m; just 7% below our FY12 forecast of S$360m and is judged to be mostly in line with expectations. Full year topline came in at S$1146m, decreasing 42% YoY mostly due to weaker contributions from the property development segment. A final dividend of 15 S-cents per share is proposed. We see mid-term catalysts to be upcoming launches at Bright Hill and St. Patrick’s. Given management’s prudent stance on the residential market, the counter is likely to perform defensively should the residential outlook worsen from this juncture. Maintain HOLDwith an unchanged fair value estimate of S$6.01 (20% RNAV disc.). (Eli Lee)

City Developments Limited: A solid year of sales
4Q12 PATMI rose 53% YoY to S$249m, mostly due to stronger progressive recognition from property development projects. Full-year PATMI cumulates to S$678m (down 15% YoY) or an EPS of 73.2 S-cents. Excluding one-time gains, we estimate core FY12 PATMI at S$557m - mostly in-line with our FY12 forecast of S$564m. Management proposed a total dividend of 13 S-cents per share. Looking ahead to 1H13, we expect CDL to launch a 912-unit condo in Pasir Ris, another one along Bartley Rd (868 units) and one at Buangkok Drive (616 units). While the group continues to execute well on its residential strategy, we continue to expect nearer term headwinds as latest property curbs affect demand fundamentals meaningfully. Maintain HOLD with a lower fair value estimate of S$12.04 (15% RNAV disc.), versus S$13.01 previously, as we update our model for softer ASP assumptions and valuations of listed holdings. (Eli Lee)

Golden Agri-Resources Ltd: Disappointing FY12 showing
Golden Agri-Resources (GAR) reported a disappointing set of FY12 results. Although revenue was up 2% at US$6051.75m, or 7% above our forecast, reported net profit saw a 67.7% tumble to US$409.6m; excluding biological fair value gains, core earnings would still have fallen 29% to US$404.3m, or 14% below our estimate. Meanwhile, inventory continues to rise in 4Q12 to some 520k tons; but GAR is upbeat that it can reduce the surplus by end 1H13, citing a growing demand for bio-fuel as current CPO prices (<US$900/ton) already make it viable as an alternative for crude oil. Management also remains relatively upbeat about its prospects, as it still sees robust demand growth for CPO as an edible oil from emerging and development countries. We are lowering our FY13 core earnings forecast by 18% as we lower our margin assumptions; but with no change to our revenue. Still based on 12.5x FY13F EPS, our fair value slips from S$0.65 to S$0.63. We maintain our HOLD rating and would be buyers closer to S$0.55. (Carey Wong)

Ezion Holdings: Undertakes placement to raise S$93.5m
Following its announcement that it has secured a letter of intent for a contract worth up to US$45.3m to provide a liftboat over a two-year period, Ezion also said that it will be undertaking a placement of 50m new shares at an issue price of S$1.895/share with DBS Bank. This will raise net proceeds of about S$93.5m for the acquisition and financing of the liftboat; the total project cost of Phase 1 and 2 of the liftboat is about US$140m. We expect a 5.5% dilution on FY13 EPS, but there would be additional earnings contribution from FY14 onwards. We maintain our BUY rating but put our fair value estimate of S$2.33 under review. (Low Pei Han)

Sembcorp Marine: Secures jack-up order worth US$208m
Sembcorp Marine (SMM) has secured a repeat order to build a second Pacific Class 400 jack-up rig worth US$208m from a wholly-owned subsidiary of Perisai Petroleum Teknologi
Bhd. Scheduled for delivery in 2Q15, this unit will be built based on PPL Shipyard’s proprietary Pacific Class 400 design with similar specification to the first jack-up unit, secured at the same price in May 2012. SMM has secured orders worth S$1.1b YTD, accounting for 27% of our full year order win estimate. Maintain BUY with S$5.84 fair value estimate. (Low Pei Han)
For more information on the above, visit www.ocbcresearch.comfor the detailed report.
Back to top
View user's profile Send private message Send e-mail
admin
Site Admin


Joined: 01 Jan 1970
Posts: 1350

PostPosted: Mon Mar 04, 2013 9:08 am    Post subject: Reply with quote

KEY IDEA

Consumer sector: Outperform STI in 2013?

Summary: Companies included in the FTSE Straits Times Consumer Services Index showed continued improvement in the 4QCY12 earnings season with both top and bottom-line figures exceeding consensus estimates. Revenue was stronger than expected (+10.3% over forecasts) while a combination of cost-control initiatives and favourable input prices during the period saw average earnings per share beat consensus projections by 16.6%. In our view, this mirrors the growth in contribution from overseas markets – particularly EM-Asia – as domestic retail sales figures were tepid during the same period. In the coming months, we continue to favour counters with greater EM-Asia exposure but urge investor caution as the recent upward re-rating of the sector has led to some counters being priced ahead of fundamentals. As such, we also maintain our preference for counters with defensive qualities like Sheng Siong [BUY; FV: S$0.69]. Maintain NEUTRAL on the overall consumer sector. (Lim Siyi)

MORE REPORTS

Rotary Engineering Ltd: JV deficit remains unresolved

Summary: Rotary Engineering Limited (Rotary) reported a second consecutive quarter of losses with 4Q12 net losses to shareholders of S$18.4m (3Q12: S$66m). Last quarter was marked by additional provisions made for its SATORP project and lower volume of work due to the late start of Fujairah Oil Terminal (FOT) project. FY12 revenue was down 16% to S$444m, while loss attributable to shareholders was S$80m, compared to profit of S$31m in the previous year. While the SATORP execution issues may be largely behind, the deficit at its JV remains unresolved. In a worst case scenario, Rotary – being the controlling shareholder – may need to take an impairment loss. Another concern is the tight labour market in Singapore, which represents about 50% of Rotary’s order-book. Maintain SELL with an unchanged S$0.34 fair value estimate. (Chia Jiunyang)
For more information on the above, visit www.ocbcresearch.comfor the detailed report.
Back to top
View user's profile Send private message Send e-mail
admin
Site Admin


Joined: 01 Jan 1970
Posts: 1350

PostPosted: Tue Mar 05, 2013 9:14 am    Post subject: Reply with quote

KEY IDEA

Hospitality Sector: Potential oversupply situation

Summary: Despite visitor arrivals climbing 9% in 2012, the total gross lettings for Singapore hotels was stagnant at 10.7m room nights. It is likely that the average length of stay has declined further from the 3.7 days in 2011, e.g. down to 3.45 days, and larger proportions of tourists may be staying in non-hotel accommodations. We understand from talking to industry players that 1Q13 operational figures for Singapore hotels are likely to be lackluster. For 2013-2015, we forecast hotel room demand growth of 5.4% p.a., lower than the projected 5.8% p.a. increase in room supply. We remain NEUTRAL on the hospitality sector. Our top pick is Global Premium Hotels [BUY, FV: S$0.33], which we believe is a longer-term asset value play. GPH is currently trading 32% below its NAV of S$0.39. (Sarah Ong)

MORE REPORTS

Starhill Global REIT: Poised for growth

Summary: We are positive on Starhill Global REIT’s (SGREIT) performance going forward. SGREIT announced that the acquisition of Plaza Arcade in Perth, Australia has been completed last Friday. At an NPI yield of 7.8%, we expect the transaction to be DPU accretive, adding 0.08 S cent to SGREIT’s DPU on an annualised basis. Apart from the maiden contribution by Plaza Arcade, SGREIT is also likely to get a boost in its 1Q13 DPU, due to the distribution of ~S$3.8m accumulated net rental arrears expected to be received from Toshin during the quarter. Further upside in rent is possible when next lease renewal exercise comes in Jun, given that Orchard Road rental and occupancy rates have been holding up well. In addition, SGREIT may possibly benefit from interest savings following the refinancing of its term loan maturing in Sep. We maintain BUY with an unchanged fair value of S$0.98 on SGREIT. (Kevin Tan)
For more information on the above, visit www.ocbcresearch.comfor the detailed report.
Back to top
View user's profile Send private message Send e-mail
admin
Site Admin


Joined: 01 Jan 1970
Posts: 1350

PostPosted: Wed Mar 06, 2013 8:55 am    Post subject: Reply with quote

KEY IDEA

Oil and Gas sector: Valuations still not stretched
Similar to 3Q12, companies in the sector presented investors with 4Q12 earnings that were mostly in line, save for a few such as Ezra Holdings (below) and STX OSV (below). Stocks in the oil and gas sector have performed well YTD, especially the small to mid cap firms. However, we note that many are still trading at or slightly above mid-cycle valuations, suggesting that multiples are not overly stretched as long as the economic recovery remains intact. Recovering earnings, sustainable earnings growth and continued contract wins for a select few are expected to be the main drivers ahead. Though we have an OVERWEIGHT rating on the oil and gas sector, investors are advised to be selective. We favour companies with earnings growth or sustainability backed by a strong order book and a positive outlook for their industry sub-segment. As such, our preferred picks are Ezion Holdings [BUY, FV: S$2.33], ASL Marine [BUY, FV: S$0.86], Keppel Corporation [BUY, FV: S$12.68] and Sembcorp Marine [BUY, FV: S$5.84]. (Low Pei Han)
MORE REPORTS

Tiger Airways: Positioning for growth
Tiger Airways (TGR) announced yesterday that it plans to raise S$297m through a renounceable one-for-five rights issue and a non-renounceable one-for-four preferential offering of perpetual convertible securities. Although this is nearly twice the amount raised in 2011, it is necessary for the group to maintain its operational push towards its goals and was not unexpected by the street. Looking beyond the short-term jitters in terms of its share price, we wish to highlight that TGR is still on track to close out the year on a positive note, and this revitalisation of its balance sheet will give it the flexibility it needs to nurture its existing ventures. With the weak macro-environment continuing to favour budget airlines such as TGR, we leave our forecasts unchanged. Reiterate BUY at an unchanged fair value estimate of S$0.86. (Lim Siyi)
For more information on the above, visit www.ocbcresearch.comfor the detailed report.
Back to top
View user's profile Send private message Send e-mail
admin
Site Admin


Joined: 01 Jan 1970
Posts: 1350

PostPosted: Thu Mar 07, 2013 8:52 am    Post subject: Reply with quote

KEY IDEA

Noble Group: Focus on asset recycling, cost savings
We recently attended Noble Group’s (Noble) post-results analyst briefing and one of the key takeaways was management’s focus on maintaining an “asset light” strategy with opportunistic capital recycling. Another key takeaway was the focus on cost savings, including interest savings. While it is good that Noble has taken steps to improve its operations, we note that the macro picture continues to be quite challenging in the medium term, especially for its Agricultural business. As such, we maintain our HOLD rating on the stock with an unchanged S$1.19 fair value. (Carey Wong)

MORE REPORTS

TEE International: Property spin-off looks on track
TEE International announced recently (22 Feb) that it would inject S$16m worth of its property assets into wholly owned subsidiary TEE Land, as part of its plans to spin off its real estate business and list it separately on SGX by May. Certain pre-IPO investors have also agreed to invest S$4m in TEE Land when the restructuring is complete. Although TEE’s share price has declined in recent days, we expect its share price to remain supported in the near term by expectations of a special dividend if its plan succeeds. Still, we prefer to remain cautious on TEE until we see stronger contributions from its real estate business, after its weak 2QFY13 results. We maintain our fair value estimate of S$0.30 and HOLD rating for TEE. (Conrad Tan)
For more information on the above, visit www.ocbcresearch.comfor the detailed report.
Back to top
View user's profile Send private message Send e-mail
admin
Site Admin


Joined: 01 Jan 1970
Posts: 1350

PostPosted: Fri Mar 08, 2013 10:54 am    Post subject: Reply with quote

KEY IDEA

Frasers Commercial Trust: DPU gets another thrust
Frasers Commercial Trust (FCOT) announced that it has successfully exercised the right of redemption for 157.1m Series A Convertible Perpetual Preferred Units (CPPUs). While this move is not expected, we expect it to result in an improvement in FCOT’s DPU. Furthermore, this would remove any uncertainty pertaining to a possible dilution in unit base from a conversion of the CPPUs. The only trade-off, in our view, would be a higher aggregate leverage, which we believe would rise from 29.2% as at 31 Dec 2012 to ~40% assuming the CPPU redemption is fully funded by debt. We now project a full CPPU redemption in our model, as it may no longer be economical for FCOT to retain the remaining CPPUs. This raises our fair value from S$1.48 to S$1.52. Maintain BUY. (Kevin Tan)


MORE REPORTS

Technology Sector: Likely a backend loaded 2013
Under our tech sector coverage, only Venture Corp (VMS) managed to report earnings which exceeded our expectations for the recently concluded 4QCY12 results season. Karin Tech’s core PATMI was in line, while that of ECS Holdings and Valuetronics Holdings missed. Two common trends we noted are apparent cost pressures present in the sector and a cut in dividends by some companies due to reduced profit levels and/or expansion plans in the pipeline. While near-term outlook remains muted, there are expectations that 2H13 would be brighter than 1H13, in line with an expected uptick in the global economy and contributions from new programmes. However, we maintain our NEUTRAL view on the tech sector, given the continued backdrop of political and economic uncertainties. VMS [BUY; FV: S$9.08] remains our top pick within this space. (Wong Teck Ching Andy)
For more information on the above, visit www.ocbcresearch.comfor the detailed report.
Back to top
View user's profile Send private message Send e-mail
admin
Site Admin


Joined: 01 Jan 1970
Posts: 1350

PostPosted: Mon Mar 11, 2013 10:12 am    Post subject: Reply with quote

KEY IDEA

Healthcare Sector: 4QCY12 results roundup

Summary: The healthcare companies under our coverage reported a contrasting set of results during the recently concluded 4QCY12 results season. While Raffles Medical Group (RMG) delivered double-digit YoY revenue and core PATMI growth which were in line with our expectations, Biosensors International Group’s (BIG) results missed ours and the street’s estimates. However, this was due to weak licensing revenue from Japan. Its core drug-eluting stent (DES) business continued to perform well. Other healthcare companies, notably IHH and Q&M Dental, have also largely delivered growth in 4QCY12. We maintain our OVERWEIGHTrating on the healthcare sector as we are still positive on the growth trajectory of the industry. BIG [BUY; FV: S$1.63] remains our preferred pick within the sector. Despite its recent share price decline, which we attribute partly to market jittery over the uncertainty of its acquisition timeline, we are optimistic that management would be able to finalise earnings accretive acquisition(s) in the near future. (Wong Teck Ching Andy)


MORE REPORTS

Ascendas REIT: First acquisition in three quarters

Summary: Ascendas REIT (A-REIT) has raised gross proceeds of ~S$406.4m through a private placement. Management intends to use the bulk of the gross proceeds to fund the potential acquisition of a property within Singapore Science Park II and an integrated industrial mixed-use property at Kallang Avenue. We project the initial NPI yields for both assets to come in at around the 6%-handle, comparable to A-REIT’s implied portfolio yield. Aggregate leverage is expected to increase slightly from 32.8% as at 31 Dec 2012 to 34.6%, assuming that the potential acquisitions and committed investments are funded immediately after the placement. However, as the Kallang Avenue property is expected to obtain TOP only around mid-2014, we believe part of the proceeds may be used to repay debt pending its deployment. We now factor in the proposed acquisitions and placement into our forecasts. This raises our fair value from S$2.43 to S$2.60. However, as A-REIT appears to be fairly priced at current level, we maintain our HOLD rating. (Kevin Tan)

Singapore Press Holdings: Exploring a REIT listing

Summary: Friday evening, Singapore Press Holdings (SPH) announced that it is exploring a REIT listing on the SGX Mainboard. The properties forming the REIT and the terms at which they would be injected are currently under review. We note that SPH now holds three retail mall assets: Paragon currently valued at S$2.43b; a 60% stake in Clementi Mall valued at S$598m (100% basis); and a 70% stake in Seletar Mall, currently under development, valued at S$505m (100% basis). If this transaction does occur, we see it to be a favorable move which would unlock additional value from its mall assets, by housing them in a more tax-effective REIT structure, and recycle capital back into the group's growing retail mall business. More importantly, we see this move to have deeper implications from a strategic perspective. The group has steadily built up a solid skill-set as a retail mall developer and manager over the last few years, and the establishment of a REIT, as a destination for stabilized assets, would further enhance its position as a major player with end-to-end capabilities, from developing greenfield projects to managing stabilized REIT assets. We would speak with management further regarding this development and, in the meantime, put our Hold rating and fair value estimate of S$4.05 UNDER REVIEW. (Eli Lee)
For more information on the above, visit www.ocbcresearch.comfor the detailed report.
Back to top
View user's profile Send private message Send e-mail
admin
Site Admin


Joined: 01 Jan 1970
Posts: 1350

PostPosted: Tue Mar 12, 2013 8:57 am    Post subject: Reply with quote

KEY IDEA

Wilmar: Upgrade to BUY; sell-down likely overdone

Summary: Wilmar International Limited (WIL) fell some 3.8% yesterday to S$3.30, likely spooked by news that China’s inflation rate has rebounded to a 10-month high; this after consumer prices rose 3.2% YoY in Feb, driven by a 6% increase in food prices due to the Chinese New Year festivities. While the Chinese government is understandably hawkish about inflation, market watchers do not expect them to take any drastic measures such as tightening monetary policy or introducing price caps on essential food items, especially since the spike could be seasonal in nature. The stock has also corrected somewhat since we downgraded it to Hold, and as there is now a potential 18% upside to our unchanged S$3.90 fair value (still based on 15x FY13F EPS), we upgrade our call to BUY. (Carey Wong)

MORE REPORTS

KS Energy: Rights issue and new convertible bonds issue

Summary: KS Energy (KSE) recently announced that it will undertake a renounceable underwritten rights issue to raise gross proceeds of about S$42.1m. The company is offering up to 111.65m new ordinary shares at an issue price of S$0.41 for each rights share, on the basis of one rights share for every four existing shares. The group will also be issuing S$45m worth of new convertible bonds to OCBC and TAEL One Partners. This ensures that KSE will have sufficient funds for the early redemption of its earlier issue of convertible bonds. We have been highlighting the early redemption option of KSE’s convertible bonds and the group has finally resolved this issue. With the increase in share base due to the rights issue, we lower our fair value estimate to S$0.64 (prev. S$0.7Cool, still based on 1.2x FY13F NTA/share. Maintain HOLD. (Low Pei Han)
For more information on the above, visit www.ocbcresearch.comfor the detailed report.
Back to top
View user's profile Send private message Send e-mail
admin
Site Admin


Joined: 01 Jan 1970
Posts: 1350

PostPosted: Wed Mar 13, 2013 9:46 am    Post subject: Reply with quote

KEY IDEA

Singapore Press Holdings: Mall strategy to drive meaningful re-rating
On Sunday evening, SPH announced that it is exploring a REIT listing on the SGX Mainboard. We believe the REIT would likely be a Singapore focused retail mall trust, with Paragon and Clementi Mall being injected and Seletar Mall positioned as a pipeline asset. A key implication: we could see significant divestment gains, and consequently a special dividend and/or a distribution in specie of REIT units to shareholders. Assuming SPH retains a 51% stake in the REIT, we estimate potential divestment gains of S$625m to S$744m or 39 to 46 S-cents per share. We upgrade the stock to a BUY rating with a fair value estimate of S$4.94. We see a particularly attractive risk-reward proposition currently. Downside is likely capped given a dividend yield of 5.4% here, while a significant re-rating is likely given potential near term catalysts such as a special dividend, and over the longer term, management’s further execution on its retail mall strategy. (Eli Lee)

MORE REPORTS

SMRT Corporation: Restructuring pains
We estimate the impact of SMRT’s wage increments for non-executive staff (~60% of its workforce) and its ~2,000 bus drivers to cost an approximate S$34.8m/year (assuming full qualification of incentive payments) from FY14 onwards. While SMRT’s wage burden increases considerably, the bulk of the wage increments will theoretically qualify for some relief under the Government-proposed Wage Credit Scheme. Nonetheless, we lower our forecasts to incorporate the increase in staff costs, and our valuation falls to S$1.56 from S$1.71 previously. Despite a likely fare increase by end-May, ongoing restructuring by SMRT continues to yield pressure on operating expenses (i.e. wages and repairs/maintenance). Therefore, we are unlikely to see an inflection point emerging for the counter in the near-term, and shareholders will have to accept lower dividends as this restructuring proceeds. Maintain HOLD. (Lim Siyi)

Keppel Corporation: US$1.2b Naftogaz contract fails to turn effective
Keppel Corporation (KEP) announced that the conditional contract between Keppel FELS Ltd and Ukraine’s Naftogaz to construct two semisubmersible drilling rigs will not be taking effect. Though the US$1.2b worth of contract was inked in Dec last year, it was also mentioned earlier that the contract will only be effective if certain conditions were met. As they were not fulfilled within the timeline that was specified, the contract will not turn effective. We do not view this as a cancellation of order, and we note that the contract amount was also not part of Keppel’s announced net order book of S$12.8b as at 31 Dec 2012. Though there may be a negative knee jerk reaction with this news, we maintain our BUY rating with S$12.68 fair value estimate and a forecasted dividend yield of 3.7% over a one-year time frame. (Low Pei Han)

Midas Holdings: Secures CNY109.6m worth of metro contracts
Midas Holdings (Midas) announced last evening that it has secured a total of CNY109.6m worth of contracts to supply aluminium alloy extrusion and fabricated parts to five metro projects in China. The value of each contract ranges from CNY10.6-31.7m, with four of these awarded by Midas’ 32.5% owned JV company Nanjing SR Puzhen Rail Transport (NPRT). Management had previously highlighted that NPRT had seven projects which it has yet to award contracts to aluminium alloy extrusion suppliers. Hence we see potential for more contract wins by Midas from NPRT in the near future. We had also stated in our previous note that Midas has been actively negotiating for metro/subway and international railway contracts to buffer the current standstill from the high-speed railway side. We retain our forecasts as we have already assumed such contract wins in our assumptions. Maintain BUY and S$0.595 fair value estimate on Midas, based on 1.2x FY13F P/B. (Wong Teck Ching Andy)
For more information on the above, visit www.ocbcresearch.comfor the detailed report.
Back to top
View user's profile Send private message Send e-mail
admin
Site Admin


Joined: 01 Jan 1970
Posts: 1350

PostPosted: Thu Mar 14, 2013 9:07 am    Post subject: Reply with quote

KEY IDEA

Tat Hong Holdings: Outlook remains positive
Tat Hong’s PATMI grew by 63% to S$42m in FY12 (financial year ended Mar 2012) and is expected to increase by a further 65% to S$70m in FY13F. The sharp improvements were mainly due to improved crane utilization and higher charter rates. With current crane utilization at around 70% levels, we think that FY14-15F PATMI growth will moderate to around 10-30%, mainly driven by crane fleet expansion. On this point, we note that Tat Hong had completed a share placement of S$82m (in Sep-2012), half of which was earmarked for fleet expansion. We remain positive on the group’s outlook over the medium term and keep our BUY rating and S$1.75 fair value estimate unchanged. Risks to our projection include (i) a sharp slowdown in its Australia business and (ii) unexpected delays in Chinese infrastructure projects. (Chia Jiunyang)

MORE REPORTS

Raffles Medical Group: Unsuccessful in Hong Kong land tender
Raffles Medical Group (RMG) announced last evening that it was not successful in its tender for the site at Aberdeen Inland Lot No. 458 in Wong Chuk Hang, Hong Kong, for the development of a private hospital. We note from Hong Kong’s Food and Health Bureau’s announcement that the site was awarded to GHK Hospital Limited, a 60%-owned subsidiary of Parkway HK Holdings, which in turn is a wholly-owned indirect subsidiary of IHH Healthcare Berhad [NON-RATED]. The winning bid for the land premium was HKD1.688b (out of three bids). No details were disclosed about RMG’s bid amount. Total capex for the project would be ~HKD5b (inclusive of the land cost), according to IHH. This is a second setback for RMG recently, as it had also failed to obtain regulatory approval for its first application for the change of use of its commercial podium at 30 Bideford Road for medical clinics (announced on 17 Oct 2012). However, RMG has since resubmitted a second application (around Dec 2012) and is currently awaiting a reply from the relevant authorities. It is also exploring a proposed development of an integrated international hospital in Shenzhen, China, via a non-binding Letter of Intent with a subsidiary of China Merchants Group. Maintain HOLDand S$3.01 fair value estimate on RMG, pegged to 27x FY13F EPS. (Wong Teck Ching Andy)

STX OSV: Fincantieri owns 55.6% of STX OSV at close of offer
At the close of its mandatory general offer yesterday, Italian shipbuilder Fincantieri received valid acceptance of only 4.9%, bringing its shareholding in STX OSV to 55.6% (previously 50.75%). This development is unsurprising to us given that the board of directors has recommended shareholders to reject the S$1.22 offer as it is not compelling. We currently have a BUY rating with a S$1.52 fair value estimate on the stock. (Chia Jiunyang)
For more information on the above, visit www.ocbcresearch.comfor the detailed report.
Back to top
View user's profile Send private message Send e-mail
admin
Site Admin


Joined: 01 Jan 1970
Posts: 1350

PostPosted: Fri Mar 15, 2013 9:45 am    Post subject: Reply with quote

KEY IDEA

STX OSV: What’s next after offer closing?
At the close of its mandatory offer for STX OSV shares on 13 Mar 2013, Fincantieri received only 4.88% valid acceptances, bringing its total shareholdings to 55.63% (pre-offer: 50.75%). The low acceptance level is unsurprising given that the Board of Directors has recommended shareholders to reject Fincantieri’s offer as it is not compelling enough. Looking ahead, we believe there will be better clarity in terms of corporate identity, board leadership and senior management. Fincantieri has also stated that it has no intention to (i) introduce any major changes to STX OSV, (ii) re-deploy the fixed assets or (iii) discontinue the employment of its employees. Maintain BUY with unchanged S$1.52 fair value estimate. (Chia Jiunyang)


MORE REPORTS

Midas Holdings: Seeking to grow its order book
We view China’s latest railway reforms as a mid-to-long term positive for the sector, which would likely benefit industry suppliers such as Midas Holdings (Midas). While we are cognisant that there may be some near-term uncertainties over the timeline of new high-speed railway (HSR) contract tenders, we note that the Chinese government has reaffirmed its railway investment targets for 2013. Its 12thFive-Year Plan for the sector also remains unchanged. Meanwhile, Midas recently won CNY109.6m worth of metro contracts in China. We expect management to continue its drive to secure more orders from the metro/subway, international rail transport, power and industrial machinery industries to act as a near-term buffer for the lack of clarity on when the resumption of HSR contract tenders would materialise. Reiterate BUY and S$0.595 fair value estimate on Midas, still pegged to 1.2x FY13F P/B. (Wong Teck Ching Andy)

Ezra Holdings: Wins two contracts for the Norwegian sea
Ezra Holdings (Ezra) announced that its subsea services division, EMAS AMC, has won an engineering, procurement, construction and installation (EPCI) contract valued at about US$165 million from Det norske oljeselskap ASA. This is the same customer that awarded Sembcorp Marine a S$900m EPC contract for an offshore platform topside in Feb this year. Ezra will undertake rigid pipe-lay and related subsea work, in the Ivar Aasen field in the Norwegian North Sea. Project management and engineering work will start immediately with offshore activities in 2015. Meanwhile EMAS AMC has also won a contract (value undisclosed) from Statoil for the transport and installation of subsea templates for the Aasta Hansteen field in the Norwegian Sea. Offshore transport and installation will take place in 2015. Pending more details on the second contract, we maintain our HOLD rating and fair value estimate of S$1.30 on Ezra. (Low Pei Han)
For more information on the above, visit www.ocbcresearch.comfor the detailed report.
Back to top
View user's profile Send private message Send e-mail
admin
Site Admin


Joined: 01 Jan 1970
Posts: 1350

PostPosted: Mon Mar 18, 2013 10:13 am    Post subject: Reply with quote

KEY IDEA

Astro – FY13 results mostly within expectations

Summary: Astro Malaysia Holdings Berhad (Astro) reported FY13 revenue of MYR4265.0m, up 10.9%, and was 0.3% above our forecast. Although net profit fell 33.6% to MYR418.0m, weighed by higher operating cost including depreciation, it was 4.7% below our forecast. Hence the results were mostly within our forecast. Astro declared a third interim dividend of 1.5 MYR cents and a final dividend of 1.0 MYR cent, bringing the full-year post-IPO payout to 4.0 MYR cents. Going forward, management remains relatively upbeat about its prospects, citing the expected 5-6% growth in the Malaysian economy, a corresponding rise in income per capita and the share of entertainment expenditure. However, it notes that the B.yond conversion and aggressive customer acquisition will impact EBITDA in FY14; hence margin could remain around 32%. But once the swap out of the B.yond is completed in FY15, management expects to see EBITDA margins recovering back towards 36%. As such, we continue to maintain our BUY rating on the stock. Our DCF-based fair value improves slightly from MYR2.98 to MYR3.00. (Carey Wong)

MORE REPORTS

CDL Hospitality Trusts: Competition to increase

Summary: We believe that CDLHT’s Singapore hotels are best classified as being in the Mid-tier/Upscale range, because their FY12 RevPAR was S$211, close to the mean of S$264 and S$171, which are the RevPAR averages for Singapore Upscale and Mid-tier hotels respectively. As detailed in our hospitality sector report dated 5 Mar 2013, we project that for 2013-2015, the Economy, Mid-tier and Upscale/Luxury categories will grow +5.9% p.a., +8.5% p.a. and +4.4% p.a. respectively. As a group, the Mid-tier/Upscale/Luxury segment will grow 5.8% p.a., the same rate that the overall supply will grow. This rate is lower than the projected room demand of 5.4% p.a. over the same period, indicating that competition is likely to intensify in the segments that CDLHT is represented in. Adjusting our assumptions and removing the 10% discount to RNAV to better reflect the worth of CDLHT’s hotel properties, we are raising our fair value from S$1.93 to S$2.11; but maintain a HOLD rating since CDLHT is trading near our fair value. (Sarah Ong)

Sembcorp Marine: Good demand from Mexico; secures two more jack-ups

Summary: Sembcorp Marine (SMM) announced this morning that its subsidiary, PPL Shipyard, has secured orders worth US$417m for the construction of two jack-up rigs from Mexican-based Integradora de Servicios Petroleros Oro Negro (Oro Negro). Scheduled for delivery at end-4Q14 and end-1Q15, the high-spec rigs will be built based on PPL’s proprietary Pacific Class 400 design. Oro Negro is a repeat customer – it ordered two similar jack-up rigs from SMM in Dec last year at a price of US$217m per unit. The strong demand coming from Mexico is within our expectations, as PEMEX plans annual capital expenditures of ~US$30b till 2019 to stem the country’s declining oil production. We see SMM as one of the beneficiaries of these developments. Maintain BUY with S$5.84 fair value estimate on SMM. (Low Pei Han)
For more information on the above, visit www.ocbcresearch.comfor the detailed report.
Back to top
View user's profile Send private message Send e-mail
admin
Site Admin


Joined: 01 Jan 1970
Posts: 1350

PostPosted: Tue Mar 19, 2013 9:10 am    Post subject: Reply with quote

KEY IDEA

Ascendas REIT: Acquires property following placement
Ascendas REIT (A-REIT) yesterday announced the proposed acquisition of The Galen at 61 Science Park Road for a purchase consideration of S$126.0m. The Galen is a six-storey multi-tenanted science park building located within Singapore Science Park II and has a NLA of 234,384 sqft. It is currently 97.5% occupied, with Ascendas Land and the REIT manager taking up c. 22.5% of the lease space. The property, we note, was first mentioned as a potential acquisition asset when it raised S$406.4m through a private placement of 160m new units on 8 Mar. According to A-REIT, the asset is expected to generate a NPI yield of 6.8% and add 0.052 S cents to its DPU on an annualised basis, assuming the acquisition is fully funded using the proceeds from the placement. This is in line with our initial assumptions made on the transaction. We maintain HOLD on A-REIT with an unchanged fair value of S$2.60. (Kevin Tan)

MORE REPORTS

Singapore Post: Awaiting news of larger acquisitions
In recent months, Singapore Post (SingPost) has been acquiring stakes in companies to build its non-mail businesses – it completed the 100% acquisition of General Storage Company Pte Ltd (GSC) in end Jan for S$37m and the 62.5% acquisition of Famous Holdings Pte Ltd (FH) in end Feb this year for S$60m. We see synergies with the group’s logistics and e-commerce businesses, but note that these acquisitions remain on a relatively small scale as we await news of larger acquisitions. Meanwhile, the stock has been trading in a range of S$1.18-S$1.23 since we downgraded it to HOLD on 28 Jan. We like SingPost’s stable operating cash flows and consistent dividends, but see few re-rating catalysts for now. Maintain HOLD with S$1.23 fair value estimate. (Low Pei Han)

Cache Logistics Trust: Private placement to fund acquisition
Cache Logistics Trust (CACHE) has exercised the call option and entered into the S&P agreement with Precise Development Pte Ltd to acquire the fully ramp-up warehouse known as Precise Two last evening. Separately, CACHE is proposing to carry out a private placement of 70m new units to institutional and other investors at an issue price of S$1.24-S$1.265 apiece. About S$86.8m in gross proceeds are expected to be raised (based on S$1.24 issue price), of which 66.0% (~S$57.3m) will be used to wholly fund the proposed acquisition of Precise Two, while the balance will be deployed to fund future investments or pare down debt. We understand that the issue price will be determined by today. An advanced distribution of ~2.12 S cents per unit is also expected to be paid to entitled unitholders around 26 Apr. We are currently reviewing our estimates as we have previously anticipated the acquisition to be fully funded by debt. For now, we place our Buy rating and S$1.34 fair value under review. (Kevin Tan)
For more information on the above, visit www.ocbcresearch.comfor the detailed report.
Back to top
View user's profile Send private message Send e-mail
admin
Site Admin


Joined: 01 Jan 1970
Posts: 1350

PostPosted: Wed Mar 20, 2013 9:09 am    Post subject: Reply with quote

KEY IDEA

Cache Logistics Trust: Raising equity to fund acquisition
Cache Logistics Trust (CACHE) has exercised the call option to acquire the newly completed ramp-up logistics warehouse known as Precise Two. In a separate announcement, CACHE also launched a private placement to raise gross proceeds of S$86.8m, of which ~66.0% of the gross proceeds is expected to be used to wholly fund the proposed acquisition of Precise Two. We have earlier anticipated CACHE to fund the acquisition fully by debt, since it has recently received its maiden credit rating from Moody’s (which allows it to exceed its previous debt ceiling of 35%). With this new development, we now adjust our estimates to factor in the placement and enlarged unit base. We also forecast a reduction in leverage as we believe CACHE may pare down its debts using the remaining proceeds to cushion a near-term dilution in DPU. Our fair value is revised to S$1.33 from S$1.34 previously. Maintain BUY. (Kevin Tan)

MORE REPORTS

TEE International: Potential new real estate projects
TEE International recently announced the establishment of two wholly owned indirect subsidiaries, TEE Industrial Pte Ltd (yesterday) and TEE Hospitality Pte Ltd (12 Mar), under its real estate unit, TEE Land Private Limited. The principal activity of both subsidiaries will be in real estate development. Though no other details were given, the choice of names suggests that the group is preparing to expand its property business further, into the industrial and hospitality services segments. Meanwhile, TEE’s plans to spin off its real estate business appear to be on track for a listing on SGX by May and we expect more updates in the weeks ahead. Its share price should remain supported in the near term by expectations of a special dividend if the plan succeeds, but we remain cautious on TEE until we see stronger contributions from its real estate business. We maintain our fair value estimate of S$0.30 and HOLDrating for TEE. (Conrad Tan)

Midas Holdings: Wins first international contract of the year
Midas Holdings (Midas) announced last evening that it has secured a EUR22.7m (~CNY182.8m) contract from Ural Locomotives LLC, a joint-venture company between Siemens AG and Russia’s Sinara Group. We note that Midas’ relationship with Siemens stretches a long way back, as it was appointed as a preferred global long-term supplier of aluminium alloy products for Siemens in Oct 2005.This is Midas’ first international contract of 2013 and also helps to boost its total order wins YTD to ~CNY292.4m, following the five metro contract wins announced on 12 Mar. This latest contract entails the supply of aluminium alloy extrusion profiles for use in the manufacture of 100 electric train sets (or 500 electric train cars) for commuter passenger service in the Russian railway sector. Delivery is expected to take place progressively from 2013 to 2019. We had previously highlighted that management would be deepening its efforts to secure international railway contracts as a means of buffering the current standstill from the high-speed railway side in China. Maintain BUY and S$0.595 fair value estimate on Midas. (Wong Teck Ching Andy)
For more information on the above, visit www.ocbcresearch.comfor the detailed report.
Back to top
View user's profile Send private message Send e-mail
admin
Site Admin


Joined: 01 Jan 1970
Posts: 1350

PostPosted: Thu Mar 21, 2013 9:00 am    Post subject: Reply with quote

KEY IDEA

Hospitality REITs: Challenging industry environment
We understand that players in the local serviced residence industry believe that demand for 2013 will remain flat, with average daily rates staying flat or declining. This corroborates our view that 1H13 is challenging for the Singapore hospitality industry. In the near term, acquisitions may be positive price catalysts. CDLHT completed the acquisition of Angsana Velavaru (Maldives) on 31 Jan and now the attention is on FEHT, which may buy the 298-room Rendezvous Hotel from Straits Trading around end 2Q13. We remain NEUTRAL on hospitality REITs. We have HOLDs on Ascott Residence Trust [FV: S$1.36], CDL Hospitality Trusts [FV: S$2.11] and Far East Hospitality Trust [FV: S$1.05]. (Sarah Ong)

MORE REPORTS

OSIM International: Expect continued resiliency
We expect OSIM International’s (OSIM) business to remain resilient despite concerns resurfacing over China’s economic growth. This would be driven by continued efforts by management to enhance its product appeal through innovative new products such as the recently launched uAngel Sofa-Tranzformer and productivity gains to boost its margins. Although similar concerns over China’s economy also transpired last year, OSIM still managed to deliver positive YoY growth in its topline and bottomline for all four quarters of 2012. We maintain our BUYrating on OSIM with an unchanged fair value estimate of S$2.19, still pegged to 16.4x FY13F EPS. The stock is trading at 14.2x FY13 and 12.8x FY14 EPS, while offering FY13F dividend yield of 3.2% and ROE of 42.8%. (Wong Teck Ching Andy)

Ezion Holdings: Secures another service rig contract
Ezion Holdings (Ezion) announced that it has secured a charter contract worth about US$48.2m over a three-year period to provide a service rig for an international oil and gas major for work in the Arabian Gulf. The unit will be deployed before end 2013 after refurbishment and upgrading, and will be funded by debt and internal resources. Pending details from management, we maintain our BUY rating but put our fair value estimate of S$2.33 under review. (Low Pei Han)
For more information on the above, visit www.ocbcresearch.comfor the detailed report.
Back to top
View user's profile Send private message Send e-mail
Display posts from previous:   
Post new topic   Reply to topic     Forum Index -> House Reports and Recommendations All times are GMT + 8 Hours
Goto page 1, 2  Next
Page 1 of 2

 
Jump to:  
You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot edit your posts in this forum
You cannot delete your posts in this forum
You cannot vote in polls in this forum


Powered by phpBB © 2001, 2002 phpBB Group. Hosted by Vodien Internet Solutions