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DBSVickers Reports April 2013
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Posts: 1350

PostPosted: Tue Apr 23, 2013 10:08 am    Post subject: Reply with quote

Today’s Focus
• Mapletree Commercial Trust – FY13 results above
expectations; organic growth will be main driver for FY14.
Maintain BUY, TP raised to S$1.53
4Q13 results for Mapletree Commercial Trust were slightly
ahead of our expectations. Organic growth will be a main
driver for FY14. While we believe that the current price fully
reflects the positives of the current portfolio, we remain
optimistic that given the significant pipeline from its sponsor,
acquisitions will remain a key feature for MCT. Maintain BUY,
TP raised to S$1.53 (Prev S$ 1.37).
Tiger Airways has received the go-ahead from the
Australian ACCC for the sale of 60% of Tiger Airways
Australia stake to Virgin Australia. With this approval in
place, Tiger Airways can now look forward to commencing
discussions with Virgin on its plans to grow Tiger Australia,
and enable it to compete more effectively in the Australia’s
budget carrier space. Based on the Group’s financial
position as at 30 September 2012, Tiger Airways will
record a pro forma one-time gain on disposal of about
The Japanese yen has dropped closed to 20% against the US
dollar since November 2012 after two rounds of sharp moves
in JPY. DBS expects slower US$/JPY depreciation to 102 by
year end, from current levels, implying a less than 4% move.
Stock beneficiaries will include:- 1) Companies with loan
exposure in JPY; 2) Japanese goods distributors and
manufacturers importing raw materials or equipment from
Japan - Tat Hong, Pan United, Sin Heng. For REITS and
business trusts, the short-term negative impact of the falling
Yen is offset by asset value reflation over the mid-term.
Potential losers are those in industries which compete with
Japanese makers for market share - Chinese Shipyards
(Yangzijiang, Cosco Corp), and those with direct Japanese
sales exposure – SATS, Biosensors.
Tiong Seng has signed a non-binding Memorandum of
Understanding (MOU) with Shwe Taung Development, one of
the most prominent corporations in Myanmar, to explore
entering into a joint venture to set up a precast plant in
Myanmar. Under the MOU, Tiong Seng and Shwe Taung are
proposing a 30% - 70% joint venture company, to establish
US Indices Last Close Pts Chg % Chg
Dow Jones �� 14,567.2 19.7 0.1
S&P �� 1,562.5 7.3 0.5
NASDAQ �� 3,233.6 27.5 0.9
Regional Indices
ST Index �� 3,308.9 14.9 0.5
ST Small Cap �� 584.4 0.9 0.2
Hang Seng �� 22,044.4 30.8 0.1
HSCEI �� 10,590.8 3.4 0.0
HSCCI �� 4,382.9 35.3 0.8
KLCI �� 1,706.7 0.4 0.0
SET �� 1,559.1 13.6 0.9
JCI �� 4,996.9 (1.5) (0.0)
PCOMP �� 7,120.5 163.4 2.3
KOSPI �� 1,926.3 19.6 1.0
TWSE �� 7,970.4 39.6 0.5
Nikkei �� 13,568.4 251.9 1.9
STI Index Performance
Total Market cap (US$bn) 612
Total Daily Vol (m shrs) 2,501
12m ST Index High 3,322
12m ST Index Low 2,699
Source: Bloomberg Finance L.P
Stock Picks – Large Cap
Rec’n Price ($)
22 Apr
Target Price
Mapletree Greater China
Commercial Trust
Buy 1.08 1.18
Neptune Orient Lines Buy 1.125 1.45
Keppel Corp Buy 11.32 13.00
SPH Buy 4.35 4.75
Stock Picks – Small /Mid Cap
Rec’n Price ($)
22 Apr
Target Price
Perennial China Retail Trust Buy 0.62 0.84
Pan-United Corp Buy 0.955 1.16
Tat Hong Holdings Buy 1.40 1.80
China Merchants Buy 0.89 1.12
Kreuz Holdings Buy 0.52 0.58
Source: Bloomberg Finance L.P, DBS Vickers
Wired Daily
Page 2
and operate a precast plant to supply precast components to
construction projects in Myanmar. Tiong Seng is expected to
provide precast technical support, project based design and
other technical supervision services. We think this is a timely
venture. This comes on the back of the group plans to
expand its pre-cast facilities regionally. With partner Shwe
Taung, this may in the longer term be another avenue to
extend its business contacts and potentially a new business
arm into Myanmar. We do not anticipate any significant
impact to earnings in the immediate term. No change to BUY
call and TP of S$0.33 for Tiong Seng. The stock gained 10%
yesterday. Technically, any follow-through reaction upside for
it looks capped at $0.285.
BBR Holdings has secured two new contracts worth
RM286m to build two bridges in Terengganu and
Sarawak in Malaysia. The first contract is for the Pulau
Sekati Bridge in Kuala Terengganu. Work has started and
the bridge is expected to be completed at the end of
2015. BBR will also build what will be the longest bridge
in Sarawak at 1.48 km in length. Work has started and is
scheduled for completion in the second quarter of 2016.
Sino Grandness Food Industry Group said that its
production facility in Qionglai, Sichuan has not been
affected by the earthquake that struck Ya'an city, Sichuan
Province, PRC. Presently, majority of the Group’s juice
production volume are still being outsourced to
manufacturers based in provinces near the coastal areas
such as Guangdong, Fujian and Zhejiang. Starhill Global
REIT also said based on preliminary reports, there is no
known damage to Renhe Spring Zongbei, Starhill Global
REIT’s property located in Chengdu, 120km from the
earthquake struck area.
Expect a significant drop in the March inflation figure for
Singapore, which will be due today. Our economist
expects inflation to come in at 3.6% YoY. And that’s a
1.3%-pt drop compared to the previous month. The main
driver is an anticipated sharp drop in transport cost, led by
the recent correction in COE premium. Note that private
transport cost accounts for 11.66% of the entire CPI
The number of tourists arriving in Singapore is estimated
to grow by only 3 to 4% each year for the next decade,
about half the rate it did for the past ten years. Tourism
receipts are also expected to grow at only 4 to 6% over
the same period. Describing the past growth in visitor
arrivals as "not sustainable", Mr S Iswaran, Second
Minister for Home Affairs and Trade and Industry, said:
"The growth model that is based solely on sheer
quantitative growth is no longer viable". From 2002 to
2012, visitor arrivals grew at a compounded annual
growth rate of 6.6%. Tourism receipts grew at a
corresponding 10% in the same period.
US stocks gained with a rebound in commodity lifted
energy & raw material companies. The US corporate
earnings progresses. Of the 111 that have reported so far,
72% exceeded analysts’ predictions for earnings, data
compiled by Bloomberg show. March existing home sales
came in lower than expected at 4.92mil annual rate
(consensus 5mil). April’s China HSBC Flash manufacturing
PMI will be released this morning. Consensus expects a
reading of 51.5 (previous 51.6).
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PostPosted: Wed Apr 24, 2013 9:44 am    Post subject: Reply with quote

Today’s Focus
• Nam Cheong - On track to achieve FY13/14 sales targets;
maintain BUY with TP of S$0.30
Nam Cheong announced another round of vessel sales worth
US$59m for two accommodation work barges to be delivered
in 1H-2014. The pricing is within expectations and the vessels
were sold to repeat customer Perdana Petroleum, one of the
major offshore services providers in Malaysia. YTD, Nam
Cheong has won orders for 6 vessels across its build-to-stock
and build-to-order business models and is on track to achieve
FY13/14 sales targets. Orderbook now stands at about
RM1.4bn. This underpins robust earnings trajectory for the
Group in FY13/14. We expect Nam Cheong to secure order
wins for another 8-10 vessels in FY13, which will cover FY13
completions and half of FY14 completions. Maintain BUY with
TP of S$0.30. Expect the stock to firm up after holding at
$0.245-0.25 over the past 2-3 weeks.
Vard Holdings (previously STX OSV Holdings) has secured a LOI
with Simon Mokster Shipping, Norway, for design and
construction of 1 PSV. To be delivered in 1Q-2015 from
Norway yard, the vessel will be built to internal design PSV 06
LNG with dual-fuel LNG/ diesel-electric capabilities. The
contract value is not disclosed but we estimate could be about
NOK400m, based on previous similar orders. When finalised,
this will bring YTD FY13 contract wins to NOK2.9bn, or 23%
of our full year order win estimate of NOK12.5bn. Vard
remains a key proxy to the buoyant subsea market; maintain
BUY with TP S$1.57.
Boustead has bagged contracts worth $60m from oil and gas
industries globally. The contracts, won since the start of its
new financial year this month, raised the group's orderbook
backlog to $415m. The deals involve the design, engineering
and construction of key process systems and waste heat
recovery units for downstream oil refineries and gas processing
plants in Canada, Finland, Nigeria and Saudi Arabia.
Mapletree Industrial Trust reported a 8.8% and 7.8% growth
in gross revenue and net property income to S$72.1m and
S$49.6m respectively. 4Q13 DPU of 2.29 Scts is in line. The
stronger performance was largely organic-led with positive
rental reversions achieved portfolio wide, while occupancy
levels remained fairly stable at close to 95.4% (vs 95.2% a
US Indices Last Close Pts Chg % Chg
Dow Jones �� 14,719.5 152.3 1.0
S&P �� 1,578.8 16.3 1.0
NASDAQ �� 3,269.3 35.8 1.1
Regional Indices
ST Index �� 3,284.4 (24.6) (0.7)
ST Small Cap �� 581.7 (2.7) (0.5)
Hang Seng �� 21,806.6 (237.Cool (1.1)
HSCEI �� 10,425.1 (165.7) (1.6)
HSCCI �� 4,305.3 (77.6) (1.Cool
KLCI �� 1,700.4 (6.3) (0.4)
SET �� 1,549.4 (9.Cool (0.6)
JCI �� 4,975.3 (21.6) (0.4)
PCOMP �� 6,982.4 (138.1) (1.9)
KOSPI �� 1,918.6 (7.7) (0.4)
TWSE �� 7,942.8 (27.6) (0.3)
Nikkei �� 13,529.7 (38.7) (0.3)
STI Index Performance
Total Market cap (US$bn) 614
Total Daily Vol (m shrs) 2,137
12m ST Index High 3,322
12m ST Index Low 2,699
Source: Bloomberg Finance L.P
Stock Picks – Large Cap
Rec’n Price ($)
23 Apr
Target Price
Mapletree Greater China
Commercial Trust
Buy 1.08 1.18
Neptune Orient Lines Buy 1.11 1.45
Keppel Corp Buy 11.30 13.00
SPH Buy 4.31 4.75
Stock Picks – Small /Mid Cap
Rec’n Price ($)
23 Apr
Target Price
Perennial China Retail Trust Buy 0.61 0.84
Pan-United Corp Buy 0.96 1.16
Tat Hong Holdings Buy 1.39 1.80
China Merchants Buy 0.89 1.12
Kreuz Holdings Buy 0.51 0.58
Source: Bloomberg Finance L.P, DBS Vickers
Wired Daily
Page 2
quarter ago). Net property income (NPI) margins, however, is
under pressure. NPI compressed to c68.7% (vs 70.9% a
quarter ago) due to increases from maintenance, utilities and
security contracts and is expected to remain stable from now
on. More updates post analyst briefing today.
According to an article in Straits Times, Nestle has started
legal proceedings against Petra Foods over alleged trademark
infringement of the former’s Kit Kat chocolate bars. Nestle
has claimed that Petra Food’s Take-It product has a similar
shape to Kit Kat and wants the production to be stopped.
Petra, on the other hand, is counter suing Nestle over the
validity of the two-finger and four-finger trademarks. We
estimate that the revenue contribution of Take-It, introduced
in Indonesia, Singapore and Philippines account for less than
1% of the group’s Branded Consumer revenue. Petra share
price has done well since the announcement of the proposed
US$950m Cocoa Ingredients business to Barry Callebaut in
December last year. We will not be surprise if there is near
term weakness on this news. We currently have a Hold call
on Petra with a TP of S$4.06.
Singapore Airlines has agreed to acquire another 9.9% of
Virgin Australia in a move that will increase its stake to
19.9%. SIA acquired 10% of Virgin Australia in late 2012
through an injection of funds in Virgin Australia Holdings.
UE E&C has been awarded the nominated sub-contract for
supply and installation of air-conditioning and mechanical
ventilation, building management, fire protection, electrical
and engineering smoke control services to the proposed
erection of 4-storey commercial development
at Sengkang West Avenue / Fernvale Road at The Seletar
Mall. The project sum is about S$20.7m. The contract period
is for 20 months and the project is expected to be completed
by November 2014.
Synear Food Holdings announced that its production plant in
Sichuan Province suffered minor physical damage as a result
of the earthquake and has temporarily shut down as a
precautionary measure. The temporary suspension of
production at the plant will affect production and sales of the
company in the south-western region of China (including
Sichuan Province).
Action Asia is expected to report a loss for 1Q13, attributed
to the decrease in revenue which was mainly due to lower
selling price for our consumer lifestyle entertainment
Plunging car prices drove Singapore's inflation rate down to
3.5% in March - the lowest it has been in more than two
years. But core inflation could still rise in the second half of
the year as economic restructuring costs pass through to
prices, according to the market. Consumer prices rose by
3.5% y-o-y, less than consensus forecast of 3.6%. Our
economist has lowered full-year inflation forecasts to 3.6%
from 4%. In month-on-month terms, the consumer price
index (CPI) fell 0.5% in March after rising 1% in February.
Excluding private road transport and accommodation costs -
which accounted for more than two-thirds of March's
inflation - core inflation eased to 1.7%, from 1.9% in
February. The government is keeping to its 2013 forecasts of
3-4% headline inflation and 1.5-2.5% core inflation.
Singapore Changi Airport achieved a 7.7% y-o-y growth in
passenger traffic for March, registering 4.61m passenger
movements, a historic high for the month of March. In the
first quarter of the year, the airport handled 13.05m
passengers, a 6.2% growth over last year's figure. This was a
result of the growth in air traffic in north-east Asia, the
southwest Pacific and South Asia. Aircraft movements also
rose – by 5.3% to 28,400 flights, compared with 26,981
flights in March last year. Aircraft movements for the quarter
recorded a 3.9% y-o-y growth to 82,600 flights, compared
with 79,500 flights the previous year. Low-cost carriers took
up about 30% of both passenger movements and air traffic
movements in March.
China's flash purchasing managers' index (PMI) compiled by
Markit and HSBC came in at 50.5 points, against 51.6 points
in March, dragged down by new export orders. Five of the 11
indicators fell yesterday, pointing to subdued growth for the
second quarter as growth in economies worldwide has yet to
gain momentum. New export orders fell to 48.6 this month,
from 50.5 in March, its lowest figure in six months, with
Europe, China's first trading partner, remaining mired in
recession. Other main indictors also pointed down, with
employment falling for a third consecutive month.
A string of good corporate results from DuPont, Delta Air, US
Airways and Coach amongst others lifted US markets higher
yesterday. In after hours, Apple sales forecasted sales that
missed analysts’ estimates as iPhone sales slowed and
competition increased. Still, shares are higher in after-hours
trade as the company said it will raise quarterly dividend by
15% and boost its share-repurchase program to US$60bil
from US$10bil.
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PostPosted: Thu Apr 25, 2013 9:46 am    Post subject: Reply with quote

Today’s Focus
• M1 - Least preferred in the sector due to downside risk to
street’s estimates. Maintain HOLD, TP S$3.00
• F&N shares imminent short-term rebound to $8.20 and
then towards $8.44
Our analyst believes that the street is overly bullish on
FY13F/14F earnings for M1 due to tiered data plans. He thinks
that tiered data plans may merely offset Average revenue per
user (ARPU) decline due to over-the-top (OTT) applications like
Whatsapp & Skype and lower roaming contribution. The rising
popularity of Android phones will benefit peers but may hurt
M1 instead. M1’s use of fair value accounting for iPhones
(heavily sold in 4Q12) will have a lingering impact on service
revenue in FY13F. In addition, while M1 has raised its monthly
service pricing, it also raised its handset subsidy. M1 offers
4.9% yield with mid-single digit growth. We do not see room
for M1 to raise dividends. M1 is the least preferred in the
sector due to downside risk to street’s estimates. Maintain
HOLD with revised TP of S$3.00 (Prev S$ 2.60).
F&N shares are due for a rebound after the 17% sell-down
that started just 3 days ago. The stock’s removal from the
MSCI standard and large cap Indices at the end of market
close yesterday had prompted the increased selling pressure in
recent session. Index related selling had increased since the
stock resumed trading this week and ended in a crescendo
yesterday during the pre-close matching period with 17.5mil
shares done in the final 5 minutes. Index related selling has
ceased. We believe this paves the way for a short-term
technical rebound. The Elliot-wave pattern of the stock’s
decline in the past 3 days supports this view. The immediate
support is at $7.85. Technically, we see the stock heading to
the 23.6% upward retracement level at $8.20 first, and then
towards the 38.2% level at $8.44.
Cache Logistics Trust reported a solid set of 1Q13 results.
100% of the income is already locked in for the rest of 2013,
providing clear visibility with minimal downside. Going
forward, given that its gearing remains conservative at 29.4%
and below management’s long term target of 35%-40%,
acquisitions will be a re-rating catalyst. BUY maintained with
TP S$1.47 (Prev S$ 1.40).
US Indices Last Close Pts Chg % Chg
Dow Jones �� 14,676.3 (43.2) (0.3)
S&P �� 1,578.8 0.0 0.0
NASDAQ �� 3,269.7 0.3 0.0
Regional Indices
ST Index �� 3,322.7 38.4 1.2
ST Small Cap �� 583.8 2.1 0.4
Hang Seng �� 22,183.1 376.4 1.7
HSCEI �� 10,634.4 209.3 2.0
HSCCI �� 4,376.4 71.1 1.7
KLCI �� 1,707.4 7.0 0.4
SET �� 1,553.9 4.5 0.3
JCI �� 5,011.6 36.3 0.7
PCOMP �� 6,972.7 (9.7) (0.1)
KOSPI �� 1,935.3 16.7 0.9
TWSE �� 8,023.7 80.9 1.0
Nikkei �� 13,843.5 313.8 2.3
STI Index Performance
Total Market cap (US$bn) 610
Total Daily Vol (m shrs) 2,699
12m ST Index High 3,323
12m ST Index Low 2,699
Source: Bloomberg Finance L.P
Stock Picks – Large Cap
Rec’n Price ($)
24 Apr
Target Price
Mapletree Greater China
Commercial Trust
Buy 1.085 1.18
Neptune Orient Lines Buy 1.12 1.45
Keppel Corp Buy 10.92 13.00
SPH Buy 4.31 4.75
Stock Picks – Small /Mid Cap
Rec’n Price ($)
24 Apr
Target Price
Perennial China Retail Trust Buy 0.61 0.84
Pan-United Corp Buy 0.965 1.16
Tat Hong Holdings Buy 1.40 1.80
China Merchants Buy 0.89 1.12
Kreuz Holdings Buy 0.52 0.58
Source: Bloomberg Finance L.P, DBS Vickers
Wired Daily
Page 2
Operational performance for Mapletree Industrial Trust in
4Q13 was bumped up by short term lease extension by
Credit Suisse. The completion of various development/asset
enhancement projects will underpin growth. HOLD call
maintained, TP raised to S$1.63 (Prev S$ 1.46).
The Media Development Authority (MDA) has ordered
SingTel's mio TV to share all Barclays Premier League (BPL)
matches over the next three seasons with StarHub. Following
a month of investigation, the MDA concluded that SingTel's
broadcast rights deal with the Football Association Premier
League (FAPL) - which the pay-TV operator had said was
"non-exclusive" - was, in essence, an exclusive one and is
now at the mercy of the cross-carriage rule. There could be
some positive revisions to our earnings projections for
StarHub over the long term assuming that it does not lose
pay TV market share to SingTel anymore. Not much impact
on FY13F earnings due to it as pay TV accounts for less than
20% of StarHub's revenue and less than 10% for earnings in
our estimates. As for SingTel, the negative impact would be
quite small compared to the size of its earnings.
According to SGX filing this morning, Andrew Rickards, CEO
of Yoma, sold 7m shares in the open market @
0.80829/share. Post disposal, his stake in Yoma would be
pared down to 0.65% from 1.25% previously.
Del Monte Pacific is seeking a secondary listing of its shares
on the Philippine Stock Exchange. The proposed dual listing
will provide the company with a platform to widen its
investor base, enhance the profile and market visibility and
allow the company to establish financing platforms in two
different equity markets simultaneously.
Sinotel Technologies is expected to record a net loss for
1QFY2013, mainly attributable to lower profit margin arising
from an increase in contribution from the sales of equipment
which commands a lower margin coupled with a decrease in
contribution from both the outdoor wireless coverage
solutions and emergency mobile communications system
(EMCS) which command higher margin.
US stocks ended mixed with earnings from Procter & Gamble
and AT&T missing estimates. 180 out of 500 S&P500
companies have reported earnings so far. What investors
have started to notice is the divergence between top and
bottom lines. According to Thomson Reuters, although 68%
of S&P companies have beaten bottom line estimates, only
about 40% have topped revenue forecast. Durable goods
orders fell 5.7%, worse than 3% forecast. Our economist
sounds an alert that the recent slew of weak numbers in US
that spanned from job to housing to ISM and now durable
goods orders suggest that the 2Q and 3Q GDP is likely to
slow down to 05% & 0.6% respectively despite the
anticipated c.3% 1Q GDP number is scheduled for release
this Friday.
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PostPosted: Fri Apr 26, 2013 10:17 am    Post subject: Reply with quote

Today’s Focus
• China Merchants Hldgs (Pacific) – Positive on earnings
growth prospects, attractive prospective yield of 6.3%.
Maintain BUY and S$1.12 TP.
1QFY13 net profit of HK$128.4m (+14% y-o-y) for China
Merchants Hldgs (Pacific) is in line with expectations; makes up
27% of full year core profit. Revenue growth of 27% y-o-y to
HK$436m was driven largely by consolidation of Ningbo-
Beilun Port Expressway. We remain positive on CMHP’s
earnings growth prospects, which are driven by both organic
traffic growth in China as well as acquisitions. Maintain BUY,
and S$1.12 target price. The stock offers an attractive
prospective yield of 6.3%.
Sheng Siong Group’s revenue was 5% below expectations,
but earnings beat our estimates by 12% on lower than
expected operating costs. FY13F earnings were raised by 5%.
We trimmed revenue growth rate but factored in better
operating margins. Maintain HOLD, TP raised to S$0.72 (Prev
S$ 0.6Cool.
Results for Suntec REIT were impacted by Suntec Mall AEI
works. Operations remain robust; strong pre-commitment
levels at Suntec Mall mitigate leasing risks and reaffirms
earnings sustainability. Maintain Hold, TP S$1.99 (Prev
S$ 1.70). The stock is trading at 4.7% FY13 and FY14 yields.
Earnings for CapitaMalls Asia in line, gross margin
improvement and divestment gains boosted results.
Bedok Residences is expected to contribute from 2Q, six new
malls are also scheduled to open this year. Maintain BUY, TP
S$2.38 (Prev S$ 2.30).
Olam announced that it will be reducing capex in FY14-FY16
by S$1bn to US$1.2-1.6bn and releasing S$1.5bn cash
through balance sheet optimization and unlocking of intrinsic
value, leading to earlier achievement of positive free cash flow
by FY14. Net gearing levels will be kept below 2.0x vs 2.5x
previously. The delivery of these plans and fruition of previous
acquisitions are re-rating catalysts. However, recent weakness
in commodity prices may be a near term drag. Maintain HOLD.
US Indices Last Close Pts Chg % Chg
Dow Jones �� 14,700.8 24.5 0.2
S&P �� 1,585.2 6.4 0.4
NASDAQ �� 3,290.0 20.3 0.6
Regional Indices
ST Index �� 3,337.7 15.0 0.5
ST Small Cap �� 586.2 2.4 0.4
Hang Seng �� 22,401.2 218.2 1.0
HSCEI �� 10,772.8 138.4 1.3
HSCCI �� 4,409.7 33.3 0.8
KLCI �� 1,706.3 (1.0) (0.1)
SET �� 1,574.3 20.4 1.3
JCI �� 4,994.5 (17.1) (0.3)
PCOMP �� 6,995.5 22.8 0.3
KOSPI �� 1,951.6 16.3 0.8
TWSE �� 8,021.8 (2.0) (0.0)
Nikkei �� 13,926.1 82.6 0.6
STI Index Performance
Total Market cap (US$bn) 623
Total Daily Vol (m shrs) 2,454
12m ST Index High 3,338
12m ST Index Low 2,699
Source: Bloomberg Finance L.P
Stock Picks – Large Cap
Rec’n Price ($)
25 Apr
Target Price
Mapletree Greater China
Commercial Trust
Buy 1.095 1.18
Neptune Orient Lines Buy 1.12 1.45
Keppel Corp Buy 10.82 13.00
SPH Buy 4.32 4.75
Stock Picks – Small /Mid Cap
Rec’n Price ($)
25 Apr
Target Price
Perennial China Retail Trust Buy 0.62 0.84
Pan-United Corp Buy 0.945 1.16
Tat Hong Holdings Buy 1.445 1.80
China Merchants Buy 0.89 1.12
Kreuz Holdings Buy 0.51 0.58
Source: Bloomberg Finance L.P, DBS Vickers
Wired Daily
Page 2
WBL Corporation expects to incur a loss for 2Q13, mainly
due to weak performance from its US-listed subsidiary, Multi-
Fineline Electronix. MFLEX expects net sales in the second
quarter of fiscal 2013 to be below its earlier guidance. It also
expects to record an $11m write-down of finished goods,
mainly due to unusable components. Business fundamentals
remain sound for WBL’s other core businesses, namely,
Automotive, Property and Engineering, Manufacturing &
CNA Group proposes to issue 37m new shares at the issue
price of S$0.081 per share to raise net proceeds of about
S$2.8m. The issue price represents a discount of
approximately 10% to the volume weighted average price.
Singapore's Urban Redevelopment Authority's (URA) price
index for private homes rose 0.6% q-o-q in 1Q13. This was
higher than the 0.5% increase reflected in URA's flash
estimate for Q1 released on April 1. URA noted that the
0.6% rise in the index in Q1 reflects a "significant
moderation" from the 1.8% q-o-q gain in the index recorded
for Q4 2012. Rentals of private residential properties inched
up 0.8% 1Q13, which was marginally higher than the 0.7%
appreciation in Q4 last year.
US markets rose but ended off session highs after initial
jobless claims fell more than expected (339k, consensus
350k) and corporate results produced mixed results. Earnings
for UPS topped estimates but 3M and Qualcomm missed
forecasts. Singapore’s March industrial production (consensus
+7.1% mom SA) is this afternoon.
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PostPosted: Mon Apr 29, 2013 10:48 am    Post subject: Reply with quote

Today’s Focus
 Positive on potential REIT spin-offs – Technically, SPH (TP:
$4.75) is base-building at slightly above $4.30, OUE has
potential to $3.52, support $3.05.
 Singapore Land – Downgrade to HOLD given on limited
upside to TP, wait to accumulate on weakness
Equity markets have benefited from the low interest rate, tame
inflation and ample liquidity environment even as recent data
releases point to a further slowing of the already tepid global
recovery. Liquidity inflows have sought yield and defensive
stocks. Bank stocks have also done well. But commodity and
cyclical stocks have underperformed as the global growth
prospect slowed. Until data points to a cyclical recovery, this
investment trend can continue. This is a heavy data week for
the US that culminates with Friday’s April employment
numbers. Consensus calls for non-farm payrolls of 150k (Mar
88k) while the unemployment rate stays unchanged at 7.6%.
The trading week is likely to start at a slow pace given the midweek
May Day holiday. Up north, the Chinese equity market is
on a 3-day break starting today. The tempo for the remainder
of the week rests on the slew of economic data releases in the
US & corporate results.
We maintain our positive view on SPH and OUE as the
potential for REIT spin-off will enable both companies to
unlock hidden value. This should continue to underpin their
stock price. We maintain our accumulate recommendation for
SPH. Technically, the stock is building a base at slightly above
$4.30. Our fundamental TP is $4.75. For OUE, the stock’s
gradually ascending 15-day EMA (currently at $3.05) has lent
support to the stock in the past 2 weeks. Our technical view is
for a rise to $3.52 should the REIT spin-off materializes.
We are selective on S-REITs after the sector’s strong
performance. Our S-RIETs picks are PCRT, MGCCT and
Yangzijiang’s 1Q13 net profit of RMB717mil (-30% y-o-y) on
the back of slower shipbuilding activities and a higher tax rate
was below our expectations but in line with the consensus.
Going forward, the yen depreciation has reduced the cost
competitiveness of Chinese yards. Our analyst trims FY13/14
net profit by 8.2/0.2% respectively. The stock is currently
trading inexpensively at 1x P/Bv and 6x FY13PE. Our TP is
reduced to S$1.02, based on 1.1x revised NBV. Dividend yield
of 4-6% could lend support to the stock price. Maintain HOLD
US Indices Last Close Pts Chg % Chg
Dow Jones  14,712.6 11.8 0.1
S&P  1,582.2 (2.9) (0.2)
NASDAQ  3,279.3 (10.7) (0.3)
Regional Indices
ST Index  3,348.9 11.2 0.3
ST Small Cap  589.9 3.7 0.6
Hang Seng  22,547.7 146.5 0.7
HSCEI  10,834.1 61.3 0.6
HSCCI  4,417.3 7.6 0.2
KLCI  1,711.3 5.0 0.3
SET  1,582.9 8.7 0.6
JCI  4,978.5 (16.0) (0.3)
PCOMP  7,025.4 30.0 0.4
KOSPI  1,944.6 (7.0) (0.4)
TWSE  8,022.1 0.3 0.0
Nikkei  13,884.1 (42.0) (0.3)
STI Index Performance
2006 2007 2008 2009 2010 2011 2012 2013
100-Day MA
Total Market cap (US$bn) 628
Total Daily Vol (m shrs) 2,438
12m ST Index High 3,349
12m ST Index Low 2,699
Source: Bloomberg Finance L.P
Stock Picks – Large Cap
Rec’n Price ($)
26 Apr
Target Price
Mapletree Greater China
Commercial Trust
Buy 1.095 1.18
Neptune Orient Lines Buy 1.115 1.45
Keppel Corp Buy 10.84 13.00
SPH Buy 4.36 4.75
Stock Picks – Small /Mid Cap
Rec’n Price ($)
26 Apr
Target Price
Perennial China Retail Trust Buy 0.62 0.84
Pan-United Corp Buy 0.94 1.16
Tat Hong Holdings Buy 1.475 1.80
China Merchants Buy 0.925 1.12
Kreuz Holdings Buy 0.52 0.58
Source: Bloomberg Finance L.P, DBS Vickers
Wired Daily
Page 2
In INR terms, Ascendas India Trust’s (a-itrust) underlying
operational performance remained fairly stable, with topline
falling by 1% to INR 1.3bn. The weak INR remains a drag
with DPU of 1.04 Scts slightly below expectations. HOLD
maintained, TP S$0.82 (prev. $0.81). Stock offers 5.7% yield.
Boost by exchange gains, Ascott Residence Trust’s 1Q13 DPU
of 2.24 Scts is in line, forming 26% of full year forecasts.
Revenue and NPI declined by 3% and 9% respectively to
S$69.2m and S$33.8m, forming c20% of our full year
forecasts. Accommodation demand is picking up and
refurbishment plans are on track to complete by end 2013.
Our BUY call is maintained, with TP of $1.53 offering a total
return of 11%.
Starhill’s 1Q13 revenue and NPI were in-line with
expectations, growing 16% and 12% yo-y respectively.
Growth in the coming quarters will come from positive rental
reversions as well as a full 9 months’ contribution from the
recently acquired Plaza Arcade in Australia. We maintain our
BUY call with a higher TP of $1.03 (prev. $0.92). The stock
has outperformed in recent months and presently offers 5.3-
5.6% FY13/FY14F yields. This translates to a total return of
Capitaland’s 1Q13 PATMI of $188.2m is in line with market
expectations but slightly below our estimates, accounting for
19% of our full year forecast. Looking ahead, we expect
better contributions in the coming quarters, led by China on
recognition of c3000 units this year. Maintain Buy with TP of
S$4.44 pegged at a 25% discount to RNAV of S$5.92. 41%
SingLand’s 1Q13 net profit of $49.6m (-11% y-o-y) with
$114.7m (-41% y-o-y) revenue was dragged by lower
residential contributions. We expect a netter 2H on new
residential launches and strong recurrent income base.
Downgrade to HOLD, TP $9.62 as the share price has
outperformed recently and is trading close to our TP. But our
analyst believes the stock still holds a lot of hidden value,
particularly from its stake in Marina Centre holdings. Another
catalyst could materialize if its major shareholder continues to
raise its stake in the company. We would be buyers on
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PostPosted: Tue Apr 30, 2013 10:01 am    Post subject: Reply with quote

Today’s Focus
 CDL Hospitality Trusts - Lacks catalyst for now,
downgrade to HOLD, TP adjusted to S$2.07
Weak 1Q13 results for CDL Hospitality Trusts were in line;
earnings dragged down by its Singapore hotels. The absence
of the bi-annual Singapore Airshow with Chinese New Year
falling later (in Feb13 vs Jan12) impacted accommodation
demand for 1Q13, especially the corporate travelers. We see
challenges in the immediate term. We believe that further
room rate hikes will be limited given new incoming hotel
supply in 2013 (4,138 rooms, +8% of current). Downgrade to
HOLD, TP adjusted to S$2.07 (Prev S$ 2.11).
OCBC 1Q13 results inline with ours but above consensus;
lifted by lower provisions. Net profit came in at S$696m (+5%
q-o-q;--16% y-o-y). While earnings were above consensus
estimate of S$641m, there were largely inline with ours. 1Q13
net profit comprised 23% of our FY13F forecasts. As expected
NIM continued to slide (-6bps q-o-q; -22bps y-o-y) given
sustained pressure from asset yields and reduced gapping
opportunities. Non-interest income was drive by brokerage
and wealth management on a q-o-q basis but was offset by
slightly lower insurance contribution and lower trading gains.
Provisions continued to be low. Loans grew 3% q-o-q; 10% yo-
y while deposits grew 2% q-o-q; 7% y-o-y. Loan-to-deposit
ratio was fairly stable at 87%. Our current BUY and S$11.50
TP is under review. Will furnish further details after analyst
briefing today.
DPU of 1.99 Scts for Frasers Commercial Trust was in line
(+14% y-o-y). Capital restructuring completing; expiring of
Alexandra Technopark master lease in FY14 presents upside.
Supported by its restructuring exercise coupled with underlying
growth, we like FCOT’s growth story over FY13-15F, which is
visible and achievable. Maintain BUY with a higher TP of
S$1.69 (Prev S$ 1.45) as we raise our FY15F earnings from
Alexandra Technopark master lease expiry.
4Q13 results for Ascendas Hospitality Trust in line. Revenues of
S$48.3m came in 8.7% below IPO forecasts. This is due to a
seasonally low quarter for its Australian hotels while a soft
operating environment resulted in its portfolio RevPAR coming
in A$158/night, - 4.8% vs forecast). However, DPU of 1.68
cents beats its forecast by 14.3%. The proposed acquisition of
US Indices Last Close Pts Chg % Chg
Dow Jones  14,818.8 106.2 0.7
S&P  1,593.6 11.4 0.7
NASDAQ  3,307.0 27.8 0.8
Regional Indices
ST Index  3,361.9 13.1 0.4
ST Small Cap  590.4 0.4 0.1
Hang Seng  22,580.8 33.1 0.1
HSCEI  10,785.6 (48.5) (0.4)
HSCCI  4,421.5 4.2 0.1
KLCI  1,708.0 (3.3) (0.2)
SET  1,584.9 2.0 0.1
JCI  4,999.8 21.2 0.4
PCOMP  7,028.4 2.9 0.0
KOSPI  1,940.7 (3.9) (0.2)
TWSE  8,029.7 7.7 0.1
Nikkei  13,884.1 (42.0) (0.3)
STI Index Performance
2006 2007 2008 2009 2010 2011 2012 2013
100-Day MA
Total Market cap (US$bn) 628
Total Daily Vol (m shrs) 2,253
12m ST Index High 3,362
12m ST Index Low 2,699
Source: Bloomberg Finance L.P
Stock Picks – Large Cap
Rec’n Price ($)
29 Apr
Target Price
Mapletree Greater China
Commercial Trust
Buy 1.115 1.18
Neptune Orient Lines Buy 1.110 1.45
Keppel Corp Buy 10.690 13.00
SPH Buy 4.390 4.75
Stock Picks – Small /Mid Cap
Rec’n Price ($)
29 Apr
Target Price
Perennial China Retail Trust Buy 0.635 0.84
Pan-United Corp Buy 0.935 1.16
Tat Hong Holdings Buy 1.485 1.80
China Merchants Buy 0.920 1.12
Kreuz Holdings Buy 0.525 0.58
Source: Bloomberg Finance L.P, DBS Vickers
Wired Daily
Page 2
Park Hotel Clarke Quay is subject to unitholders vote at an
EGM to be convened soon. While we have not factored in
the acquisition in our estimates pending financial details,
based on our initial analysis, assuming that the trust raises
67% of the acquisition value (cS$200m) in equity, we
estimate a 4-6% dilution to our FY14-15F estimates to 6.8
and 7.1Scts. Maintain HOLD, TP S$1.00.
Indofood Agri Resources’ 1Q13 earnings of Rp106.8 bn (-
72% y-o-y; -45% q-o-q) was below our and consensus
expectations. Plantations EBITDA plunged 64% y-o-y, partly
offset by 21% rise in Edible Oils & Fats EBITDA. Production
cost is guided to increase 5-10% for FY13F on 15% higher
wages and 5-10% output increase. FY13F/14F/15F earnings
cut by 9%/7%/5% on lower Lonsum contribution, higher
fertiliser and indirect costs, and lower FFB purchases.
Maintain HOLD, TP reduced to S$1.14 (Prev S$ 1.20).
Bumitama released its 1Q13 production numbers after
market yesterday. Both own and smallholders FFB (Fresh Fruit
Bunches) output grew by 34% and 23%, slightly
outperforming our full year growth forecasts of 29% and
12%, respectively. We expect own and smallholder FFB
output to reach 1,221,106 MT and 561,389 MT, respectively.
Hence, in 1Q13, the group had already achieved 20.2% and
21.4% of our full year forecasts, respectively. Bear in mind
that 1Q is the lowest production quarter (typically accounting
for c.19% of full year output). We understand the group
expects full year growth rate to remain sustainable; and
higher contribution in 2H13. Bumitama is due to release its
results on 13 May13 after market close. We expect results to
outperform our expectations, despite lower CPO ASP. We
understand FFB yields in Kalimantan were not as adversely
affected by dryness in Jul-Sep12 nor Mar13 that was
reported by IndoAgri yesterday.
1Q13 results for Broadway came in below forecast due to
continued HDD weakness and lower margins. The Foam
Plastic segment offers better growth but expansion is too
slow to offset HDD decline. We are likely to maintain Fully
Valued call and cut earnings for FY13F and FY14F. Will
provide more details after analyst briefing today.
Yongnam has announced that the consortium which it is
working with (in partnership with JGC Corporation and
Changi Airport Planners and Engineers), has submitted a
proposal to the Myanmar Department of Civil Aviation for
the right to design, construct, operate and maintain Yangon
International Airport and its facilities for a 30 year concession
period. We believe Yongnam’s consortium stands a good
chance to win the project due to their credentials. Maintain
Hold rating and TP S$0.32 for now.
Lian Beng Group has secured three new projects worth a
total of $211m. This brings the group’s construction order
book to a new high of $1.2 bn, and will provide the group
with a substantial construction revenue flow through FY2016.
The three new contracts involve the construction of Oxley
Tower @ Robinson, a hotel at 122 Middle Road, and
Goodwood Residence.
Prices of completed private apartments and condominiums
rose marginally in March, reversing February's drop,
according to the latest flash estimate from the National
University of Singapore (NUS). NUS's overall Singapore
Residential Price Index (SRPI), which tracks prices of
completed non-landed private homes, excluding executive
condos, rose 0.9% in March, after dipping 1.2% in February.
This was driven mainly by the sub-index for Central Region
(excluding small units), which rose 2.2% in March, against a
3.7% slide in February.
The first- quarter Global Economic Conditions Survey (GECS)
revealed that levels of business confidence in Singapore,
while still fragile, were stabilising and remained stronger than
those in the rest of the region. Singapore's confidence index
was up 8.4 points since Q4 last year, hitting -24.0 in Q1. This
was just above the Asia-Pacific average at -24.8, as well as
Hong Kong's at -25.7 and, to a greater extent, Malaysia's at -
41.7. However, Singapore still fell short of the global
confidence index at -13.0, as well as that of China at -4.7.
The Middle East saw the highest confidence levels at 4.5.
US markets continued to rally higher. Not because the
economy is improving but ironically, because it’s not
doing all that well and with tame inflation, the optimism
is that the FED will renew its pledge to purchase bonds. In
Europe, the ECB is also seen cutting interest rates to a
record low of 0.5% this Thursday. Of the 273 S&P500
companies that have reported earnings so far this month,
74% exceeded analysts’ profit predictions, while 55%
missed sales estimates, this according to Bloomberg.
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