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DBS Vickers Reports July 2013
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Posts: 1350

PostPosted: Fri Jul 19, 2013 9:09 am    Post subject: Reply with quote

Today’s Focus
�� Keppel Corp - 2Q13 results slightly below on higher tax
rate; announced dividend-in-specie
�� Ezion - Adding new liftboat; maintain BUY; TP adjusted
to S$2.96
2Q13 results for Keppel Corp were slightly below on higher
tax rate. O&M saw a slight uptick in EBIT margin from 14.1%
last quarter to 14.2%, though we had expected it to be
closer to 14.4%. A positive surprise was the dividend-inspecie
of 8 KREIT shares for 100 Keppel shares, equivalent
to10.8 Scents per Keppel share, bringing total interim DPS to
20.8 Scents. Management reiterates confidence in Brazil
operations. We believe over 10 years of operating experience
in Brazil and excellent risk management distinguishes Keppel
from other players that have run into operational issues in
Brazil. We have trimmed our FY13 core profit by 1.5% to
account for the higher taxes in 2Q13. Our TP is thus revised
to S$12.90 (Prev: S$13.00). Reiterate BUY.
Ezion is adding a 12th liftboat to fleet, which is backed by a
5-year charter contract. It may be converted to time charter
with potentially higher contract value of c.US$90m. The
newbuild rig is expected to be delivered to a national oil
company in SEA by late 1Q 2015. The cost of the newbuild -
US$60m - will be funded by the issuance of preference shares
(27%) and bank borrowings (73%). Ezion is issuing 300
redeemable exchange preference shares to five Global
Investor Programme Funds at an issue price of S$100k each
to raise S$29.5m net proceeds. Dilution is minimal at 1.4%
and would be more than offset by 1.6% earnings accretion
from the new liftboat. FY13-15F earnings were trimmed by
0.4-2.2%. Maintain BUY; TP adjusted to S$2.96 (Prev S$
3.00).
2Q13 results for CapitaRetail China Trust in line. Upgrade to
BUY, TP adjusted to S$1.75. We believe that market reaction
to CRCT on concerns of the supply glut and the economic
downturn is a tad unwarranted. Share price has fallen c.20%
from its high of S$1.87 in early April, and given its compelling
growth story for FY14 and the still strong underlying
performance of its existing malls, we believe this weakness
presents an opportunity to re-look at the investment case for
the stock.
US Indices Last Close Pts Chg % Chg
Dow Jones �� 15,548.5 78.0 0.5
S&P �� 1,689.4 8.5 0.5
NASDAQ �� 3,611.3 1.3 0.0
Regional Indices
ST Index �� 3,218.2 9.9 0.3
ST Small Cap �� 577.4 0.3 0.0
Hang Seng �� 21,345.2 (26.6) (0.1)
HSCEI �� 9,492.1 11.2 0.1
HSCCI �� 4,032.0 (36.3) (0.9)
KLCI �� 1,791.5 2.9 0.2
SET �� 1,487.2 29.1 2.0
JCI �� 4,720.4 41.4 0.9
PCOMP �� 6,648.4 73.6 1.1
KOSPI �� 1,875.5 (12.0) (0.6)
TWSE �� 8,194.9 (64.1) (0.Cool
Nikkei �� 14,808.5 193.5 1.3
STI Index Performance
Singapore
Total Market cap (US$bn) 595
Total Daily Vol (m shrs) 3,664
12m ST Index High 3,454
12m ST Index Low 2,946
Source: Bloomberg Finance L.P
Stock Picks – Large Cap
Rec’n Price ($)
18 Jul
Target Price
($)
ST Engineering Buy 4.27 4.80
ComfortDelgro Buy 1.94 2.19
Hutchison Port Holdings Trust
(US$)
Buy 0.76 0.82
UOL Buy 6.74 8.21
Stock Picks – Small /Mid Cap
Rec’n Price ($)
18 Jul
Target Price
($)
Del Monte Buy 0.865 0.97
Pan-United Corp Buy 0.90 1.16
China Merchants Buy 0.87 1.07
Nam Cheong Buy 0.27 0.36
Source: Bloomberg Finance L.P, DBS Vickers
Singapore
Wired Daily
Page 2
The depreciation of the JPY against the SGD resulted in
Mapletree Logistics Trust (MLT) reporting 2% and 3% y-o-y
declines in gross revenues and net property income to
S$75.4m and S$65.3m, respectively. 1Q14 distribution
includes the payout of gains from the divestment of 30
Woodlands Loop. As with prior divestments, the manager will
distribute gains over 8 quarters. MLT has a defensive
portfolio. Forex weakness is expected to persist but will be
substantially hedged. Maintain BUY with revised S$1.32 TP
(Prev S$ 1.37).
OUE Hospitality Trust (OUE H-Trust) is set to raise about
$600m from its initial public offering (IPO), after pricing
its stapled securities at the lower end of its indicative
range. The stapled group, comprising OUE Hospitality
Real Estate Investment Trust (Reit) and OUE Hospitality
Business Trust, is selling 434.6m stapled securities in the
public and placement tranches at 88 cents each, subject
to an overallotment option of 68.2m units. This compares
with the earlier price range of 88 cents to 90 cents. Based
on the price set, the distribution yield is expected at an
annualised 7.4% this year and 7.5% for the next.
Global Logistic Properties has leased 24,000 sqm to one
of the largest hypermarket operators in China, at GLP
Park SND in Suzhou. This lease agreement marks the first
collaboration between GLP and the customer.
Hankore Environment is placing 293.6m new shares at
the issue price of S$0.05 per Placement Share. The issue
price of S$0.05 represents a discount of approximately
1% to the last volume weighted average price. The
estimated net proceeds of S$14.7m will be used for
business investments and working capital purposes.
Oxley Holdings is taking a 10% stake in GD Capital for
RMB35.7m, with its eyes set on development projects in
an economic and technical development zone in China's
Anhui province.
UPP Holdings has entered into an agreement to develop
an industrial park and jetty port in the Mandalay region of
Myanmar. UPP will be given the option to gradually invest
up to an aggregate sum of US$175.0m to acquire up to
70.0% of the equity interest in the JV Co.
CNA Group is placing 60m new shares at the issue price
of S$0.1208 per share. The issue price represents a
discount of approximately 10% to the last volume
weighted average price. The estimated net proceeds of
S$6.8m shall be used for general working capital and
selected projects in Thailand.
Singapore's Keppel Corp and Sembcorp Marine, the
world's top offshore rig-makers, stand to be among the
winners from Beijing's moves to tighten credit amid a
downturn at China's shipyards. The two companies have
been under mounting pressure from Chinese yards
offering generous payment terms, price discounts and
help with financing. That may be changing after Beijing
pledged to cut credit to industries plagued with
overcapacity, and China Rongsheng Heavy Industries
Group, the country's largest private shipbuilder, fell into
financial trouble.
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PostPosted: Tue Jul 23, 2013 10:19 am    Post subject: Reply with quote

SIA Engineering, Hold S$5.16, Bloomberg: SIE SP
Mixed bag
Price Target : 12-Month S$ 5.10 (Prev S$ 4.80)
By: Suvro SARKAR +65 6398 7973


• 1QFYMar14 net profit of S$69m largely in line
• Weaker core operating margins offset by stronger contributions from JV/ associates
• Trading cum dividend (FY13 final DPS of 15Scts) till 25 July; lacks major catalysts for any further re-rating
• Maintain HOLD while revising our TP higher to S$5.10, as we benchmark valuations to listed peers

Highlights
Weaker core operating margins. 1QFY14 net profit of S$69m (up 5% q-o-q, down 2% y-o-y) came in largely within expectations, and made up more than 24% of our full-year FY14 earnings estimates. Revenue of S$289.4m showed similar flattish trends – lower 4% y-o-y on lower material and fleet management revenue – but core operating margins dipped during the quarter to 9.6%, down from 10.9% in 4Q13 and 11.4% in 1Q13, likely on the back of higher subcontract costs.
Offset by strong performance at JV/assoc level. The performance of the Group’s JV/ associates – largely driven by its engine shops like SAESL and Eagle Asia – picked up strongly in 1Q14, likely helped by a stronger USD as well. Contributions from JV/ associates improved 14% y-o-y to S$45.6m, accounting for close to 58% of Group PBT during the quarter.

Our View
Near term outlook steady but unexciting. We expect sustained demand for the Group’s core MRO businesses in the near term, despite the uncertain macro environment. SIE should continue to benefit from growth in air traffic in the Asia-Pacific region, supporting the relative resilience of Asian carriers. Growth will be driven by its cluster of strategic partnerships that SIE has established in various pockets of the MRO value chain over recent years, but the ramp up will be gradual, as evidenced by the flattish growth in FY13.

Recommendation
Trading at close to +2 S.D. valuations, maintain HOLD. Cash generation continued to be robust in 1Q14 and net cash is now close to S$620m, supporting the Group’s ability to pay steady dividends. However, further growth in dividends is unlikely in FY14 and current valuations look rich at 20x FY14 PE. Given the lack of significant near term catalysts, we maintain HOLD at a revised TP of S$5.10 (adjusting for higher relative valuation pegs).
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PostPosted: Tue Jul 23, 2013 10:24 am    Post subject: Reply with quote

Today’s Focus
 Tiger Airways - Look beyond the weak quarter, maintain
BUY with lower TP of S$0.74
Tiger Airways reported 1QFYMar14 operating loss of S$6.2m,
lower than our expectations of a small profit. Yield erosion in
Singapore led to disappointing operating results. FY14/15F
earnings cut by 32%/22% to reflect higher losses from
associates. The group should report stronger operating profits
hereon, with Tigerair Australia moving to the associate line
from 2Q14, and Tigerair Singapore expanding its fleet by
almost 25% in FY14. We still remain positive on Tigerair’s
ongoing transformation, and its niche focus on the booming
Singapore-Indonesia routes should bear fruit. Maintain BUY
with lower TP of S$0.74 (Prev S$ 0.79).
SIA Engineering reported 1QFYMar14 net profit of S$69m,
largely in line. Weaker core operating margins were offset by
stronger contributions from JV/ associates. Near term outlook
is steady but unexciting. Maintain HOLD while revising our TP
higher to S$5.10 (Prev S$ 4.80), as we benchmark valuations
to listed peers.
Ascendas India Trust’s 1Q14 performance was stable, with
revenue coming in flat at INR1,392m. Available distribution
per unit (DPU) of 1.27 cents for 1Q14 was down 5%
compared to the 1.33 cents posted a year ago. A-iTrust
remains operationally robust as India continues to be an
important hub for IT services. But the weakening INR means
that the strong growth in income has not been translated
into a stronger DPU growth in SGD. Given that acquisitions in
its current pipeline are more a medium term event, we
maintain HOLD, with TP unchanged at S$0.82.
2Q13 result for Raffles Medical in line, net profit up 16% y-oy.
A 1 Sct interim DPS was declared; group remains in healthy
net cash position. Its plan to divest Thong Sia Building is
underway. Maintain HOLD, TP is intact at S$3.15.
Courts Asia has entered into a Memorandum of
Understanding (MOU) with Sinar Mas Land, the property
development part of the Indonesian Conglomerate, Sinar Mas
Group, to build two “Big-Box” outlets in Indonesia. One
includes the previously announced 140,000 sq ft Bekasi store
located in eastern Jakarta. The second development will be
US Indices Last Close Pts Chg % Chg
Dow Jones  15,545.6 1.8 0.0
S&P  1,695.5 3.4 0.2
NASDAQ  3,600.4 12.8 0.4
Regional Indices
ST Index  3,234.4 21.1 0.7
ST Small Cap  575.8 (0.5) (0.1)
Hang Seng  21,416.5 54.1 0.3
HSCEI  9,415.1 (33.5) (0.4)
HSCCI  4,024.1 25.1 0.6
KLCI  1,797.7 (0.1) (0.0)
SET  1,481.8 (5.4) (0.4)
JCI  4,679.0 (45.4) (1.0)
PCOMP  6,627.4 6.3 0.1
KOSPI  1,880.4 8.9 0.5
TWSE  8,105.5 43.4 0.5
Nikkei  14,658.0 68.1 0.5
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013
100-Day MA
Index
STI
Total Market cap (US$bn) 594
Total Daily Vol (m shrs) 2,286
12m ST Index High 3,454
12m ST Index Low 2,946
Source: Bloomberg Finance L.P
Stock Picks – Large Cap
Rec’n Price ($)
22 Jul
Target Price
($)
ST Engineering Buy 4.32 4.80
ComfortDelgro Buy 1.945 2.19
UOL Buy 6.93 8.21
Stock Picks – Small /Mid Cap
Rec’n Price ($)
22 Jul
Target Price
($)
Del Monte Buy 0.905 0.97
Pan-United Corp Buy 0.91 1.16
China Merchants Buy 0.865 1.07
Singapore Post Buy 1.295 1.56
Nam Cheong Buy 0.275 0.36
Source: Bloomberg Finance L.P, DBS Vickers
Singapore
Wired Daily
Page 2
located at BSD City, Serpong, Tangerang, 25km S-W of
Jakarta. The BSD City site will have 130,000 sq ft of retail
space, a regional distribution centre and a support office.
This is expected to open six months after the Bekasi store
opens. The first development in Bekasi Indonesia is
expected to start contributing to earnings in 2014. We
have factored in modest contribution in FY15F. We expect
minimal contribution the BSD City store in FY15F since it
will open later than the Bekasi store. Maintain BUY, TP
S$1.13.
Global Logistic Properties has signed a new lease
agreement of approximately 13,000 sqm in Fukuoka,
Japan. This lease is the first signed between GLP and CL
Co, an expanding third-party logistics company dealing
with consumer and pharmaceutical products.
F J Benjamin Holdings has signed 10-year exclusive
distribution agreements for the British Label "Superdry"
for Singapore and Malaysia with UK-based SuperGroup. F
J Benjamin will open 3 stores in Kuala Lumpur, Malaysia
by early 2014. The group is looking for appropriate
locations for Singapore.
Manufacturing Integration Technology is expected to
incur a net loss for the six months ended 30 June 2013.
The net loss is mainly caused by the current weak market
for the semiconductor equipment worldwide.
A growing number of economists surveyed by Bloomberg
say the FED will begin trimming its USD85bil in monthly
bond purchases in September. That was the view of half
of those who participated in the July 18-22 survey, up
from 44% in last month’s poll. Even as expectations of a
September taper rose, 10-year Treasury yields continued
to fall last week from an almost 2-year high after Fed
Chairman Ben S. Bernanke said reducing bond-buying
wouldn’t constitute policy-tightening. In its first trim, the
FOMC will probably cut monthly bond buying to
USD65bil. The economists see purchases divided between
USD$35bil in Treasuries and USD30bil in mortgagebacked
securities, this according to the median estimate
of economists. The central bank will probably halt the
asset purchases in 2Q 2014, according to half of the
economists. 20% forecast the FOMC will end so-called
quantitative easing in the third quarter of 2014.
We think market rationality has returned with regards to
QE tapering. Investors understand that its timing and pace
is not cast in stone but depends on the unemployment
and inflation numbers while keeping a watchful eye on
housing.
US markets were marginally firmer on June weak-thanexpected
existing home sales (actual 5.08mil, consensus
5.26mil) and McDonald’s Corp disappointed on revenue.
The 10-yr Treasury yield was flat at 2.48%.
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PostPosted: Wed Jul 24, 2013 8:58 am    Post subject: Reply with quote

Today’s Focus
 Yoma - No change to long term positive view; maintain
BUY with lower TP of S$1.02
 Nam Cheong - Maintains FY13 momentum with another
US$70m contract wins
We hosted Yoma on a two-day roadshow in Hong Kong.
Investors who are keen on Myanmar opening up mostly
agreed that Yoma is a direct and liquid access to this frontier
market. Discussions centered on Yoma’s property business,
with key concerns being sustainability of demand and pricing,
Yoma’s funding needs and its ability to execute an aggressive
and diversified expansion plan. Also, the share price has more
than doubled within the year and investors are apprehensive
of entering at current levels, and asked about possible rerating
catalysts. Property sales remain healthy but we cut
FY14F/15F earnings by 14%/9% as higher costs would
squeeze margins and growth. No change to long term
positive view on Yoma; maintain BUY with lower TP of
S$1.02 (Prev S$ 1.0Cool.
Nam Cheong announced another round of vessel sales worth
US$70.5m for 2 PSVs and 1 accommodation work barge
(AWB) to be delivered between 1Q14-4Q14. The AWB was
sold to a subsidiary of Malaysian contractor Perdana
Petroleum, a repeat customer who had earlier bought 2
similar vessels in April 2013. 1 of the PSVs were sold to an
existing Asian customer, who had earlier bought 4 PSVs in
May 2013, and the other PSV was bought by new customer
EDT Offshore, a specialist OSV operator based in Cyprus. Nam
Cheong is well on track to achieve its sales target of 19
vessels in FY13 and 25 in FY14. Orderbook now stands at
about RM1.5bn. This underpins robust net profit CAGR of
20% for the Group in FY13/14. Maintain BUY with TP of
S$0.36. Expect further near term catalysts from a strong
showing in 2Q13.
Organic expansion and revaluation gains lifted CapitaMalls
Asia’s earnings. 2Q13 net profit grew 6% y-o-y to S$246m
while revenue was up 25% to S$93.4m. New mall
completions and healthy rental growth in China support NAV
and cashflow. Maintain BUY, TP S$2.34 (Prev S$ 2.3Cool. With
20 malls in the pipeline to be completed by 2017, earnings
US Indices Last Close Pts Chg % Chg
Dow Jones  15,567.7 22.2 0.1
S&P  1,692.4 (3.1) (0.2)
NASDAQ  3,579.3 (21.1) (0.6)
Regional Indices
ST Index  3,253.8 19.4 0.6
ST Small Cap  575.1 (0.7) (0.1)
Hang Seng  21,915.4 498.9 2.3
HSCEI  9,780.2 365.1 3.9
HSCCI  4,132.8 108.8 2.7
KLCI  1,805.3 7.6 0.4
SET  1,513.3 31.5 2.1
JCI  4,767.2 88.2 1.9
PCOMP  6,743.2 115.9 1.7
KOSPI  1,904.2 23.8 1.3
TWSE  8,214.7 109.2 1.3
Nikkei  14,778.5 120.5 0.8
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013
100-Day MA
Index
STI
Total Market cap (US$bn) 597
Total Daily Vol (m shrs) 2,465
12m ST Index High 3,454
12m ST Index Low 2,946
Source: Bloomberg Finance L.P
Stock Picks – Large Cap
Rec’n Price ($)
23 Jul
Target Price
($)
ST Engineering Buy 4.330 4.80
ComfortDelgro Buy 1.960 2.19
UOL Buy 6.97 8.21
Stock Picks – Small /Mid Cap
Rec’n Price ($)
23 Jul
Target Price
($)
Del Monte Buy 0.905 0.97
Pan-United Corp Buy 0.895 1.16
China Merchants Buy 0.865 1.07
Singapore Post Buy 1.305 1.56
Nam Cheong Buy 0.275 0.36
Source: Bloomberg Finance L.P, DBS Vickers
Singapore
Wired Daily
Page 2
trajectory remains visible. The sentiment on China remains a
dampener amid short term adjustments on growth quality,
longer term prospects are bright, on the consumption front.
This bodes well for CMA as a Pan Asian retail real estate
player.
3Q13 results for Frasers Centrepoint Trust in line. Strong
performances were seen at Causeway Point (CWP) and
North Point (NP). We should continue to see positive
rental reversions at both malls. Management is
repositioning Bedok Point in light of the completion of
Bedok Mall at the end of the year. In the coming quarters,
CWP and NP will continue to be the two key growth
drivers for the REIT, with performances for the other malls
remaining stable. In addition, we expect the acquisition of
Changi City Point to be completed in FY14, and this
should contribute positively to earnings. Maintain BUY, TP
unchanged at S$2.33.
Ascott Reit reported weaker yoy revenue and profit,
largely due to a lost income from the divestments of
Grand Cairnhill and Somerset Gordon Heights. Despite
the JPY and AUD depreciating against the SGD, Ascott
recorded a 0.4% net property income translation gain
due to stronger EUR and CNY. Going forward, the REIT is
looking to hedge 50% to 70% of its EUR and JPY
denominated currencies in order to minimize income
volatility from exchange rate movements. Maintain BUY,
TP S$1.51.
2Q13 earnings for Sheng Siong Group slightly below;
growth was driven by margin expansion and contribution
by new stores but offset by store renovations and
competition. We expect margins to expand further, and
earnings should improve sequentially from seasonally
weak 2Q. The group has declared interim DPS of 1.2
Scents; dividend yield of c.4% supports share price.
Maintain BUY, TP S$0.80 (Prev S$ 0.7Cool.
Singapore Exchange reported 4Q13 net profit of S$88m.
Full year earnings at S$336m were in line with consensus
but 7% above our estimates. Strong derivatives and other
revenue lifted profits; expenses rose in tandem with
revenue, and were mainly due to higher staff costs. SGX
declared final DPS of 16 Scts, inclusive of 4 Scts base DPS,
bringing full year DPS to 28 Scts (89% payout). Maintain
HOLD and S$7.15 TP
Global Logistic Properties has signed lease agreements
totaling 44,000 sqm to Goodbaby, a leading global
manufacturer and retailer of infant and children products.
With these two new leases in Suzhou and Langfang,
Goodbaby has increased its leased area with GLP to
51,000 sqm (549,000 sq ft).
Mencast Holdings has won contracts worth a total of
approximately S$6m from a Singapore based refinery.
Effective from mid-2013 to June 2016, these contracts
cover work such as maintenance, waste treatment,
cleaning and operations.
Smartflex Holdings expects revenue for 1H2013 to be
lower than 1H2012 as customers’ demand for the
Group’s products fell. Consequently, the Group expects
to report a net loss before tax for 1H2013.
CSE Global has entered into agreements to acquire 75%
stake in S3 ID for S$14.7m. The acquisition will enable
CSE to increase products and services offered to the Oil &
Gas Industry.
Sinostar PEC Holdings will report a loss for 2Q2013 and 6
months ended 30 June 2013. The loss is mainly due to
prolonged sluggish demands in the oil and petrochemical
products leads to over-supply situation in the markets and
the lower market selling price.
Singapore’s inflation rose to 1.8% y-o-y this June due to
higher petrol pump prices. June's inflation data was also
0.2% higher than the 1.6% in May. Services inflation was
higher at 2.7% in June compared with 2.5% in May,
mainly on account of costlier medical insurance and
holiday travel. Food inflation was stable at 2.0% as the
cost of prepared meals rose at a slightly stronger pace,
while the price increase for non-cooked food was more
modest. The government has reduced its inflation forecast
for the year and said that its current monetary policy
stance remains appropriate. Consumer price inflation is
likely to range between 2.0% and 3.0% in 2013,
according to the Monetary Authority of Singapore,
revising an April estimate for a 3.0% to 4.0% rise in the
index.
The Monetary Authority of Singapore said that
Singapore's growth will be stronger and inflation lower
this year compared to last year. GDP should comfortably
meet growth forecast of 1-3% this year, according to
MAS managing director Ravi Menon. Growth was
estimated at 2% in H1 and should pick up further in 2H.
MAS revised down CPI to 2-3% from 3-4% previously but
said core inflation will persist.
Passenger traffic at Singapore Changi Airport increased
6.1% in June 2013 with 4.67mil passengers passing
through the airport. Air traffic to and from Southeast
Asia, Northeast Asia, South Asia and the Middle East
grew. The haze situation in Singapore during the month
had no discernible impact on passenger and aircraft
movements, this according to Changi Airport Group. On
the cargo front, 150,500 tonnes of airfreight were
Singapore
Wired Daily
Page 3
processed at Changi Airport in June 2013, 1.8% lower yo-
y.
A state tender for a 30-year leasehold industrial site in
Woodlands Industrial Park E9 has drawn 10 bids. The
highest bid from Incorporated Woodlands Pte Ltd came in
at S$72.69mil or S$161.02 per square foot per plot ratio
(psf ppr). The second highest bid was from Lian Beng
Group's unit, Wealth Land (S$107.17 psf ppr). The 1.68-
hectare site is zoned for Business 2 use with an integrated
heavy vehicle park.
Premier Li Keqiang's government sees 7% growth for
China as the bottom line for tolerance of an economic
slowdown, signalling the nation will act to support
expansion if needed. Expansion below 7% won't be
tolerated because China needs to achieve a moderately
prosperous society by 2020, according to a commentary
published by the official Xinhua News Agency.
US indices pulled back from gains in recent sessions as
earnings releases continued and investors pondered when
the FED will start QE tapering. In the technology sector,
shares of Texas Instruments rose on better than expected
results while Netflix fell on lower subscriber gains. In after
hours trade, Apple reported profit and sales ahead of
expectations.
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PostPosted: Thu Jul 25, 2013 9:03 am    Post subject: Reply with quote

Today’s Focus
 STI – Expect minor pullback in current session, immediate
support at 3248-3258
 Frasers Commercial Trust - Attractive growth over next 2
years; forward yields of 6.0%-7.1% attractive. Maintain
BUY, TP S$1.61
STI rose above the 3266 near-term resistance yesterday,
which positions it at or slightly above the 13.9x (average) 12-
mth forward PE mark. While further gains towards 3310 is
possible from a technical view point, we think continued
short-term rise towards that level will result in a pullback as
bond yields stay underpinned by QE tapering, the uneven
global economic recovery and the low single digit EPS growth
for the STI this year. For the current session, we expect a
modest pullback for the STI, immediate support at 3248-
3258.
3Q13 results for Frasers Commercial Trust in line. Operational
outlook stable; expiry of lease at Alexandra Technopark in
2014 could lead to higher earnings. Maintain BUY, TP revised
to S$1.61 (Prev S$ 1.69) after adjusting our risk free rate
assumptions from 2.0% to 2.9%. FCOT offers attractive
growth over the next 2 years. Forward yields of 6.0%-7.1% is
strong and above the commercial and the sector average.
Cache Logistics Trust reported 2Q13 DPU of 2.147 Scts, in
line with expectations. Gearing remains conservative at
c.29%, which is below management’s optimal range of 35%.
Looking ahead, we continue to see opportunities for the
Manager to utilise its balance sheet to fund acquisitions.
There could also be opportunities to extract further GFA in its
existing portfolio. Maintain BUY, TP S$1.45 (Prev S$ 1.47).
Starhill Global REIT’s 2Q13 results in line. We expect strong
reversions for Singapore and Malaysian properties, while
income growth prospects still strong. Maintain BUY, TP
S$0.94 (Prev S$ 0.9Cool, after accounting for a larger share
base and a higher risk free rate. Going forward, we believe
that 2H13 will reflect a stronger set of results as reversions
from the master leases in Ngee Ann City, Starhill Gallery and
Lot 10 begin to contribute on a full quarter basis.
US Indices Last Close Pts Chg % Chg
Dow Jones  15,542.2 (25.5) (0.2)
S&P  1,685.9 (6.5) (0.4)
NASDAQ  3,579.6 0.3 0.0
Regional Indices
ST Index  3,274.8 21.0 0.6
ST Small Cap  577.2 2.1 0.4
Hang Seng  21,968.9 53.5 0.2
HSCEI  9,778.5 (1.6) (0.0)
HSCCI  4,137.6 4.8 0.1
KLCI  1,810.0 4.7 0.3
SET  1,501.4 (12.0) (0.Cool
JCI  4,718.1 (49.1) (1.0)
PCOMP  6,804.2 60.9 0.9
KOSPI  1,912.1 7.9 0.4
TWSE  8,196.2 (18.5) (0.2)
Nikkei  14,731.3 (47.2) (0.3)
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013
100-Day MA
Index
STI
Total Market cap (US$bn) 601
Total Daily Vol (m shrs) 3,971
12m ST Index High 3,454
12m ST Index Low 2,946
Source: Bloomberg Finance L.P
Stock Picks – Large Cap
Rec’n Price ($)
24 Jul
Target Price
($)
ST Engineering Buy 4.40 4.80
ComfortDelgro Buy 1.95 2.19
UOL Buy 7.02 8.21
Stock Picks – Small /Mid Cap
Rec’n Price ($)
24 Jul
Target Price
($)
Del Monte Buy 0.91 0.97
Pan-United Corp Buy 0.895 1.16
China Merchants Buy 0.85 1.07
Singapore Post Buy 1.31 1.56
Nam Cheong Buy 0.285 0.36
Source: Bloomberg Finance L.P, DBS Vickers
Singapore
Wired Daily
Page 2
2Q13 results for Cambridge Industrial Trust in line with
expectations. Portfolio remains resilient; earnings growth to
be led by opportunistic acquisitions or development projects.
HOLD maintained, TP S$0.78.
Keppel Land plans to transfer its 51% interest in
integrated township Jakarta Garden City to its partner PT
Modernland Realty for S$290.5mil. Keppel Land expects a
net proceed of S$275mil from the sale, for a profit after
tax of S$186mil. The transaction is expected to be
completed by the fourth quarter of the year.
The deadline for Yoma to accept the offer to acquire the
land development rights of and to participate in the
development of the approximately 12-acres site located
along the Hlaing River has been extended till 31
December 2013.
Hisaka has entered into an agreement to acquire the
entire stake in Temasek Regal, a Malaysian entity
principally involved in property development, construction
/ project management, investment, trading of
construction materials, asset management and real estate
marketing in Malaysia. This acquisition allows the group
to diversify from its core semi-conductor business. The
purchase consideration of S$127.3m will be satisfied via
the issue of 195m new shares at an issue price of S$0.55
per share and cash of S$20m. The issue price is at a 20%
premium to its last 5-day average price.
Mirach Energy said it will commence drilling another 4
new infill wells that form part of the nine wells to be
drilled this year, having received the approval from
Pertamina EP.
Crane operator Tat Hong and crane maker Yongmao are
restructuring their alliance in China after numerous issues
over the past few years. Tat Hong will allot shares in its
wholly owned Tat Hong Equipment (China) unit to 23.9%
associate Yongmao in exchange for Yongmao's stake in
two China subsidiaries. The value of the Tat Hong
Equipment shares is RMB78.7m, which is equal to
Yongmao's original cost of investment in the two China
subsidiaries.
China Essence Group expects to register a net loss for the
quarter ended 30 June 2013 in the financial year ending
31 March 2014 (1Q FY14), due to a decrease in sales
volumes for all its products, despite the increase in
average selling price.
China Kangda Food is expected to record a significant
decrease in profit or a loss for the six months ended 30
June 2013 compared to the same period last year. The
expected decline is mainly attributable to the decrease of
demand and selling price of chicken meat products
because of the negative impact from H7N9, which was
detected in chickens in the southern China.
The flash HSBC/Markit Purchasing Managers' Index for
China fell to 47.7 in July from June's final reading of 48.2,
marking a third straight month below the 50 line. It was
also the weakest level since August 2012. A sub-index
measuring employment slid to 47.3 in July, the weakest
since March 2009. It stood at 47.6 in June and has been
below 50 for four months in a row. The new orders subindex
fell to its lowest level in 11 months, and stayed
below 50 for a third straight month. Output declined to
10-month low and remained in contraction for a second
month.
China will scrap business and VAT for small companies
from Aug 1st and roll out more measures to help
exporters. The tax exemption will cover over 6mil firms
whose monthly sales revenues are below 20,000 yuan
(US$3,300). To help the ailing trade sector, the State
Council said banks should increase support for exporters
while the government will simplify customs clearance
procedures, cut administrative fees and provide zero
tariffs for exporters in the services sector.
Las Vegas Sands posted 2Q results that fell short of
analysts’ estimates after winnings in Singapore and
Macau came in lower than projected. The company cited
a lower win percentage at the Marina Bay Sands in
Singapore and the Sands Cotai Central in Macau as well
as competitive pressure on hotel room rates in the Nevada
market. CEO Sheldon Adelson said he saw no evidence
that reports of a slowdown in China were impacting
business in Macau.
US index dipped modestly as weaker forecast by
Caterpillar & Broadcom weighed while utility and home
builder shares fell amid rising interest rates. The US 10-yr
yield rose to 2.588% (from 2.505%).
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PostPosted: Fri Jul 26, 2013 9:16 am    Post subject: Reply with quote

Today’s Focus
 Upgrade Goodpack to BUY on forward earnings growth
After a slow 2HFY13 (FYE Jun), Goodpack’s volume growth
momentum is set to accelerate from 1QFY14 underpinned by
additional demand of: 1) 15k boxes /month from new
synthetic rubber (SR) customer, Sibur in Russia; and 2) 8-9k
boxes/month from newly commenced SR plants of Lanxess
and Asahi in Singapore. This lays the ground for 8-10%
volume growth in FY14. In addition, Goodpack stands to
benefit from the lower handling and logistic costs on its
global tender exercise and leasing cost after the buyback of
300k leased boxes in FY13. Furthermore, Goodpack should
not be affected by any potential rate hikes as c.90% of its
debts are fixed rate. The recent price weakness is an
opportunity for long term investors to accumulate. Goodpack
trades at 12x FY14PE and 1.7x P/BV, which are 1 S.D. below
mean. Our DCF-based S$1.90 TP translates to 14.6x FY14F PE
and 2.1x P/BV or 6-19% discount to historical mean. Upgrade
to Buy, TP unchanged at $1.90.
SIA’s 1QFY14 net earnings of S$122m is in-line with
expectations but due mainly to lift from one-off items
amounting to over S$90m. Passenger yields continue to
weaken on a stronger S$ and weak demand, while cargo
operations continue to lose money. While lower fuel prices
should provide some relief for SIA, passenger yields are
expected to continue to be under pressure, with its cargo
operations also struggling for profitability. The risk for our
earnings projection is on the downside if the decline in yield
becomes even more pronounced. The stock is trading at 0.9x
P/B and we see little upside to our TP of S$11.50, which is
based on 1x P/B as its outlook is still weak. A net cash
position of over S$3.80 should however, hold the stock up
around current levels. Maintain HOLD with S$11.50 TP.
Capitaland’s results were slightly below expectations.
Revenue was 37% higher at S$1.18bn while PATMI was flat
at S$383m after factoring in lower portfolio and revaluation
gains and a S$28m one-off charge from repurchase of CBs.
Stripping out these items, operating profits would have been
S$108m, 20% higher than previously, to reach S$240m for
1H13. We expect 2H earnings to be better sequentially.
US Indices Last Close Pts Chg % Chg
Dow Jones  15,555.6 13.4 0.1
S&P  1,690.3 4.3 0.3
NASDAQ  3,605.2 25.6 0.7
Regional Indices
ST Index  3,235.7 (39.1) (1.2)
ST Small Cap  575.9 (1.3) (0.2)
Hang Seng  21,901.0 (68.0) (0.3)
HSCEI  9,752.6 (25.9) (0.3)
HSCCI  4,151.6 14.0 0.3
KLCI  1,808.4 (1.6) (0.1)
SET  1,456.7 (44.7) (3.0)
JCI  4,674.1 (44.0) (0.9)
PCOMP  6,800.1 (4.1) (0.1)
KOSPI  1,909.6 (2.5) (0.1)
TWSE  8,163.6 (32.6) (0.4)
Nikkei  14,562.9 (168.4) (1.1)
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013
100-Day MA
Index
STI
Total Market cap (US$bn) 603
Total Daily Vol (m shrs) 4,107
12m ST Index High 3,454
12m ST Index Low 2,946
Source: Bloomberg Finance L.P
Stock Picks – Large Cap
Rec’n Price ($)
25 Jul
Target Price
($)
ST Engineering Buy 4.380 4.80
ComfortDelgro Buy 1.985 2.19
UOL Buy 6.89 8.21
Stock Picks – Small /Mid Cap
Rec’n Price ($)
25 Jul
Target Price
($)
Del Monte Buy 0.900 0.97
Pan-United Corp Buy 0.910 1.16
China Merchants Buy 0.850 1.07
Singapore Post Buy 1.300 1.56
Nam Cheong Buy 0.275 0.36
Source: Bloomberg Finance L.P, DBS Vickers
Singapore
Wired Daily
Page 2
Another key takeaway was the result of the strategic review
of the group’s operations and its non-core investments. It
aspires to be a growth company underpinned by steady
recurrent earnings, derived from 1/3 development and 2/3
ready assets and would focus on integrated projects in its
core markets in Spore and China to deliver a target ROE of 8-
12%. We are retaining our Buy call with TP of S$4.36,
pegged to a 25% discount to RNAV. The stock is currently
trading at a steep 26% below its TP. We believe that the
share price gap to TP could close as the group continues to
drive ROE improvements towards it’s long term objective.
Maintain Buy with TP $4.36 (prev. $4.44).
Net profit for SATS grew 11.9% to S$46.2m while revenues
dipped 0.8% to S$434.5m. There was a S$3.8m tax
writeback in the quarter and it booked S$1.7m impairment
charge on assets held for sale. Excluding these items, net
profit would have registered lower 6.8% y-o-y growth to
S$44.1m. 1QFY14 earnings were in line at c.22% of our
FY14F profit, similar to the year-ago quarter. There is little
scope for share price upside in view of moderating passenger
traffic growth and declining airfreight volume. However, this
should be mitigated by its commitment to manage costs, as
well as relatively attractive yields. SATS is currently trading at
+1 SD of its historical PE band, in line with regional/global
peers’ average. Our target PE is the average of the values
derived from our DCF model (WACC 7.7%, t=1.5%) and PE
valuation model (16x FY14/15 EPS). Maintain HOLD, TP
$3.29.
Tat Hong issued S$100m 4.5% fixed rate note due 2018.
Funding will be used for working capital, capex and
refinancing of existing debt. This is slight negative to balance
sheet and earnings. Net gearing will increase from 0.6x to
about 0.63x. Interest cost will increase by 7%, resulted in a
1.7% reduction in earnings for FY14F. Consequently, TP is
adjusted down to S$1.41 from S$1.43. Maintain BUY.
Yangzijiang will be the first to launch dual currency trading in
RMB on SGX dual currency trading platform in addition to
existing SGD counter, with effect from 5th Aug. The rationale
is to bring greater flexibility and convenience to investors
wishing to invest in RMB denominated shares. This may help
to churn more interest and liquidity in the stock but we
believe is only to a small extent as there is no change in the
fundamental of the company.
Ziwo issues a profit warning as it expects to record a
significant drop in revenue and report an operating loss for
2Q2013 and 6M2013. The significant drop in its financial
performance for 2Q2013 was mainly attributed to the
slowdown in sales of key products, lower gross profit margins
and additional provision for doubtful debts. Results will be
released on 13 Aug.
China's government plans to spend RMB1,700bil (US$277bil)
to tackle air pollution over the next 5 years, state media
reported Thursday. Smog has become a major source of
social discontent. The money will be spent on reducing
concentrations of damaging particles known as PM2.5 in the
air. Meanwhile, the country’s labour ministry said China faces
heavy pressure on employment in coming months,
highlighting the depth of the challenge facing Beijing as it
tries to wean the economy off its manufacturing dependency
without disrupting social stability. China's leaders are
working to turn the economy into one led by domestic
consumption and demand from a focus on manufacturing
and exports, but those changes raise the possibility of job
losses as traditional industries restructure.
China ordered more than 1,400 companies in 19 industries
to cut excess production capacity this year. This is part of the
efforts to shift towards a slower but more-sustainable
economic growth. Steelmaking, ferroalloys, electrolytic
aluminum, copper smelting, cement production and
papermaking are among areas affected, the Ministry of
Industry and Information Technology said in a statement
posted on its website yesterday. Excess capacity must be idled
by September and eliminated by year-end.
US indices recovered from intra-session losses to finish
firmer. Facebook shares rallied on better-than-expected
2Q results while HDD manufacturers WD and Seagate fell
after the former reported weak earnings. June durable
goods orders rose a better-than-expected 4.2%
(consensus 1.4%), skewed by aircraft orders.
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PostPosted: Mon Jul 29, 2013 9:02 am    Post subject: Reply with quote

Today’s Focus
�� CDL Hospitality Trusts - Improving signs come 2H13;
upgrade to BUY, TP S$1.89
STI has rebounded 210pts over the past month since the June
3066 low. A choppy trend could be in stall for August ahead
of consensus expectation for QE tapering to start in
September. Still, follow the line projection towards 3430 by
year-end positions the STI at 3345 by early October. Thus, we
expect a higher low on the pullback. We currently peg index
support at 3170, which is the 50% downward retracement
level, assuming a short-term high last week at 3277.
We prefer companies that offer good earnings visibility, are in
a net cash position and offer good dividend yield. Our picks
continue to be ST Engineering, Comfort Delgro and
SingPost. For ST Engineering and Comfort Delgro, we prefer
to be buyers on pullback as both stocks have performed well
over the past month.
The 2Q results season that’s currently in progress has been
unable to fire up optimism thus far as most companies have
reported either in-line results or outlook lacked shine.
Singapore banks will be releasing results this week. Shares of
OCBC have continued to lag behind UOB. This is likely
because of concerns about possible mark-to-market losses on
Great Eastern's non-par insurance portfolio in the upcoming
results. Support for OCBC shares is at $10.22. UOB shares
have clearly outperformed, rising to a touch below $22 that
lifted it back to the previous YTD high. Technically, we think
the stock has touched near-touch resistance last week. A
pullback to $20.9 is likely.
Results for Hi-P will be out on Friday. The group reported a
strong set of 1Q13 results. Shares of Hi-P rose 11.4% last
week ahead of its results release. The stock currently offers a
modest 6% upside to our 88cts TP. Technically, immediate
term upside looks capped at $0.85 ahead of earnings release.
Immediate support is at $0.79.
2Q13 results CDL Hospitality Trusts was weak but in line.
Gross revenue and NPI declined by 3% and 4% y-o-y to
S$35.6m and S$32.6m respectively. Looking ahead, the
group is seeing demand stabilizing in 3Q13 with bookings for
the Sept’13 Formula One race looking brighter compared to a
US Indices Last Close Pts Chg % Chg
Dow Jones �� 15,558.8 3.2 0.0
S&P �� 1,691.7 1.4 0.1
NASDAQ �� 3,613.2 8.0 0.2
Regional Indices
ST Index �� 3,236.1 0.4 0.0
ST Small Cap �� 577.4 1.5 0.3
Hang Seng �� 21,969.0 68.0 0.3
HSCEI �� 9,755.7 3.1 0.0
HSCCI �� 4,139.1 (12.5) (0.3)
KLCI �� 1,807.6 (0.Cool (0.0)
SET �� 1,476.7 20.0 1.4
JCI �� 4,658.9 (15.2) (0.3)
PCOMP �� 6,763.6 (36.5) (0.5)
KOSPI �� 1,910.8 1.2 0.1
TWSE �� 8,149.4 (14.2) (0.2)
Nikkei �� 14,130.0 (433.0) (3.0)
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013
100-Day MA
Index
STI
Total Market cap (US$bn) 598
Total Daily Vol (m shrs) 2,881
12m ST Index High 3,454
12m ST Index Low 2,946
Source: Bloomberg Finance L.P
Stock Picks – Large Cap
Rec’n Price ($)
26 Jul
Target Price
($)
ST Engineering Buy 4.36 4.80
ComfortDelgro Buy 1.995 2.19
UOL Buy 6.88 8.21
Stock Picks – Small /Mid Cap
Rec’n Price ($)
26 Jul
Target Price
($)
Del Monte Buy 0.94 0.97
Pan-United Corp Buy 0.915 1.16
China Merchants Buy 0.845 1.07
Singapore Post Buy 1.305 1.56
Nam Cheong Buy 0.28 0.36
Source: Bloomberg Finance L.P, DBS Vickers
Singapore
Wired Daily
Page 2
year ago. Thus, 2H13 performance is likely see a sequential
improvement. Acquisitions are likely catalysts. We believe
CDL HT deserves a re-look, Upgrade to BUY, TP S$1.89 (prev
S$ 2.07) (adjusted for higher risk free of 2.8% vs 2.1%).
DPU of 2.43 Scts for Mapletree Industrial Trust in line.
Looking ahead, the manager expects steady earnings
growth backed by decent operational performance and
completion of development projects. Maintain BUY, TP
revised to S$1.52 (prev S$ 1.63) as we raise our risk free
assumption to 2.6% from 1.8%.
Swiber Holdings has clinched sizeable contracts worth
approximately US$435m. Contract wins comprise of
approximately US$330m under the Swiber Group and
approximately US$105m under Swiber Group Joint
venture company. These contracts will commence
immediately and are expected to be completed by 2015.
Otto Marine announced that it has sold 2 Anchor
Handling Tug Supply Vessels to a renowned unrelated
third party for US$170m. This will significantly improve its
cash flow and reduce its gearing ratio. The vessels would
be chartered by the buyer to the group for a period of 8
years.
WBL Corporation warned that it was expecting a net loss
for the third quarter ended June 30. The loss was
attributed to lower net sales from its Nasdaq-listed
subsidiary, Multi-Fineline Electronix.
Armarda Group expects to report a loss for the first
quarter of FY2014 ended 30 June 2013. The loss is mainly
attributed to low revenue.
Samudera Shipping Line expects to report a net loss after
tax for 2Q 2013. The loss was due mainly to lower freight
rate(s) and charter rate(s) as a result of oversupply of
vessels across all three business segments of the Group
namely Regional Container Shipping, Indonesia Domestic
Container Shipping and Bulk Carrier, Offshore & Tanker
business.
AsiaMedic expects to report a loss for 1H2013 due mainly
to the increase in operating costs and market
development expenses for China and Myanmar.
Goodpack has priced S$50m 4.15% Notes due 2018, to
be issued under its S$600m Multicurrency Medium Term
Note Programme.
Singapore’s manufacturing sector shrank a slightly larger
than expected 5.9% in June compared to a year ago, and
lower than market expectation of a 5.7% contraction,
due to a sharp fall in pharmaceutical output. Excluding
the volatile biomedical sector, output fell 0.5%. After
seasonal adjustments, overall factory output declined
3.1% m-o-m in June - the first slump following three
consecutive months of sequential expansion. Excluding
biomedical output, production fell 0.5%. Although the
electronics sector continued to show signs of
improvement in June (growing 2.6% y-o-y), the rise was
not enough to offset a 28.9% plunge in pharmaceutical
output. The electronics sector owed its increased output
in June to the computer peripherals and other electronic
modules & computer segments, which expanded 30.9%
and 14.9% respectively thanks to higher export demand.
The semiconductors segment increased 2%.
The construction industry may be able to reduce its overall
workforce by 20 to 30% by 2020 if it attains a similar
increase in productivity. This is assuming that the volume
of construction work stays unchanged from now,
according to the chief executive of the Building and
Construction Authority (BCA), John Keung. BCA has set
itself a productivity improvement target of at least 30%
by 2020. Dr Keung reiterated the stance that construction
companies need to be less reliant on a large pool of
manpower and change their perception of what building
means. Demand for construction will remain strong over
the next few years, with contracts worth about $20 bn to
$28 bn a year in 2014 and 2015, according to BCA.
US indices recovered from earlier session losses to end
marginally higher but concerns about when the FED will
start to taper QE remained. Shares of bellwether
Caterpillar fell quarterly earnings missed estimates and
the company cut its forecast. McDonald’s shares fell as
well after the company said forward earnings will be
affected by economic weakness.
This is a heavy week for US economic data releases that
culminate with July non-farm payrolls on Friday.
Consensus expects the figure to be 185k (previous month
195k) while the closely watched unemployment rate is
seen improving to 7.5% from 7.6% in June.
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PostPosted: Tue Jul 30, 2013 9:10 am    Post subject: Reply with quote

Today’s Focus
 United Envirotech - Acquiring Memstar; positive deal but
new share issues to dilute earnings impact
United Envirotech has signed an agreement to fully acquire
Memstar’s membrane operation for S$293.4m or
S$0.11/share. Of this, S$73m will be settled in cash and the
remaining S$220m by the issue of 200m new shares priced at
S$1.10 a share (~19x FY14 PE). Apart from ensuring
membrane supply, this acquisition enables UENV to be
vertically integrated and to ride on growth potential of
Memstar’s membrane operations. Although this acquisition
could boost FY14/FY15F net profit by 1% and 6%
respectively, new share issues would dilute FY14/FY15 EPS by
18%/14% respectively. We are maintaining our earnings
forecast for UENV pending completion of this acquisition. No
change to HOLD call and TP for now.
2Q13 results for OKP Holdings below; gross margin collapsed
16ppts on higher subcontracting costs and low margin work.
We expect gross margins to remain depressed for at least
another quarter. Project rollout by the government has been
slow in 1H13. Visibility for project wins weak; going forward,
we expect project wins to come from the low value, low
margin maintenance segment. Maintain Fully Valued call.
Casa Holdings has entered into an agreement to acquire 25
lots of land in Teluk Jawa, Johor Bahru, Malaysia for
RM115.0m. The Group proposes to expand the scope of its
existing business to include the development of residential,
commercial and industrial properties in the region in order to
expand and diversify its portfolio and improving its future
growth prospects,
Pteris Global (formerly known as Inter-Roller Engineering) will
be acquiring a 70% stake in Shenzhen CIMC-TianDa Airport
Support, manufacturer and operator of airport equipment,
owned by China International Marine Containers (CIMC).
Aussino Group is terminating the sale and purchase
agreements in respect of the proposed acquisition of Max
Strategic Investments and the disposal of its existing
businesses to Samcorp Capital Corp.
US Indices Last Close Pts Chg % Chg
Dow Jones  15,522.0 (36.9) (0.2)
S&P  1,685.3 (6.3) (0.4)
NASDAQ  3,599.1 (14.0) (0.4)
Regional Indices
ST Index  3,237.0 0.9 0.0
ST Small Cap  576.2 (1.2) (0.2)
Hang Seng  21,850.2 (118.Cool (0.5)
HSCEI  9,641.1 (114.6) (1.2)
HSCCI  4,092.9 (46.2) (1.1)
KLCI  1,798.8 (8.Cool (0.5)
SET  1,454.3 (22.4) (1.5)
JCI  4,580.5 (78.4) (1.7)
PCOMP  6,717.7 (46.0) (0.7)
KOSPI  1,899.9 (10.9) (0.6)
TWSE  8,084.5 (64.9) (0.Cool
Nikkei  13,661.1 (468.9) (3.3)
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013
100-Day MA
Index
STI
Total Market cap (US$bn) 598
Total Daily Vol (m shrs) 1,918
12m ST Index High 3,454
12m ST Index Low 2,946
Source: Bloomberg Finance L.P
Stock Picks – Large Cap
Rec’n Price ($)
29 Jul
Target Price
($)
ST Engineering Buy 4.38 4.80
ComfortDelgro Buy 1.98 2.19
UOL Buy 6.72 8.21
Stock Picks – Small /Mid Cap
Rec’n Price ($)
29 Jul
Target Price
($)
Pan-United Corp Buy 0.90 1.16
China Merchants Buy 0.845 1.07
Singapore Post Buy 1.30 1.56
Nam Cheong Buy 0.28 0.36
Source: Bloomberg Finance L.P, DBS Vickers
Singapore
Wired Daily
Page 2
Marking its first overseas development project, Soilbuild
Group has entered a joint venture to develop a high-end
condominium in Yangon, with about 250 units. Located
on Kabaraye Pagoda Road - along one of the main arterial
roads in Yangon, the group intends to market the units at
between US$300 and US$350 psf when it is launched.
Units at the project will range from 1,500 sq ft to 1,700
sq ft in size. While the construction contract, which is
estimated to be about US$50m, has not yet been
awarded, there is a "good expectation" that Soilbuild
Construction Group (SBCG) will clinch it. SBCG made its
intention to expand into Myanmar clear when it launched
its initial public offering in May this year, setting aside up
to 11.9% of net proceeds for this purpose.
It was reported in the news that Tsit Wing is suing TWG
Tea Company, where Osim has a 45% stake, over breach
of trademark in HK. TWG Tea is appealing against the
ruling as it strongly believes in its rights to its name and
mark. TWG HK’s contribution is insignificant to Osim as a
whole. There is currently only one store in HK at IFC mall.
Damages, if any, are not expected to be significant.
Sapphire Corporation is expected to report a loss for the
2nd quarter ended 30 June 2013, mainly due
to:impairment losses and high production costs overrun.
Lion Asiapac expects to report a loss for 4Q 13 and lower
net earnings for FY Jun 13, owing to an impairment loss
on the fair value of the Groups available-for-sale financial
asset.
Singapore Medical Group is expected to continue
incurring losses for the 1H 2013. This was mainly due to
the decrease in gross profit as a result of drop in revenue
of its eye cluster.
According to KPMG's latest M&A Predictor, the appetite
for M&A (merger and acquisition) deals among the
world's largest companies is greater than it was a year
ago, but macroeconomic factors - such as nervousness
over the continuation of quantitative easing in the US,
continue to weigh on confidence. The July 2013 M&A
Predictor found that forward PE (price-to-earnings) ratios -
a measure of confidence, or appetite - were up 14% from
June 2012. Forward PE ratios over the past six months,
however, have remained stagnant since the start of the
calendar year.
US market fell, ahead of several events this week that
could set the tone for the rest of the summer. Investors
were reducing their exposure to stocks ahead of a
meeting of Federal Reserve policymakers later this week.
The European Central Bank and Bank of England also
meet this week. While the Fed is unlikely to announce any
major changes in policy this week, many investors believe
the central bank will begin slowing the pace of its $85
billion-per-month bond-buying program as soon as
September. On the economic front, a report on 2Q US
GDP and the government's monthly jobs report are on
tap this week.
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PostPosted: Wed Jul 31, 2013 9:00 am    Post subject: Reply with quote

Today’s Focus
�� Hutchison Port Holdings Trust - Well past the worst;
maintain BUY, TP US$0.82
�� Osim – New products to drive growth; maintain BUY, TP
raised to S$2.50
2Q13 net profit for Hutchison Port Holdings Trust declined
26% y-o-y to HK$420.5m, which was within expectations
given the impact of the port workers’ strike in HK earlier in
April 2013. On a positive note, 1H13 DPU of 2.4UScts was
slightly ahead of expectations. We expect higher DPU in
2H13, in line with seasonal patterns. Maintain BUY with
unchanged TP of US$0.82. There could be potential earnings
upside from lower refinancing costs as the Trust has been
evaluating refinancing options for its US$3bn term loan.
Osim’s 2Q13 results in line, driven by sales of uAngel.
Sustainable growth ahead as new uInfinity chair will be rolled
out in 3Q13. DPS of 2 Scents was declared, exceeding our
estimate of 4 Scts for FY13F or 1 Sct per quarter. As such, we
raise our FY13F DPS to 5 Scts. Maintain BUY, TP raised to
S$2.50 (Prev S$ 2.21) as we roll over our 16x PE valuation to
FY14F earnings.
Yoma’s 1QFY14 profit tumbled 82% y-o-y to S$0.4m,
missing expectation. Sales were below forecast due to slow
construction and weaker sales at Star City. We expect
improvements in 2QFY14 and beyond. Given visible revenue
drivers, we are maintaining our sales assumptions but
trimmed FY14F/15F earnings on weaker margins and higher
expenses. Maintain BUY rating and S$1.02 TP.
2Q13 net profit of S$0.16m for Broadway Industrial Group
came in below forecast, partly due to higher marketing
expenses. FY13/FY14F earnings cut by 44-48%. More
restructuring is needed to optimise operations and lift
margins; recovery is pushed back to 4Q13. Maintain Hold and
TP of S$0.30 (~0.6x P/BV).
Great Eastern Holdings reported this morning that its net
profit for 2Q13 tumbled 77% y-o-y to S$18.6m, mainly
due to significant unrealised mark-to-market loss as
financial markets reacted to the potential tapering of the
US quantitative easing programme. GEH is planning an
interim dividend of 10cts, unchanged from a year ago.
US Indices Last Close Pts Chg % Chg
Dow Jones �� 15,520.6 (1.4) (0.0)
S&P �� 1,686.0 0.6 0.0
NASDAQ �� 3,616.5 17.3 0.5
Regional Indices
ST Index �� 3,245.5 8.5 0.3
ST Small Cap �� 571.9 (4.3) (0.7)
Hang Seng �� 21,954.0 103.8 0.5
HSCEI �� 9,669.6 28.5 0.3
HSCCI �� 4,081.3 (11.6) (0.3)
KLCI �� 1,795.1 (3.7) (0.2)
SET �� 1,435.4 (18.Cool (1.3)
JCI �� 4,608.5 28.0 0.6
PCOMP �� 6,728.0 10.3 0.2
KOSPI �� 1,917.1 17.2 0.9
TWSE �� 8,163.6 79.1 1.0
Nikkei �� 13,869.8 208.7 1.5
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013
100-Day MA
Index
STI
Total Market cap (US$bn) 597
Total Daily Vol (m shrs) 2,384
12m ST Index High 3,454
12m ST Index Low 2,946
Source: Bloomberg Finance L.P
Stock Picks – Large Cap
Rec’n Price ($)
30 Jul
Target Price
($)
ST Engineering Buy 4.340 4.80
ComfortDelgro Buy 1.99 2.19
UOL Buy 6.77 8.21
Stock Picks – Small /Mid Cap
Rec’n Price ($)
30 Jul
Target Price
($)
Pan-United Corp Buy 0.91 1.16
China Merchants Buy 0.825 1.07
Singapore Post Buy 1.30 1.56
Nam Cheong Buy 0.280 0.36
Source: Bloomberg Finance L.P, DBS Vickers
Singapore
Wired Daily
Page 2
Mapletree Greater China Commercial Trust reported its
maiden set of results. 1QFY14 income available for
distribution of S$46.1m was 8.3% higher than prospectus
forecast, translating to a DPU of 1.734cts (vs prospectus
forecast of 1.6cts). This was achieved on a revenue of
$73.8m (+3.4% ahead of forecast) while NPI came in at
$59.7m. Will provide more details after the briefing this
morning.
1QFY14 results for SMRT were below expectations, net
profit tumbled 55% y-o-y to S$16.3m. Soaring costs
remained the main culprit, and is expected to continue to
rise. Changes in operating model and fare review is key to
profitability, but timing of government move is uncertain.
Maintain Fully Valued and S$1.20 TP.
Q & M Dental Group has entered into a non-binding
Memorandum of Understanding with Dr. Yongxin Shao
to acquire 60% stake in the dental businesses owned by
Dr Shao located in Shenyang, PRC known as Aoxin
Stomatology Group for RMB108m. Aoxin Stomatology
Group currently owns 3 dental hospitals and 3 dental
clinics in Shenyang.
Compact Metal is proposing a 20 shares into 1
consolidated share and subsequent renounceable nonunderwritten
rights cum warrants on the basis of 2 rights
shares and 2 free warrants for every 1 consolidated share
at an issue price of S$0.04 for each Rights Share. The
exercise price is at S$0.02 for each New Share. The net
proceeds of approximately up to S$18.4m is to partially
finance the capital expenditure required to build a full
scale commercial plant at Tuas Bay Drive Singapore.
Blumont Group is proposing to undertake a renounceable
non-underwritten rights issue of up to 861m new shares
at an issue price of S$0.05 for each Rights Share, on the
basis of one (1) Rights Share for every two (2) shares held.
The Rights Issue will raise net proceeds of up to
approximately S$42.7m, mainly to fund the company’s
business expansion.
Rotary Engineering has been awarded S$200m worth of
EPC contracts in Singapore and Saudi Arabia. Year to
date, Rotary has secured over S$600m worth of contracts.
Mermaid Maritime has recently been awarded several
subsea contracts with a combined estimated value of
US$40m with most of these contracts scheduled to be
completed this calendar year.
LionGold Corp could list one of its subsidiaries in one to
two years time. This is one of several funding options that
the group is exploring. It is also in talks with private equity
players to explore joint acquisitions or sell a minority stake
in its assets. The firm plans to raise $100m.
BioWa, Inc. and Lonza have entered into research
agreements with Pfizer Inc. allowing the use of the
POTELLIGENT® CHOK1SV Cell Line in the research and
development of multiple proprietary antibodies in Pfizer’s
pipeline.
TPV Technology is expected to record a loss after tax for
1H13, due to continued weakness in demand in its key
markets and the provisions made for the restructuring
and optimization of its manufacturing operations in Brazil
and Hungary.
Delong Holdings is expected to report a net loss for 2Q13.
The weaker than expected performance is due to weaker
steel prices and lower production output.
Great Group expects to report an operating loss for 2Q13
mainly due to lower revenues and gross margin resulting
from weaker demand in Europe and severe competition in
the midst of an increasingly challenging business
environment.
The head of Real Estate Developers’ Association of
Singapore (Redas) said that Singapore’s real estate cycle is
near an important inflexion point with 2 clear trends
emerging – increased market volatility and a maturing
property cycle. While record low interest rates and
sustained inflation growth had driven buyers towards
property, risks factors are a tightening of US monetary
policy, China’s change in domestic policies and a steady
supply of real estate availability in the next few years.
US markets finished mixed ahead of the 2-day FOMC
meeting. The Fed will probably keep FED funds rate at
0.25% and begin reducing the QE program in September,
this according to Bloomberg consensus. Of the 305
companies in the S&P 500 that have posted quarterly
results so far, 72% exceeded analysts’ estimates for profit
and 55% have topped sales projections, data compiled by
Bloomberg showed. Meanwhile, the ADP employment
change (consensus 180k) will be release tonight ahead of
the closely watched Friday’s jobs data. In Asian trade this
morning, Japan’s Nikkei is lower as the Yen firmed
against the USD.
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