Indofood Agri - Upgrade to BUY on higher forecast
output and ASP, target price raised to S$0.93
Global palm oil stockpile is at one-year low on stronger-thanexpected
demand, despite global Slowdown. Near-term
weakness in CPO prices may not drag planters much, given
output and earnings recoveries. Our analyst has adjusted
CPO prices for CY13F/14F/15F by -4%/-10%/-11% in USD,
0%/+1%/-1% in MYR. Beware of upside risks from FY16F, as
supply growth decelerates. We expect multi-year CPO price
gain from here. For the SGX-listed CPO stocks, we upgraded
Indofood Agri to BUY on higher forecast output and ASP,
target price raised to S$0.93 (Prev S$0.81). We believe the
counter is oversold. Maintain BUY on Bumitama Resources
(TP: S$1.26) and First Resources (TP: S$2.19) and HOLD on
Wilmar (TP: S$3.53).
In SPH’s upcoming full year results (11 Oct 2013), we expect
final/special DPS of 16Scts with payout in Dec, equating to
4% yield for a c.10-week period. Going forward, we believe
earnings could improve, going by recent upward adjustments
to consensus’ 2013 GDP growth forecast for Singapore. We
also noted that AdEx growth for the period from May to
Aug’13 has been stronger y-o-y. With the listing of SPH REIT,
we project that SPH’s cash pile has risen to c.S$1.1bn. We
estimate SPH can well afford to pay out at least another 20-
30 Scts per share, on top of its usual DPS (FY14F: 22 Scts) to
shareholders. We reiterate our BUY recommendation, with
TP adjusted to S$4.53 (from S$4.75) to account for the
S$0.18 special DPS paid in Aug and 5-10% cut to our
earnings forecasts.
SATS is acquiring Singapore Cruise Centre for S$110m to
further develop its gateway services. The purchase price
implies historical PE of c.7.9x and 1.7x P/BV. This acquisition
is mildly positive given immediate but minor earnings
accretion.
SembCorp Industries (SCI) reported a successful close of
Sembcorp Salalah IPO last night. The IPO offering of 33.4m
shares (~35% of share capital) was comfortably
oversubscribed with strong demands from investors. Shares
are expected to commence trading on 10 Oct 2013. SCI is
expected to recognise a total gain of S$117m, higher than
our S$109m forecast. This divestment gain would boost
US Indices Last Close Pts Chg % Chg
Dow Jones 15,328.3 55.0 0.4
S&P 1,698.7 5.9 0.3
NASDAQ 3,787.4 26.3 0.7
Regional Indices
ST Index 3,194.3 (14.3) (0.4)
ST Small Cap 578.8 (3.2) (0.6)
Hang Seng 23,125.0 (84.6) (0.4)
HSCEI 10,541.0 (57.1) (0.5)
HSCCI 4,415.4 (20. (0.5)
KLCI 1,774.2 (9.9) (0.6)
SET 1,424.8 (12.1) (0.
JCI 4,405.9 (0.9) (0.0)
PCOMP 6,407.5 (13.0) (0.2)
KOSPI 2,007.3 9.3 0.5
TWSE 8,184.7 (99.2) (1.2)
Nikkei 14,799.1 178.6 1.2
Index
STI
Total Market cap (US$bn) 590
Total Daily Vol (m shrs) 5,771
12m ST Index High 3,454
12m ST Index Low 2,946
Source: Bloomberg Finance L.P
Stock Picks – Large Cap
Rec’n Price ($)
26 Sep
Target Price
($)
ST Engineering Buy 4.200 4.80
ComfortDelgro Buy 1.950 2.19
OCBC Bank Buy 10.370 12.40
Singapore Airlines Buy 10.430 11.40
Suntec REIT Buy 1.680 1.78
Stock Picks – Small /Mid Cap
Rec’n Price ($)
26 Sep
Target Price
($)
Ezion Holdings Buy 2.370 3.20
Goodpack Buy 1.780 2.00
CSE Global Buy 0.900 1.07
Mapletree Commercial Trust Buy 1.210 1.35
CDL Hospitality Trust Buy 1.640 1.80
Source: Bloomberg Finance L.P, DBS Vickers
Singapore
Wired Daily
Page 2
PATMI to S$864.8m. Stripping out exceptional items, core
profits would be S$772.8m from S$753.3m in FY12. No
change to our BUY recommendation and TP of S$5.60.
TriTech is proposing a share split of every one (1) existing
share into two (2) Shares and upon completion, up to
386.6m new Shares will be issued. Following completion of
the proposed share split and the issue of the additional
shares, TriTech is proposing to issue bonus warrants of up to
386.6m non-renounceable bonus warrants on the basis of
one (1) Warrant for every two (2) Shares held.
Singapore’s manufacturing output in August fell 1.4% from
July, marking a third consecutive month of decline despite
expanding 3.5% y-o-y. Last month's growth in factory output
was bolstered by a 5.3% increase in electronics production,
thanks to a 12.7% expansion in the semiconductor segment.
Electronics, which make up about a third of the entire
manufacturing sector, helped to offset a 1.9% contraction in
biomedical output as a result of a 3.4% decline in the
pharmaceuticals segment. Excluding biomedical
manufacturing, Singapore's output grew 4.8%. With this set
of weak data, the market is expecting GDP in the third
quarter to contract 3.5 to 4%, in line with our expectations.
In property news, demand in all segments of the property
market slumped in July following the introduction of the total
debt servicing ratio (TDSR) framework in late June.
Transactions of strata industrial and commercial units fell
20.9% and 31% respectively from June. But residential deals
dropped even more, by 56.6%. These were findings made by
property consultancy CBRE.
Singapore’s population expanded at its slowest pace in nine
years. Latest government figures released showed that the
total population stands at 5.4 million, a 1.6% increase from
the 5.31 million recorded last June. The resident total fertility
rate (TFR) had increased to 1.29 last year from 1.2 in 2011,
but is still far below the replacement level of 2.1 - a trend
that has remained for more than three decades.
US markets rebounded Thursday lifted by a better-thanexpected
initial jobless claims (actual 305k, consensus 325k).
But August pending home sales declined a worse than
expected -1.9% m-o-m compared to the -1% expected. The
US 10-yr treasury yield held stabilized off the 2.61% level in
recent sessions heading into next week’s data heavy week
that culminates with the September employment numbers. |
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