Indofood Agri Resources - Strong sequential
rebound, FY13F-15F earnings raised by 5-18%.
Maintain BUY, TP S$1.00.
CDL Hospitality Trusts - Higher earnings on the
horizon; maintain BUY and TP S$1.80
Indofood Agri Resources registered sequentially higher
earnings, as expected. Ex-translational FX loss of
Rp88.7bn, 3Q13 earnings of Rp211.6bn (-13% y-o-y;
+220% q-o-q) were ahead. 3Q13 operating margin
rebounded to 12.3% from 5.4% in 2Q13, as unit cost
eased in line with higher output FY13F-15F earnings were
raised by 5-18%. BUY for 12% upside to revised TP of
S$1.00 (Prev S$ 0.93). We believe the market has not yet
priced in stronger 4Q13 earnings. Technically, the stock
looks set to head to the fundamentally of $1 and may
even trend beyond that eventually, once it clears the
$0.92 level.
3Q13 DPU of 2.64 Scts for CDL Hospitality Trusts in line.
As we approach the year-end peak season, we expect
CDREIT to deliver sequentially stronger performance in
4Q13. Valuations remain attractive at 1.0x P/BV, with
FY13F-15F yield of 6.5%-7.3%. Maintain BUY and TP of
S$1.80.
Results for NOL were slightly below as Intra-Asia rates
plunged, owing to capacity cascading from mainlanes,
despite rate restorations on Asia-Europe in June-July that
helped the container liner division to break even in 3Q13.
Current spot rates on Asia-Europe are back at panic levels
again, but no major capacity reduction measures seen.
Maintain HOLD with TP adjusted to S$1.10 (Prev S$ 1.13).
Singapore Post’s 2Q14 underlying profit of S$37.3m
(+13.8% y-o-y, +3.0% q-o-q) was in line, as 1H14
comprised 49.7% of our FY14F estimates. S$1.25 Scts
interim DPS was also in line. High developmental costs for
e-commerce were offset by higher rental income and
lower interest costs. Maintain BUY with a TP of S$1.50.
SingPost has S$139m net cash which can be used for
profitable acquisitions, in our view.
US Indices Last Close Pts Chg % Chg
Dow Jones 15,618.8 (61.6) (0.4)
S&P 1,763.3 (8.6) (0.5)
NASDAQ 3,930.6 (21.7) (0.5)
Regional Indices
ST Index 3,230.4 21.6 0.7
ST Small Cap 537.5 (2.1) (0.4)
Hang Seng 23,304.0 457.5 2.0
HSCEI 10,640.9 250.3 2.4
HSCCI 4,541.1 89.1 2.0
KLCI 1,817.4 1.7 0.1
SET 1,431.1 (24.7) (1.7)
JCI 4,574.9 12.1 0.3
PCOMP 6,597.2 53.8 0.8
KOSPI 2,059.6 7.8 0.4
TWSE 8,465.1 44.1 0.5
Nikkei 14,502.4 176.4 1.2
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013
100-Day MA
Index
STI
Total Market cap (US$bn) 596
Total Daily Vol (m shrs) 3,312
12m ST Index High 3,454
12m ST Index Low 2,946
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price ($)
30 Oct
Target Price
($)
ST Engineering Buy 4.230 4.80
ComfortDelgro Buy 1.915 2.19
OCBC Bank Buy 10.500 12.40
Singapore Airlines Buy 10.500 11.40
Stock Picks – Small /Mid Cap
Rec’n Price ($)
30 Oct
Target Price
($)
Ezion Holdings Buy 2.220 3.10
CSE Global Buy 0.890 1.07
Frasers Centrepoint Trust Buy 1.860 2.14
Yoma Strategic Holdings Buy 0.750 1.02
Source: Bloomberg Finance L.P., DBS Vickers
Singapore
Wired Daily
Page 2
CapitaLand achieves net profit of S$135.5m in 3Q 2013,
down 9% y-o-y. Group revenue rose 52.5% to S$1.05 bn,
up 52.5%. The performance is led by higher revenue from
CapitaLand Singapore (CL Singapore), CapitaLand China (CL
China) and CapitaMalls Asia (CMA), as well as higher sales
from development projects in Australia and Vietnam. Will
follow up with more updates.
China Minzhong posted a 60% plunge in net profit to
RMB48.4m for the first quarter ended Sept 30, 2013. Higher
operating costs, mostly labour, and average selling prices not
rising fast enough to offset higher costs, pressured its
margins in both its cultivation and processed business
segments.
Yongnam Holdings is expected to record an operating loss
for 3Q FY2013, notwithstanding a healthy increase in
revenue. This is mainly due to two factors:-
1. Cost overruns from three on-going projects which pared
operating margin to new lows;
2. A significant non-recurring one-off loss on disposal of
some fixed assets that eroded the already thin bottomline
profit for the quarter.
Yongnam is still expected to report a net profit for FY2013,
but significantly lower than that of FY2012.
Metax Engineering has been awarded a tender by the
Singapore Public Utilities Board worth S$6.7m to expand the
Greasy Waste Receiving and the Associated Digestion Facility
at the Jurong Water Reclamation Plant. The award will
increase Metax Engineering’s orderbook to S$31.8m.
China Bearing is expected to report a loss for 3Q2013 and
9M2013. The significant drop in its financial performance
was mainly attributed to decrease in revenue and increase in
costs.
Sapphire Corporation will record a loss in the 3Q13 and it is
highly likely that this loss will be higher than that reported in
2Q13 due mainly to lower operating margins and additional
assets impairment.
Ziwo Holdings is expected to record a profit for 3Q 2013.
However, for the nine months ended 30 September 2013
(9M2013), the Group is expected to record a significant drop
in its revenue due to losses incurred in first and second
quarter of 2013.
Eastern Holdings expects to report significant profits for
1HFY2014, partly due to the disposal of investment
properties.
China Environment has secured five contracts worth RMB
119.1m from three customers. These contracts are scheduled
to be delivered by the first half of 2014 and are expected to
contribute positively to the earnings of the Group for FY Dec
2013 and 2014.
A survey by Nielsen shows that while Singaporeans may be
getting more upbeat about their job prospects and personal
finances, consumer confidence levels here still fall on the side
of pessimism. Confidence levels in Singapore slipped in Q4
last year and remained flat for three consecutive quarters. But
confidence bounced back in Q3 this year to the same level a
year earlier.
Asia-Pacific air freight carriers - which account for nearly
40% of the global cargo market - continue to be dogged by
weak cargo demand, with traffic slipping 3.1% y-o-y for the
region last month. Globally, traffic (in freight tonne
kilometres) edged up by 0.5%, with strong growth from the
Middle Eastern and Latin American cargo carriers, while the
European freight players turned in marginal growth,
according to figures released by the International Air
Transport Association (Iata). Capacity grew at a faster 3.3%,
resulting in a load factor of 45.1%.
The FED decided to continue with its USD85bil/mth bond
purchase as it needs to see more evidence that the economy
can continue to improve. The housing sector recovery slowed
somewhat and fiscal policy is restraining growth, it observed.
Still, the FED removed a sentence from its previous
September statement that said tighter financial conditions
could slow the improvement in the economy. This fueled
speculation that it will reduce QE in coming months. The FED
statement wasn’t as dovish as investors wished it to be,
stocks eased off.
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