OCBC Report 17 Oct 13

KEY IDEA Keppel Land: A firm set of results KPLD’s 3Q13 PATMI increased 70% YoY to S$126.4m mostly due to higher profits from the property development segment and a maiden contribution from Corals at Keppel Bay launched in May 13. 9MFY13 PATMI now cumulates to S$318.5m, forming 70% of our FY13 forecast which we judge to be mostly in line. KPLD sold about 310 residential units in Singapore over 9M13 and we expect the group’s condominium project in Tiong Bahru to be launched next year. In China, KPLD sold a fairly impressive 3,070 units in 9M13 which we note is up three times over the 970 units in 9M12. We understand the group completed 1,800 homes in China over 9M13 and will take an opportunistic stance in launching its new projects in the pipeline. Maintain BUY with an unchanged fair value estimate of S$4.09 (30% RNAV disc.). (Eli Lee) MORE REPORTS Ascendas REIT: Continued strong execution Ascendas REIT (A-REIT) delivered a better-than-expected set of 2QFY14 results, with DPU rising 2.0% to 3.60 S cents. Leasing activity at A-REIT’s portfolio assets, we note, also remained healthy during the quarter. Looking ahead, A-REIT expects occupancy in certain properties to come under pressure due to non-renewal of tenants. However, given the healthy pre-commitment rates at A-REIT City@Jinqiao and Nexus@one-north, and the completion of enhancement works at two of its properties, we expect the portfolio occupancy to remain stable or even improve going forward. In addition, management highlighted that passing rents for leases due to expire are still below spot rents, and positive rental reversions are still expected, albeit at more modest pace. We make marginal upward revisions in our FY14 forecasts to reflect the better results, but we keep our S$2.45 fair value unchanged. Maintain BUY. (Kevin Tan) Midas Holdings: Secures contracts worth CNY221.8m Midas Holdings (Midas) announced last evening that it has secured a number of contracts amounting to CNY221.8m. These include EUR17.7m (~CNY145.9m) worth of international contracts for two main train projects in Europe (delivery expected between 2013 and 2017) and metro contracts totalling CNY75.9m in China. The metro contracts from China were awarded by Midas’ 32.5% owned joint-venture company, Nanjing SR Puzhen Rail Transport (NPRT) and involve a number of projects such as the Nanjing Metro Line 4 project. Deliveries for the various projects are slated to occur between 2013 and 2016. This latest development brings total YTD contract wins by Midas to ~CNY645.1m. We are keeping our estimates intact as our projections allow for such contract wins. We expect Midas’ share price to react positively given these sizeable contract wins. Maintain BUY and S$0.65 fair estimate on Midas, based on 1.3x blended FY13/14F P/B. (Wong Teck Ching Andy)

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NEWS HEADLINES

- US stocks surged on Wed, lifting the S&P 500 near its record, as the Senate reached an agreement to reopen the government and raise the debt ceiling, with votes later in the day expected to end the fiscal standoff. - Developers' private home sales surged 65% MoM to 1,246 units in Sep from 756 units in Aug, although the figure was slightly less than half the 2,621 units transacted in the primary market in Sep last year. - Jubilee Industries Holdings has unveiled a proposed reverse takeover deal involving a Malaysian property developer. - Singapore Technologies Aerospace has clinched S$600m worth of new orders in 3Q13, with projects including freighter conversions, cabin retrofitting as well as airframe, component and engine maintenance. - Higher contributions from associated firms pushed 3Q13 profit for Keppel T&T up 4.2% YoY to S$14.1m. - Loyz Energy has proposed a private placement of 50m new shares at S$0.35 each to raise net proceeds of about S$17.46m.