Friday, November 29, 2013

Daily Summary 29 Nov 13


Dow was closed for Thanks Giving last night. Europe were flat.  Dow's future is now +40.  Europe opened flat.

Asian bourses were mixed.  Nikkei -65, ShanghaiC +1, Hangseng +92.  STI closed -10 at 3176. Volume was 1.7b shares.  Gainers were 204 to 215 losers.  

Trend of STI is flattening.

Top volumes were Albedo +0.4, Vallianz +0.6, SkyOne +0.5, Europtron +0.1, Innopac +0.1, MDR unchanged, Blumont +0.2, CharismaEner unchanged, Viking+0.1, SingTel -2.

STI opened down and stayed down throughout the day.  Blue chips were mixed and so were penny and speculatives. The closing was firm given a Friday.

Europe is looking flat while Dow could be positive for the Black Friday.

Thursday, November 28, 2013

DBS Vickers Report 29 Nov 13

Nam Cheong - Potential early beneficiary of renewed
strength in OSV market. Maintain BUY with TP revised
up to S$0.42
Nam Cheong is a potential early beneficiary of renewed
strength in offshore support vessel (OSV) market. Earnings
execution is above estimates YTD in FY13; FY13/14 EPS
estimates revised up by 6-8%. We are expecting healthy 2-
year earnings CAGR of 22%, with further upside if FY15
built-to-stock programme is bigger than expected. Maintain
BUY with TP revised up to S$0.42 (Prev S$ 0.36) as we roll
over valuations to FY14 earnings. Nam Cheong remains one
of our top picks in the O&M sector.
Centurion announced that it is the successful bidder for the
RMIT Village and an adjoining car park building in Melbourne,
Australia, for a total purchase consideration of A$60m. RMIT
Village is located on the northern edge of Melbourne’s
Central Business District, also close to RMIT University and the
University of Melbourne. This is a 4,000 sqm freehold land
parcel comprising 229 apartments with a current capacity of
approximately 456 beds. As this student accommodation
facility is affiliated to RMIT University, this property benefits
from the university's reservations for its students at the start
of each academic year. Typically, RMIT University reservations
account for 70% of the total occupied beds annually. For the
past three years, occupancy at RMIT Village has been close to
100%. This acquisition is in line with Centurion's
diversification strategy and expected to be earnings accretive
upon completion in early 2014. The proposed acquisition will
be funded through proceeds from S$50m MTN issued on 10
Oct 2013 and bank borrowings.
Swissco Holdings has secured charter contracts worth an
aggregate of S$27.0m for its new vessels. The contracts
secured are for a minimum 12-months charter contract for
new 60-meters AHTS to be deployed in the Middle East and
27-months charter contract for another new 60-meters AHTS
to be deployed in North East Australia. This reiterates healthy
demand for offshore support vessels. The Group continues to
focus on vessel expansion and fleet renewal program.
US Indices Last Close Pts Chg % Chg
Dow Jones 􀀘 16,097.3 24.5 0.2
S&P 􀀘 1,807.2 4.5 0.2
NASDAQ 􀀘 4,044.8 27.0 0.7
Regional Indices
ST Index 􀀘 3,186.4 14.3 0.5
ST Small Cap 􀀘 535.9 1.2 0.2
Hang Seng 􀀙 23,789.1 (17.3) (0.1)
HSCEI 􀀙 11,385.3 (16.7) (0.1)
HSCCI 􀀘 4,641.3 23.2 0.5
KLCI 􀀘 1,807.6 9.1 0.5
SET 􀀙 1,359.5 (13.7) (1.0)
JCI 􀀙 4,233.9 (17.6) (0.4)
PCOMP 􀀘 6,170.0 116.1 1.9
KOSPI 􀀘 2,045.8 17.0 0.8
TWSE 􀀘 8,362.4 66.6 0.8
Nikkei 􀀘 15,727.1 277.5 1.8
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013
100-Day MA
Index
STI
Total Market cap (US$bn) 579
Total Daily Vol (m shrs) 1,471
12m ST Index High 3,454
12m ST Index Low 3,004
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price (S$)
28 Nov
Target Price
(S$)
Hutchison Port Holdings Trust Buy 0.685 0.82
ComfortDelgro Buy 1.970 2.19
OCBC Buy 10.500 12.40
Singapore Airlines Buy 10.530 11.40
Stock Picks – Small /Mid Cap
Rec’n Price (S$)
28 Nov
Target Price
($)
Ezion Holdings Buy 2.070 2.65
China Merchants Buy 0.905 1.20
CSE Global Buy 1.005 1.11
Frasers Centrepoint Trust Buy 1.785 2.14
Yoma Strategic Holdings Buy 0.750 1.02
Source: Bloomberg Finance L.P., DBS Vickers
Singapore
Wired Daily
Page 2
Oxley Holdings said its wholly owned subsidiary, Oxley Ruby
Sdn Bhd, will develop a 15.28-acre freehold land in Malaysia's
state of Selangor. Oxley Ruby was granted the rights to
develop the land after it inked a joint venture agreement with
the landowner, Peninsular Teamwork Sdn Bhd. The agreement
provides for Oxley Ruby to have sole and absolute discretion to
develop the land in any manner it deems appropriate, and at
its own cost.
Pteris Global released more details of its reverse takeover
(RTO) by passenger boarding bridge manufacturer Tianda
Group. It will acquire the remaining 30% of Tianda from
Shenzhen TGM, the management company of Tianda, for
$41.3m, or RMB208.4m. This is in addition to the 70% of
Tianda to be acquired from China International Marine
Containers (Hong Kong) for $96.3m, announced in July after a
conditional sales-and-purchase agreement was made. Like its
purchase of the previous stake in Tianda, Pteris will issue new
shares to satisfy the deal, after the proposed consolidation of
five shares, at 13 cents each, into one. Post-consolidation,
shares will be issued at 65 cents apiece.
China Aviation Oil, the largest physical jet fuel trader in the
Asia Pacific region, has expanded its operations in Europe with
the establishment of a wholly owned subsidiary, China
Aviation Oil (Europe) Limited (CAO Europe), in the United
Kingdom. The expansion into new market broadens aviation
marketing opportunities and creates synergies for enhanced
trading activities.
Singapore’s home prices fell at a faster pace in October,
dropping 1.2% from the previous month as evidence builds
that the government's efforts to cool the property market are
working. The Singapore Residential Price Index fell to 159.1
points last month after declining a revised 0.9% in September.
The measure tracking prices in the central region decreased
1.4% in October. Meanwhile, URA data earlier this month
showed Singapore's home sales fell 19% m-o-m and 48% yo-
y in October to 1,009 units.
Despite the slowdown in new private home sales, demand for
land remains strong, with two adjacent plots at Upper
Serangoon View garnering eight bids each. The top bid for
both sites was put up by Kingsford Development, at $522.43
psf ppr, which translates into $258.8m for Parcel A and
$201.6m for Parcel B. Parcel A has a land area of 165,125 sq
ft and is located next to Rio Vista condo, while Plot B has a
land area of 128,644 sq ft. Kingsford Development beat the
second highest bids for Parcel A and Parcel B by 16% and
12.7% respectively.
Li Ka-shing said his companies have slowed land purchases in
Hong Kong and China as prices have escalated to a high level.
“Land prices in Hong Kong are high, and already showing
signs of an unhealthy situation,” Li said, according to a
statement from Cheung Kong Holdings Ltd. Li added that
“Land prices in China have surged, and we’re unable to win
auctions for land.” His comments underline concerns that
governments in China and in the city are struggling to tame an
asset bubble fuelled by cheap credit

DBS Vickers Report 29 Nov 13

Nam Cheong - Potential early beneficiary of renewed
strength in OSV market. Maintain BUY with TP revised
up to S$0.42
Nam Cheong is a potential early beneficiary of renewed
strength in offshore support vessel (OSV) market. Earnings
execution is above estimates YTD in FY13; FY13/14 EPS
estimates revised up by 6-8%. We are expecting healthy 2-
year earnings CAGR of 22%, with further upside if FY15
built-to-stock programme is bigger than expected. Maintain
BUY with TP revised up to S$0.42 (Prev S$ 0.36) as we roll
over valuations to FY14 earnings. Nam Cheong remains one
of our top picks in the O&M sector.
Centurion announced that it is the successful bidder for the
RMIT Village and an adjoining car park building in Melbourne,
Australia, for a total purchase consideration of A$60m. RMIT
Village is located on the northern edge of Melbourne’s
Central Business District, also close to RMIT University and the
University of Melbourne. This is a 4,000 sqm freehold land
parcel comprising 229 apartments with a current capacity of
approximately 456 beds. As this student accommodation
facility is affiliated to RMIT University, this property benefits
from the university's reservations for its students at the start
of each academic year. Typically, RMIT University reservations
account for 70% of the total occupied beds annually. For the
past three years, occupancy at RMIT Village has been close to
100%. This acquisition is in line with Centurion's
diversification strategy and expected to be earnings accretive
upon completion in early 2014. The proposed acquisition will
be funded through proceeds from S$50m MTN issued on 10
Oct 2013 and bank borrowings.
Swissco Holdings has secured charter contracts worth an
aggregate of S$27.0m for its new vessels. The contracts
secured are for a minimum 12-months charter contract for
new 60-meters AHTS to be deployed in the Middle East and
27-months charter contract for another new 60-meters AHTS
to be deployed in North East Australia. This reiterates healthy
demand for offshore support vessels. The Group continues to
focus on vessel expansion and fleet renewal program.
US Indices Last Close Pts Chg % Chg
Dow Jones 􀀘 16,097.3 24.5 0.2
S&P 􀀘 1,807.2 4.5 0.2
NASDAQ 􀀘 4,044.8 27.0 0.7
Regional Indices
ST Index 􀀘 3,186.4 14.3 0.5
ST Small Cap 􀀘 535.9 1.2 0.2
Hang Seng 􀀙 23,789.1 (17.3) (0.1)
HSCEI 􀀙 11,385.3 (16.7) (0.1)
HSCCI 􀀘 4,641.3 23.2 0.5
KLCI 􀀘 1,807.6 9.1 0.5
SET 􀀙 1,359.5 (13.7) (1.0)
JCI 􀀙 4,233.9 (17.6) (0.4)
PCOMP 􀀘 6,170.0 116.1 1.9
KOSPI 􀀘 2,045.8 17.0 0.8
TWSE 􀀘 8,362.4 66.6 0.8
Nikkei 􀀘 15,727.1 277.5 1.8
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013
100-Day MA
Index
STI
Total Market cap (US$bn) 579
Total Daily Vol (m shrs) 1,471
12m ST Index High 3,454
12m ST Index Low 3,004
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price (S$)
28 Nov
Target Price
(S$)
Hutchison Port Holdings Trust Buy 0.685 0.82
ComfortDelgro Buy 1.970 2.19
OCBC Buy 10.500 12.40
Singapore Airlines Buy 10.530 11.40
Stock Picks – Small /Mid Cap
Rec’n Price (S$)
28 Nov
Target Price
($)
Ezion Holdings Buy 2.070 2.65
China Merchants Buy 0.905 1.20
CSE Global Buy 1.005 1.11
Frasers Centrepoint Trust Buy 1.785 2.14
Yoma Strategic Holdings Buy 0.750 1.02
Source: Bloomberg Finance L.P., DBS Vickers
Singapore
Wired Daily
Page 2
Oxley Holdings said its wholly owned subsidiary, Oxley Ruby
Sdn Bhd, will develop a 15.28-acre freehold land in Malaysia's
state of Selangor. Oxley Ruby was granted the rights to
develop the land after it inked a joint venture agreement with
the landowner, Peninsular Teamwork Sdn Bhd. The agreement
provides for Oxley Ruby to have sole and absolute discretion to
develop the land in any manner it deems appropriate, and at
its own cost.
Pteris Global released more details of its reverse takeover
(RTO) by passenger boarding bridge manufacturer Tianda
Group. It will acquire the remaining 30% of Tianda from
Shenzhen TGM, the management company of Tianda, for
$41.3m, or RMB208.4m. This is in addition to the 70% of
Tianda to be acquired from China International Marine
Containers (Hong Kong) for $96.3m, announced in July after a
conditional sales-and-purchase agreement was made. Like its
purchase of the previous stake in Tianda, Pteris will issue new
shares to satisfy the deal, after the proposed consolidation of
five shares, at 13 cents each, into one. Post-consolidation,
shares will be issued at 65 cents apiece.
China Aviation Oil, the largest physical jet fuel trader in the
Asia Pacific region, has expanded its operations in Europe with
the establishment of a wholly owned subsidiary, China
Aviation Oil (Europe) Limited (CAO Europe), in the United
Kingdom. The expansion into new market broadens aviation
marketing opportunities and creates synergies for enhanced
trading activities.
Singapore’s home prices fell at a faster pace in October,
dropping 1.2% from the previous month as evidence builds
that the government's efforts to cool the property market are
working. The Singapore Residential Price Index fell to 159.1
points last month after declining a revised 0.9% in September.
The measure tracking prices in the central region decreased
1.4% in October. Meanwhile, URA data earlier this month
showed Singapore's home sales fell 19% m-o-m and 48% yo-
y in October to 1,009 units.
Despite the slowdown in new private home sales, demand for
land remains strong, with two adjacent plots at Upper
Serangoon View garnering eight bids each. The top bid for
both sites was put up by Kingsford Development, at $522.43
psf ppr, which translates into $258.8m for Parcel A and
$201.6m for Parcel B. Parcel A has a land area of 165,125 sq
ft and is located next to Rio Vista condo, while Plot B has a
land area of 128,644 sq ft. Kingsford Development beat the
second highest bids for Parcel A and Parcel B by 16% and
12.7% respectively.
Li Ka-shing said his companies have slowed land purchases in
Hong Kong and China as prices have escalated to a high level.
“Land prices in Hong Kong are high, and already showing
signs of an unhealthy situation,” Li said, according to a
statement from Cheung Kong Holdings Ltd. Li added that
“Land prices in China have surged, and we’re unable to win
auctions for land.” His comments underline concerns that
governments in China and in the city are struggling to tame an
asset bubble fuelled by cheap credit

Daily Summary 28 Nov 13

Dow and Europe were all up last night. Dow +25 at 16097.  Dow's trend is
up. Dow's future is now +20.  Europe has opened up.

Asian bourses were mostly up.  Nikkei +277, ShanghaiC +18, Hangseng -17.
STI closed +14 at 3186.  Volume was 1.5b shares.  Gainers were 249 to 173
losers.

Trend of STI is flattening and we are seeing the first rebound after the
recent falls.

Top volumes were Albedo, +0.3, Viking +1.1, Dragon -0.2, Ipco unchanged,
KLW unchanged, GoldenAgr unchanged, Vallianz +0.3, WCorp +0.1, SIICEnv
unchanged, HanKore unchanged.

Market opened flat but gained strength to hit a day high at 3200. It gave
up some gains to close at 3186. It appeared to be some window dressing with
most of the blue chips up. Penny stocks were also firmer.

Europe and Dow are looking positive for tonight.

Wednesday, November 27, 2013

OCBC Report 28 Nov 13

COSCO Corp: Time needed to scale offshore value chain
2013 is looking to be the weakest year in terms of earnings for COSCO Corp (Singapore). After recording net profit of S$139.7m and S$105.7m in FY11 and FY12, respectively, net profit for FY13 looks set to be below S$50m. Indeed, after five quarters of either little cost overruns or reversal of provisions made earlier, COSCO returned to making provisions on its construction contracts again, dousing hopes that it is gaining footing on the execution front. Looking ahead, we expect the operating environment for the group to remain difficult. Any credit tightening in China may also affect the ability of customers to meet their financial obligations. Maintain SELL with S$0.61 fair value estimate. (Low Pei Han)

For more information on the above, visit
www.ocbcresearch.comfor the detailed report.


NEWS HEADLINES


- Taxi operators Comfort, CityCab and SMRT will be allowed to expand their fleet in the first half of next year, after meeting the LTA’s taxi availability standards.


- SembCorp Industries has announced that its wholly-owned subsidiary has issued S$200m 3.64% fixed rate notes due 2024.


- Interra Resources has started drilling development well TMT-58. TMT-57 is producing 650 barrels of oil/day.

- Global Invacom Group has acquired Raven Manufacturing Limited for a cash consideration of £1.98m (approximately US$3.18m).


- Datapulse reported 1Q14 net profit of S$985k versus S$4.05m a year ago.

- PNE Industries announced FY13 profit of S$3.76m versus S$5.6m a year ago.


- Elektromotive has issued S$200k of convertible notes due in 2018.

DBS Vickers Report 28 Nov 13

United Envirotech - Growth delayed to FY15; downgrade
to HOLD, TP reduced to S$0.91
Recurring income model for United Envirotech remains intact
but escalating costs need monitoring. Our analyst has cut
FY14/15F earnings by 36%/19% to account for higher costs
and slow EPC (Engineering, Procurement and Construction)
execution. Downgrade to HOLD on limited upside to reduced
TP of S$0.91 (Prev S$ 0.98). Earnings catalysts: EPC wins,
higher than expected accretion from Memstar. Memstar
takeover is long term positive but EPS dilutive near term.
Technically, there is downside risk to $0.75 or even as low as
$$0.66. These 2 levels are the major 38.2% and 50%
downward retracement of the stock’s bullish trend from a
low of $0.31 (Jun12) to $1.02 (July13).
Upstream oil and gas firm Interra Resources' latest
development well in the Tanjung Miring Timur (TMT) field in
Indonesia has achieved a flow rate of 650 barrels of oil a day.
The firm currently has an average shareable production of
1,904 barrels a day. The firm has also started drilling another
well in the TMT field, the third of four that it plans to do.
ST Engineering announced that its electronics arm, ST
Electronics has set up a wholly owned subsidiary, ST
Electronics (Thailand), in Thailand with a paid up capital of
Thai Baht 120,000,000 (about S$4.8m). It will offer ST
Electronics’ transportation and advance electronics solutions
in Thailand.
China Aviation Oil, Asia's top jet fuel buyer, is seeking up to
1.6 million barrels of jet fuel for delivery over late December
to January, a tender document showed. This is about 30%
higher than what the company has been requiring every
month over the past two tenders, though the reason was not
immediately clear. CAO had earlier halved its monthly jet fuel
requirement for October due to a tax policy change that went
into effect in August. China removed a value-added tax
exemption on imported jet fuel used by Chinese airlines on
their international flights, making imports more expensive
than buying from domestic refiners, traders said. CAO
resumed normal purchase volumes in September for its late
October to November volumes, though it is unclear if this will
be a long-term trend.
US Indices Last Close Pts Chg % Chg
Dow Jones  16,097.3 24.5 0.2
S&P  1,807.2 4.5 0.2
NASDAQ  4,044.8 27.0 0.7
Regional Indices
ST Index  3,172.1 (1.5) (0.0)
ST Small Cap  534.7 (1.4) (0.3)
Hang Seng  23,806.4 125.1 0.5
HSCEI  11,402.0 99.9 0.9
HSCCI  4,618.1 5.7 0.1
KLCI  1,798.5 0.3 0.0
SET  1,373.1 14.4 1.1
JCI  4,251.5 16.2 0.4
PCOMP  6,053.9 28.5 0.5
KOSPI  2,039.0 10.2 0.5
TWSE  8,295.9 47.9 0.6
Nikkei  15,449.6 (65.6) (0.4)
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013
100-Day MA
Index
STI
Total Market cap (US$bn) 581
Total Daily Vol (m shrs) 1,902
12m ST Index High 3,454
12m ST Index Low 3,004
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price (S$)
27 Nov
Target Price
(S$)
Hutchison Port Hldgs Trust (US$) Buy 0.685 0.82
ComfortDelgro Buy 1.98 2.19
OCBC Buy 10.44 12.40
Singapore Airlines Buy 10.49 11.40
Stock Picks – Small /Mid Cap
Rec’n Price (S$)
27 Nov
Target Price
($)
Ezion Holdings Buy 2.04 2.65
China Merchants Buy 0.91 1.20
CSE Global Buy 1.005 1.11
Frasers Centrepoint Trust Buy 1.79 2.14
Yoma Strategic Holdings Buy 0.740 1.02
Source: Bloomberg Finance L.P., DBS Vickers
Singapore
Wired Daily
Page 2
Singapore’s services sector continued to put up a strong
showing in the third quarter, with all segments experiencing
higher turnover compared with a year earlier. Business receipts
from companies in services - excluding wholesale & retail
trade, and accommodation & food services - rose 8% y-o-y, in
line with Q3 government data released last week. Business
services enjoyed the highest growth of 12.2% compared with
a year ago, while financial & insurance services followed close
behind with an 11.6% rise in revenue.
U.S. stocks rose as Hewlett-Packard led a rally in the
technology sector while data on employment and consumer
confidence boosted optimism in the economy. Hewlett-
Packard posted revenue and profit that topped analysts’
estimates. Weekly jobless claims fell more than expected at
316k (consensus 330k). The Thomson Reuters/University of
Michigan final index of consumer sentiment unexpectedly rose
to 75.1 in November from 73.2 a month earlier.

Daily Summary 27 Nov 13

Dow was flat while Europe were down last night.  Dow's trend is slightly up. Dow's future is now +10, Europe opened up.  

Asian bourses were mixed. Nikkei -66, ShanghaiC +18, Hangseng +125.  STI closed -1 at 3172.  Volume was 1.9b shares,  Gainers were 190 to 248 losers.

Trend of STI is down.

Top volumes were Albedo unchanged, KLW -0.1, Vallianz -0.2, HanKore +0.4, Innopac +0.1, CharismaEner unchanged, Dragon +0.5, OttoMarine -0.1, GoldenAgr -1, SIIC Env +0.2.

STI opened up but drifted to close -1. Another day of listless trading. Blue chips were slightly weaker with more losers than gainers.  Penny and speculatives were mixed.

Europe and Dow are looking slightly better for tonight.

Tuesday, November 26, 2013

DBS Vickers Report 27 Nov 13

IHH Healthcare - Current valuation reflects positive
prospects, maintain HOLD, TP: S$1.53
3Q13 operating results for IHH Healthcare in line. Admissions
and average patient revenue showed growth. We cut our
FY13F net profit forecasts by c.23% to reflect unrealized FX
losses on USD loans. We also adjusted FY14F earnings down
by c.7% with the weaker Turkish Lira, offset by a stronger
SGD. Our TP is raised marginally to S$1.53 (RM3.94) as we
roll valuations over to FY14F, from blended FY13F/14F
previously. While long term prospects remain positive for
healthcare players, we believe this has largely been priced in.
Maintain HOLD.
United Envirotech (UENV) has entered into a second
supplemental agreement with regards to the proposed
acquisition of the business, assets and principal subsidiaries of
Memstar by UENV. Among the changes are :- 1) Extend the
existing agreement to 28 April 2014 from 28 Jan 2014; 2)
KKR has undertaken, upon completion of the merger, to
immediately convert US$51.1m or 44.9% of the US$113.8m
convertible bonds into approximately 137m shares at the
conversion price of S$0.45; 3) Memstar to distribute special
dividend; 4) Purchase consideration shall be satisfied via cash
and new UENV shares.
PGEO Group, a wholly-owned subsidiary of Wilmar, has
acquired a 100% interest in Vopak Terminals Pasir Gudang
from Vopak Pasir Gudang Malaysia BV for a purchase price of
MYR45mil. The principal activity of Vopak Terminals Pasir
Gudang is the provision of tank facilities for storage,
unloading, loading and drumming of bulk liquid chemicals.
Global Logistic Properties has signed a lease agreement for
13,000 sqm with Geodis Group, one of the world’s largest
supply chain solutions providers, at GLP Park Suzhou, Eastern
China.
Vallianz Holdings has been awarded US$150m worth of
chartering contracts by a leading company in the Middle East.
Platform Supply Vessels (PSVs) will be chartered out from 1Q
2014 for 5 years, including option of extension. These
contracts boost the current outstanding orderbook by 45%
to US$485m.
US Indices Last Close Pts Chg % Chg
Dow Jones  16,072.8 0.3 0.0
S&P  1,802.8 0.3 0.0
NASDAQ  4,017.7 23.2 0.6
Regional Indices
ST Index  3,173.5 (7.1) (0.2)
ST Small Cap  536.1 5.1 1.0
Hang Seng  23,681.3 (3.2) (0.0)
HSCEI  11,302.0 (85.2) (0.7)
HSCCI  4,612.4 7.0 0.2
KLCI  1,798.1 0.2 0.0
SET  1,358.7 5.8 0.4
JCI  4,235.3 (99.5) (2.3)
PCOMP  6,025.4 21.1 0.4
KOSPI  2,022.6 6.7 0.3
TWSE  8,248.0 60.5 0.7
Nikkei  15,515.2 (103.9) (0.7)
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013
100-Day MA
Index
STI
Total Market cap (US$bn) 583
Total Daily Vol (m shrs) 1,936
12m ST Index High 3,454
12m ST Index Low 3,004
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price (S$)
26 Nov
Target Price
(S$)
Hutchison Port Hldgs Trust (US$) Buy 0.68 0.82
ComfortDelgro Buy 1.99 2.19
OCBC Buy 10.47 12.40
Singapore Airlines Buy 10.41 11.40
Stock Picks – Small /Mid Cap
Rec’n Price (S$)
26 Nov
Target Price
($)
Ezion Holdings Buy 2.05 2.65
China Merchants Buy 0.91 1.20
CSE Global Buy 1.015 1.11
Frasers Centrepoint Trust Buy 1.81 2.14
Yoma Strategic Holdings Buy 0.74 1.02
Source: Bloomberg Finance L.P., DBS Vickers
Singapore
Wired Daily
Page 2
Mermaid Maritime has recently been awarded additional
US$30m diving and cable lay projects in Middle East. This
latest suite of contract awards include new build DP2
construction barge chartered-in to support additional work
requirements.
Chip Eng Seng has entered into three contracts of sale to
purchase a former nursery and orchard site in Australia. The
purchase price of the property is A$19.3m. The property has a
site area of 28,002 square metres which the Group intends to
develop it into a residential project consisting of around 90
town houses and 50 apartments.
Novo Group expects to record an increase of loss for the six
months ended 31 October 2013 as compared to that for
2012. The loss is mainly attributable to the cost increased
significantly due to the commencement of operations of the
Group’s tinplate manufacturing plant in Jiangsu and tinplate
processing plant in Tianjin.
Singapore’s manufacturing output rose 8% in October but still
short of market expectations, dragged down by a 2.3%
contraction in the biomedical manufacturing cluster. Excluding
the volatile biomedical sector - which shrank on a 6.9% drop
in pharmaceuticals output - industrial production would have
grown an even stronger 10.4% y-o-y. The electronics sector
continued to build on September's robust showing, rising
from 20% y-o-y growth that month to 22.8% in October. This
was largely a result of most segments expanding amid
improved demand.
U.S. stocks pared gains in the final minutes of trading to
reflect changes in MSCI indices that offset a rally among
homebuilders and technology shares. Homebuilders rose after
the S&P/Case-Shiller index of property values indicated home
prices in 20 U.S. cities rose 13.29% y-o-y, better than
consensus estimates of 13%. October building permits
registered 1.034mil, better than consensus expectations for
930k

OCBC Report 27 Nov 13

KEY IDEA

Consumer sector: Challenging 2014 ahead

Summary
: We expect the first half of 2014 to be an uneventful one for the consumer sector, and we maintain our UNDERWEIGHT rating. We feel that revenue growth is likely to be challenging given the recent spate of bearish data points both domestically and abroad, which indicate that consumer spending is likely to be subdued in 2014, and that companies will also continue to face margin pressures from rising operating expenses (i.e. higher staff and rental expenses). In addition, ongoing concerns over the overall macro environment and the focus on rising inflation will also keep a lid on consumer spending. Within our sector coverage our top picks are Sheng Siong Group [BUY; FV: S$0.78] as we like its defensive qualities in the face of weaker domestic sales, and Petra Foods [BUY; FYS$3.95] for its dominant leadership position in chocolate confectionary products. (Lim Siyi)

For more information on the above, visit
www.ocbcresearch.comfor the detailed report.


NEWS HEADLINES


- For 3Q13, IHH Healthcare’s revenue grew by 13% YoY to RM1.7b while PATMI, excluding exceptional items, increased 63% to RM138.3m.

- Vallianz has received US$150m chartering contracts in the Middle East.

- Willas-Array Electronics expects its shares to start trading on the Main Board of the SEHK on 6 Dec, having received approval-in-principle for the dual primary listing.

- United Envirotech has announced the termination of the Transfer-Operate-Transfer project in Shangzhi, Harbin City, Heilongjiang Province, China.

- Novo Group reports that it expects to see a higher loss for its half year ended 31 Oct.

- Food Empire has established a S$200m multicurrency medium term note program.

Daily Summary 26 Nov 13

Dow and Europe were slightly positive last night. Dow +8 at 16073.  Dow's trend is pointing up slightly. Dow's future is now +15.  Europe has opened flat.

Asian bourses were mixed.  Nikkei -104, ShanghaiC -3, Hangseng -3.  STI closed -7 at 3174.  Volume was 1.9b shares.  Gainers were 250 to 190 losers.

Trend of STI is down but flattening.

Top volumes were Albedo +0.6, SingHaiyi +0.1, Vallianz +0.8, HPHTrust -1, Noble +3, CharismaEnergy +0.2, Transcu unchanged, GoldenAgr +1, GSH +0.3, Inopac unchanged.

STI opened slightly down and traded in a narrow band. Volume was slightly better. Blue chips were mixed but penny and speculatives were firmer.

Europe and Dow are looking flat at the moment.

Monday, November 25, 2013

DBS Vickers Report 26 Nov 13

Yongnam secures S$168mil contract for M&S Marine
One, maintain Fully Valued, TP: $0.24
 ST Engineering wins USD350mil contract to build 2
ConRo vessels
Yongnam has secured S$168mil worth of structural steel
subcontract works for M&S Marina One project, which is a
mixed development at Marina South. This lifts order book to
S$397mil. The project is expected to be completed in 1Q16.
The bulk of revenue will therefore be recognized in FY14F
and FY15F. Although significant, this project win is within
expectation for FY14F. We continue to be negative on
projects going forward and expect lacklustre growth for
FY14F. We believe Yongnam is likely to see slower order book
drawdown for FY14F due to a lack of project wins earlier this
year as well as declining margins. No change in our Fully
valued recommendation & $0.24 TP.
ST Engineering announced today that its US Shipyard, VT
Halter Marine has won a shipbuilding contract from Crowley
Maritime Corporation to build two Container Roll-on/Roll-off
(ConRo) vessels. The value of this contract is in the region of
US$350m (approximately $420m).
Pacific Andes posted a net profit of HK$775.19mil
(S$125.2mil) for the FY13 that ended Sept, up 23.5% y-o-y
from HK$627.66mil. The results included a maiden onemonth
contribution from Copeinca ASA that the group
acquired a 99.1% stake on Aug 30. Revenue stood at
HK$8.7bil down 9.2% from HK$9.58bil the previous year.
This was due to a fall in revenue from the frozen fish SCM
division. Gross profit fell 25.8% from HK$1.89bil to
HK$1.4bil.
Meanwhile, China Fishery, which is 70% owned by Pacific
Andes, reported a FY13 net profit of US$83.8mil, up 7.3% yo-
y from US$78.12mil. Revenue was lower by 8.1% to
US$555mil.
CapitaLand’s wholly-owned serviced residence business unit,
The Ascott Limited, has crossed its milestone of having
10,000 apartment units in its key market of China. This brings
Ascott closer to its target of achieving 12,000 apartment
units in China by 2015.
US Indices Last Close Pts Chg % Chg
Dow Jones  16,072.5 7.8 0.0
S&P  1,802.5 (2.3) (0.1)
NASDAQ  3,994.6 2.9 0.1
Regional Indices
ST Index  3,180.7 7.8 0.2
ST Small Cap  531.0 (1.9) (0.4)
Hang Seng  23,684.5 (11.8) (0.0)
HSCEI  11,387.2 (61.5) (0.5)
HSCCI  4,605.4 (3.5) (0.1)
KLCI  1,798.0 3.5 0.2
SET  1,352.9 (6.2) (0.5)
JCI  4,334.8 16.8 0.4
PCOMP  6,004.3 (80.6) (1.3)
KOSPI  2,008.8 (7.2) (0.4)
TWSE  8,187.5 70.7 0.9
Nikkei  15,619.1 237.4 1.5
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013
100-Day MA
Index
STI
Total Market cap (US$bn) 582
Total Daily Vol (m shrs) 1,450
12m ST Index High 3,454
12m ST Index Low 3,004
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price ($)
25 Nov
Target Price
($)
Hutchison Port Hldgs Trust (US$) Buy 0.69 0.82
ComfortDelgro Buy 1.965 2.19
OCBC Buy 10.49 12.40
Singapore Airlines Buy 10.53 11.40
Stock Picks – Small /Mid Cap
Rec’n Price ($)
25 Nov
Target Price
($)
Ezion Holdings Buy 2.04 2.65
China Merchants Buy 0.90 1.20
CSE Global Buy 1.015 1.11
Frasers Centrepoint Trust Buy 1.795 2.14
Source: Bloomberg Finance L.P., DBS Vickers
Singapore
Wired Daily
Page 2
US markets ended mixed as energy shares retreated
following Iran’s agreement to limit its nuclear program. Iran
had agreed to curtail nuclear activities in return for easing of
some sanctions on oil, auto parts, gold and precious metals,
an accord that broke a decade-long deadlock. Valuation is
another reason for the hesitance in the current US stock
market rally. According to Bloomberg, the S&P500 Index
currently trades at about 17 times earnings, which is at the
highest level since May 2010. The current level is not far
below the previous peak of 17.5 attained in October 2007

OCBC Report 26 Nov 13

Wilmar: Forms China corn starch JV

Summary:
Wilmar International Limited (WIL) recently announced that it has formed a JV with Tereos Internacional to manufacture corn starch in China – this is its second commercial collaboration with Tereos. However, we do not see any immediate boost to earnings. Meanwhile, we note that WIL’s share price has done very well (+17%) since our upgrade to Buy on 6 Sep; but as WIL looks fairly priced around current levels versus unchanged S$3.55 fair value (based on 12.5x FY14F EPS), we opt to maintain our HOLDrating. We also advocate taking profit closer to S$3.70. (Carey Wong)

MORE REPORTS


ST Engineering: US Shipyard wins US$350m contract from Crowley

Summary:
Singapore Technologies Engineering Ltd (STE) has announced that its US Shipyard, VT Halter Marine, Inc has won a shipbuilding contract from Crowley Maritime Corporation (Crowley) to build two Container Roll-on/Roll-off (ConRo) vessels. The value of this contract is in the region of US$350m (~S$420m). The vessels will be built at the Pascagoula facility in the US, with construction taking place in the first half of 2014 with deliveries in mid and late 2017. While there is no material impact to near-term earnings, we still see the contract as a testament to STE’s shipbuilding capabilities. We maintain our FV of S$4.32 and HOLD rating on STE. (Sarah Ong)

For more information on the above, visit
www.ocbcresearch.comfor the detailed report.


NEWS HEADLINES


- Yongnam Holdings has secured a structural steel subcontract worth S$168m for works at Marina One, a mixed-use development located at Marina South.

- City Developments has been approached by independent third parties regarding the possibility of the sale of its 52.52% interest in its Hong Kong unit, City e-Solutions Limited.

- CapitaLand’s wholly-owned serviced residence business unit, The Ascott Limited, has crossed a milestone of having 10,000 apartment units in its key market of China.

- Singapore Exchange has formed a direct-listing framework with the China Securities Regulatory Commission where Chinese companies planning to list in Singapore will file applications to the SGX and the Chinese regulator.

- Rex International’s jointly-controlled entity, Lime Petroleum Plc, through its subsidiary Masirah Oil Ltd, has begun drilling an exploration well in Oman.

- Freight Links Express Holdings Ltd has changed its name to Vibrant Group Ltd.

Daily Summary 25 Nov 13

Dow and Europe were up on Friday. Dow +55 at 16065.  Dow's trend is up. Dow's future is now +10. Europe opened up.

Asian bourses were mixed.  Nikkei +237, ShanghaiC -10, Hangseng -12.  STI closed +8 at 3181.  Volume was 1.4b shares.  Gainers were 177 to 248 losers.

Trend of STI is down.

Top volumes were KLW unchanged, Transcu -0.1, MDR unchanged, Albedo +0.3, Aussino -0.6, Innopac unchanged, Valianz +0.1, NexGenCom -0.1, SingHaiyi unchanged, Noble +1.5.

Market opened up and stayed up the whole day. Blue chips were slightly firmer while penny and speculatives were weaker. Volume is another low of 1.4b shares, as good as only the computers were trading. Wondering how many real trading would be left if the computer traders were to switch off their machines.

What is happening only the SGX would know.

Europe are Dow are looking firm for tonight.

Sunday, November 24, 2013

OCBC Report 25 Nov 13

KEY IDEA

Biosensors International Group: Sale by largest shareholder

Summary:
Shandong Weigao (SW), which is Biosensors International Group’s (BIG) largest shareholder, announced that it has agreed to dispose its entire 21.7% stake in BIG to CB Medical Holdings Limited (CBMH) at a sale price of S$1.05 per share. According to a SGX-net filing, CBMH is part of CITIC Private Equity Funds Management, a large private equity fund in China. As SW will incur a loss of ~CNY449.0m from this transaction, we believe it also partly reflects the lack of confidence in BIG’s prospects going forward. We do not foresee any impact from SW’s sale on the operations of BIG. While we do not rule out the possibility of a privatisation exercise on BIG by CBMH in the future, we continue to value the stock based on our expectations of its operational performance. Hence, maintain SELLand S$0.80 fair value estimate on BIG. (Wong Teck Ching Andy)

For more information on the above, visit
www.ocbcresearch.comfor the detailed report.


NEWS HEADLINES


- US stocks rose on Fri, with the S&P 500 index closing above 1,800 for the first time and extending gains into a seventh consecutive week.

- Pacific Andes Resources reported FY13 net profit attributable to shareholders of HK$775.2m, up 23.5%.

- China Fishery Group announced FY13 net profit attributable to shareholders of US$83.8m, representing a 7.3% growth.

- Keppel Land has completed the divestment of its 51% shareholding in Jakarta Garden City.

- Straits Trading Co is planning "Blackstone-like" funds as Asia's appetite for real estate investments increases.

- Shares in Aussino Group plunged 50% to a low of 3.6 S cents, after SGX issued a delisting notification to the company and rejected its application for a time extension to meet certain listing requirements.

- Guthrie GTS will be delisted from SGX at 9am today.

DBS Vickers 25 Nov 13

STI – 3150 support despite last week’s decline, 3290
view intact but delayed beyond this year-end
􀂃 China Merchants benefits from better traffic numbers
& lower finance cost, earnings estimates & TP raised
to $1.20 (from $1.07)
The current relative underperformance in the STI could be
due to South-East Asian equities falling out of favour among
investors as this region is seen as having a higher risk when
the FED starts to taper QE. The penny stocks rout over the
past 2 months and the year end lull period provides a further
drag.
But we continue to see the prospect of the index higher
towards 3290 despite STI’s 29pt decline last week. The
likelihood of this happening though looks to be delayed
beyond the year-end lull period.
The short-term support levels for the index are 3150 and
3100. With the STI currently trading closer to 13.12x (-0.5SD)
FY14F PE at c.3100, GDP forecasted to improve next, there is
not much more that the STI can dip if the rest of the world
continues to stay firm. Unless global equities slip into a
correction, we expect the first support level at 3150 to hold.
Crude oil slid and gold declined and equity futures gained
after Iran agreed to limit its nuclear program in exchange for
relief from some sanctions. Brent crude fell 2% to USD108.81
pbl.
We believe that traffic for China Merchant’s toll roads will
grow at a mid to high single digit pace over the next few
years. Core earnings are poised to improve steadily in through
FY14 before flattening out in FY15. We raised our FY13 and
FY14 estimates by 10% and 11% respectively. Completion of
the sale of the Group’s NZ property business will also further
boost its coffers, and allow room for potentially more
acquisitions. We increase our DCF-based (WACC 9.1%)
target price to S$1.20 (from $1.07) due to our higher
earnings estimates and lower WACC assumptions. The stock
offers an attractive dividend yield of 6.3% and is trading at
just 8.8x core fully diluted FY13 PE, or 7.7x FY14 PE.
ISDN, through its wholly-owned subsidiary, Aenergy Holdings
Company Limited, plans to acquire a larger equity stake in the
Datara mini hydropower project in South Sulawesi through a
proposed JV between PT SDM and the Gowa Regency
Government in Sulawesi. ISDN through PT SDM will own
76% of the JV company while the Gowa Regency
Government retains its 20% ownership. The Datara mini
hydropower project is targeted to have am installed base
capacity of 10 megawatt.
US Indices Last Close Pts Chg % Chg
Dow Jones 􀀘 16,064.8 54.8 0.3
S&P 􀀘 1,804.8 8.9 0.5
NASDAQ 􀀘 3,991.6 22.5 0.6
Regional Indices
ST Index 􀀘 3,172.9 0.5 0.0
ST Small Cap 􀀙 532.9 (0.3) (0.1)
Hang Seng 􀀘 23,696.3 116.0 0.5
HSCEI 􀀘 11,448.7 115.6 1.0
HSCCI 􀀘 4,608.8 6.3 0.1
KLCI 􀀙 1,794.5 (0.1) (0.0)
SET 􀀙 1,359.1 (16.8) (1.2)
JCI 􀀙 4,318.0 (8.2) (0.2)
PCOMP 􀀙 6,084.8 (38.1) (0.6)
KOSPI 􀀘 2,006.2 12.5 0.6
TWSE 􀀘 8,116.8 17.3 0.2
Nikkei 􀀘 15,381.7 16.1 0.1
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013
100-Day MA
Index
STI
Total Market cap (US$bn) 582
Total Daily Vol (m shrs) 1,487
12m ST Index High 3,454
12m ST Index Low 2,987
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price ($)
22 Nov
Target Price
($)
Hutchison Port Hldgs Trust (US$) Buy 0.680 0.82
ComfortDelgro Buy 1.940 2.19
OCBC Buy 10.460 12.40
Singapore Airlines Buy 10.230 11.40
Stock Picks – Small /Mid Cap
Rec’n Price ($)
22 Nov
Target Price
($)
Ezion Holdings Buy 2.050 2.65
CSE Global Buy 1.015 1.11
Frasers Centrepoint Trust Buy 1.790 2.14
Yoma Strategic Holdings Buy 0.745 1.02
Source: Bloomberg Finance L.P., DBS Vickers
Singapore
Wired Daily
Page 3
Keppel Land has completed the divestment of its 51% stake
in Jakarta Garden City to PT Modernland Realty Tbk
(Modernland). Based on a sale consideration of about
S$249mil, this translates into net proceeds of about S$237
million. The divestment will enable Keppel Land to realise a
net gain of about S$149 million. The sale of Keppel Land's
stake in Jakarta Garden City will allow the company to
redeploy capital to new residential and commercial projects
in Indonesia, with a focus on Jakarta.

Friday, November 22, 2013

Daily Summary 22 Nov 13

Dow was +109 last night, closing at 16010. Europe were marginally down.  Dow's trend is resuming its climb up. Dow's future is now +20.  Europe opened up.

Asian bourses  were mostly up.  Nikkei +16, ShanghaiC -9, Hangseng +116.  STI closed -3 at 3169.  Volume was 1.4b shares.  Gainers were 197 to 194 losers.

Trend of STI is down.

Top volumes were MDR unchanged, Aussino -3.6, SingHaiyi unchanged, HPHTrust unchanged, KLW +0.1, Innopac unchanged, LippoMalls -2, CharismaEnergy unchanged, Albedo -0.1, GoldenAgr +0.5.

STI opened flat but drifted down to close negative but off its low.  Blue chips were mixed and so were penny stocks. It was another day of lacklustre trading with decreasing volumes. This lull is extending and there is no signs of when would the retail traders returning.

Europe and Dow are looking positive for tonight.

Thursday, November 21, 2013

DBS Vickers Report 22 Nov 13

Rex invests US$20mil in Rexonic, Maintain Buy TP $1.15
Rex will be investing US$20m for a 67% stake in Rexonic,
which will own a proprietary environmentally-friendly, highpower
ultrasound technology for commercial oil well
stimulation developed by Swiss partner Ogsonic AG. This
technology is intended to replace traditional chemical
methods and has been shown to increase oil production from
30% to 380%, both onshore and offshore, according to
management. Rexonic has already signed contracts with three
major NOCs and could contribute a recurrent earnings stream
within the next few years. Drill results from the first well in
Oman can be expected around end-December 2013, and the
second well around 40 days later. Maintain Buy, our TP for
Rex is adjusted down to S$1.15, as we factor in a bigger
share base arising from the recent share placement, as well as
consideration shares issued to fund the acquisition of the
Rexonic stake and an additional stake in Rex Caribbean.
LionGold Corp's partially owned Ghana gold mining unit,
Owere Mines, has entered into an agreement with Australia's
B&C Gold to purchase and process gold-bearing waste
tailings. Owere Mines will purchase from B&C a minimum of
1mil dry tonnes of gold-bearing waste tailings, which are
potentially hazardous material left behind from old gold
mining operations. LionGold estimates that 90,000 ounces of
gold can be produced from the tailings, assuming an average
grade of three grams per tonne of gold and a 90% recovery
rate. An existing processing plant will be utilized, which has
an annual processing capacity of 320,000 tonnes of ore, for
the production
KLW Holdings has secured 3 contracts worth a total of
$6.4mil for residential project developments in Singapore.
Under these contracts, it will supply and install doors for
Hillsta, Waterbay EC and The Topiary Executive
Condominium. In total, there are 1,499 apartments in these 3
developments. These contracts are not expected to have a
material impact on the company's financial year ending
March 31, 2014.
US Indices Last Close Pts Chg % Chg
Dow Jones 􀀘 16,010.0 109.2 0.7
S&P 􀀘 1,795.9 14.5 0.8
NASDAQ 􀀘 3,969.2 47.9 1.2
Regional Indices
ST Index 􀀙 3,172.4 (11.8) (0.4)
ST Small Cap 􀀙 533.2 (0.8) (0.1)
Hang Seng 􀀙 23,580.3 (120.6) (0.5)
HSCEI 􀀙 11,333.1 (104.3) (0.9)
HSCCI 􀀙 4,602.6 (18.0) (0.4)
KLCI 􀀙 1,794.7 (4.0) (0.2)
SET 􀀙 1,375.9 (29.0) (2.1)
JCI 􀀙 4,326.2 (24.6) (0.6)
PCOMP 􀀙 6,122.9 (32.4) (0.5)
KOSPI 􀀙 1,993.8 (23.5) (1.2)
TWSE 􀀙 8,099.5 (105.0) (1.3)
Nikkei 􀀘 15,365.6 289.5 1.9
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013
100-Day MA
Index
STI
Total Market cap (US$bn) 587
Total Daily Vol (m shrs) 1,665
12m ST Index High 3,454
12m ST Index Low 2,960
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price ($)
21 Nov
Target Price
($)
Hutchison Port Holdings Trust Buy 0.680 0.82
ComfortDelgro Buy 1.910 2.19
OCBC Buy 10.410 12.40
Singapore Airlines Buy 10.170 11.40
Stock Picks – Small /Mid Cap
Rec’n Price ($)
21 Nov
Target Price
($)
Ezion Holdings Buy 2.010 2.65
CSE Global Buy 1.025 1.11
Frasers Centrepoint Trust Buy 1.785 2.14
Yoma Strategic Holdings Buy 0.745 1.02
Source: Bloomberg Finance L.P., DBS Vickers
Singapore
Wired Daily
Page 2
Changi Airport's passenger traffic rose 3.2% y-o-y last
month, which was a slower pace of growth compared to
recent months. Air freight volumes edged up 1.8% after
two consecutive months of contraction. 4.41 mil passengers
passed through the airport last month. The airport saw
6.9% more passengers y-o-y in September and passenger
movement growth of 9.4% in August. Meanwhile, aircraft
landings and takeoffs rose 6.7% to 29,500 in October.
US markets rose after jobless claims slid more than forecast
(actual 323k, consensus 335k) and the Markit US
preliminary PMI for the month of November rose more
expected (actual 54,3, consensus 52.3).
Share

OCBC Report 22 Nov 13

SPH REIT: Retail blue chip with just valuation

Summary:
SPH REIT is a Singapore-based REIT established principally to invest in a portfolio of income-producing real estate used primarily for retail purposes in Asia-Pacific. The initial portfolio comprises two commercial properties in Singapore, namely Paragon, upscale retail mall and medical suite/office property, and The Clementi Mall, a mid-market suburban mall. We like SPH REIT’s exposure to the local retail landscape as the outlook is expected to remain robust, bolstered by growing retail sales, rising visitor arrivals, an expanding population and comfortable supply of retail space. In addition, the underlying growth drivers for the regional healthcare scene are expected to remain strong. Since its listing, we note that SPH REIT has enjoyed a strong run-up in unit price of 8.9%, significantly outperforming the FTSE ST REIT Index over the same period. At current price, SPH REIT is trading at 1.10x P/B, slightly higher than the local retail subsector P/B of 1.05x. Our DDM-based fair value of S$0.99 implies a total expected return of 6.4%, including a FY14F DPU yield of 5.4%. As the counter appears to be fairly priced with no visible strong near-term price catalyst, we initiate coverage on SPH REIT with a HOLD rating. (Kevin Tan)
For more information on the above, visit www.ocbcresearch.comfor the detailed report.

NEWS HEADLINES


- The Dow achieved its first-ever close above 16,000 on Thu as US stocks rallied, boosted by better-than-expected data on weekly jobless claims and less concerns on the Fed tapering talks.

- The Singapore government raised its 2013 GDP growth forecast to 3.5%-4% from its earlier 2.5%-3.5% forecast range.

- The S$126m buyout of OpenNet by SingTel-owned NetLink Trust has been given the nod by the Infocomm Development Authority.

- LionGold Corp's partially owned Ghana gold mining unit, Owere Mines, has entered into an agreement with Australia's B&C Gold to purchase and process gold-bearing waste tailings.

- CapitaLand raised A$426m (S$485m) by selling a third of its stake in Australian property developer Australand.

- CosmoSteel Holdings reported a net profit of S$1.16m for 4QFY13, down 53.3% YoY.

- KLW Holdings has secured three contracts worth a total of S$6.4m for residential project developments in Singapore.

Daily Report 21 Nov 13

Dow and Europe were down last night. Dow closed -66 at 15901.  Dow's trend is still up but levelling. Dow's future is now -10.  Europe opened down.

Asian bourses were mixed.  Nikkei +290, ShanghaiC -1, Hangseng -121. STI closed -12 at 3172.  Volume was 1.6b shares.  Gainers were 159 to 288 losers.

Trend of STI is down.

Market was down the whole day with little trading activities. Volume was 1.6b shares which is as good as inactive. Blue chips were down as well as penny stocks. Retails were staying away from the market. The year end holiday season could also contribute to the lack of market participation.

Europe and Dow are likely to close negative tonight.

Wednesday, November 20, 2013

OCBC Report 21 Nov 13

Transportation sector: Hindered movement in 2014
Despite general economic improvements, the counters within the transportation sector failed to perform well in 2013 due to industry-specific challenges and issues (e.g. sustained competitive pressures in the aviation sector, demand-supply imbalance for the shipping sector, lack of fare increases for the land transportation sector). With some of these issues unlikely to be resolved in 2014, we are downgrading the overall sector to UNDERWEIGHT and expect investor interest to remain tepid. Out of the counters in our coverage, our top pick is ComfortDelgro, rated BUY with a fair values estimate of S$2.20, as we favour its diversified and stable earnings stream, attractive overseas operations, and strong domestic leadership in the taxi and bus segments.
More reports:
- Bumi Armada Berhad: 3Q13 PATMI grows 27.6% YoY
News Headlines
 US stocks fell on Wed after Federal Reserve meeting minutes signaled the central bank was on track to slow down its bond-buying programme.
 Singapore’s domestic wholesale trade rose 5.1% in 3Q13 compared with a year ago, according to data released by the Department of Statistics Singapore.
 The Draft Master Plan 2013 has taken a more holistic approach to developing new activity clusters and encouraging green spaces.
 Keppel Corporation has secured a contract to build a repeat KFELS Super A Class harsh environment jackup rig from Ensco plc for around US$265m.
 CapitaLand has unveiled plans for a quick sale of about a third of its stake in Australand Property Group that could fetch around A$434m (S$507m).
 Rex International Holding has received the green light to acquire 10% stakes in two offshore licences in Norway from North Energy ASA.
 SIIC Environment Holdings is buying a 50% stake in Shanghai Pucheng Thermal Power Energy for 530m yuan (S$108.2m).
 Hafary Holdings is placing a big bet on Singapore's housing outlook with the opening of its new S$21.5m showroom building.

DBS Vickers Report 21 Nov 13

F&N – Value uncapped; upgrade to BUY, target price
revised to S$6.50
DBSV research upgrades F&N to BUY, as shareholders’
value is unlocked through dividend-in-specie of its
property unit, Frasers Centrepoint Limited (FCL). Its JV
partner in Myanmar Brewery Limited (MBL) has issued a
notice of arbitration on FNN’s 55% stake. The outcome is
unknown at this stage, but we believe in the worst case
scenario, impact on RNAV is low, at 2.5%. Stripping out
the estimated value of F&B, we estimate that FCL is
trading at a steep 47%/27% discount to RNAV and book
value, higher than the property sector’s average of 31%
and c.5%, despite FCL’s established position. We revised
our TP to S$6.50 (Prev S$9.52), after incorporating the
recent capital distribution (S$3.28/share).
SIA has unveiled plans with India's Tata group again to set
up a joint-venture airline in that country. SIA said it had
signed a Memorandum of Understanding with Tata Sons
and applied for Foreign Investment Promotion Board (FIPB)
approval to establish a new full-service airline in India.
Total initial investment will be US$100m, with Tata Sons
owning 51% for its US$51m share and SIA the remaining
49%. SIA and Tata had first tried - and failed - to start up
their joint-venture airline in India back in 1994.
Albedo has agreed to a $774.1m reverse takeover (RTO)
with a company majority owned by Malaysian tycoon Tan
Sri Dato’ Danny Tan that will see Albedo transformed into
a major property developer in Iskandar, Malaysia’s special
economic zone in the southern state of Johor. Seven
parcels of land in Iskandar valued at RM2.7 bn will be
injected into Albedo; two more parcels under
negotiations. The company will focus on property
development and management in Malaysia after the RTO.
Albedo will pay for the acquisition by issuing 34.55 bn
new shares representing about 95% of the enlarged
issued capital of the company at around 2.24 Singapore
cents per share.
ComfortDelGro has incorporated a wholly-owned subsidiary
with an initial paid-up capital of RMB1m in China. The
principal activity of the subsidiary is operation of a driving
school.
US Indices Last Close Pts Chg % Chg
Dow Jones �� 15,636.6 (40.4) (0.3)
S&P �� 1,722.3 (3.2) (0.2)
NASDAQ �� 3,789.4 5.7 0.2
Regional Indices
ST Index �� 3,251.8 57.9 1.8
ST Small Cap �� 580.7 7.1 1.2
Hang Seng �� 23,502.5 385.1 1.7
HSCEI �� 10,769.5 181.5 1.7
HSCCI �� 4,488.1 34.9 0.8
KLCI �� 1,792.9 21.5 1.2
SET �� 1,489.1 49.9 3.5
JCI �� 4,670.7 207.5 4.6
PCOMP �� 6,511.7 177.7 2.8
KOSPI �� 2,005.6 (7.Cool (0.4)
TWSE �� 8,209.2 (40.6) (0.5)
Nikkei �� 14,766.2 260.8 1.8
STI Index Performance
Singapore
Total Market cap (US$bn) 600
Total Daily Vol (m shrs) 5,768
12m ST Index High 3,454
12m ST Index Low 2,946
Source: Bloomberg Finance L.P
Stock Picks – Large Cap
Rec’n Price ($)
19 Sep
Target Price
($)
ST Engineering Buy 4.270 4.80
ComfortDelgro Buy 1.960 2.19
OCBC Bank Buy 10.460 12.40
Spore Airlines Buy 10.470 11.40
Suntec REIT Buy 1.705 1.78
Stock Picks – Small /Mid Cap
Rec’n Price ($)
19 Sep
Target Price
($)
Ezion Holdings Buy 2.400 3.20
Goodpack Buy 1.740 2.00
CSE Global Buy 0.905 1.07
Mapletree Commercial Trust Buy 1.195 1.35
CDL Hospitality Trust Buy 1.620 1.80
Source: Bloomberg Finance L.P, DBS Vickers
Singapore
Wired Daily
Page 2
Hiap Tong is proposing to acquire a leasehold industrial
property located at Soon Lee Road Singapore, with an
estimated land area of 26,131 square metres, for S$18m.
The proposed acquisition is for the Group’s operations and
business activities. Its current leasehold property at Pandan
Loop, expiring on 15 January 2014, has been granted a one
year tenancy (from 16 July 2013 to 15 July 2014) from
Jurong Town Corporation.
Hiap Seng Engineering has been awarded two contracts
worth approximately S$57m for the provision of piping and
equipment installation works and the provision of
mechanical, equipment erection and structural works in
Singapore. Both contracts are expected to commence in
September 2013 and scheduled for completion in the
financial year ending 31 March 2015.
In property news, rental demand for homes continued to
strengthen in Q2, driven by a surge in interest in shoebox
units. According to data from Square Foot Research, a total
of 12,352 rental contracts in the non-landed private
residential market were reported in Q2, up 11.6% y-o-y. In
the first six months of this year, a total of 22,937 rental
contracts were signed, a 10.2% rise compared with the
previous year. Rental demand for shoebox units, defined as
units ranging from 300 to 500 sq ft, rose 93% to 748
contracts in H1 2013.
US markets eased, taking a breather from the rise the prior
session triggered by the FED’s decision to postpone cutting
down QE. The 10-yr yield rebound a tat to 2.75% while the
USD Index tapped up slightly to 80.36. Existing home sales
rose 1.7% m-o-m, better than the -2.6% consensus
expectations. The September Philadelphia Fed Business
Outlook also gained a better 22.3 compared to 10.3
consensus expectations.

Daily Summary 20 Nov 13

Dow and Europe were slightly down last night. Dow's trend is still up.  Dow's future is not available today.  Europe opened marginally up.

Asian bourses were mixed.  Nikkei -50, ShanghaiC +13, Hangseng +43. STI closed -7 at 3185.  Volume was 1.5b shares.  Gainers were 179 to 274 losers.

Trend of STI is flat.

Top volumes were KLW -0.1, MDR unchanged, Thakral +0.1, Digiland unchanged, CharismaEnergy(YHM) -0.1, Blumont -0.4, GoldenAgr -1, HPHTrust +1, SingHaiyi -0.1, Infinio unchanged.

 STI opened slightly up but closed at day low. Blue chips were mixed and penny stocks were slightly weaker. Volume has hit another low of 1.47b shares. Market is as usual, directionless and lack of activity.

Europe is flat at the moment.

Tuesday, November 19, 2013

OCBC Report 20 Nov 13

Golden Agri-Resources: Recent run-ahead likely overdone

Summary:
Despite a disappointing set of 3Q13 results, Golden Agri-Resources’ (GAR) share price has continued to do well, likely buoyed by more signs that CPO (crude palm oil) prices are stabilizing around current levels (MYR2500/ton), aided by slightly better demand and supply factors. Note that our US$830/ton (MYR2650/ton) forecast has already taken these factors into consideration. But further CPO price upside may still be capped by the expected jump in global oilseed production. And as the market appears to be taking on a more “risk on” approach, we apply a higher 13.5x peg (versus 12.5x previously) to our FY14F EPS, thus raising our fair value from S$0.465 to S$0.50. But given the potential downside risk, we maintain our SELL rating. (Carey Wong)

MORE REPORTS


ST Engineering: ST Kinetics in Myanmar

Summary:
The land systems arm of Singapore Technologies Engineering (STE), ST Kinetics, has set up a wholly-owned subsidiary, Kinetics Automotive & Specialty Equipment Co., Ltd (KASE), in Yangon, Myanmar, with a paid up capital of US$423,000 (S$524,000). KASE will serve as a platform to introduce and support ST Kinetics’ automotive and specialty vehicles products and services in Myanmar. The setting up of KASE is not expected to have any material impact on EPS of STE for the current financial year. We maintain our HOLD rating and S$4.32 FV on STE. (Sarah Ong)
For more information on the above, visit www.ocbcresearch.comfor the detailed report.


NEWS HEADLINES


- US stocks pulled back on Tue, as investors showed caution after the Dow and S&P 500 failed to hold above milestone levels in the prior session.

- Singapore's growing status as a commodities trading hub has drawn global heavyweight IntercontinentalExchange Group Inc, which will fork out US$150m to acquire commodities market operator Singapore Mercantile Exchange.

- Organisation for Economic Co-operation and Development (OECD) announced yesterday a "significant" downward revision of its earlier growth forecasts for 2013 and 2014.

- The blueprint for Singapore's development over the medium term identifies new districts that will provide 14,500 homes and 100,000 jobs in Woodlands Regional Centre.

- CapitaMalls Asia Limited announced that it is acquiring a new shopping mall in Guangzhou, China – its first in the city.

- Standard & Poor's Ratings Services yesterday lowered the long-term corporate credit rating of First Ship Lease Trust to "B-" from "B".

DBS Vickers Report 20 Nov 13

OECD ups China’s 2014 GDP forecast to 8.2%, above
consensus economist estimates
DBSV Research believes that the combination of stabilizing
economies for China, Europe bottoming with upside for
recovery, attractive relative valuation and the possibility of a
further delay to QE tapering form the ingredients for an
uptick in interest for Asian equities going forward, Singapore
included. Our picks are banks as a proxy to GDP recovery,
2014 growth names and companies that tend to payout
good dividend come year end. Full details in our Singapore
Strategy report out later today.
Swissco has placed orders for 3 vessels worth an aggregate of
S$35mil (excluding owner supplied equipment) consisting of
2 anchor handling tug supply vessels (“AHTS”), and one
Multipurpose Utility Tug. The newbuild vessels are expected
to be delivered in FY2015, adding to the Group’s fleet
capabilities.
According to a Reuters news article, Myanmar aims to lure
private companies to upgrade and run nearly half its airports
in a bid to spruce up its poor record on air safety and support
a fast-growing tourism industry. Myanmar has an air accident
rate nine times the world average, aviation authorities say,
and there are fears the figure could rise as the government
aggressively expands the industry and private airlines add
flights in a growing economy. The government plans to invite
local private firms to upgrade and run 32 of the 69 airports
across Myanmar "with intent to improve the service as well as
the image of the airports", said a senior official of the
Directorate of Civil Aviation.
China's foreign direct investment inflows rose 5.8% y-o-y in
the first 10 months of 2013. The Commerce Ministry said
China drew US$97bil in foreign direct investment between
January and October, with October's inflow up 1.2% on year
earlier at US$8.4bil.
US Indices Last Close Pts Chg % Chg
Dow Jones 􀀙 15,967.0 (9.0) (0.1)
S&P 􀀙 1,787.9 (3.7) (0.2)
NASDAQ 􀀙 3,931.6 (17.5) (0.4)
Regional Indices
ST Index 􀀙 3,192.1 (11.0) (0.3)
ST Small Cap 􀀙 535.1 (1.1) (0.2)
Hang Seng 􀀙 23,657.8 (2.3) (0.0)
HSCEI 􀀘 11,365.5 58.1 0.5
HSCCI 􀀙 4,627.8 (25.8) (0.6)
KLCI 􀀘 1,807.2 14.8 0.8
SET 􀀙 1,412.4 (11.5) (0.8)
JCI 􀀘 4,398.3 4.7 0.1
PCOMP 􀀙 6,267.9 (75.4) (1.2)
KOSPI 􀀘 2,031.6 20.8 1.0
TWSE 􀀘 8,260.2 68.7 0.8
Nikkei 􀀙 15,126.6 (37.7) (0.2)
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013
100-Day MA
Index
STI
Total Market cap (US$bn) 590
Total Daily Vol (m shrs) 1,926
12m ST Index High 3,454
12m ST Index Low 2,951
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price ($)
19 Nov
Target Price
($)
Hutchison Port Holdings Trust Buy 0.700 0.82
ComfortDelgro Buy 1.925 2.19
OCBC Bank Buy 10.440 12.40
Singapore Airlines Buy 10.370 11.40
Stock Picks – Small /Mid Cap
Rec’n Price ($)
19 Nov
Target Price
($)
Ezion Holdings Buy 2.070 2.65
CSE Global Buy 1.005 1.11
Frasers Centrepoint Trust Buy 1.810 2.14
Yoma Strategic Holdings Buy 0.730 1.02
Source: Bloomberg Finance L.P., DBS Vickers
Singapore
Wired Daily
Page 2
China's annual economic growth is likely to accelerate to
8.2% in 2014 from an expected 7.7% this year, driven by
stronger domestic demand, this according to the OECD.
Growth is picking up and inflation remains low, domestic
demand has led the turnaround, OECD commented in its
latest report on the global economic outlook. The outlook
was rosier than a recent Reuters poll that showed China's
economic growth could slow to 7.4% in 2014 from an
expected 7.6% this year. The OECD highlighted the need for
Beijing to quicken structural reforms in favour of stronger
domestic consumption, as economic expansion still relies
heavily on investment.
US stocks dipped modestly as investors await a speech by FED
chairman Ben Bernanke. Meanwhile, the OECD cut growth
forecasts for this year and next as emerging market
economies including India and Brazil cools. Bernanke said the
labour market has shown “meaningful improvement” since
the start of the central bank’s bond-buying program and that
the benchmark interest rate will probably stay low long after
the purchases end

Daily Summary 19 Nov 13


Europe and Dow were up slightly last night, Dow +14 at 15976.  Dow's trend is up.  Dow's future is flat at the moment.  Europe opened down.

Asian bourses were mixed.  Nikkei -38, ShanghaiC -4, Hangseng -2.  STI closed -11 at 3192.  Volume was 1.9b shares.  Gainers were 176 and losers 288.

STI's trend is trying to turn up.

Top volumes were SingHaiyi -0.1, KLW -0.2, AdvSCT +0.1, Innopac -0.1, Blumont -0.1, Sunmoon unchanged, Vallianz -0.1, Albedo -0.2, Digiland unchanged, Transcu unchanged,

Market opened up but drifted to close down. Another quiet and almost dead market other than the computers trading among themselves.  Blue chips were mixed. Penny stocks were mostly in the red.

Europe and Dow are looking slightly weak at the moment but likely to be sideways.

Monday, November 18, 2013

DBS Vickers Report 19 Nov 13

Suntec REIT acquires North Sydney freehold land,
maintain Buy with TP $1.80
􀂃 Singapore 3Q GDP number releases this Thursday –
consensus +5.3% y-o-y
Suntec REIT has entered into an agreement to acquire a
100% stake in a freehold land in North Sydney CBD, which
will be developed into a 31-storey office building, to be
completed in 2016, with NLA of 424k sqft. The acquisition,
costing A$413m, will be fully funded by a 5-year unsecured
loan. We retain our Buy call for Suntec with TP of $1.80. We
think the deal is likely to refocus investors’ attention to the
stronger growth prospects of the REIT from the inbuilt rental
escalations as well as the earnings boost from the progressive
completion of the Suntec Mall AEI. At the current price, the
REIT is trading at 5.7-5.9% FY13-14 yields.
SingHaiyi Group has acquired the full equity stake of Vietnam
Town, a partially completed commercial condominium
development project in San Jose, California, for US$33.05mil.
According to SingHaiyi, the acquisition price - already settled
in full by the company - comprised US$29.8mil to repay an
outstanding secured debt and US$3.3mil for the freehold
project. The project has several parcels of land sitting on a
total site area of 853,502 square feet. Of the 256 planned
condominium units (each about 1,000 square feet), 115 have
been built and of which 64 have been sold. SingHaiyi intends
to sell the 51 unsold units in the next 1-2 years and use the
sale proceeds to construct and sell the remaining 141 units
within the next three to five years.
Non-oil domestic exports (NODX) expanded for the first time
since January, growing 2.8% y-o-y in October, which is much
better than the 1.1% contraction expected. With recent data
pointing to strong growth, economists now expect the
Singapore government to upgrade its 2013 GDP growth
forecast to as high as 4% when it announces the 3Q GDP
(+5.3% y-o-y) figure on Thursday. Our economist currently
sees 2013 GDP growth of 3.8%.
US markets eased off after the Dow Jones crossed the 16,000
mark for the first time as some investors started to lock in
recent gains. US stocks have been rising in recent weeks and
proceed into all-time highs after Janet Yellen signalled she
will continue stimulus efforts. Consensus expects the FED to
begin QE tapering only after the March 2014 FOMC meeting.

OCBC Report 19 Nov 13

ECS Holdings: Challenging environment, but growth achieved
ECS Holdings (ECS) reported a 4.5% YoY increase in its 3Q13 PATMI to S$8.7m on the back of a 11.4% jump in revenue to S$999.3m. After adjusting for forex and other exceptional items, we estimate that core earnings would have increased 4.7% YoY from S$8.7m to S$9.1m. This was in-line with our expectations. Looking ahead, we expect ECS to benefit from new product launches by major IT vendors in which it has established a strong working relationship with, such as Apple and Lenovo. We finetune our assumptions and raise our fair value estimate from S$0.56 to S$0.585 as we roll forward our valuations to 6x FY14F EPS. Maintain BUY, as valuations remain undemanding, with the stock trading at FY14F P/NTA of 0.55x and PER of 5.6x. (Wong Teck Ching Andy)

For more information on the above, visit
www.ocbcresearch.comfor the detailed report.


NEWS HEADLINES


- US stocks closed mostly lower on Mon after activist investor Carl Icahn said he’s “very cautious” on equities and they could experience a “big drop.”


- Singapore's non-oil re-exports (NORX) surged to a record high of S$22.3b in Oct, rising 26.7% YoY.


- SingHaiyi Group has acquired the full equity stake of Vietnam Town, a partially completed commercial condominium development project in San Jose, California, for US$33.05m.


- Falcon Energy Group proposed a 1-for-10 bonus warrant issue of up to 82,453,751 free warrants for shareholders.


- Soilbuild Construction has won a contract to build a S$13m facility at the new Seletar Aerospace Park.


- NSL Chemicals, a wholly owned subsidiary of NSL Ltd, has agreed to sell its entire 100% stake in NSL Chemicals (Thailand) Ltd (NSCT) to SCG Chemicals Ltd for S$328.3m.


- Civmec Construction & Engineering, a subsidiary of Civmec Limited, has bagged new contracts worth a combined S$65m.

Daily summary 18 Nov 13

Dow and Europe were slightly up on Friday. Dow was +85 at 15962.  Dow's trend is up. Dow's future is now -3.  Europe opened slightly down.

Asian bourses were mostly up with Hangseng rallying by 628 pts. Nikkei -2 and ShanghaiC +62.  STI +2 at 3203.  Volume was 2.7b shares.  Gainers were 213 to 249 losers.

Trend of STI is turning up.

Top volumes were KLW +0.9, Vallianz -0.2, Youyue -1.3, GoldenAgr +0.5, YHM -0.2, Digiland unchanged, GSH +0.2, Noble +3.5, THBev -2, AdvSct unchanged.

Market opened up but drifted to close at day low at +2. And this was despite Hangseng rallying up 628 pts and Shanghai also +61. Blue chips were firmer but penny stocks were weaker.  Volume slightly improved but still very few retail participation.

Europe and Dow are looking flat at the moment.

Sunday, November 17, 2013

DBSVickers Report 18 Nov 13

Equities revitalized by Janet Yellen’s dovish comments,
STI reverse recent lethargy and looks headed to 3275-
3290 in coming weeks
Dovish comments by FED chairperson Janet Yellen look to
have revived the equity market that otherwise would have
headed to a dull year-end lull period. We see the STI heading
to 3275-3290 in coming weeks. Further gains beyond this
level towards 3380, however, would have to be justified by
an end to the earnings downward revision trend that is still
not in sight. Riding on Singapore’s GDP recovery, we see
banks OCBC & UOB leading the index rise. Yield names
should be underpinned as QE tapering timeline is pushed
back to March 2014 or beyond. Our picks are Venture Corp,
China Merchant, Pan-United and Keppel Corp as they tend to
pay out good dividend when they announce their 4Q/FY
results by end-Feb. Finally, look towards the Industrial sector -
Noble Group, Yoma, Midas, O&M - Ezion, Nam Cheong and
planters –Indofood Agri to drive growth in FY14F.
Ezion’s 3Q13 net profit surged 137% y-o-y and 5% q-o-q to
US$38.2m, bringing 9M13 net profit to US$102.9m, or 73%
and 77% of our and consensus’ FY13 estimates. This is
slightly better than our already above consensus estimates.
We lift FY14/15F EPS estimates marginally by 3.0%/1.6%.
Maintain BUY, TP adjusted to S$2.65, based on 14x revised
FY13/14F EPS. Current valuation is undemanding and we
believe Ezion’s strong earnings growth (2-year CAGR of 42%
in FY13-15) and contract wins will underpin the stock.
Suntec REIT announced that it had entered into an agreement
to acquire a 100% stake in a (a) freehold land, and (b) a tobe-
developed office building in the North CBD area of
Sydney, Australia, for a consideration of A$413.2m. The 31-
floor office building is expected to have a NLA of 423,915
sqft and is Suntec REIT's first outside of Singapore. The
acquisition will be fully funded by a S$500m 5-year
unsecured loan facility.
Pacific Radiance 9M FY13 revenue rose 25% to US$126.2mil
on the back of higher utilisation and charter rates for its
vessels. This increase in revenue, coupled with contributions
from its 2 JV in high-growth and cabotage-protected markets
in Indonesia and Malaysia, lifted 9M FY13 net attributable
profit (PATMI) 36% higher y-o-y to US$40.4mil.
US Indices Last Close Pts Chg % Chg
Dow Jones 􀀘 15,961.7 85.5 0.5
S&P 􀀘 1,798.2 7.6 0.4
NASDAQ 􀀘 3,986.0 13.2 0.3
Regional Indices
ST Index 􀀘 3,201.3 10.2 0.3
ST Small Cap 􀀘 535.2 0.9 0.2
Hang Seng 􀀘 23,032.2 383.0 1.7
HSCEI 􀀘 10,702.7 311.6 3.0
HSCCI 􀀘 4,514.1 83.0 1.9
KLCI 􀀘 1,789.9 5.7 0.3
SET 􀀘 1,420.7 5.0 0.4
JCI 􀀙 4,335.4 (31.9) (0.7)
PCOMP 􀀘 6,346.4 18.5 0.3
KOSPI 􀀘 2,005.6 38.1 1.9
TWSE 􀀘 8,177.1 42.2 0.5
Nikkei 􀀘 15,165.9 289.5 1.9
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013
100-Day MA
Index
STI
Total Market cap (US$bn) 589
Total Daily Vol (m shrs) 1,790
12m ST Index High 3,454
12m ST Index Low 2,946
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price ($)
15 Nov
Target Price
($)
Hutchison Port Holdings Trust Buy 0.690 0.82
ComfortDelgro Buy 1.890 2.19
OCBC Bank Buy 10.530 12.40
Singapore Airlines Buy 10.330 11.40
Stock Picks – Small /Mid Cap
Rec’n Price ($)
15 Nov
Target Price
($)
Ezion Holdings Buy 2.130 2.60
CSE Global Buy 1.000 1.11
Frasers Centrepoint Trust Buy 1.810 2.14
Yoma Strategic Holdings Buy 0.740 1.02
Source: Bloomberg Finance L.P., DBS Vickers
Singapore
Wired Daily
Page 2
Otto Marine’s subsidiary, PT Batamec shipyard, has clinched 2
newbuilding contracts to build two 3000 HP Habour Tugs for
a consideration of approximately USD 9mil. The vessels are
expected to be completed by 4Q 2014 and are not expected
to have a material effect on the consolidated NTA/share or
EPS for the FY ending 31 Dec 2013.
Singapore's NODX rose 2.8% y-o-y (better than consensus
expectation of -1.1%) in October due to a rise in shipment of
non-electronic goods that outweighed a continued
contraction in electronic exports. Shipments to China rose
21.8% y-o-y in October, compared with a 20.2% y-o-y rise
the previous month. Exports to the EU fell 12.3 while that to
the U.S. fell 15.5% y-o-y after a 24.8% rise in September.
Electronic exports declined 1.4% y-o-y while non-electronic
shipments grew 4.9%.
US markets set another record level as speculation continued
that the FED will maintain its monthly stimulus and as China
announced changes to economic policy. The Chinese
government pledged to allow more private investment in the
state sector, loosen its one-child policy and better protect
farmers’ rights to land.

OCBC Report 18 Nov 13

KEY IDEA

Suntec REIT: Foray into overseas market

Summary:
Suntec REIT announced last Fri that it is seeking to acquire a 100% interest in 177-199 Pacific Highway for A$413.19m (~S$483.4m). While we are surprised by the timing of the acquisition and Suntec REIT’s move into the overseas market, we see several positives in the investment. First, as the transaction is expected to be earning accretive, this may reduce/eliminate the need to dip into CHIJMES sales proceeds to mitigate the temporary decline in DPU due to Suntec City asset enhancement. Second, the property is 100% pre-committed with the Leighton Group taking a head lease of 76% of the NLA for an average lease term of ~10 years. As such, the arrangement provides income certainty and stability to Suntec REIT. Lastly, the acquisition will be fully funded by a S$500m five-year unsecured loan facility. This dispels market fears of an equity fund raising. We raise our fair value to S$1.90 from S$1.85 after factoring the acquisition. Maintain BUYon Suntec REIT. (Kevin Tan)

MORE REPORTS


Midas Holdings: Recovery under way

Summary:
Midas Holdings’ 3Q13 results exceeded our expectations, with revenue jumping 48.5% YoY to CNY301.0m, or 15.8% above our forecast. While gross margin of 20.8% (-10.7 ppt YoY) disappointed, bottomline reversed from a CNY6.1m net loss in 3Q12 to a PATMI of CNY16.4m and beat our projection of CNY13.3m. Looking ahead, we expect contribution from its recent CNY167.5m high-speed railway (HSR) contract to be recognised in 4Q13 and 1Q14. We also expect Midas to secure more HSR train car related contracts in late Dec or early Jan 2014 from the second round of tender exercise by the China Railway Corporation. Our fair value estimate is increased marginally from S$0.65 to S$0.67 as we roll forward our valuations to 1.3x FY14F P/B. Maintain BUY on Midas.  (Wong Teck Ching Andy)

For more information on the above, visit
www.ocbcresearch.comfor the detailed report.


NEWS HEADLINES


- US stocks stepped higher on Fri, lifting the S&P 500 and Dow to record closes again, as investors continued to find encouragement in Janet Yellen’s support for Fed’s stimulus efforts.

- The Singapore economy could expand up to 3.7% in 2013, according to findings from the latest Business Times-UniSIM Business Climate Survey.

- Singapore's non-oil domestic exports probably fell YoY for a ninth straight month in Oct, albeit at a slower pace, according to economists polled by Reuters.

- Retail sales slipped 5.9% in Sep from a year ago as sales of motor vehicles and telecommunications apparatus and computers suffered double-digit declines.

- Developers' sales of private homes are poised to rebound in Nov, after slipping 19% in Oct to 1,009 units from 1,246 units in Sep, according to Savills Singapore.

- LionGold Corp said it plans to place 98.2m new shares at 18.3 S cents each to raise net proceeds of about S$17.1m for its gold mining operations and working capital.

- China Environment plans to place out 31m new shares at S$0.55/each to Havenport Asset Management to raise S$17.05m for working capital needs.