Sunday, November 3, 2013

DBS Vickers Report 4 Oct 13

Mapletree Greater China Commercial Trust –
Downgrade to HOLD, limited upside to $0.97 TP
We have less than two weeks to go before the results
reporting season ends. So far the results reported have
been uninspiring. With a modest 1.3% downward
revision to FY13F and FY14F earnings and a slight dip for
STI’s average FY14F PE level, it’s small wonder that STI
remained resisted at 3250 in recent weeks. We maintain
our 3150-3250 range in the near-term as the year-end lull
period draws closer.
For the SMC, our picks for potential earnings
outperformer are Nam Cheong, Ezion, Centurion &
Yoma. These stocks offer ample upside to fundamental
TP. Technically, we’d pointed out that Yoma has upside
potential to $0.87-0.89 in coming weeks.
Besides the 3Q results season, interest could also turn to
China’s key reform meeting this month. Should large
liquidity stocks in China led by insurance and railway
companies rally, Midas, underpinned by the recovery in
high-speed railway and subway equipment orders, could
find interest.
Earnings for Mapletree Greater China Commercial Trust
were ahead of prospectus forecast, lifted by strong
positive rental reversions. Forward earnings growth
underpinned by continued positive reversions, stable
cashflow from a well patronized and a niche portfolio. We
continue to like MAGIC for its quality assets and stable
cashflow. However, with our latest revision in the 10-year
bond rate, our DCF-backed TP is lowered to $0.97 (Prev
S$ 1.00), translating to only a total return of 10%.
Downgrade to HOLD.
Cambridge Industrial Trust’s 3Q13 results in line; early
refinancing of expiring loans minimizes refinancing risks.
Going forward, developments and acquisitions are
expected to drive earnings growth. Maintain HOLD, given
limited upside to our roll-forward TP of S$0.74 (Prev
S$0.70). CREIT continues to offer a steady, resilient and
growing DPU growth profile of c.5-6%, which in our view
is transparent and easily achievable.
US Indices Last Close Pts Chg % Chg
Dow Jones  15,615.6 69.8 0.4
S&P  1,761.6 5.1 0.3
NASDAQ  3,922.0 2.3 0.1
Regional Indices
ST Index  3,201.2 (9.5) (0.3)
ST Small Cap  539.3 1.5 0.3
Hang Seng  23,249.8 43.4 0.2
HSCEI  10,678.7 51.7 0.5
HSCCI  4,536.5 (14.4) (0.3)
KLCI  1,810.4 3.6 0.2
SET  1,429.1 (13.8) (1.0)
JCI  4,432.6 (78.0) (1.7)
PCOMP  6,585.4 (11.8) (0.2)
KOSPI  2,039.4 9.3 0.5
TWSE  8,388.2 (61.9) (0.7)
Nikkei  14,201.6 (126.4) (0.9)
US Indices Last Close Pts Chg % Chg
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013
100-Day MA
Index
STI
Total Market cap (US$bn) 595
Total Daily Vol (m shrs) 2,382
12m ST Index High 3,454
12m ST Index Low 2,946
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price ($)
1 Nov
Target Price
($)
ST Engineering Buy 4.190 4.80
ComfortDelgro Buy 1.905 2.19
OCBC Bank Buy 10.360 12.30
Singapore Airlines Buy 10.330 11.40
Stock Picks – Small /Mid Cap
Rec’n Price ($)
1 Nov
Target Price
($)
Ezion Holdings Buy 2.290 3.10
CSE Global Buy 0.925 1.07
Frasers Centrepoint Trust Buy 1.835 2.14
Yoma Strategic Holdings Buy 0.760 1.02
Source: Bloomberg Finance L.P., DBS Vickers
Singapore
Wired Daily
Page 2
Kreuz Holdings today reported that the Group’s net profit
surged 60.3% to US$16.6m for 3Q13, on the back of the
69.0% jumped in revenue to US$76.9m. 9M2013’s revenue
of US$202.5m already surpasses FY2012’s revenue. Will
follow up with more updates.
Great Group Holdings expects to report substantially higher
operating loss for 3Q13, as compared to the corresponding
period last year. This is due to, amongst others, lower
revenues and gross margin resulting from weaker demand in
Europe and severe competition in the midst of an increasingly
challenging business environment.
Changjiang Fertilizer expects to report a bigger loss in its
3Q13 results, as compared to the corresponding period in
2012 due to weak demand.
Hiap Seng Engineering expects to record a net loss for
2QFY14 and 1HFY14, attributable to cost overruns on certain
projects.
Tung Lok Restaurants expects to report a loss for HY2014
due to new restaurant outlets and rising operating costs.
China Aviation Oil is proposing a 1-for-5 bonus issue of new
shares. This is to reward and give due recognition to
shareholders for their loyalty and continuing support.
Dyna-Mac has secured new fabrication orders for a
provisional sum of US$117m from two new customers,
Daewoo Shipbuilding & Marine Engineering and OneSubsea
Malaysia Systems.
Oxley Holdings is continuing its aggressive overseas
expansion drive with one of its biggest acquisitions to date:
the purchase of East London's 40-acre (16.2-hectare) Royal
Wharf development site for £200m. The company intends to
build more than 3,400 homes and develop a mix of
commercial, retail, leisure and educational facilities - amid a
London housing shortage and cheap credit scheme from the
UK government.
China’s manufacturing sector expanded in October, two
surveys showed. The official purchasing managers' index
(PMI) - which measures manufacturing activity in Chinese
factories, hit an 18-month peak of 51.4, a touch higher than
the 51.1 in September and the 51.2 consensus forecast. A
separate final PMI index published by HSBC and Markit rose
to a seven-month high of 50.9. According to the official PMI,
strong output was the main driver, rising to 54.4 from 52.9.
This was offset by weakness in new orders and new export
orders, which both dipped 0.3 points to 52.5 and 50.4
respectively. The final HSBC/Markit PMI was unchanged from
a preliminary flash estimate released last week, and showed a
uptick in both new orders and new export orders.

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