OCBC Report 15 Nov 13

Olam Int’l: 1QFY14 results mostly in line Summary: Olam International Limited (Olam) posted 1QFY14 revenue of S$4321.0m, down 8% YoY, reflecting lower commodity prices and also relatively flat sales volume. Nevertheless, EBITDA improved 18% to S$243.0m, aided by margin expansion from upstream and midstream initiatives and also organic growth from core supply chain activities. As such, PATMI inched up 6% to S$45.6m; estimated core earnings (excluding bio-asset gains) climbed 25% to S$42.7m. We judge both revenue and core PATMI to be in line as these met 19% and 12% of our full-year estimates, respectively, with its first quarter being seasonally slower. As we are keeping our FY estimates unchanged, our fair value remains at S$1.45, still based on 10x FY14F EPS. Given the limited upside, we maintain our HOLDrating. (Carey Wong) MORE REPORTS Midas Holdings: 3Q13 results exceeded expectations 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. This was attributed largely to a share of profit of CNY10.9m from its 32.5%-owned associated company Nanjing SR Puzhen Rail Transport (NPRT) as more train cars were delivered, versus a share of loss of CNY7.0m in 3Q12. For 9M13, revenue and PATMI increased by 20.6% and 145.6% to CNY787.5m and CNY26.4m, respectively. Regarding its financial position, Midas’ net gearing rose from 42.1% as at end Jun 2013 to 49.0% as at 30 Sep 2013 due to larger borrowings to finance the purchase of PPE for its new Aluminium Alloy Plates and Sheets business. We will provide more details after speaking with management. We maintain our BUY rating but our fair value estimate of S$0.65 is under review. (Wong Teck Ching Andy) Ezion Holdings: Another steady quarter Summary: Ezion Holdings reported a 97.2% YoY rise in revenue to US$76.2m (+13% QoQ) and a 137.2% increase in net profit to US$38.2m (+5% QoQ) in 3Q13, with 9M13 net profit accounting for 77.5% of our full year estimate. Core 9M13 net profit represented 74.6% of our full year estimate. Looking ahead, we are expecting more liftboats/service rigs to be deployed in 4Q13, solidifying earnings. The group is also pursuing opportunities to support LNG related projects in Australia and its vicinity. Pending an analysts’ briefing later in the morning, we maintain our BUYrating on the stock but put our fair value estimate of S$2.42 (adjusted for bonus issue) under review. (Low Pei Han)

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NEWS HEADLINES - US stocks on Thu closed at record highs for a second day in a row after Janet Yellen vigorously defended the central bank’s bond-buying program. - COSCO Corp (Singapore) has secured contracts worth about US$380m to build two jack-up rigs and a bulk carrier vessel. - Singapore banks will be able to withstand even a 50% plunge in property prices here if this were to occur over the next two years, say stress tests done by IMF and MAS. - Global Logistic Properties announced the establishment of a US$3b China Logistics Fund, even as 2QFY14 net profit fell 26% YoY to US$145m. - Ho Bee Land posted a 76.7% YoY slide in 3Q13 net profit to S$7.3m due to lower revenue from property development. - Thai Beverage posted a 74% fall in its 3Q13 net profit to 4.08b baht (S$161m), on the lack of associate investment gains made in the corresponding period last year. - United Engineers posted net profit of S$12.5m for its 3Q13, down 2% YoY.