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)

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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.