DBS Vickers Report 18 Dec 13

Selective on consumer sector – Picks Del Monte, Courts,
Osim and Sheng Siong
􀂃 Technicals - Courts and Del Monte look ripe for bargain
hunting. Rebound potential for Coursts to $0.715, Del
Monte to $0.665 or $0.72
DBSV Research advocates a selective stance on the Singapore
consumer sector for 2014. Amid expectations of slower
private consumption growth in 2014, we look to pick stocks
for company specific factors to outperform within the
Singapore consumer space. Go for stocks with: 1) Stronger
fundamentals and better resilience to softening revenue and
margin compression; 2) Oversold companies at attractive
valuations; and 3) Stable earnings and dividend payout.
We like Osim (BUY, TP: S$2.60) for its growth profile and
exposure to the North Asia market, Courts (BUY, TP: S$0.77)
on expectations of recovery in 2014 and Del Monte (BUY, TP:
S$0.82) for being oversold and the uncertainty of its
proposed acquisition being priced in. We also like Sheng
Siong (BUY, TP: S$0.80) for its defensive traits and yield
profile.
From a technical perspective, shares of Courts & Del Monte
look ripe for bargain hunting following their price decline in
recent month. We see support for Courts at $0.58 and Del
Monte a $0.585, which are at current levels. Beyond the
immediate term, there is rebound potential for Courts to
$0.715 (23.6% upward retracement) and Del Monte to
$0.665 (23.6% upward retracement) or $0.72 (38.2%
upward retracement). The current year-end lull provides a
good opportunity to bargain both Courts & Del Monte while
at their oversold situation.
US Indices
Dow Jones 􀀙 15,875.3 (9.3) (0.1)
S&P 􀀙 1,781.0 (5.5) (0.3)
NASDAQ 􀀙 4,023.7 (5.8) (0.1)
Regional Indices
ST Index 􀀘 3,067.6 13.8 0.5
ST Small Cap 􀀘 525.5 0.6 0.1
Hang Seng 􀀙 23,069.2 (45.4) (0.2)
HSCEI 􀀙 10,894.3 (38.0) (0.3)
HSCCI 􀀘 4,540.2 8.5 0.2
KLCI 􀀘 1,850.9 13.0 0.7
SET 􀀘 1,337.2 8.8 0.7
JCI 􀀘 4,182.3 56.4 1.4
PCOMP 􀀘 5,929.0 116.5 2.0
KOSPI 􀀘 1,965.7 4.6 0.2
TWSE 􀀘 8,352.9 39.1 0.5
Nikkei 􀀘 15,278.6 125.7 0.8
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013
100-Day MA
Index
STI
Total Market cap (US$bn) 562
Total Daily Vol (m shrs) 2,923
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$)
17 Dec
Target Price
(S$)
Hutchison Port Hldgs Trust (US$) Buy 0.640 0.82
Keppel Corp Buy 10.810 12.90
OCBC Buy 9.830 12.40
Yangzijiang Buy 1.145 1.32
Stock Picks – Small /Mid Cap
Rec’n Price (S$)
17 Dec
Target Price
($)
Ezion Holdings Buy 2.260 3.30
China Merchants Buy 0.920 1.20
CSE Global Buy 1.025 1.11
Nam Cheong Buy 0.285 0.42
Source: Bloomberg Finance L.P., DBS Vickers
Singapore
Wired Daily
Page 2
KrisEnergy has received approvals from the Government of
the People’s Republic of Bangladesh and from Bangladesh
Oil, Gas and Mineral Corporation (“Petrobangla”) for its
acquisition of Tullow Bangladesh Limited (“TBL”), which
holds a 30% working interest and operatorship of the
onshore Bangora gas producing field in Block 9. Block 9
covers 1,770 sq. km and is located approximately 50 km
east of Dhaka. The Bangora gas field commenced
production in 2006 and lies in a gas province with
substantial gas infrastructure. In the third quarter 2013,
gross production from the Bangora field averaged 92.7
million cubic feet of gas per day and 285 barrels of
condensate per day.
US stocks dipped modestly, awaiting Federal Reserve policy
makers’ plans for their monthly bond-buying program later
tonight. About 34% of economists (source: Bloomberg) on
Dec 6 predicted that the Fed will start to reduce its US$85bil
of monthly bond purchases when it concludes this policy
meeting. This is higher than the 17% in a survey from
November. DBS Research sees the FED starting to taper
around April next year.