Wednesday, January 29, 2014

Daily Summary 30 Jan 14

Dow and Europe were down last night.  Dow -190 at 15739.  Dow's trend is down.  Dow's future is now +23.  Europe is still closed. We are having a half day today for the Chinese New Year.

Asian bourses fell sharply following Dow's weakness last night.  Nikkei -395, Shanghai -10, Hangseng -93.

STI closed -26 at 3022. Volume was 1.9b shares. Gainers were 137 to 263 losers.

Trend of STI is down.

Top volumes were Transcu +0.1, Hankore +0.2, SingHaiyi unchanged, Albedo +0.1, CharismaEner -0.1, KLW -0.1, Vallianz -0.1, JES -0.4, Genting -3, Federal +0.4.

Market opened down and remained down for the whole morning. It closed off its low of 3012.  Blue chips were mostly lower. Penny and speculatives were mixed. With Dow continues to show weakness and the regional bourses much weaker, our market is fairly resilient to lose only 26 pts.

Wish everyone a prosperous New Year of the Horse.

DBS Vickers 30 Jan 14

Today’s Focus
 CDL Hospitality Trusts - Turnaround in performance;
Maintain BUY, target price S$1.84
4Q13 results for CDL Hospitality Trusts signals a recovery in
performance. Portfolio-wide improvements expected in 2014,
complemented by Maldives acquisitions. CDREIT will
distribute a DPU of 2.92 Scts, +0.7% y-o-y after 10%
retention. Maintain BUY, target price S$1.84. We believe
CDREIT’s valuation is attractive at 1.0x P/BV, with FY14F-15F
yields of 7.3%-7.8%.
Positive earnings momentum for CapitaRetail China Trust
continued into Q4 despite income vacuum from MZLY.
However, DPU fell 5.5% y-o-y to 2.2Scts due to dilution from
an enlarged share base post-preferential offering. FY14
income growth will be supported by three drivers – maiden
full-year contribution from Grand Canyon Mall, completion of
the MZLY asset enhancement initiatives, as well as organic
rental growth. Maintain BUY, target price $1.56 (Prev S$
1.60). CRCT is trading at 7.2-8% FY14-15 DPU yield.
C&G Environmental Protection Holdings has entered into a
conditional acquisition agreement with Grandblue
Environment in relation to the proposed sale of the entire
shareholdings in C&G Environmental Protection (China)
Company. The principal terms of the acquisition agreement
are substantially the same as the principal terms of the
framework acquisition agreement which was entered into on
23 December 2013. Under the acquisition agreement, the
Group will sell its Waste-to-Energy (WTE) business and assets
(including concession rights) and its principal operating
subsidiaries in China to Grandblue for RMB1.85bn. The cash
proceeds will be used for expansion in Southeast Asia,
working capital as well as special dividend for shareholders.
WE Holdings has entered into sale and purchase agreements
to purchase four Singapore and Malaysia companies, namely
SingYaSin Technologies, SCT Technologies, LSP Technology
and LSP Advanced Sdn Bhd. The acquisitions are in line with
plan to achieve economies of scale for electronic and
component business, so as to provide systems integration
business and value-added testing solutions for enlarged
customer base.
US Indices Last Close Pts Chg % Chg
Dow Jones  15,738.8 (189.8) (1.2)
S&P  1,774.2 (18.3) (1.0)
NASDAQ  4,051.4 (46.5) (1.1)
Regional Indices
ST Index  3,047.9 (14.5) (0.5)
ST Small Cap  527.8 (2.0) (0.4)
Hang Seng  22,141.6 181.0 0.8
HSCEI  9,898.0 134.1 1.4
HSCCI  4,275.6 52.8 1.3
KLCI  1,789.2 8.0 0.4
SET  1,271.4 (0.4) (0.0)
JCI  4,417.3 75.7 1.7
PCOMP  6,069.8 47.0 0.8
KOSPI  1,941.2 24.2 1.3
TWSE  8,462.6 (135.7) (1.6)
Nikkei  15,383.9 403.8 2.7

STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013 2014
100-Day MA
Index
STI
Total Market cap (US$bn) 558
Total Daily Vol (m shrs) 2,167
12m ST Index High 3,454
12m ST Index Low 3,004
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price (S$)
29 Jan
Target Price
(S$)
Hutchison Port Hldgs Trust (US$) Buy 0.665 0.80
Keppel Corp Buy 10.540 12.60
ST Engineering Buy 3.820 4.90
Yangzijiang Buy 1.170 1.32
Stock Picks – Small /Mid Cap
Rec’n Price (S$)
29 Jan
Target Price
($)
Ezion Holdings Buy 2.280 3.36
China Merchants Buy 0.900 1.20
Pacific Radiance Ltd Buy 0.950 1.05
Nam Cheong Buy 0.320 0.43
Source: Bloomberg Finance L.P., DBS Bank
Singapore
Wired Daily
Page 2
Eratat Lifestyle defaults on bond interest payment. The
redeemable 12.5% per annum non-convertible bonds in the
principal amount of RMB134m was issued on 24 June 2013
to SHK Securities (Nominees), which is now held by SWAT
Securitisation Fund, a fund managed by SWAT
Management, a wholly-owned subsidiary of Sun Hung Kai
Financial Ltd. Eratat will be suspended from trading pending
verification of Group’s cash balance.
Dragon Group International is expected to report a net loss
for FY2013 mainly due to:-
1. Realisation of reserve upon the Group’s completion of
its disposal of the distribution business; and
2. Cessation of its distribution business since May 2013.
Metech International expects to report a loss for the
financial period 2QFY2014 and 1HFY2014, primarily
attributed to (i) investment in market development and
marketing initiatives (ii) transitional costs involved in the
commencement of new business activities in Singapore and
United States (iii) higher costs and lower resultant margins
from US operations.
AEM Holdings is expected to record a loss for FY2013
mainly due to:
1. Lower revenue;
2. High development cost incurred for starting up its
new substrates programmes.
ASTI Holdings is expected to report a net loss for FY2013
mainly due to:-
1. Weak market demand for its Equipment business;
2. Realisation of reserve upon the Group’s
completion of its disposal of the distribution
business;
3. continuous research and development cost
incurred for development of semiconductor
packaging technologies; and
4. impairment of goodwill.
Advanced Systems Automation is expected to report a net
loss for FY2013, mainly due to weak market demand for its
Equipment business.
The annual average overall and citizen unemployment rates
in Singapore dipped to 1.9% and 2.9% respectively, while
the permanent resident rate stayed unchanged at 2.8%.
Income growth – based on the nominal median monthly
income of full-time employed citizens - also strengthened
last year, amid the tight labour market. It rose 7.1% to
$3,480 last June, better than the 5.8% gain to $3,248 in
the preceding year.
Singapore consumer confidence stays stable in Q4.
According to the latest consumer confidence index released
by Nielsen, the Republic recorded an index score of 97 in Q4
2013, down a touch from 98 in the previous quarter.
Nielsen attributed the slight pullback to a four-point
increase from Q3 in the number of consumers who were
worried about future job prospects; almost one in four
expressed worry in Q4.
U.S. stocks fell amid disappointing earnings forecasts from
Yahoo, Boeing and AT&T. Sentiment was further affected
with the Federal Reserve’s plan to reduce QE even amid the
latest currency volatility that befell some emerging countries
such as Turkey, Argentina and South Africa. The Turkish lira
depreciated as much as 2.4% today, even after the country
more than doubled its key interest rate to stem capital
outflows. South Africa’s rand also weakened as an
unexpected increase in its benchmark interest rate failed to
reassure investors.
FED policy makers pressed on with another USD10bil
reduction in the monthly bond purchases, lowering the
figure to USD65bil. Some officials expressed concern that
the FED’s record USD4.1tril balance sheet could create
asset-price bubbles

Daily Summary 29 Jan 14

Dow and Europe recovered some grounds last night. Dow +91 at 15929.  Dow's
trend is down. Dow's future is now +62.  Europe opened strongly up.

Asian bourses were mixed.  Nikkei404, ShanghaiC +11, Hangseng +181.  STI
closed -11 at 3051.  Volume was 2.1b shares.  Gainers were 173 to 274
losers.

Trend of STI is down but looking like holding at this level.

Top volumes were Albedo -0.1, CharismaEner -0.3, KLW -0.2, Hankore -0.1,
Vallianz -1.3, Oceanus -0.1, CCM -0.1, Federal -0.6, ChinaBearing -0.2,
Transcu unchanged.

Market opened flat but fell in midday. There were some buying in the last
hour with a strong opening in Europe to close off its low.  Blue chips were
mix but penny and speculatives were mostly down.

Dow and Europe are looking to continue to recover tonight.

Tuesday, January 28, 2014

OCBC Report 28 Jan 14

KEY IDEA

Global Premium Hotels: NAV climbs 62% to S$0.64

4Q13 results for Global Premium Hotels (GPH) were in-line with our expectations. Total revenue fell 1.4% YoY to S$15.0m and gross profit rose 0.9% to S$13.2m. Net profit climbed 20.1% to S$5.2m. FY13 revenue and EPS came to 100% and 105% of our prior respective full-year estimates. Under other comprehensive income, GPH saw revaluation gain of land and hotels buildings of S$259.5m. This helped to boost NAV to 64.0 S cents as of end-Dec from 39.6 S cents as of end-Sep. We understand that recent transactions in the industry drove these revaluations. We maintain our FV of S$0.33 and BUY rating on GPH. The opening of the second Parc Sovereign hotel in 1H14 should lead to a significant earnings boost from 2H14.  (Sarah Ong)

MORE REPORTS


SMRT Corporation: 3QFY14 earnings weak as expected

As expected, SMRT reported another set of lacklustre results for 3QFY14. Although revenue climbed 4.1% YoY to S$293.3m due to positive contribution from all segments except its Taxi and LRT operations, PATMI dipped 44.1% to S$14.2m as operating expenses increased at a faster pace of 10.6%. The main culprit was a 21.4% hike in SMRT’s staff costs to S$119.6m, which formed 40.8% of its topline, versus 35.0% in 3QFY13. For 9MFY14, revenue rose 4.3% to S$874.4m but PATMI slumped 52.8% to S$45.0m. SMRT’s Rail operations (Train and LRT combined) recorded its first ever quarterly loss of S$0.2m in 3QFY14, while its overall fare business (Train, Bus and LRT) suffered a S$9.0m operating loss, in contrast to 3QFY13’s S$7.4m operating profit. In terms of balance sheet strength, SMRT’s net gearing increased from 8.3% as at 31 Dec 2012 to 63.7% as at 31 Dec 2013, largely due to the payment of S$392.7m for 17 trains and operating assets taken over from the LTA. We will provide more updates after the analyst conference call. For now, we place our Hold rating and S$1.30 fair value estimate under review. (Wong Teck Ching Andy)


CDL Hospitality Trusts: 4Q13 boosted by Angsana Velavaru

CDL Hospitality Trusts (CDLHT) reported 4Q13 results that were generally in line with ours and the street’s expectations. 4Q13 revenue rose by 2.8% YoY to S$39.4m and net property income climbed 2.5% YoY to S$36.4m. 4Q13 DPU is 2.92 S cents (up 0.7% YoY), bringing FY13 DPU to 10.97 S cents. RevPAR for CDLHT’s Singapore hotels in 4Q13 had declined 6.0% YoY. For the first 26 days of Jan 2014, RevPAR for CDLHT’s Singapore hotels declined by 0.3% YoY, in-line with our expectations for fairly flat RevPAR change for the industry in 2014. While contributions from the Singapore and Australian hotels continued to be weak, Angsana Velavaru boosted the results, with a recognition of S$5.0m (inclusive of a 11 months variable rent of S$3.0m). We are placing our FV of S$1.84 and Buy rating under review. (Sarah Ong)


CapitaRetail China Trust: 4Q13 results in line

CRCT reported 4Q13 results that were in line with ours and the street’s expectations. Gross revenue climbed 8.9% YoY to S$41.2m, driven by revenue growth at CapitaMall Xizhimen, CapitaMall Wangjing and CapitaMall Saihan. Net property income rose 6.6% to S$25.8m. Distributable income grew 5.6% to S$17.7m. DPU, however, fell 4.3% to 2.20 S cents due to a private placement in Nov 2012. We maintain our BUY rating on CRCT but place our FV of S$1.64 under review pending a meeting with management. (Sarah Ong)

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


NEWS HEADLINES


- US stocks ended Tue with the best gains in two weeks, as indexes rebounded from heavy losses in the previous three sessions.


- Prices of completed non-landed private homes eased 0.6% for the whole of 2013, compared with a 4.2% increase in 2012, show flash estimates for NUS's Overall Singapore Residential Price Index.


- KrisEnergy yesterday announced its acquisition of a 60% stake in exploration block G3/48 in the Gulf of Thailand from UAE's Mubadala Petroleum.

- Higher interest costs and taxes caused Eu Yan Sang to post a 31% decline in its net profit to S$3.2m for its 2QFY14.


- IPC Corporation almost quadrupled its FY13 net profit to S$18.2m from S$4.8m a year ago as sales from its business hotels and condominium projects in Japan surged.


- Fragrance Group's 4Q13 net profit has almost quadrupled to S$133.7m from S$34.5m a year ago.

DBS Vickers Report 28 Jan 14

Today’s Focus
 Nam Cheong - Secures vessel sale contracts. Catalysts
expected from strong quarterly earnings delivery and
further order wins. Maintain BUY with slightly higher TP
of S$0.43
Nam Cheong has secured US$70m worth of vessel sale
contracts from repeat customer. With these sales, Nam
Cheong has already sold 17 of the 25 vessels in its 2014 builtto-
stock work programme. Our forecasts for Nam Cheong
don't include any future build-to-order wins. Hence, this
round of contract wins boosts our revenue and earnings
estimates for FY14/15. Our earnings estimate for FY14/15 is
revised up by about 5%. The weaker MYR-USD exchange
rate can also potentially have a beneficial impact on
shipbuilding margins, which we haven't taken into account.
Expect healthy net profit CAGR of 26% over FY12-15;
maintain BUY with a slightly higher TP of S$0.43 (Prev S$
0.42). Catalysts expected from strong quarterly earnings
delivery and further order wins.
SMRT reported weak 3QFY14 results, in line with our
expectations. Net profit tumbled 44% y-o-y. Fare revenue
segments reported larger EBIT loss of S$9m compared to 2Q.
The government recently approved a 3% increase in fares
with effect from 6 April 2014, with the remaining 3.4%
rolled over to next year. While this is a positive development
for SMRT, we also expect high operating expenses given the
requirement to maintain higher service standards and
minimise disruptions. This could negate the positive impact of
higher fares. Maintain cautious view; stock is FULLY VALUED
with S$1.08 target price.
CDL Hospitality Trusts' 4Q13 results. Topline and net property
income were 2.8% and 2.5% higher y-o-y at S$39.4m and
36.5m respectively. Growth was largely contributed by higher
performance from (i) Rendezvous Grand Auckland, coupled
by contribution from Angsana Velavaru. This offset the weak
performance for its Singapore hotels. We expect RevPAR
growth to turn positive in 2014 on back of returning
corporate travel market, boosted by a strong list of MICE
events. More updates post meeting with management this
morning.
US Indices Last Close Pts Chg % Chg
Dow Jones  15,928.6 90.7 0.6
S&P  1,792.5 10.9 0.6
NASDAQ  4,098.0 14.4 0.4
Regional Indices
ST Index  3,062.4 20.0 0.7
ST Small Cap  529.7 0.2 0.0
Hang Seng  21,960.6 (15.5) (0.1)
HSCEI  9,764.0 (28.6) (0.3)
HSCCI  4,222.8 3.2 0.1
KLCI  1,781.3 2.4 0.1
SET  1,271.8 (16.8) (1.3)
JCI  4,341.7 18.9 0.4
PCOMP  6,022.8 (58.8) (1.0)
KOSPI  1,916.9 6.6 0.3
TWSE  8,462.6 (135.7) (1.6)
Nikkei  14,980.2 (25.6) (0.2)

STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013 2014
100-Day MA
Index
STI
Total Market cap (US$bn) 554
Total Daily Vol (m shrs) 2,316
12m ST Index High 3,454
12m ST Index Low 3,004
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price (S$)
28 Jan
Target Price
(S$)
Hutchison Port Hldgs Trust (US$) Buy 0.665 0.80
Keppel Corp Buy 10.62 12.60
ST Engineering Buy 3.82 4.90
Yangzijiang Buy 1.175 1.32
Stock Picks – Small /Mid Cap
Rec’n Price (S$)
28 Jan
Target Price
($)
Ezion Holdings Buy 2.26 3.36
China Merchants Buy 0.90 1.20
Pacific Radiance Ltd Buy 0.92 1.05
Nam Cheong Buy 0.32 0.43
Source: Bloomberg Finance L.P., DBS Bank
Singapore
Wired Daily
Page 2
CapitaRetail China Trust reported 4.9% higher revenues of
S$41m, 3.4% higher net property income of S$26m. This was
largely attributable to higher revenue growth at CapitaMall
Xizhimen, CapitaMall Wanjing and CapitaMall Saihan,
although partially offset by the closure of Minzhonglequan for
asset enhancement initiative works. DPU fell 5.5% y-o-y to
2.20scts however, due to dilution of the share base post
preferential offering. Recommendation and target price under
review, and we will update accordingly after briefing by
management.
Yoma has progressed from an earlier non-binding head of
agreement to a definitive agreement with The Hongkong and
Shanghai Hotels Limited (HSH) to develop a hotel on the
Landmark site. Yoma estimated that its overall investment for
this hotel development would be about US$30m (c.S$38m).
As we had mentioned earlier, the participation of HSH is
positive for Yoma as it would greatly relieved the funding
burden on the company. This US$30m investment is indeed
far more manageable than the total expected US$300-400m
needed to develop Landmark. Yoma exited 3Q14 with close to
S$40m cash or net cash of S$24m. In view of the various
business ventures Yoma is running concurrently, we feel that
there could still be some shortfall in capital when this
development begins. Hence, we would not rule out possible
fund-raising by Yoma in due course.
Global Logistic Properties (GLP) has signed a lease agreement
of approximately 46,000 sqm with Suning Commerce at GLP
Park Langfang, Hebei Province, Northern China. Suning is one
of China’s largest retailers, with a strong online presence. The
facility will support distribution for both e-commerce and retail
stores. The growth of e-commerce continues to drive demand
for GLP’s facilities.
Kris Energy announced its acquisition of a 60% stake in
exploration block G3/48 in the Gulf of Thailand from UAE's
Mubadala Petroleum. The deal is pending approval from the
Thai government and block partners.
The Urban Redevelopment Authority has awarded a land
parcel at East Coast Road to Keong Hong Holdings and Master
Contract Services at the tender price of S$352.8m, for the
purpose of development into a hotel. The land parcel has an
area of 8,238.5 square metres and a leasehold tenure of 99
years.
In property news, flash estimates for National University of
Singapore's Overall Singapore Residential Price Index (SRPI)
eased 0.6% for the whole of last year, compared with an
increase of 4.2 per cent in 2012, following five consecutive
month-on-month declines. The index had risen 8.7% in 2011,
11.7% in 2010 and 22.7% in 2009. Going forward, it is likely
that resale prices will continue to slide if resale volumes remain
muted due to the borrowing restrictions as well as some
buyers withholding their purchases and adopting a wait-andsee
attitude.
Developers are showing greater caution in bidding for
executive condominium (EC) sites, after a tender for a 99-year
leasehold site at Canberra Drive closed yesterday. A joint
venture between Verwood Holdings, a unit of City
Developments, and TID Residential made the highest offer out
of six bidders for the 2.86-hectare site, which is near
Sembawang Shopping Centre and about 1.2 kilometres from
Sembawang MRT station. Its bid of $226m, or $350.04 psf
ppr was 4.4% higher than the second highest offer $335.33
psf ppr, from MCL Land (Brighton). The top bid was in line
with earlier market estimates of between $320 and $380 psf
ppr.
HUDC estate Braddell View has been designated for
privatisation, the Ministry for National Development (MND)
said. It is the last of 18 HUDC estates to be designated for
privatisation.
U.S. stocks rose rebounded as corporate earnings topped
estimates and consumer confidence increased ahead of a
Federal Reserve policy meeting. The FOMC started its 2-day
policy meeting last night, which is also the final meeting under
Ben Bernanke. Consensus expects the FED to announce a cut
in QE pace by US10bil/mth to USD65bil/mth later tonight. The
Conference Board’s index of consumer confidence rose to
80.7 (consensus 78) in January from a revised 77.5 in the prior
month.
US equity futures are currently higher after Turkey’s central
bank raised all its main interest rates at an emergency
meeting. The bank in Ankara raised the benchmark 1-wk repo
rate to 10% from 4.5%. It also raised the overnight lending
rate to 12% from 7.75%, and the overnight borrowing rate to
8% from 3.5%. The Lira strengthened against the USD to
2.18. The currency cross had risen to as high as 2.39 just 3
days ago. The rebound in US indices is not surprising. We had
pointed out that the Dow had retreated to its immediate
support. Rebound upside in the near-term is seen capped at
16100-16250.

Daily Summary 28 Jan 14

Dow and Europe fell again last night. Dow -41 at 15838.  Dow's trend is down.  Dow's future is now +80.  Europe opened up.  

Asian bourses closed mixed.  Nikkei -26, ShanghaiC +5, Hangseng -15.  STI closed +21 at 3063.  Volume 2.3b shares.  Gainers 195 and losers 232.

Trend of STI is bouncing from support level at 3028.

Top volumes were Transcu unchanged, CharismaEner -0.2, Albedo -0.1, CCM unchanged, ChinaBearing +1.3, Hankore unchanged, Memstar unchanged, KLW unchanged, JES +0.1, Vallianz -0.4.

Market opened down but recovered to close at day high.  Blue chips were firmer. Penny and speculatives were mixed.

Dow seems to be stabilising with a smaller fall last night. Its future is now positive. Europe also opened positive. Looks like a technical rebound is on the card tonight.

Monday, January 27, 2014

Daily Summary 27 Jan 14

A sharp fall in Dow and Europe on Friday.  Dow -318 at 15879.  Dow's trend is down. Dow's future is now +20,,  Europe opened slightly down.

Asian bourses fell sharply.  Nikkei -386, ShanghaiC -21, Hangseng -474.  STI closed -36 at 3040.  Volume was 2.8b shares. Gainers were 86 and losers 428.

Trend of STI is down.

Top volumes were Albedo -0.3, Hankore -0.4, CharismaEner -0.4, Blumont +0.2, Transcu unchanged, Memstar +0.3, KLW -0.1, Federal -0.1, SingHaiyi unchanged, GoldenAgri unchanged.

Market opened sharply down but recovered some lost grounds to close near day high losing only 34 pts.  Blue chips were heavily bruised with many in the red. Penny and speculatives also fell but were more steady.

Europe is looking steady at the moment and Dow is looking for a technical rebound tonight.

Sunday, January 26, 2014

DBS Vickers Report 27 Jan 14

Today’s Focus
 Sound Global - Returning to stronger growth than
before. Reinitiate coverage with BUY recommendation
and target price of HK$8.92
We reinitiate coverage on Sound Global with BUY
recommendation and target price of HK$8.92 (full CB
conversion). We expect strong growth backed by RMB5bn
orderbook and growing BOT (build-operate-transfer)
portfolio. Upside catalysts to FY14F growth are stronger
execution and contract wins. We feel Sound Global is the
best bargain in the water space now at 18x FY14, 30%
discount to peers’ average of 25x forward PE. Sound Global
will be delisted from SGX but is listed on the Hong Kong
Stock Exchange.
4Q13 results for Starhill Global REIT in line. Higher income
from Singapore and Australia mitigated weaker overseas
contribution. Going forward, growth is expected to be driven
by Singapore and Australia. Maintain HOLD, target price
S$0.87. SGREIT offers attractive 6.5-6.8% dividend yield, but
there is limited upside to our S$0.87 target price.
Exclusive talks for a potential takeover of Hong Kong's Wing
Hang Bank by OCBC Bank will now take longer. OCBC said
that the substantial shareholders of Wing Hang and it have
agreed to extend the exclusivity period to March 3 from Jan
31. This is to "seek to finalise the terms for the possible
offer".
Yoma Strategic Holdings has made its first foray into
Myanmar's fast-moving consumer goods (FMCG) sector by
entering into an agreement with the Asia Beverages Co
group of companies (the ABC Group). Yoma Strategic,
together with PMM Partners, will acquire a 30% and 20%
interest respectively in ABC Group’s assets and businesses
relating to the production, branding, marketing and
distribution of bottled water, spirits, wines, beers, alcoholic
beverages and other FMCG products in Myanmar. The
aggregate consideration of Yoma Strategic’s proposed
acquisition of 30% of the ABC Group's Assets and Business
Operations is up to US$11.1m.
US Indices Last Close Pts Chg % Chg
Dow Jones  15,879.1 (318.2) (2.0)
S&P  1,790.3 (38.2) (2.1)
NASDAQ  4,128.2 (90.7) (2.1)
Regional Indices
ST Index  3,076.0 (24.3) (0.8)
ST Small Cap  536.2 (1.4) (0.3)
Hang Seng  22,450.1 (283.8) (1.2)
HSCEI  10,014.0 (95.5) (0.9)
HSCCI  4,344.0 (41.6) (0.9)
KLCI  1,802.6 (5.7) (0.3)
SET  1,314.6 6.3 0.5
JCI  4,437.3 (58.7) (1.3)
PCOMP  6,191.5 21.4 0.3
KOSPI  1,940.6 (7.0) (0.4)
TWSE  8,598.3 3.2 0.0
Nikkei  15,391.6 (304.3) (1.9)

STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013 2014
100-Day MA
Index
STI
Total Market cap (US$bn) 565
Total Daily Vol (m shrs) 2,757
12m ST Index High 3,454
12m ST Index Low 3,004
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price (S$)
27 Jan
Target Price
(S$)
Hutchison Port Hldgs Trust (US$) Buy 0.67 0.80
Keppel Corp Buy 10.68 12.60
ST Engineering Buy 3.82 4.90
Yangzijiang Buy 1.19 1.32
Stock Picks – Small /Mid Cap
Rec’n Price (S$)
27 Jan
Target Price
($)
Ezion Holdings Buy 2.38 3.36
China Merchants Buy 0.92 1.20
Pacific Radiance Ltd Buy 0.93 1.05
Nam Cheong Buy 0.32 0.42
Source: Bloomberg Finance L.P., DBS Bank
Singapore
Wired Daily
Page 2
Profit guidance from Hi-P International :-
1. The Group expects lower revenue and profit in 4Q2013 as
compared to 4Q2012.
2. The Group expects higher revenue but lower profit in
2H2013 as compared to 1H2013.
3. The Group expects higher revenue and profit in FY2013 as
compared to FY2012.
Cordlife Group announced that Cryoviva Singapore has
entered into an amicable settlement with Cordlife, with
respect to Cryoviva's passing off and infringement of
Cordlife's registered trademarks and copyrights.
The auditors of China Flexible Packaging Holdings have drawn
attention to potential doubts about the company's ability to
continue as a going concern. The group incurred net losses of
approximately RMB630m and negative cash flow from
operating activities of approximately RMB47.5m for the
financial year ended Oct 31, 2013.
Singapore’s industrial production grew 6.2% in December
from a year ago. The unexpected rise in industrial production
was largely due to double-digit jumps in electronics (22.2%)
and transport engineering (13.8%) output, which helped
offset a 14.9% contraction in the biomedical manufacturing
cluster. Excluding the volatile biomedical sector, industrial
production would have grown an even stronger 12.1% y-o-y.
The unexpected growth of manufacturing sector may result in
GDP upgrades by economists.
Nearly all indicators in the Urban Redevelopment Authority's
(URA) fourth-quarter 2013 figures for the private housing
market point towards weakening. The overall private home
price index dipped 0.9% in Q4 from the preceding quarter
after inching up 0.4% in Q3. With the exception of the
subindex for prices of completed non-landed private homes,
which remained unchanged in Q4, the other sub-indices fared
worse in Q4 than they did in Q3. It was a similar story for
URA's private residential rental indices. The overall rental index
dipped 0.5% in Q4, on the back of rising supply and
moderating demand - marking the first decline since Q3 2009.
URA figures showed that developers sold 3,854 private homes
in the October to December period last year in both primary
and secondary markets - the lowest volume since Q4 2008,
when only 1,639 units were transacted during the global
financial crisis. Transaction volumes halved from 14,755 units
in the first half of last year to 7,873 in the second half after
the rollout of the TDSR framework made it difficult for buyers
to obtain financing. In the primary market, developers sold
14,948 private homes last year, one-third below 2012's record
volume of 22,197 units.
Prices and rentals of industrial space were found to have
moderated in the fourth quarter of last year.
The market expects this to carry on for the next few years,
now that JTC Corporation plans to double the yearly average
supply of industrial space to two million sq m between this
year and 2016. Prices of industrial properties fell 3.3% to 188
percentage points, reversing a 2.8% gain in the previous
quarter. Rentals moderated significantly, rising incrementally
by only 0.2% to 139.5 percentage points; last quarter, they
rose by 4.4%.
US indices finished mixed with gainers leading decliners.
BlackBerry rose 8.6% after the company said it will work with
CBRE Group Inc. to sell vacant properties as well as occupied
space it will then lease back from the new owners. Coach
slipped 6% after reporting earnings that missed estimates. In
the technology space, IBM dropped 3.3% after announcing a
decline in revenue and profit dropped at its hardware unit.
Advanced Micro Devices Inc. slumped 12 % after forecasting
1Q revenue that fell short of expectations. In after hours trade,
EBay reported a higher profit for the quarter and said activist
investor Carl Icahn submitted a proposal to spin off eBay's
PayPal business.

OCBC Report 27 Jan 14

KEY IDEA

Starhill Global REIT: Consistent performer


Summary:
Starhill Global REIT (SGREIT) reported an 8.8% YoY growth in its 4Q13 DPU to 1.23 S cents, coming in within our expectations. For the quarter, Singapore portfolio continued to deliver good performance, thereby increasing its percentage revenue contribution to 65.5% from 63.0% in 4Q12. Notably, Ngee Ann City retail NPI gained 16.6% YoY amid 6.7% rental uplift from Toshin master lease renewal in 2Q. In addition, SGREIT saw a S$137.5m revaluation gain in its portfolio. As a result, gearing ratio improved by 1.6ppt QoQ to 29.0%, while book value rose by 7.3% QoQ to S$0.92. This implies a 0.82x P/B, the lowest within the local retail space. We maintain BUY on SGREIT, but revise our fair value to S$0.90 from S$0.95 to reflect higher risk-free rate and risk premium assumptions. (Kevin Tan)


MORE REPORTS


Fortune REIT: 4Q13 solid with Kingswood


Summary:
FRT reported 4Q13 results that were in line with ours and the street's expectations. Revenue rose 34.6% YoY to HK$392.6m chiefly due to contribution from Fortune Kingswood from Oct 2013, as well as higher occupancy rates and strong rental growth across the portfolio. Net property income was up 33.0% at HK$275.2m. Income available for distribution climbed 27.8% YoY to HK$182.1m. DPU increased by 16.1% to 9.72 HK cents because of the placement units (representing an increase of 8.4% over the number of prior units) issued on 6 Aug 2013. Raising the cost of equity to 8.5% from 7.9%, we lower our FV on FRT to HK$6.28 from HK$7.01. We maintain our BUY rating on FRT. (Sarah Ong)
For more information on the above, visit www.ocbcresearch.comfor the detailed report.

NEWS HEADLINES


- US stocks finished the week with deep losses as investors fled equities and emerging-markets currencies on concerns about a contagion effect from China’s manufacturing slowdown.


- HDB resale flat prices registered a drop in 4Q13 that was larger than estimated, leading to the first annual price decline in eight years.

- Prices and rentals of industrial space in Singapore were found to have moderated in 4Q13.


- Singapore's 4Q13 and 2013 GDP estimates look set to be revised higher than most expected, after the manufacturing sector grew by a surprising 6.2% in Dec 2013 from a year ago.


- Blumont Group is launching an all-share bid for all of Australia-listed miner Genesis Resources.


- Parkway Life REIT's 4Q13 DPU rose 4.5% YoY to 2.82 S cents, as distributable income went up 4.5% to S$17m.


- Ezra Holdings' subsea services division has clinched projects worth about US$80m, including options.

Friday, January 24, 2014

Daily Summary 24 Jan 14

Dow and Europe were down last night. Dow -176 at 16197.  Dow's trend is down.  Dow's future is now -50.  Europe opened down.

Asian bourses were mixed.  Nikkei -304, ShanghaiC +12, Hangseng -284.  STI closed -24 at 3076.  Volume was 2.7b shares.  Gainers were 155 to 269 losers.

Trend of STI is down.

Top volumes were Transcu -0.1, Hankore +0.1. CCM -0.2, Blumont +0.9, AdvSct +0.1, Albedo unchanged, Charisma Ener -0.1, Digiland unchanged, Innopac +0.2, KLW -0.1.

Market opened flat but slipped down to close near day low at -24.  Blue chips were mostly red. Penny and speculatives were mixed. Volume has also come down.

Dow and Europe look like going to close weak tonight.

Thursday, January 23, 2014

OCBC Report 24 Jan 14

KEY IDEA

CapitaCommercial Trust: Poised to benefit from CBD office recovery

4Q13 distributable income increased 3.3% YoY to S$60.2m. This cumulates to a distributable income of S$234.2m for FY13, which is up 2.5% YoY mainly due to higher revenue contributions across portfolio properties and a full-year contribution from Twenty Anson. FY13 distributable income constitutes 102.1% of our annual forecast and we deem this this performance to be within expectations. The group reported 4Q13 DPU at 2.09 S-cents, adding up to a total FY13 DPU of 8.14 S-cents – a 5.6% distribution yield based on the traded price of S$1.45 per unit. We continue to like CCT for its exposure to the relatively attractive CBD sub-market. With its low gearing of 29.3%, there is significant dry powder for accretive acquisitions with a debt headroom of S$1.2b (40% gearing). Maintain BUY with an unchanged fair value estimate of S$1.61. (Eli Lee)


MORE REPORTS


Keppel Corporation: BUY with lower S$12.25 FV

Keppel Corporation (KEP) reported a set of disappointing FY13 results last night, with core earnings falling 26% to S$1.41b, or around 7% below ours and the street’s forecast; this mainly due to larger-than-expected provisions for its Infrastructure business. Going forward, KEP maintains a fairly cautiously upbeat outlook, especially for its main O&M business. We also believe that KEP should just stay ahead of the pack with its Near Market, Near Customer strategy. Maintain BUY with a slightly lower SOTP-based fair value of S$12.25 (versus S$12.87) due to lower market values of its listed units. (Low Pei Han, Carey Wong)

Suntec REIT: Starting to shine brightly

Suntec REIT’s 4Q13 results exceeded both market and our expectations. Going forward, we understand that management will continue to focus on forward renewal of its office leases. With only 12.5% of its office leases due to expire in 2014, we believe the office segment will remain robust. Suntec REIT also updated that Phase 2 AEI is on track for completion in 1Q14, and that pre-commitment for the retail space has reached 97.0%, up from 83.7% in 3Q. While bottomline may experience a dip in 1Q as Phase 3 tenants vacate for the last phase of AEI, we continue to be overall positive on its longer-term potential, arising from 1) strong rental uplift at Suntec City, 2) earnings accretion from 177-199 Pacific Highway acquisition and 3) potential interest savings post refinancing of its S$773.5m club loan due in 2014. We maintain BUY with unchanged fair value of S$1.90 on Suntec REIT. (Kevin Tan)

Tiger Airways: Time to disembark

Tiger Airways Holdings (TR) recorded a shocking S$118.5m net loss, including S$88.3m in exceptional charges, for 3QFY14; net profit a year ago was S$2.0m. The exceptional charges comprise a S$30.3m loss on the planned disposal of Tigerair Philippines (TRP) and an impairment of associates of S$58.0m (this latter number excludes TRP). TR also clocked S$23.1m as its share of losses of associates. While Tigerair Singapore (TRS) saw an increase in traffic volume of 9.2% YoY, its revenue fell by 2.9% to S$168.0m. Yield had contracted 11.3% and load factor declined by 9.8 ppt to 75.8%. Management states the TRS continues to face short-term pressure on yield and load factors in the current seasonally weaker quarter given the industry’s overcapacity situation. TR’s NAV fell from S$0.51 as of end-Sep to S$0.39 as of end-Dec. Adjusting our estimates, we cut our FV estimate from S$0.55 to S$0.42 (1.1x FY14F P/B) and downgrade TR from Hold to SELL. We expect strong pressure on the share price following these disappointing results. (Sarah Ong)

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


NEWS HEADLINES


- US stocks closed sharply lower on Thu as weak economic data from China prompted investors to sell resource stocks and emerging-markets assets and seek safety in bonds, gold, and high-dividend paying sectors.

- A 60-40 consortium comprising Sun Ventures Homes and Low Keng Huat (Singapore) has exercised its options to buy Westgate Tower from CapitaLand for S$579.4m.

- Ascendas India Trust yesterday reported a 4% rise in its DPU, to 55 Indian paise, for the 3QFY14, compared to a year ago.

- SunVic Chemical Holdings is selling its plant in Taixing, China to French chemical producer Arkema for RMB3.9b (S$817m).

- GK Goh Holdings has launched a mandatory conditional takeover offer for Boardroom Ltd, a provider of corporate and advisory services, at 57.5 S cents a share in cash.

- Mapletree Greater China Commercial Trust announced a DPU of 1.518 S cents for 3QFY14, 16.6% more than the forecast DPU of 1.302 S cents.

DBS Vickers Report 24 Jan 14

Today’s Focus
• Keppel Corp - Beneficiary of Mexico energy reform;
Maintain BUY; TP adjusted to S$12.60
Most Asian markets, Singapore included, had already felt the
brunt of the negative reaction to China’s weak flash PMI
numbers with the STI down more than 1% yesterday. The
immediate support is at 3085 while immediate resistance is at
3115.
Keppel Corp’s FY13 results were slightly below on
infrastructure losses in 4Q; O&M EBIT margin held above
14%. 30 Scents final dividend was declared. Maintain BUY;
TP adjusted to S$12.60 (Prev S$ 12.90). Keppel Corp is a
prime beneficiary of Mexico energy reform.
Suntec REIT’s 4Q13 DPU increased by 10% y-o-y to 2.6Scts,
due to contribution from Phase 1 at Suntec Mall. Phase 2 of
Suntec Mall to open by 2Q14; earnings to continue to
improve sequentially. Maintain BUY, TP revised to S$1.78
(Prev S$ 1.80), after adjusting for slightly higher interest costs
in our forecasts. We continue to like Suntec REIT for
anticipated strong growth in distributions after the
completion of its asset enhancement initiatives (AEI) by end
2014.
Soilbuild Business Space REIT reported 4Q13 DPU of 1.5Scts,
beats forecast by 3.4%. Growth momentum is expected to
continue into 2014. Looking ahead, growth in FY14 will be
driven by organic rental improvements. With 17% of NLA to
be renewed in 2014, we expect reversions to remain positive,
Maintain BUY, target price S$0.87. At current prices, SBREIT
offers dividend yields of 7.9-8.5%, which is one of the
highest among industrial SREITs in our coverage.
Underlying operations for Ascendas India Trust continue to
strengthen. Distributable income increased by 3% y-o-y to
INR554m. Due to the appreciation of the SGD against the
INR, distributable income after retention came in 8% lower yo-
y to S$10.0m, resulting in DPU of 1.10 Scts (-9% y-o-y).
Operating outlook stable; Aviator, a c.600k-sqft (representing
c.8% of the portfolio’s NLA) Development is expected to lead
earnings growth. Maintain HOLD, TP S$0.73. The expected
weakness of the INR against SGD is likely to cap re-rating
opportunities in the near term.
US Indices Last Close Pts Chg % Chg
Dow Jones 􀀙 16,197.4 (217.1) (1.3)
S&P 􀀙 1,828.5 (15.3) (0.8)
NASDAQ 􀀙 4,218.9 (6.9) (0.2)
Regional Indices
ST Index 􀀙 3,100.2 (33.5) (1.1)
ST Small Cap 􀀙 537.6 (4.5) (0.8)
Hang Seng 􀀙 22,733.9 (299.2) (1.3)
HSCEI 􀀙 10,109.5 (108.9) (1.1)
HSCCI 􀀙 4,385.6 (15.4) (0.3)
KLCI 􀀙 1,808.3 (7.0) (0.4)
SET 􀀘 1,308.3 15.2 1.2
JCI 􀀘 4,496.0 43.5 1.0
PCOMP 􀀘 6,170.1 150.8 2.5
KOSPI 􀀙 1,947.6 (16.3) (0.8)
TWSE 􀀙 8,595.1 (4.8) (0.1)
Nikkei 􀀙 15,695.9 (100.1) (0.6)
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013 2014
100-Day MA
Index
STI
Total Market cap (US$bn) 571
Total Daily Vol (m shrs) 3,153
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$)
23 Jan
Target Price
(S$)
Hutchison Port Hldgs Trust (US$) Buy 0.675 0.80
Keppel Corp Buy 10.880 12.90
ST Engineering Buy 3.820 4.90
Yangzijiang Buy 1.220 1.32
Stock Picks – Small /Mid Cap
Rec’n Price (S$)
23 Jan
Target Price
($)
Ezion Holdings Buy 2.410 3.36
China Merchants Buy 0.920 1.20
Pacific Radiance Ltd Buy 0.945 1.05
Nam Cheong Buy 0.325 0.42
Source: Bloomberg Finance L.P., DBS Bank
Singapore
Wired Daily
Page 2
4Q13 results for CapitaCommercial Trust in line. DPU of
2.09 Scts was declared. The portfolio valuation is stable
while gearing is conservative. Looking ahead, the manager
has renewed half of the leases expiring in 2014, while the
remaining will expire in 2H14 at an average rate of S$10.30.
The manager is confident of achieving positive rental
reversions in view of an improving demand for office space.
Maintain HOLD, revised TP S$1.52 (Prev S$ 1.46).
Tiger Airways Holdings reported disappointing core loss of
S$30m in 3QFY14; Exceptional losses from impairment of
investment in associates, as well as loss on disposal of its
40% stake in Tigerair Philippines to Cebu Pacific compound
poor operating performance. Weak load factors and sub-par
yields may continue to impact Tigerair Singapore amid
heightened competition. Associates continue to bleed; may
be a while before recent strategic initiatives make a
difference. In view of yield pressures at Tigerair Singapore
and slower-than-expected improvements at key associates,
we push up our loss estimates for FY14/FY15 from
S$80m/S$22m to S$124m/S$53m. Maintain FULLY VALUED
call with lower TP of S$0.44 (Prev S$ 0.47).
Ezra Holdings announced that its Subsea Services division
(EMAS AMC) been awarded projects worth a total of
approximately US$80m, including options. Work for a
majority of the contracts is expected to commence by the
first half of 2014.
Bumitama Agri FY13 production data was slightly below our
expectations. Own output is slightly below our expectations;
as the yield drop at the start of its low crop cycle was
steeper than usual. It seems the group had purchased more
outside FFB than expected to cover for the shortfall. Based
on this data, Jan-Feb output may remain lower than normal
and we expect faster recovery in 2H14. We also expect
4Q13 earnings to lag our expectations; due to lower yields
and higher FFB purchases. The steep Rupiah depreciation in
4Q13 may probably not have much impact, as topline
growth is also boosted by USD-linked cost. We are
reviewing our forecasts for slight downside adjustment to
4Q13 earnings.
SunVic Chemical is selling its plant in Taixing, China to
French chemical producer Arkema for RMB3.9 bn (S$817m).
The sale will result in a pretax gain of about RMB1.87 bn for
SunVic. SunVic expects to use the proceeds to reduce its
bank borrowings as well as to continue to grow its
intermediate chemical business in China through the setting
up of new facilities and expansion of new sales channels.
Blumont proposes acquisition of highly prospective goldsilver-
copper project in Macedonia through takeover bid for
Genesis. Takeover bid to acquire ASX-listed Genesis is at an
implied bid price of A$0.169 per share. Genesis has the
conditional right to a majority stake in the Plavica goldsilver-
copper project in Macedonia, with a JORC Inferred
Resource of 1.86 million ounces of gold at an average grade
of 1.0 gram per tonne. The proposed acquisition reaffirms
Blumont’s commitment to becoming Asia’s major diversified
natural resources company.
Swee Hong is expected to report a loss for 2Q2014 and
1H2014. The expected loss is attributable to decline in
revenue from operations and significant costs increases.
Inflation in December for Singapore eased to 1.5% from
2.6% in November. The better-than-expected figure was
largely due to a decline in private road transport costs,
which was in turn thanks to lower COE premiums.
However, economists say inflation is unlikely to stay this low
for long, especially with domestic cost pressures driving up
consumer prices in 2014.
China's manufacturing contracted for the first time in six
months, according to a gauge released by HSBC Holdings
plc and Markit Economics. The preliminary reading of 49.6
for January in a Purchasing Managers' Index (PMI) was
below a final figure of 50.5 in December and all 19
estimates of analysts in a Bloomberg News survey.
US markets fell, reacting to a weak HSBC Flash PMI for
January that indicated contraction at 49.6. The provided a
trigger for profit taking as valuation and optimism run high.
Oil driller Noble Corp. fell 8.6% after it said the offshore
industry may be due for a cyclical pause. According to its
CEO, 1HCY14 is likely to be characterized by lower rig
utilization that is likely to be more pronounced for the
floating rigs with limited technical features. The company
remains confident however, over the long-term outlook for
offshore drilling especially in the ultra-deep water segment.
In after-hours trade, Microsoft shares rose 4% after
reporting earnings that beat estimates on strong office
software sales.

Daily Summary 23 Jan 14

Dow and Europe were slightly down last night. Dow -41 at 16373.  Dow's trend is down. Dow's future is now -30.  Europe opened marginally down.

Asian bourses were mostly down.  Nikkei -125, ShanghaiC -10, Hangseng -348.  STI -31 at 3103. Volumes were 3.1b shares.  Gainers were 139 to 335 losers.

Trend of STI is turning down.

Top gainers were KLW +0.2, KimHeng +1, Albedo unchanged, CharismaEner -0.2, Memstar -0.3, Viking +0.5, Hankore unchanged, MDR unchanged, Sunvic -11.5, MirachEner -0.4.

Market opened flat but fell after weak manufacturing data from China. Blue chips were mostly down with banks taking a hit. Penny and speculatives were also weaker.

Dow and Europe are looking a bit weak tonight.

Wednesday, January 22, 2014

DBS Vickers Report

oday’s Focus
• Keppel Land – Earnings beat estimate; maintain BUY,
target price nudged up to S$4.65
• Frasers Commercial Trust - Offers one of the strongest
growth profiles among its S-REIT peers. Maintain BUY
with a target price of S$1.46
Earnings for Keppel Land beat estimate, lifted by robust
operations, one-off items and revaluation surplus. The group
has proposed a final DPS of 13Scts which implies c.4% yield.
The group will focus on four core markets with a target
capital allocation of 35-40% for Singapore and China, and
the rest for Indonesia and Vietnam. Maintain BUY, target
price nudged up to S$4.65 (Prev S$ 4.35). Technically, there is
upside bias to $3.35 and $3.43. Beyond this, the next level is
$3.55.
1Q14 DPU of 2.05 Scts for Frasers Commercial Trust (FCOT) is
in line. FCOT offers strong income visibility, while risk of AUDS$
is mitigated through forward hedges. The expected expiry
of the Alexandra Technopark’s (ATP) master-lease offers a
significant upside to FCOT’s distributions come Aug’14. At a
FY14-15F CAGR of 7.0%, FCOT continues to offer one of the
strongest growth profiles among its S-REIT peers. FY14-15F
prospective yields of 6.6%-7.2% remain attractive. Maintain
BUY with a target price of S$1.46.
Capitamall Trust (CMT) reported a strong end to 2013; DPU
of 2.72 is up 8.6%. Assets enhancements are expected to
drive growth while acquisitions to be selectively in the
medium term. HOLD call maintained, target price S$2.16.
CMT offers FY14-15F yields of 5.8% to 6.0%.
3QFY14 results for Mapletree Commercial Trust (MCT) slightly
above estimate; DPU increased by 12% y-o-y to 1.67 Scts.
Strong rental uplift at VivoCity and PSA Building. Maintain
HOLD, TP S$1.32. MCT offers resilient 5.7%-6.0% dividend
yield. We like MCT as its key asset VivoCity continues to
power ahead through the Manager’s active leasing and asset
management strategy. But at the current price, most of the
positives have been priced in.
Mapletree Industrial Trust reported strong 3Q14 results;
capital management remains prudent. Distributable income
came in 12% higher y-o-y at S$42.2m, translating to a DPU
US Indices Last Close Pts Chg % Chg
Dow Jones 􀀙 16,373.3 (41.1) (0.3)
S&P 􀀘 1,844.9 1.1 0.1
NASDAQ 􀀘 4,243.0 17.2 0.4
Regional Indices
ST Index 􀀙 3,133.7 (0.0) (0.0)
ST Small Cap 􀀘 542.4 0.2 0.0
Hang Seng 􀀘 23,082.3 49.1 0.2
HSCEI 􀀘 10,326.7 108.3 1.1
HSCCI 􀀘 4,433.1 32.1 0.7
KLCI 􀀙 1,814.1 (1.2) (0.1)
SET 􀀙 1,290.5 (2.6) (0.2)
JCI 􀀘 4,477.5 25.0 0.6
PCOMP 􀀘 6,139.9 120.6 2.0
KOSPI 􀀘 1,970.4 6.5 0.3
TWSE 􀀘 8,625.3 25.4 0.3
Nikkei 􀀘 15,821.0 25.0 0.2
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013 2014
100-Day MA
Index
STI
Total Market cap (US$bn) 571
Total Daily Vol (m shrs) 4,422
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$)
22 Jan
Target Price
(S$)
Hutchison Port Hldgs Trust (US$) Buy 0.675 0.80
Keppel Corp Buy 10.850 12.90
ST Engineering Buy 3.860 4.90
Yangzijiang Buy 1.200 1.32
Stock Picks – Small /Mid Cap
Rec’n Price (S$)
22 Jan
Target Price
($)
Ezion Holdings Buy 2.360 3.36
China Merchants Buy 0.925 1.20
Pacific Radiance Ltd Buy 0.995 1.05
Nam Cheong Buy 0.330 0.42
Source: Bloomberg Finance L.P., DBS Bank
Singapore
Wired Daily
Page 2
of 2.51 Scts (+8.2% y-o-y). Organic growth outlook is still
robust. Maintain BUY, target price of S$1.44. We continue
to like MINT for its stable earnings growth profile
underpinned by organic rental uplifts. Yield of 7.7-7.9% is
attractive.
Singapore Exchange reported lower revenues and earnings
for 2Q14 as expected, amid slower activities during the
calendar year end. Base DPS of 4 Scts was declared. We
expect higher expenses and capex going forward. SGX will
be moving to new premises. Maintain HOLD and S$7.15
target price.
Raffles Medical acquires adjacent land to existing hospital
for expansion, expected completion in 2H2016. The site
provides capacity headroom for longer-term expansion;
limited near-term impact. The estimated cost of investment
is S$310m, equating to about S$1.4k psf ppr, with a 64-
year remaining lease term. Raffles Medical trades at 24x
FY14F PE, similar to regional peers. Maintain HOLD, target
price unchanged at S$3.15.
Global Logistic Properties has signed nine new lease
agreements totaling approximately 180,000 sqm in multiple
locations across Japan. This is the highest level of leasing
recorded by GLP Japan in a single month.
C&G Environmental Protection Holdings has received a
Support Letter from State's Economic Planning Unit for the
Proposed Waste-To-Energy (WTE) plant in Terengganu,
Malaysia. The Terengganu WTE project is designed to have
a daily waste handling capacity of 800 tonnes and would be
able to generate between 15MW and 18MW of electricity.
The total investment of the project is estimated to be not
less than RM450m.
Aspial Corporation has acquired a freehold development in
Melbourne for A$42.3m, and plans to turn it into the tallest
building in the city that will offer a gross floor area of more
than a million square feet of residential and commercial
space. This is the jewellery and property group's second
major overseas acquisition, coming just weeks after it
announced its first overseas foray in the Australian city.
China Essence Group expects to register a net loss for 3Q
FY14. The Group saw a decrease in sales volumes for its
products in 3Q FY14 due to the low production level during
the quarter. Coupling with the high finance and operating
expenses, the Group expects to register a net loss for 3Q
FY14.
The Singapore Exchange (SGX) will introduce circuit
breakers from Feb 24. Circuit breakers will apply to all
Straits Times Index (STI) components, MSCI Singapore Index
components and securities priced 50 cents and above. Since
stapled securities, funds, exchange-traded funds, exchangetraded
notes and extended settlement contracts are also
included, this means that circuit breakers will apply to 80%
of the market.
US indices finished mixed with gainers leading decliners.
BlackBerry rose 8.6% after the company said it will work
with CBRE Group Inc. to sell vacant properties as well as
occupied space it will then lease back from the new owners.
Coach slipped 6% after reporting earnings that missed
estimates. In the technology space, IBM dropped 3.3% after
announcing a decline in revenue and profit dropped at its
hardware unit. Advanced Micro Devices Inc. slumped 12 %
after forecasting 1Q revenue that fell short of expectations.
In after hours trade, EBay reported a higher profit for the
quarter and said activist investor Carl Icahn submitted a
proposal to spin off eBay's PayPal business.

Daily Summary 22 Jan 14


Dow was -44 at 16414 last night. Europe marginally down. Dow's trend is still down but levelling. Dow's future is now -3.  Europe opened slightly up.

Asian bourses were mostly up.  Nikkei +25, ShanghaiC +43 and Hangseng +49.  STI closed -1 at 3133.  Volume was 4.3b shares.  Gainers were 186 to 242 losers.

STI's trend is flat. It has been hovering at this level for two weeks.

Top volumes were KLW -0.3, Albedo -0.1, Memstar +0.8, CharismaEner unchanged, AdvSct unchanged, CCM -0.2, Hankore -0.4, JEP +0.1, KimHeng Offshore IPO closed at 29.5, Unionmet -0.2.

Market opened slightly down and traded flat for the whole day. Blue chips were firmer. Penny and speculatives were weaker. Though volumes were higher than yesterday, market was flat.

Europe and Dow are also looking flat at the moment.

Tuesday, January 21, 2014

DBS Vickers Report 22 Jan 14

Today’s Focus
• Jaya - Steady proxy to industry upswing; maintain BUY,
target price S$0.91
Jaya reported another steady quarter with net profit of
US$7.2m for 2Q-FY14, up about 16% y-o-y (excluding vessel
disposal gains) on a 31% y-o-y improvement in chartering
revenue. 83% fleet utilisation in low season, higher day rates
from more sophisticated fleet boost charter income in 2QFY14.
Charter backlog improves significantly as Jaya increases
its presence in the Middle East market with long-term
charters. Interim dividend of 1Sct was declared (1H13 interim:
0.5Scts). Maintain BUY for 11% upside to target price of
S$0.91, plus 4-5% dividend yield supported by net cash
position.
4Q13 results for Ascott Residence Trust in line; NAV lifted by
stable property valuations. Armed with a strong war chest
and available debt headroom given low gearing of 34%,
management will continue to pursue growth through
acquisitions. Maintain BUY; S$1.33 TP has been adjusted for
rights issue.
3QFY14 results for Mapletree Logistics Trust in line; YTD net
income is 77% of forecast. Future growth is expected to be
driven by acquisitions/ developments while its portfolio
earnings remain resilient. Maintain BUY rating and S$1.16
target price.
Results Cache Logistics Trust was slightly below expectations
as Cache did not execute on more acquisitions that we had
previously anticipated for. With only 3% of GFA up for
renewal in FY14, Cache offers strong near term earnings
visibility. Cache is well poised for acquisitions as its gearing
level of 29.1% is fairly conservative. Maintain BUY, target
price revised slightly to S$1.31 (Prev S$ 1.33).
1Q14 results for Frasers Centrepoint Trust in line. Organic
growth is expected to be driven by positive rental reversions
from Causeway Point and Northpoint. The next catalyst for
FCT would be new acquisitions, namely Changi City Point.
Maintain BUY, TP S$2.14.
US Indices Last Close Pts Chg % Chg
Dow Jones 􀀙 16,414.4 (44.1) (0.3)
S&P 􀀘 1,843.8 5.1 0.3
NASDAQ 􀀘 4,225.8 28.2 0.7
Regional Indices
ST Index 􀀘 3,133.8 5.0 0.2
ST Small Cap 􀀘 542.1 2.5 0.5
Hang Seng 􀀘 23,033.1 104.2 0.5
HSCEI 􀀘 10,218.4 178.3 1.8
HSCCI 􀀙 4,400.9 (6.8) (0.2)
KLCI 􀀘 1,815.3 7.8 0.4
SET 􀀘 1,293.1 3.1 0.2
JCI 􀀘 4,452.5 20.9 0.5
PCOMP 􀀘 6,019.2 13.6 0.2
KOSPI 􀀘 1,963.9 10.1 0.5
TWSE 􀀙 8,599.9 (21.7) (0.3)
Nikkei 􀀘 15,796.0 154.3 1.0
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013 2014
100-Day MA
Index
STI
Total Market cap (US$bn) 570
Total Daily Vol (m shrs) 3,877
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$)
21 Jan
Target Price
(S$)
Hutchison Port Hldgs Trust (US$) Buy 0.675 0.80
Keppel Corp Buy 10.960 12.90
ST Engineering Buy 3.880 4.90
Yangzijiang Buy 1.190 1.32
Stock Picks – Small /Mid Cap
Rec’n Price (S$)
21 Jan
Target Price
($)
Ezion Holdings Buy 2.430 3.36
China Merchants Buy 0.920 1.20
Pacific Radiance Ltd Buy 0.950 1.05
Nam Cheong Buy 0.330 0.42
Source: Bloomberg Finance L.P., DBS Bank
Singapore
Wired Daily
Page 2
Rex International has been awarded five new offshore
licences in the 2013 Awards in Predefined Areas (APA
2013), according to a Norwegian Ministry of Petroleum and
Energy press release dated 21 January 2014. The Group’s
portfolio of licences increased to 12 in Norway, and 21
internationally, well ahead of its target of 20 licences by July
2014.
Courts has announced earlier than expected opening of its
first big box megastore in Bekasi Indonesia. The store is now
scheduled to open by 2Q FY14/15 (September 2014)
instead of 3Q FY14/15 (December 2014). We do not think
that an earlier than expected opening of this store would
change our earnings forecast significantly. We have already
factored expectations for Indonesia. We expect minimal
contribution for FY14/15F, with growth accelerating in
FY15/16F. We forecast revenue of S$50m for Indonesia in
FY15/16F contributing to about 5% of our revenue forecast.
Maintain BUY, target price S$0.77.
Keppel Land has acquired a residential site in West Jakarta
for about $42m. It would develop a high-rise condominium
with more than 1,200 units, as well as about 60 ancillary
shophouses, on the three-hectare site. This is part of
Keppel's move to strengthen its foothold in Indonesia.
Raffles Medical Group is acquiring a site adjacent to Raffles
Hospital for a purchase consideration of S$105.2m for
expansion. The Group will use the adjacent site to expand
its existing healthcare facilities at North Bridge Road from its
current GFA of 28,604.94 m2 to 49,217.28 m2. The total
development cost of the project, including the purchase
price of the site, construction costs and improvement works
to the existing hospital, is estimated to be approximately
S$310m.
Ntegrator International has started 2014 with four major
contracts, worth S$4.02m, from repeat customers in the
region. These contracts are for the supply of equipment and
services to Vietnam, Myanmar and Singapore.
Libra Group has been awarded a sub-contract for air
conditioning and mechanical ventilation for a proposed
condominium development at Bedok South worth S$6.4m
and a contract for mechanical & electrical works worth
S$9.9m from the Ministry of National Development.
In property news, a 99-year leasehold site along East Coast
Road housing the former Joo Chiat police station is believed
to have drawn a new record bid for a Government Land
Sales (GLS) hotel site. A consortium comprising Master
Contract Services and Keong Hong Construction placed the
highest offer out of eight bidders of $352.8m, or $1,326.11
psf ppr in the tender that closed yesterday.
US indices were mixed as corporate earnings disappointed
investors. Verizon Communications Inc., Johnson & Johnson
and Travelers Cos. lost more than 1%, dragging the DJIA
lower after reporting earnings. The global economy will
grow 3.7% this year compared with an October estimate of
3.6%, the IMF said in revisions to its World Economic
Outlook. US GDP will expand 2.8% (previous 2.6%); Japan
will gain 1.7% (previous 1.2%) and the U.K. will increase
2.4 % (previous 1.9%). Meanwhile, China is projected to
grow 7.5$, faster than the 7.3% forecasted in October.

Daily Summary 21 Jan 14


Europe were mixed while Dow was closed last night.  Dow's trend is looking down but steady.  Dow's future is now +50.  Europe opened slightly up.

Asian bourses were mostly up.  Nikkei +154, ShanghaiC +17, Hangseng +104.  STI closed +5 at 3134.  Volume was 3.9b shares.  Gainers were 271 to 182 losers.

Trend of STI is neutral at this point.

Top volumes were KLW +0.4, Hankore +0.6, Albedo +0.3, CCM +0.6, JES +1.4, EMS +0.5, CharismaEner +0.1, MirachEner -0.5, Memstar +0.3, OttoMarine +0.3.

Market opened flat, traded in a small band and maintaining slightly positive throughout the day.  Blue chips were slightly firmer.  Penny and speculatives were active and with more gainers but the gains were small.

Europe and Dow are looking positive for tonight at this moment.

Monday, January 20, 2014

OCBC Report 21 Jan 14

KEY IDEA

M1: Declares S$0.07 special dividend

M1 Ltd saw FY13 revenue fall 6.4% to S$1007.9m, and was 3.8% below our forecast, while net profit climbed 9.4% to S$160.2m, or 3.5% above our forecast. M1 declared a final dividend of S$0.071 per share and a special dividend of S$0.071, bringing the total full year dividend to S$0.21 per share. This translates into a payout ratio of 121% of its earnings, versus its official minimum payout ratio of 80%. Going forward, management believes that it can continue to achieve moderate earnings growth (within the single-digit range), where it remains largely positive about the mobile business; but slightly more guarded about the fixed services segment. Factoring in the latest developments, we opt to pare our FY14 revenue forecast by 8% but increase our earnings estimate by 2%. Our DCF-based fair value will also improve from S$3.17 to S$3.30 as we roll forward to FY14. As we are unlikely to see a repeat of such a hefty special dividend this year, we maintain our HOLD rating. (Carey Wong)

MORE REPORTS


First REIT: Ends FY13 with 7.52 S cents DPU

First REIT (FREIT) reported FY13 gross revenue and DPU growth of 44.5% and 14.3% (excluding exceptional gains distribution of 0.68 S cents in FY12) to S$83.3m and 7.52 S cents, and closely matched our revenue and DPU forecast of S$83.2m and 7.54 S cents, respectively. Looking ahead, we believe FREIT’s key priority in any lease terms negotiation for new acquisitions would be to maintain its base rental denomination in SGD to minimise its FX risk. We trim our FY14 and FY15 DPU forecasts marginally by 1.5%, on lower revenue and higher finance costs assumptions. But as we roll forward our valuations, our DDM-derived fair value estimate inches up from S$1.18 to S$1.19. Maintain BUY on FREIT as FY14F distribution yield remains attractive at 7.9%. (Wong Teck Ching Andy)

Mapletree Logistics Trust: Strong but priced in

Mapletree Logistics Trust (MLT) reported 3QFY14 DPU of 1.84 S cents, up 7.0% YoY. This brings the 9MFY14 DPU to 5.46 S cents, meeting 75.2%/76.9% of our/consensus full-year projections. Going forward, management reiterated that active lease and asset management will be a key priority in light of the supply of warehouse space in 2014 and impending conversion of more single-user assets into multi-tenancies (which may result in occupancy dip). MLT also confirmed our view that competition for acquisition of logistic assets is becoming increasingly intense. Nevertheless, given that MLT’s recent initiatives are like to contribute positively to MLT’s income, we believe MLT’s performance will remain robust in FY15. Maintain HOLDwith unchanged fair value of S$1.06. (Kevin Tan)

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


NEWS HEADLINES


- US stock and bond markets were closed for Martin Luther King Jr. Day on Mon.


- Local business confidence is wilting in 1Q14, although it remains in the positive range, going by the latest Business Optimism Index compiled by the Singapore Commercial Credit Bureau.


- K-Green Trust has maintained its 2H13 DPU at 4.69 S cents, bringing its FY13 DPU to 7.82 S cents, unchanged from FY12.


- Keppel REIT posted a 4Q13 DPU of 1.97 S cents, unchanged from a year ago.


- Jardine Strategic Holdings Ltd has agreed to invest US$731m to buy a 20% stake in Hong Kong-listed Zhongsheng Group Holdings Ltd.

- Xinjiang mining exploration firm Mineriver, in which JES International is buying a 30% stake, sought to dispel questions over the claim that it had 4.2b tonnes of resources in its mine.


- Ley Choon Group Holdings secured a S$7m contract from the Public Utilities Board through its subsidiary Chin Kuan Engineering and Contractors.

DBS Vickers Report 21 Jan 14

Today’s Focus
• M1 – FY13 earnings inline, announced special dividend.
Maintain BUY with target price of S$3.60
M1’s FY13 earnings of S$160m (+ 9.4%) was in line;
including special DPS of 7.1Scts, final DPS of 14.2Scts beat
our 9Scts estimate. Management guided for single-digit
growth in FY14, prompting us to trim FY14F/15F earnings by
2% each. Maintain BUY with target price of S$3.60, implying
11% upside potential and 5% plus yield.
Keppel REIT’s 4Q13 results in line; valuations remained stable.
K REIT offers stable portfolio with limited refinancing risks in
2014 and modest growth prospects. Maintain HOLD with
revised TP of S$1.29 (Prev S$ 1.23).
Despite being hit by a weak JPY-S$ exchange rate, Mapletree
Logistics Trust (MLT) reported resilient results – topline and
net property income came in at S$78.1m (+0.9% y-o-y) and
S$67.4m (-0.2% y-o-y). Distributable income came in 7.7%
higher at S$45.0m (DPU of 1.82 Scts), supported by lower
interest rates of 1.9%. MLT’s will be acquiring an industrial
property in Iskandar Malaysia from its sponsor, which could
lift earnings further from 2HFY15. Our target price and
recommendation under review pending conference call with
management.
First Resources released its FY2013 production data. The data
is in-line with our expectations; but the slow pace of
smallholders' yields also suggests that 1Q14 output
(combined) may still be weak and probably only recover
towards 2H14. We expect own estates output to recover by
22% y-o-y and smallholders by 11% y-o-y by end of 2014.
Except for forward selling prices and margins for its
downstream businesses (i.e. refining and biodiesel); we
expect no surprises to the group's 4Q13 earnings. Our HOLD
call and S$2.19 target price is maintained.
Jardine Strategic Holdings is investing US$731m to buy a
20% stake in Hong Kong-listed Zhongsheng Group Holdings,
a distributor of Volkswagen, Porsche, Mercedes Benz and
Audi cars in China. The acquisition will result in Jardine
Strategic becoming one of the top three shareholders of
Zhongsheng after its two co-founders.
US Indices Last Close Pts Chg % Chg
Dow Jones 􀀘 16,458.6 41.6 0.3
S&P 􀀙 1,838.7 (7.2) (0.4)
NASDAQ 􀀙 4,197.6 (21.1) (0.5)
Regional Indices
ST Index 􀀙 3,128.8 (18.5) (0.6)
ST Small Cap 􀀙 539.6 (2.7) (0.5)
Hang Seng 􀀙 22,929.0 (204.4) (0.9)
HSCEI 􀀙 10,040.2 (127.1) (1.3)
HSCCI 􀀙 4,407.7 (35.6) (0.8)
KLCI 􀀙 1,807.6 (5.4) (0.3)
SET 􀀙 1,290.0 (5.4) (0.4)
JCI 􀀘 4,431.6 19.3 0.4
PCOMP 􀀘 6,005.6 18.5 0.3
KOSPI 􀀘 1,953.8 9.3 0.5
TWSE 􀀘 8,621.6 25.6 0.3
Nikkei 􀀙 15,641.7 (92.8) (0.6)
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013 2014
100-Day MA
Index
STI
Total Market cap (US$bn) 574
Total Daily Vol (m shrs) 3,545
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$)
20 Jan
Target Price
(S$)
Hutchison Port Hldgs Trust (US$) Buy 0.675 0.80
Keppel Corp Buy 10.940 12.90
ST Engineering Buy 3.880 4.90
Yangzijiang Buy 1.195 1.32
Stock Picks – Small /Mid Cap
Rec’n Price (S$)
20 Jan
Target Price
($)
Ezion Holdings Buy 2.400 3.36
China Merchants Buy 0.920 1.20
Pacific Radiance Ltd Buy 0.940 1.05
Nam Cheong Buy 0.325 0.42
Source: Bloomberg Finance L.P., DBS Bank
Singapore
Wired Daily
Page 2
SATS’ aviation operating data for 3Q and 9M FY2013-14. In
the third quarter of FY2013-14, the number of flights
handled by SATS grew 10.2% and unit services increased by
6.6% year-on-year. Cargo throughput was up 1.9%.
Passengers handled rose 4.8% to 11.25m, driven by higher
low-cost carrier traffic. Gross and unit meals, however,
declined 8.0% and 5.7% respectively due mainly to the loss
of Qantas’ flights to Europe. Except for gross and unit
meals, all operating metrics grew in the first nine months of
FY2013-14.
AusGroup has been awarded a two year plus one year
option for scaffolding for maintenance services at BHP
Billiton’s Worsley Alumina refinery, in the South West of
Western Australia, worth up to AUD$7m per annum with a
potential full contract value of AUD$21m.
China Environment has secured two contracts amounting to
RMB393.6m in total, including a RMB11m contract from
Nanjing Steel for the upgrading of two units of existing
electrostatic precipitators and a RMB 382.6m contract from
Shanxi Electric for the supply of industrial dust collectors.
Ley Choon Group has secured a contract worth
approximately S$7.0m awarded by the Public Utilities Board.
The contract is in respect of watermain repairs and other
contract work for network services.
Local business confidence is wilting in the first quarter of
this new year, although it remains in the positive range,
going by the latest Business Optimism Index (BOI) compiled
by the Singapore Commercial Credit Bureau (SCCB). The
overall BOI score fell from +33.98 percentage points last
quarter to +13.13 percentage points for Q1 this year,
suggesting strongly that moderation has set in and local
firms are cautious about their business expectations.
According to the Bloomberg Global Poll, international
investors are the most upbeat about the global economy
than at any time in almost 5 years, buoyed by the U.S.-led
revival of industrial nations. 59% of Bloomberg subscribers
surveyed last week said the economic outlook is improving.
This is up from 33% in November and marks the most
optimistic result since the poll began in July 2009. Strength
in the richest economies was cited as the main
reason. The poll also underscores the confidence shift
towards advanced economies, while emerging markets
become a cause for concern. 72% in the Bloomberg survey
said the U.S. economy is improving, up from 53% a year
ago. 49% said the same of the euro zone and 49% said
Japan is strengthening. By contrast, just 13% of those
surveyed said China’s economy is improving, with 36%
saying it is deteriorating.
For every company predicting in January that earnings that
will beat analyst estimates, 2.5 are projecting results that
fall short, matching the worst ratio since the rally began in
March 2009, this according to data compiled by Bloomberg.
Among the 52 companies in the S&P 500 that have
reported results for last quarter, fewer are posting income
that exceeds Wall Street forecasts - about 62% compared
with 75% in the previous period. Profit growth slowed to a
quarterly average of 4.1% in 2013, down from 20% over
the last 3 years, this according to Bloomberg data.

Daily Summary 20 Jan 14

Dow and Europe closed positive on Friday.  Dow +42 at 16459.  Dow's trend is down. Dow's future is now -15.  Europe opened down.  

Asian bourses were weaker.  Nikkei -93, ShanghaiC -14, Hangseng -204.  STI closed -16 at 3131.  Volume was 3.5b shares.  Gainers were 143 to 291 losers.

Trend of STI is flat but weakening.

Top volumes were MirachEner +3.3, CharismaEner -0.2, Hankore -0.5, KLW unchanged, Albedo -0.1, Transcu unchanged, Federal +0.5, CNA +0.6, MDevt unchanged, Innopac -0.2.

Market opened down and remained down throughout the session. It closed near day low. Blue chips were weaker. Penny and speculatives were mixed and more to the weaker side. Rotational play still on some stocks.   MirachEner +3.3, APStrat +6, Dukang +3.

Europe have started to turn positive. Dow is still flat.

Sunday, January 19, 2014

DBS Vickers Report 20 Jan 14

Today’s Focus
Ascendas REIT - Inorganic growth to drive earnings;
maintain BUY, TPS$2.44
Results releases are much focused on SREITs this week with
11 companies scheduled to report. Outside of this group, M1,
Keppel Corp, Keppel Land and SGX are also scheduled to
release results.
M1 is our preferred pick for the telco sector while Keppel
Corp is our pick for yards. Keppel Land trades at a steep 48%
discount to RNAV of $6.21. This is an attractive entry level as
the discount magnitude places it more than -1SD below
mean valuation for property stocks. It is one of our picks
within the property sector.
We are less optimistic about SGX. The value of shares traded
on the Singapore Exchange averaged S$990mil/day in
4QCY13. This is 25% lower q-o-q compared to S$1.32bil for
3QCY13 and 19.5% lower y-o-y compared to S$1.23bil for
4QCY12.
The Global Economic Prospects report by the World Bank last
week underpins our strategy to go for stocks that stand to
benefit from the economic recovery in the developed
economies of US and Europe. According to the World Bank,
global GDP is projected to grow from 2.4%in 2013 to 3.2%
this year, stabilizing at 3.4% and 3.5% in 2015 and 2016,
respectively, with much of the initial acceleration reflecting a
pick-up in high-income economies.
Our picks are HPH Trust, Venture Corp, Goodpack and ST
Engineering.
The improving sentiment about global recovery should also
sustain interest in O&G stocks. Our picks are asset
owners/operators such as Pacific Radiance and Jaya, shipyards
Nam Cheong while Ezion should see sustainable earnings
growth from strong execution in its niche vessel segment.
China’s 4Q GDP, December industrial production, retail sales
and fixed assets investment will be released at 10am this
morning.
US Indices Last Close Pts Chg % Chg
Dow Jones 􀀘 16,458.6 41.6 0.3
S&P 􀀙 1,838.7 (7.2) (0.4)
NASDAQ 􀀙 4,197.6 (21.1) (0.5)
Regional Indices
ST Index 􀀘 3,147.3 6.9 0.2
ST Small Cap 􀀙 542.3 (1.2) (0.2)
Hang Seng 􀀘 23,133.4 146.9 0.6
HSCEI 􀀙 10,167.3 (20.2) (0.2)
HSCCI 􀀙 4,443.3 (5.9) (0.1)
KLCI 􀀙 1,813.0 (11.0) (0.6)
SET 􀀙 1,295.4 (6.1) (0.5)
JCI 􀀙 4,412.2 (0.3) (0.0)
PCOMP 􀀘 5,987.1 4.9 0.1
KOSPI 􀀙 1,946.2 (11.1) (0.6)
TWSE 􀀙 8,596.0 (16.1) (0.2)
Nikkei 􀀙 15,734.5 (12.7) (0.1)
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013 2014
100-Day MA
Index
STI
Total Market cap (US$bn) 574
Total Daily Vol (m shrs) 3,117
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$)
17 Jan
Target Price
(S$)
Hutchison Port Hldgs Trust (US$) Buy 0.680 0.80
Keppel Corp Buy 11.010 12.90
ST Engineering Buy 3.850 4.90
Yangzijiang Buy 1.210 1.32
Stock Picks – Small /Mid Cap
Rec’n Price (S$)
17 Jan
Target Price
($)
Ezion Holdings Buy 2.400 3.36
China Merchants Buy 0.920 1.20
Pacific Radiance Ltd Buy 0.965 1.05
Nam Cheong Buy 0.330 0.42
Source: Bloomberg Finance L.P., DBS Bank
Singapore
Wired Daily
Page 2
3Q14 performance for Ascendas REIT was in line. A-REIT
continues to offer a steady growth profile over FY14F/15F.
In additional, A-REIT is also likely to acquire the remaining
stake in Aperia, which is expected to lift earnings further.
Maintain BUY, TPS$2.44. We continue to like A-REIT’s
steady earnings growth profile which is visible and
achievable, while maintaining a conservative gearing profile
of <35%, in our view.
Cambridge Industrial Trust reported DPU of 1.251 Scts, in
line with expectations. Going forward, we expect
acquisitions and developments to fuel growth in
2014/2015. CREIT continues to offer steady, resilient yields
of 7.3%-7.7%. Our HOLD Call and target price of S$0.74 is
maintained, given limited upside.
Osim has increased its stake in subsidiary TWG Tea
Company to 70%, up from 53.7% previously, after TWG
undertook a rights issue to raise $25m. The funds raised will
be utilised mainly for expansion during 2014 and to repay a
bank loan and a shareholder loan. The investment is
expected to be earnings accretive for Osim this financial
year.
Data errors in trade data collection has skewed trade
figures. Total trade and NODX for 2013 are expected to
come in lower than expected due to data revisions. October
2013's non-oil domestic exports (NODX) was said to have
grown 2.8%, when in fact it had shrunk 2.7%. Data for
September was also overstated - NODX was initially said to
have shrunk 1.2% when the actual contraction was a larger
2% - due to the "multiple counting of some trade permits".
International Enterprise (IE) said that the errors were traced
back to changes to a trade declaration system known as
Access, which is used by four air express companies to
declare their consolidated imports and exports.
Rental yields for non-landed private homes fell below the
4% psychological mark at 3.9% in 2013, from 4.2% the
previous year, according to the Singapore Real Estate
Exchange (SRX). Four locations, comprising Orchard,
Tanglin, Southern Islands (Sentosa Cove) and Newton, saw
gross rental yields below 3%. On the other end of the
spectrum, Outram, Yishun, Geylang, Tampines and Jurong
West registered gross yields of 4% or above.