Today’s Focus
• United Envirotech - Upgrade to BUY, target price raised
to S$1.18. Positive industry re-rating, contract flows are
medium-term upside catalyst.
United Envirotech (UENV) has won another EPC contract
worth RMB250m after securing a RMB160m BOT agreement
few days ago. UENV has clinched c.RMB877m of EPC
contracts so far in FY14. More order wins are possible as
RMB500-600m of contracts are in advanced bidding stages.
FY15 is shaping up to be a banner year for EPC. Memstar
acquisition could add S$0.28/share to UENV when completed
in April. FY15 net earnings were raised by 16% to factor in
stronger EPC recognition. With the strong rally in share price
recently, UENV may see near-term profit-taking. Investors
with a medium term horizon should take advantage of
pullbacks to take position in the stock. Upgrade to BUY on
positive industry re-rating; contract flows are medium-term
upside catalyst. Target price raised to S$1.18 (Prev S$ 0.91)
including Memstar’s contribution and higher new win
assumptions.
Ezion has received a letter of intent with a contract value of
up to approximately US$94m over a 5 year period to provide
a Service Rig to be used by a Southeast Asian based national
oil company to support its oil & gas activities. The Service Rig
is expected to be deployed and working in the Southeast
Asian waters by the 1Q 2016.
Singapore Airlines' passenger load factor (PLF) edged up 0.3
percentage point to 82.5% in December last year as
passenger carriage narrowly outpaced capacity growth.
Systemwide passenger carriage rose 1.4% against a 0.9%
increase in capacity during the month. The number of
passengers carried was up 2.5% y-o-y to 1.67m. On a
regional level, SIA load factors declined slightly for East Asia
and the South West Pacific and were flat for West Asia and
Africa. However, load factors increased for the Americas and
Europe, up 1.8 percentage points to 86.3% and up 2.6
percentage points to 82.8%, respectively. Meanwhile, SIA
Cargo reported a 1.4 percentage point decline in cargo load
factor to 63% in December as cargo traffic was 5.1% lower
y-o-y, while cargo capacity was scaled back by 3.1%.
US Indices Last Close Pts Chg % Chg
Dow Jones 16,481.9 108.1 0.7
S&P 1,848.4 9.5 0.5
NASDAQ 4,214.9 31.9 0.8
Regional Indices
ST Index 3,143.3 19.5 0.6
ST Small Cap 544.8 2.4 0.4
Hang Seng 22,902.0 110.7 0.5
HSCEI 10,201.8 52.6 0.5
HSCCI 4,449.3 21.7 0.5
KLCI 1,824.0 (10.9) (0.6)
SET 1,277.0 (18.8) (1.5)
JCI 4,441.6 50.8 1.2
PCOMP 5,958.1 22.6 0.4
KOSPI 1,953.3 7.2 0.4
TWSE 8,602.6 54.4 0.6
Nikkei 15,808.7 386.3 2.5
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013 2014
100-Day MA
Index
STI
Total Market cap (US$bn) 572
Total Daily Vol (m shrs) 3,933
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$)
15 Jan
Target Price
(S$)
Hutchison Port Hldgs Trust (US$) Buy 0.675 0.80
Keppel Corp Buy 10.850 12.90
ST Engineering Buy 3.860 4.90
Yangzijiang Buy 1.200 1.32
Stock Picks – Small /Mid Cap
Rec’n Price (S$)
15 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 Research
Singapore
Wired Daily
Page 2
Global Logistic Properties will commence development of GLP
Yachiyo, a 72,000 sqm, multi-tenant logistics facility in Greater
Tokyo. The project is expected to be completed in October
2015, with a total estimated development cost of JPY11.1 bn
(US$106m).
Wilmar has signed a mandate letter for the launch of the
syndication of US$1,750m Revolving Loan Facilities. The
purpose of the Facility is to finance general corporate and
working capital requirements of Wilmar and its subsidiaries,
including refinancing of existing debt.
Koh Brothers Group and Heeton Holdings Limited announced
that their joint venture has been awarded the mandate to
develop an executive condominium (EC) site at Westwood
Avenue in Jurong West, Singapore. They have successfully bid
$382 psf ppr for the 99-year leasehold site. The site is
expected to yield approximately 480 residential homes,
ranging from two bedrooms to five bedrooms.
OEL Holdings has entered into an agreement to acquire 100%
of two wholly-owned property investment subsidiaries for
S$53.9m, to be satisfied by S$10m cash and issuance of
S$43.9m secured convertible bonds.
Developers' private home sales shrank to 259 units (excluding
executive condominiums, or ECs) in December 2013 - a big
drop from 1,271 units in November and 1,410 units in
December 2012. The figure was the lowest since January 2009
(108 units) and worse than market expectations. The
December drop was due largely to developers' strategy of
holding back launches and gathering interest first, said agents.
The December number takes the preliminary 2013 tally to
15,015 - down 32.4% from the record 22,197 in 2012. In
2011, the total was 15,904 and in 2010, 16,292.
Singapore's retail sales fell a larger- than-expected 8.7% in
November compared to a year ago, mainly due to a 41.8%
drop in motor vehicle sales. Stripping out sales of motor
vehicles, however, retail sales went up by 0.4%, still below
market expectation of +0.6%. Compared to October, the
seasonally adjusted retail sales figure increased marginally by
0.1% in November. Excluding motor vehicles, they rose 1%.
The telecommunications apparatus & computers category
declined 11.7% y-o-y. Other categories which reported lower
sales were furniture & household equipment (-4.4%) and
watches & jewellery (-2.8%).
U.S. stocks rose following the World Bank lifting its global
growth forecast while Bank of America Corp.’s profit spurred
a rally in financial shares. Bank of America reported 4Q
earnings and revenue that beat analysts’ estimates. Apple Inc.
gained after China Mobile said pre-orders for iPhones had
reached 1 million. The World Bank raised its global growth
forecasts as a recovery in advanced economies tempers the
effects of tighter monetary conditions on developing markets.
The forecast for the richest nations was raised to 2.2%from
2%. Meanwhile, International Monetary Fund Managing
Director Christine Lagarde said today that momentum in the
world economy seen in 2H13 should continue in 2014. The
IMF plans to raise its forecast for global growth when it
releases a report later this month.
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