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.
No comments:
Post a Comment