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.