Today’s Focus
Jaya Holdings - Downgrade to HOLD with target price of
S$0.78; switch to Pacific Radiance
Vard Holdings - Margin execution will be the key;
maintain HOLD, target price S$0.90
Jaya Holdings proposes sale of its operating businesses to
Mermaid Marine Australia for S$625m cash. Net proceeds of
about S$0.78 per share is likely to be paid out to shareholders
as cash dividend The pricing is below book and is not very
exciting at only 5.5% premium to lat weighted average price.
Downgrade to HOLD with target price of S$0.78 (Prev S$
0.91); we recommend switching to Pacific Radiance.
4Q13 operating numbers for Vard Holdings below as Vard
Niteroi in Brazil continues to disappoint with further losses.
Order wins is the silver lining. Vard has maintained the
momentum in FY14, with 3 orders worth more than NOK2bn
secured already. Orderbook of NOK19.4bn as of end-FY13 is
the highest since 2008 and implies about 1.7x book-to-bill,
securing revenue visibility in FY14/15 to a large extent.
Margins will recover hereon, but extent and speed of recovery
remain uncertain. Maintain HOLD with revised target price of
S$0.90 (Prev S$ 0.84), pegged to a higher multiple of 10x
FY14F earnings (from 9x previously), in line with improved
revenue visibility.
Core recurring net profit for Del Monte Pacific within
expectations but headline net profit slipped by 50% to
US$16.1m, mainly on the back of higher one-off acquisition
expenses relating to the acquisition of US-based Del Monte
Foods’ consumer business (DMFI). With the >30% share price
correction since late last Oct, we believe this presents a
buying opportunity, especially with financing of the
acquisition largely firmed up through issuance of bonds and
bank financing. Key share price catalyst is post-acquisition
integration, execution and extraction of synergies. Maintain
BUY, target price unchanged at S$0.82.
First Resources’ 4Q13 core earnings of US$64m were beyond
expectations; backed by stronger refining & processing profit.
More biodiesel sales and higher forward average selling price
boosted refining & processing EBITDA by 272% y-o-y. With
expiry of forward contracts from FY14F; we cut FY14F/15F
US Indices Last Close Pts Chg % Chg
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Nikkei 15,051.6 213.9 1.4
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013 2014
100-Day MA
Index
STI
Total Market cap (US$bn) 572
Total Daily Vol (m shrs) 2,438
12m ST Index High 3,454
12m ST Index Low 2,960
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price (S$)
25 Feb
Target Price
(S$)
Keppel Corp Buy 10.430 12.60
ST Engineering Buy 3.820 4.90
Yangzijiang Buy 1.145 1.32
Stock Picks – Small /Mid Cap
Rec’n Price (S$)
25 Feb
Target Price
($)
Ezion Holdings Buy 2.250 3.26
China Merchants Buy 0.905 1.20
Pacific Radiance Ltd Buy 0.970 1.05
Nam Cheong Buy 0.345 0.43
Source: Bloomberg Finance L.P., DBS Bank
Singapore
Wired Daily
Page 2
earnings by 3%/4% each. HOLD call maintained for c.2%
dividend yield. Target price slightly raised to S$2.22 (Prev
SE2.19).
FY13 results for Pan-United Corporation in line with our
estimate; growth was driven by the ready concrete mix
(RMC) and port businesses. Final DPS of 2.75 Scts was
declared, increasing FY13 DPS to 4.25 Scts. We are positive
on RMC business this year, but CCIP port acquisition will be
a drag on earnings growth. Maintain HOLD and target price
of S$1.03.
Cosco Corp’s 4Q13 results were disappointing, dragged by
provision for cost overruns. While order win momentum has
been encouraging, we believe the spotlight stays on
earnings delivery and potential financial impact from the
drillship saga in the near term. Maintain FULLY VALUED;
target price reduced to S$0.69 (Prev S$ 0.76).
Nam Cheong’s FY2013 revenue surpasses the billion mark
to reach a record of RM1.3bn, +43% y-o-y. FY2013 net
profit registered a strong double-digit growth of 51% to
RM206.2m. For 4Q13, the group achieves record revenue
and net profit of RM406.1m and RM70.2m respectively.
Strong gross profit margin of 20% for 4Q 2013 was
maintained. A total dividend of 1.0 Singapore cent was
proposed for FY2013.
Pacific Radiance reports a sterling set FY2013 results as its
net profit sailed past the US$50m mark for the first time, to
US$56.8m, +76%. The Group sees strong profit
contribution from subsea services. The timely fleet
expansion sets the Group in prime position to ride rising
E&P spending in key markets in Asia, Africa and South
America.
Global Logistic Properties has entered into a strategic
alliance with Guangdong Holdings (GDH), a leading China
state-owned company, to jointly develop logistics and
industrial facilities in Dongguan, Southern China. Both
parties will collaborate on Guangdong GDH Equipment
Technology Industrial Park (“the Park”), the largest
investment project in Dongguan.
In property news, MCL Land (Brighton) has swooped in on
two adjoining executive condominium (EC) plots in Choa
Chu Kang, offering $375.05 psf ppr for one and $338.94
psf ppr for the other. This works out to a tender price of
$232.5m for Plot A and $210.1m for Plot B. The premium
paid over the second-highest bid for Parcel A and B was
0.48% and 1.74% respectively.
Five more small industrial sites in Tuas were launched
yesterday, in line with JTC Corporation's plan to offer more
affordable land parcels to small and medium-sized
industrialists. The market expects the sites to attract at least
five bids each, with the expected top bid of between $80
and $100 per square foot per plot ratio (psf ppr).
U.S. stocks fell after data showed slower growth in home
prices and a drop in consumer confidence. Home prices in
the U.S. climbed at a slower pace in the year through
December, indicating the market is entering a new stage
that will help sustain further progress. The S&P/Case-Shiller
index of property values in 20 cities rose 13.4% y-o-y in
December after increasing 13.7% the prior month. It was
the first deceleration since June. Meanwhile, consumer
confidence fell to 78.1 (consensus 80) in February from 79.4
the prior month.
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