DBS Vickers Report

Today’s Focus
􀂃 CWT - Undervalued logistics play. Initiate coverage with
BUY recommendation and target price of S$1.82
We initiate coverage on CWT with a BUY recommendation
and target price of S$1.82. CWT is a leading logistics player in
Singapore with global presence in commodity logistics and
marketing. We forecast a 13% EPS CAGR over FY13-15F,
driven by logistics and commodity marketing segments. CWT
is undervalued at just 7.2x FY14 PE and 1x FY14 P/BV vis-a-vis
peers and historical trading bands.
Goodpack is in talks for potential takeover offer. Discussions
are ongoing and it is premature to speculate on the likelihood
of a takeover offer, price, and consequences to Goodpack at
this stage. While Goodpack’s founder, Mr David Lam, who
has a controlling stake of 32%, is open to a takeover offer,
we believe current low valuations could be a hurdle, given
that the autopart business could be an X factor for further rerating
of the stock. We like Goodpack’s resilience during
downturns and ability to leverage the upcycle with
continuous market share gains. Reiterate BUY with higher
target price of S$2.60 (Prev S$ 2.25) as we roll over our
valuation to FY15 (FYE Jun).
Mapletree Industrial Trust has signed an agreement with
Hewlett-Packard Singapore (HP) to develop and lease a new
build-to-suit (BTS) facility at its existing Telok Blangah Cluster.
HP has committed to lease the BTS Facility for an initial tenure
of 10.5 years. The Property will be redeveloped and
repositioned as a high-tech industrial cluster at an estimated
total cost of S$250m.
Rex International announced that North Energy, in which the
Group holds an approximate stake of 5.35%, will commence
drilling campaigns at two of its licences in the third and
fourth quarters of 2014. North Energy is using Rex Virtual
Drilling in high grading possible drilling targets in its portfolio.
Ascott Residence Trust has acquired a rental housing property
in Fukuoka named Infini Garden for JPY6.3 billion (about
S$78.4m) at an EBITDA yield of 6.6%. On a pro forma basis,
the accretive acquisition is expected to increase FY 2013
distribution per unit by 2.1% to 8.58 cents. Ascott REIT
US Indices Last Close Pts Chg % Chg
Dow Jones 􀀘 16,331.1 108.9 0.7
S&P 􀀘 1,872.0 11.2 0.6
NASDAQ 􀀘 4,319.3 11.7 0.3
Regional Indices
ST Index 􀀙 3,057.2 (23.6) (0.8)
ST Small Cap 􀀙 534.0 (2.2) (0.4)
Hang Seng 􀀙 21,182.2 (386.5) (1.8)
HSCEI 􀀙 9,203.1 (157.6) (1.7)
HSCCI 􀀙 3,946.5 (58.8) (1.5)
KLCI 􀀘 1,818.2 0.7 0.0
SET 􀀙 1,361.5 (2.8) (0.2)
JCI 􀀙 4,699.0 (122.5) (2.5)
PCOMP 􀀙 6,417.4 (45.1) (0.7)
KOSPI 􀀙 1,919.5 (18.2) (0.9)
TWSE 􀀙 8,597.3 (92.1) (1.1)
Nikkei 􀀙 14,224.2 (238.3) (1.6)
STI Index Performance
Singapore
Total Market cap (US$bn) 570
Total Daily Vol (m shrs) 1,869
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$)
20 Mar
Target Price
(S$)
ComfortDelgro Buy 1.915 2.19
Global Logistic Properties Buy 2.580 3.31
Keppel Corp Buy 10.430 12.60
Yangzijiang Buy 1.065 1.45
Stock Picks – Small /Mid Cap
Rec’n Price (S$)
20 Mar
Target Price
($)
Ezion Holdings Buy 2.080 3.26
Goodpack Buy 2.230 2.60
China Merchants Buy 0.965 1.32
Pacific Radiance Ltd Buy 0.985 1.20
Nam Cheong Buy 0.315 0.43
Source: Bloomberg Finance L.P., DBS Bank
Singapore
Wired Daily
Page 2
has acquired the 389-unit Infini Garden from The Ascott
Limited (Ascott) and ArcResidential Japan Investments
Limited.
TEHO International has entered into an agreement with
TIEC to acquire the entire issued and paid-up share capital
of TIEC for S$12.3m. TIEC has ongoing property
development projects worth S$60.8m. The diversification
would reduce any over-reliance on the Group’s existing
businesses and contribute an additional stream of revenue
and earnings. The acquisition will be funded by S$7.3m
cash and the remaining to be paid by the issuance of new
shares.
Viva Industrial Trust announced that Standard & Poor's has
reaffirmed Viva Industrial Real Estate Investment Trust's
credit rating of BB+ with a stable outlook.
Tritech Group has been awarded a RMB24.4m waste water
treatment contract in Henan, China. The duration of the
contract is 400 days from the signing of the contact.
US stocks rose as better-than-expected Mar Philadelphia
FED business outlook (actual 9, consensus 3.2) and initial
jobless claims (actual 320k, consensus 322k) overshadowed
concerns that interest rates may rise by 2Q 2015. Investors
also watched the situation in Ukraine, where the
government of Kiev said it plans to reinforce its
eastern border with Russia and withdraw troops from
Crimea. President Obama said the US will impose financial
sanctions on a wider swath of Russian officials and a
Russian bank. Microsoft rose to the highest since July 2000
as CEO Satya Nadella is expected to debut a version of
Office for the iPad at an event next week. AT&T Inc. rose to
lead a rally in phone stocks. Guess? Inc fell after its FY
earnings projection trailed analysts’ predictions