OCBC Report 5 Mar 14

KEY IDEA Tiger Airways: Exiting Indonesia? Reuters reported on Monday that Tiger Airways Holdings (TR) may sell or close Tigerair Mandala (TRM) if there are no signs of a turnaround this year. YTD, TR has clocked S$39.5m in share of loss from TRM; 3QFY14: S$11.2m, 2QFY14: S$7.7m, 1QFY14: S$20.6m (S$13.3m incurred in earlier quarters). We would be positive on a sale of TRM. The carrier lacks the economies of scale for Indonesian market, which is facing increasing overcapacity. TRM has only a 1-2% market share, in stark contrast to Lion Air (46%) and Garuda Indonesia (28%), according to CAPA Centre for Aviation. Using a lower FY14F P/B peg of 1.0x (versus 1.0x previously) as TR is expected to remain loss-making this year, we lower our FV estimate from S$0.42 to S$0.38. Maintain SELL. (Sarah Ong) MORE REPORTS Ezion Holdings: Secures jack-up rig contract Ezion Holdings announced last evening that it has won a contract to provide a jack-up rig to a South Asian based oil company. This contract is worth US$87.6m over a three-year period, and is expected to begin working by early 2015 after its refurbishment and upgrading. The jack-up rig will be deployed in the Arabian Sea in South Asia. Ezion does not expect this event to have a material impact on its FY14 EPS and NTA/share. We maintain our BUY rating and S$2.57 fair value estimate on Ezion, and expect more assets to be deployed by the group in FY14, which will support its growth ahead. (Low Pei Han and Andy Wong)

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NEWS HEADLINES - The US stock market finished Tue with the best gains this year as the S&P 500 closed at a record high for the 49th time in the past 12 months. - JES International has proposed to place up to 50m new shares worth S$7.23m to four private investors. - Amtek Engineering yesterday announced its purchase of US firm Interplex Industries for up to US$210m, in a deal aimed at lifting it beyond the declining hard disk drive market. - Global Logistic Properties announced a strategic alliance with China's state-owned Jinbei Automotive, the warehouse provider's sixth partnership with a Chinese company in two weeks. - Singapore Exchange has placed nine mainboard companies on its watch-list with effect from today. This appears to be the largest number of new entrants to the list in recent times. - Noble Group Ltd said it is in talks with a consortium for a potential joint venture on its agriculture business. - Elektromotive Group has secured three contracts worth a total of £2.9m (S$6.13m) to supply, install and maintain rapid charger stations in England. - Metro will be the new anchor tenant of The Centrepoint from May, refurbish the space vacated by Robinsons and offer shoppers a fresh retail experience by Christmas.