Wednesday, April 30, 2014

DBSVickers Report 30 Apr 14

Dow and Europe were firmer last night. Dow closed +87 at 16535. Dow's trend is turning back up. Dow's future is now -21. Europe opened mixed.

Asian bourses were mixed. Nikkei +16, ShanghaiC +6, Hangseng -320. STI closed +27 at 3265. Volume was 1.8b shares. Gainers were 220 to 234 losers.

Top volumes were Transcu unchanged, Cacola +0.5, Artivision -0.3, Amplefield R -0.1, Hankore -0.2, AdvanceSCT unchanged, GoldenAgr +1, Albedo unchanged, SIIC -0.3, Noble +4.

Trend of STI is down but today's gain is quite strong. Another up with turn it back up unless today is just a window dressing.

Market opend up and stayed up for the whole day. Blue chips particularly the banks were big gainers in the morning but pared off some of the gains. Penny and speculatives were mixed. The big gains in blue chips were likely due to window dressing.

Europe and Dow are looking mixed at the moment.

Tomorrow is May Day holiday.

Daily Summary 30 Apr 14

Dow and Europe were firmer last night. Dow closed +87 at 16535. Dow's trend is turning back up. Dow's future is now -21. Europe opened mixed.

Asian bourses were mixed. Nikkei +16, ShanghaiC +6, Hangseng -320. STI closed +27 at 3265. Volume was 1.8b shares. Gainers were 220 to 234 losers.

Top volumes were Transcu unchanged, Cacola +0.5, Artivision -0.3, Amplefield R -0.1, Hankore -0.2, AdvanceSCT unchanged, GoldenAgr +1, Albedo unchanged, SIIC -0.3, Noble +4.

Trend of STI is down but today's gain is quite strong. Another up with turn it back up unless today is just a window dressing.

Market opend up and stayed up for the whole day. Blue chips particularly the banks were big gainers in the morning but pared off some of the gains. Penny and speculatives were mixed. The big gains in blue chips were likely due to window dressing.

Europe and Dow are looking mixed at the moment.

Tomorrow is May Day holiday.

Tuesday, April 29, 2014

Daily Summary 29 Apr 14

Europe and Dow were up last night. Dow was +87 at 16449. Dow's trend is flattening but with last night's gain the MACDs pulled back up and did not cut down to firm its down trend. Dow's future is now +20. Europe also opened up.

Asian bourses were mixed. Nikkei closed, ShanghaiC +17, Hangseng +321. STI closed -5 at 3238. Volume was 1.5b shares. Gainers were 187 to 247 losers.

STI is starting on its downtrend.

Top volumes were Hankore +0.1, QTVascular IPO closed at 34c, Artivision +1.4, Memstar unchanged, Albedo +0.1, Vallianz -0.1, Equation -0.1, CCM unchanged, Charisma -0.1, Wilmar -9.

Market opened marginally down but fell further to a low of 3223. It recovered some grounds in the last couple of hours to close at 3238. Trading was very quiet and in a very small range. Blue chips were mixed. Penny and speculatives were also mixed.

The low activity could be due to the coming May Day holiday. But it should not make much difference in a market devoid of investors. Let's see what more tricks SGX could bring out to 'stimulate the market'.

Europe and Dow are looking steady at the moment.

OCBC Report 29 Apr 14

KEY IDEA

Raffles Medical Group: Strong track record continues

Raffles Medical Group (RMG) reported its 1Q14 results, with both revenue and PATMI increasing by 8.0% YoY to S$87.6m and S$14.6m, such that topline and bottomline formed 23.0% and 21.4% of our FY14 forecasts, respectively. This is within our expectations as 1Q is seasonally RMG’s weakest quarter. RMG has started construction of its commercial building at Holland Village and is finalising the development plans for its Raffles Hospital extension. It is also in continued negotiations with its partners on working out the details for two separate greenfield hospital development projects in China. We keep our forecasts intact and expect RMG to record revenue and core PATMI growth of 11.7% and 12.1% in FY14, respectively. Rolling forward our valuations to 30x blended FY14/15F EPS, we derive a higher fair value estimate of S$3.90 (previously S$3.6Cool. Maintain BUY. (Wong Teck Ching Andy)


MORE REPORTS

Hutchison Port Holdings Trust: Boost from divestment gain
HPHT reported 1Q14 PATMI of HK$558.9m (EPU: 6.42 HK-cents), which increased 47.0% YoY mostly due to a one-time HK$243.8m gain from the divestment of a 60% stake in ACT. Accounting for this impact, we estimate that 1Q14 PATMI would have constituted 24.1% of our full year forecast, which we judge to be mostly within expectations and consensus. 1Q14 revenues came in at HK$2944.5m, up 2.7% due to ACT’s contributions (acquired in Mar-13), a 1.9% YoY increase in YICT’s throughput and higher average revenue per TEU for HIT and YICT, but partially offset by HIT’s throughput dipping 6% YoY. The trust also reported an uptrend for outbound cargoes to the US and the EU – a major factor determining total container volume handled by HPHT – and management notes that growth outlooks in the US and the Eurozone remain favorable. We update our valuation model for the latest data-points and our fair value estimate increases marginally to US$0.68 from US$0.63 previously. Maintain HOLD. (Eli Lee)

Midas Holdings: Won high-speed train car orders worth CNY146m
Midas Holdings announced last evening that it has secured contracts for high-speed train car body components from CNR Changchun Railway Vehicle Co. Ltd (subsidiary of China CNR) worth CNY146m. Under the terms of the contract, Midas will supply aluminium alloy extrusion profiles and certain fabricated parts for high-speed trains which will operate at speeds of up to 350 km/h. Delivery is slated for 2014. We believe this is part of China Railway Corporation’s (CRC) second round of high-speed train car tender, of which Midas has already won CNY318m of orders (announced on 7 Apr 2014) from CNR Tangshan Railway Vehicle Co. Ltd (another subsidiary of China CNR). The combined value of these contracts amounts to CNY464m, and comes ahead of our CNY325-380m expectation. YTD, Midas has clinched CNY536.9m of orders. We expect the market to react positively to this latest news. Maintain BUY with S$0.66 fair value estimate on Midas.(Wong Teck Ching Andy)

Vard Holdings: 1Q14 results below expectations
Vard Holdings Limited’s (VARD) 1Q14 revenue declined slightly by 2.7% YoY to NOK2.67b, or 21.3% of our FY14 forecast. PATMI slumped 51.1% YoY to NOK92m, forming just 15.5% of our full-year estimate. Although we expect a much stronger 2H, this set of earnings still came in below our expectations. We believe VARD’s Brazilian shipyards continued to rake in losses during the quarter. On a positive note, VARD managed to secure a very large order intake of NOK5.53b (eight vessels) in 1Q14, thus boosting its order book value to NOK21.84b as at 31 Mar 2014. Nevertheless, management cautioned that this round of order wins should be considered as exceptional. We will provide more details after the analyst briefing later. Our Hold rating and S$0.84 fair value estimate is under review. (Wong Teck Ching Andy)

For more information on the above, visit www.ocbcresearch.comfor the detailed report.


NEWS HEADLINES

- The US stock market finished Mon’s session generally higher, after the main indexes swung wildly between gains and losses.

- Growth across Asia should remain steady at around 5.5% overall this year and the next, as advanced economies "turn the corner" towards recovery and fuel global demand, the IMF said.

- Ho Bee Land's first-quarter net profit tumbled 92.1% to S$4.1m from S$52.1m a year ago.

- Grand Banks Yachts has taken a significant step towards being removed from the watch-list of Singapore Exchange.

- Sapphire Corp's shares defied the stock market's general bearish tone yesterday, jumping 38% on news that it was selling its entire flagging steel business in China for S$70m.

- Aspial Corporation continues to expand its presence in Australia with its third Melbourne property purchase this year.

- Fraser and Neave has acquired a 70% interest in Yoke Food Industries Sdn Bhd for RM54.6m (S$21m).

DBSVickers Report 29 Apr 14

Today’s Focus
�� Plantation Companies - Expect higher near-term CPO
prices. Reiterate BUY calls for Bumitama and Wilmar;
downgrade Indofood Agri Resources to HOLD.
We expect higher near-term CPO prices on lower FFB yields
caused by dry weather in Feb14; CY15F yield recovery will be at
risk if El Nino develops. Palm oil supply growth is expected to
decelerate further from CY16F, when new maturities dwindle.
The fair values of the plantation counters under our coverage
are raised by 1-77% as we lifted CY14-16F CPO prices (in USD)
by 6-12% to reflect tighter supply expectations. We now
forecast CPO prices of RM2,790/MT, RM2,680/MT and
RM2,820/MT for FY2014F, FY2015 and FY2016F respectively.
For SGX-listed plantation stocks, Indofood Agri Resources is
downgraded to HOLD (TP: S$ 1.17 (Prev S$ 1.00)) as recent
rally has mostly priced in higher CPO price outlook. We
reiterate our BUY calls for Bumitama Agri, TP: S$ 1.25 (Prev
S$1.19) and Wilmar, TP: S$ 4.00 (Prev S$ 3.92). First Resources
remains a HOLD (TP: S$2.51 (Prev S$ 2.22); Golden Agri
Resources NOT RATED, fair value S$ 0.57 (Prev S$ 0.46).
1Q14 operating results for Hutchison Port Holdings Trust in line
with estimates, with volume growth at both ports. Net profit
was boosted by gains on divestment of stake in ACT. There are
signs of improvement in US/ EU trade flows; we look for 3-4%
volume growth at the Trust’s ports in FY14. Steady DPU
guidance for FY14 maintained. HPHT is a proxy to the global
recovery theme; prospective yield of close to 8% for FY14 is
attractive. Maintain BUY and US$0.76 target price.
Vard Holdings reported weaker earnings for 1Q14 on higher
salaries and related costs. 1Q14 results below expectations as
net profit came in at NOK85m compared to our expectations in
excess of NOK100m. Disappointment is still largely driven by
Brazil operations. Revenue slipped 2.7% to NOK 2.7 bn. Longer
term investment thesis remains intact, despite near term
operational challenges. More updates to follow.
Midas has won RMB146m worth of contracts for high-speed
train car body components. This is the third set of contract wins
for high-speed train car body components in six months and
brings value of year-to-date order wins to RMB536.9m. These
contracts are for trains up to a speed of 350km/h and are
slated for delivery in 2014, helping the Group to achieve a
strong rebound in earnings. Maintain BUY with target price
S$0.64.
US Indices Last Close Pts Chg % Chg
Dow Jones �� 16,448.7 87.3 0.5
S&P �� 1,869.4 6.0 0.3
NASDAQ �� 4,074.4 (1.2) (0.0)
Regional Indices
ST Index �� 3,242.7 (24.9) (0.Cool
ST Small Cap �� 545.6 (3.3) (0.6)
Hang Seng �� 22,132.5 (91.0) (0.4)
HSCEI �� 9,770.1 (28.6) (0.3)
HSCCI �� 4,084.1 (44.7) (1.1)
KLCI �� 1,855.7 (5.2) (0.3)
SET �� 1,411.2 3.1 0.2
JCI �� 4,818.8 (78.9) (1.6)
PCOMP �� 6,604.4 (80.Cool (1.2)
KOSPI �� 1,969.3 (2.4) (0.1)
TWSE �� 8,809.7 35.6 0.4
Nikkei �� 14,288.2 (141.0) (1.0)
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013 2014
100-Day MA
Index
STI
Total Market cap (US$bn) 609
Total Daily Vol (m shrs) 1,890
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$)
28 Apr
Target Price
(S$)
ComfortDelgro Buy 2.11 2.19
Global Logistic Properties Buy 2.75 3.31
Keppel Corp Buy 10.52 12.60
Stock Picks – Small Cap
Rec’n Price (S$)
28 Apr
Target Price
(S$)
Goodpack Buy 2.34 2.60
China Merchants Buy 0.965 1.32
Pacific Radiance Ltd Buy 1.035 1.20
Nam Cheong Buy 0.36 0.46
Centurion Corporation Buy 0.725 0.86
Source: DBS Bank
Singapore
Wired Daily
Page 2
Keppel has signed an engineering services agreement with
Workfox B.V, a subsidiary of the Seafox Group (Seafox), to
embark on an engineering study of a purpose-built
accommodation jackup rig with well intervention and one
of the world’s first with Plug & Abandonment (P&A)
features. This has again demonstrated Keppel’s strong
product innovation and R&D capability.
OKP Holdings has secured a S$19.2m contract from PUB,
the national water agency, to implement drainage
improvement projects at several locations across Singapore.
With the inclusion of this contract, OKP’s gross order book
currently stands at S$388.0m, extending till 2017.
Aspial Corporation has entered into an agreement to
acquire a property located at 54-64 A’Beckett Street,
Melbourne, Australia. The total purchase consideration for
the property is A$26.8m. The property is freehold with an
existing low-rise building with a total land area of
approximately 1,295 sqm.
Growth across Asia should remain steady at around 5.5%
overall this year and the next, according to the International
Monetary Fund (IMF). But it warned that this rosy scenario
could go badly wrong if the tightening in global liquidity
occurs more suddenly and sharply than expected, and if
China's economic slowdown proves more serious than
projected. It expects China's growth to moderate to 7.5%
this year (from 7.7% last year), and then to 7.3% next year.
Singapore's growth is forecast to moderate from last year's
4.1% to 3.6% for this year and the next.
U.S. stocks rebounded from last week’s sell-off on betterthan-
expected pending home sales (actual +3.4% m-o-m,
consensus +1%) amid optimism over merger activity. Pfizer
is still interested in a deal after AstraZeneca spurned its
earlier offer. General Electric Co. shares gained after Chief
Executive Officer Jeffrey Immelt met with France’s President
Francois Hollande over the company’s offer for Alstom SA.
Meanwhile, Bank of America shares fell after saying it will
suspend its planned buybacks and dividend increase
because of an error in its capital planning. Investors are also
watching developments in Ukraine. The Obama
administration imposed sanctions on 7 Russian officials and
17 companies linked to the Russian President Vladimir’s
inner circle involved in banking, energy and infrastructure.

Monday, April 28, 2014

Daily Summary 28 Apr 14

Dow and Europe were down on Friday. Dow -140 at 16361. Dow's trend started to turn down. Dow's future is now +65. Europe opened up.

Asian bourses were mostly down. Nikkei -141, ShanghaiC -33, Hangseng -91. STI closed -25 at 3243. Volume was 1.9b shares. Gainers were 153 against 335 losers.

Trend of STI is turning down as well.

Top volumes were Albedo -0.3, TopGlobal -0.1, Hankore -0.6, Memstar -0.1, SIIC -1.1, CapitaMallsAsia unchanged, GoldenAgr -0.5, CharismaEner unchanged, GSH unchanged, Noble -0.5.

Market opened slightly down but stayed flat most of the day. It only fell in late afternoon to close near day low. Most blue chips were in the red. Penny and speculatives too were mostly red.

Europe have opened up and Dow's future is up at this moment.

OCBC Report 28 Apr 14

CapitaLand Limited: Focused on marketing SG home inventory
CapitaLand (CAPL) reported 1Q14 PATMI of S$182.8m, down 1.7% YoY mostly due to the absence of a one-time S$58.7m divestment gain in 1Q13. 1Q14 PATMI now constitutes 20.8% of our full year forecast and we judge 1Q performance to be mostly in line with expectations. An anemic 34 residential units were sold in Singapore over 1Q14, down significantly YoY from the 544 units sold in 1Q13, due to continued headwinds in the domestic housing segment and a lack of new launches over the quarter. We expect the run-rate to pick up ahead, however, as the group pushes to sell remaining inventory by adjusting prices at slower projects. Management reports that newly operational assets, Raffles City Chengdu and Raffles City Ningbo, are gaining good traction. The retail components for both assets are already 98% and 92% committed, respectively, with tenant sales and shopper traffic showing firm double-digits YoY growth. Maintain BUY with an unchanged FV estimate of S$3.79. (Eli Lee)

MORE REPORTS
Sheng Siong Group: Plans ahead
During Sheng Siong Group’s (SSG) 1Q14 results briefing, management shared updates on growth strategies and business operations. Measures to grow bottom line are: 1) renovation of three stores in FY14, and 2) actively increasing the proportion of goods sold from direct sourcing (currently 55%), which will translate into improved GP margins that are sustainable. In SSG’s usual fashion of prudence, management updated it is in talks for new stores, but would not hesitate to walk away if the price is deemed too high. Finally, the pilot phase in e-commerce has expanded to other areas with a larger base of customers. We think that if this is executed well it will make up for the challenges in opening new stores. Maintain BUY with fair value estimate of S$0.68. (Yap Kim Leng)

CapitaRetail China Trust: Boost from Grand Canyon
CapitaRetail China Trust (CRCT) reported 1Q14 DPU of 2.40 S cents, up 3.9% YoY.
The improved performance was due to contributions from newly-acquired Grand Canyon and higher rentals from existing malls. We note that the asset enhancement works for CapitaMall Minzhongleyuan is near completion, and that ~90.0% of the mall’s total NLA has been secured or in advanced negotiations for leasing commitments. With the mall’s scheduled reopening in 2Q14, we expect it to provide additional rental uplift to CRCT’s earnings. CRCT is currently the top performer in the S-REITs sector, clocking a 13.2% gain YTD. At its present level, we believe that CRCT is justly valued, with limited upside over the near term. As such, we downgrade CRCT to HOLD from Buy. Our fair value is revised marginally from S$1.54 to S$1.55. (Kevin Tan)

CDL Hospitality Trusts: Encouraging 1Q14 results
CDL Hospitality Trusts (CDLHT) reported a 2.2% YoY growth in 1Q14 DPU to 2.75 S cents, ahead of our expectations. Over the quarter, CDLHT witnessed RevPAR growth for both its Maldives and Singapore assets. However, we note that the operating environment in Singapore remains competitive amid a restrained corporate travel budget and larger supply of new hotel rooms, as evidenced by a slight 0.5% decline in average daily rate. For the first 23 days of Apr, we understand that RevPAR for its Singapore hotels eased 1.2%. The Australia hotels, which saw reduced contribution in 1Q as a result of a weaker AUD and lower full-year variable income, may also continue to be impacted by the slower Australia economy and lower activity in the mining sector. However, as we factor in the better-than-expected results, our fair value is now raised to S$1.80 from S$1.65. Maintain HOLD. (Kevin Tan)
Raffles Medical Group: 1Q14 results within our expectations

Summary: Raffles Medical Group (RMG) reported its 1Q14 results this morning, with both revenue and PATMI increasing by 8.0% YoY to S$87.6m and S$14.6m, such that topline and bottomline formed 23.0% and 21.4% of our FY14 forecasts, respectively. This is within our expectations as 1Q is seasonally RMG’s weakest quarter. On a segmental basis, revenue for RMG’s Healthcare Services and Hospital Services segments grew 14.3% and 4.8% YoY, respectively. This was driven by higher patient loads, increased volume of healthcare insurance services and the addition of more specialist consultants. Pending an analyst briefing later, our BUY rating and S$3.68 fair value estimate is under review. (Wong Teck Ching Andy)


For more information on the above, visit www.ocbcresearch.comfor the detailed report.


NEWS HEADLINES

- US stocks slumped Fri, hit by renewed tensions between Russia and Ukraine as well as a batch of disappointing results.

- Singapore's 1Q14 GDP estimates look set to be upgraded, after the manufacturing sector grew by a surprising 12.1% in Mar from a year ago.

- The labour market in Singapore will remain tight until 2020 - and become even tighter for a full decade after that, labour chief Lim Swee Say said.

- Australian food company Goodman Fielder said it had received a takeover offer proposal from Wilmar International Limited and First Pacific Company Limited, but said the offer undervalued the company.

DBSVickers Report 28 Apr 14

Today’s Focus
�� CDL Hospitality Trusts - Downgrade to HOLD, target price
unchanged at S$1.84. We believe share price has factored
in most positives.
The STI finish the week at 3267 that is above our stated 3250
near-term resistance. Still, we believe that forays above the
13.9x (average) 12-mth forward PE level that is current at
c.3255 are unsustainable so long as the earnings downward
revision trend has yet to reverse. Last week’s high of 3285 is
just 15pts shy of the 13.9x (average) blended FY14/15F PE level
at 3300. We maintain our view that a pullback for the STI is
due in the short-term.
This will be an important week for the 1Q reporting season as
all 3 banks, with a combined index weight of nearly 30%,
reports their quarterly results on Wednesday. Shipyards – Cosco
Corp and Yangzijiang, will also announce results on
Wednesday and SembCorp Marine on Friday. Keppel reported
a decent 1Q performance and we expect SembCorp Marine to
be on track. Yangzijiang could beat market expectations while
Cosco Corp struggles to keep its head above water.
Stocks are starting to go ex-dividend during this period. Index
component stocks going XD this week are OCBC, UOB, ST
Engineering and SembCorp Industries.
This will be a heavy week for US economic data releases
culminating with the April employment numbers. Ahead of
Friday’s employment numbers, the FED meeting on Thursday is
expected to result in a USD10bil cut to QE that reduces the
monthly purchase to USD45bil.
CDL Hospitality Trusts (CDL HT) reported a decent set of 1Q14
results, within expectations. DPU rise c.2.0% to 2.75Scts (23%
of estimates). This was on the back of a 15% y-o-y and 4%
growth in revenues and net property income, respectively.
Room rates are on an uptrend; Maldives resorts are expected to
perform strongly. While CDL HT remains a beneficiary of rising
RevPAR, its share price has performed well recently, up c.15%
higher YTD. We believe the share price has factored in most
positives. Downgrade to HOLD, target price unchanged at
S$1.84.
US Indices Last Close Pts Chg % Chg
Dow Jones �� 16,361.5 (140.2) (0.Cool
S&P �� 1,863.4 (15.2) (0.Cool
NASDAQ �� 4,075.6 (72.Cool (1.Cool
Regional Indices
ST Index �� 3,267.6 (16.4) (0.5)
ST Small Cap �� 548.9 (1.1) (0.2)
Hang Seng �� 22,223.5 (339.3) (1.5)
HSCEI �� 9,798.7 (141.9) (1.4)
HSCCI �� 4,128.8 (36.1) (0.9)
KLCI �� 1,861.0 (4.3) (0.2)
SET �� 1,408.2 (14.5) (1.0)
JCI �� 4,897.6 6.6 0.1
PCOMP �� 6,685.1 (46.2) (0.7)
KOSPI �� 1,971.7 (26.7) (1.3)
TWSE �� 8,774.1 (171.3) (1.9)
Nikkei �� 14,429.3 24.3 0.2
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013 2014
100-Day MA
Index
STI
Total Market cap (US$bn) 609
Total Daily Vol (m shrs) 2,301
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$)
25 Apr
Target Price
(S$)
ComfortDelgro Buy 2.10 2.19
Global Logistic Properties Buy 2.78 3.31
Keppel Corp Buy 10.51 12.60
Stock Picks – Small Cap
Rec’n Price (S$)
25 Apr
Target Price
(S$)
Goodpack Buy 2.33 2.60
China Merchants Buy 0.965 1.32
Pacific Radiance Ltd Buy 1.065 1.20
Nam Cheong Buy 0.36 0.46
Centurion Corporation Buy 0.74 0.86
Source: DBS Bank
Singapore
Wired Daily
Page 2
Capitaland reported a 3.4% y-o-y drop in revenue from
continuing operations (excl Australand) to S$612.6m while
net profit was 13.3% lower at S$147.4m. Profits for the
rest of 2014 will be boosted by higher performance from
Singapore as well as contributions from China. The
privatisation offer for CMA is ongoing and if successful,
should lift Capitaland’s RNAV. Maintain Buy, and S$3.85
target price.
China Merchants Hldgs’ (CMHP) 1Q14 net profit of
HK$148m (+15% y-o-y) was largely in line with
expectations. Organic growth is expected to remain steady,
with 7% rise in toll revenue. CMHP’s balance sheet
continues to strengthen on firm cash flows, and with
completion of the disposal of its NZ property business with
proceeds of over HK$350m, the Group is in a good position
to make further toll road acquisitions to grow its business.
Maintain BUY and S$1.32 target price; the stock is currently
trading cum dividend of 4.25Scts.
Wilmar and Hong Kong's First Pacific Company have made
a A$1.3 bn (A$0.65 per share) takeover offer for Australian
food company Goodman Fielder. However, Goodman
Fielder said the offer undervalued the company. Wilmar,
which already owns 10.1% of the company, said Goodman
Fielder would be privatised and its shares would be de-listed
from the ASX and NZX if the deal proceeds.
China International Holdings is proposing private placement
of 150m new shares at S$0.051 per share. The placement
price represents a discount of approximately 1.92% to the
last volume weighted average price. The estimated net
proceeds of approximately S$7.6m will be used for general
working capital for the Group.
Singapore’s manufacturing sector grew by a surprising
12.1% in March from a year ago, boosted by double-digit
jumps in transport engineering and biomedical output. The
strong, broad-based growth caught the market off-guard;
median growth forecast was for 6.4% growth. March's
growth in industrial production marked the second
consecutive month of double-digit expansion, following
February's revised year-on-year pace of 13.1% (previously
estimated at 12.8%). Though the biomedical manufacturing
cluster grew 16.4% in March from a year ago - helped by a
19.4% expansion in the pharmaceuticals segment - it was
not the sole driver of growth. Output of the transport
engineering cluster surged 29.4%, boosted by its marine &
offshore engineering segment, which expanded 45.1%,
with several rig building and ship building projects achieving
milestone completion last month. All other clusters also
expanded in March. Electronics production grew 8.7%,
driven by a 14.1% output increase in the semiconductors
segment. Expansion was also seen in the chemicals (5.2%),
precision engineering (4.3%) and general manufacturing
industries (1%) clusters. In sequential terms, manufacturing
output outstripped market expectations of a 6.1% increase
from February, after seasonal adjustments. Excluding
biomedical manufacturing, output rose 1.6% from the
previous month.
Resale prices of public flats slipped for the third consecutive
quarter, and the market expects this downtrend to continue
amid market caution and a large supply of new flats coming
onstream. Data from the Housing and Development Board
(HDB) showed that resale prices in the first quarter fell 1.6%
from the previous quarter ago, following a 0.9% dip in the
third quarter and 1.5% decline in the fourth quarter of last
year. Resale transactions fell 5% in the quarter to 3,781.
U.S. stocks fell following disappointing results from
Amazon.com Inc. Amazon predicted an operating loss in
the current quarter. Geopolitical tension also contributed to
the sell-off. U.S. Secretary of State warned Russian President
that he’s running out of time to ease tension in Ukraine as
Russia began new military exercises on the country’s border.

Friday, April 25, 2014

Daily Summary 25 Apr 14

Dow and Europe were flat last night. Dow closed unchanged at 16502. Dow's trend is up. Dow's future is now -25. Europe opened down.

Asian bourses were mostly down. Nikkei +24, ShanghaiC -21, Hangseng -339. STI closed -16 at 3268. Volume was 2.3b shares. Gainers were 177 to 260 losers.

Trend of STI is flattening.

Top volumes were Top Global +0.1, Memstar -0.1, HanKore -0.3, CapitaMallAsia +1, Equation +0.1, Transcu unchanged, Albedo -0.1, POSH(IPO) closed1.155, SIIC +1.5, CharismaEner -0.2.

Market opened down and closed slightly lower at the end of the day. Blue chips were mostly red with profit taking for the weekend. Penny and speculatives too were more losers than gainers.

Overall market is stable.

Dow and Europe are looking slightly weaker for tonight.

OCBC Report 25 Apr 14

KEY IDEA

Suntec REIT: Pure operational boost in 1Q14
Suntec REIT posted a strong recovery in its 1Q14 results, with NPI and distributable income rising 42.7% and 7.0% YoY to S$43.8m and S$50.9m respectively. The increase was due mainly to the opening of Suntec City Phase 1 and contribution from its recent acquisition in Sydney. Over the quarter, Suntec REIT continued to make significant progress on its leasing activities. On its capital management, we note that it has also signed a S$800m five-year unsecured loan facility to refinance the outstanding balance of its S$1.1b loan facility due in 2014 and 2015. Together with the recent private placement to pre-pay its S$350m debt due in 2015, Suntec REIT no longer has any refinancing needs till 2016. We maintain BUY with unchanged S$1.85 fair value on Suntec REIT. (Kevin Tan)


MORE REPORTS

Sheng Siong Group: Margin improvement drives 1Q14 results
Sheng Siong Group’s (SSG) 1Q14 revenue increased by 5.7% YoY to S$190m, forming 26.3% of our FY14 forecast. This is within expectations as 1Q results are typically stronger due to Chinese New Year. As a result of better gross profit (GP) margin, 1Q14 operating profit increased proportionally higher by 20.7% to S$12.5m (vs. 5.7% YoY increase in revenue), forming 29.0% of our FY14 forecast. GP margin improved from 22.5% in 1Q13 to 23.8% in 1Q14, which we identify as the key driver for the significant YoY increase in operating profit as COGS made up 82.1% of operating costs in the quarter. We see limited downside to the share price at the last close of S$0.60 as FY14F dividend yield at 4.8% is expected to lend strong support. Maintain BUY with fair value estimate of S$0.68. (Yap Kim Leng)

Roxy-Pacific Holdings: Acquiring commercial asset in Sydney Australia
Roxy announced yesterday that it has acquired, for AUD90.2m, a property located at 59 Goulburn Street, Sydney, NSW, Australia. This is located in the central CBD opposite the World Square development and is also adjacent to Sydney’s Chinatown. The freehold asset has 18.9k and 546 sqm of commercial and retail net lettable area, respectively, with 126 car park spaces. The current occupancy stands at 89%, with a passing net income of S$6.6m which translates to a NPI yield of 7.3% - a reasonable price in our view. Given continued uncertainties in the Singapore housing space, we like that management is growing its recurring income streams, in addition to recurring contributions from the Grand Mercure Roxy hotel asset in Singapore, and diversifying its portfolio geographically. Maintain HOLD with an unchanged fair value estimate of S$0.61 per share. (Eli Lee)
For more information on the above, visit www.ocbcresearch.comfor the detailed report.

NEWS HEADLINES

- The US stock market finished Thu generally higher as positive earnings and stronger-than-expected data outweighed worries over military escalation near Ukrainian border.

- Businesses in Singapore may not face more months of sharp increases in industrial prices and rents as a huge supply of completed industrial space comes onstream from now until 2016.

- Shares of SMRT Corp yesterday rocketed up 19 cents, or 18.5%, to a four-month high of S$1.215 on a high volume of 14.6m shares, prompting a query from SGX.

- Thakral Corporation has unveiled new growth plans across its divisions in the hopes of bringing positive returns to shareholders.

- A tough macro environment in Singapore has led Hong Leong Finance to post a 5.4% decline in net profit to S$14.43m for 1Q14.

- Temasek Holdings' offer for Olam International has been declared unconditional, as the level of acceptances crossed the 50% mark of Olam's maximum potential share capital.

- Negotiations are under way for a potential sale of Equity Plaza, a landmark quadrant-shaped office block beside Republic Plaza in the Raffles Place financial district.

- The outgoing chairman of Asiasons Capital has sold his one-third stake in two vehicles through which he jointly controlled a deemed 49.3% stake in the investment firm, leaving him with just a 3.8% direct interest.

DBSVickers Report 25 Apr 14

Today’s Focus
 Shipyards: 1Q14 results preview - Keppel reported a
decent 1Q performance and we expect SMM to be on
track. Yangzijiang could beat market expectations while
Cosco struggles to keep its head above water
 Suntec REIT - Delays in Suntec Mall refurbishment.
Downgrade to HOLD, target price cut to S$1.66
1Q14 results preview for Shipyards. Keppel Corp reported a
decent 1Q performance that saw its O&M profits growing 11%
y-o-y with a healthy operating margin of 14.2%.
For Keppel Corp, we are more bullish than the street and
believe that Yangzijiang could deliver a net profit growth of
9% y-o-y to Rmb780m in 1Q14, aided by a 10-ppt reduction in
tax rate following the accreditation of high-tech status for its
new yard in March. This represents 26%/33% of our/consensus
estimates for FY14. We think that peers may have
underestimated its shipbuilding margins. We expect
1Q net profit for Sembcorp Marine is expected to grow 10% yo-
y to S$130m, driven by higher orderbook recognition.
Operating margin is sustainable at around 11%, bolstered by
higher contribution from more profitable repair business and
own proprietary designs.
We have relatively low visibility on Cosco. The group is barely
breaking even with its net margin dipping to 0.5% in 4Q13.
The market is hopeful to see an earnings recovery for Cosco
this year after its massive provisions in FY13, hinging on an
improved shipping market. We project net profit to recover
from S$4.6m in 4Q13 to S$8m in 1Q14.
Our top picks are Keppel and Yangzijiang.
1Q14 results for Suntec REIT in line. DPU was flat at 2.2Scts.
The opening of Phase 2 of Suntec Mall is understood to be
delayed to 2H14 due to engineering issues. Phase 3 remains on
track to complete by 4Q14 and begin operations in 1Q15. As a
result of the updated construction schedules, we moderate our
FY14- 15F DPU by -2 to -3% and also updated our estimates to
account for a larger share base due to the recent placement.
Given limited upside to our revised target price of S$1.66 (Prev
S$ 1.7Cool, we downgrade our call to HOLD.
US Indices Last Close Pts Chg % Chg
Dow Jones  16,501.7 - -
S&P  1,878.6 3.2 0.2
NASDAQ  4,148.3 21.4 0.5
Regional Indices
ST Index  3,283.9 25.9 0.8
ST Small Cap  549.9 3.5 0.6
Hang Seng  22,562.8 53.2 0.2
HSCEI  9,940.6 35.0 0.4
HSCCI  4,164.9 3.0 0.1
KLCI  1,865.3 (2.1) (0.1)
SET  1,422.7 (0.7) (0.1)
JCI  4,891.1 (2.1) (0.0)
PCOMP  6,731.3 (38.2) (0.6)
KOSPI  1,998.3 (2.0) (0.1)
TWSE  8,945.5 (11.5) (0.1)
Nikkei  14,405.0 (141.3) (1.0)

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$bn) 605
Total Daily Vol (m shrs) 2,314
12m ST Index High 3,454
12m ST Index Low 2,960
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price (S$)
24 Apr
Target Price
(S$)
ComfortDelgro Buy 2.090 2.19
Global Logistic Properties Buy 2.790 3.31
Keppel Corp Buy 10.590 12.60
Stock Picks – Small Cap
Rec’n Price (S$)
24 Apr
Target Price
(S$)
Goodpack Buy 2.310 2.60
China Merchants Buy 0.960 1.32
Pacific Radiance Ltd Buy 1.060 1.20
Nam Cheong Buy 0.365 0.46
Centurion Corporation Buy 0.740 0.86
Source: DBS Bank
Singapore
Wired Daily
Page 2
Ascendas India Trust (a-itrust) reported a 4Q14 DPU of 1.22
Scts (+11% y-o-y), bringing full year DPU to 4.52 Scts,
slightly ahead of expectations. Aviator and aVance’s third
building are the key drivers to earnings. a-itrust offers stable
organic growth outlook, while the low gearing level opens
up opportunities for acquisitions. Maintain HOLD, target
price raised to S$0.75 (Prev S$ 0.73). The expected
weakness of the INRSGD is likely to cap re-rating
opportunities in the near term, in our view.
Ascott Residence Trust’s 1Q14 results in line. Various
refurbishment plans initiated, which are expected to see
rates increase going forward. Acquisition growth is still a
main catalyst. BUY maintained, target price S$1.33. Ascott
REIT offers a stable growing earnings profile of c.2-3% over
FY13F-15, and its yields of 7.0-7.2% is attractive.
CapitaRetail China Trust (CRCT) reported impressive growth
in 1Q14. The strong 1Q growth was led by organic
expansion and new contributions. We expect earnings to be
even better in 2H with the reopening of Minzhong Leyuan
in May. Maintain BUY, target price raised to S$1.62 (Prev S$
1.56). CRCT offers FY14-15 DPU yields of 7.4-8.1%.
Frasers Commercial Trust’s 1Q14 DPU of 2.30 Scts in line.
Alexandra Technopark operations continue to strengthen,
more upside in store when master lease expires in Aug’14.
Maintain BUY, target price S$1.46. FY14-15F prospective
yields of 6.4%-7.0% remain attractive.
1Q14 earnings for Sheng Siong Group were slightly ahead
on better than expected revenue growth and margin
expansion. We expect growth from existing stores to be
backed by resilient same store sales growth (SSSG) and
improved cost efficiencies. FY14F/FY15F earnings raised by
+6%/+5%. Maintain BUY with higher TP of S$0.76 (Prev S$
0.72).
Metech International proposed placement of up to 160m
new shares at an issue price of S$0.0144 per share. The
placement price represents a discount of approximately
10% to the last weighted average price. The net proceeds
of about S$2.3m will be used to expand its business
operations in US and Asia and for working capital purposes.
Negotiations are under way for a potential sale of Equity
Plaza, a landmark quadrant-shaped office block beside
Republic Plaza in the Raffles Place financial district. Talk in
the market is that listed GSH Corporation and its chairman
and key shareholder, Sam Goi Seng Hui, are teaming up
with a view to acquire the 28-storey office tower. They may
be entering an exclusive due diligence period on the asset,
BT understands. The price is thought to be around $550-
560m, which would work out to $2,177-$2,217 psf based
on the building's net lettable area of about 252,600 sq ft.
Businesses may not face more months of sharp increases in
industrial prices and rents as a huge supply of completed
industrial space - about six million square metres - comes
onstream from now until 2016. While prices and rentals of
industrial space continued to rise in the first quarter, the
pace was significantly lower than the average annual
increase in the past four years, according to data released
by JTC Corporation. The first quarter saw transaction prices
of industrial space increase 3.8% quarter on quarter and
2.5% year on year, compared to an average annual growth
of about 20% in the last four years. Industrial rentals rose
0.4% quarter on quarter and 4.9% year on year, compared
to an average annual growth of about 10% in the last four
years. The quarter saw occupancy rates of Singapore's
industrial property market fall by 0.3 percentage points to
91.6% from the previous quarter as supply outstripped
demand.

Thursday, April 24, 2014

Daily Summary 24 Apr 14

Dow and Europe were slightly down last night. Dow -13 at 16502. Dow's trend is still up. Dow's future is +33 at the moment. Europe opened firmly up.

Asian bourses were mixed. Nikkei -141, ShanghaiC -10, Hangseng +53. STI closed +24 at 3282. Volume was 2.3b shares. Gainers were 332 to 157 losers.

Trend of STI is up.

Top volumes were Memstar -0.7, HanKore +0.1, CharismaEner +0.1, Vallianz +0.8, Equation unchanged, Albedo unchanged, Cacola +0.3, Rex +4, GoldenAgr +0.5, APAC Strat +0.7.

Market opened flat but gained grounds through the day to close at day high. Blue chips were mostly firmer. Speculatives and penny stocks were also mostly up.

Europe and Dow are looking good tonight.

OCBC Report 24 Apr 14

KEY IDEA

Cache Logistics Trust: Looking beyond 2014
Cache Logistics Trust (CACHE) delivered 1Q14 DPU of 2.14 S cents, representing a YoY decline of 4.2%. However, this is within expectations as the unit base has risen due to the private placement in Mar 2013. CACHE’s portfolio continued to exhibit strength, with occupancy holding steady at 100% and weighted average lease to expiry healthy at 2.9 years. During the quarter, CACHE also renewed its master lease at Kim Heng warehouse for another two years. Only 2% of portfolio GFA is now left for renewal in 2014. As announced last week, CACHE has secured an agreement to develop and lease a build-to-suit (BTS) ramp-up warehouse. In our view, the contract will not only provide CACHE with quality recurring income, enhance its lease expiry profile, but also strengthen its market position in modern ramp-up warehouse in Singapore. We maintain BUY with unchanged fair value of S$1.25 on CACHE. (Kevin Tan)

MORE REPORTS

CapitaMall Trust: Sustained growth momentum
CapitaMall Trust (CMT) reported 1Q14 DPU of 2.57 S cents, 4.5% higher than that achieved in 1Q13. This met 23.4% of both ours and consensus full-year DPU projections. The better performance was driven mainly by higher occupancy at Plaza Singapura and Atrium@Orchard, and completion of Phase 1 asset enhancement initiative (AEI) at IMM Building. Looking ahead, CMT will continue to focus on executing its AEIs at Bugis Junction and Tampines Mall. In addition, it will also embark on Phase 2 AEI at IMM Building and reconfigure Level 2 of JCube to increase the retail offerings and enhance the shoppers’ experience. We are making minor adjustments to our forecasts except incorporating the FRS111 Joint Arrangements accounting principle into our model. Maintain BUY with unchanged S$2.20 fair value on CMT. (Kevin Tan)
Frasers Commercial Trust: Sound underlying performance
Frasers Commercial Trust (FCOT) reported 2QFY14 DPU of 2.05 S cents (+3.0% YoY), in line with our expectations. China Square Central (CSC) continued to bolster FCOT’s performance, and helped to mitigate the softer showing at its Australia properties. Looking ahead, we remain positive on FCOT’s Singapore portfolio, as CSC is expected to continue to benefit from its asset enhancement works and better connectivity with the opening of Telok Ayer MRT station, while Alexandra Technopark is likely to see meaningful rental uplift upon the master lease expiry in Aug. For its Australian assets, we believe the income may continue to suffer from weaker AUD. As such, we are making minor adjustments to our forecasts to factor in the potential weakness; but there is no change to our fair value of S$1.45. Maintain BUY. (Kevin Tan)

Singapore Exchange: 3QFY14 results within expectations
Singapore Exchange (SGX) reported 3QFY14 results which came in within our expectations. Operating revenue fell 13.1% YoY but inched up 0.6% QoQ to S$165.6m, while net earnings dipped 22.4% YoY but rose 1.1% QoQ to S$75.8m. The YoY decline was driven largely by lacklustre Securities revenue (-32.1% to S$52.3m) as the daily average traded value slumped 37% to S$1.1b. Although SGX’s Derivatives revenue slipped slightly by 1.5% YoY to S$52.3m, there was an encouraging 10% growth in contract volumes if we exclude Nikkei 225 futures and options, which had a very strong 3QFY13. Another key highlight during 3QFY14 was SGX’s announcement of a series of initiatives to improve the quality and liquidity of the securities market. For 9MFY14, operating revenue was almost flat at S$514.2m (+0.3%), forming 71.5% of our full-year forecast. Net earnings of S$243.0m represented a decline of 2.1% and constituted 72.3% of our FY14 projection. We are expecting a better 4Q ahead. An interim dividend of 4 S cents/share was declared, similar to 3QFY13, and brings 9MFY14 declared dividends to 12 S cents/share. Looking ahead, SGX expects its FY14 operating expenses to come in around S$310-315m, an improvement from its previous S$320-330m guidance. It also intends to expand its distribution network and product offerings, which includes introducing RMB futures in 1QFY15 (subject to regulatory approvals). For now, we maintain our HOLDrating and S$7.22 fair value estimate on SGX. (Carmen Lee and Research Team)

CapitaRetail China Trust: Positive start to FY14
CapitaRetail China Trust (CRCT) reported 1Q14 NPI of S$32.3m and distributable income of S$19.6m, representing a 25.0% and 13.2% YoY growth, respectively. DPU was up 3.9% to 2.40 S cents. This makes up 25.1% of our FY14 DPU forecast, which is in line with expectations. The improved performance was due to contribution from newly acquired CapitaMall Grand Canyon and strong rental reversions of 23.0% from its existing assets. Management disclosed that the asset enhancement works for CapitaMall Minzhongleyuan is near completion, and that ~90.0% of the mall’s total NLA has been secured or in advanced negotiations for leasing commitments. With the mall’s scheduled reopening in 2Q14, we expect it to provide additional rental uplift to CRCT’s earnings. We keep our BUY rating on CRCT, but now place our S$1.54 fair value under review as we incorporate the results into our model. (Kevin Tan)
For more information on the above, visit www.ocbcresearch.comfor the detailed report.

NEWS HEADLINES
- The US stock market ended Wed’s choppy session lower, as investors paused for breath after six-straight days of gains on the S&P 500 and Nasdaq Composite.
- Higher domestic costs - particularly rising wages - are now pushing prices up, and are expected to continue to do so over the rest of this year.

- Mapletree Commercial Trust yesterday reported a DPU of 1.953 S cents for its 4QFY14, up 12.4% from 1.737 S cents a year ago.

- The board of directors of AIMS AMP Capital Industrial REIT Management Limited said yesterday that Standard & Poor's had reaffirmed its BBB- credit rating for the trust.

- United Industrial Corp has obtained enough acceptances to raise its shareholding in Singapore Land to 90.15%, allowing the parent developer to privatise its subsidiary.

- Sunpower Group plans to sell up to 65.8m new shares, or one-fifth of its existing share capital, at 14 S cents apiece through a private placement to raise S$9.2m.

- Global Logistic Properties has signed five new lease agreements totalling 155,000 sqm in China.

DBSVivkers Report 24 Apr 14

Today’s Focus
�� Mapletree Commercial Trust - Storming ahead; upgrade to
BUY, target price raised to S$1.41
�� Mapletree Industrial Trust - Improving portfolio quality;
maintain BUY, target price nudged up to S$1.53
Mapletree Commercial Trust reported a sterling set of FY14
results, beat expectations. 4Q14 DPU grew 12% to 1.95Scts,
translating into FY14 DPU of 7.37Scts (+14% y-o-y). VivoCity
drove strong rental reversions, testament to the Manager’s
active leasing strategy. Upgrade to BUY after adjusting for
higher earnings from Vivo City; raised target price to S$1.41
(Prev S$ 1.32). At current price, the stock offers yields of 6.0%-
6.4% and a total return of 18%.
Mapletree Industrial Trust reported a strong set of 4QFY14
results. 4Q14 DPU of 2.51 Scts (FY14: 9.92 scts) beat
expectations on the back of stronger operations (sustainable
strong rental reversions, high occupancy of 91.3%) and lower
interest expense. Positive rental reversions and inorganic
growth are expected to drive earnings going forward. Maintain
BUY, target price nudged up to S$1.53 (Prev S$ 1.50) after
rolling forward valuation base.
1Q14 profit for Cache Logistics Trust in line; DPU fell 4.2% y-oy
to 2.14 Scts due to a larger share base. Cache offers high
income visibility in rest of 2014 with only 2% of leases expiring.
Cache has also embarked on the largest built-to-suit project for
DHL, a key driver of inorganic growth. We have assumed
Cache would fund this acquisition with debt and expect
gearing to settle at c.36% upon completion (vs 29% currently).
gearing to settle at c.36%. Maintain BUY. The stock is
attractive, offering yields of close to 7.3%-7.7% and a total
return of 16% to our target price of S$1.29.
2Q14 results for Frasers Centrepoint Trust in line, DPU rises 7%
y-o-y to 2.88Scts. Changi City Point (CCP) acquisition to be
completed in May, we expect S$120m of fund raising for CCP.
Maintain BUY, target price S$2.13. The stock is currently
trading at yields of 6.3-6.6%, or 1.0 P/BV.
Capitamall Trust’s 1Q14 results in line. DPU grew 5% to
2.57Scts. The Manager has announced that the Trust will
undertake AEI works at JCube and IMM, actively repositioning
both malls to benefit portfolio over the longer term. Maintain
HOLD, target price S$2.16. The stock is currently trading at
yields of 5.6-5.8%.
US Indices Last Close Pts Chg % Chg
Dow Jones �� 16,501.7 (12.7) (0.1)
S&P �� 1,875.4 (4.2) (0.2)
NASDAQ �� 4,127.0 (34.5) (0.Cool
Regional Indices
ST Index �� 3,258.0 (19.5) (0.6)
ST Small Cap �� 546.5 (3.7) (0.7)
Hang Seng �� 22,509.6 (221.0) (1.0)
HSCEI �� 9,905.6 (125.1) (1.2)
HSCCI �� 4,161.9 (40.9) (1.0)
KLCI �� 1,867.4 0.9 0.0
SET �� 1,423.4 8.3 0.6
JCI �� 4,893.1 (5.1) (0.1)
PCOMP �� 6,769.5 (15.4) (0.2)
KOSPI �� 2,006.8 6.4 0.3
TWSE �� 8,956.9 (17.Cool (0.2)
Nikkei �� 14,546.3 157.5 1.1
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013 2014
100-Day MA
Index
STI
Total Market cap (US$bn) 608
Total Daily Vol (m shrs) 2,042
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$)
23 Apr
Target Price
(S$)
ComfortDelgro Buy 2.03 2.19
Global Logistic Properties Buy 2.76 3.31
Keppel Corp Buy 10.63 12.60
Stock Picks – Small Cap
Rec’n Price (S$)
23 Apr
Target Price
(S$)
Goodpack Buy 2.32 2.60
China Merchants Buy 0.96 1.32
Pacific Radiance Ltd Buy 1.065 1.20
Nam Cheong Buy 0.355 0.46
Centurion Corporation Buy 0.73 0.86
Source: DBS Bank
Singapore
Wired Daily
Page 2
Frasers Commercial Trust (FCOT) reported a c.4% and c.6%
y-o-y decline in gross revenue and NPI to S$28.6m and
S$21.7m respectively. The slight dip in performance were
mainly coming a weaker AUD-SGD exchange rate and
slightly lower occupancy at Central Park property (93.3%),
which was offset by higher rentals achieved for its China
Square Central property post the refurbishment of its office
tower. DPU of 2.05 Scts was declared, + 3% y-o-y. Gearing
remains at c. 37.8%, within management optimal range.
More updates after briefing today.
Earnings for Singapore Exchange were in line with
expectations, on weaker securities markets and flattish
derivatives revenues. Base DPS of 4 Scts declared as
expected. Securities market is expected to remain
unexciting. With recent launches of an enlarged suite of
derivatives products, derivatives will be its saving grace.
Maintain HOLD; target price lowered to S$7.05 (Prev S$
7.15) after cutting earnings by 3-4% over FY14-16F.
StarHub has reversed its decision to charge for 4G access,
while M1 and SingTel are reviewing their pricing plans after
Infocomm Development Authority (IDA) steps in. All three
telcos had been offering 4G as a free value-added service
(VAS) to subscribers. StarHub said last week that it would
begin charging mobile subscribers using its 4G service $2.14
per month from June.
Yangzijiang has entered into an agreement with several
strategic partners to subscribe for up to Rmb150m equity
interest in the capital of Jiangsu New Material Industrial
Venture Capital Enterprise (Limited Partnership) (JNMIV),
thereby making JNMIV an associate of the Company. JNMIV
is practically a private equity fund with expected operational
term of 7 years and paid up capital of approximately
Rmb500m (which Yangzijiang will contribute up to
Rmb150m only). It aims to generate capital gains from
investment in new materials in terms of its technologies,
products, equipment and services. This investment is
immaterial as it represents only <1% of Yangzijiang's NAV
and market cap.
Together with the other two partners, the State Oil
Company of Azerbaijan Republic (SOCAR, 65% stake) and
Azerbaijian Investment Company (AIC, 25% stake), Keppel
Corp announces that its 10%-owned associate - Baku
Shipyard has secured its first major contract worth
US$378m from BP Exploration (Shah Deniz), the operator of
the Shah Deniz gas field development, to design and build a
Subsea Construction Vessel (SCV). This contract will not
form part of Keppel's orderbook as Baku Shipyard is just an
associate. However, as Baku Shipyard is relatively new, there
could be pull through orders for Keppel, particularly the
higher value add jobs, to be announced in due course.
Singapore’s March inflation rebound to 1.2% from
February's four-year low of 0.4%, widely expected, though
a shade stronger than the 1.1% market forecast, on the
back of higher food, healthcare, education, recreation and
other services costs. Higher domestic costs - particularly
rising wages - are pushing prices up, and are expected to
continue to do so over the rest of this year. These also
pushed core inflation to 2% last month, from 1.6% in
February, to overtake overall inflation for a fourth
consecutive month.
China's factory activity shrank for the fourth straight month
in April - signalling economic weakness into the second
quarter - a preliminary survey showed yesterday, although
the pace of decline eased, helped by policy steps to arrest
the slowdown. The HSBC/Markit flash Purchasing Managers
Index (PMI) for April rose to 48.3 from March's final reading
of 48.
U.S. stocks dipped and Treasuries rose after data showed
new home sales for March tumbled 14.5% m-o-m, far
worse than consensus expectation for 2.3% gain. Sales of
new U.S. homes plunged in March to 384k, an 8-month
low. The Markit Economics preliminary U.S. manufacturing
index decreased to 55.4 in April from a final reading of 55.5
a month earlier. AT&T Inc. shares fell as more customers
opted to pay full price for smartphones in exchange for
lower bills in the future, putting pressure on profits. Amgen
Inc. shares fell after sales for its best-selling arthritis drug
missed analysts’ estimates. Boeing Co. gained after a boost
in jetliner deliveries helped profit top forecasts. In after
hours trade, Apple shares rose after posting higher-thanestimated
EPS for the fiscal second quarter, raised its
dividend payout and expanded a buyback program.
Facebook said reported better-than-estimated sales and
profit for the first quarter.

Wednesday, April 23, 2014

Daily Summary 23 Apr 14

Europe and Dow were up last night. Dow closed +65 at 16514. Dow's trend is up. Dow's future is +3 at the moment. Europe opened down.

Asian bourses were mixed. Nikkei +158, ShanghaiC -5, Hangseng -221. STI closed -21 at 3256. Volume was 2b shares. Gainers were 169 to 311 losers.

Trend of STI is still up but looking toppish.

Top volumes were HanKore +0.2, Memstar +0.3, OttoMarine +0.4, CharismaEner -0.2, Transcu unchanged, CCM unchanged, GoldenAgr +0.5, CapitaMallAsia +1, SIIC +0.2, Vallianz -0.3.

Market opened down and went down further with some profit taking. Blue chips were mixed. Penny and Speculatives were also weaker.

Europe opened slight down while Dow's future is flat at the moment.

OCBC Report 23 Apr 14

KEY IDEA

Frasers Centrepoint Trust: Performance to get better
Frasers Centrepoint Trust (FCT) reported 2QFY14 DPU of 2.88 S cents, up 6.7% YoY. This is largely within our view, given that first-half DPU of 5.38 S cents met 47.8% of our FY14F DPU. We note that portfolio occupancy has maintained steady at 96.8% (1Q: 96.7%), while rental reversions stayed robust at 9.3% (1Q: +2.5%) for the leases renewed during the quarter. Looking ahead, FCT reiterated that Causeway Point and Northpoint are expected to underpin growth within its existing portfolio, as both malls contribute to the bulk of the lease renewals in FY14-15. As announced on 8 Apr, FCT has proposed to acquire Changi City Point for S$305.0m. We view this addition as timely, as it will provide another boost to DPU in an otherwise moderating growth portfolio. Maintain BUY with unchanged S$2.02 fair value on FCT. (Kevin Tan)


MORE REPORTS


Mapletree Logistics Trust: Closing FY14 on positive note
Mapletree Logistics Trust (MLT) reported 4QFY14 DPU of 1.89 S cents, up 9.2% YoY. This is in line with both our and consensus expectations. Operationally, MLT has been exhibiting resilience, as evidenced by its stable portfolio occupancy and healthy rental reversion achieved during the year. Going forward, management expects the demand for logistics facilities in its markets to remain robust, while rental reversion to stay positive. MLT also said that it will focus on driving organic and inorganic growth. We believe MLT may carry out capital recycling to partially fund the potential investments, given that it has identified a few lower yielding assets for divestment. We lift our fair value from S$1.06 to S$1.10 as we roll our valuation to FY15. However, as the stock appears fairly priced, we maintain our HOLD rating. (Kevin Tan)

CapitaMall Trust: 1Q14 results within view
CapitaMall Trust (CMT) released its 1Q14 results this morning. NPI grew 5.3% YoY to S$114.3m, while distributable income increased 4.5% to S$89.1m. DPU for the quarter came in at 2.57 S cents, 4.5% higher than that achieved in 1Q13. This met 23.4% of both ours and consensus full-year DPU projections. The better performance was driven mainly by higher occupancy at Plaza Singapura and Atrium@Orchard, and completion of Phase 1 asset enhancement initiative (AEI) at IMM Building. Looking ahead, CMT will continue to focus on executing its AEIs at Bugis Junction and Tampines Mall. In addition, it will also embark on Phase 2 AEI at IMM Building and reconfigure Level 2 of JCube to enhance the shoppers’ experience. We are maintaining our BUYrating on CMT, but now place our S$2.20 fair value under review as we incorporate the results into our valuation. (Kevin Tan)
For more information on the above, visit www.ocbcresearch.comfor the detailed report.
NEWS HEADLINES

- The US stock market closed higher Tue, with the S&P 500 extending its winning streak to six days, the longest streak of gains since Sep 2013.

- Singapore private home purchases fell across the board in 1Q14 to just over 2,000 units - the first time in more than five years that the number has dropped below 3,000 homes.

- AsiaPhos has entered into a raft of agreements to take over the full economic benefits of its existing mines, as well as expand its exploration area in Sichuan, China.

- Mapletree Industrial Trust yesterday posted DPU of 2.51 S cents for its 4QFY14, a 5.9% increase from 2.37 S cents a year ago.

- SATS handled 6.7% more flights YoY in 4QFY14, while unit services rose 3.2% and cargo throughput, by 4.4%.

- Suspended China Sky Chemical Fibre Co could see the clouds clear soon, after its shareholders passed resolutions to receive and adopt directors' reports and audited accounts for the past three financial years at its AGM yesterday.

- A loss-making subsidiary of CCM Group that is being disposed of has received a notice of termination on a condominium in Balestier it was constructing.

DBSVickers Report 23 Apr 14

Today’s Focus
 Mapletree Logistics Trust - 4Q14 results slightly above
estimates, ample firepower to execute on inorganic
opportunities. Maintain BUY, target price raised to S$1.20
4Q14 results for Mapletree Logistics Trust (MLT) slightly above
estimates. Portfolio occupancy levels maintained steady at
98.3%. Distributable income came in 10.1% higher at
S$46.3m, boosted by a lower interest rate of 1.9%. NAV up by
5.4% to S$0.97; gearing down to 33%. The lower gearing
empowers MLT to execute on inorganic opportunities. Maintain
BUY, target price raised to S$1.20 (Prev S$ 1.16) as we roll
forward our valuations.
4Q14 results for Mapletree Industrial Trust (MLT) ahead of
estimates. MLT reported DPU of 2.51 Scts in 4Q14, bringing its
full-year DPU to 9.92 Scts. 4Q14 revenues and net property
income grew by c.4.2% and 7.5% to S$75.2m and S$53.3m
respectively. The stronger performance was largely organic-led
with positive rental reversions achieved portfolio-wide.
Distributable income came in 9.5% higher y-o-y at S$42.6m,
driven mainly by lower all-in interest costs of c. 2.0% (vs 2.3%
a year ago). More updates post briefing today. Target price of
S$1.50 and BUY call under review.
Frasers Centrepoint Trust (FCT) reported 2Q14 revenue of
S$41m (+3% yoy), net property income of S$29m (+2%) and
distribution income of S$24m (+7%). In terms of operations,
portfolio occupancy rate fell slightly to 96.8% as Bedok Point’s
occupancy rate dipped to 77%. However this was largely a
result of tenant refitting and refurbishment works at the
basement, and occupancy rates in the coming quarters should
improve to >95%, based on committed leases. We like FCT for
its ability to grow revenues via organic rental reversions as well
as inorganic acquisitions from its Sponsor, which has a strong
and visible pipeline of assets currently development. Our
current target price of S$2.13 is under review, pending the
analyst briefing.
SATS’ aviation operating data for 4Q and FY14. In the fourth
quarter of FY14, the number of flights handled by SATS grew
6.7% year-on-year while unit services increased by 3.2%.
Cargo throughput improved 4.4%, with express cargo and
perishable segments recording the highest year-on-year
growth. Passengers handled rose marginally to 10.53 million.
Gross and unit meals declined 8.2% and 6.3% respectively due
US Indices Last Close Pts Chg % Chg
Dow Jones  16,514.4 65.1 0.4
S&P  1,879.6 7.7 0.4
NASDAQ  4,161.5 39.9 1.0
Regional Indices
ST Index  3,277.5 21.7 0.7
ST Small Cap  550.2 2.9 0.5
Hang Seng  22,730.7 (29.6) (0.1)
HSCEI  10,030.7 (49.5) (0.5)
HSCCI  4,202.8 (46.5) (1.1)
KLCI  1,866.4 3.5 0.2
SET  1,415.1 2.0 0.1
JCI  4,898.2 5.9 0.1
PCOMP  6,785.0 17.4 0.3
KOSPI  2,004.2 5.0 0.3
TWSE  8,974.7 23.5 0.3
Nikkei  14,388.8 (123.6) (0.9)

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$bn) 605
Total Daily Vol (m shrs) 2,264
12m ST Index High 3,454
12m ST Index Low 2,960
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price (S$)
22 Apr
Target Price
(S$)
ComfortDelgro Buy 2.070 2.19
Global Logistic Properties Buy 2.740 3.31
Keppel Corp Buy 11.010 12.60
Stock Picks – Small Cap
Rec’n Price (S$)
22 Apr
Target Price
(S$)
Goodpack Buy 2.370 2.60
China Merchants Buy 0.960 1.32
Pacific Radiance Ltd Buy 1.065 1.20
Nam Cheong Buy 0.355 0.46
Centurion Corporation Buy 0.745 0.86
Source: DBS Bank
Singapore
Wired Daily
Page 2
primarily to Qantas Airways moving its hub for European
flights away from Changi. For the full year, all operating
metrics achieved broad-based growth with the exception of
gross and unit meals.
Global Logistic Properties has signed two lease agreements
totaling 38,000 sqm (409,000 sq ft) with RT-Mart, one of
the largest hypermarket operators in China. The customer is
expanding its distribution network throughout China to
meet increasing demand driven by the growth of domestic
consumption. The two locations are at GLP Park Qihe in
Greater Jinan and GLP Park SND in Suzhou. GLP Park SND is
now 100% leased.
Centurion announced the sale of its Australian optical disc
operation for A$650K. Against a net book value of A$88k
for the asset as at 31 Dec 2013, we estimated a small divest
gain of around A$500k. More importantly, this disposal is in
line with the company's plan to scale down its optical disc
operation which structurally declining. This development is
positive but financially immaterial. No change to BUY rating
and target price of S$0.86.
Yoma Strategic Holdings has entered into a joint venture
agreement with Mitsubishi Corporation and First Myanmar
Investment for the purposes of establishing a joint-venture
company to provide the technical services and solutions,
installation, testing and commissioning and import and
supply of elevators, escalators and related products in
Myanmar.
Yanlord Land Group has successfully formed a joint venture
company with Haimen City in Jiangsu to develop 10 km2
Eco Hi-Tech City. This latest venture capitalizes on the close
collaboration and relationship between Jiangsu and
Singapore and builds on Yanlord’s earlier success in
developing the 15 km2 Sino-Singapore Nanjing Eco Hi-Tech
Island in Nanjing.
Ley Choon Group has recently secured three contracts
worth S$7.3m to undertake the water pipe/main laying
works for the Group’s long-term customer, the Public
Utilities Board (PUB). The Group is poised to benefit from
the growing underground utilities construction demand in
Singapore and the region.
Tritech Group has been awarded a S$9.96m contract for
the Instrumentation and Monitoring for Thomson Line
contracts by the Land Transport Authority (LTA) for the
Thomson Line. The contract includes supplying and
installing geotechnical instruments and monitoring ground
movements within the surrounding excavation and
construction area.
Private home purchases in Singapore fell across the board in
the first three months of this year to 2076 units - the first
time in more than five years that the number has dropped
below 3,000 homes. However, foreigners' share of
transactions edged up because of a sharper pullback by
Singaporean buyers. Singaporeans' share - at 70% - is at its
lowest since the introduction of the additional buyer's
stamp duty (ABSD) in Q4 2011. In absolute terms, purchases
by permanent residents (PRs) and foreign buyers were also
at their lowest levels since the Q1 2009 market trough
during the global financial crisis.
US stocks rose as health-care shares surged amid a
US$45.7bil bid for Allergan Inc. and earnings from Netflix
Inc. to Harley-Davidson Inc topped estimates. McDonald’s
Corp shares dipped after the company posted falling sales
at its established U.S. locations and 1Q profit trailed
consensus estimates. In after hours trade, AT&T reported
earnings that beat estimates as phone discounts Diminished.
In Asia, preliminary estimates for the April HSBC China
manufacturing PMI will be released this morning (consensus
48.3).

Tuesday, April 22, 2014

Daily Summary 22 Apr 14

Europe were up on Friday but Dow closed -16 at 16408. Dow's trend is looking to break up. Dow's future is now +21. Europe opened firmly up at the moment.

Asian bourses were mixed. Nikkei -4, ShanghaiC -32, Hanseng closed. STI closed +2 at 3255. Volume was 1.8b shares. Gainers were 186 to 242 losers.

Trend of STI is still up.

Top volumes wereTranscu unchanged, Albedo -0.2, CharismaEner -0.2, HanKore -0.2, CCM unchanged, Federal unchanged, Armarda -0.1, Memstar -0.1, Vallianz +1, CapitaMallAsia unchanged.

Market opened up, dipped to negative territory marginally and closed +2. It was a sideway market trading in a small range. Blue chips were slightly firmer. Penny and speculatives were weaker.

Transcu announced a reversed takeover and was top volume with 308.7 million shares trade but price unchanged. The deal was too good if materialised but the price is showing doubts.

Europe and Dow are looking good tonight.

DBSVickers Report 22 Apr 14

Today¡¦s Focus
„X Ascendas REIT - 4QFYMar14 results in line. Maintain BUY,
target price raised to S$2.47
„X Mapletree Greater China Commercial Trust - Reported
another strong quarter; FY Mar14 results beat forecasts.
Maintain BUY, target price raised to S$1.02
4QFYMar14 results for Ascendas REIT in line. 4Q14 DPU of
3.55 Scts (+5.3% y-o-y) brings DPU for the full year to 14.2
Scts, within our estimates. Steady organic growth, underpinned
by positive rental reversions, is expected to compensate for
margin pressure. Visible pipeline and proposed acquisition of
Aperia in 1QFY15 to drive growth. Maintain BUY, target price
raised to S$2.47 (Prev S$ 2.44). A-REIT¡¦s is expected to offer
steady and resilient earnings.
Mapletree Greater China Commercial Trust (MAGIC) reported
another strong quarter. FY Mar14 results were ahead of
prospectus forecast on better than projected rental uplift.
Portfolio occupancy inched up to 98.5% from 97.9% in the
previous quarter with higher take ups at Gateway Plaza while
Festival Walk continued to enjoy full occupancy. Strong and
visible organic growth are expected to drive bottomline going
forward. Maintain BUY, target price raised to S$1.02 (Prev S$
0.97). We continue to like MAGIC for its strong organic growth
prospects and portfolio of quality assets. The stock is currently
trading at FY15 and FY16 DPU yields of 6.8% and 7.3%
respectively.
Mapletree Logistics Trust (MLT) reported a DPU of 1.89 Scts in
4Q14, bringing full year DPU to 7.34 Scts, slightly beating our
estimates. Operational performance continues to remain
resilient with topline and net property income rising by 5.7%
and 4.3% to S$80.1m and S$68.3m respectively. Portfolio
occupancy levels also maintained steady at 98.3%.
Distributable income came in 10.1% higher at S$46.3m,
boosted by lower interest rates of 1.9%. More updates to
come post briefing. Target price of S$1.16 and BUY call under
review.
US Indices Last Close Pts Chg % Chg
Dow Jones Æ’¥Æ’n 16,449.3 40.7 0.2
S&P Æ’¥Æ’n 1,871.9 7.0 0.4
NASDAQ Æ’¥Æ’n 4,121.5 26.0 0.6
Regional Indices
ST Index Æ’¥Æ’n 3,255.8 2.0 0.1
ST Small Cap Æ’¦Æ’n 547.3 (0.5) (0.1)
Hang Seng Æ’¥Æ’n 22,760.2 64.2 0.3
HSCEI Æ’¥Æ’n 10,080.2 44.3 0.4
HSCCI Æ’¥Æ’n 4,249.3 9.0 0.2
KLCI Æ’¥Æ’n 1,862.9 10.2 0.6
SET Æ’¥Æ’n 1,413.1 3.9 0.3
JCI Æ’¦Æ’n 4,892.3 (4.Cool (0.1)
PCOMP Æ’¥Æ’n 6,767.5 96.3 1.4
KOSPI Æ’¦Æ’n 1,999.2 (5.1) (0.3)
TWSE Æ’¦Æ’n 8,951.2 (15.5) (0.2)
Nikkei Æ’¦Æ’n 14,512.4 (3.9) (0.0)
Æ’n
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013 2014
100-Day MA
Index
STI
Total Market cap (US$bn) 605
Total Daily Vol (m shrs) 1,852
12m ST Index High 3,454
12m ST Index Low 2,960
Source: Bloomberg Finance L.P.
Stock Picks ¡V Large Cap
Rec¡¦n Price (S$)
21 Apr
Target Price
(S$)
ComfortDelgro Buy 2.070 2.19
Global Logistic Properties Buy 2.730 3.31
Keppel Corp Buy 10.930 12.60
Stock Picks ¡V Small Cap
Rec¡¦n Price (S$)
21 Apr
Target Price
(S$)
Goodpack Buy 2.320 2.60
China Merchants Buy 0.965 1.32
Pacific Radiance Ltd Buy 1.065 1.20
Nam Cheong Buy 0.360 0.46
Centurion Corporation Buy 0.740 0.86
Source: DBS Bank
Singapore
Wired Daily
Page 2
Cosco Corp has secured a contract worth about US$100m
from an Asian company to build four (4) Emergency
Response / Rescue / Field Support Vessels (ERRVs) and two
(2) PX121 Platform Supply Vessels. The four (4) vessels are
scheduled for delivery in the first half of 2016 while the two
(2) vessels are expected to be delivered in the first and
second quarters of 2016. Contract wins have been rather
slow with YTD wins of only S$217m, representing 9% of
our full year assumption of US$2.5bn. This is significantly
lagging behind peers - Keppel Corp, Sembcorp Marine and
Yangzijiang, which have already secured US$1.5bn /
US$1.3bn / US$1.1bn new orders YTD.
Sembcorp Industries is reactivating Sembcorp Properties, a
dormant subsidiary which developed condominiums in
Singapore a decade ago, with a new strategy - to develop
residential and commercial properties in its existing
industrial parks, starting with China. This is in tandem with
its ramped-up efforts to build up urban development as a
third pillar of the company, next to its mainstay utilities and
marine operations.
IEV Holdings has entered into two separate Gas Sales
Agreements (GSAs) to supply compressed natural gas (CNG)
to two divisions of PT Indofood ¡V the Noodle Division and
the Nutrition & Special Food Division manufacturing plants
in Padalarang, Bandung for a period of 12 and 24 months
respectively. The revenue from the GSAs, which is in excess
of US$9m, is expected to contribute to the Group¡¦s financial
performance over the 2-year period from March 2014 to
February 2016.
Rowsley has received the regulatory greenlight for its first
residential development called SKIES in Johor Bahru. SKIES
comprises two 75-storey towers, each with approximately
500 units of residential apartments.
Hock Lian Seng Holdings has been awarded a contract from
Land Transport Authority for the construction of Maxwell
Station for Thomson Line. The contract sum is
approximately $221.8m. The project will commence in April
2014 and is expected to complete by December 2020.
Yongmao extends foray into Myanmar with S$3m worth of
contract wins. The contract wins came on the heels of the
Group¡¦s maiden delivery of tower crane to Myanmar in
January 2014. Under these new contracts, 10 units of the
Group¡¦s STT series of tower cranes are sold to Erect Group
(Singapore) for its end user in Myanmar. Based in
Singapore, Erect Group is a leading one-stop service
provider of access equipment and its business includes the
sales and rental of towercranes. Yongmao is expected to
deliver these 10 units in 2014/2015.
CCM Group has received a notice of termination on a
condominium in Balestier they are building. The contract
was terminated "on the grounds of alleged breaches of
contract". The company said it is seeking legal advice and is
evaluating the financial impact of this development. The
contract, secured on August 2011, was worth S$32.3m. It
was awarded by Orion-One Residential to CCM subsidiary
CCM Industrial.
Singapore¡¦s Land Transport Authority (LTA) has awarded
civil as well as electrical and mechanical contracts for the
Thomson and Eastern Region Lines worth almost S$1.15 bn.
The contracts include the construction of Mt Pleasant,
Stevens and Maxwell stations; and communications system,
signalling system and platform screen doors for the two
MRT Lines.
US markets rose on signs earnings are improving. This even
as Ukraine warned that Russia may use a fatal shootout in
the country¡¦s east as a pretext for invasion. More than 70%
of the S&P 500 member companies that have announced
results this season have beaten analysts¡¦ profit estimates,
this according to Bloomberg. Netflix gained more than 6
percent after markets closed as it reported better-thanprojected
sales, profit and subscriber growth. Pfizer Inc. held
informal, now-discontinued talks with AstraZeneca Plc
about buying the London-based maker of asthma and heart
drugs.

OCBC Report 22 Apr 14

KEY IDEA

Ascendas REIT: Expecting further upside
Ascendas REIT (A-REIT) reported 4QFY14 DPU of 3.55 S cents, up 16.0% YoY. This brings the full-year DPU to 14.24 S cents (+3.6%), largely in line with our expectation. For FY14, positive rental reversion averaging 14.8% was also achieved. Going forward, A-REIT guided that positive reversion in the mid-to-high single digit is still anticipated, given that passing rents are below market rates. A-REIT also announced two new asset enhancement initiatives (AEIs) this quarter, with the objective of maximising the plot ratio and improving the marketability of the properties. We also note that the acquisition of Kallang Ave development may happen soon as TOP is expected in 2QCY14. We roll our valuation to FY15, while tweaking our assumptions to factor in potentially higher operating costs. Our fair value now increases to S$2.45 from S$2.40 previously. Maintain BUY. (Kevin Tan)


MORE REPORTS

Mapletree Logistics Trust: Fundamentals remain resilient
Mapletree Logistics Trust (MLT) reported NPI of S$68.3m and distributable amount of S$46.3m for 4QFY14. This represents a growth of 4.3% and 10.1% YoY, respectively. DPU for the quarter came in at 1.89 S cents, up 9.2% YoY. For FY14, DPU totalled 7.35 S cents (+7.1%), which is largely consistent with our full-year DPU forecast of 7.26 S cents (consensus: 7.2 S cents). We note that portfolio occupancy was stable at 98.3% (98.4% in 3Q), while leases renewed or replaced during the year achieved rents 17% higher than the preceding contracted rates. Management expects the demand for logistics facilities in its markets to remain robust going forward, and will continue to focus on driving both organic and inorganic growth. We will be attending MLT’s analyst briefing later in the morning. For now, we place our S$1.06 fair value and Buy rating under review. (Kevin Tan)
For more information on the above, visit www.ocbcresearch.comfor the detailed report.

NEWS HEADLINES

- US stocks closed modestly higher Mon, helping the S&P 500 to extend its winning streak to the longest in six months.

- Sembcorp Industries is reactivating Sembcorp Properties to develop residential and commercial projects in its parks, starting with China.

- Transcu Group was heavily traded yesterday on news that it had moved ahead with plans for contractor Straits Construction to do a reverse takeover of the company.

- Mapletree Greater China Commercial Trust said its 4QFY14 DPU rose to 1.587 S cents, beating its own forecast by 15.9%.

- Food Empire Holdings warned that it expected a net loss for 1Q14, because of the unrest between Russia and Ukraine, two of the group's key markets.

- Grand Banks Yacht confirmed yesterday that it has sold a luxury yacht to David Loh, owner of local logistics company KME Transport and a resident of Sentosa Cove.

Monday, April 21, 2014

Daily Summary 21 Apr 14

Europe were up on Friday but Dow closed -16 at 16408. Dow's trend is looking to break up. Dow's future is now +21. Europe opened firmly up at the moment.

Asian bourses were mixed. Nikkei -4, ShanghaiC -32, Hanseng closed. STI closed +2 at 3255. Volume was 1.8b shares. Gainers were 186 to 242 losers.

Trend of STI is still up.

Top volumes wereTranscu unchanged, Albedo -0.2, CharismaEner -0.2, HanKore -0.2, CCM unchanged, Federal unchanged, Armarda -0.1, Memstar -0.1, Vallianz +1, CapitaMallAsia unchanged.

Market opened up, dipped to negative territory marginally and closed +2. It was a sideway market trading in a small range. Blue chips were slightly firmer. Penny and speculatives were weaker.

Transcu announced a reversed takeover and was top volume with 308.7 million shares trade but price unchanged. The deal was too good if materialised but the price is showing doubts.

Europe and Dow are looking good tonight.

DBD Vickers Report 21 Apr 14

Today’s Focus
 StarHub - Big boost from 4G price hike; upgrade to BUY
with higher target price of S$4.50
The 1Q reporting season has only just started. There is currently
a marginal 5pt dip in forward PE numbers but it’s still early in
the results season to draw any conclusion. Our view is that
earnings forecasters tend not move the needle early in the year
that means the overall 1Q earnings revision will more likely be
flattish.
The STI is due for a pullback now that the month-long rally has
lifted it to the 13.9x (average) 12-mth forward PE level nearterm
resistance currently at c.3250. The 2 downward
retracement level are at 3210 (23.6% retracement) and 3180
(38.2% retracement).
We avoid STI component stocks that have performed well over
the past month and are currently trading near our fundamental
TP. Both UOB and CityDev fit into this screen. Other index
component stocks that are trading within 5% of fundamental
TP are SingTel and SGX.
StarHub will start charging S$2.14 for its 4G service from June
2014 onwards versus its current promotional free offer. The
company may further raise the extra charge for 4G to S$10.70
at a later unspecified date. Meanwhile, M1 offers free 4G
services till Dec 2014 with regular price for 4G advertised as
S$10.70. Elsewhere, SingTel has yet to indicate any intent of
following suit. The premium price for 4G service is expected to
benefit Starhub’s FY14F/15F earnings by 2%/6%. If 4G prices
were to rise to S$10.70, FY15F earnings could increase by
30%. StarHub is also expected to benefit most from subsidies
for SMEs. Its corporate fixed line growth is likely to offset
weaker broadband & prepaid mobile. Upgrade to BUY with
revised target price of S$4.50 (Prev S$ 4.30), implying potential
returns of 16%. StarHub is committed to a fixed 5-Sct DPS
each quarter, with dividend yield of about 5%.
1Q14 results for CapitaCommercial Trust (CCT) in line.
Operational outlook improves further. Looking ahead, we
expect firmer revenues in FY14-15F given expiring rents at Six
Battery Road (S$11.00-11.30psf) and OGS (S$8.30-9.30psf) are
US Indices Last Close Pts Chg % Chg
Dow Jones  16,408.5 (16.3) (0.1)
S&P  1,864.9 2.5 0.1
NASDAQ  4,095.5 9.3 0.2
Regional Indices
ST Index  3,253.8 0.6 0.0
ST Small Cap  547.8 (0.7) (0.1)
Hang Seng  22,760.2 64.2 0.3
HSCEI  10,080.2 44.3 0.4
HSCCI  4,249.3 9.0 0.2
KLCI  1,852.7 2.2 0.1
SET  1,409.2 0.4 0.0
JCI  4,897.1 24.0 0.5
PCOMP  6,671.2 49.5 0.7
KOSPI  2,003.6 (0.7) (0.0)
TWSE  8,966.7 22.5 0.3
Nikkei  14,516.3 98.7 0.7

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$bn) 605
Total Daily Vol (m shrs) 2,024
12m ST Index High 3,454
12m ST Index Low 2,960
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price (S$)
17 Apr
Target Price
(S$)
ComfortDelgro Buy 2.050 2.19
Global Logistic Properties Buy 2.760 3.31
Keppel Corp Buy 10.990 12.60
Stock Picks – Small Cap
Rec’n Price (S$)
17 Apr
Target Price
(S$)
Goodpack Buy 2.310 2.60
China Merchants Buy 0.950 1.32
Pacific Radiance Ltd Buy 1.085 1.20
Nam Cheong Buy 0.355 0.46
Centurion Corporation Buy 0.755 0.86
Source: DBS Bank
Singapore
Wired Daily
Page 2
at/below committed rents of S$9.50-S$13.00 in 2Q14.
CapitaGreen is expected to see progressively higher rents.
Maintain HOLD, target price raised to S$1.67 (Prev S$ 1.52).
CCT remains a beneficiary of improved fundamentals in
Singapore’s office sector but the recent price rally has priced
in most positives.
We feature TT International (TTI) in the Singapore sector of
our ASEAN Small Mid Caps Radar for this month. TTI is a
potential turnaround play if its big box hypermarket retail
concept takes off when operation begins by December
2014. By selling products at competitive prices through bulk
sourcing, management is confident of achieving S$200m
annual revenue within five years with a potential net margin
of >4%. With the business turned around, TTL could also
repay S$240m scheme debts if potential bank refinancing is
successful. Meanwhile, FY15 Mar YE would be boosted by a
potential revaluation of its 51% owned Big Box property
(1m sq ft) which could also reverse its balance sheet’s
negative equity of S$117m.
Transcu Group has signed a Sale and Purchase agreement
for potential reverse take-over of Straits Construction
Group. The purchase consideration will be between
S$325m - S$338m. The consideration will be satisfied by
the issue of new Transcu shares of S$0.50 per share, postconsolidation.
The proposed Reverse Take-Over (RTO) will
give Transcu a new lease of life. Completion of proposed
acquisition is expected by 31 December 2014.
Sarine Technologies announced the launch of its new laser
diamond sawing and shaping system – the QuazerTM 3.
The original QuazerTM and second generation QuazerTM II,
introduced in 2005 and 2010 respectively, based on
proprietary technology and state-of-the-art green laser
technology, introduced multiple breakthroughs in the
sawing, cutting and shaping of rough diamonds and
became the de-facto high-end market-leading solutions.
Sarine is now introducing its next generation system- the
QuazerTM 3. The QuazerTM 3 offers a completely new
control system with unique advantages, amongst which is a
fully automated pie cutting feature, facilitating accurate
sawing of highly advanced sawing profiles.
China’s economy grew an annual 7.4% in the first quarter,
its slowest pace in 18 months, but just ahead of forecasts
for 7.3% growth. March trade figures earlier this month
showed exports unexpectedly fell for a second successive
month and imports dropped sharply.

OCBC Report 21 Apr 14

KEY IDEA

CapitaCommercial Trust: Looks fairly valued here
1Q14 distributable income increased 7.6% to S$59.9m mostly due to stronger contributions from portfolio assets and lower interest expenses. 1Q figures were mostly within expectations and YTD distributable income now constitutes 25.6% of our full year forecast. We note that the Trust enjoyed higher revenues from all properties due to a mix of stronger occupancies and positive rental reversions, except for One George St which was impacted by the cessation of yield protection income. 1Q14 DPU of 1.94 S-cents translates to a 5.2% yield as at the last closing price of S$1.635. As our top pick in the REITs sector, CCT has outperformed significantly YTD, appreciating 12.8% versus the STI’s 2.7% movement over this period. We update our model for latest rental assumptions, and our fair value increases marginally to S$1.67 from S$1.61 previously. At this juncture, however, we believe CCT is almost fully valued; downgrade to HOLD on valuation grounds. (Eli Lee)
For more information on the above, visit www.ocbcresearch.comfor the detailed report.
NEWS HEADLINES

- US stocks ended the holiday-shortened week with solid gains, after four straight days of increases on the S&P 500 index and Nasdaq Composite.

- Singapore's non-oil domestic exports (NODX) fell 6.6% YoY in Mar after a 8.9% spike in Feb, dragged down by declines in electronics and non-electronics shipments.

- Two of Pteris Global's directors have indicated their support for a proposed reverse takeover.

- The manager of Cambridge Industrial Trust said on Thu that it had decided to reduce its performance fee calculation in favour of unitholders.

- The independent financial adviser to Olam International has declared Temasek's offer to be "fair and reasonable" for shareholders and warrant holders, but not so for those who own its convertible bonds.

- Linc Energy on Thu said the recent dispute with Queensland Government would not affect the company's finances or operations.

- The Singapore arm of GlobalFoundries is ramping up to expand its 300mm silicon wafer production capacity to wring out a third more chips compared to the older 200mm wafers.

Thursday, April 17, 2014

Daily Summary 17 Apr 14

Dow and Europe were up last night. Dow +162 at 16425. Dow's short term trend is turning up. Dow's future is now -40. Europe opened flat.

Asian bourses were mixed. Nikkei flat, ShanghaiC -8, Hangseng +64. STI closed +0.6 at 3254. Volume was 2b shares. Gainers were 242 to 235 losers.

Trend of STI is up.

Top volumes were Albedo -0.5, CharismaEner +0.4, HanKore -0.2, Memstar +0.2, Amplefield -3.3, Equation +0.1, GlobalTech +0.3, AusGroup +2, KeppelReit +3.5, Ezion +9.

Market opened up but traded in a small range. It dipped slightly to negative but closed flat. Blue chips were firmer. Penny and speculatives were mixed. Market is generally steady for the long weekend.

Europe and Dow are looking slightly weak at the moment but steady.

OCBC Report 17 Apr 14

KEY IDEA

Ezion Holdings: New contracts and new strategic investors
Ezion Holdings recently clinched two service rigs charter contracts worth a total of US$78.7m, bringing its YTD order wins to US$260.3m. We believe this underscores Ezion’s dominant position in the service rigs market, especially in the Asia-Pacific region. Separately, Ezion also announced that it will issue 100m new shares (7.7% of Ezion’s enlarged share capital) to two subsidiaries of Hong Leong Company (Malaysia) Berhad (HLCM) at S$1.94/share, thus raising gross proceeds of S$194m. As the Chairman and CEO of HLCM is Tan Sri Quek Leng Chan, Ezion believes it will be able to tap on his vast experience and network, and has plans to increase its penetration into the Malaysian oil and gas market. We take into account these developments, and pare our FY14 and FY15 core EPS projections by 6.2% and 3.5%, respectively. Maintain BUY on Ezion, albeit with a reduced fair value estimate of S$2.41 (previously S$2.57). (Low Pei Han and Andy Wong)

MORE REPORTS

Keppel Corporation: A steady quarter
Keppel Corporation (KEP) reported a 8.6% YoY rise in revenue to S$3b and a 5.1% fall in net profit to S$338.7m in 1Q14, and within expectations. Excluding one-off gains in 1Q13, net profit in 1Q14 was largely in line with that in 1Q13. Operating margins in the O&M segment remain healthy at 14.6% in 1Q14, and construction of the semi-submersible rigs for Sete remains on track. On the infrastructure side, we understand that no provisions were made for the Qatar project in 1Q14. The O&M division secured S$1.9b of new orders in 1Q14, and it is expected that the ongoing bifurcation towards premium assets and the replacement of old rigs should continue to support order momentum. As at end 1Q14, the net orderbook stood at a record S$14.4b with deliveries till 2019. Maintain BUY with S$12.25 fair value estimate. (Low Pei Han and Carey Wong)

UOL Group: Top bid for Prince Charles Crescent site
Last evening, a consortium comprising UOL Venture Investments and Kheng Leong put in the top bid of S$463.1m in the government land sales tender for a residential land parcel at Prince Charles Crescent (Parcel B). The tender attracted seven bids and UOL’s bid was 5.2% above the second highest bidder. The site has a land area of 268.7k sq ft with a plot ratio of 2.1, and is located in an established residential estate within a 10-min drive to Orchard Rd and the city center. UOL’s top bid translates to a price of S$821 psf GFA, and we forecast breakeven and selling prices for this project at S$1.35k psf and S$1.60k psf, respectively. These estimates are fairly in line with prices at nearby Alex Residences and Echelon, and the selling price yields a reasonable margin of 16%. We note that UOL’s top bid of S$821 psf GFA is 15% lower than that for the neighboring site awarded in Sep-12 and reflects falling land prices given a weakening housing outlook. Pending the award of the site, our fair value estimate remains unchanged at S$6.95. Maintain BUY. (Eli Lee)
For more information on the above, visit www.ocbcresearch.comfor the detailed report.

NEWS HEADLINES

- US stocks rallied Wed, and three days of gains sent the benchmark S&P 500 into positive territory for the year.

- Fewer Singapore businesses have M&A plans in the next three years than they did a year ago, said Grant Thornton in its International Business Report.

- StarHub has become the first telco to bite the 4G bullet, saying on Tue that it will start charging mobile subscribers S$2.14 per month for using its 4G service in Jun this year.

- Cambridge Industrial Trust has posted 1Q14 DPU of 1.251 S cents, a 1.4% increase YoY.

- QT Vascular is aiming to raise S$55m in what is so far the largest IPO on Catalist this year. The offer is by way of placement, with 196.4m new shares priced at 28 S cents apiece.

- Sabana REIT’s DPU fell 22% YoY to 1.88 S cents/unit for 1Q14.

- Global Logistic Properties has leased 34,000sqm of space to a "leading smartphone manufacturer" at GLP parks in six cities across China.