Thursday, May 29, 2014

DBSVickers Report 30 May 14

Today’s Focus
 Tat Hong - Better visibility in Australia; upgrade to HOLD,
raised target price to S$0.85
FY14 results for Tat Hong in line; earnings fell due to slowdown
in Australia. Tat Hong’s Australian operations could improve
ahead. The restructured Australian team will result in lower
staff costs in FY15, while the recent Australia Federal Budget
2014-2015 outlines planned infrastructure spending and
development going forward. Premised on these, earnings
visibility has improved for Tat Hong. Upgrade to HOLD, raised
target price to S$0.85 (Prev S$ 0.64).
Courts Asia’s 4Q14 and FY14 results in line, earnings decline
dragged by higher costs. DPS of 0.76 Scts was declared (30%
payout), bringing full year DPS to 1.52 Scts. We believe outlook
remains positive going forward. In the immediate term, new
stores in Malaysia, Singapore and Indonesia will contribute to
growth, with HDB housing completions in Singapore and
Tangerang store opening in Indonesia support growth beyond
that. Maintain BUY and S$0.70 target price on the back of
positive outlook and decent valuations.
1Q14 results for IHH Healthcare inline, forms 20% of FY14F
estimates. Parkway Pantai shows strong contribution, while
Acibadem was impacted by weaker Turkish Lira against MYR
(c.-12%). Management seem optimistic of further EBITDA
margin expansion from 1Q14 on the back of the quick ramp up
of new operations and strong organic growth but valuations
look rich. Maintain HOLD, target price adjusted to
S$1.53/RM3.99 (Prev S$1.49/ RM3.87), after taking into
account a higher value for its stake in PREIT and Apollo
Hospitals, and forex movements.
ASL Marine has secured new shipbuilding contracts worth
approximately S$91m for the construction of three units of
powerful and highly manoeuvrable Infield Support Vessels and
one unit of Seismic Support Vessel. The vessels are secured
from customers in Australia and Norway respectively. The four
vessels will be built at the Group’s shipyard and are expected to
be completed in the first quarter of 2016.
US Indices Last Close Pts Chg % Chg
Dow Jones  16,698.7 65.6 0.4
S&P  1,920.0 10.3 0.5
NASDAQ  4,247.9 22.9 0.5
Regional Indices
ST Index  3,300.7 28.9 0.9
ST Small Cap  558.9 2.2 0.4
Hang Seng  23,010.1 (69.9) (0.3)
HSCEI  10,185.2 (12.8) (0.1)
HSCCI  4,272.8 (43.9) (1.0)
KLCI  1,876.6 5.0 0.3
SET  1,408.5 5.7 0.4
JCI  4,985.6 21.7 0.4
PCOMP  6,676.7 (111.2) (1.6)
KOSPI  2,012.3 (4.8) (0.2)
TWSE  9,109.0 (12.7) (0.1)
Nikkei  14,681.7 10.8 0.1

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$bn) 612
Total Daily Vol (m shrs) 2,260
12m ST Index High 3,367
12m ST Index Low 2,960
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price (S$)
29 May
Target Price
(S$)
ComfortDelgro Buy 2.350 2.50
Global Logistic Properties Buy 2.820 3.42
Mapletree Greater China
Commercial Trust
Buy 0.890 1.02
Thai Beverage Public Buy 0.630 0.68
Stock Picks – Small Cap
Rec’n Price (S$)
29 May
Target Price
(S$)
Vard Holdings Buy 1.060 1.21
Nam Cheong Buy 0.390 0.47
Centurion Corporation Buy 0.735 0.86
Source: DBS Bank
Singapore
Wired Daily
Page 2
PEC adds new contracts worth S$100m to its orderbook. Its
latest wins include a contract from an existing client to
perform EPC works for crude oil storage and handling
facilities in the Middle East Its long-standing relationships
with MNC clients play key role in securing contracts.
Transcu Group is proposing to change its name to “OLS
Enterprise Ltd.”.
Two contracts have been awarded for the building of more
than 200km of sheltered walkways leading to MRT stations,
the Land Transport Authority (LTA) announced. The
contracts awarded, the first two of four, are worth
$156.6m. Work on the walkways will begin in the fourth
quarter, and is expected to finish by 2018.
In property news, the Housing and Development Board
(HDB) has released another executive condominium (EC) site
for tender. The site is expected to yield about 620
residential units. The 99-year leasehold site at Sembawang
Avenue is launched under the Confirmed List of the first
half 2014 Government Land Sales (GLS) programme. It has
a land area of 22,189.7 sq m and has a maximum gross
floor area of 62,131.2 sq m. The site is adjacent to Skypark
Residences, an EC that is jointly developed by JBE Holdings
and Keong Hong and was launched late last year.
U.S. stocks rose despite a weaker-than-expected 1Q GDP
contraction (actual -1%, consensus -0.5%) as investors bet
that the economy will improve going forward. Still, trading
volume stayed below par. About 5.1bil shares changed
hands on U.S. exchanges that is 19% below the 3-mth
average. Weekly jobless claims came in lesser than expected
at 300k (consensus 318k). M&A activities continued, this
time as Tyson offered to buy Hillshire Brands Co.

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