Thursday, June 5, 2014

DBSVickers Report 5 Jun 14

Today’s Focus
􀂃 Vard Holdings - Orders continue to flow in faster than
expected. Maintain BUY with higher target price of S$1.34
Vard Holdings has secured a contract for the design and
construction of one Offshore Construction and Anchor
Handling Vessel for Rem Offshore worth approximately NOK
800m, to be delivered in 1Q 2016. Including the LOIs, this
marks Vard’s 5th contract win in 2Q14 and its 13th newbuild
contract since the beginning of FY14. We estimate YTD
contract wins to be about NOK8.5bn already, or 60% of our
full-year order win forecast of NOK14bn within just five months
of FY14, ahead of our expectations. Signs of revival in demand
for high end offshore support vessels is a big positive. Vard is
positioned for normalised margins and sharp earnings rebound
by FY15. Maintain BUY with higher target price of S$1.34 (Prev
S$1.21) as we believe the recent spate in order wins and
ongoing sector re-rating calls for a higher peg of 11x FY14/15F
blended earnings estimates.
Frasers Centrepoint Limited (FCL) has submitted an all-cash
offer to acquire 100% of Australand Property Group at A$4.48
per stapled security, translating to about A$2.6bn. The offer
represents a premium of 4% over the last closing price. The
Managers of FCL sees this acquisition as a strategic move to
deepen its business in Australia, which is one of FCL’s three
core markets, alongside Singapore and China. In terms of
capital management, the Manager has indicated that it is
comfortable with a long term gearing level of 0.8x. There are
no plans to raise equity at this moment, and funding could be
via a mix of debt and internal cash.
Tat Hong Holdings has divested its entire 31.27% interest in
Kian Ho Bearings to Raffles United Pte Ltd in a married deal for
S$17.2m. Tat Hong had acquired the stake in Kian Ho back in
2006, originally intending to synergise its spare parts business
with Kian Ho, but this did not materialise. Raffles United is an
investment holding company held by the son and daughter of
Teo Teng Beng, who is also the managing director and a
member of Kian Ho's nominating committee. Kian Ho Bearings
is listed on the mainboard of the SGX-ST, and is a stockist,
distributor and retailer of all kinds of bearings, seals and power
transmission belts in Southeast Asia and the Far East. Following
the acquisition, Raffles United owns approximately 52.65%
stake in Kian Ho Bearings, triggering a mandatory
unconditional cash offer. It will have to make an offer for all
the remaining Kian Ho shares in issue not already owned, at
US Indices Last Close Pts Chg % Chg
Dow Jones 􀀘 16,737.5 15.2 0.1
S&P 􀀘 1,927.9 3.6 0.2
NASDAQ 􀀘 4,251.6 17.6 0.4
Regional Indices
ST Index 􀀙 3,280.2 (16.5) (0.5)
ST Small Cap 􀀙 556.2 (1.8) (0.3)
Hang Seng 􀀙 23,151.7 (139.3) (0.6)
HSCEI 􀀙 10,317.8 (50.3) (0.5)
HSCCI 􀀙 4,282.9 (50.9) (1.2)
KLCI 􀀙 1,865.2 (7.3) (0.4)
SET 􀀙 1,449.4 (4.8) (0.3)
JCI 􀀙 4,932.6 (9.6) (0.2)
PCOMP 􀀙 6,766.6 (34.3) (0.5)
KOSPI 􀀘 2,008.6 6.6 0.3
TWSE 􀀙 9,120.0 (3.5) (0.0)
Nikkei 􀀘 15,068.0 33.7 0.2
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013 2014
100-Day MA
Index
STI
Total Market cap (US$bn) 614
Total Daily Vol (m shrs) 1,991
12m ST Index High 3,302
12m ST Index Low 2,960
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price (S$)
4 Jun
Target Price
(S$)
ComfortDelgro Buy 2.420 2.50
Global Logistic Properties Buy 2.720 3.42
Mapletree Greater China
Commercial Trust
Buy 0.885 1.02
Thai Beverage Public Buy 0.635 0.68
Stock Picks – Small Cap
Rec’n Price (S$)
4 Jun
Target Price
(S$)
Vard Holdings Buy 1.125 1.34
Nam Cheong Buy 0.385 0.47
Centurion Corporation Buy 0.705 0.86
Source: DBS Bank
Singapore
Wired Daily
Page 2
a price of S$0.235 in cash for each Offer Share. The offer
price carries a 6.8% premium to Kian Ho's last traded price.
The offer price is final. The offeror does not intend to revise
the offer price.
Midas Holdings announced that its joint venture company,
Nanjing SR Puzhen Rail Transport (NPRT) has secured three
metro train contracts worth a combined RMB3.5 bn. The
latest orders bring the total value of contracts announced by
NPRT so far this year to over RMB4.5 bn.
In the responses to an SGX query regarding the stock’s
trading action yesterday, STATS ChipPAC says certain other
parties have contacted the them to explore a possible
acquisition, this is in addition to an earlier announcement
that it had received a non-binding expression of interest
from a third party with a view to a possible acquisition of all
the shares in the Company. However, there has been no
material development thus far.
Rex International Holding announced that its jointlycontrolled
entity, Lime Petroleum Norway has signed an
agreement with North Energy to acquire 5% stakes in two
additional licences in Norway, PL591 and PL591B. The
transfer of the 5% stakes is pending regulatory approval.
Both licences have been assessed using Rex Virtual Drilling.
Exploration drilling in the licences is expected to commence
in the first half of 2015.
Tritech Group has been awarded a S$6.1m contract for the
Instrumentation and Monitoring for Thomson Line by the
Land Transport Authority (LTA). The commencement date of
the contract is on 02 June 2014 and is expected to be
completed on 30 December 2020.
The Singapore Exchange (SGX) could make it easier for
established global companies to seek a secondary listing on
its bourse. The market operator announced that it is seeking
feedback on a proposal to create two main tiers for
secondary-listed companies, based on each company's
home market. For companies with a primary listing or
substantial exposure to one of 23 "developed" markets, the
SGX will no longer impose additional continuing listing
obligations. That list of developed markets will be based on
classifications by index operators MSCI and FTSE.
Secondary-listing companies that are not from those 23
markets will continue to be subject to current additional
obligations, which usually involve rules on interested party
transaction, major deals and delistings.

No comments:

Post a Comment