Monday, September 2, 2013

DBS Vickers 3 Sep 13

Today’s Focus
 Vard – Secured PSV contract from newly established
player in the offshore support vessel market
The anticipated near-term technical rebound that started
off c.3000 level on the STI should follow through in early
trade on the back of the overnight rally in European
markets that reacted to a better-than-expected PMI for
the Eurozone and China. US futures continue to point to a
higher opening tonight. For the STI, follow through levels
seen at 3070 first, before scoping towards 3100.
We see the possibility of the STI dipping towards 2880
once the current rebound ends before reaching a
significant low. Foreign funds outflow from the region
due to QE unwinding remains the main stumbling block.
This in addition to the lack lustre earnings outlook,
troubles in Syria and the need to raise the USD16.7tril US
debt ceiling by mid-Oct.
In a further sign that policymakers may have averted a
sharp slowdown, China's factory activity expanded for the
first time in 4 months in August as domestic demand
rebounded. The final HSBC/Markit Purchasing Managers'
Index (PMI) climbed to 50.1 in August, up sharply from
July's 47.7 and in line with last week's flash reading.
In the Eurozone, strong orders for manufactured goods
helped factory activity rise at the fastest pace in over 2
years in August and led to backlogs of work for the first
time since mid-2011. Markit's Manufacturing Purchasing
Managers' Index (PMI) rose to 51.4 from 50.3 in July. The
figure was also better than an earlier flash reading of
51.3.
Vard has secured a new contract for the design and
construction of one Platform Supply Vessel (PSV) for
Carlotta Offshore, a newly established player in the
offshore support vessel market. Delivery is scheduled from
Vard Vung Tau in Vietnam in 4Q 2014. The contract value
was not disclosed. Based on the similar PSV secured in
2011, the contract could worth about NOK300m. This will
bring YTD-FY13 order wins to NOK11.6bn, making up
93% of our order win assumption this year. We expect
Vard to book NOK12.5bn new wins in FY13 and
NOK11.0bn in FY14. Maintain HOLD call and TP of S$0.92
on Vard.
US Indices Last Close Pts Chg % Chg
Dow Jones  14,810.3 (30.6) (0.2)
S&P  1,633.0 (5.2) (0.3)
NASDAQ  3,589.9 (30.4) (0.Cool
Regional Indices
ST Index  3,055.7 26.8 0.9
ST Small Cap  535.5 11.0 2.1
Hang Seng  22,175.3 444.0 2.0
HSCEI  10,055.1 229.8 2.3
HSCCI  4,292.3 45.1 1.1
KLCI  1,717.6 (10.0) (0.6)
SET  1,323.7 29.4 2.3
JCI  4,101.2 (93.9) (2.2)
PCOMP  6,061.8 (13.4) (0.2)
KOSPI  1,924.8 (1.5) (0.1)
TWSE  8,038.9 17.0 0.2
Nikkei  13,572.9 184.1 1.4
 


STI
Total Market cap (US$bn) 558
Total Daily Vol (m shrs) 4,107
12m ST Index High 3,454
12m ST Index Low 2,946
Source: Bloomberg Finance L.P
Stock Picks – Large Cap
Rec’n Price ($)
2 Sep
Target Price
($)
ST Engineering Buy 3.990 4.80
ComfortDelgro Buy 1.830 2.19
OCBC Bank Buy 10.010 12.40
Stock Picks – Small /Mid Cap
Rec’n Price ($)
2 Sep
Target Price
($)
Ezion Holdings Buy 2.350 3.20
Goodpack Buy 1.675 2.00
Nam Cheong Buy 0.265 0.36
CSE Global Buy 0.870 0.97
Venture Corporation Buy 7.620 8.40
Source: Bloomberg Finance L.P, DBS Vickers
Singapore
Wired Daily
Page 2
PT Indofood Sukses Makmur has made an offer to acquire
the remaining shares of China Minzhong that it does not
already owned at S$1.12 in cash per share, valuing the
company at around S$734m. It currently owns 219.5m
shares or approximately 33.49% stake in China
Minzhong.
Fitch Ratings has affirmed Mapletree Industrial Trust’s
Long-Term Issuer Default Rating at “BBB+” with a Stable
Outlook. In addition, Fitch has affirmed “BBB+” ratings to
senior unsecured notes issued under the S$1 billion Multi-
Currency Medium Term Note programme.
Singapore Post has entered into an agreement for the
acquisition of the entire issued and paid-up share capital
of EK Media for S$1.2m. EK Media owns and operates a
leading online sampling platform in Singapore called The
Sample Store (www.thesamplestore.sg), which focuses on
distributing product samples to end-consumers. In
addition, EK Media also runs branding and social media
marketing campaigns for advertisers.
Notwithstanding the ongoing legal action, AusGroup will
receive a further $18.3m from Karara Mining, expected to
be paid under the terms of the contract over the course
of this week. This is in addition to the progress payment
of $13.0m paid in July 2013.
CNA Group has signed a Letter of Award via its
Vietnamese subsidiary, CNA-HTE Vietnam to renovate,
upgrade and expand Ho Chi Minh City’s Tan Son Nhat
International Airport’s domestic terminals for
approximately S$10.6m. The project is CNA’s second
airport-related project in South East Asia clinched this year
and will increase order book to approximately S$74.2m.
China Environment has secured three contracts with an
aggregate value of RMB86.6m to supply Electrostatic
Precipitators (ESPs) to Indonesia, thus increasing its
orderbook to RMB241.2m.
A-Sonic Aerospace has established an aircraft leasing
business which is steadily growing and will contribute
significantly to its bottomline in the years to come. To
date, it has leased out two aircraft to clients in South Asia
and Euro-Asia. Another two are expected to be leased out
before the end of this year. A-Sonic also owns six aircraft
engines, of which three have been leased out. The
company has entered into letters of intent to acquire
additional seven airframes, one aircraft and three aircraft
engines.

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