Monday, September 9, 2013

DBSVickers Report 10 Sep 13

CSE Global – Likely to return most of the proceeds
from upcoming IPO of about 26-28 Scts to
shareholders
CSE Global is likely to return most of the proceeds, which
our analyst estimates to be 26-28 Scts DPS, from the
divestment of its UK business. The UK business (~33% of
group profit) can fetch higher PE than CSE itself, thus
unlocking value for its shareholders. We estimate that CSE
will take three years to recover the earnings gap due to
divestment of UK business. Our TP of S$1.07 ((Prev.
S$0.97) implies potential returns of 28%. Maintain BUY.
A successful IPO could lead to a re-rating of the stock.
Tiger Airways has upped its shareholding in the capital of
Indonesia's PT Mandala Airlines from 33% to 35.8%.
Tiger became a shareholder of Mandala early last year
when it acquired a one-third stake for a nominal amount
of US$1, but committed itself to re-fleeting the
Indonesian carrier with its own A320 planes and providing
technical and management expertise to the once-troubled
carrier. Tiger's partner at Mandala is Indonesian
conglomerate Saratoga Investment Corp, which took over
51% of the airline.
Sound Global is proposing to delist from SGX. The exit
offer will be made at S$0.70 in cash for each Offer Share.
The offeror does not intend to increase the exit offer
price. The company will continue to maintain its primary
listing of the shares on the SEHK. Sound Global will also
be making an offer for the outstanding RMB600m
principal amount of bonds.
Amara Holdings may sell hospitality assets as a real estate
investment trust (Reit). Amara is considering putting its
27-year-old Amara Singapore Hotel, along with the
adjacent 100 AM shopping mall and Amara Sanctuary
Resort Sentosa into a Reit and selling the assets in an
initial public offering (IPO), according to a person with
knowledge of the matter. The IPO could take place next
year.
US Indices Last Close Pts Chg % Chg
Dow Jones �� 15,063.1 125.6 0.8
S&P �� 1,671.7 16.6 1.0
NASDAQ �� 3,706.2 47.4 1.3
Regional Indices
ST Index �� 3,088.2 39.8 1.3
ST Small Cap �� 543.4 6.0 1.1
Hang Seng �� 22,750.7 129.4 0.6
HSCEI �� 10,528.7 194.6 1.9
HSCCI �� 4,354.3 29.8 0.7
KLCI �� 1,747.0 23.2 1.3
SET �� 1,384.3 48.1 3.6
JCI �� 4,191.3 118.9 2.9
PCOMP �� 5,997.0 22.4 0.4
KOSPI �� 1,974.7 19.4 1.0
TWSE �� 8,192.1 27.9 0.3
Nikkei �� 14,205.2 344.4 2.5
 


STI
Total Market cap (US$bn) 562
Total Daily Vol (m shrs) 2,868
12m ST Index High 3,454
12m ST Index Low 2,946
Source: Bloomberg Finance L.P
Stock Picks – Large Cap
Rec’n Price ($)
9 Sep
Target Price
($)
ST Engineering Buy 4.01 4.80
ComfortDelgro Buy 1.865 2.19
OCBC Bank Buy 10.01 12.40
Stock Picks – Small /Mid Cap
Rec’n Price ($)
9 Sep
Target Price
($)
Ezion Holdings Buy 2.28 3.20
Goodpack Buy 1.64 2.00
Nam Cheong Buy 0.27 0.36
CSE Global Buy 0.87 1.07
Venture Corporation Buy 7.61 8.40
Source: Bloomberg Finance L.P, DBS Vickers
Singapore
Wired Daily
Page 2
GRP is proposing a renounceable non-underwritten rights
cum warrants issue of up to 418.2m new shares at an
issue price of S$0.08 for each Rights Share, with up to
418.2m free detachable warrants. Each Warrant carries
the right to subscribe for one (1) new share at an exercise
price of S$0.08 per share, on the basis of three (3) Rights
Shares for every one (1) existing share held.
See Hup Seng announced that it is in discussions in
relation to possible transactions involving the issue of
shares in the company and acquisition of business.
In property news, the response to last week's launches of
The Glades in Tanah Merah and The Skywoods in the
Dairy Farm area shows that the new loan curbs have
affected private home sales. Not only were sales relatively
weak but they also seemed to have stalled after the first
day of booking. Keppel Land said that it had sold around
80 units at 99-year-leasehold The Glades, next to Tanah
Merah MRT Station, at average price of $1,450-1,500 psf.
The bulk of the sales are understood to have been done
on the first day, Friday. Meanwhile, the consortium
developing The Skywoods, also a 99-year project, sold 35
units last Friday, followed by 10 units on Saturday and
Sunday combined. Its average price for the first 150 units
released in the 420-unit project is $1,250 psf.
China’s inflation slowed to 2.6% y-o-y in August, slightly
lower than July's 2.7%. In the first eight months of the
year, the CPI rose 2.5% y-o-y, below both the
government's 3.5% target for 2013 and a touch below
the 2.6% seen in 2012. China's producer price index
(PPI), which measures prices of goods at the factory gate,
rose 0.1% in August from July. It was the first increase in
six months and came after five months of deflation. The
PPI fell 1.6% y-o-y in August, up from a 2.3% decrease in
July and the highest reading in six months.
US stocks rose reacting to positive China August export
numbers (actual 7.2%, consensus 5.5%). Corporate
acquisitions also underpinned optimism while Apple
shares gained ahead of the unveiling of new iPhone
models. In Asia, eyes will be on the release of China’s
August industrial production, fixed asset investments and
retail sales.

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