OCBC Report 11 Sep 13

UOB: Tapping on opportunities in Thailand
UOB’s core Thailand management team is generally positive on its business and growth in Thailand, supported by rising regional trades, higher transactional banking activities and higher affluence. Profit before tax grew from THB1845m in 2010 to THB2927m in 2012 or a CAGR of 26% (FY10-12). Despite this growth, its NPL ratio edged lower from 4.98% in 2010 to 2.12% in 2012. In terms of its loans breakdown, Personal Financial Services (PFS) accounted for the bulk at 45% as of Jun 2013. Some of the key areas of business emphasis include PFS (growing its market share for deposits, credit cards, personal loans, housing loans, etc), Corporates and SMEs. We are maintaining our fair value estimates of S$22.97, but as the share price has recently corrected to S$20.36m, we are upgrading to a BUY. (Carmen Lee)

MORE REPORTS

Midas Holdings: Keeping the faith
The recent public tender for 91 high-speed train sets by China Railway Corporation (CRC) was awarded to CSR Qingdao Sifang, which we believe is a disappointment for Midas Holdings since Midas is not its major supplier. However, we believe that Midas will still be able to secure high-speed contracts in 4Q13, as our channel checks reveal that CRC will also be awarding contracts for 51 high-speed train sets to China CNR via a competitive negotiation. Midas is a key supplier of aluminium alloy extrusion profiles for high-speed trains to China CNR. We estimate potential addressable market size of CNY153m for Midas for this round of procurement. We understand that there may also be another round of procurement by CRC by year end, while 2014 will likely see the bulk of high-speed train car purchases by CRC under China’s 12th Five-Year Plan (2011-2015). Maintain BUY and S$0.65 fair estimate on Midas. (Wong Teck Ching Andy)

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


NEWS HEADLINES

- US stocks rallied on Tue, with the S&P 500 continuing its longest stretch of gains since mid-Jul, after upbeat data from China and amid heightened diplomacy on Syria.

- Singapore’s local banks have been named Asia's top three safest banks for the third year running, even after Moody's lowered its outlook for the banks to "negative" for the next one to two years.

- Asia is not on the verge of financial crisis, despite the recent turmoil in regional equity and currency markets, said Prime Minister Lee Hsien Loong.

- Sound Global’s controlling shareholders is seeking the delisting of the company from the Singapore Exchange with an exit offer of 70 S cents per share.

- United Envirotech yesterday announced that it has signed a S$59m contract to acquire, upgrade and expand a wastewater treatment plant in China.

- While mindful of Japan's deep pockets, CapitaMalls Asia is not looking to spin off its assets in that country at the moment.