Wednesday, September 25, 2013

OCBC Report 26 Sep 13

Sheng Siong Group: No new stores not a concern
Although 3Q13 is coming to a close, we are unconcerned by the lack of new store additions by Sheng Siong Group (SSG). While this development means that SSG will be unable to achieve its 10% gross floor area target for the year, the group should still experience decent top-line growth for 3Q13 from full-quarter contributions of new stores added last year. Furthermore, expected margin stability and a conducive macro environment – more dining-in of consumers and relatively subdued supermarket competition – provide price support for SSG’s share price at current levels. Favouring the counter for its defensive qualities and healthy balance sheet, we maintain BUY with a slightly lower fair value estimate of S$0.78 (S$0.80 previously). A potential catalyst for the counter exists in the form of its pilot e-commerce initiative, which is likely to commence in 4Q13. (Lim Siyi)

MORE REPORTS

CapitaRetail China Trust: Outcome of Distribution Reinvestment Plan
CRCT has announced that ~6.0m new CRCT units have been allotted and issued at an issue price of S$1.447 per unit to eligible unitholders of CRCT who have elected to participate in the Distribution Reinvestment Plan in respect of the distribution of 4.69 cents per unit for 1H13. The new units will commence trading on the SGX-ST today. With the issue of the new units, the number of issued units has increased by ~0.8% to 756,140,024. Since 3Q13 results will be announced soon, we will hold off on adjusting our model for this development. We maintain our fair value of S$1.58 FV and BUY rating on CRCT. (Sarah Ong)

Lippo Malls Indonesia Retail Trust: S$150m of notes issued under MTN programme
Lippo Malls Indonesia Retail Trust (LMIRT) has priced S$150m 4.25% notes due 2016. The notes will be issued under its S$750m Guaranteed Euro Medium Term Note Programme. The fundraising does not come as a surprise since management had indicated during the 2Q13 analyst conference call that LMIRT may refinance the S$147.5m term loan due June 2014 as early as late 2013. We maintain our DDM-based FV of S$0.44 on LMIRT and HOLD rating for now. (Sarah Ong)

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


NEWS HEADLINES

- US stocks dropped on Wed, with the S&P 500 index recording its longest decline since Dec, as a possible government shutdown overrode better-than-forecast economic reports.

- The wealthy in the Asia Pacific trust their wealth managers more than high net worth individuals in the rest of the world, a wealth report has found.

- OUE Limited is mulling over establishing yet another REIT to be listed on the Main Board of SGX.

- Asiaphos Limited, a Singapore-based explorer and miner of phosphate in China, hopes to raise about S$24.4m in an IPO on the Catalist board.

- Asia Fashion Holdings assured the market that a RMB461.5m (S$94.6m) compensation it is making to customers will not render the company "insolvent immediately".

- OKH Global has entered into a placement agreement in which it will issue up to 60m new ordinary shares at 68 S cents apiece.

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