Tuesday, October 22, 2013

DBSVickers Report 23 Oct 13

Frasers Centrepoint Trust - Expect acquisition of
Changi City Point in FY14 to drive earnings. Maintain
BUY and TP S$2.14.
Frasers Centrepoint Trust’s 4Q13 DPU of 2.98Scts in line.
In FY14, FCT will renew 32% of its income, out of which
75% will be derived from Causeway Point and
Northpoint. We expect positive rental reversions from
these two malls, given the strong shopper traffic and
tenant sales. However, we expect more moderate
reversion rates compared to previous years, as a
significant amount of upside from the AEI works have
already been captured. We expect the acquisition of
Changi City Point in FY14 to drive earnings. Maintain BUY
and TP S$2.14.
2Q14 results for Mapletree Industrial Trust in line.
Distributable income came in 9.7% higher y-o-y at
S$41.1m, translating to a DPU of 2.47 Scts. Operational
performance remain strong and we expect robust
reversionary trends for the quarter. DPU growth is
expected to be underpinned by MINT’s series of
development and asset enhancement projects. Will
provide more updates after meeting with management
today.
Yoma announced that its 70% owned subsidiary German
Car Industries Company (GCI) has signed a non-exclusive
agreement with Volkswagen (VW) to operate VW's first
service centre in Myanmar. This service centre will provide
maintenance and repair services for VW branded vehicles,
including the sale of spare parts for the replacement
market. This centre is scheduled to commence operation
this month. This is Yoma's second automotive service
centre tie-up. The group signed its first service centre with
Mitsubishi in May this year. We believe the automotive
division is shaping up to be a strategic line of business for
Yoma as we see the division expanding steadily. This
announcement is positive but the impact is long term and
not significant at this juncture. Near term, we look
forward to a positive set of results with 2Q14 earnings
growing y-o-y and q-o-q. The company is due to release
results on 7 Nov. We maintain our BUY call on Yoma
with TP of S$1.02.
US Indices Last Close Pts Chg % Chg
Dow Jones 􀀘 15,467.7 75.5 0.5
S&P 􀀘 1,754.7 10.0 0.6
NASDAQ 􀀘 3,929.6 9.5 0.2
Regional Indices
ST Index 􀀘 3,210.2 14.4 0.5
ST Small Cap 􀀘 544.3 2.4 0.4
Hang Seng 􀀙 23,316.0 (122.2) (0.5)
HSCEI 􀀙 10,653.4 (14.8) (0.1)
HSCCI 􀀙 4,551.3 (19.7) (0.4)
KLCI 􀀘 1,803.6 1.0 0.1
SET 􀀘 1,457.4 8.8 0.6
JCI 􀀙 4,512.7 (65.4) (1.4)
PCOMP 􀀘 6,603.6 6.0 0.1
KOSPI 􀀘 2,056.1 3.1 0.2
TWSE 􀀙 8,418.3 (1.0) (0.0)
Nikkei 􀀘 14,713.3 19.7 0.1

Index
STI
Total Market cap (US$bn) 593
Total Daily Vol (m shrs) 3,277
12m ST Index High 3,454
12m ST Index Low 2,946
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price ($)
22 Oct
Target Price
($)
ST Engineering Buy 4.210 4.80
ComfortDelgro Buy 1.910 2.19
OCBC Bank Buy 10.350 12.40
Singapore Airlines Buy 10.380 11.40
Stock Picks – Small /Mid Cap
Rec’n Price ($)
22 Oct
Target Price
($)
Ezion Holdings Buy 2.250 3.10
Goodpack Buy 1.860 2.00
CSE Global Buy 0.885 1.07
Mapletree Commercial Trust Buy 1.250 1.35
Frasers Centrepoint Trust Buy 1.845 2.14
Source: Bloomberg Finance L.P., DBS Vickers
Singapore
Wired Daily
Page 2
C&G Environmental Protection Holdings entered into a letter
of intent (LOI) with a potential Purchaser, a company listed
on a stock exchange in the PRC, to facilitate the negotiation
and finalisation of a definitive sale and purchase agreement
of the Group’s waste-to-energy business and assets
(including concession rights) and its principal operating
subsidiaries in the PRC. The consideration for the proposed
sale is subject to further negotiations and shall be satisfied in
part by cash and in part by the issue and allotment of quoted
shares of the Purchaser.
Global Logistic Properties has signed lease agreements for
totaling 25,000 sqm (269,000 sq ft) with Deppon Logistics at
GLP Park Wangting in Suzhou, Eastern China and GLP Park
Hunnan in Shenyang, Northeastern China.
Temasek Holdings has sold its entire direct stake in office
landlord Keppel Reit (KReit) in a share placement. The deal
involved 104m shares offered at a price range of between
$1.195 and $1.21 per share. This represents a 1.6-1.8%
discount to the trust's last closing price of $1.23 on Oct 21.
The placement offer amounted to an estimated $125m.
Temasek's share sale works out to 3.74% of KReit,
representing the stake it had received from the dividend in
specie distributed by Keppel Corp to its shareholders during
its FY2012 final results.
Sino Grandness Food Industry Group has entered into a
Cooperation Agreement (CA) with the Municipal
Government of Anhui Province whereby the Group principally
agrees to invest RMB600m to construct a production plant to
produce canned products and beverage and the Municipal
agree to provide assistance and support in land acquisition
and infrastructure as well as necessary administrative services
to facilitate the project.
Transview Holdings has received a non-binding approach for
certain of its assets, which the Company is presently
evaluating on a preliminary basis. However, no definitive
terms are finalised at this moment and there is no assurance
as to whether or not any transaction will take place.
Industrial property developer OKH Global plans to dispose of
its IT business, which is separated from its core business,
following a $123m reverse takeover of Chinese technology
firm Sinobest. The company will divest itself of two units:
Guangzhou Sinobest Information Technology and Sinobest
Technologies (HK). To do so, OKH intends to set up an
intermediate holding company and transfer the shares it
holds in the subsidiaries to the new company. In return, OKH
will receive new shares in the holding company under a
restructuring exercise. Subsequently, OKH will undertake a
capital reduction exercise and distribute all the shares it owns
in the holding company to its shareholders rather than
distributing cash. OKH's shareholders will then hold shares in
two separate companies: OKH and the holding company. The
distribution will be made on the basis of one holding
company share for every share held in OKH. Shares in the
holding company will not be listed on the SGX. Shareholders
who do not wish to own unlisted shares of the holding
company can choose to sell their shares back to the holding
company and receive cash instead.
In property news, at least 8,700 shoebox units are expected
to hit the resale market between now and 2017, as the
Seller's Stamp Duty (SSD) lock-in period approaches expiry.
While this figure is more than double the current completed
shoebox residential stock of 3,472 units, signs in the market
suggest that demand for such resale units remains relatively
resilient amid a slow-moving overall resale market. This
figure, revealed in the latest report from the Singapore Real
Estate Exchange (SRX), is predicated on a first wave of at
least 805 resale units - comprising units bought between Aug
30, 2010 and Jan 13, 2011 - and a second wave of at least
7,910 units entering the market from 2015 to 2017.
US markets rose after a weaker-than-expected September
non-farm payrolls (actual 148k, consensus 180k) figure
underpinned expectation that the FED will postpone the start
of QE tapering till around March 2014. The 10-year treasury
yield fell to a 3-mth low at 2.51% while the USD Index
dipped to 79.23. For the STI, we continue to see a near-term
cap at 3250 and working towards 3330 by year-end on the
assumption of a benign 3Q results season. Yield plays should
be underpinned by the dip in long-bond yields.

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