Sunday, October 20, 2013

DBSVickers Report 21 Oct 13

Small Mid Caps - Recent sell down presents
opportunity for quality small mid caps with superior
growth & visibility
We believe that small mid caps will continue to attract
investors interest with its superior growth. Our universe of
SMCs has packed in superior growth of 24% in 2014 vs
12% for Large Caps. Near term winners are potential
earnings outperformers and strong growth. Our picks are
Nam Cheong, Ezion, Goodpack, Centurion and Yoma.
O&G still has legs to run, thanks to new contracts and
strong earnings visibility. We like Ezion, Kreuz and Rex.
Higher volume and lower costs are planting recovery for
CPO stocks – We expect earnings for Bumitama and Indo
Agri to rebound strongly in FY14.
We are lowering our earnings estimates for Courts Asia
for FY14F/FY15F by 10%/16% and TP to S$0.97 (Prev
S$1.05) as we envisage softer sales in Malaysia going
forward and lacklustre sales in Singapore in the near term.
However, we are maintaining our BUY recommendation
on the stock, as valuations are attractive vis-à-vis peers.
Ascott Residence Trust is reaping value from the sale of 81
serviced residence units in Beijing. The proceeds are to be
redeployed to other value enhancing sources. Maintain
BUY and TP S$1.42.
CapitaCommercial Trust’s 3Q13 DPU of 2.04 Scts in line.
Underlying portfolio occupancy shows strength. While
prospective yields of c5.6-5.9% are attractive, the
execution of CapitaGreen, a year away from completion
and has yet to secure first tenant, is key for a sustained rerating
of the stock. Maintain HOLD, TP revised to S$1.46
(Prev S$ 1.43) as we roll forward valuations.
Weak JPY has impacted the performance of Mapletree
Logistics Trust; DPU of 1.82 Scts in line. We are tapering
MLT’s acquisition assumptions but expect more
development projects to be unveiled to extract value.
Maintain BUY with S$1.16 TP. Yield is attractive at 6.5%-
6.9%.
Asiasons Capital and LionGold Corp, along with Blumont,
will have their trading restrictions lifted by the Singapore
Exchange (SGX) today. The regulator said it would lift the
restrictions as trading in these stocks has stabilised.
US Indices Last Close Pts Chg % Chg
Dow Jones 􀀘 15,399.7 28.0 0.2
S&P 􀀘 1,744.5 11.3 0.7
NASDAQ 􀀘 3,914.3 51.1 1.3
Regional Indices
ST Index 􀀘 3,192.9 6.3 0.2
ST Small Cap 􀀘 537.2 1.0 0.2
Hang Seng 􀀘 23,340.1 245.2 1.1
HSCEI 􀀘 10,644.0 75.3 0.7
HSCCI 􀀘 4,532.9 7.6 0.2
KLCI 􀀘 1,799.6 2.2 0.1
SET 􀀘 1,484.7 15.6 1.1
JCI 􀀘 4,546.6 27.6 0.6
PCOMP 􀀘 6,607.8 46.9 0.7
KOSPI 􀀘 2,052.4 11.8 0.6
TWSE 􀀘 8,441.2 66.5 0.8
Nikkei 􀀙 14,561.5 (25.0) (0.2)
STI Index Performance
Singapore
Total Market cap (US$bn) 592
Total Daily Vol (m shrs) 1,897
12m ST Index High 3,454
12m ST Index Low 2,946
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price ($)
18 Oct
Target Price
($)
ST Engineering Buy 4.200 4.80
ComfortDelgro Buy 1.910 2.19
OCBC Bank Buy 10.420 12.40
Singapore Airlines Buy 10.320 11.40
Stock Picks – Small /Mid Cap
Rec’n Price ($)
17 Oct
Target Price
($)
Ezion Holdings Buy 2.220 3.10
Goodpack Buy 1.780 2.00
CSE Global Buy 0.895 1.07
Mapletree Commercial Trust Buy 1.230 1.35
Frasers Centrepoint Trust Buy 1.845 2.14
Source: Bloomberg Finance L.P., DBS Vickers
Singapore
Wired Daily
Page 2
Rex International Holding restructures its holdings in US
investments and increases stake in licence-holding company
in Trinidad & Tobago. Rex US’s 20% direct interest in Fram’s
Colorado and North Dakota concessions will be exchanged
for equity stake in Fram. Rex’s direct stake in Fram will be
increased to 27.7%. Its stake in the licence-holding company
Caribbean Rex will be increased to 64.17%.
SembCorp Industries will be investing RMB932m (S$190m) to
develop the first - and its most comprehensive - total water
management plant to support a coal-to-diesel project in
China. The plant, to be located in Wangqiao Industrial Park in
Changzhi City, Shanxi province, will support Shanxi Lu'an
Group's coal-to-diesel project under a 15-year service
agreement secured by Sembcorp's wholly owned subsidiary,
Sembcorp China Holding.
The management of People’s Food intends to make a
voluntary conditional offer for all the remaining shares. The
consideration for each Offer Share will be either S$1.20 in
cash and/or One (1) new ordinary share in the capital of the
Offeror.
Work on three MRT stations and a depot for the 30-kilometre
Thomson Line will start in the first quarter of next year, with
the Land Transport Authority (LTA) awarding four civil
contracts for them worth a combined $1.04 bn. The three
stations are Woodlands, Lentor and Mayflower, and the
depot will be in Mandai.
China's annual economic growth quickened to 7.8%
between July and September from 7.5% in the previous
three months, the fastest growth this year and in line with
expectations. In the first nine months of 2013, China grew
7.7%from a year earlier. Meanwhile industrial output grew
10.2% in September from a year ago, versus expectations of
10.1%. Retail sales in September rose 13.3% y-o-y versus an
expected 13.5%. Fixed-asset investment grew 20.2% in the
first nine months from a year earlier, versus an expected
20.3%.-

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