HPH Trust – Expect DPU to improve to 5.9UScts in
FY14; maintain BUY and US$0.82 TP
Midas – Finally, high-speed railway contract wins,
with potential for much more
Hutchison Port Holdings Trust’s 3Q earnings fell 8% y-o-y
to HK$539m, but improved 28% q-o-q as its HK port
operations are now back on track. There are signs of
some improvement in US bound trade but cargo traffic to
Europe remains tepid. HPHT is on track for DPU of
40HKcts for the full year. We maintain our view that the
worst is over for HPHT. We project HPHT’s DPU to
improve from 5.3UScts to 5.9UScts in FY14. Maintain BUY
and US$0.82 TP
Midas has finally announced the high-speed train contract
wins worth Rmb168m, the first in three years. This is a
positive sign of turning point, with more such contracts
expected to flow in rapidly. Order book is now nearly
Rmb1bn, with potential for much more. Maintain BUY, TP
S$0.60. Further upside to our TP could come from large
high-speed train contract wins in 2014. The stock is
currently trading at just 0.9x P/BV, with a firm turnaround
story to boot.
United Envirotech has signed a concession agreement
with the local government of Qixia City in Yantai,
Shandong for the transfer- expand-operate-transfer
(TEOT) of a municipal wastewater treatment project.
Under the terms of the agreement, the total investment
for the project is approximately RMB105m (~S$21m). The
expansion and upgrading work will commence
immediately and is expected to be completed by third
quarter of 2014. The construction of this project will add
RMB70m to EPC's orderbook, lifting YTD new contract
win to RMB521m, ahead of our RMB 400m assumption.
However, major recognition of this orderbook would be in
FY15 and the impact of this particular project on UENV's
existing portfolio is small. Hence, impact of this project is
immaterial to existing performance. However, separately,
we believe higher interest expenses arising from the
recent MTN issues could take toll on earnings. Our
earnings and TP of S$0.98 are under review.
US Indices Last Close Pts Chg % Chg
Dow Jones 15,392.2 (7.4) (0.0)
S&P 1,744.7 0.2 0.0
NASDAQ 3,920.0 5.8 0.1
Regional Indices
ST Index 3,195.8 2.9 0.1
ST Small Cap 541.9 4.7 0.9
Hang Seng 23,438.2 98.1 0.4
HSCEI 10,668.2 24.2 0.2
HSCCI 4,571.0 38.1 0.8
KLCI 1,802.6 3.0 0.2
SET 1,448.5 (36.2) (2.4)
JCI 4,578.2 31.6 0.7
PCOMP 6,597.6 (10.3) (0.2)
KOSPI 2,053.0 0.6 0.0
TWSE 8,419.3 (21.9) (0.3)
Nikkei 14,693.6 132.0 0.9
STI
Total Market cap (US$bn) 593
Total Daily Vol (m shrs) 4,570
12m ST Index High 3,454
12m ST Index Low 2,946
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price ($)
21 Oct
Target Price
($)
ST Engineering Buy 4.23 4.80
ComfortDelgro Buy 1.92 2.19
OCBC Bank Buy 10.36 12.40
Singapore Airlines Buy 10.34 11.40
Stock Picks – Small /Mid Cap
Rec’n Price ($)
21 Oct
Target Price
($)
Ezion Holdings Buy 2.23 3.10
Goodpack Buy 1.865 2.00
CSE Global Buy 0.885 1.07
Mapletree Commercial Trust Buy 1.25 1.35
Frasers Centrepoint Trust Buy 1.85 2.14
Source: Bloomberg Finance L.P., DBS Vickers
Singapore
Wired Daily
Page 2
Civmec has recently won over S$$210m of contracts. These
contracts have increased the order book to over S$$330m.
TTJ has clinched $41m deals for Downtown Line 2 jobs. It
had re-secured the sub-contracts from McConnell Dowell
SEA to supply, fabricate and install civil defence shelter doors
for the Sixth Avenue and King Albert Park stations on the
Downtown Line 2. The new contract, which the group
expects to complete substantially in FY2014 and 2015, will
bring TTJ's order book to $151m.
OKH Global has been awarded a S$32.8m contract in
relation to the design and build for the proposed new
erection of a 4-storey warehouse with ramp up facilities at
No. 7 Pioneer Sector Lane, by Nam Leong Co. The Project is
expected to have a positive impact on FY June 2014.
New and existing players in the foreign school arena looking
for a long-term investment in a flagship Singapore campus
will soon be able to bid for a 26-year lease for a property
surrounded by international schools and near Good Class
Bungalow (GCB) areas. The German European School
Singapore (GESS) has launched a tender for a 26-year sublease
on its main campus at 72 Bukit Tinggi Road in the Swiss
Club locale. The minimum reserve price is set at $39m, which
translates to $415 psf on the existing gross floor area of
93,969 sq ft for the campus. Selling a long sub-lease for the
Bukit Tinggi premises to another educational institution will
help the school to fund development of a new campus in
Upper Bukit Timah which is expected to be ready in 2017.
GESS is currently in talks with the Singapore authorities for
allocation of the site for the new campus.
US markets ended mixed ahead of the September
employment numbers scheduled for release tonight.
Consensus expects non-farm payrolls to improve to 180k
from 169k in August. Meanwhile, consensus now expects QE
tapering to begin only in 1Q 2014 earliest, accessing the
impact of the recent partial federal government shutdown
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