Sunday, October 6, 2013

OCBC Report 7 Oct 13

TEE International: Scrip dividend scheme in place

Summary:
Tee International announced that its scrip dividend scheme will apply to the final tax-exempt (one-tier) dividend of 2.5 S-cents per ordinary share for the financial year ended 31 May 2013. Management updates that the price for the new shares issued under the scheme will be set at not more than a 10% discount, nor shall it exceed the average of the last traded prices for the period between 9 Oct 2013 and 11 Oct 2013 (both dates included). We believe this scrip dividend scheme allows shareholders who are looking to re-invest dividends into the counter to do so conveniently, and also enable the group to retain such capital for allocation into future opportunities. While we hold our fair value estimate of S$0.38 per share unchanged, we are upgrading our rating to a BUY (from hold previously) on valuation grounds as the share price has weakened marginally from our last update.  (Eli Lee)

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China Environment: Focus on air pollution control

Summary:
China Environment Ltd (CEL) is a provider of industrial waste gas treatment solutions in China, which is likely to benefit from the Chinese government’s increased focus on cleaning up the environment in China. The Chinese government has reiterated its stance to clean up the environment, this time with the intent to spend RMB1.7t to combat air pollution, where a key focus is on reducing the amount of PM2.5 particle in the air. With its new facility in Anhui nearing completion, which will increase its capacity to process 80k tonnes of steel to over 350k tonnes, as well as the recent RMB80m share place, CEL feels that it has sufficient working capital to take on bigger and more jobs. We currently do not have a rating on the stock. (Carey Wong)

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NEWS HEADLINES


- US stocks ended higher Fri but closed mostly lower for the week, as investors stayed sensitive to news about the government shutdown.

- KS Energy Limited has extended its reach into Mexico with the signing of a memorandum of agreement with one of Mexico’s renowned conglomerate Empresas ICA, S.A.B. de C.V.

- Blumont Group has called off plans to buy Australia-listed Cokal Ltd for S$146m for now, after its shares came crashing down after announcing the deal.

- BreadTalk wants to more than double its revenue to S$1b by 2016, and to have more than 2,000 outlets across its business segments by 2018.

- Indofood's S$1.12 a share general offer for China Minzhong is "not fair but reasonable", said the independent financial adviser appointed by China Minzhong's directors.

- Keppel Offshore & Marine has signed a Memorandum of Understanding with two Mexican oil majors, to jointly develop, own and operate a yard facility there.

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