Monday, October 7, 2013

OCBC Report 8 Oct 13

Keppel Corporation: Healthy order wins and expecting more
Keppel Corporation (KEP) has secured new orders worth about S$4.9b YTD, close to our original forecast of S$5b. With good order momentum that is supported by prospects in the O&M sector, we increase our new order win forecast to S$6b for this year, while keeping our S$6.75b target for FY14F unchanged for now. KEP also recently announced that it will jointly develop, own and operate a yard facility in Mexico, in line with its “Near Market, Near Customer” strategy that we have always believed will put it in good stead to win new orders, especially with increasing focus on local content requirements. Besides more orders expected from Mexico, we also look to other growth areas such as West Africa, the Caspian Sea and the Gulf of Mexico. Our SOTP-based fair value estimate rises from S$12.53 to S$12.87; maintain BUY. (Low Pei Han)

MORE REPORTS


Ascendas REIT: Heading for another harvest

We are positive that Ascendas REIT (A-REIT) will put up a firm showing in FY14, as it is likely to benefit not only from incremental rental income from The Galen and continued positive rental reversions, but also from the completion of its various investment projects. While the industrial property market was relatively static in 3Q13 amid uncertainty in the manufacturing economy, we understand that the demand in the high-tech and business park segments has continued to hold up well. Given A-REIT’s significant exposure in these sub-markets, we believe A-REIT is in better position to shield off any fatigue in the industrial rental market. Maintain BUY and S$2.45 fair value on A-REIT. (Kevin Tan)

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NEWS HEADLINES


- US stocks declined on Mon, with the S&P 500 index closing at a four-week low, as a stalemate on Capitol Hill over preventing a government default persisted.

- Boustead Singapore said that the value of contracts secured by the group since Apr has topped the S$300m mark, surpassing that for the whole of the preceding financial year.

- Phospate miner AsiaPhos' shares closed 58% above its offer price of 25 S cents in its trading debut yesterday, making it the best performing IPO so far this year in percentage terms.

- Climate Holding, a special purpose vehicle in which its shareholders have a collective 43% control of Devotion Energy Group, is seeking voluntary delisting of the company.

- Catalist-listed Albedo yesterday disclosed additional information on its proposed S$774.14m reverse takeover deal - first announced about two weeks ago.

- ICP Ltd announced that it would be selling its factory building and leasehold land at 5 Loyang Drive to Chang Hua Construction Pte Ltd for S$11.8m.

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