Wednesday, November 27, 2013

DBS Vickers Report 28 Nov 13

United Envirotech - Growth delayed to FY15; downgrade
to HOLD, TP reduced to S$0.91
Recurring income model for United Envirotech remains intact
but escalating costs need monitoring. Our analyst has cut
FY14/15F earnings by 36%/19% to account for higher costs
and slow EPC (Engineering, Procurement and Construction)
execution. Downgrade to HOLD on limited upside to reduced
TP of S$0.91 (Prev S$ 0.98). Earnings catalysts: EPC wins,
higher than expected accretion from Memstar. Memstar
takeover is long term positive but EPS dilutive near term.
Technically, there is downside risk to $0.75 or even as low as
$$0.66. These 2 levels are the major 38.2% and 50%
downward retracement of the stock’s bullish trend from a
low of $0.31 (Jun12) to $1.02 (July13).
Upstream oil and gas firm Interra Resources' latest
development well in the Tanjung Miring Timur (TMT) field in
Indonesia has achieved a flow rate of 650 barrels of oil a day.
The firm currently has an average shareable production of
1,904 barrels a day. The firm has also started drilling another
well in the TMT field, the third of four that it plans to do.
ST Engineering announced that its electronics arm, ST
Electronics has set up a wholly owned subsidiary, ST
Electronics (Thailand), in Thailand with a paid up capital of
Thai Baht 120,000,000 (about S$4.8m). It will offer ST
Electronics’ transportation and advance electronics solutions
in Thailand.
China Aviation Oil, Asia's top jet fuel buyer, is seeking up to
1.6 million barrels of jet fuel for delivery over late December
to January, a tender document showed. This is about 30%
higher than what the company has been requiring every
month over the past two tenders, though the reason was not
immediately clear. CAO had earlier halved its monthly jet fuel
requirement for October due to a tax policy change that went
into effect in August. China removed a value-added tax
exemption on imported jet fuel used by Chinese airlines on
their international flights, making imports more expensive
than buying from domestic refiners, traders said. CAO
resumed normal purchase volumes in September for its late
October to November volumes, though it is unclear if this will
be a long-term trend.
US Indices Last Close Pts Chg % Chg
Dow Jones  16,097.3 24.5 0.2
S&P  1,807.2 4.5 0.2
NASDAQ  4,044.8 27.0 0.7
Regional Indices
ST Index  3,172.1 (1.5) (0.0)
ST Small Cap  534.7 (1.4) (0.3)
Hang Seng  23,806.4 125.1 0.5
HSCEI  11,402.0 99.9 0.9
HSCCI  4,618.1 5.7 0.1
KLCI  1,798.5 0.3 0.0
SET  1,373.1 14.4 1.1
JCI  4,251.5 16.2 0.4
PCOMP  6,053.9 28.5 0.5
KOSPI  2,039.0 10.2 0.5
TWSE  8,295.9 47.9 0.6
Nikkei  15,449.6 (65.6) (0.4)
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013
100-Day MA
Index
STI
Total Market cap (US$bn) 581
Total Daily Vol (m shrs) 1,902
12m ST Index High 3,454
12m ST Index Low 3,004
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price (S$)
27 Nov
Target Price
(S$)
Hutchison Port Hldgs Trust (US$) Buy 0.685 0.82
ComfortDelgro Buy 1.98 2.19
OCBC Buy 10.44 12.40
Singapore Airlines Buy 10.49 11.40
Stock Picks – Small /Mid Cap
Rec’n Price (S$)
27 Nov
Target Price
($)
Ezion Holdings Buy 2.04 2.65
China Merchants Buy 0.91 1.20
CSE Global Buy 1.005 1.11
Frasers Centrepoint Trust Buy 1.79 2.14
Yoma Strategic Holdings Buy 0.740 1.02
Source: Bloomberg Finance L.P., DBS Vickers
Singapore
Wired Daily
Page 2
Singapore’s services sector continued to put up a strong
showing in the third quarter, with all segments experiencing
higher turnover compared with a year earlier. Business receipts
from companies in services - excluding wholesale & retail
trade, and accommodation & food services - rose 8% y-o-y, in
line with Q3 government data released last week. Business
services enjoyed the highest growth of 12.2% compared with
a year ago, while financial & insurance services followed close
behind with an 11.6% rise in revenue.
U.S. stocks rose as Hewlett-Packard led a rally in the
technology sector while data on employment and consumer
confidence boosted optimism in the economy. Hewlett-
Packard posted revenue and profit that topped analysts’
estimates. Weekly jobless claims fell more than expected at
316k (consensus 330k). The Thomson Reuters/University of
Michigan final index of consumer sentiment unexpectedly rose
to 75.1 in November from 73.2 a month earlier.

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