OCBC Report 19 Nov 13

ECS Holdings: Challenging environment, but growth achieved ECS Holdings (ECS) reported a 4.5% YoY increase in its 3Q13 PATMI to S$8.7m on the back of a 11.4% jump in revenue to S$999.3m. After adjusting for forex and other exceptional items, we estimate that core earnings would have increased 4.7% YoY from S$8.7m to S$9.1m. This was in-line with our expectations. Looking ahead, we expect ECS to benefit from new product launches by major IT vendors in which it has established a strong working relationship with, such as Apple and Lenovo. We finetune our assumptions and raise our fair value estimate from S$0.56 to S$0.585 as we roll forward our valuations to 6x FY14F EPS. Maintain BUY, as valuations remain undemanding, with the stock trading at FY14F P/NTA of 0.55x and PER of 5.6x. (Wong Teck Ching Andy)

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NEWS HEADLINES - US stocks closed mostly lower on Mon after activist investor Carl Icahn said he’s “very cautious” on equities and they could experience a “big drop.” - Singapore's non-oil re-exports (NORX) surged to a record high of S$22.3b in Oct, rising 26.7% YoY. - SingHaiyi Group has acquired the full equity stake of Vietnam Town, a partially completed commercial condominium development project in San Jose, California, for US$33.05m. - Falcon Energy Group proposed a 1-for-10 bonus warrant issue of up to 82,453,751 free warrants for shareholders. - Soilbuild Construction has won a contract to build a S$13m facility at the new Seletar Aerospace Park. - NSL Chemicals, a wholly owned subsidiary of NSL Ltd, has agreed to sell its entire 100% stake in NSL Chemicals (Thailand) Ltd (NSCT) to SCG Chemicals Ltd for S$328.3m. - Civmec Construction & Engineering, a subsidiary of Civmec Limited, has bagged new contracts worth a combined S$65m.