Wednesday, December 4, 2013

DBS Vickers Report 5 Dec 13

Courts Asia – Upgrade to BUY on attractive valuations.
Target price remains at S$0.77.
􀂃 CDL Hospitality Trust - Second foray into Maldives offers
strong growth potential. Maintain BUY, TP raised to
S$1.84.
Our analyst upgrades Courts Asia to BUY on attractive
valuations, and believe share price have more than factored in
the negative aspects. The recent 22% share price correction
presents accumulation opportunities. We believe credit
tightening has already factored into share price; and is likely
to end post FYE Mar’14. FY15F growth is expected to be
driven by new stores and relaxation of credit tightening.
Target price remains at S$0.77.
CDL Hospitality Trust (CDREIT) announced its acquisition of
Jumeirah Dhevanafushi, a 35-villa top-end luxury resort
located in Maldives, for US$59.6m (S$74.8m). This is
CDREIT’s 2nd acquisition in Maldives and will see its
contribution increase to c.7.8% (vs. 4.6% previously) of
FY14F net property income. This acquisition offers strong
growth potential; FY15F yield is estimated to hit a high of
7.7%. Maintain BUY, TP raised to S$1.84 (Prev S$1.80).
Cosco's Zhoushan yard has secured contracts worth US$54m
from an Asian buyer to build two 64k dwt bulk carriers. The
two bulk carriers are scheduled for delivery in the 4Q14. With
these contracts, YTD wins is lifted to slightly over US$3bn.
While Cosco's strong order win momentum is encouraging,
we need to monitor its execution and ability to translate these
orders to bottomline. In addition, overhang risk from drillship
saga persists. Maintain FULLY VALUED call; TP: S$0.76.
Yoma Strategic Holdings has entered into a new joint venture
with LCT Investment (LCT) and First Myanmar Investment
(FMI) to establish a Myanmar-incorporated joint venture
company to build and operate a steel mesh products
manufacturing plant in Yangon. Parties will invest in the Joint
Venture by way of equity and shareholders’ loans amounting
to an aggregate of US$6.5m.
US Indices Last Close Pts Chg % Chg
Dow Jones 􀀙 15,889.8 (24.9) (0.2)
S&P 􀀙 1,792.8 (2.3) (0.1)
NASDAQ 􀀘 4,038.0 0.8 0.0
Regional Indices
ST Index 􀀙 3,160.7 (27.0) (0.8)
ST Small Cap 􀀙 534.2 (2.1) (0.4)
Hang Seng 􀀙 23,728.7 (181.8) (0.8)
HSCEI 􀀙 11,368.8 (79.6) (0.7)
HSCCI 􀀙 4,651.3 (28.4) (0.6)
KLCI 􀀙 1,821.9 (2.4) (0.1)
SET 􀀙 1,376.6 (7.3) (0.5)
JCI 􀀙 4,241.3 (47.5) (1.1)
PCOMP 􀀙 6,105.2 (74.3) (1.2)
KOSPI 􀀙 1,986.8 (22.6) (1.1)
TWSE 􀀘 8,418.0 25.5 0.3
Nikkei 􀀙 15,407.9 (341.7) (2.2)
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013
100-Day MA
Index
STI
Total Market cap (US$bn) 585
Total Daily Vol (m shrs) 2,277
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$)
4 Dec
Target Price
(S$)
Hutchison Port Hldgs Trust (US$) Buy 0.670 0.82
ComfortDelgro Buy 1.950 2.19
OCBC Buy 10.250 12.40
Singapore Airlines Buy 10.540 11.40
Stock Picks – Small /Mid Cap
Rec’n Price (S$)
4 Dec
Target Price
($)
Ezion Holdings Buy 2.210 3.30
China Merchants Buy 0.925 1.20
CSE Global Buy 0.995 1.11
Nam Cheong Buy 0.290 0.42
Source: Bloomberg Finance L.P., DBS Vickers
Singapore
Wired Daily
Page 2
Swissco Holdings has placed orders for two anchor handling
tug supply vessels (AHTS) and a fast utility/crew boat with a
one plus one option. The newbuild vessels, excluding owner
supplied equipment, are worth an aggregate of S$42m.
Swissco continuously renews its fleet to maintain a low age
profile and to capitalise on strong demand for offshore
support vessels.
Ascendas Hospitality Trust (A-HTRUST), has signed a 5-year
management agreement with Oakwood Asia Pacific to
operate its serviced apartment property in Tokyo, Japan.
SBI Offshore proposed issue or placement of 22m new shares
at S$0.125 per share. The Placement Shares represents 14.1%
of the existing issued share capital and 12.38% of the
enlarged issued share capital. The Placement Price represents a
premium of approximately 12% to the last volume weighted
average price. The net proceeds of approximately S$2.7m will
be used for working capital and funding for existing projects
and for new market expansion, new business development
plans and new projects.
The global air cargo market continues gradual recovery with
the industry posting 4% y-o-y growth in traffic in October, as
most regions registered an expansion thanks to an improving
business environment. Global capacity was up 4.9%, which
caused freight load factor to come in at 46.4%, according to a
report by the International Air Transport Association (Iata).
However, load factors are showing signs of bottoming out
after a year of continued decline, Iata noted. The airfreight
market was also stronger in October compared to the month
before, when traffic contracted 0.3%. Asia-Pacific carriers,
which account for nearly 40% of global cargo traffic,
rebounded with volumes increasing by 2% in October after
posting year-on-year declines throughout 2013. However, this
was outstripped by a 4.1% bump in capacity, resulting in a
load factor of 56.2%.
US stocks ended mixed despite better-than expected economic
reports. In its Beige Book report on regional economic activity,
the Fed said the economy expanded at a "modest to moderate
pace" from early October to mid-November. It noted gains in
the auto and high-tech industries and reported that retailers
are "hopeful, but cautious" about the holiday shopping
season

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