Today’s Focus
• SPH - Attractive cash hoard; maintain BUY, target price
reduced slightly to S$4.49
1Q14 results for SPH within expectations; topline and
operating profit registered marginal growth of 2% and 4%
to S$328.5m and S$125.7m respectively. Net profit dipped by
6.6%, arising from non-controlling interest in SPH REIT.
Advertising revenues decline but show signs of moderating;
property still growing. We believe SPH has the ability to
distribute a portion of its c.S$1.4bn cash and reward longterm
shareholders. If this happens, we expect it to be a
catalyst for the share price. We trim our FY14F/15F forecasts
by 6%/8% as we adjust our ad revenue growth down to
1%/2%, from 2%/4% previously. Maintain BUY, target price
reduced slightly to S$4.49 (Prev S$ 4.53).
In our Asean Telecom Sector report, our analyst highlighted
that M1 is a beneficiary of sector changes (i) data re-pricing &
declining handset subsidies in the mobile sector (ii) gains in
the fixed broadband space versus losses for its peers (iii)
potentially free pay TV content by mid 2014 due to the crosscarriage
regulation. On the other hand, content subsidy costs
may hurt StarHub while we see slower subscriber growth at
SingTel.
United Envirotech is awarded a RMB250m engineering
procurement and construction (EPC) project from Bishui
Lantian Water Co (BSLT) in Gaoyang County, Baoding City,
Hebei Province, China. The project is to construct a 60,000
m3/day underground membrane bioreactor (MBR) plant to
treat textile wastewater from a textile industrial park in
Gaoyang. The new MBR plant is the phase 3 expansion of an
existing 140,000 m3/day wastewater treatment plant serving
the industrial park.
In addition, United Envirotech has signed a framework
agreement with the parent company of BSLT, Hebei Hongrun
New Material (Hongrun)to set up a joint venture to
collaborate on future projects on wastewater treatment plant
upgrading, recycling, supply of steam and the acquisition of
its existing water treatment assets. With an asset value of
RMB 2.8 bn, Hongrun is a textile conglomerate with business
interest in textile and dyestuff, environmental protection,
property development, commodity trading and financing.
US Indices Last Close Pts Chg % Chg
Dow Jones 16,373.9 115.9 0.7
S&P 1,838.9 19.7 1.1
NASDAQ 4,183.0 69.7 1.7
Regional Indices
ST Index 3,123.8 (11.7) (0.4)
ST Small Cap 542.5 1.0 0.2
Hang Seng 22,791.3 (97.5) (0.4)
HSCEI 10,149.2 (33.2) (0.3)
HSCCI 4,427.6 (12.2) (0.3)
KLCI 1,835.0 8.4 0.5
SET 1,295.9 12.3 1.0
JCI 4,390.8 135.8 3.2
PCOMP 5,935.6 (5.1) (0.1)
KOSPI 1,946.1 (2.9) (0.1)
TWSE 8,548.1 (18.1) (0.2)
Nikkei 15,422.4 (489.7) (3.1)
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013 2014
100-Day MA
Index
STI
Total Market cap (US$bn) 574
Total Daily Vol (m shrs) 3,329
12m ST Index High 3,454
12m ST Index Low 3,004
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price (S$)
13 Jan
Target Price
(S$)
Hutchison Port Hldgs Trust (US$) Buy 0.670 0.80
Keppel Corp Buy 10.860 12.90
ST Engineering Buy 3.870 4.90
Yangzijiang Buy 1.220 1.32
Stock Picks – Small /Mid Cap
Rec’n Price (S$)
13 Jan
Target Price
($)
Ezion Holdings Buy 2.340 3.36
China Merchants Buy 0.910 1.20
Pacific Radiance Ltd Buy 0.975 1.05
Nam Cheong Buy 0.325 0.42
Source: Bloomberg Finance L.P., DBS Research
Singapore
Wired Daily
Page 2
Shares in JES International soared 26% yesterday to close at
18 cents, after a Xinjiang mining exploration firm that JES is
investing in was estimated to have 4.2 billion tonnes in
resources, equivalent to a value of more than US$500 bn. This
is far higher than the S$60 bn condition that had been laid
out in the earlier agreement between both firms.
Select Group, a Singapore food service provider has set its
sights on expanding into Malaysia, Indonesia, Thailand and
China. It unveiled plans for a $45m new corporate
headquarters in Senoko South Road to pave the way for its
overseas expansion. The new building is expected to be
operational by the third quarter of next year. Select Group said
it aims to set up 300 outlets in the next five years, half
overseas and half in Singapore.
UOL has made a top bid of $648.30 psf ppr for a private
housing site near Bartley MRT Station. The bid was just 3.7%
higher than the second-highest offer of around $625 psf ppr
by EL Development. However, the top two bids were quite far
apart from the other five. The site can accommodate a 17-
storey project with about 700 units.
Singapore is not facing a credit bubble because its property
market is stabilising, household balance sheets are strong and
the financial system is robust, the Monetary Authority of
Singapore (MAS) said yesterday in response to a critical article
in Forbes. A contributed article in the magazine this week
argued that Singapore was heading for an "Iceland-style
meltdown", citing property prices and construction activity
inflated by abnormally low interest rates, among others. In its
response, MAS acknowledged that low global interest rates
have stimulated credit growth and an increase in property
prices in recent years. "That is why the government and MAS
have taken decisive steps to cool property demand and
prevent excessive leverage."
US stocks rallied as better-than-expected December retail sales
(actual 0.2%, consensus 0.1%) and corporate merger activity
underpinned investors’ confidence on the economy. Corporate
results flows in with Wells Fargo and JPMorgan reporting
today while Bank of America, Citigroup and Goldman Sachs
report later this week. According to Bloomberg, earnings for
companies in the S&P500 Index likely climbed 4.9% on the
average in 4Q while revenue rose 1.8%. Meanwhile, FED
officials continue to show support for QE tapering.
Philadelphia FED President said the central bank’s stimulus
program should end later this year because the economy is on
a firmer footing than it has been in the past few years. The
Dallas FED President meanwhile likened QE to “beer goggles”
that makes everything look good.
-----------------------------------
CONFIDENTIAL NOTE:
This message is intended only for use of the addressee and may contain
information that is privileged and confidential. If you are not the
intended recipient, you are hereby notified that any use or dissemination
of this communication is strictly prohibited. If you have received this
communication in error, please notify us immediately by reply and delete
this message from your system.
No comments:
Post a Comment