Today’s Focus
• Yoma - Maintaining momentum; BUY, target price
S$1.02
3Q14 results for Yoma Strategic Holdings in line, driven by
further sales at Star City and tourism income. Property sales
are healthy while construction of Star City is progressing. Star
City remains the key driver as Landmark delay continues.
Yoma has again extended the longstop date for the
Landmark deal to Jun 2014. Maintain BUY and target price of
S$1.02 as this quarter has exhibited continued momentum in
property sales and additional income from tourism. We
expect non-property income to grow going forward.
The Public Transport Council (PTC) has announced that it has
granted an overall fare adjustment of 3.2% for the 2013 Fare
Review Exercise. This is about half of the 6.6% combined
2012 and 2013 fare caps, and the remainder (c.3.4%) will be
rolled over to next year’s fare review exercise. The new fares
will be effective from 6 April 2014.Adult card fares for buses
and trains will increase by 4 to 6 cents per journey, 2 to 3
cents per journey for senior citizen and 2 cents per journey
for student fares.
The 3.2% fare increase translates to fare revenue increase of
about $53.5m a year collectively for both SMRT and SBS
Transit (SBST, ComfortDelGro’s subsidiary), which is about
S$17.5m and S$36m, respectively. The estimated increase in
fare revenue is before funds to be set aside by the operators
for the Public Transport Fund, which amounts to $4.3m for
SMRT and S$7.2m for SBST. Hence, the net increase is
estimated at S$13.2m for SMRT and S$28.8m for SBST.
We have already factored in 2% increase in fares, and this is
slightly above our expectations, assuming no further cost
increases arising from higher service standards. Maintain BUY
for ComfortDelgro, FULLY VALUED for SMRT. We are
maintaining our forecasts for now. We continue to prefer CD
(BUY, TP: S$2.19) over SMRT (FV, TP: S$1.08). We like CD for
its geographical diversification, and stronger balance sheet.
On the other hand, while this fare increase will alleviate some
cost pressure for SMRT, we still have reservations given that
cost increase may continue to keep pace arising from higher
service requirements and maintenance of standards.
US Indices Last Close Pts Chg % Chg
Dow Jones 16,417.0 (64.9) (0.4)
S&P 1,845.9 (2.5) (0.1)
NASDAQ 4,218.7 3.8 0.1
Regional Indices
ST Index 3,140.4 (2.8) (0.1)
ST Small Cap 543.5 (1.4) (0.2)
Hang Seng 22,986.4 84.4 0.4
HSCEI 10,187.5 (14.3) (0.1)
HSCCI 4,449.2 (0.1) (0.0)
KLCI 1,813.0 (11.0) (0.6)
SET 1,301.5 24.5 1.9
JCI 4,412.5 (29.1) (0.7)
PCOMP 5,982.2 24.1 0.4
KOSPI 1,957.3 4.0 0.2
TWSE 8,612.1 9.6 0.1
Nikkei 15,747.2 (61.5) (0.4)
STI Index Performance
Singapore
Total Market cap (US$bn) 574
Total Daily Vol (m shrs) 2,852
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$)
16 Jan
Target Price
(S$)
Hutchison Port Hldgs Trust (US$) Buy 0.680 0.80
Keppel Corp Buy 10.940 12.90
ST Engineering Buy 3.840 4.90
Yangzijiang Buy 1.185 1.32
Stock Picks – Small /Mid Cap
Rec’n Price (S$)
16 Jan
Target Price
($)
Ezion Holdings Buy 2.390 3.36
China Merchants Buy 0.925 1.20
Pacific Radiance Ltd Buy 0.955 1.05
Nam Cheong Buy 0.325 0.42
Source: Bloomberg Finance L.P., DBS Research
Singapore
Wired Daily
Page 2
Cambridge REIT 4Q13 results released this morning were in
line with our expectations, bringing full year DPU to 4.976
Scts, a 4% increase compared to a year ago. Gearing remain
at a conservative c28%, with 83% of their debt fixed over the
next 2 years, mitigating the impact on any risk of rising
interest rates in the immediate tern. We will follow up with a
full report.
Singapore Airlines (SIA) and Air New Zealand are deepening
ties in a partnership that will beef up capacity between the
two countries while giving each airline access to specific
destinations in the other's network. SIA has been forging
partnerships and alliances to stay ahead of the competition as
it battles with sliding yields and tough competition from both
the regional and cash-rich Gulf carriers. For Air NZ, this will
enable it to relaunch flights to Singapore after it cut the citystate
from its network in 2006, due to a lack of profitability.
Mapletree Investments Pte Ltd has been awarded a prime
commercial site in Hong Kong for HK$3.77bn (S$618m). The
5,112-square-metre site is located in Kwun Tong, Kowloon
East, a key office cluster in Hong Kong that has been
earmarked as the new central business district. Mapletree
plans to develop a Grade-A office building there, with a total
gross floor area of over 61,300 square metres.
Singapore's key non-oil exports rose faster-than-expected in
December, rebounding from a fall in November, as shipments
of non-electronics goods grew. NODX rose 6.0% y-o-y, better
than market expectation of 1.7% expansion, after falling a
revised 8.9% in November. Compared with the previous
month, exports rose 9.2%, after contracting 4.2% m-o-m in
November. Shipments to China, its biggest export destination,
surged 45% y-o-y in December, compared with a 16% rise in
the previous month. Exports to the U.S. rose 27.9% y-o-y,
accelerating from a 10.3% rise in November. Shipments to the
European Union, however, fell 23.4% after a 26.6% fall in
November. Electronics exports declined 3.1% y-o-y, after
falling 8.9% in November, while non-electronics shipments
grew 10.6%, reversing a 8.9% fall in November. In the nonelectronics
sector, petrochemical exports rose 39.8%, after
growing 24% in the previous month.
U.S. stocks fell as Best Buy tumbled after reporting a drop in
US same-store sales during the December holiday shopping
period and earnings at companies from Citigroup Inc. to CSX
Corp. disappointed investors. Citigroup and Goldman Sachs
Group Inc. led declines among banks after releasing 4Q
results. Intel Corp. slid 2.6% in extended trading after
forecasting sales that may fall short of some estimates. On the
data front, weekly jobless claims figure was a tat lower than
expected (actual 326k, consensus 328k) while December CPI
was in-line with expectations. Meanwhile, the Fed said in its
Beige Book yesterday that it saw “moderate” growth across
most of the U.S. Speaking at a forum, Ben Bernanke defended
quantitative easing, saying it has helped the economy and
shows no immediate sign of creating a bubble in asset prices.
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