Today’s Focus
• M1 – FY13 earnings inline, announced special dividend.
Maintain BUY with target price of S$3.60
M1’s FY13 earnings of S$160m (+ 9.4%) was in line;
including special DPS of 7.1Scts, final DPS of 14.2Scts beat
our 9Scts estimate. Management guided for single-digit
growth in FY14, prompting us to trim FY14F/15F earnings by
2% each. Maintain BUY with target price of S$3.60, implying
11% upside potential and 5% plus yield.
Keppel REIT’s 4Q13 results in line; valuations remained stable.
K REIT offers stable portfolio with limited refinancing risks in
2014 and modest growth prospects. Maintain HOLD with
revised TP of S$1.29 (Prev S$ 1.23).
Despite being hit by a weak JPY-S$ exchange rate, Mapletree
Logistics Trust (MLT) reported resilient results – topline and
net property income came in at S$78.1m (+0.9% y-o-y) and
S$67.4m (-0.2% y-o-y). Distributable income came in 7.7%
higher at S$45.0m (DPU of 1.82 Scts), supported by lower
interest rates of 1.9%. MLT’s will be acquiring an industrial
property in Iskandar Malaysia from its sponsor, which could
lift earnings further from 2HFY15. Our target price and
recommendation under review pending conference call with
management.
First Resources released its FY2013 production data. The data
is in-line with our expectations; but the slow pace of
smallholders' yields also suggests that 1Q14 output
(combined) may still be weak and probably only recover
towards 2H14. We expect own estates output to recover by
22% y-o-y and smallholders by 11% y-o-y by end of 2014.
Except for forward selling prices and margins for its
downstream businesses (i.e. refining and biodiesel); we
expect no surprises to the group's 4Q13 earnings. Our HOLD
call and S$2.19 target price is maintained.
Jardine Strategic Holdings is investing US$731m to buy a
20% stake in Hong Kong-listed Zhongsheng Group Holdings,
a distributor of Volkswagen, Porsche, Mercedes Benz and
Audi cars in China. The acquisition will result in Jardine
Strategic becoming one of the top three shareholders of
Zhongsheng after its two co-founders.
US Indices Last Close Pts Chg % Chg
Dow Jones 16,458.6 41.6 0.3
S&P 1,838.7 (7.2) (0.4)
NASDAQ 4,197.6 (21.1) (0.5)
Regional Indices
ST Index 3,128.8 (18.5) (0.6)
ST Small Cap 539.6 (2.7) (0.5)
Hang Seng 22,929.0 (204.4) (0.9)
HSCEI 10,040.2 (127.1) (1.3)
HSCCI 4,407.7 (35.6) (0.8)
KLCI 1,807.6 (5.4) (0.3)
SET 1,290.0 (5.4) (0.4)
JCI 4,431.6 19.3 0.4
PCOMP 6,005.6 18.5 0.3
KOSPI 1,953.8 9.3 0.5
TWSE 8,621.6 25.6 0.3
Nikkei 15,641.7 (92.8) (0.6)
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013 2014
100-Day MA
Index
STI
Total Market cap (US$bn) 574
Total Daily Vol (m shrs) 3,545
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$)
20 Jan
Target Price
(S$)
Hutchison Port Hldgs Trust (US$) Buy 0.675 0.80
Keppel Corp Buy 10.940 12.90
ST Engineering Buy 3.880 4.90
Yangzijiang Buy 1.195 1.32
Stock Picks – Small /Mid Cap
Rec’n Price (S$)
20 Jan
Target Price
($)
Ezion Holdings Buy 2.400 3.36
China Merchants Buy 0.920 1.20
Pacific Radiance Ltd Buy 0.940 1.05
Nam Cheong Buy 0.325 0.42
Source: Bloomberg Finance L.P., DBS Bank
Singapore
Wired Daily
Page 2
SATS’ aviation operating data for 3Q and 9M FY2013-14. In
the third quarter of FY2013-14, the number of flights
handled by SATS grew 10.2% and unit services increased by
6.6% year-on-year. Cargo throughput was up 1.9%.
Passengers handled rose 4.8% to 11.25m, driven by higher
low-cost carrier traffic. Gross and unit meals, however,
declined 8.0% and 5.7% respectively due mainly to the loss
of Qantas’ flights to Europe. Except for gross and unit
meals, all operating metrics grew in the first nine months of
FY2013-14.
AusGroup has been awarded a two year plus one year
option for scaffolding for maintenance services at BHP
Billiton’s Worsley Alumina refinery, in the South West of
Western Australia, worth up to AUD$7m per annum with a
potential full contract value of AUD$21m.
China Environment has secured two contracts amounting to
RMB393.6m in total, including a RMB11m contract from
Nanjing Steel for the upgrading of two units of existing
electrostatic precipitators and a RMB 382.6m contract from
Shanxi Electric for the supply of industrial dust collectors.
Ley Choon Group has secured a contract worth
approximately S$7.0m awarded by the Public Utilities Board.
The contract is in respect of watermain repairs and other
contract work for network services.
Local business confidence is wilting in the first quarter of
this new year, although it remains in the positive range,
going by the latest Business Optimism Index (BOI) compiled
by the Singapore Commercial Credit Bureau (SCCB). The
overall BOI score fell from +33.98 percentage points last
quarter to +13.13 percentage points for Q1 this year,
suggesting strongly that moderation has set in and local
firms are cautious about their business expectations.
According to the Bloomberg Global Poll, international
investors are the most upbeat about the global economy
than at any time in almost 5 years, buoyed by the U.S.-led
revival of industrial nations. 59% of Bloomberg subscribers
surveyed last week said the economic outlook is improving.
This is up from 33% in November and marks the most
optimistic result since the poll began in July 2009. Strength
in the richest economies was cited as the main
reason. The poll also underscores the confidence shift
towards advanced economies, while emerging markets
become a cause for concern. 72% in the Bloomberg survey
said the U.S. economy is improving, up from 53% a year
ago. 49% said the same of the euro zone and 49% said
Japan is strengthening. By contrast, just 13% of those
surveyed said China’s economy is improving, with 36%
saying it is deteriorating.
For every company predicting in January that earnings that
will beat analyst estimates, 2.5 are projecting results that
fall short, matching the worst ratio since the rally began in
March 2009, this according to data compiled by Bloomberg.
Among the 52 companies in the S&P 500 that have
reported results for last quarter, fewer are posting income
that exceeds Wall Street forecasts - about 62% compared
with 75% in the previous period. Profit growth slowed to a
quarterly average of 4.1% in 2013, down from 20% over
the last 3 years, this according to Bloomberg data.
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