Today’s Focus
• Jaya - Steady proxy to industry upswing; maintain BUY,
target price S$0.91
Jaya reported another steady quarter with net profit of
US$7.2m for 2Q-FY14, up about 16% y-o-y (excluding vessel
disposal gains) on a 31% y-o-y improvement in chartering
revenue. 83% fleet utilisation in low season, higher day rates
from more sophisticated fleet boost charter income in 2QFY14.
Charter backlog improves significantly as Jaya increases
its presence in the Middle East market with long-term
charters. Interim dividend of 1Sct was declared (1H13 interim:
0.5Scts). Maintain BUY for 11% upside to target price of
S$0.91, plus 4-5% dividend yield supported by net cash
position.
4Q13 results for Ascott Residence Trust in line; NAV lifted by
stable property valuations. Armed with a strong war chest
and available debt headroom given low gearing of 34%,
management will continue to pursue growth through
acquisitions. Maintain BUY; S$1.33 TP has been adjusted for
rights issue.
3QFY14 results for Mapletree Logistics Trust in line; YTD net
income is 77% of forecast. Future growth is expected to be
driven by acquisitions/ developments while its portfolio
earnings remain resilient. Maintain BUY rating and S$1.16
target price.
Results Cache Logistics Trust was slightly below expectations
as Cache did not execute on more acquisitions that we had
previously anticipated for. With only 3% of GFA up for
renewal in FY14, Cache offers strong near term earnings
visibility. Cache is well poised for acquisitions as its gearing
level of 29.1% is fairly conservative. Maintain BUY, target
price revised slightly to S$1.31 (Prev S$ 1.33).
1Q14 results for Frasers Centrepoint Trust in line. Organic
growth is expected to be driven by positive rental reversions
from Causeway Point and Northpoint. The next catalyst for
FCT would be new acquisitions, namely Changi City Point.
Maintain BUY, TP S$2.14.
US Indices Last Close Pts Chg % Chg
Dow Jones 16,414.4 (44.1) (0.3)
S&P 1,843.8 5.1 0.3
NASDAQ 4,225.8 28.2 0.7
Regional Indices
ST Index 3,133.8 5.0 0.2
ST Small Cap 542.1 2.5 0.5
Hang Seng 23,033.1 104.2 0.5
HSCEI 10,218.4 178.3 1.8
HSCCI 4,400.9 (6.8) (0.2)
KLCI 1,815.3 7.8 0.4
SET 1,293.1 3.1 0.2
JCI 4,452.5 20.9 0.5
PCOMP 6,019.2 13.6 0.2
KOSPI 1,963.9 10.1 0.5
TWSE 8,599.9 (21.7) (0.3)
Nikkei 15,796.0 154.3 1.0
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013 2014
100-Day MA
Index
STI
Total Market cap (US$bn) 570
Total Daily Vol (m shrs) 3,877
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$)
21 Jan
Target Price
(S$)
Hutchison Port Hldgs Trust (US$) Buy 0.675 0.80
Keppel Corp Buy 10.960 12.90
ST Engineering Buy 3.880 4.90
Yangzijiang Buy 1.190 1.32
Stock Picks – Small /Mid Cap
Rec’n Price (S$)
21 Jan
Target Price
($)
Ezion Holdings Buy 2.430 3.36
China Merchants Buy 0.920 1.20
Pacific Radiance Ltd Buy 0.950 1.05
Nam Cheong Buy 0.330 0.42
Source: Bloomberg Finance L.P., DBS Bank
Singapore
Wired Daily
Page 2
Rex International has been awarded five new offshore
licences in the 2013 Awards in Predefined Areas (APA
2013), according to a Norwegian Ministry of Petroleum and
Energy press release dated 21 January 2014. The Group’s
portfolio of licences increased to 12 in Norway, and 21
internationally, well ahead of its target of 20 licences by July
2014.
Courts has announced earlier than expected opening of its
first big box megastore in Bekasi Indonesia. The store is now
scheduled to open by 2Q FY14/15 (September 2014)
instead of 3Q FY14/15 (December 2014). We do not think
that an earlier than expected opening of this store would
change our earnings forecast significantly. We have already
factored expectations for Indonesia. We expect minimal
contribution for FY14/15F, with growth accelerating in
FY15/16F. We forecast revenue of S$50m for Indonesia in
FY15/16F contributing to about 5% of our revenue forecast.
Maintain BUY, target price S$0.77.
Keppel Land has acquired a residential site in West Jakarta
for about $42m. It would develop a high-rise condominium
with more than 1,200 units, as well as about 60 ancillary
shophouses, on the three-hectare site. This is part of
Keppel's move to strengthen its foothold in Indonesia.
Raffles Medical Group is acquiring a site adjacent to Raffles
Hospital for a purchase consideration of S$105.2m for
expansion. The Group will use the adjacent site to expand
its existing healthcare facilities at North Bridge Road from its
current GFA of 28,604.94 m2 to 49,217.28 m2. The total
development cost of the project, including the purchase
price of the site, construction costs and improvement works
to the existing hospital, is estimated to be approximately
S$310m.
Ntegrator International has started 2014 with four major
contracts, worth S$4.02m, from repeat customers in the
region. These contracts are for the supply of equipment and
services to Vietnam, Myanmar and Singapore.
Libra Group has been awarded a sub-contract for air
conditioning and mechanical ventilation for a proposed
condominium development at Bedok South worth S$6.4m
and a contract for mechanical & electrical works worth
S$9.9m from the Ministry of National Development.
In property news, a 99-year leasehold site along East Coast
Road housing the former Joo Chiat police station is believed
to have drawn a new record bid for a Government Land
Sales (GLS) hotel site. A consortium comprising Master
Contract Services and Keong Hong Construction placed the
highest offer out of eight bidders of $352.8m, or $1,326.11
psf ppr in the tender that closed yesterday.
US indices were mixed as corporate earnings disappointed
investors. Verizon Communications Inc., Johnson & Johnson
and Travelers Cos. lost more than 1%, dragging the DJIA
lower after reporting earnings. The global economy will
grow 3.7% this year compared with an October estimate of
3.6%, the IMF said in revisions to its World Economic
Outlook. US GDP will expand 2.8% (previous 2.6%); Japan
will gain 1.7% (previous 1.2%) and the U.K. will increase
2.4 % (previous 1.9%). Meanwhile, China is projected to
grow 7.5$, faster than the 7.3% forecasted in October.
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