OCBC Report 15 Jan 14

KEY IDEA Singapore Press Holdings: A soft landing for ad revenues Summary: 1QFY14 PATMI dipped 6.6% YoY to S$88.8m mostly due to lower contributions from the property segment after the SPH REIT spin-off and softer numbers from the core print business. We judge this set of results to be mostly in line with expectations as 1Q PATMI now makes up 26.8% of our full year estimates. In terms of the topline, 1QFY14 revenue came in at S$328.5m, up 2.0% YoY due to positive rental reversions from property assets and partially offset by an anticipated decline in print revenue. Recall that management has set up a S$100m New Media Fund to invest in media-related businesses and has also began cost-saving initiatives to generate savings of S$19m per annum and we would expect updates from the group going into 2QFY14. Maintain HOLD with a fair value estimate of S$4.14.  (Eli Lee) MORE REPORTS UOL Group: Top bid for Upper Paya Lebar tender Summary: Last evening, UOL put in the top bid of S$392.3m in the government land sales tender for a residential land parcel at Upper Paya Lebar Road. The tender attracted seven bids and UOL’s bid was 3.7% above the second highest bidder. The site has a land area of 216.1k sq ft with a plot ratio of 2.8, and is within walking distance to Bartley MRT Station. UOL’s top bid translates to a price of S$648 psf GFA, and we forecast breakeven and selling prices for this project at S$1.1k psf and S$1.3k psf, respectively. These estimates are fairly in line with prices at nearby Bartley Residences and Bartley Ridge, and yield a fairly reasonable margin of 15% with an estimated accretion to RNAV of S$0.13 S-cents per share. Pending the award of the site, our fair value estimate remains unchanged at S$7.16. Maintain BUY. (Eli Lee)

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NEWS HEADLINES - US stocks rallied to their best day of the year on Tue as investors welcomed stronger-than-expected retail sales and got a boost from Google Inc and Apple Inc. - Singapore remained the most active bidder in mergers and acquisitions among South-east Asian countries over the course of last year, a Mergermarket report showed. - Moves to secure future revenue streams may be put in place in the upcoming Budget, as public spending rises with a rapidly ageing population and the government move towards greater redistribution. - Shares in JES International soared 26% yesterday, after a Xinjiang mining exploration firm that JES is investing in was estimated to have 4.2b tonnes in resources, equivalent to a value of more than US$500b. - United Envirotech won a 250m yuan (S$52.45m) engineering, procurement and construction project to construct an underground membrane bioreactor within Hebei province in China. - Select Group Ltd has set its sights on expanding into Malaysia, Indonesia, Thailand and China. - MTQ Corp is acquiring Binder Group for A$19.3m (S$21.9m) to boost its products and services.