Today’s Focus
Sembcorp Marine - Rebound in 4Q13 margins a
confidence booster. Upgrade to BUY, TP S$4.80
Super Group - Soft outlook ahead; proposed 1-for-1
bonus issue. Maintain HOLD, TP S$4.09
4Q13 net profit for Sembcorp Marine (SMM) beat
expectations. The outperformance came from higher revenue
recognition and tax incentives of S$33m. EBIT margin
rebounded 0.3ppts y-o-y and 1.1ppts q-o-q to 11.1%.
Dividend payout ratio remained at 50%; management
proposed final/special DPS of 8.0Scts, bringing total FY13 DPS
to 13.0Scts, unchanged from FY12, translating to a dividend
yield of 3.2%. Brazil yard is on track to assume integration
work for first drillship in June. SMM is a purer play in the
offshore & marine sector with stronger EPS CAGR of 15% in
FY13-15F. We believe the good results, margin recovery and
on-schedule Brazilian projects should restore confidence and
reverse the downtrend in SMM’s share price since Nov (-9%)
after it reported a weak 3Q set of results. Upgrade to BUY
with unchanged target price of S$4.80.
FY13 results for Super Group slightly ahead on better-thanexpected
gross margins. Final DPS of 7 Scents was declared.
The Group is also proposing a 1 for 1 bonus issue. We expect
weaker growth outlook on soft demand, and higher input
costs. Maintain HOLD, target price S$4.09.
4Q13/ FY13 core profits for Raffles Medical within
expectations. Final DPS of 4 Scts was proposed. Expansion
remains on track; we expect no major impact from CFO’s
resignation. We maintain our HOLD recommendation with
our target price raised slightly to S$3.27, as we roll valuations
over to the average of FY14F/15F earnings, still based on 24x
PE.
First Resources reported 4Q13 net profit of US$64m (+36%
y-o-y; +25% q-o-q) - significantly above our expectation of
US$48m. This brought FY13 earnings (excluding biological
asset gains) to US$217m - or 8% above our full year forecast.
The better-than-expected performance was driven by 105%
q-o-q jump in refining and processing revenue on top of 13%
q-o-q rise plantations revenues. Our forecasts and target price
of S$2.19 are under review, pending management inquiries
and further analysis.
US Indices Last Close Pts Chg % Chg
Dow Jones 16,207.1 103.8 0.6
S&P 1,847.6 11.4 0.6
NASDAQ 4,293.0 29.6 0.7
Regional Indices
ST Index 3,105.8 5.9 0.2
ST Small Cap 533.9 (2.7) (0.5)
Hang Seng 22,388.6 (179.7) (0.8)
HSCEI 9,797.9 (138.4) (1.4)
HSCCI 4,158.7 (68.1) (1.6)
KLCI 1,828.7 (2.1) (0.1)
SET 1,301.4 (2.8) (0.2)
JCI 4,623.6 (22.6) (0.5)
PCOMP 6,296.3 (12.0) (0.2)
KOSPI 1,949.1 (8.8) (0.4)
TWSE 8,560.6 (41.3) (0.5)
Nikkei 14,837.7 (28.0) (0.2)
STI Index Performance
Singapore
Total Market cap (US$bn) 569
Total Daily Vol (m shrs) 2,234
12m ST Index High 3,454
12m ST Index Low 2,960
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price (S$)
24 Feb
Target Price
(S$)
Keppel Corp Buy 10.440 12.60
ST Engineering Buy 3.800 4.90
Yangzijiang Buy 1.145 1.32
Stock Picks – Small /Mid Cap
Rec’n Price (S$)
24 Feb
Target Price
($)
Ezion Holdings Buy 2.260 3.26
China Merchants Buy 0.890 1.20
Pacific Radiance Ltd Buy 0.950 1.05
Nam Cheong Buy 0.340 0.43
Source: Bloomberg Finance L.P., DBS Bank
Singapore
Wired Daily
Page 2
Asian Pay TV Trust (APTT) results and distributions inline,
10.7% yield intact for FY14F. APTT declared an ordinary
distribution of 4.13 Scts per unit for 2H13, inline with
forecasts. The management has reaffirmed FY14F
distribution guidance of 8.25 Scts per unit (10.7% yield)
after raising capex guidance. APTT also guided for FY15F
distributions not to be impacted by expansion capex.
Maintain BUY, target price S$ 0.91.
Cosco Corp's net profit for FY13 slid 71% to $30.6m. This
came on the back of a 6% decline in revenue to $3.51bn
and a 34% fall in gross profit to $321.2m. The fall in
turnover was largely due to lower shipyard revenue. A
dividend of 1cts per share was proposed, versus 2cts in the
previous financial year.
Pan-United Corp posted a 37% rise in quarterly net profit
attributable to equity holders to S$11.98mil, up from
S$8.75mil a year ago. Revenue was largely unchanged at
S$186.26mil, compared to S$186.38mil in FY2012. For FY,
net profit rose 4% to S$44.6 mil, due partly to an increase
in port activities and in the group's share of Changshu
Xinghua Port (CXP) from 51.3% to 85.5% in September
2013, and higher contribution from its basic building
resources (BBR) division. Excluding vessel disposal gains of
S$2.2mil in FY2012, the group's PATMI would be 9%
higher y-o-y.
For 4Q2013, Vard recorded a 22.5% y-o-y increase in
revenue to NOK 3.1 nil, up from NOK 2.5bil a year ago on
the back of high yard utilization and good project progress.
While showing an improvement from the previous two
quarters, 4Q2013 EBITDA decreased 45% to NOK 158mil
compared to NOK 287mil in 4Q2012, as further delays and
cost overruns at the Niterói yard in Brazil continue to weigh
on overall margins. EBITDA margin was 5.1% for 4Q2013.
UIC made an unconditional cash offer for all the issued and
paid-up ordinary shares in the capital of Singapore Land, at
an offer price of S$9.40 per share. The price offered
represents an 11% premium to last transacted price, and
c.8% premium to average price traded over the past 12
months. Based on the offer price, UIC will pay a maximum
of S$762m for the remaining 19.6% stake in Singland
(c.81m shares), representing 18.8% of UIC’s market cap,
and will be funded by internal resources and external
borrowings. UIC offered the following rationale for its offer:
(a) the opportunity for cash exit for investors, given low
historical trading volume and (b) the ability to consolidate
and optimise Singland’s resources and operations.
Jaya Holdings is proposing to dispose the entire issued and
paid up share capital of all its subsidiaries (the “Sale
Companies”) to Mermaid Marine Australia for aggregate
cash consideration of S$625m. The Sale Companies
represent materially all of the business of Jaya. The purchase
consideration taken together with the US$10m cash held at
the company as of 31 December 2013 represents S$0.826
on a per share basis (Gross Implied Value). The Gross
Implied Value also represents a premium of 5.5% to the last
volume weighted average share price. Following completion
of the proposed transaction, the company intends to
distribute a significant portion of the purchase consideration
to shareholders by way of a cash dividend.
Sembcorp Industries (Sembcorp) continues its growth
momentum in China with the expansion of two of its
utilities facilities – its wind power plant in Huanghua, Hebei
province, which will see its wind power capacity increase by
almost 50%, and its industrial water plant in Nanjing,
Jiangsu province, which will have its industrial water
capacity doubled. Sembcorp will build, own and operate an
additional 48-megawatt wind farm in Huanghua. The
RMB454.9m expansion will increase the wind power
capacity in Huanghua by almost 50%, from 99 megawatts
to 147 megawatts, and is expected to be completed by the
first half of 2015. In addition, Sembcorp will be doubling its
industrial water capacity from 120,000 cubic metres per day
to 240,000 cubic metres per day in the Nanjing Chemical
Industrial Park (NCIP), Jiangsu province. The total expansion
cost will amount to RMB65.2m. Besides meeting the
country’s growing energy and water needs in a sustainable
manner, the expansions also demonstrate the Group’s focus
on growth in China, a key market for Sembcorp.
Yongnam consortium, which is one of four shortlisted
consortiums that has been invited by the authorities of
Myanmar to resubmit, by 22 April 2014, its proposal for the
design, construction, operation and maintenance of
Hanthawaddy International Airport (HIA) and its facilities on
the basis of a public-private partnership agreement for a 30-
year concession period.
Sino Construction expects a loss for FY2013, mainly due to
declining financial performance arising from deteriorating
business environment the Group operates in.
CNA Group has established a partnership with Mitsui
Knowledge Industry (MKI) to explore bringing MKI’s IT
cloud-based energy management solution called Green
energy Management (GeM2) into Singapore. This
partnership marks MKI’s first step into penetrating the
Singapore market and GeM2 will be the first MKI solution
available for Singapore’s buildings and various specialised
facilities such as cinemas.
January inflation dipped to 1.4% from 1.5% in December, a
near four-year low. The easing in overall inflation was
mainly due to a larger decline in private road transport
costs, which fell 3.5% in January after a 2.8% decline in
Singapore
Wired Daily
Page 3
December. This was in turn due to lower COE premiums at
the end of 2013. Core inflation - which strips out the costs
of accommodation and private road transport, however,
remained on an upward trend, rose at a faster 2.2% from
2% in December, due to higher contributions from services
and food prices. Services inflation edged up to 2.9% in
January from 2.8% in the preceding month, led by a
stronger increase in holiday travel cost and pre-school fees.
Food inflation crept up to 3% from 2.7% in December,
reflecting the seasonal uptick in food prices during Chinese
New Year.
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