DBS Vickers Report 4 Feb 14

􀂃 SIA Engineering – 3Q13 results hit by higher costs
SIA Engineering saw its net profit for the third quarter ended
Dec 31, 2013, decline 9.7% y-o-y to $60.5m, due in part to
higher costs. Revenue edged up 2% to $283.8m, although
expenditure grew at a faster pace, increasing 4.7% to
$258.6m, on the back of higher staff costs, subcontract and
material costs. This caused operating profit to drop $6m to
$25.2m.
SembCorp Industries has agreed to acquire 45% of India's
NCC Power Projects (NCCPP) for 8.48 billion rupees
(S$175m), and will ink further agreements to take up another
20% to make up a majority stake. Potential "substantial
synergies" drove the investment. NCCPP is currently building
a 1,320-megawatt coal-fired power plant along the coast of
Nellore in Andhra Pradesh, adjacent to Sembcorp's first
power plant investment in India, Thermal Powertech
Corporation India (TPCIL).
Rex International has discovered oil in the second exploration
well in Oman. This discovery confirms the high quality and
value of the Oman asset.
Otto Marine has disposed two vessels for US$30m. The net
proceeds from the sale of the vessels would be used to repay
bank loan, thus improving the working capital of the Group.
On completion of the transaction, the Group would realize an
estimated net gain of approximately US$6.4m.
In a move to strengthen its presence in northern India,
Religare Health Trust (RHT) has entered into agreements
worth $68.8m with its sponsor Fortis Healthcare to acquire a
hospital facility as well as its related business services and
equipment. Among the agreements is a sale deed to acquire
Mohali Clinical Establishment for 2.7 billion rupees (S$55m).
Mohali Clinical Establishment operates the Fortis Hospital, a
multi-specialty hospital providing emergency trauma care
services which serves as a hub for a number of smaller,
secondary hospitals in the surrounding areas. Other
agreements include a business transfer agreement for the
purchase of Fortis' out-patient rehabilitation and consultation
US Indices Last Close Pts Chg % Chg
Dow Jones 􀀙 15,372.8 (326.1) (2.1)
S&P 􀀙 1,741.9 (40.7) (2.3)
NASDAQ 􀀙 3,997.0 (106.9) (2.6)
Regional Indices
ST Index 􀀙 2,991.0 (36.3) (1.2)
ST Small Cap 􀀙 524.9 (2.2) (0.4)
Hang Seng 􀀙 22,035.4 (106.2) (0.5)
HSCEI 􀀙 9,818.4 (79.7) (0.8)
HSCCI 􀀙 4,218.7 (56.9) (1.3)
KLCI 􀀘 1,804.0 14.8 0.8
SET 􀀘 1,292.8 18.5 1.5
JCI 􀀙 4,386.3 (32.5) (0.7)
PCOMP 􀀙 6,015.3 (25.9) (0.4)
KOSPI 􀀙 1,920.0 (21.2) (1.1)
TWSE 􀀙 8,462.6 (135.7) (1.6)
Nikkei 􀀙 14,619.1 (295.4) (2.0)
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013 2014
100-Day MA
Index
STI
Total Market cap (US$bn) 552
Total Daily Vol (m shrs) 1,593
12m ST Index High 3,454
12m ST Index Low 2,991
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price (S$)
3 Feb
Target Price
(S$)
Hutchison Port Hldgs Trust (US$) Buy 0.66 0.80
Keppel Corp Buy 10.30 12.60
ST Engineering Buy 3.74 4.90
Yangzijiang Buy 1.14 1.32
Stock Picks – Small /Mid Cap
Rec’n Price (S$)
3 Feb
Target Price
($)
Ezion Holdings Buy 2.19 3.36
China Merchants Buy 0.89 1.20
Pacific Radiance Buy 0.925 1.05
Nam Cheong Buy 0.31 0.43
Source: Bloomberg Finance L.P., DBS Bank
Singapore
Wired Daily
Page 2
services and day-care services, radiology and imaging
diagnostic services, and a deed of sale for the purchase of
Fortis' immovable plant and machinery at the Mohali
Clinical Establishment.
China's non-manufacturing purchasing managers’ index fell
to a five-month low in January to 53.4 in January, down 1.2
points, from 54.6 in December. The business expectations
sub-index fell to 58.1 from December's 58.7, the lowest
reading since February 2009. The new orders sub-index
nudged down to 50.9 from December's 51.0. The data, in
line with expectations, echoed the manufacturing PMI
published on Sunday which also fell for a third consecutive
month to a five-month low of 50.5.
US markets tumbled after data showed manufacturing
slowed more than expected. The ISM factory index
for January decreased to 51.3 (consensus 56) from 56.5 the
prior month. Bond prices rose, yields declined amid the
flight to safety. The US 10-year yield dipped to 2.576%
from 2.644% the previous session. Yields had topped at
3.028% at the start of 2014. The USD weakened against
major currencies with the Dollar Index dipping to 81 from
81.3. Likewise, the SGD firmed slightly to 1.2752 against
the USD. Attention turns towards the US January
employment numbers scheduled for release this Friday. The
non-farm payrolls figure is expected to read 185k while the
unemployment rate remains at 6.7%.