OCBC Report

KEY IDEA Noble Group: To dispose 51% stake in Noble Agri Limited Noble Group Limited has entered into a share sale agreement with COFCO (Hong Kong) Limited to dispose its 51% stake in Noble Agri Limited (NAL) for an initial payment of US$1.5b. The closing amount will be adjusted after completion so that the final consideration is equal to 1.15x of 51% of the audited book value of NAL Group for FY14. As before, we see the proposed disposal as being consistent with Noble’s asset-light strategy, where it does not have to own upstream assets as long as it can secure the off-take. Anyway, it is still too early to make any drastic estimate changes, given that the deal is subject to several conditions with a long stop date of 31 Dec 2014 (unless mutually extended or terminated). Nevertheless, our fair value improves from S$1.03 to S$1.26 as we are raising our valuation peg from 11x to 13.5x FY14F EPS to reflect the improved investor sentiment towards commodity plays in general. Maintain HOLD. (Carey Wong) MORE REPORTS Biosensors International Group: Enhances relationship with Terumo Biosensors International Group (BIG) announced last evening that it had struck a deal with Terumo Corporation to extend its licensing agreement, such that the latter may continue to incorporate BIG’s BioMatrix™ drug-eluting stent (DES) technology in the production, marketing and sales of the Nobori DES in territories outside the U.S. and Japan until Dec 2016. The previous licensing agreement was supposed to expire in Dec 2014. This is the second time in which this licensing agreement has been extended. Terumo’s Nobori DES is currently sold in over 20 countries across Europe, Asia and Latin America. But given that Terumo is planning to launch its next-generation “Ultimaster™“ in Jun 2014, we believe it is highly probable that this could be the last licensing extension with BIG for this current agreement. Meanwhile, BIG also said that it is expanding its existing sales collaboration with Terumo in Japan in a bid to increase its market share amid strong competitive pressures. We maintain our SELL rating on BIG with a fair value estimate of S$0.77. (Wong Teck Ching Andy)

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NEWS HEADLINES - The S&P 500 closed at another record high as signs of steady private-sector hiring suggested that the economy was slowly building momentum after a winter-related pullback. - Singapore's latest PMI fell short of expectations, dipping a marginal 0.1 to 50.8 in Mar. - Capitaland's wholly owned serviced residence business unit, The Ascott Limited, has acquired an operating serviced residence in Hong Kong for HK$545m (S$88.8m). - Global Logistic Properties has signed two lease agreements, for space totalling 13,000 sqm, with China National Pharmaceutical Group in an expansion of their partnership. - Yangzijiang Shipbuilding has secured 18 new orders to take its newbuild contracts for this year past the US$1b mark. - The auditor for Pteris Global has flagged "significant doubt" over the firm's ability to continue as a going concern. - CAD announced information about key executives and directors of Blumont Group and LionGold Corp is sought, amid investigations into suspected trading irregularities,