Today’s Focus
ComfortDelgro - Consistent performer. Maintain BUY,
target price raised to S$2.30
ComfortDelgro reported a strong start with 1Q net profit up by
9.7% y-o-y. EBIT margin dipped slightly but still at a healthy
10.7%. Strong balance sheet is expected to aid in opportunistic
inorganic acquisitions. Maintain BUY, target price raised to
S$2.30 (Prev S$ 2.19) as we roll forward our DCF/PE-backed
target price to the average of FY14F/15F (previously FY14F).
9M14 results for Goodpack were below expectations, dragged
by higher other operating expenses. We have trimmed our
FY14/15F recurring net profit by 6.5%/5.2% to account for the
higher other operating expenses. We expect a seasonally
stronger 4Q; spotlight will be on potential takeover. Private
equity firms, namely KKR, Blackstone, Carlyle, have reportedly
been interested in Goodpack. Various sources also seem to
suggest that discussion with one of the offerors is advancing.
We believe the offer price could range from S$2.50-2.80
assuming a target PE of 17-19x. Maintain BUY; target price
adjusted to S$2.52 (Prev S$2.60).
1Q14 results for Super Group were below on disappointing
sales, higher operating expenses. Outlook will be challenging
but management is diversifying into new products. We have
lowered FY14F/FY15F earnings by 5%8%. Maintain HOLD with
lower target price of S$3.26 (Prev S$ 4.09).
1Q14 results for Kim Heng in line; gross margin expanded
1.8ppt y-o-y to 41.6%. We look forward to a stronger 2H and
potential jackup conversion project. We expect further earnings
uplift from potential jackup project, which Kim Heng is
pursuing. Securing high value projects like jackup conversions
and newbuilds could boost bottomline by up to 24% per
project if executed well. Reiterate BUY; target price S$0.33.
Value has emerged as the share price has fallen 26% from its
high of 32.5 Scts and is trading 4% below its IPO price of 25
Scts.
US Indices Last Close Pts Chg % Chg
Dow Jones 16,715.4 20.0 0.1
S&P 1,897.5 0.8 0.0
NASDAQ 4,130.2 (13.7) (0.3)
Regional Indices
ST Index 3,222.4 (29.7) (0.9)
ST Small Cap 538.8 (0.4) (0.1)
Hang Seng 22,352.4 90.8 0.4
HSCEI 9,855.8 27.9 0.3
HSCCI 4,164.0 51.5 1.3
KLCI 1,866.1 (0.6) (0.0)
SET 1,375.1 (2.2) (0.2)
JCI 4,921.4 8.4 0.2
PCOMP 6,852.8 41.5 0.6
KOSPI 1,982.9 18.0 0.9
TWSE 8,817.9 9.3 0.1
Nikkei 14,425.4 275.9 2.0
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013 2014
100-Day MA
Index
STI
Total Market cap (US$bn) 601
Total Daily Vol (m shrs) 2,046
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$)
12 May
Target Price
(S$)
ComfortDelgro Buy 2.120 2.30
Global Logistic Properties Buy 2.740 3.31
Keppel Corp Buy 10.620 12.60
Stock Picks – Small Cap
Rec’n Price (S$)
12 May
Target Price
(S$)
Goodpack Buy 2.320 2.52
Pacific Radiance Ltd Buy 1.070 1.20
Nam Cheong Buy 0.370 0.46
Centurion Corporation Buy 0.745 0.86
Source: DBS Bank
Singapore
Wired Daily
Page 2
SATS announced that they have terminated the proposed
S$110m acquisition of Singapore Cruise Centre Private
Limited (SCC), citing “market developments in Asia”. We
have trimmed FY15F/16F earnings by 6% each as we had
assumed acquisition to contribute from FY15F. We expect
management to continue to lookout for inorganic growth
opportunities to supplement growth. Maintain HOLD, target
price lowered to S$3.09 (Prev S$ 3.25). The attractive yield
should provide support to share price despite muted
growth, in our view.
Technics Oil and Gas and Middle East Consortium partner
(70:30) have received the Letter of Award in setting up Gas
Processing Facility in South Asia worth S$166m with two
years operations and maintenance where the terms and
conditions have yet to be finalized.
Yamada Green Resources is proposing to acquire a lease for
the moso bamboo plantation for a period of 10 years for
RMB78.9m. The Plantation, which is situated at Pucheng
County, Fujian Province, China, has gross land area
measuring approximately 22,543 mu. The Plantation shall
be used solely for the cultivation and harvest of moso
bamboo, spring bamboo shoots and winter bamboo shoots.
Dyna-Mac Holdings has secured new fabrication orders for a
provisional sum of S$50m. These orders are expected to
commence fabrication in 2Q2014.
In property news, resale prices of non-landed private homes
slipped 1.7% in April, touching a 16-month low since
December 2012. This was despite the increase in volumes of
resale transactions, which at 476 was 24.6% higher than
March's level, flash estimates by the Singapore Real Estate
Exchange (SRX) showed. This also suggested that buyers are
moving back into the resale market as prices stabilise, said
market observers. Prices in the Rest of Central Region (RCR)
led the decline with a 3.6% drop, while those in the Core
Central region (CCR) fell 2.3%. Prices Outside Central
Region (OCR) crept up 0.4%.
US stocks ended mixed as data showed advanced April retail
sales rose lesser than expected at 0.1% (consensus 0.4%).
Retailers Macy’s Inc. Wal-Mart Stores Inc. and Kohl’s Corp.
are among the companies scheduled to disclose results this
week. About 76% of the S&P 500 companies that have
released results this earnings season have beaten profit
estimates, while 53% have exceeded revenue projections,
this according to Bloomberg. Cisco Systems is scheduled to
report 3Q earnings in after-hours trade tomorrow.
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