Thursday, May 29, 2014

DBSVickers Report 29 May 14

Today’s Focus
 Biosensors - 4Q14 and FY14 results missed expectations;
expect muted growth ahead. Maintain HOLD and S$0.90
target price
4Q14 and FY14 results for Biosensors International missed
expectations on weak royalty income, lower ASPs and weaker
margins. We expect muted growth ahead with moderate
revenue growth and falling margins. However there may be
upside risk to our call, including CITIC Private Equity making a
takeover offer for BIG. Maintain HOLD rating and S$0.90 target
price.
Banyan Tree Holdings has issued and successfully placed out
S$125m 4.875% fixed rate notes. It plans to used the proceeds
to finance the general working capital, capital expenditure and
investment requirements and refinancing needs of the
company and its subsidiaries.
Sarine Technologies announced cooperation with Rapaport's
RapNet® Diamond Trading Network to provide Sarine Loupe
imagery on polished diamonds showcased for sale on their
industry-standard website. Rapaport's RapNet® web-based
platform has been enhanced to optionally provide Sarine Loupe
imagery in an integrative and seamless manner, providing
unique visual information that will empower online trade.
Soilbuild Construction Group has been awarded construction
contracts worth approximately S$175.5m for the development
of a 7-storey multiple-user general industrial building at 60
Jalan Lam Huat. The Project comprises contracts for the
construction, completion and maintenance and the excavation
and earth works in relation to the development, and is the
Group’s largest project secured since its listing in May 2013.
The Project is expected to commence by July 2014 and to be
completed by the fourth quarter of 2016. It also brings the
Group’s latest order book to approximately S$512.8m to date,
which would be substantially completed in 2016.
WE Holdings has secures iron ore contract for shipment of
30,000 wet metric tonne worth an estimated US$1.7m.
Delivery of iron ore from Malaysian mine to China-based
trading company Ningbo Foreign Trade is at the price of
US$57.0 per dry metric ton. This is the second iron ore contract
with Ningbo Foreign Trade, with first contract of US$1.4m
secured in March 2014.
US Indices Last Close Pts Chg % Chg
Dow Jones  16,633.2 (42.3) (0.3)
S&P  1,909.8 (2.1) (0.1)
NASDAQ  4,225.1 (12.0) (0.3)
Regional Indices
ST Index  3,271.8 (2.2) (0.1)
ST Small Cap  556.6 3.5 0.6
Hang Seng  23,080.0 135.7 0.6
HSCEI  10,198.0 115.2 1.1
HSCCI  4,316.6 15.5 0.4
KLCI  1,871.7 4.1 0.2
SET  1,402.8 10.1 0.7
JCI  4,985.6 21.7 0.4
PCOMP  6,787.9 7.6 0.1
KOSPI  2,017.1 19.4 1.0
TWSE  9,121.7 66.4 0.7
Nikkei  14,671.0 34.4 0.2

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$bn) 611
Total Daily Vol (m shrs) 2,172
12m ST Index High 3,406
12m ST Index Low 2,960
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price (S$)
28 May
Target Price
(S$)
ComfortDelgro Buy 2.360 2.50
Global Logistic Properties Buy 2.820 3.42
Mapletree Greater China
Commercial Trust
Buy 0.890 1.02
Thai Beverage Public Buy 0.630 0.68
Stock Picks – Small Cap
Rec’n Price (S$)
28 May
Target Price
(S$)
Vard Holdings Buy 1.060 1.21
Nam Cheong Buy 0.390 0.47
Centurion Corporation Buy 0.735 0.86
Source: DBS Bank
Singapore
Wired Daily
Page 2
Under the new government contracting model, the first
public bus service package to be tendered out will comprise
24 bus services originating from the western part of
Singapore, with 16 of the bus services from SBS Transit and
the rest from SMRT. The bus services in the first package
(out of a total of three packages) originate from the Jurong
East, Bukit Batok and Clementi bus interchanges. To be
operated out of the new Bulim bus depot located off Jurong
West Avenue 2, they serve largely Jurong East and Bukit
Batok.
The LTA said that the package would start with about 380
buses in 2016, and grow to involve about 500 buses in
2021, in tandem with ridership growth and the
development of Tengah New Town and Bukit Batok West.
The package will be tendered out in the second half of
2014, for implementation from the second half of 2016.
More than $2 billion worth of government projects will be
shelved to help ease the shortage of construction workers
as the government continues to tighten the inflow of
foreign workers. Disclosing this in Parliament yesterday,
Prime Minister Lee Hsien Loong described these projects -
which include the extensions to Gardens by the Bay and a
new Science Centre - as "less urgent". HDB homes, rail
network and other urgent developments are not affected.
Deferring the projects will save Singapore 20,000 or 30,000
foreign workers, he said.
In property news, an overwhelming majority of property
consultants predict that the government will further trim
land supply for private housing development in the
confirmed list for the second half of this year, citing the
sharp slowdown in home sales and the substantial supply
pipeline. They also expect the authorities to offer
commercial sites on the confirmed list and/or reserve list in
locations such as Paya Lebar and Woodlands to speed up
their development as commercial hubs.
US indices fell moderately ahead of the release of 1Q GDP
figure that is expected to show a 0.5% contraction q-o-q.
US bond yields fell, in tandem with the rise in European
bonds prices on the optimism that ECB President will act to
stimulate the economy and boost inflation next week. U.S.
10-year note yields slid 8bps to 2.44%. Lenovo Group
shares gained as Chinese technology shares advanced amid
speculation local companies will benefit from a government
dispute with the U.S. over cyber-spying.

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