OCBC Report 27 May 14

KEY IDEA Olam International: SELL now that Temasek offer has expired The S$2.23/share cash offer for Olam International by a consortium led by Breedens Investment – a Temasek-owned unit – has closed on 23 May, with the group collectively owning 80.4% of all issued shares (71.9% of fully diluted share capital). As the free-float of the company remains well above the 10% threshold, Olam will continue to be listed on SGX. We had previously advised shareholders to accept the offer of S$2.23. And with the expiry of the offer, we do not expect the current share price to be supported around current levels. Hence, we recommend a SELLon Olam with a new fair value of S$1.87 (10x FY15F EPS). (Carey Wong) MORE REPORTS KSH Holdings: Proposes final dividend of 1.75 S-cents KSH Holdings reported 4QFY14 PATMI of S$11.0m, down 28% YoY mostly due to weaker contributions from the property development segment. Full year FY14 PATMI cumulates to S$44.5m, which increased 18% and makes up 92% of our full year forecast. While this is a healthy set of numbers, we judge this to be slightly below our expectations due to slower-than-anticipated progressive recognition at development projects over the fourth quarter. In terms of the topline, FY14 revenue increased 40.1% to S$324.5m as we saw stronger contributions from the construction segment (up 38.6%), the development segment (up 62.9%) and rental income from investment properties (up 13.5%) as well. The group has proposed a final dividend of 1.75 S-cents. We will speak with management later today regarding its 4Q results and, in the meantime, maintain BUY while our fair value estimate of S$0.73 is under review. (Eli Lee)

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NEWS HEADLINES - Singapore's manufacturing sector expanded at a faster-than-expected pace of 4.6% YoY in Apr. - Boustead Singapore's net profit for 4QFY14 slipped 8% YoY to S$25.5m, dragged down by lower value of non-recurring items. - Mapletree Logistics Trust has entered into a sale-and-purchase agreement with Daehwa Logistics Co to acquire Daehwa Logistics Centre in South Korea for KRW25.5b (S$31.2m). - A healthcare private equity fund seeded by IMC Group has become a substantial shareholder of Q&M Dental Group (Singapore) with a 10% stake which it acquired from existing shareholders for S$29.1m. - Leveraged buyout loans in Asia are set to increase as the region's companies mature and seek to grow by acquisition rather than organically, according to Credit Agricole SA. - Yongmao Holdings posted net profit of RMB11m (S$2.2m) in 1Q14, almost double that of RMB5.7m in 1Q13. - Singapore faces hotel room crunch as there is an imbalance between the forecasted tourist arrivals and the supply of hotel rooms, Chesterton Singapore said in a report.