Today’s Focus
Yoma’s TP lowered to $0.90 (prev. $1) factoring in
uncertainty
GP Batteries a possible turnaround play – Unrated
Instead of just waiting, Yoma is going ahead to buy from SPA
the 80% stake in the 24- to 26-year leases remaining for its
Landmark project while SPA continues to negotiate for lease
extension. There will be a 1st payment of S$43.2m (based on
24 years) and a 2nd payment of S$38.08m when the extension
is successful and approved by Myanmar Investment Committee
(MIC). For its 80% stake (pending transfer) in this project,
Yoma has capped its share of development cost at US$47m.
Rights issue is revised to 1-for-8 since initial payment is lower
than before. Serge Pun undertakes to support the entire rights
issue. Maintain BUY with lower TP of S$0.90 as we discount
Landmark’s valuation by 30% to factor in uncertainty. Our
theoretical ex-rights RNAV is S$0.85/sh vs current TERP of
S$0.73.
GP Batteries looks to be a turnaround play, trading at only 0.4x
PBV (5-yr historical mean). After a round of rationalisation,
management believes the group is in better shape to return to
growth and profitability. We also believe GP could turn
profitable, premised on the following: 1) revenues were stable
in the past two years but margins have been improving, 2)
absence of loss-making venture, and 3) lower finance costs. In
addition, GP might book S$7m gain on disposal of its factory
building. Interestingly, parent company GP Industries has raised
its stake in GP to 54% after a series of open market purchases
since February. In our view, GP looks ripe for privatisation given
record low net gearing of 0.2, sustainable FCF generation, and
potential turnaround to profit.
TT International (TTI) expects to raise net proceeds of S$24.8mil
from a proposed placement of up to 167.3mil new ordinary
shares at 15.45cts each. The price is a discount of
approximately 9.9% from the volume-weighted average
market price of 17.15cts/share for trades done on June 13. TTI
intends to use approximately 60.4%, about $15 mil, for capital
expenditure of its warehouse retail project in Jurong. The
balance will be used for the same project's financing costs and
working capital requirements.
US Indices Last Close Pts Chg % Chg
Dow Jones 16,781.0 5.3 0.0
S&P 1,937.8 1.6 0.1
NASDAQ 4,321.1 10.5 0.2
Regional Indices
ST Index 3,290.3 (3.0) (0.1)
ST Small Cap 555.5 (1.4) (0.3)
Hang Seng 23,300.7 (18.5) (0.1)
HSCEI 10,522.1 5.1 0.0
HSCCI 4,355.0 1.3 0.0
KLCI 1,871.6 (5.2) (0.3)
SET 1,471.9 15.8 1.1
JCI 4,885.5 (41.2) (0.8)
PCOMP 6,758.5 (26.5) (0.4)
KOSPI 1,993.6 2.7 0.1
TWSE 9,202.9 6.5 0.1
Nikkei 14,933.3 (164.5) (1.1)
STI Index Performance
Singapore
Total Market cap (US$bn) 614
Total Daily Vol (m shrs) 1,695
12m ST Index High 3,305
12m ST Index Low 2,960
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price (S$)
16 Jun
Target Price
(S$)
Global Logistic Properties Buy 2.660 3.42
Mapletree Greater China
Commercial Trust
Buy 0.875 1.02
Thai Beverage Public Buy 0.620 0.68
Stock Picks – Small Cap
Rec’n Price (S$)
16 Jun
Target Price
(S$)
Vard Holdings Buy 1.140 1.34
Nam Cheong Buy 0.380 0.47
Centurion Corporation Buy 0.680 0.86
Source: DBS Bank
Yeo Kee Yan (65) 6682 3706 keeyan@dbs.com
www.dbsvickers.com
Refer to important disclosures at the end of this report
Singapore
Wired Daily
Page 2
Huan Hsin Holdings is selling its 30% stake in Li Sheng
Electronic (Kunshan) or LSE for US$3.5mil. Its wholly
owned subsidiary, Huan Hsin (BVI), entered into an
agreement yesterday to sell the stake to Sacred Success
International, the 70% owner of LSE.
Singapore’s May NODX fell 6.6% y-o-y after a 0.9%
increase in April. Electronic NODX plunged 15.3 % y-o-y,
extending the 8.7% decline in the previous month. Nonelectronic
NODX dropped 2.4%, following a 5.5% rise.
Non-oil re-exports, about the only key indicator to have
risen consistently, slipped 4.7% last month. They jumped
6.6% in April.
Data from the URA showed developers sold 1,470 private
condos last month, the highest level since June 2013 and
a 96% jump from the 749 units sold in April. The top five
projects made up 78% of total sales in May. The strong
showing is driven by new launches with 1,790 condo units
launched last month compared with only 600 units in
April.
U.S. indices rose marginally as corporate deals and growth
in American manufacturing overshadowed escalating
tension in Iraq. Data showed May industrial production
climbed 0.6%, better than consensus expectations for
0.5% while capacity utilization rose to 79.1%, also better
than consensus expectation for 78.9%.Yahoo! Inc. shares
fell after Alibaba Group reported a slowdown in quarterly
revenue growth.
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