Today’s Focus
Singapore Post - New business from Alibaba and
acquisitions may uplift FY16F earnings significantly.
Maintain BUY with higher target price of S$2.00
We expect new business from Alibaba and new acquisitions to
uplift Singapore Post’s FY16F earnings significantly. We project
7% EPS dilution in FY15F after issuing new shares to Alibaba
for its 10.35% stake in SPOST. However, we see EPS accretion
from FY16F onwards. With S$482m net cash, SPOST may
acquire profitable companies across the e-commerce value
chain. We have been early believers in SPOST’s low-cost and
pan-Asia e-commerce strategy. Alibaba’s entry convinces us
further that SPOST is well-positioned to benefit from ecommerce
sales, which according to eMarketer, is expected to
see CAGR of 29% in Asia over the next 4-years. Maintain BUY
with target price raised to S$2.00 (Prev S$ 1.60).
Genting Singapore's plans to build a casino in South Korea
have been stalled, according to Channel NewsAsia (CNA).
Instead of going ahead with initial plans for a ground-breaking
ceremony in Jeju Island on June 24, the company has decided
to reschedule the event. The postponement is to "allow the
company the opportunity to brief the newly-elected governor
of Jeju and his team on the casino's development plans and its
contribution to Jeju Island", according to CNA. The news also
said that a separate e-mail was sent to notify guests of the
change; Genting Singapore had said that Resorts World Jeju
was expected to break ground in Q3 this year, and slated to
open in stages three years from now. Genting Singapore had
first announced in February that it had partnered a Chinese
property developer, Landing International Development, to
build and operate a US$2.2 bn integrated resort on Jeju island.
Low-cost carriers Scoot and Nok Airlines have signed a jointventure
agreement to set up NokScoot by acquiring Pete Air,
said Scoot's parent Singapore Airlines. It comes six months
after the two parties signed a memorandum of understanding
to establish the new Bangkok-based low-cost carrier. After
restructuring, Pete Air, which already holds an air operator's
licence, will be renamed NokScoot Airlines. The joint venture
parties have agreed to invest an initial aggregate share capital
of two billion Thai baht (S$76.9m) in the airline.
US Indices Last Close Pts Chg % Chg
Dow Jones 16,921.5 14.8 0.1
S&P 1,959.5 2.5 0.1
NASDAQ 4,359.3 (3.5) (0.1)
Regional Indices
ST Index 3,269.0 (7.8) (0.2)
ST Small Cap 559.3 1.7 0.3
Hang Seng 23,167.7 (14.0) (0.1)
HSCEI 10,354.1 (90.4) (0.9)
HSCCI 4,331.8 (11.4) (0.3)
KLCI 1,881.5 4.9 0.3
SET 1,461.9 10.6 0.7
JCI 4,864.3 (23.6) (0.5)
PCOMP 6,699.4 (3.7) (0.1)
KOSPI 1,992.0 2.5 0.1
TWSE 9,316.8 36.9 0.4
Nikkei 15,361.2 245.4 1.6
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013 2014
100-Day MA
Index
STI
Total Market cap (US$bn) 614
Total Daily Vol (m shrs) 2,182
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$)
19 Jun
Target Price
(S$)
Global Logistic Properties Buy 2.670 3.42
Mapletree Greater China
Commercial Trust
Buy 0.870 1.02
Thai Beverage Public Buy 0.620 0.68
Stock Picks – Small Cap
Rec’n Price (S$)
19 Jun
Target Price
(S$)
Vard Holdings Buy 1.150 1.34
Nam Cheong Buy 0.380 0.47
Centurion Corporation Buy 0.710 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
KS Energy has entered into an irrevocable sale and
purchase agreement for the sale of the rights and
obligation under the construction contract for the KS
Orient Star 1 (the “Rig”) for a cash consideration of
US$84.9m. The consideration represents an excess of
approximately US$45.2m over the aggregate book value
of the Rig which was US$39.6m as at 31 March 2014.
Advance SCT is placing up to 1,700m new shares at an
issue price of S$0.0019 per share. The Placement Price
represents a discount of approximately 5% to the last
weighted average price. Estimated net proceeds of
approximately S$3.1m will be mainly used to fund the
growth of the Group’s operations, including expansion in
production facilities, investments in new capabilities and
businesses, and for working capital purposes.
Armarda Group proposed placement of 1,440m new
shares at an issue price of HK$0.05 per share. The Issue
Price represents a premium of approximately 34.6%
premium to the last volume weighted average price. The
net proceeds of approximately HK$63m will be mainly
used to finance or fund any acquisitions, purchases or
investments that the Group may make or embark upon.
Vibrant Group, formerly known as Freight Links Express, is
teaming up with DB2 Group to purchase Cecil House. The
deal values the 11-storey office block on a site with a
balance lease term of about 66 years, at $110m. Vibrant is
not planning to redevelop Cecil House. Rather it plans to
refurbish the property.
US stocks moderately extended Wednesday’s rally as the
FED’s policy statement fuelled optimism that the economic
recovery will accelerate. BlackBerry shares rose after
reporting a narrower loss than consensus projection.
Kroger Co. shares advanced after it increased its full-year
profit forecast. Coach Inc. shares fell after it forecast a
prolonged slump in sales at its North American stores. US
President Barack Obama said he’s sending as many as 300
U.S. military advisers to assist the Iraqi army battle an
insurgency and is prepared to take additional “targeted,
precise” action if necessary. The uncertainty in Iraq lifted
the price of Brent crude to USD115pbl, the highest in 11
months
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