Today’s Focus
Vard
Holdings - Orders continue to flow in faster than
expected. Maintain BUY with higher
target price of S$1.34
Vard Holdings has secured a contract
for the design and
construction of one Offshore Construction
and Anchor
Handling Vessel for Rem Offshore
worth approximately NOK
800m, to be delivered in 1Q 2016.
Including the LOIs, this
marks Vard’s 5th contract win
in 2Q14 and its 13th newbuild
contract since the beginning of
FY14. We estimate YTD
contract wins to be about NOK8.5bn
already, or 60% of our
full-year order win forecast of
NOK14bn within just five months
of FY14, ahead of our expectations.
Signs of revival in demand
for high end offshore support
vessels is a big positive. Vard is
positioned for normalised margins
and sharp earnings rebound
by FY15. Maintain BUY with higher
target price of S$1.34 (Prev
S$1.21) as we believe the recent
spate in order wins and
ongoing sector re-rating calls
for a higher peg of 11x FY14/15F
blended earnings estimates.
Frasers Centrepoint Limited (FCL)
has submitted an all-cash
offer to acquire 100% of Australand
Property Group at A$4.48
per stapled security, translating
to about A$2.6bn. The offer
represents a premium of 4% over
the last closing price. The
Managers of FCL sees this acquisition
as a strategic move to
deepen its business in Australia,
which is one of FCL’s three
core markets, alongside Singapore
and China. In terms of
capital management, the Manager
has indicated that it is
comfortable with a long term gearing
level of 0.8x. There are
no plans to raise equity at this
moment, and funding could be
via a mix of debt and internal
cash.
Tat Hong Holdings has divested
its entire 31.27% interest in
Kian Ho Bearings to Raffles United
Pte Ltd in a married deal for
S$17.2m. Tat Hong had acquired
the stake in Kian Ho back in
2006, originally intending to
synergise its spare parts business
with Kian Ho, but this did not
materialise. Raffles United is an
investment holding company held
by the son and daughter of
Teo Teng Beng, who is also the
managing director and a
member of Kian Ho's nominating
committee. Kian Ho Bearings
is listed on the mainboard of
the SGX-ST, and is a stockist,
distributor and retailer of all
kinds of bearings, seals and power
transmission belts in Southeast
Asia and the Far East. Following
the acquisition, Raffles United
owns approximately 52.65%
stake in Kian Ho Bearings, triggering
a mandatory
unconditional cash offer. It will
have to make an offer for all
the remaining Kian Ho shares in
issue not already owned, at
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Nikkei
15,068.0 33.7 0.2
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011
2012 2013 2014
100-Day MA
Index
STI
Total Market cap (US$bn) 614
Total Daily Vol (m shrs) 1,991
12m ST Index High 3,302
12m ST Index Low 2,960
Source: Bloomberg Finance L.P.
Stock Picks – Large
Cap
Rec’n Price (S$)
4 Jun
Target Price
(S$)
ComfortDelgro Buy 2.420 2.50
Global Logistic Properties Buy
2.720 3.42
Mapletree Greater China
Commercial Trust
Buy 0.885 1.02
Thai Beverage Public Buy 0.635
0.68
Stock Picks – Small
Cap
Rec’n Price (S$)
4 Jun
Target Price
(S$)
Vard Holdings Buy 1.125 1.34
Nam Cheong Buy 0.385 0.47
Centurion Corporation Buy 0.705
0.86
Source: DBS Bank
Singapore
Wired Daily
Page 2
a price of S$0.235 in cash for
each Offer Share. The offer
price carries a 6.8% premium to
Kian Ho's last traded price.
The offer price is final. The
offeror does not intend to revise
the offer price.
Midas Holdings announced that
its joint venture company,
Nanjing SR Puzhen Rail Transport
(NPRT) has secured three
metro train contracts worth a
combined RMB3.5 bn. The
latest orders bring the total
value of contracts announced by
NPRT so far this year to over
RMB4.5 bn.
In the responses to an SGX query
regarding the stock’s
trading action yesterday, STATS
ChipPAC says certain other
parties have contacted the them
to explore a possible
acquisition, this is in addition
to an earlier announcement
that it had received a non-binding
expression of interest
from a third party with a view
to a possible acquisition of all
the shares in the Company. However,
there has been no
material development thus far.
Rex International Holding announced
that its jointlycontrolled
entity, Lime Petroleum Norway
has signed an
agreement with North Energy to
acquire 5% stakes in two
additional licences in Norway,
PL591 and PL591B. The
transfer of the 5% stakes is pending
regulatory approval.
Both licences have been assessed
using Rex Virtual Drilling.
Exploration drilling in the licences
is expected to commence
in the first half of 2015.
Tritech Group has been awarded
a S$6.1m contract for the
Instrumentation and Monitoring
for Thomson Line by the
Land Transport Authority (LTA).
The commencement date of
the contract is on 02 June 2014
and is expected to be
completed on 30 December 2020.
The Singapore Exchange (SGX) could
make it easier for
established global companies to
seek a secondary listing on
its bourse. The market operator
announced that it is seeking
feedback on a proposal to create
two main tiers for
secondary-listed companies, based
on each company's
home market. For companies with
a primary listing or
substantial exposure to one of
23 "developed" markets, the
SGX will no longer impose additional
continuing listing
obligations. That list of developed
markets will be based on
classifications by index operators
MSCI and FTSE.
Secondary-listing companies that
are not from those 23
markets will continue to be subject
to current additional
obligations, which usually involve
rules on interested party
transaction, major deals and delistings.
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