Dow and Europe were down last night.
Dow -65 at 16417. Dow's trend still down. Dow's future
is now +11. Europe opened positive.
Asian bourses were mixed. Nikkei
-13, ShanghaiC -19, Hangseng +147. STI closed +5 at 3145. Volume
was 3.1b shares. Gainers were 222 and losers 220.
Trend of STI is flat.
Top volumes were KLW +0.4, Equation
+0.2, MirachEner +3, CharismaEner +0.1, Hankore unchanged, SIIC +0.2, ICP
+0.1, Albedo unchanged, GoldenAgr +1, CCM -0.2.
Market opened down but recovered after
lunch time. It closed at day at high at +5. Blue chips were firmer.
Penny and speculatives were more positive. Several penny stocks
were played up. Tritech +6, Sunvic +4, MirachEner +3.
Europe and Dow are looking firmer for
tonight.
Friday, January 17, 2014
Thursday, January 16, 2014
OCBC Report 17 Jan 14
| KEY IDEA United Envirotech: HOLD with higher S$1.00 fair value United Envirotech Ltd (UEL) recently announced that it has secured two more water treatment projects in China, suggesting that the outlook for the wastewater sector in China remains buoyant. We believe that this justifies a higher 15x valuation peg (versus 13x previously). While we are also raising our FY15F earnings forecast by 27% to account for the inclusion of Memstar’s membrane manufacturing business (acquisition looks likely to go through), we note that there will be a huge dilution for existing shareholders; this as UEL will use 200.055m new shares and S$73.354m cash to pay for the deal. Given the limited upside to our new fair value of S$1.00 (versus S$0.83 previously), we maintain our HOLD rating. (Carey Wong) MORE REPORTS Land Transport Sector: Fare increase of 3.2% for buses and trains Singapore’s Public Transport Council (PTC) announced last evening that it has granted an overall fare adjustment of 3.2%, which will come into effect on 6 Apr 2014. Although this is lower than the combined 2012 and 2013 fare caps of 6.6%, but the 3.4% balance will be rolled over to 2015 for consideration of a future fare adjustment. This increase falls within our expectations, as we had highlighted in our Transport Sector Strategy report (dated 21 Nov 2013) that we expected a positive fare adjustment of around 3-3.5%. The PTC estimates that the net increase in revenue for SBS Transit and SMRT are approximately S$28.8m and S$13.2m a year, respectively, after taking into account both public transport operators’ (PTO) contribution to the Public Transport Fund (PTF). We believe this low single-digit fare increase will result in a positive boost to the PTOs’ earnings as the bulk of this net increment (after PTF contribution) will flow down to their profit before tax since their cost base remains similar and ridership is unlikely to be impacted. We keep our estimates intact for now as this fare adjustment exercise came in within our expectations. Our preferred pick in the sector is ComfortDelgro [BUY; FV: S$2.20] over SMRT[HOLD; FV: S$1.30] due to the former’s better growth potential both locally and abroad, and less uncertainties over its opex outlook. (Wong Teck Ching Andy) Yoma Strategic Holdings: Boost from sales of land development rights Yoma reported 3QFY14 PATMI of S$5.2m – up 42% YoY mostly due to a boost from land development rights (LDR) sales and a maiden contribution from their tourism business “Balloons Over Bagan”. Overall, we judge 3QFY14 results to be above expectations as profit recognition from LDRs came in stronger than anticipated. In terms of the top-line, 3QFY14 revenues rose 132.5% YoY to S$30.2m, again boosted by real estate segment sales; we note that only S$14.8m out of a total S$60.6m from units sold in Star City to date has been booked, which points to S$45.9m of progress billings over the next 4 to 6 quarters. Management continues to report a fairly healthy rate of sales conversion - 526 out of 528 units in Buildings A3 and A4 and 474 out of 1,043 units in Zone B has been sold as end of Dec 2013. We would speak with management regarding these results later today and, in the meantime, we put our fair value estimate of S$0.84 and hold rating under review. (Eli Lee) |
For more information on the above, visit www.ocbcresearch.comfor the detailed report. |
NEWS HEADLINES - US stocks ended lower on Thu, snapping a two-day rally, after disappointing results from Best Buy Co. Inc., Citigroup Inc. and Goldman Sachs Group Inc. - Singapore Airlines and Air New Zealand are deepening ties in a partnership that will beef up capacity between the two countries while giving each airline access to specific destinations in the other's network. - Some Singapore businesses are finding out that Iskandar Malaysia, touted as a more cost-effective destination for them, is no longer that cheap. - Public transport fares will rise 3.2% this year and 3.1% next year, with this year's increase raising S$53.5m for public transport operators although S$11.6m of it will go to the Public Transport Fund. - City Developments Ltd wants to accelerate its overseas growth engines and has appointed Grant Kelley, formerly from Apollo Global Management and Colony Capital, as its CEO. - EuroSports Global hit 38 S cents in yesterday's grey market as its S$22.4m IPO wrapped up with a 2.9-time subscription rate, market sources said. |
DBS Vickers Report 17 Jan 14
Today’s Focus
• Yoma - Maintaining momentum; BUY, target price
S$1.02
3Q14 results for Yoma Strategic Holdings in line, driven by
further sales at Star City and tourism income. Property sales
are healthy while construction of Star City is progressing. Star
City remains the key driver as Landmark delay continues.
Yoma has again extended the longstop date for the
Landmark deal to Jun 2014. Maintain BUY and target price of
S$1.02 as this quarter has exhibited continued momentum in
property sales and additional income from tourism. We
expect non-property income to grow going forward.
The Public Transport Council (PTC) has announced that it has
granted an overall fare adjustment of 3.2% for the 2013 Fare
Review Exercise. This is about half of the 6.6% combined
2012 and 2013 fare caps, and the remainder (c.3.4%) will be
rolled over to next year’s fare review exercise. The new fares
will be effective from 6 April 2014.Adult card fares for buses
and trains will increase by 4 to 6 cents per journey, 2 to 3
cents per journey for senior citizen and 2 cents per journey
for student fares.
The 3.2% fare increase translates to fare revenue increase of
about $53.5m a year collectively for both SMRT and SBS
Transit (SBST, ComfortDelGro’s subsidiary), which is about
S$17.5m and S$36m, respectively. The estimated increase in
fare revenue is before funds to be set aside by the operators
for the Public Transport Fund, which amounts to $4.3m for
SMRT and S$7.2m for SBST. Hence, the net increase is
estimated at S$13.2m for SMRT and S$28.8m for SBST.
We have already factored in 2% increase in fares, and this is
slightly above our expectations, assuming no further cost
increases arising from higher service standards. Maintain BUY
for ComfortDelgro, FULLY VALUED for SMRT. We are
maintaining our forecasts for now. We continue to prefer CD
(BUY, TP: S$2.19) over SMRT (FV, TP: S$1.08). We like CD for
its geographical diversification, and stronger balance sheet.
On the other hand, while this fare increase will alleviate some
cost pressure for SMRT, we still have reservations given that
cost increase may continue to keep pace arising from higher
service requirements and maintenance of standards.
US Indices Last Close Pts Chg % Chg
Dow Jones 16,417.0 (64.9) (0.4)
S&P 1,845.9 (2.5) (0.1)
NASDAQ 4,218.7 3.8 0.1
Regional Indices
ST Index 3,140.4 (2.8) (0.1)
ST Small Cap 543.5 (1.4) (0.2)
Hang Seng 22,986.4 84.4 0.4
HSCEI 10,187.5 (14.3) (0.1)
HSCCI 4,449.2 (0.1) (0.0)
KLCI 1,813.0 (11.0) (0.6)
SET 1,301.5 24.5 1.9
JCI 4,412.5 (29.1) (0.7)
PCOMP 5,982.2 24.1 0.4
KOSPI 1,957.3 4.0 0.2
TWSE 8,612.1 9.6 0.1
Nikkei 15,747.2 (61.5) (0.4)
STI Index Performance
Singapore
Total Market cap (US$bn) 574
Total Daily Vol (m shrs) 2,852
12m ST Index High 3,454
12m ST Index Low 3,004
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price (S$)
16 Jan
Target Price
(S$)
Hutchison Port Hldgs Trust (US$) Buy 0.680 0.80
Keppel Corp Buy 10.940 12.90
ST Engineering Buy 3.840 4.90
Yangzijiang Buy 1.185 1.32
Stock Picks – Small /Mid Cap
Rec’n Price (S$)
16 Jan
Target Price
($)
Ezion Holdings Buy 2.390 3.36
China Merchants Buy 0.925 1.20
Pacific Radiance Ltd Buy 0.955 1.05
Nam Cheong Buy 0.325 0.42
Source: Bloomberg Finance L.P., DBS Research
Singapore
Wired Daily
Page 2
Cambridge REIT 4Q13 results released this morning were in
line with our expectations, bringing full year DPU to 4.976
Scts, a 4% increase compared to a year ago. Gearing remain
at a conservative c28%, with 83% of their debt fixed over the
next 2 years, mitigating the impact on any risk of rising
interest rates in the immediate tern. We will follow up with a
full report.
Singapore Airlines (SIA) and Air New Zealand are deepening
ties in a partnership that will beef up capacity between the
two countries while giving each airline access to specific
destinations in the other's network. SIA has been forging
partnerships and alliances to stay ahead of the competition as
it battles with sliding yields and tough competition from both
the regional and cash-rich Gulf carriers. For Air NZ, this will
enable it to relaunch flights to Singapore after it cut the citystate
from its network in 2006, due to a lack of profitability.
Mapletree Investments Pte Ltd has been awarded a prime
commercial site in Hong Kong for HK$3.77bn (S$618m). The
5,112-square-metre site is located in Kwun Tong, Kowloon
East, a key office cluster in Hong Kong that has been
earmarked as the new central business district. Mapletree
plans to develop a Grade-A office building there, with a total
gross floor area of over 61,300 square metres.
Singapore's key non-oil exports rose faster-than-expected in
December, rebounding from a fall in November, as shipments
of non-electronics goods grew. NODX rose 6.0% y-o-y, better
than market expectation of 1.7% expansion, after falling a
revised 8.9% in November. Compared with the previous
month, exports rose 9.2%, after contracting 4.2% m-o-m in
November. Shipments to China, its biggest export destination,
surged 45% y-o-y in December, compared with a 16% rise in
the previous month. Exports to the U.S. rose 27.9% y-o-y,
accelerating from a 10.3% rise in November. Shipments to the
European Union, however, fell 23.4% after a 26.6% fall in
November. Electronics exports declined 3.1% y-o-y, after
falling 8.9% in November, while non-electronics shipments
grew 10.6%, reversing a 8.9% fall in November. In the nonelectronics
sector, petrochemical exports rose 39.8%, after
growing 24% in the previous month.
U.S. stocks fell as Best Buy tumbled after reporting a drop in
US same-store sales during the December holiday shopping
period and earnings at companies from Citigroup Inc. to CSX
Corp. disappointed investors. Citigroup and Goldman Sachs
Group Inc. led declines among banks after releasing 4Q
results. Intel Corp. slid 2.6% in extended trading after
forecasting sales that may fall short of some estimates. On the
data front, weekly jobless claims figure was a tat lower than
expected (actual 326k, consensus 328k) while December CPI
was in-line with expectations. Meanwhile, the Fed said in its
Beige Book yesterday that it saw “moderate” growth across
most of the U.S. Speaking at a forum, Ben Bernanke defended
quantitative easing, saying it has helped the economy and
shows no immediate sign of creating a bubble in asset prices.
• Yoma - Maintaining momentum; BUY, target price
S$1.02
3Q14 results for Yoma Strategic Holdings in line, driven by
further sales at Star City and tourism income. Property sales
are healthy while construction of Star City is progressing. Star
City remains the key driver as Landmark delay continues.
Yoma has again extended the longstop date for the
Landmark deal to Jun 2014. Maintain BUY and target price of
S$1.02 as this quarter has exhibited continued momentum in
property sales and additional income from tourism. We
expect non-property income to grow going forward.
The Public Transport Council (PTC) has announced that it has
granted an overall fare adjustment of 3.2% for the 2013 Fare
Review Exercise. This is about half of the 6.6% combined
2012 and 2013 fare caps, and the remainder (c.3.4%) will be
rolled over to next year’s fare review exercise. The new fares
will be effective from 6 April 2014.Adult card fares for buses
and trains will increase by 4 to 6 cents per journey, 2 to 3
cents per journey for senior citizen and 2 cents per journey
for student fares.
The 3.2% fare increase translates to fare revenue increase of
about $53.5m a year collectively for both SMRT and SBS
Transit (SBST, ComfortDelGro’s subsidiary), which is about
S$17.5m and S$36m, respectively. The estimated increase in
fare revenue is before funds to be set aside by the operators
for the Public Transport Fund, which amounts to $4.3m for
SMRT and S$7.2m for SBST. Hence, the net increase is
estimated at S$13.2m for SMRT and S$28.8m for SBST.
We have already factored in 2% increase in fares, and this is
slightly above our expectations, assuming no further cost
increases arising from higher service standards. Maintain BUY
for ComfortDelgro, FULLY VALUED for SMRT. We are
maintaining our forecasts for now. We continue to prefer CD
(BUY, TP: S$2.19) over SMRT (FV, TP: S$1.08). We like CD for
its geographical diversification, and stronger balance sheet.
On the other hand, while this fare increase will alleviate some
cost pressure for SMRT, we still have reservations given that
cost increase may continue to keep pace arising from higher
service requirements and maintenance of standards.
US Indices Last Close Pts Chg % Chg
Dow Jones 16,417.0 (64.9) (0.4)
S&P 1,845.9 (2.5) (0.1)
NASDAQ 4,218.7 3.8 0.1
Regional Indices
ST Index 3,140.4 (2.8) (0.1)
ST Small Cap 543.5 (1.4) (0.2)
Hang Seng 22,986.4 84.4 0.4
HSCEI 10,187.5 (14.3) (0.1)
HSCCI 4,449.2 (0.1) (0.0)
KLCI 1,813.0 (11.0) (0.6)
SET 1,301.5 24.5 1.9
JCI 4,412.5 (29.1) (0.7)
PCOMP 5,982.2 24.1 0.4
KOSPI 1,957.3 4.0 0.2
TWSE 8,612.1 9.6 0.1
Nikkei 15,747.2 (61.5) (0.4)
STI Index Performance
Singapore
Total Market cap (US$bn) 574
Total Daily Vol (m shrs) 2,852
12m ST Index High 3,454
12m ST Index Low 3,004
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price (S$)
16 Jan
Target Price
(S$)
Hutchison Port Hldgs Trust (US$) Buy 0.680 0.80
Keppel Corp Buy 10.940 12.90
ST Engineering Buy 3.840 4.90
Yangzijiang Buy 1.185 1.32
Stock Picks – Small /Mid Cap
Rec’n Price (S$)
16 Jan
Target Price
($)
Ezion Holdings Buy 2.390 3.36
China Merchants Buy 0.925 1.20
Pacific Radiance Ltd Buy 0.955 1.05
Nam Cheong Buy 0.325 0.42
Source: Bloomberg Finance L.P., DBS Research
Singapore
Wired Daily
Page 2
Cambridge REIT 4Q13 results released this morning were in
line with our expectations, bringing full year DPU to 4.976
Scts, a 4% increase compared to a year ago. Gearing remain
at a conservative c28%, with 83% of their debt fixed over the
next 2 years, mitigating the impact on any risk of rising
interest rates in the immediate tern. We will follow up with a
full report.
Singapore Airlines (SIA) and Air New Zealand are deepening
ties in a partnership that will beef up capacity between the
two countries while giving each airline access to specific
destinations in the other's network. SIA has been forging
partnerships and alliances to stay ahead of the competition as
it battles with sliding yields and tough competition from both
the regional and cash-rich Gulf carriers. For Air NZ, this will
enable it to relaunch flights to Singapore after it cut the citystate
from its network in 2006, due to a lack of profitability.
Mapletree Investments Pte Ltd has been awarded a prime
commercial site in Hong Kong for HK$3.77bn (S$618m). The
5,112-square-metre site is located in Kwun Tong, Kowloon
East, a key office cluster in Hong Kong that has been
earmarked as the new central business district. Mapletree
plans to develop a Grade-A office building there, with a total
gross floor area of over 61,300 square metres.
Singapore's key non-oil exports rose faster-than-expected in
December, rebounding from a fall in November, as shipments
of non-electronics goods grew. NODX rose 6.0% y-o-y, better
than market expectation of 1.7% expansion, after falling a
revised 8.9% in November. Compared with the previous
month, exports rose 9.2%, after contracting 4.2% m-o-m in
November. Shipments to China, its biggest export destination,
surged 45% y-o-y in December, compared with a 16% rise in
the previous month. Exports to the U.S. rose 27.9% y-o-y,
accelerating from a 10.3% rise in November. Shipments to the
European Union, however, fell 23.4% after a 26.6% fall in
November. Electronics exports declined 3.1% y-o-y, after
falling 8.9% in November, while non-electronics shipments
grew 10.6%, reversing a 8.9% fall in November. In the nonelectronics
sector, petrochemical exports rose 39.8%, after
growing 24% in the previous month.
U.S. stocks fell as Best Buy tumbled after reporting a drop in
US same-store sales during the December holiday shopping
period and earnings at companies from Citigroup Inc. to CSX
Corp. disappointed investors. Citigroup and Goldman Sachs
Group Inc. led declines among banks after releasing 4Q
results. Intel Corp. slid 2.6% in extended trading after
forecasting sales that may fall short of some estimates. On the
data front, weekly jobless claims figure was a tat lower than
expected (actual 326k, consensus 328k) while December CPI
was in-line with expectations. Meanwhile, the Fed said in its
Beige Book yesterday that it saw “moderate” growth across
most of the U.S. Speaking at a forum, Ben Bernanke defended
quantitative easing, saying it has helped the economy and
shows no immediate sign of creating a bubble in asset prices.
Daily summary 16 Jan 14
Dow and Europe were up last night. Dow +108 at 16582. Dow's trend is
starting to turn up. Dow's future is now -20. Europe opened marginally
down.
Asian bourses were mixed. Nikkei -62, ShanghaiC +0.5, Hangseng +84. STI
closed -4 at 3140. Volume was 2.8b shares. Gainers were 179 to 279
losers.
Trend of STI is flat.
Top volumes were OEL +0.1, hankore -0.2, CharismaEner -0.2, KLW -0.1,
Ellipsiz +0.3, JEP +0.7, CCM -0.6, Albedo -0.1, JES -1.7, Vallianz -0.1.
Market opened up but slipped down to close -3. Blue chips were mixed.
Penny and speculatives were weaker. Most of the penny stocks that were
played up came down.
Dow and Europe are looking flat tonight.
starting to turn up. Dow's future is now -20. Europe opened marginally
down.
Asian bourses were mixed. Nikkei -62, ShanghaiC +0.5, Hangseng +84. STI
closed -4 at 3140. Volume was 2.8b shares. Gainers were 179 to 279
losers.
Trend of STI is flat.
Top volumes were OEL +0.1, hankore -0.2, CharismaEner -0.2, KLW -0.1,
Ellipsiz +0.3, JEP +0.7, CCM -0.6, Albedo -0.1, JES -1.7, Vallianz -0.1.
Market opened up but slipped down to close -3. Blue chips were mixed.
Penny and speculatives were weaker. Most of the penny stocks that were
played up came down.
Dow and Europe are looking flat tonight.
Wednesday, January 15, 2014
DBS Vickers Report 16 Jan 14
Today’s Focus
• United Envirotech - Upgrade to BUY, target price raised
to S$1.18. Positive industry re-rating, contract flows are
medium-term upside catalyst.
United Envirotech (UENV) has won another EPC contract
worth RMB250m after securing a RMB160m BOT agreement
few days ago. UENV has clinched c.RMB877m of EPC
contracts so far in FY14. More order wins are possible as
RMB500-600m of contracts are in advanced bidding stages.
FY15 is shaping up to be a banner year for EPC. Memstar
acquisition could add S$0.28/share to UENV when completed
in April. FY15 net earnings were raised by 16% to factor in
stronger EPC recognition. With the strong rally in share price
recently, UENV may see near-term profit-taking. Investors
with a medium term horizon should take advantage of
pullbacks to take position in the stock. Upgrade to BUY on
positive industry re-rating; contract flows are medium-term
upside catalyst. Target price raised to S$1.18 (Prev S$ 0.91)
including Memstar’s contribution and higher new win
assumptions.
Ezion has received a letter of intent with a contract value of
up to approximately US$94m over a 5 year period to provide
a Service Rig to be used by a Southeast Asian based national
oil company to support its oil & gas activities. The Service Rig
is expected to be deployed and working in the Southeast
Asian waters by the 1Q 2016.
Singapore Airlines' passenger load factor (PLF) edged up 0.3
percentage point to 82.5% in December last year as
passenger carriage narrowly outpaced capacity growth.
Systemwide passenger carriage rose 1.4% against a 0.9%
increase in capacity during the month. The number of
passengers carried was up 2.5% y-o-y to 1.67m. On a
regional level, SIA load factors declined slightly for East Asia
and the South West Pacific and were flat for West Asia and
Africa. However, load factors increased for the Americas and
Europe, up 1.8 percentage points to 86.3% and up 2.6
percentage points to 82.8%, respectively. Meanwhile, SIA
Cargo reported a 1.4 percentage point decline in cargo load
factor to 63% in December as cargo traffic was 5.1% lower
y-o-y, while cargo capacity was scaled back by 3.1%.
US Indices Last Close Pts Chg % Chg
Dow Jones 16,481.9 108.1 0.7
S&P 1,848.4 9.5 0.5
NASDAQ 4,214.9 31.9 0.8
Regional Indices
ST Index 3,143.3 19.5 0.6
ST Small Cap 544.8 2.4 0.4
Hang Seng 22,902.0 110.7 0.5
HSCEI 10,201.8 52.6 0.5
HSCCI 4,449.3 21.7 0.5
KLCI 1,824.0 (10.9) (0.6)
SET 1,277.0 (18.8) (1.5)
JCI 4,441.6 50.8 1.2
PCOMP 5,958.1 22.6 0.4
KOSPI 1,953.3 7.2 0.4
TWSE 8,602.6 54.4 0.6
Nikkei 15,808.7 386.3 2.5
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013 2014
100-Day MA
Index
STI
Total Market cap (US$bn) 572
Total Daily Vol (m shrs) 3,933
12m ST Index High 3,454
12m ST Index Low 3,004
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price (S$)
15 Jan
Target Price
(S$)
Hutchison Port Hldgs Trust (US$) Buy 0.675 0.80
Keppel Corp Buy 10.850 12.90
ST Engineering Buy 3.860 4.90
Yangzijiang Buy 1.200 1.32
Stock Picks – Small /Mid Cap
Rec’n Price (S$)
15 Jan
Target Price
($)
Ezion Holdings Buy 2.360 3.36
China Merchants Buy 0.925 1.20
Pacific Radiance Ltd Buy 0.995 1.05
Nam Cheong Buy 0.330 0.42
Source: Bloomberg Finance L.P., DBS Research
Singapore
Wired Daily
Page 2
Global Logistic Properties will commence development of GLP
Yachiyo, a 72,000 sqm, multi-tenant logistics facility in Greater
Tokyo. The project is expected to be completed in October
2015, with a total estimated development cost of JPY11.1 bn
(US$106m).
Wilmar has signed a mandate letter for the launch of the
syndication of US$1,750m Revolving Loan Facilities. The
purpose of the Facility is to finance general corporate and
working capital requirements of Wilmar and its subsidiaries,
including refinancing of existing debt.
Koh Brothers Group and Heeton Holdings Limited announced
that their joint venture has been awarded the mandate to
develop an executive condominium (EC) site at Westwood
Avenue in Jurong West, Singapore. They have successfully bid
$382 psf ppr for the 99-year leasehold site. The site is
expected to yield approximately 480 residential homes,
ranging from two bedrooms to five bedrooms.
OEL Holdings has entered into an agreement to acquire 100%
of two wholly-owned property investment subsidiaries for
S$53.9m, to be satisfied by S$10m cash and issuance of
S$43.9m secured convertible bonds.
Developers' private home sales shrank to 259 units (excluding
executive condominiums, or ECs) in December 2013 - a big
drop from 1,271 units in November and 1,410 units in
December 2012. The figure was the lowest since January 2009
(108 units) and worse than market expectations. The
December drop was due largely to developers' strategy of
holding back launches and gathering interest first, said agents.
The December number takes the preliminary 2013 tally to
15,015 - down 32.4% from the record 22,197 in 2012. In
2011, the total was 15,904 and in 2010, 16,292.
Singapore's retail sales fell a larger- than-expected 8.7% in
November compared to a year ago, mainly due to a 41.8%
drop in motor vehicle sales. Stripping out sales of motor
vehicles, however, retail sales went up by 0.4%, still below
market expectation of +0.6%. Compared to October, the
seasonally adjusted retail sales figure increased marginally by
0.1% in November. Excluding motor vehicles, they rose 1%.
The telecommunications apparatus & computers category
declined 11.7% y-o-y. Other categories which reported lower
sales were furniture & household equipment (-4.4%) and
watches & jewellery (-2.8%).
U.S. stocks rose following the World Bank lifting its global
growth forecast while Bank of America Corp.’s profit spurred
a rally in financial shares. Bank of America reported 4Q
earnings and revenue that beat analysts’ estimates. Apple Inc.
gained after China Mobile said pre-orders for iPhones had
reached 1 million. The World Bank raised its global growth
forecasts as a recovery in advanced economies tempers the
effects of tighter monetary conditions on developing markets.
The forecast for the richest nations was raised to 2.2%from
2%. Meanwhile, International Monetary Fund Managing
Director Christine Lagarde said today that momentum in the
world economy seen in 2H13 should continue in 2014. The
IMF plans to raise its forecast for global growth when it
releases a report later this month.
• United Envirotech - Upgrade to BUY, target price raised
to S$1.18. Positive industry re-rating, contract flows are
medium-term upside catalyst.
United Envirotech (UENV) has won another EPC contract
worth RMB250m after securing a RMB160m BOT agreement
few days ago. UENV has clinched c.RMB877m of EPC
contracts so far in FY14. More order wins are possible as
RMB500-600m of contracts are in advanced bidding stages.
FY15 is shaping up to be a banner year for EPC. Memstar
acquisition could add S$0.28/share to UENV when completed
in April. FY15 net earnings were raised by 16% to factor in
stronger EPC recognition. With the strong rally in share price
recently, UENV may see near-term profit-taking. Investors
with a medium term horizon should take advantage of
pullbacks to take position in the stock. Upgrade to BUY on
positive industry re-rating; contract flows are medium-term
upside catalyst. Target price raised to S$1.18 (Prev S$ 0.91)
including Memstar’s contribution and higher new win
assumptions.
Ezion has received a letter of intent with a contract value of
up to approximately US$94m over a 5 year period to provide
a Service Rig to be used by a Southeast Asian based national
oil company to support its oil & gas activities. The Service Rig
is expected to be deployed and working in the Southeast
Asian waters by the 1Q 2016.
Singapore Airlines' passenger load factor (PLF) edged up 0.3
percentage point to 82.5% in December last year as
passenger carriage narrowly outpaced capacity growth.
Systemwide passenger carriage rose 1.4% against a 0.9%
increase in capacity during the month. The number of
passengers carried was up 2.5% y-o-y to 1.67m. On a
regional level, SIA load factors declined slightly for East Asia
and the South West Pacific and were flat for West Asia and
Africa. However, load factors increased for the Americas and
Europe, up 1.8 percentage points to 86.3% and up 2.6
percentage points to 82.8%, respectively. Meanwhile, SIA
Cargo reported a 1.4 percentage point decline in cargo load
factor to 63% in December as cargo traffic was 5.1% lower
y-o-y, while cargo capacity was scaled back by 3.1%.
US Indices Last Close Pts Chg % Chg
Dow Jones 16,481.9 108.1 0.7
S&P 1,848.4 9.5 0.5
NASDAQ 4,214.9 31.9 0.8
Regional Indices
ST Index 3,143.3 19.5 0.6
ST Small Cap 544.8 2.4 0.4
Hang Seng 22,902.0 110.7 0.5
HSCEI 10,201.8 52.6 0.5
HSCCI 4,449.3 21.7 0.5
KLCI 1,824.0 (10.9) (0.6)
SET 1,277.0 (18.8) (1.5)
JCI 4,441.6 50.8 1.2
PCOMP 5,958.1 22.6 0.4
KOSPI 1,953.3 7.2 0.4
TWSE 8,602.6 54.4 0.6
Nikkei 15,808.7 386.3 2.5
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013 2014
100-Day MA
Index
STI
Total Market cap (US$bn) 572
Total Daily Vol (m shrs) 3,933
12m ST Index High 3,454
12m ST Index Low 3,004
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price (S$)
15 Jan
Target Price
(S$)
Hutchison Port Hldgs Trust (US$) Buy 0.675 0.80
Keppel Corp Buy 10.850 12.90
ST Engineering Buy 3.860 4.90
Yangzijiang Buy 1.200 1.32
Stock Picks – Small /Mid Cap
Rec’n Price (S$)
15 Jan
Target Price
($)
Ezion Holdings Buy 2.360 3.36
China Merchants Buy 0.925 1.20
Pacific Radiance Ltd Buy 0.995 1.05
Nam Cheong Buy 0.330 0.42
Source: Bloomberg Finance L.P., DBS Research
Singapore
Wired Daily
Page 2
Global Logistic Properties will commence development of GLP
Yachiyo, a 72,000 sqm, multi-tenant logistics facility in Greater
Tokyo. The project is expected to be completed in October
2015, with a total estimated development cost of JPY11.1 bn
(US$106m).
Wilmar has signed a mandate letter for the launch of the
syndication of US$1,750m Revolving Loan Facilities. The
purpose of the Facility is to finance general corporate and
working capital requirements of Wilmar and its subsidiaries,
including refinancing of existing debt.
Koh Brothers Group and Heeton Holdings Limited announced
that their joint venture has been awarded the mandate to
develop an executive condominium (EC) site at Westwood
Avenue in Jurong West, Singapore. They have successfully bid
$382 psf ppr for the 99-year leasehold site. The site is
expected to yield approximately 480 residential homes,
ranging from two bedrooms to five bedrooms.
OEL Holdings has entered into an agreement to acquire 100%
of two wholly-owned property investment subsidiaries for
S$53.9m, to be satisfied by S$10m cash and issuance of
S$43.9m secured convertible bonds.
Developers' private home sales shrank to 259 units (excluding
executive condominiums, or ECs) in December 2013 - a big
drop from 1,271 units in November and 1,410 units in
December 2012. The figure was the lowest since January 2009
(108 units) and worse than market expectations. The
December drop was due largely to developers' strategy of
holding back launches and gathering interest first, said agents.
The December number takes the preliminary 2013 tally to
15,015 - down 32.4% from the record 22,197 in 2012. In
2011, the total was 15,904 and in 2010, 16,292.
Singapore's retail sales fell a larger- than-expected 8.7% in
November compared to a year ago, mainly due to a 41.8%
drop in motor vehicle sales. Stripping out sales of motor
vehicles, however, retail sales went up by 0.4%, still below
market expectation of +0.6%. Compared to October, the
seasonally adjusted retail sales figure increased marginally by
0.1% in November. Excluding motor vehicles, they rose 1%.
The telecommunications apparatus & computers category
declined 11.7% y-o-y. Other categories which reported lower
sales were furniture & household equipment (-4.4%) and
watches & jewellery (-2.8%).
U.S. stocks rose following the World Bank lifting its global
growth forecast while Bank of America Corp.’s profit spurred
a rally in financial shares. Bank of America reported 4Q
earnings and revenue that beat analysts’ estimates. Apple Inc.
gained after China Mobile said pre-orders for iPhones had
reached 1 million. The World Bank raised its global growth
forecasts as a recovery in advanced economies tempers the
effects of tighter monetary conditions on developing markets.
The forecast for the richest nations was raised to 2.2%from
2%. Meanwhile, International Monetary Fund Managing
Director Christine Lagarde said today that momentum in the
world economy seen in 2H13 should continue in 2014. The
IMF plans to raise its forecast for global growth when it
releases a report later this month.
OCBC Report 16 Jan 14
| KEY IDEA Golden Agri-Resources: Valuations look less pricey Summary: Despite a disappointing set of 3Q13 results, Golden Agri-Resources’ (GAR) share price rose to a high of S$0.61 on 18 Nov, likely buoyed by more signs that CPO (crude palm oil) prices are stabilizing around current levels (MYR2500/ton). However, as noted in our report dated 20 Nov, we believe that the run-up in share price looked overdone. And true enough, GAR’s share price has since corrected over 14% from that high. Nevertheless, with recent correction in share price, we note that GAR is just 5% above our unchanged fair value of S$0.50 (based on 13.5x FY14F EPS). As such, we upgrade our rating from Sell to HOLD. (Carey Wong) MORE REPORTS KSH Holdings: Acquires 40% stake in mixed development site in Malaysia Summary: KSH announced that it has agreed to acquire, through an associated company, a 40% stake in a 679.5k sq ft site in Mukim Klang, Daerah Klang, Negeri Selangor. The total purchase consideration comes up to MYR 91.7m (S$36.0m), of which KSH’s effective share is S$14.4m. The site has a plot ratio of 1.5 and will likely be developed into a mixed development with hospitality, retail and SOHO components, forming part of a proposed business park in that area. Given a muted domestic residential outlook, we understand the group would actively seek accretive opportunities in the region, in particular China and Malaysia, and we are positive on management deploying capital in this manner if the acquisitions are optimally sized and alongside competent local partners. Pending more details and the completion of the acquisition (within 6 months), we hold our fair value estimate unchanged at S$0.73. Maintain BUY. (Eli Lee) Vard Holdings: Secures new contract worth an estimated NOK1.3-1.5b Summary: Vard Holdings Limited (VARD) announced its first contract win of the year last evening. This entails the design and construction of one Diving Support and Construction vessel (DSCV) for an international customer. This vessel is of VARD 3 06 design and has a length of 157m, beam of 27m and an accommodation capacity for 150 persons. Delivery of this vessel is slated in mid-2016 from one of its Norway yards. Although the value of the contract was not disclosed, we believe a ballpark range could be NOK1.3-1.5b, after drawing reference from a recent >NOK1b contract for a DSCV of smaller size secured on 30 Dec 2013 and a NOK1.4b Offshore Subsea Construction vessel contract secured in Jun 2012 with similar basic hull design and of a comparable size. While we are positive on VARD’s bright start to the year, we maintain our HOLD rating and S$0.84 fair value estimate on the stock (pegged to 8x FY14F EPS), as we believe challenging conditions in Brazil will continue to pose downside risks to its margins and profitability. (Wong Teck Ching Andy) |
For more information on the above, visit www.ocbcresearch.comfor the detailed report. |
NEWS HEADLINES - The S&P 500 closed at a record high on Wed, narrowly beating its previous peak reached on 31 Dec 2013. - Developers' private home sales shrank to 259 units (excluding executive condominiums) in Dec 2013 - a big drop from 1,271 units in Nov and 1,410 units in Dec 2012. - Singapore's retail sales fell a larger-than-expected 8.7% YoY in Nov, mainly due to a 41.8% drop in motor vehicle sales. - Kim Heng Offshore & Marine Holdings, which has a track record of more than 40 years, has launched its IPO to raise net proceeds of S$36.4m to help fund its expansion plans. - Global Logistic Properties will start work on developing a 72,000 sqm multi-tenant logistics facility in Greater Tokyo. - Singapore Airlines' passenger load factor edged up 0.3ppt to 82.5% in Dec 2013 as passenger carriage narrowly outpaced capacity growth. - A joint venture between Koh Brothers Group and Heeton Holdings has clinched the mandate to develop an executive condominium site in Westwood Avenue in Jurong West. |
Daily Summary 15 Jan 14
Dow and Europe rebounded last night.
Dow closed +116 at 16374. Dow's trend is still down. Dow's
future is now +40. Europe opened firmly up.
Asian bourses were mostly up. Nikkei +386, ShanghaiC -3, Hangseng +111. STI closed +20 at 3143. Volume was 3.9b shares. Gainers were 281 to 165 losers.
Trend of STI is flat and looking to turn up.
Top volumes were Albedo +0.2, CharismaEner +0.1, KLW +0.1, JES +0.2, Vallianz +0.4, Unionmet -0.4, SunningTech +2.1, Memstar +0.2, Federal +0.5, MDevt unchanged.
Market opened up and gained strength to close higher, +20 pts. Blue chips were mostly higher. Penny and speculatives were also active and firmer. JES continued to run by adding 2c. Sunvic also added 10c. PSL +4,
As long as Dow is firm the market is likely to be active till the CNY. Europe and Dow's future are looking good for tonight.
Asian bourses were mostly up. Nikkei +386, ShanghaiC -3, Hangseng +111. STI closed +20 at 3143. Volume was 3.9b shares. Gainers were 281 to 165 losers.
Trend of STI is flat and looking to turn up.
Top volumes were Albedo +0.2, CharismaEner +0.1, KLW +0.1, JES +0.2, Vallianz +0.4, Unionmet -0.4, SunningTech +2.1, Memstar +0.2, Federal +0.5, MDevt unchanged.
Market opened up and gained strength to close higher, +20 pts. Blue chips were mostly higher. Penny and speculatives were also active and firmer. JES continued to run by adding 2c. Sunvic also added 10c. PSL +4,
As long as Dow is firm the market is likely to be active till the CNY. Europe and Dow's future are looking good for tonight.
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