Singapore Banks - Stable NIM and slower loan
growth expected for 3Q
Del Monte Pacific -Downgrade to HOLD after recent
outperformance
Tiger Airways - Too much turbulence; downgrade to
FULLY VALUED with TP cut to S$0.47
Mapletree Commercial Trust - Lack of acquisitions
limits upside to DPU. Downgrade to HOLD, TP revised
to S$1.32
Our analyst expects stable net interest margin (NIM) and
slower loan growth for the upcoming 3Q results for the
banks. NIM should remain fairly stable, tracking trends
recorded in 2Q13. System loan growth is trending down,
as expected. We expect loan growth to normalise at a
more modest c.2% q-o-q, after the chucky loan growth
seen in 1H13. In line with the softer capital market
environment, market-related income is expected to
moderate q-o-q. We also expect slower regional
contribution due to both currency and macro effects.
Preference for OCBC (BUY, TP: S$12.40) remains.
Although OCBC may record another relatively feeble
quarter from its insurance business contribution (we have
lowered our FY13F earnings by 5% accordingly), we
believe its banking operations will remain strong. OCBC
will release 3Q results on 1 Nov and UOB on 5 Nov.
Unlike the market’s optimism, we are neutral on Del
Monte Pacific’s proposed US$1.7bn acquisition of USbased
Del Monte Foods’s Consumer Food Business.
Earnings accretion to common equity holders is estimated
to be minor in the interim, and is highly sensitive to
acquired entity’s business performance going forward.
3Q13 earnings were in line. Going forward, the Group’s
growth profile will be altered, given the consolidation of a
larger entity with lower growth. We estimate that revenue
contribution from Philippines will drop to 14% in FY14F,
down from 62% in FY13F. Downgrade to HOLD after
recent outperformance; TP reduced slightly to S$0.96
(Prev S$0.97). There are possible downsides to dividend
payout, given its high gearing of c.1.8x post-acquisition,
in our view.
US Indices Last Close Pts Chg % Chg
Dow Jones 15,509.2 95.9 0.6
S&P 1,752.1 5.7 0.3
NASDAQ 3,929.0 21.9 0.6
Regional Indices
ST Index 3,218.0 13.1 0.4
ST Small Cap 546.4 1.3 0.2
Hang Seng 22,835.8 (164.1) (0.7)
HSCEI 10,322.1 (135.2) (1.3)
HSCCI 4,437.5 (29.6) (0.7)
KLCI 1,818.9 4.8 0.3
SET 1,466.3 9.0 0.6
JCI 4,594.8 48.3 1.1
PCOMP 6,583.8 (51.3) (0.8)
KOSPI 2,046.7 10.9 0.5
TWSE 8,413.7 20.1 0.2
Nikkei 14,486.4 60.4 0.4
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013
100-Day MA
Index
STI
Total Market cap (US$bn) 599
Total Daily Vol (m shrs) 2,080
12m ST Index High 3,454
12m ST Index Low 2,946
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price ($)
24 Oct
Target Price
($)
ST Engineering Buy 4.160 4.80
ComfortDelgro Buy 1.910 2.19
OCBC Bank Buy 10.450 12.40
Singapore Airlines Buy 10.450 11.40
Stock Picks – Small /Mid Cap
Rec’n Price ($)
24 Oct
Target Price
($)
Ezion Holdings Buy 2.240 3.10
Goodpack Buy 1.890 2.00
CSE Global Buy 0.880 1.07
Frasers Centrepoint Trust Buy 1.850 2.14
Source: Bloomberg Finance L.P., DBS Vickers
Singapore
Wired Daily
Page 2
2Q-FY14 results for Tiger Airways disappoint (core net loss of
S$35m) as Tigerair Singapore slips into the red. No significant
improvement from associates in Australia, Indonesia and
Philippines either. Factoring in lower load factors and higher
costs at Tigerair Singapore and wider losses from associates,
we push up our core loss estimate for FY14 to S$80m from
S$11m previously, and we now believe the Group is unlikely
to turnaround in FY15 as well. Downgrade to FULLY VALUED
with TP cut to S$0.47 (Prev S$ 0.74).
2Q14 results for Mapletree Commercial Trust in line. Strong
rental reversions provide solid platform for organic income
growth. However, lack of acquisitions limits upside to DPU.
Downgrade to HOLD, TP revised to S$1.32 (Prev S$ 1.35).
Capitamall Trust’s 3Q13 results in line. Tampines Mall will be
undergoing S$65m of AEI works in 1Q14. Going forward,
rising labour costs could cap reversionary upside. Maintain
HOLD, TP raised to S$2.16 (Prev S$ 2.07) as we roll forward
our valuations.
Far East Hospitality Management will launch three Singapore
hotels over the next three months. These are the Village
Hotel Katong in the Marine Parade/East Coast area, Amoy at
Far East Square in the Chinatown/CBD area, and a relaunch
of the Rendezvous Grand Hotel in the Bras Basah area which
Far East Hospitality Trust (FEHT) acquired recently from Straits
Trading Company.
Tiong Seng Holdings has been awarded a contract worth
approximately $42.7m for the proposed erection of a 7-
storey industrial building with underground tanks at One-
North.
Stamford Tyres has appointed a dealer, Al Habtoor Motors,
for Sumo Firenza tyres in the United Arab Emirates to expand
its presence in the Middle East.
Changtian Plastic & Chemical expects to report a loss for the
third quarter ended 30 September 2013. This was mainly due
to an impairment loss on the Group’s property, plant and
equipment.
Mainland Chinese, Malaysians, Indonesians and Indians
continued to remain the top four nationalities among the
combined pool of foreigners and Singapore permanent
residents who bought private homes in the first nine months
of this year. Together they accounted for 81.3% of the 4,028
private homes purchased by PRs and foreigners in Jan-Sept
2013, similar to their 80.9% share of the 7,717 private
homes that PRs and foreigners picked up in 2012, according
to property consulting group DTZ.
Manufacturing activity in China has risen to a seven-month
high this month, led by new orders. The flash HSBC Markit
PMI released yesterday, a week ahead of the month's final
reading, was 50.9, above market expectations. A breakdown
of the PMI or purchasing managers index showed most subindices
over-performing. Output rose to a six-month high of
51 from 50.2; new orders were up 0.8 point to 51.6, a
seven-month high; purchases of inputs climbed above 50 for
the first time in nine months; and employment increased to
49.9 from 48.8.
US stocks rose on a busy day of results releases as earnings
generally beat estimates and signs of slower economic
growth underpinned expectations that the FED will delay QE
tapering. The US 10-year bond yield stayed around the 2.5%
mark. Of the 217 S&P500 companies that have released
results so far, 77% beat bottom line consensus estimates
while 53% beat sales estimates.
Thursday, October 24, 2013
Daily Summary 24 Oct 13
Dow and Europe closed slightly down last night. Dow -54 at 15413. Dow's
future is now +46. Dow's trend is still up. Europe opened up.
Asian bourses were mixed. Nikkei +60, ShanghaiC -19, Hangseng -164. STI
closed +15 at 3220. Volume was 2b shares. Gainers were 235 to 183 losers.
Trend of STI is up.
Top volumes were YHM +0.2, SingHaiyi +0.1, Innopac +0.2, Albedo unchanged,
MDR unchanged, FreightLinks +0.7, Blumont -0.5, LionGold +0.5, Asiasons
-0.5, HanKore unchanged.
Market was slightly up in early morning and traded in a narrow range, There
were some short coverings in the last half hour to push index to close at
day high. Blue chips were mostly up. Penny and speculatives were slightly
firmer. Volume was a low of 2b shares.
Europe and Dow are looking firm at the moment.
future is now +46. Dow's trend is still up. Europe opened up.
Asian bourses were mixed. Nikkei +60, ShanghaiC -19, Hangseng -164. STI
closed +15 at 3220. Volume was 2b shares. Gainers were 235 to 183 losers.
Trend of STI is up.
Top volumes were YHM +0.2, SingHaiyi +0.1, Innopac +0.2, Albedo unchanged,
MDR unchanged, FreightLinks +0.7, Blumont -0.5, LionGold +0.5, Asiasons
-0.5, HanKore unchanged.
Market was slightly up in early morning and traded in a narrow range, There
were some short coverings in the last half hour to push index to close at
day high. Blue chips were mostly up. Penny and speculatives were slightly
firmer. Volume was a low of 2b shares.
Europe and Dow are looking firm at the moment.
Wednesday, October 23, 2013
DBSVickers Report 24 Oct 13
Mapletree Industrial Trust – Rental reversion higher
than expected; maintain BUY, TP raised to S$1.44
STI’s pullback off 3235 that is modestly below our stated
3250 near-term resistance level yesterday is within
expectations. With earnings revision still in a downward
cycle, it is unlikely for the index to rise above the13.9x
(ave) FY14F PE level that is currently at c.3300. We keep
our view for STI to range within c.3150-3250 in the near
term before heading towards 3300 by year-end on the
assumption that the current reporting season turns out
benign with no major downward revision to FY14F
earnings forecast. For the current session/s, immediate
support is peg at 3193 or 3178.
2Q14 results for Mapletree Industrial Trust above
expectations. Operational performance remains strong,
with MINT reporting renewals hikes in the range of 12%
to 27%, higher than expected. Maintain BUY, TP raised to
S$1.44 (Prev S$ 1.37).
Cache Logistics Trust’s 3Q13 results in line. With minimal
renewals in FY14F, Cache offers strong income visibility.
Cache is poised for acquisitions, with opportunities
coming from overseas markets. Maintain BUY, TP S$1.33.
Yields of close to 7.3%-7.5% are one of the highest
amongst peers.
4Q13 results for Frasers Commercial Trust in line; outlook
remains positive. We expect DPU CAGR of 7-8% over
FY14-15. FCOT has resilient portfolio occupancies of
97.9%, with organic-driven growth in FY14. Maintain
BUY, TP revised slightly to S$1.46 (Prev S$ 1.44) as we roll
forward valuations. Forward yields of 6.6%-7.0% are
attractive.
Sheng Siong Group’s 3Q13 results in line; earnings
growth of 8% was driven by contribution from new
stores. Margins expanded further from lower input costs,
outperforming all quarters since listing. Maintain BUY and
S$0.80 TP; valuations are now more attractive post share
price correction.
US Indices Last Close Pts Chg % Chg
Dow Jones 15,413.3 (54.3) (0.4)
S&P 1,746.4 (8.3) (0.5)
NASDAQ 3,907.1 (22.5) (0.6)
Regional Indices
ST Index 3,204.8 (5.4) (0.2)
ST Small Cap 545.1 0.9 0.2
Hang Seng 23,000.0 (316.0) (1.4)
HSCEI 10,457.3 (196.1) (1.8)
HSCCI 4,467.1 (84.2) (1.8)
KLCI 1,814.1 10.5 0.6
SET 1,457.4 8.8 0.6
JCI 4,546.5 33.8 0.7
PCOMP 6,635.1 31.5 0.5
KOSPI 2,035.8 (20.4) (1.0)
TWSE 8,393.6 (24.6) (0.3)
Nikkei 14,426.1 (287.2) (2.0)
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013
100-Day MA
Index
STI
Total Market cap (US$bn) 598
Total Daily Vol (m shrs) 2,777
12m ST Index High 3,454
12m ST Index Low 2,946
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price ($)
23 Oct
Target Price
($)
ST Engineering Buy 4.140 4.80
ComfortDelgro Buy 1.910 2.19
OCBC Bank Buy 10.390 12.40
Singapore Airlines Buy 10.370 11.40
Stock Picks – Small /Mid Cap
Rec’n Price ($)
23 Oct
Target Price
($)
Ezion Holdings Buy 2.240 3.10
Goodpack Buy 1.930 2.00
CSE Global Buy 0.880 1.07
Mapletree Commercial Trust Buy 1.255 1.35
Frasers Centrepoint Trust Buy 1.850 2.14
Source: Bloomberg Finance L.P., DBS Vickers
Singapore
Wired Daily
Page 2
Keppel Land China has acquired a 10.37 ha prime residential
site in the Sino-Singapore Tianjin Eco-City (Tianjin Eco-City)
for RMB241.1m. Targeted at the upper-middle income
homebuyers, the new landed homes will be launched
progressively, starting from the second half of 2014.
Courts Asia has started construction on its first “Big-Box”
megastore in Indonesia. With more than 13,000 sqm
(140,000 sq. ft.) of retail space, Courts Megastore in Bekasi
will be the largest store in Courts’ entire portfolio.
Operational by 2014, it will offer the largest range of
electrical, furniture and IT products in Indonesia, as well as
innovative retail concepts.
Wee Hur Holdings ventures into workers’ dormitory business
through a 60% stake in joint venture (JV) company, Active
System. Active System recently awarded tender by JTC to
operate 16,800-bed workers’ dormitory at Tuas South
Avenue 1. Construction of the dormitory is expected to
complete in 2H2014. With Government’s emphasis on proper
management of accommodation for foreign workers, the
Group is cautiously optimistic on high occupancy of
dormitory upon completion.
ISDN Holdings has signed the second MOU with Japanese
corporation IDI for the development of 540 megawatt coalfired
power plant in North West Myanmar. This latest MOU
follows an earlier MOU signed in June this year to collaborate
and explore opportunities to develop and invest in energy
projects and expand international power production business
in Asia.
Digiland is proposing to place up to 5800m new share at an
issue price of S$0.001 each. The estimated net proceeds of
about S$5.8m will be used for general working capital.
Travelite Holdings expects to register a net loss in 1H FY2014,
mainly due to lower demand for the Group’s apparels.
After climbing four consecutive months, inflation in
Singapore eased to 1.6% in September from 2% in August
and also below market forecast of a 2% rise, largely due to a
decline in the cost of private road transport. Private road
transport costs fell by 2% after rising marginally by 0.1% in
August, as a correction in car prices more than offset the
increase in petrol pump prices. Services inflation, however,
was stable in September at 2.7%, as the stronger pick-up in
the cost of recreation & entertainment and holiday travel was
offset by lower contributions from education and household
services fees. Accommodation costs, meanwhile, went up by
3.9%, slightly lower than the 4.2% rise in August. MAS core
inflation - which excludes costs of accommodation and
private road transport - slowed slightly to 1.7% in
September, from 1.8% in August. The government expects
core inflation to rise "over the next few quarters", and
average 1.5-2% in 2013, and 2-3% in 2014. The
government also reiterated that headline inflation is projected
to come in at 2.5-3% in 2013, and 2-3% in 2014.
A total of 39.7 million travellers passed through Changi
Airport in the first nine months of the year, up 5.6% y-o-y.
Volume of aircraft take-offs and landings was also higher,
increasing 5.5% to 254,000, though the cargo market has
been a little more subdued, with air freight volumes
remaining virtually flat at 1.4 million tonnes, edging up
0.7%
than expected; maintain BUY, TP raised to S$1.44
STI’s pullback off 3235 that is modestly below our stated
3250 near-term resistance level yesterday is within
expectations. With earnings revision still in a downward
cycle, it is unlikely for the index to rise above the13.9x
(ave) FY14F PE level that is currently at c.3300. We keep
our view for STI to range within c.3150-3250 in the near
term before heading towards 3300 by year-end on the
assumption that the current reporting season turns out
benign with no major downward revision to FY14F
earnings forecast. For the current session/s, immediate
support is peg at 3193 or 3178.
2Q14 results for Mapletree Industrial Trust above
expectations. Operational performance remains strong,
with MINT reporting renewals hikes in the range of 12%
to 27%, higher than expected. Maintain BUY, TP raised to
S$1.44 (Prev S$ 1.37).
Cache Logistics Trust’s 3Q13 results in line. With minimal
renewals in FY14F, Cache offers strong income visibility.
Cache is poised for acquisitions, with opportunities
coming from overseas markets. Maintain BUY, TP S$1.33.
Yields of close to 7.3%-7.5% are one of the highest
amongst peers.
4Q13 results for Frasers Commercial Trust in line; outlook
remains positive. We expect DPU CAGR of 7-8% over
FY14-15. FCOT has resilient portfolio occupancies of
97.9%, with organic-driven growth in FY14. Maintain
BUY, TP revised slightly to S$1.46 (Prev S$ 1.44) as we roll
forward valuations. Forward yields of 6.6%-7.0% are
attractive.
Sheng Siong Group’s 3Q13 results in line; earnings
growth of 8% was driven by contribution from new
stores. Margins expanded further from lower input costs,
outperforming all quarters since listing. Maintain BUY and
S$0.80 TP; valuations are now more attractive post share
price correction.
US Indices Last Close Pts Chg % Chg
Dow Jones 15,413.3 (54.3) (0.4)
S&P 1,746.4 (8.3) (0.5)
NASDAQ 3,907.1 (22.5) (0.6)
Regional Indices
ST Index 3,204.8 (5.4) (0.2)
ST Small Cap 545.1 0.9 0.2
Hang Seng 23,000.0 (316.0) (1.4)
HSCEI 10,457.3 (196.1) (1.8)
HSCCI 4,467.1 (84.2) (1.8)
KLCI 1,814.1 10.5 0.6
SET 1,457.4 8.8 0.6
JCI 4,546.5 33.8 0.7
PCOMP 6,635.1 31.5 0.5
KOSPI 2,035.8 (20.4) (1.0)
TWSE 8,393.6 (24.6) (0.3)
Nikkei 14,426.1 (287.2) (2.0)
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013
100-Day MA
Index
STI
Total Market cap (US$bn) 598
Total Daily Vol (m shrs) 2,777
12m ST Index High 3,454
12m ST Index Low 2,946
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price ($)
23 Oct
Target Price
($)
ST Engineering Buy 4.140 4.80
ComfortDelgro Buy 1.910 2.19
OCBC Bank Buy 10.390 12.40
Singapore Airlines Buy 10.370 11.40
Stock Picks – Small /Mid Cap
Rec’n Price ($)
23 Oct
Target Price
($)
Ezion Holdings Buy 2.240 3.10
Goodpack Buy 1.930 2.00
CSE Global Buy 0.880 1.07
Mapletree Commercial Trust Buy 1.255 1.35
Frasers Centrepoint Trust Buy 1.850 2.14
Source: Bloomberg Finance L.P., DBS Vickers
Singapore
Wired Daily
Page 2
Keppel Land China has acquired a 10.37 ha prime residential
site in the Sino-Singapore Tianjin Eco-City (Tianjin Eco-City)
for RMB241.1m. Targeted at the upper-middle income
homebuyers, the new landed homes will be launched
progressively, starting from the second half of 2014.
Courts Asia has started construction on its first “Big-Box”
megastore in Indonesia. With more than 13,000 sqm
(140,000 sq. ft.) of retail space, Courts Megastore in Bekasi
will be the largest store in Courts’ entire portfolio.
Operational by 2014, it will offer the largest range of
electrical, furniture and IT products in Indonesia, as well as
innovative retail concepts.
Wee Hur Holdings ventures into workers’ dormitory business
through a 60% stake in joint venture (JV) company, Active
System. Active System recently awarded tender by JTC to
operate 16,800-bed workers’ dormitory at Tuas South
Avenue 1. Construction of the dormitory is expected to
complete in 2H2014. With Government’s emphasis on proper
management of accommodation for foreign workers, the
Group is cautiously optimistic on high occupancy of
dormitory upon completion.
ISDN Holdings has signed the second MOU with Japanese
corporation IDI for the development of 540 megawatt coalfired
power plant in North West Myanmar. This latest MOU
follows an earlier MOU signed in June this year to collaborate
and explore opportunities to develop and invest in energy
projects and expand international power production business
in Asia.
Digiland is proposing to place up to 5800m new share at an
issue price of S$0.001 each. The estimated net proceeds of
about S$5.8m will be used for general working capital.
Travelite Holdings expects to register a net loss in 1H FY2014,
mainly due to lower demand for the Group’s apparels.
After climbing four consecutive months, inflation in
Singapore eased to 1.6% in September from 2% in August
and also below market forecast of a 2% rise, largely due to a
decline in the cost of private road transport. Private road
transport costs fell by 2% after rising marginally by 0.1% in
August, as a correction in car prices more than offset the
increase in petrol pump prices. Services inflation, however,
was stable in September at 2.7%, as the stronger pick-up in
the cost of recreation & entertainment and holiday travel was
offset by lower contributions from education and household
services fees. Accommodation costs, meanwhile, went up by
3.9%, slightly lower than the 4.2% rise in August. MAS core
inflation - which excludes costs of accommodation and
private road transport - slowed slightly to 1.7% in
September, from 1.8% in August. The government expects
core inflation to rise "over the next few quarters", and
average 1.5-2% in 2013, and 2-3% in 2014. The
government also reiterated that headline inflation is projected
to come in at 2.5-3% in 2013, and 2-3% in 2014.
A total of 39.7 million travellers passed through Changi
Airport in the first nine months of the year, up 5.6% y-o-y.
Volume of aircraft take-offs and landings was also higher,
increasing 5.5% to 254,000, though the cargo market has
been a little more subdued, with air freight volumes
remaining virtually flat at 1.4 million tonnes, edging up
0.7%
Daily Summary 23 Oct 13
Dow and Europe were up last night. Dow
+75 at 15468. Dow's trend is up. Dow's future is now -67. Europe
opened down.
Asian bourses were mostly down after a positive opening. Nikkei -287, ShanghaiC -28, Hangseng -316. STI closed -5 at 3205. Volume was 2.7b shares. Gainers were 254 to 242 losers.
Trend of STI is up.
Top volumes were Digiland +0.1, SingHaiyi -0.1, Innopac -0.3, YHM -0.1, Cedar unchanged, GoldenAgr +1, LionGold -3, AsiaPhos +4.5, Albedo -0.1, Noble unchanged.
Market opened up but closed near day low at -5. Blue chips were mostly up but ended slightly weaker. Penny stocks were mixed. Market started to fall into negative territory in late afternoon when Dow's future was down and Europe also opened negative. The early morning strength disappeared quickly.
Dow and Europe are looking weak at the moment.
Asian bourses were mostly down after a positive opening. Nikkei -287, ShanghaiC -28, Hangseng -316. STI closed -5 at 3205. Volume was 2.7b shares. Gainers were 254 to 242 losers.
Trend of STI is up.
Top volumes were Digiland +0.1, SingHaiyi -0.1, Innopac -0.3, YHM -0.1, Cedar unchanged, GoldenAgr +1, LionGold -3, AsiaPhos +4.5, Albedo -0.1, Noble unchanged.
Market opened up but closed near day low at -5. Blue chips were mostly up but ended slightly weaker. Penny stocks were mixed. Market started to fall into negative territory in late afternoon when Dow's future was down and Europe also opened negative. The early morning strength disappeared quickly.
Dow and Europe are looking weak at the moment.
Tuesday, October 22, 2013
Maybank KE Report 23 Oct 13
Nam Cheong: Risk Taker Sees Rewards; Initiate BUY, TP $0.37
NCL SP | Mkt Cap USD483m
Ø Initiate BUY and TP of SGD0.37, pegged to 9x PER on average FY13-15F
EPS. We see Nam Cheong benefiting from (1) a recovering Offshore Support
Vessel (OSV) market, (2) OSV replacement cycle, (3) Petronas’ Oil & Gas
capex and (4) its foresight in reading the supply-demand dynamics of the
sector.
Ø Nam Cheong has demonstrated a strong ability to read market demand
with a track record of selling all build-to-stock vessels before
delivery. 2014 shipbuilding program is a big ramp-up over 2013 and it has
already sold 57% of the 2014 vessels. Outstanding orderbook stands at
MYR1.7b. We expect the company to deliver 16% EPS CAGR over FY13-15F as
vessels in its ramped-up newbuild programs are readily absorbed by the
market.
Ø At current share price, stock is trading at only 6.1x/6.6x FY14F/15F
PERs, inexpensive considering the robust growth prospects, higher ROEs
and shipbuilding margins. We also see possibility of higher dividend
payout in FY14F translating into a yield of about 5%.
Click here for full report
yeakcheekeong@maybank-ke.com.sg
NCL SP | Mkt Cap USD483m
Ø Initiate BUY and TP of SGD0.37, pegged to 9x PER on average FY13-15F
EPS. We see Nam Cheong benefiting from (1) a recovering Offshore Support
Vessel (OSV) market, (2) OSV replacement cycle, (3) Petronas’ Oil & Gas
capex and (4) its foresight in reading the supply-demand dynamics of the
sector.
Ø Nam Cheong has demonstrated a strong ability to read market demand
with a track record of selling all build-to-stock vessels before
delivery. 2014 shipbuilding program is a big ramp-up over 2013 and it has
already sold 57% of the 2014 vessels. Outstanding orderbook stands at
MYR1.7b. We expect the company to deliver 16% EPS CAGR over FY13-15F as
vessels in its ramped-up newbuild programs are readily absorbed by the
market.
Ø At current share price, stock is trading at only 6.1x/6.6x FY14F/15F
PERs, inexpensive considering the robust growth prospects, higher ROEs
and shipbuilding margins. We also see possibility of higher dividend
payout in FY14F translating into a yield of about 5%.
Click here for full report
yeakcheekeong@maybank-ke.com.sg
OCBC Report 23 Oct 13
Frasers Centrepoint Trust: Repeating its success
Frasers Centrepoint Trust’s (FCT) FY13 DPU came in at 10.93 S cents (+9.2%), spot on with our DPU projection.
We note that overall performance has remained robust, with portfolio occupancy maintained at a high 98.4%,
while positive rental reversion of 10.8% was achieved. We also understand ~2% of retail space at YewTee Point
is expected to start operating in Oct, which is likely to improve the mall’s occupancy. For Bedok Point,
management also updated that it has successfully secured an electronics retailer as its anchor tenant for
basement one. This may translate to a more stable performance at the mall. Looking forward, FCT reiterated CWP
and Northpoint will continue to perform, as leases at the malls amounting to 75.5% of FCT’s gross rent are due
for renewal and positive reversions are still expected. FCT also revealed that the strata title division of
One@Changi City is progressing well, and that the asset injection may take place in 2014. We are rolling our
valuation to FY14, while keeping our forecasts largely intact. Our fair value is in turn raised to S$2.02 from
S$1.96 previously. As upside now looks compelling, we upgrade FCT from Hold to BUY. (Kevin Tan)
MORE REPORTS
CapitaRetail China Trust: 3Q13 results in line
CRCT reported 3Q13 results that were in line with ours and the street’s expectations. Gross revenue climbed
2.2% YoY to S$39.5m. Property expenses rose 7.8% YoY to S$14.5m, chiefly due to higher property management
fees and staff related costs. Net property income fell 0.8% YoY to S$25.0m. Total return for the period after
tax stayed roughly flat YoY at S$15.2m. 3Q13 distributable income grew 2.1% YoY to S$17.1m. DPU, however, fell
6.6% YoY to 2.26 S cents due to a private placement last November. Rental reversion for the multi-tenanted
malls, excluding CapitaMall Minzhongleyuan (which is undergoing AEI), is healthy at 10.0%. We maintain our BUY
rating on CRCT but place our fair value of S$1.58 under review. (Sarah Ong)
Yoma Strategic Holdings: To operate Volkswagen’s first service center in Yangon
Yoma reported that it will operate Volkswagen’s first service center in Yangon, Myanmar, which is expected to
begin operations in Oct 13. Yoma’s 70% owned subsidiary, German Car Industries Company (CGI) will enter into
a service partner agreement with Volkswagen Aktiengesellschaft (VW) to provide maintenance and repair services
and sell genuine vehicle parts to VW automobile owners. We understand that the automotive market in Myanmar is
currently dominated by Japanese cars and that VW currently has no manufacturing facilities or car show room in
Myanmar, and hence this agreement is expected to have limited financial impact for Yoma over the near term.
That said, we see this further strengthening the growth potential of the group’s automotive division which,
together with a similar service agreement with Mitsubishi earlier, is one that is steadily growing –
particularly so given that VW is a significant global player with a strong brand. We maintain a HOLD rating on
the counter with our fair value estimate of S$0.87 under review. (Eli Lee)
For more information on the above, visit www.ocbcresearch.comfor the detailed report.
NEWS HEADLINES
- US stocks gained on Tue, further propelling the S&P 500’s record rise, as the Sep non-farm-payrolls report
supported the notion that the Federal Reserve’s monthly bond purchases would continue into next year.
- Proposed changes in auditor reporting are expected to dramatically change the way external auditors reflect
their opinions on companies' financial statements.
- At least 8,700 shoebox units are expected to hit the resale market between now and 2017, as the Seller's
Stamp Duty lock-in period approaches expiry.
- Temasek Holdings has sold its entire direct stake in Keppel REIT in a share placement that started on Mon
evening, sources close to the deal said yesterday.
Frasers Centrepoint Trust’s (FCT) FY13 DPU came in at 10.93 S cents (+9.2%), spot on with our DPU projection.
We note that overall performance has remained robust, with portfolio occupancy maintained at a high 98.4%,
while positive rental reversion of 10.8% was achieved. We also understand ~2% of retail space at YewTee Point
is expected to start operating in Oct, which is likely to improve the mall’s occupancy. For Bedok Point,
management also updated that it has successfully secured an electronics retailer as its anchor tenant for
basement one. This may translate to a more stable performance at the mall. Looking forward, FCT reiterated CWP
and Northpoint will continue to perform, as leases at the malls amounting to 75.5% of FCT’s gross rent are due
for renewal and positive reversions are still expected. FCT also revealed that the strata title division of
One@Changi City is progressing well, and that the asset injection may take place in 2014. We are rolling our
valuation to FY14, while keeping our forecasts largely intact. Our fair value is in turn raised to S$2.02 from
S$1.96 previously. As upside now looks compelling, we upgrade FCT from Hold to BUY. (Kevin Tan)
MORE REPORTS
CapitaRetail China Trust: 3Q13 results in line
CRCT reported 3Q13 results that were in line with ours and the street’s expectations. Gross revenue climbed
2.2% YoY to S$39.5m. Property expenses rose 7.8% YoY to S$14.5m, chiefly due to higher property management
fees and staff related costs. Net property income fell 0.8% YoY to S$25.0m. Total return for the period after
tax stayed roughly flat YoY at S$15.2m. 3Q13 distributable income grew 2.1% YoY to S$17.1m. DPU, however, fell
6.6% YoY to 2.26 S cents due to a private placement last November. Rental reversion for the multi-tenanted
malls, excluding CapitaMall Minzhongleyuan (which is undergoing AEI), is healthy at 10.0%. We maintain our BUY
rating on CRCT but place our fair value of S$1.58 under review. (Sarah Ong)
Yoma Strategic Holdings: To operate Volkswagen’s first service center in Yangon
Yoma reported that it will operate Volkswagen’s first service center in Yangon, Myanmar, which is expected to
begin operations in Oct 13. Yoma’s 70% owned subsidiary, German Car Industries Company (CGI) will enter into
a service partner agreement with Volkswagen Aktiengesellschaft (VW) to provide maintenance and repair services
and sell genuine vehicle parts to VW automobile owners. We understand that the automotive market in Myanmar is
currently dominated by Japanese cars and that VW currently has no manufacturing facilities or car show room in
Myanmar, and hence this agreement is expected to have limited financial impact for Yoma over the near term.
That said, we see this further strengthening the growth potential of the group’s automotive division which,
together with a similar service agreement with Mitsubishi earlier, is one that is steadily growing –
particularly so given that VW is a significant global player with a strong brand. We maintain a HOLD rating on
the counter with our fair value estimate of S$0.87 under review. (Eli Lee)
For more information on the above, visit www.ocbcresearch.comfor the detailed report.
NEWS HEADLINES
- US stocks gained on Tue, further propelling the S&P 500’s record rise, as the Sep non-farm-payrolls report
supported the notion that the Federal Reserve’s monthly bond purchases would continue into next year.
- Proposed changes in auditor reporting are expected to dramatically change the way external auditors reflect
their opinions on companies' financial statements.
- At least 8,700 shoebox units are expected to hit the resale market between now and 2017, as the Seller's
Stamp Duty lock-in period approaches expiry.
- Temasek Holdings has sold its entire direct stake in Keppel REIT in a share placement that started on Mon
evening, sources close to the deal said yesterday.
DBSVickers Report 23 Oct 13
Frasers Centrepoint Trust - Expect acquisition of
Changi City Point in FY14 to drive earnings. Maintain
BUY and TP S$2.14.
Frasers Centrepoint Trust’s 4Q13 DPU of 2.98Scts in line.
In FY14, FCT will renew 32% of its income, out of which
75% will be derived from Causeway Point and
Northpoint. We expect positive rental reversions from
these two malls, given the strong shopper traffic and
tenant sales. However, we expect more moderate
reversion rates compared to previous years, as a
significant amount of upside from the AEI works have
already been captured. We expect the acquisition of
Changi City Point in FY14 to drive earnings. Maintain BUY
and TP S$2.14.
2Q14 results for Mapletree Industrial Trust in line.
Distributable income came in 9.7% higher y-o-y at
S$41.1m, translating to a DPU of 2.47 Scts. Operational
performance remain strong and we expect robust
reversionary trends for the quarter. DPU growth is
expected to be underpinned by MINT’s series of
development and asset enhancement projects. Will
provide more updates after meeting with management
today.
Yoma announced that its 70% owned subsidiary German
Car Industries Company (GCI) has signed a non-exclusive
agreement with Volkswagen (VW) to operate VW's first
service centre in Myanmar. This service centre will provide
maintenance and repair services for VW branded vehicles,
including the sale of spare parts for the replacement
market. This centre is scheduled to commence operation
this month. This is Yoma's second automotive service
centre tie-up. The group signed its first service centre with
Mitsubishi in May this year. We believe the automotive
division is shaping up to be a strategic line of business for
Yoma as we see the division expanding steadily. This
announcement is positive but the impact is long term and
not significant at this juncture. Near term, we look
forward to a positive set of results with 2Q14 earnings
growing y-o-y and q-o-q. The company is due to release
results on 7 Nov. We maintain our BUY call on Yoma
with TP of S$1.02.
US Indices Last Close Pts Chg % Chg
Dow Jones 15,467.7 75.5 0.5
S&P 1,754.7 10.0 0.6
NASDAQ 3,929.6 9.5 0.2
Regional Indices
ST Index 3,210.2 14.4 0.5
ST Small Cap 544.3 2.4 0.4
Hang Seng 23,316.0 (122.2) (0.5)
HSCEI 10,653.4 (14.8) (0.1)
HSCCI 4,551.3 (19.7) (0.4)
KLCI 1,803.6 1.0 0.1
SET 1,457.4 8.8 0.6
JCI 4,512.7 (65.4) (1.4)
PCOMP 6,603.6 6.0 0.1
KOSPI 2,056.1 3.1 0.2
TWSE 8,418.3 (1.0) (0.0)
Nikkei 14,713.3 19.7 0.1
Index
STI
Total Market cap (US$bn) 593
Total Daily Vol (m shrs) 3,277
12m ST Index High 3,454
12m ST Index Low 2,946
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price ($)
22 Oct
Target Price
($)
ST Engineering Buy 4.210 4.80
ComfortDelgro Buy 1.910 2.19
OCBC Bank Buy 10.350 12.40
Singapore Airlines Buy 10.380 11.40
Stock Picks – Small /Mid Cap
Rec’n Price ($)
22 Oct
Target Price
($)
Ezion Holdings Buy 2.250 3.10
Goodpack Buy 1.860 2.00
CSE Global Buy 0.885 1.07
Mapletree Commercial Trust Buy 1.250 1.35
Frasers Centrepoint Trust Buy 1.845 2.14
Source: Bloomberg Finance L.P., DBS Vickers
Singapore
Wired Daily
Page 2
C&G Environmental Protection Holdings entered into a letter
of intent (LOI) with a potential Purchaser, a company listed
on a stock exchange in the PRC, to facilitate the negotiation
and finalisation of a definitive sale and purchase agreement
of the Group’s waste-to-energy business and assets
(including concession rights) and its principal operating
subsidiaries in the PRC. The consideration for the proposed
sale is subject to further negotiations and shall be satisfied in
part by cash and in part by the issue and allotment of quoted
shares of the Purchaser.
Global Logistic Properties has signed lease agreements for
totaling 25,000 sqm (269,000 sq ft) with Deppon Logistics at
GLP Park Wangting in Suzhou, Eastern China and GLP Park
Hunnan in Shenyang, Northeastern China.
Temasek Holdings has sold its entire direct stake in office
landlord Keppel Reit (KReit) in a share placement. The deal
involved 104m shares offered at a price range of between
$1.195 and $1.21 per share. This represents a 1.6-1.8%
discount to the trust's last closing price of $1.23 on Oct 21.
The placement offer amounted to an estimated $125m.
Temasek's share sale works out to 3.74% of KReit,
representing the stake it had received from the dividend in
specie distributed by Keppel Corp to its shareholders during
its FY2012 final results.
Sino Grandness Food Industry Group has entered into a
Cooperation Agreement (CA) with the Municipal
Government of Anhui Province whereby the Group principally
agrees to invest RMB600m to construct a production plant to
produce canned products and beverage and the Municipal
agree to provide assistance and support in land acquisition
and infrastructure as well as necessary administrative services
to facilitate the project.
Transview Holdings has received a non-binding approach for
certain of its assets, which the Company is presently
evaluating on a preliminary basis. However, no definitive
terms are finalised at this moment and there is no assurance
as to whether or not any transaction will take place.
Industrial property developer OKH Global plans to dispose of
its IT business, which is separated from its core business,
following a $123m reverse takeover of Chinese technology
firm Sinobest. The company will divest itself of two units:
Guangzhou Sinobest Information Technology and Sinobest
Technologies (HK). To do so, OKH intends to set up an
intermediate holding company and transfer the shares it
holds in the subsidiaries to the new company. In return, OKH
will receive new shares in the holding company under a
restructuring exercise. Subsequently, OKH will undertake a
capital reduction exercise and distribute all the shares it owns
in the holding company to its shareholders rather than
distributing cash. OKH's shareholders will then hold shares in
two separate companies: OKH and the holding company. The
distribution will be made on the basis of one holding
company share for every share held in OKH. Shares in the
holding company will not be listed on the SGX. Shareholders
who do not wish to own unlisted shares of the holding
company can choose to sell their shares back to the holding
company and receive cash instead.
In property news, at least 8,700 shoebox units are expected
to hit the resale market between now and 2017, as the
Seller's Stamp Duty (SSD) lock-in period approaches expiry.
While this figure is more than double the current completed
shoebox residential stock of 3,472 units, signs in the market
suggest that demand for such resale units remains relatively
resilient amid a slow-moving overall resale market. This
figure, revealed in the latest report from the Singapore Real
Estate Exchange (SRX), is predicated on a first wave of at
least 805 resale units - comprising units bought between Aug
30, 2010 and Jan 13, 2011 - and a second wave of at least
7,910 units entering the market from 2015 to 2017.
US markets rose after a weaker-than-expected September
non-farm payrolls (actual 148k, consensus 180k) figure
underpinned expectation that the FED will postpone the start
of QE tapering till around March 2014. The 10-year treasury
yield fell to a 3-mth low at 2.51% while the USD Index
dipped to 79.23. For the STI, we continue to see a near-term
cap at 3250 and working towards 3330 by year-end on the
assumption of a benign 3Q results season. Yield plays should
be underpinned by the dip in long-bond yields.
Changi City Point in FY14 to drive earnings. Maintain
BUY and TP S$2.14.
Frasers Centrepoint Trust’s 4Q13 DPU of 2.98Scts in line.
In FY14, FCT will renew 32% of its income, out of which
75% will be derived from Causeway Point and
Northpoint. We expect positive rental reversions from
these two malls, given the strong shopper traffic and
tenant sales. However, we expect more moderate
reversion rates compared to previous years, as a
significant amount of upside from the AEI works have
already been captured. We expect the acquisition of
Changi City Point in FY14 to drive earnings. Maintain BUY
and TP S$2.14.
2Q14 results for Mapletree Industrial Trust in line.
Distributable income came in 9.7% higher y-o-y at
S$41.1m, translating to a DPU of 2.47 Scts. Operational
performance remain strong and we expect robust
reversionary trends for the quarter. DPU growth is
expected to be underpinned by MINT’s series of
development and asset enhancement projects. Will
provide more updates after meeting with management
today.
Yoma announced that its 70% owned subsidiary German
Car Industries Company (GCI) has signed a non-exclusive
agreement with Volkswagen (VW) to operate VW's first
service centre in Myanmar. This service centre will provide
maintenance and repair services for VW branded vehicles,
including the sale of spare parts for the replacement
market. This centre is scheduled to commence operation
this month. This is Yoma's second automotive service
centre tie-up. The group signed its first service centre with
Mitsubishi in May this year. We believe the automotive
division is shaping up to be a strategic line of business for
Yoma as we see the division expanding steadily. This
announcement is positive but the impact is long term and
not significant at this juncture. Near term, we look
forward to a positive set of results with 2Q14 earnings
growing y-o-y and q-o-q. The company is due to release
results on 7 Nov. We maintain our BUY call on Yoma
with TP of S$1.02.
US Indices Last Close Pts Chg % Chg
Dow Jones 15,467.7 75.5 0.5
S&P 1,754.7 10.0 0.6
NASDAQ 3,929.6 9.5 0.2
Regional Indices
ST Index 3,210.2 14.4 0.5
ST Small Cap 544.3 2.4 0.4
Hang Seng 23,316.0 (122.2) (0.5)
HSCEI 10,653.4 (14.8) (0.1)
HSCCI 4,551.3 (19.7) (0.4)
KLCI 1,803.6 1.0 0.1
SET 1,457.4 8.8 0.6
JCI 4,512.7 (65.4) (1.4)
PCOMP 6,603.6 6.0 0.1
KOSPI 2,056.1 3.1 0.2
TWSE 8,418.3 (1.0) (0.0)
Nikkei 14,713.3 19.7 0.1
Index
STI
Total Market cap (US$bn) 593
Total Daily Vol (m shrs) 3,277
12m ST Index High 3,454
12m ST Index Low 2,946
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price ($)
22 Oct
Target Price
($)
ST Engineering Buy 4.210 4.80
ComfortDelgro Buy 1.910 2.19
OCBC Bank Buy 10.350 12.40
Singapore Airlines Buy 10.380 11.40
Stock Picks – Small /Mid Cap
Rec’n Price ($)
22 Oct
Target Price
($)
Ezion Holdings Buy 2.250 3.10
Goodpack Buy 1.860 2.00
CSE Global Buy 0.885 1.07
Mapletree Commercial Trust Buy 1.250 1.35
Frasers Centrepoint Trust Buy 1.845 2.14
Source: Bloomberg Finance L.P., DBS Vickers
Singapore
Wired Daily
Page 2
C&G Environmental Protection Holdings entered into a letter
of intent (LOI) with a potential Purchaser, a company listed
on a stock exchange in the PRC, to facilitate the negotiation
and finalisation of a definitive sale and purchase agreement
of the Group’s waste-to-energy business and assets
(including concession rights) and its principal operating
subsidiaries in the PRC. The consideration for the proposed
sale is subject to further negotiations and shall be satisfied in
part by cash and in part by the issue and allotment of quoted
shares of the Purchaser.
Global Logistic Properties has signed lease agreements for
totaling 25,000 sqm (269,000 sq ft) with Deppon Logistics at
GLP Park Wangting in Suzhou, Eastern China and GLP Park
Hunnan in Shenyang, Northeastern China.
Temasek Holdings has sold its entire direct stake in office
landlord Keppel Reit (KReit) in a share placement. The deal
involved 104m shares offered at a price range of between
$1.195 and $1.21 per share. This represents a 1.6-1.8%
discount to the trust's last closing price of $1.23 on Oct 21.
The placement offer amounted to an estimated $125m.
Temasek's share sale works out to 3.74% of KReit,
representing the stake it had received from the dividend in
specie distributed by Keppel Corp to its shareholders during
its FY2012 final results.
Sino Grandness Food Industry Group has entered into a
Cooperation Agreement (CA) with the Municipal
Government of Anhui Province whereby the Group principally
agrees to invest RMB600m to construct a production plant to
produce canned products and beverage and the Municipal
agree to provide assistance and support in land acquisition
and infrastructure as well as necessary administrative services
to facilitate the project.
Transview Holdings has received a non-binding approach for
certain of its assets, which the Company is presently
evaluating on a preliminary basis. However, no definitive
terms are finalised at this moment and there is no assurance
as to whether or not any transaction will take place.
Industrial property developer OKH Global plans to dispose of
its IT business, which is separated from its core business,
following a $123m reverse takeover of Chinese technology
firm Sinobest. The company will divest itself of two units:
Guangzhou Sinobest Information Technology and Sinobest
Technologies (HK). To do so, OKH intends to set up an
intermediate holding company and transfer the shares it
holds in the subsidiaries to the new company. In return, OKH
will receive new shares in the holding company under a
restructuring exercise. Subsequently, OKH will undertake a
capital reduction exercise and distribute all the shares it owns
in the holding company to its shareholders rather than
distributing cash. OKH's shareholders will then hold shares in
two separate companies: OKH and the holding company. The
distribution will be made on the basis of one holding
company share for every share held in OKH. Shares in the
holding company will not be listed on the SGX. Shareholders
who do not wish to own unlisted shares of the holding
company can choose to sell their shares back to the holding
company and receive cash instead.
In property news, at least 8,700 shoebox units are expected
to hit the resale market between now and 2017, as the
Seller's Stamp Duty (SSD) lock-in period approaches expiry.
While this figure is more than double the current completed
shoebox residential stock of 3,472 units, signs in the market
suggest that demand for such resale units remains relatively
resilient amid a slow-moving overall resale market. This
figure, revealed in the latest report from the Singapore Real
Estate Exchange (SRX), is predicated on a first wave of at
least 805 resale units - comprising units bought between Aug
30, 2010 and Jan 13, 2011 - and a second wave of at least
7,910 units entering the market from 2015 to 2017.
US markets rose after a weaker-than-expected September
non-farm payrolls (actual 148k, consensus 180k) figure
underpinned expectation that the FED will postpone the start
of QE tapering till around March 2014. The 10-year treasury
yield fell to a 3-mth low at 2.51% while the USD Index
dipped to 79.23. For the STI, we continue to see a near-term
cap at 3250 and working towards 3330 by year-end on the
assumption of a benign 3Q results season. Yield plays should
be underpinned by the dip in long-bond yields.
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