Daily summary 29 Oct 13

Dow and Europe were flat last night. Dow closed -1 at 15569.  Dow's trend is up. Dow's future is now +30.  Europe opened up.

Asian bourses were mixed.  Nikkei -70, ShanghaiC -5, Hangseng +40.  STI closed +2 at 3210.  Volume was 2.1b shares.  Gainers were 197 to 253 losers.

Trend of STI is flat.

Top volumes were SkyOne -0.7, YHM -0.2, Blumont +0.1, Innopac -0.1, Sunmoon unchanged, Albedo +0.1, Digiland unchanged, LionGold -0.5, Cedar unchanged, Asiasons +1.1.

Market opened slightly down but crept up to close marginally up. It was another quiet day of trading with news a broking houses introducing more curbs on penny and speculative stocks. Blue chips were firmer. Penny and speculatives were mixed. Market is likely to trade side ways as sentiment was dampened by the curbs.

Europe and Dow are steady but directionless.

DBS Vickers Report 29 Oct 13

ARA - Growth trajectory accelerated with new
strategic partner. Maintain BUY, TP raised to S$2.08
􀂃 Hi-P - No growth for 3Q13, 2H13<1H13. Downgrade
to FULLY VALUED, TP cut to S$0.47
ARA Asset Management (ARA) and Straits Trading
Company (STC) have announced a strategic collaboration
to jointly invest in property. The transaction details: (1)
STC will acquire a 20.1% stake in ARA, from vendor share
sales by Cheung Kong and John Lim, (2) ARA will manage
STC’s entire real estate portfolio (ex hospitality) and (3)
STC and John Lim will set up a new S$950m coinvestment
vehicle (Straits Real Estate) to provide seed
capital for new fund products to be managed by ARA.
With a much-needed strong war chest to accelerate its
growth trajectory, we see exciting times ahead for ARA.
We have raised ARA’s TP to S$2.08 (Prev S$ 1.89).
Maintain BUY.
Hi-P has cut earnings guidance due to lower orders from
customers. 3Q is affected by inventory provisions; we
believe margins were lower than expected. We had earlier
warned of downside risks for Hi-P, in view of weak
demand and rising stockpiles of Blackberry and Apple
smartphones. However, the decline turned out to be more
severe than we had expected. FY13F/14F EPS cut by
37%/25%. Downgrade to FULLY VALUED, TP revised
down to S$0.47 (Prev S$0.65).
3Q13 results for Raffles Medical within expectations.
Hospital revenue growth a tad slower, but attributed to
one-off events. The group is in a strong cash position to
fund expansion plans internally. Maintain HOLD and TP of
S$3.15.
Petra Foods' deal to sell its cocoa ingredients business to
Barry Callebaut for US$950m - subject to adjustments at
completion - appears to have hit a more sour note as
Petra is now being asked by the buyer to assume a closing
price reduction to the tune of US$98.3m, on top of the
US$74m that was already cut earlier. Should Petra be
compelled to accept the closing price reduction, it would
mean a chunky 20% slice off the original offer price when
the deal was struck in December last year. This could also
US Indices Last Close Pts Chg % Chg
Dow Jones 􀀙 15,568.9 (1.4) (0.0)
S&P 􀀘 1,762.1 2.3 0.1
NASDAQ 􀀙 3,940.1 (3.2) (0.1)
Regional Indices
ST Index 􀀘 3,207.9 2.6 0.1
ST Small Cap 􀀙 540.6 (4.7) (0.9)
Hang Seng 􀀘 22,806.6 108.2 0.5
HSCEI 􀀘 10,258.4 80.6 0.8
HSCCI 􀀘 4,425.0 2.4 0.1
KLCI 􀀘 1,818.4 0.8 0.0
SET 􀀙 1,449.6 (5.3) (0.4)
JCI 􀀘 4,590.5 9.7 0.2
PCOMP 􀀙 6,539.8 (44.0) (0.7)
KOSPI 􀀘 2,048.1 13.7 0.7
TWSE 􀀘 8,407.8 61.2 0.7
Nikkei 􀀘 14,396.0 307.9 2.2
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013
100-Day MA
Index
STI
Total Market cap (US$bn) 600
Total Daily Vol (m shrs) 3,246
12m ST Index High 3,454
12m ST Index Low 2,946
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price ($)
28 Oct
Target Price
($)
ST Engineering Buy 4.180 4.80
ComfortDelgro Buy 1.910 2.19
OCBC Bank Buy 10.400 12.40
Singapore Airlines Buy 10.460 11.40
Stock Picks – Small /Mid Cap
Rec’n Price ($)
28 Oct
Target Price
($)
Ezion Holdings Buy 2.220 3.10
CSE Global Buy 0.885 1.07
Frasers Centrepoint Trust Buy 1.870 2.14
Yoma Strategic Holdings Buy 0.755 1.02
Source: Bloomberg Finance L.P., DBS Vickers
Singapore
Wired Daily
Page 2
mean that Petra's last announced initial net proceeds of
US$164m from the last agreed price of US$860m and the
net estimated gain on divestment of US$64m could be
whittled down to just US$66m in net proceeds and a
significant estimated net loss on divestment of about
US$34.3m.
ST Engineering’s aerospace arm, ST Aerospace and Jetstar
Asia has signed a three-year line maintenance contract. The
agreement covers a full suite of line maintenance support for
Jetstar Asia’s existing and future fleet of Airbus A320 aircraft.
King Wan Corp has secured five new mechanical and
electrical (M&E) contracts in Singapore worth a total of
S$26m during the period from August to October 2013.
With these new contracts, the Group’s order book to date
stands at S$168.9m, with M&E contracts which will keep the
group busy to 2016.
BH Global Corp expects to report a net loss for 3Q13, mainly
due to foreign exchange losses arising from the significant
depreciation in value of Indonesian Rupiah against Singapore
Dollar.
US markets finished mixed ahead of the mid-wk FOMC
meeting even as consensus expects the FED to continue its
USD85bil/mth bond purchases, cutting back on stimulus only
around March 2014. The US 10-year bond yield stay
generally flat around the 2.51% level in recent sessions. In
after hours, shares of Apple Inc fell 2.2% after it forecasts
lower-than-expected gross margins going forward despite
reporting better-than-expected quarterly results

Daily Summary 28 Oct 13

Dow closed +61 at 15570 on Friday. Europe closed flat.  Dow's trend is up.
Dow's future is now +27. Europe opened mixed.

Asian bourses were mostly up.  Nikkei +308, ShanghaiC +1, Hangseng +108.
STI closed at day low, +3 at 3206.  Volume was 3.2b shares.  Gainers were
130 to 354 losers.

STI's trend is flat.

Top volumes were SkyOne -37.8, Digiland unchanged, YHM -0.5, SingHaiyi
unchanged, Innopac -0.3, HanKore -0.4, Albedo -0.3, Blumont -3.5, GoldenAgr
+1, Cedar unchanged.

Market opened up but closed near its day low at +3. Blue chips were weaker.
Penny and speculatives were big losers. SkyOne -37.8 from last Friday's
closing at 47.  Sentiments for penny and speculatives were hurt likely
because of the investigation on the 3 designated counters and now the sharp
fall of SkyOne.

Regional markets were positive. Europe and Dow are looking steady too.

OCBC Report 28 Oct 13

Wilmar: Downgrade to HOLD on valuation Summary: Wilmar International Limited’s (WIL) share price has done very well since we upgraded our rating to Buy on 6 Sep, rising as much as 14% to a recent high of S$3.50. As the current price is also 4% above our S$3.33 fair value (still based on 12.5x blended FY13/FY14F EPS), we downgrade our call to HOLD on valuation grounds. We also do not see any strong near-term catalysts to justify a re-rating before its 3Q13 results due 7 Nov. (Carey Wong) MORE REPORTS Ascott Residence Trust: 3Q13 ahead of expectations Summary: ART announced 3Q13 results that were ahead of ours and the street’s expectations. Revenue climbed 11% YoY to S$86.1m, chiefly due to additional revenue of S$14.1m from the properties acquired in second half last year and on 28 Jun 2013. The increase was partially offset by the decrease in revenue of S$4.7m from the divestment of Somerset Grand Cairnhill in Sep 2012 and lower contribution of S$0.7m from the existing properties, mainly properties in Philippines and Japan. The group achieved a RevPAU of S$133 in 3Q13, a decrease of 10% as compared to 3Q12. The decrease in RevPAU was mainly due to divestment of Somerset Grand Cairnhill Singapore and weaker performance from Philippines and Japan. Gross profit climbed 10% YoY to S$44.8m. Unitholders' distribution increased 17% YoY to S$30.0m. DPU rose 6% YoY to 2.37 S cents, bringing 9M13 DPU to 7.07 S cents, versus full year estimates of ours and the street of 8.9 S cents and 9.0 S cents respectively. Adjusting our assumptions, our FY13F DPU forecast increases from 8.9 S cents to 9.1 S cents and our FV increases to S$1.39 from S$1.37. We maintain our BUY rating on ART. (Sarah Ong) First REIT: 3Q13 DPU below expectations Summary: First REIT (FREIT) reported 3Q13 revenue of S$22.8m and DPU of S$0.0196, representing an increase of 60.7% and 16.7% YoY, respectively. For 9M13, revenue jumped 43.1% to S$60.4m and was within our expectations. However, DPU of S$0.0555 (+14.2% after excluding exceptional distributions) was below due to higher-than-estimated expenses. Looking ahead, FREIT will continue to seek opportunities at expanding its footprint in Indonesia, given her growing healthcare market and the strong pipeline of possible acquisition targets from its sponsor Lippo Karawaci. We maintain our revenue estimates but tweak our DPU forecasts for FY13 and FY14 downwards by 4.4% and 1.9%, respectively. This correspondingly lowers our DDM-derived fair value estimate from S$1.20 to S$1.18. Given a decent FY14F dividend yield of 7.5%, we maintain our BUY rating for FREIT. (Wong Teck Ching Andy) Starhill Global REIT: Delivering as promised Summary: Starhill Global REIT (SGREIT) reported 3Q13 DPU 1.21 S cents, up 9.0% YoY. This brings the 9M13 DPU to 3.77 S cents, in line with our expectations. SGREIT’s Singapore portfolio continued to benefit from Wisma Atria (WA) redevelopment and upward rent reviews at Ngee Ann City (NAC). For its overseas properties, Australia portfolio was the key performer, raking up a 25.7% increase in NPI due to incremental income from Plaza Arcade. This more than offset the lower contributions from the other overseas properties due to unfavourable forex movements and increased competition. On the capital management front, we note that SGREIT has completed the drawdown of new unsecured loan facilities to refinance its debts due in 2013, leaving it with no refinancing needs until Jun 2015. As at 30 Sep, gearing stood largely unchanged at 30.6%, while the fixed/hedged debt ratio improved to 94.0% from 81.0% seen in 2Q. We maintain BUY and S$0.95 fair value on SGREIT as we continue to like its clear growth drivers, robust financial standing and compelling valuation. (Kevin Tan) Ezion Holdings: Secures US$65m LOI for service rig Summary: Ezion Holdings announced this morning that it has received a letter of intent with a contract value of up to about US$65m over a three-year period to provide a service rig for an oil major to support its oil & gas activities in SE Asia. The unit is expected to be deployed by late 3Q15, and will be funded through internal resources and borrowings, like Ezion’s earlier projects. The group is in the process of forming a JV to order and own an additional service rig in conjunction with this project, and pending more details from management, we maintain our BUY rating and fair value estimate of S$2.90 on the stock. (Low Pei Han) Raffles Medical Group: 3Q13 results in-line with expectations Summary: Raffles Medical Group (RMG) reported its 3Q13 results this morning which were within our expectations. Revenue rose 8.0% YoY to S$85.1m. PATMI was up 10.3% to S$13.9m. Growth during the quarter was driven largely by a higher patient load. Both of RMG’s core divisions contributed to its topline increase, with its Hospital Services and Healthcare Services segments growing 9.4% and 5.7% YoY, respectively. For 9M13, revenue and PATMI increased 10.7% and 14.0% to S$253.0m and S$41.7m, forming 72.8% and 68.7% of our full-year estimates, respectively. 4Q is traditionally RMG’s strongest quarter and we expect this trend to continue in FY13. We will provide more details after the analyst briefing. Maintain BUYand S$3.61 fair value estimate. (Wong Teck Ching Andy) Triyards Holdings: Secures contracts worth US$59m Summary: Triyards Holdings announced this morning that it has secured two contracts worth US$59m, including its 10th Self-Elevating Unit (SEU) order. The SEU order is with an Asian-based client and is for TRIYARDS’ BH 335, which has a leg length of more than 100m (~335ft). The other contract is for the construction of a turret for a Floating Storage Offloading (FSO) unit in Indonesia. As at 31 Aug 2013, the group’s net order book stood at US$217m. Pending more details such as the delivery date of the SEU, we maintain our BUY rating with S$0.88 fair value estimate on the stock. (Low Pei Han)

For more information on the above, visit www.ocbcresearch.comfor the detailed report.

NEWS HEADLINES

- US stocks finished another week of gains with the S&P 500 index at a record high after earnings from large technology companies wowed investors with revenue growth. - Singapore's industrial production for Sep outstripped even the most bullish of market forecasts to grow 9.3% from a year ago. - Property consultants have given mixed reactions to the latest 3Q13 private housing data released by the Urban Redevelopment Authority. - Fraser and Neave's move to shed its property arm and focus on its other core businesses took a step forward after Frasers Centrepoint Limited got the go-ahead for its planned listing. - The units of three local firms - Tat Hong Holdings, Boustead Singapore and CSC Holdings - have set up a joint venture with AME Group to develop land in Iskandar Malaysia.

DBSVickers Report 28 Oct 13

Ezra - Turnaround in the offing? Upgrade to HOLD,
TP raised to S$1.34
􀂃 Starhill Global REIT - Positives priced in; downgrade
to HOLD
The 3Q results season that spans till mid-Nov should set
the tone as the calendar year heads towards the
traditional year-end holiday lull period. With few
exceptions, we expect a generally lack lustre 3Q reporting
season. We maintain our view for the STI to be range
bound from c.3150-3250 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.
Traders looking to position into stocks that have the
potential to not only report healthy growth but also stand
a good chance of beating forecasts in their upcoming
results should consider Nam Cheong, Ezion, Centurion &
Yoma given their ample upside to TP.
Investors expect the FED not to start tapering QE at
Thursday’s FOMC meeting. The recent US federal
government partial shutdown has pushed back consensus
expectation for the start of QE tapering to March 2014. to
leave While long bond yields should remain suppressed in
the short-term and S-REITs continue to be underpinned by
tapering delay, further gains for the sector could be tame.
Delay does not mean terminate and it won’t be too long
into early 2014 when QE tapering concerns re-emerge.
Our SREITs picks are Fraser Centrepoint Trust and Cache.
Investors who seek exposure to REITs without the interest
rate risk can consider ARA. Technically, we continue to
see $1.82 upside for this stock.
4Q13 results for Ezra beat our estimates. Subsea division
turns around; we expect stable margins hereon with
legacy projects completed. FY14 core earnings were raised
by 33% on better margin assumptions, in line with
improving execution and charter market recovery. TP
raised to S$1.34 (Prev S$ 0.90); upgrade to HOLD.
US Indices Last Close Pts Chg % Chg
Dow Jones 􀀘 15,570.3 61.1 0.4
S&P 􀀘 1,759.8 7.7 0.4
NASDAQ 􀀘 3,943.4 14.4 0.4
Regional Indices
ST Index 􀀙 3,205.2 (12.7) (0.4)
ST Small Cap 􀀙 545.3 (1.1) (0.2)
Hang Seng 􀀙 22,698.3 (137.5) (0.6)
HSCEI 􀀙 10,177.8 (144.3) (1.4)
HSCCI 􀀙 4,422.6 (14.9) (0.3)
KLCI 􀀙 1,817.6 (1.4) (0.1)
SET 􀀙 1,454.9 (11.4) (0.8)
JCI 􀀙 4,580.8 (14.0) (0.3)
PCOMP 􀀙 6,539.8 (44.0) (0.7)
KOSPI 􀀙 2,034.4 (12.3) (0.6)
TWSE 􀀙 8,346.6 (67.1) (0.8)
Nikkei 􀀙 14,088.2 (398.2) (2.7)
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$bn) 600
Total Daily Vol (m shrs) 2,264
12m ST Index High 3,454
12m ST Index Low 2,946
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price ($)
25 Oct
Target Price
($)
ST Engineering Buy 4.160 4.80
ComfortDelgro Buy 1.915 2.19
OCBC Bank Buy 10.400 12.40
Singapore Airlines Buy 10.480 11.40
Stock Picks – Small /Mid Cap
Rec’n Price ($)
25 Oct
Target Price
($)
Ezion Holdings Buy 2.230 3.10
Goodpack Buy 1.900 2.00
CSE Global Buy 0.890 1.07
Frasers Centrepoint Trust Buy 1.865 2.14
Source: Bloomberg Finance L.P., DBS Vickers
Singapore
Wired Daily
Page 2
3Q13 results for Starhill Global REIT in line. Weaker overseas
income mitigated by strong performances at Ngee Ann City
and Wisma Atria. Backed by a quality portfolio with good
earnings visibility, we believe that positives have already been
priced in at this level. Downgrade to HOLD, given limited
upside to our rolled-forward TP of S$0.87 (Prev S$ 0.84).
Strengthening SGD-INR continues to be a drag on Ascendas
India Trust earnings. Gross revenues and NPI declined by a
9% and 14% y-o-y to S$28.9m and S$16.4m respectively.
Development of Aviator is on track, with 100% of space
committed. Low gearing of 21% opens opportunities for
growth. Maintain HOLD, TP revised to S$0.73 (Prev S$ 0.75).
3Q13 results for Ascott Residence Trust slightly ahead.
Refurbishments completing in subsequent quarters are
expected to drive organic growth. Divestment of Somerset
Grand Fortune Garden Beijing is positive. Maintain BUY with
TP S$1.42 for its attractive 6.8%-7.2% yields.
Hi-P slashed its 3Q13 earnings guidance despite higher
revenue because of a S$4.4m inventory provision due to
lower orders from an existing customers. Y-o-y, the company
now expects 3Q13 profits to be flat. For the full year, Hi-P
now expects higher sales in 2H13 vs 1H13 but expect lower
profits. We had earlier warned of earnings downside risks for
Hi-P due to demand weakness and rising stockpiles for both
smartphone customers Blackberry and Apple. However, the
magnitude of decline is much substantial than we had
expected. Although our current forecast is already the lowest
in the street, we now expect at least another 15% downside
to our FY13F of S$38m. This is assuming 2H13 is 20% lower
h-o-h. We will review our earnings as well as TP (last @
S$0.65) and HOLD recommendation pending details from
management.
Ezion has received a letter of intent with a contract value of
up to about US$ 65m over a 3 year period to provide a
Service Rig to be used by an oil major to support its oil & gas
activities in South East Asia.
Triyards has secured 2 contracts worth an additional
US$59mil that includes its 10th Self-Elevating Unit (SEU)
order and the construction of a turret for a Floating Storage
Offloading (FSO) in Indonesia. The latest contract win lifts
total orders over the past 12 months to about US$209mil.
Rex is proposing to place up to 70m new shares at the
placement price of S$0.755 per share. The Placement Price
represents a discount of 9.6% to last weighted average price.
The company intends to use the net proceeds of about
S$50.5m mainly for exploration and drilling activities.
Lum Chang has been awarded the construction contract
worth S$178.6m for the Glades condominium at Bedok Rise.
This latest award brings the total outstanding value of
construction projects still in progress to S$566.4m.
Boustead Singapore enters into joint venture for
developments in Iskandar Malaysia. The JV Company intends
to develop six parcels of vacant industrial land in Nusajaya,
Iskandar Malaysia’s Flagship Zone B.
Sheng Siong has acquired 18,000 sq ft of shop space at
Junction Nine, a mixed development located at 18 Yishun
Avenue 9. The property has a 99 year lease period and costs
S$55m. Funding will be by internal cash. As of 3Q13, SSG
has net cash of S$107m. Immediate impact on cash; no
change to our earnings estimates and dividends.
Singapore’s industrial production for September posted its
biggest rise since February 2012, expanded by 11.3% y-o-y,
following a revised growth of 4% y-o-y in August, and better
than market expectation of a 9.3% growth. This rise is on the
back of a 20% surge in electronics output and a busy time
for rig and ship-builders. After adjusting for seasonal factors,
manufacturing output rose 3.7% m-o-m. Excluding the
biomedical cluster, output would have grown 5.8% from
August.

Daily Summary 25 Oct 13

Dow and Europe were up last night.  Dow +96 at 15509.  Dow's trend is up. Dow's future is now -3.  Europe opened down.

Asian  bourses were mostly down.  Nikkei -398, ShanghaiC -31, Hangseng -137.  STI closed -9 at 3209,  Volume was 2.2b shares.  Gainers were 192 to 263 losers.

STI's trend is slightly up.

Top volumes were Innopac -0.4, YHM unchanged, Blumont -3.7, SIICEnv +1.2, Hankore unchanged, Asiasons -4.1, LionGold -4.5, Acma unchanged, Albedo -0.1, GoldenAgr -1.

Market opened up but drifted down through the day to close near day low. Volume was low. Blue chips were mixed while penny and speculatives were weaker.  The three counters of Blumont, Asiasons and LionGold fell again with news that SGX is conducting an investigation on the volatility of these stocks that cost the lost of $8b.

Europe and Dow are looking a bit weak for a Friday.

OCBC Report 25 Oct 13

KEY IDEA Suntec REIT: Poised for strong harvest Suntec REIT posted 3Q13 DPU of 2.289 S cents, up 1.8% QoQ (-2.6% YoY). This brings the 9M13 DPU to 6.766 S cents (-5.6%), meeting 73.4% of both consensus and our FY13F DPU. As at 30 Sep, both the office and retail portfolio occupancy rates were maintained at high levels of 99.8% and 98.3%, respectively. We understand that ~160,000 sqft of leases was signed in 3Q, leaving only a balance of 1.7% of office NLA due for renewal in 2013. As such, its portfolio performance is expected to stay relatively steady, despite potential weakness in 4Q13/1Q14 as Suntec REIT prepares for Phase 3 AEI. Management also updated that pre-commitment at Phase 2 retail space has improved from 70.1% in 2Q to 83.7%. While there are a few anchor tenants (which may command lower rents), Suntec REIT reiterated that ROI of 10.1% remains on track. In 4Q, we can reasonably expect revaluation gains of the portfolio assets, which may improve Suntec REIT’s gearing and P/B ratios (currently at 37.2% and 0.84x respectively). Maintain BUYwith higher fair value of S$1.85 (S$1.80 previously) as we roll our valuation to FY14. (Kevin Tan) MORE REPORTS Tiger Airways: Growing pains to sustain We were disappointed by Tigerair’s (TR) 2QFY14 results, which showed a larger operating loss (S$12.8m vs. S$11.5m in 2Q13) due to higher operating costs. Performance by its associate airlines during the quarter was also weak with overall losses at almost S$24m (S$26.6m in 1Q14; S$3.8m in 2Q13), and that lead to an erosion of gains from the disposal of 60% interest in Tigerair Australia. Although there were some seasonality factors at play, the lack of demand traction and competitive fare pressures force us to temper our earlier optimism over TR’s performance for FY14/15. Lowering our FY14/15 net profit projections considerably to account for the growing pains of its associate airlines and the likelihood of depressed passenger yields for Tigerair Singapore in the near-term, we downgrade TR to HOLDwith a reduced fair value estimate of S$0.55 (S$0.79 previously). (Lim Siyi) Triyards Holdings: Proposes maiden dividend Triyards Holdings (Triyards) reported a 6.5% YoY drop in revenue to US$76.7m and a 32.2% decrease in net profit to US$10.3m in 4QFY13, bringing FY13 revenue and net profit to US$275.1m and US$31.4m, respectively. Though results were good, the market is likely to focus on new orders. It has been about ten months since the group secured its last SEU order, and the lack of new contracts so far has been a key factor that has weighed on the share price, in our view. The group’s net order book of US$217m will provide work for FY14, but more work has to be secured to keep its yards busy beyond that. Rolling forward our valuation to blended FY14/15F earnings with a lower P/E of 7x (prev 8x) due to the lack of orders so far, our fair value estimate dips from S$1.07 to S$0.88. Maintain BUY. Meanwhile, the group has proposed a final dividend of S$0.02/share, translating to a 3.1% dividend yield. (Low Pei Han) Ascott Residence Trust: 3Q13 results ahead ART has announced 3Q13 results that were ahead of ours and the street’s expectations. Revenue climbed 11% YoY to S$86.1m, chiefly due to additional revenue of S$14.1m from the properties acquired in second half last year and on 28 June 2013. The increase was partially offset by the decrease in revenue of S$4.7m from the divestment of Somerset Grand Cairnhill in September 2012 and lower contribution of S$0.7m from the existing properties, mainly properties in Philippines and Japan. The group achieved a REVPAU of S$133 in 3Q 2013, a decrease of 10% as compared to 3Q 2012. The decrease in REVPAU was mainly due to divestment of Somerset Grand Cairnhill Singapore and weaker performance from Philippines and Japan. Gross profit climbed 10% YoY to S$44.8m. Unitholder’s distribution increased 17% YoY to S$30.0m. DPU rose 6% YoY to 2.37 S cents, bringing 9M13 DPU to 7.07 S cents, versus full year estimates by us and the street of 8.9 S cents and 9.0 S cents respectively. We maintain our BUYrating on ART but place out FV of S$1.37 under review. (Sarah Ong)

For more information on the above, visit www.ocbcresearch.comfor the detailed report.

NEWS HEADLINES - US stocks climbed on Thu, as equities picked up steam along with large-cap companies on signs of an improving global economy. - The total debt servicing ratio framework appears to have made a bigger dent on purchases of private homes by those with HDB addresses than by those with private addresses, according to consulting group DTZ. - Mapletree Commercial Trust's DPU rose to 1.801 S cents in 2QFY14, up 16.5% from a year earlier, thanks to positive contributions from its properties. - Far East Hospitality Management will launch three Singapore hotels over the next three months. - Stamford Tyres has appointed a dealer for Sumo Firenza tyres in the United Arab Emirates to expand its presence in the Middle East.