Daily Summary 10 Apr 14

Dow and Europe had a good recovery last night.  Dow +181 closing at 16437.  Dow's trend is starting to turn back up.  Dow's future is now +10.  Europe opened up.  

Asian bourses were mostly positive.  Nikkei +0.5, ShanghaiC +29, Hangseng +344.  STI -6 at 3204.  Volume was 2.2b shares.  Gainers were 231 to 262 losers.

Trend of STI is flat but steady.

Top volumes were Albedo -0.4, Artivision +1.6, Ausgroup -2.5, HanKore -0.2, Equation +0.3, Memstar unchanged, HPH Trust +2, GoldenAgr -1.5, Noble +0.5, CapMallAsia +4.5.

Market opened down but recovered some grounds in the afternoon to close off its low.  Blue chips were mixed but steady. Penny and speculatives were slightly weaker.

Dow and Europe are looking steady at the moment.

Daily Summary 9 Apr 14

Europe were marginally down last night but Dow closed +10 at 16256.  Dow's trend is down.  Dow's future is now +40.  Europe opened firmly up.  

Asian bourses were mixed.  Nikkei -307,  ShanghaiC +7, Hangseng +246.  Volume was 2.4b shares.  Gainers were 269 to 205 losers.

Trend of STI is up but a bit flat at this point.

Top volumes were Albedo +0.3, HanKore unchanged, CharismaEner -0.1, AusGroup +9.5. GoldenAgr +2, JES +1.2, AddvalTech +0.1, CCM +0.1, Tritech -0.5, Noble -4.5.

Market opened flat but traded the whole day staying just on the positive side. Blue chips were mostly green. Speculatives and penny stocks were slightly more firmer.

Dow and Europe are looking for a positive closing tonight.

Daily Summary 8 Apr 14

Dow and Europe were sharply down last night.  Dow -167 at 16246.  Dow's trend is breaking down.  Dow's future is now +19.  Europe opened flat.

Asian bourses were mixed.  Nikkei -202, ShanghaiC +39, Hangseng +220.  STI closed +11 at 3204.  Volume was 2.2b shares.  Gainers were 279 to 186 losers.  

Uptrend of STI is holding.

Top volumes were HanKore +0.3, Albedo +0.1, CCM -0.4, Noble +6, AddvalTech +0.8, GoldenAgr +1.5, GLP -6, CharismaEner +0.1, Equation unchanged, SIIC +0.2.

Market opened down but recovered to closed positive.  Blue chips were mostly green. Penny and speculatives too recovered and many were postive.

Dow is looking positive at the moment while Europe opened flat.

DBS Vickers Report 8 Apr 14

Today’s Focus
 Midas - Significant RMB318m high speed railway contract
win. Maintain BUY, target price S$ 0.64.
Midas announced a significant high speed railway order win
worth RMB318m, from CNR Tangshan for the delivery of high
speed train car body components, for trains travelling up to a
speed of 350km/h. For delivery between 2014, the clinching of
this order should help the Group's earnings rebound
significantly this year. YTD, the Group has announced wins of
c. RMB390m, which is in line with our expectations. Just as
importantly, this represents the second high speed railway
order win since 4Q13 last year, and should signify a return of
high speed railway projects and contracts for Midas. Excluding
the revenue delivered in the first quarter of this year, the
Group's order books would be around RMB1.3bn, with more
to come from both metro and overseas contracts. Maintain
BUY, target price S$ 0.64.
Pacific Radiance has entered into a joint venture agreement
with Westsea Marine to set up a JV company. The Westsea
Marine's group of companies have operations in Perth,
Western Australia and are providers of maritime services, vessel
owners and operators of a modern diversified fleet of offshore
support vessels fleet. The JV Company intends to be engaged
in the business of ship ownership and other offshore marine
related services, in the offshore support vessel segment. Upon
incorporation, the JV Company intends to acquire two
deepwater platform supply vessels to position itself to access
the offshore oil and gas industry in Australia.
Sembcorp Industries has signed a joint venture agreement to
build, own and operate a new industrial wastewater treatment
plant in the Jingmen Chemical Industrial Park (JCIP). Sembcorp
will own a 95% stake in the JV. At a total investment of
RMB98.7m, the facility will have an initial capacity of 10,000
cubic metres per day with capabilities to treat multiple streams
of industrial wastewater. Expected to be completed in the first
half of 2016, the facility will provide industrial wastewater
treatment services to companies in the JCIP under a 30-year
exclusive concession agreement. With this expansion to Hubei
province, Sembcorp’s utilities business now extends across 11
provincial regions in China.
US Indices Last Close Pts Chg % Chg
Dow Jones  16,245.9 (166.8) (1.0)
S&P  1,845.0 (20.1) (1.1)
NASDAQ  4,079.8 (48.0) (1.2)
Regional Indices
ST Index  3,193.6 (19.1) (0.6)
ST Small Cap  542.8 (3.4) (0.6)
Hang Seng  22,377.2 (132.9) (0.6)
HSCEI  10,156.9 46.9 0.5
HSCCI  4,232.9 35.0 0.8
KLCI  1,862.9 6.3 0.3
SET  1,392.0 0.8 0.1
JCI  4,921.0 63.1 1.3
PCOMP  6,614.4 53.2 0.8
KOSPI  1,983.7 (6.0) (0.3)
TWSE  8,876.4 (12.1) (0.1)
Nikkei  14,808.9 (254.9) (1.7)

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$bn) 595
Total Daily Vol (m shrs) 1,847
12m ST Index High 3,454
12m ST Index Low 2,960
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price (S$)
7 Apr
Target Price
(S$)
ComfortDelgro Buy 2.03 2.19
Global Logistic Properties Buy 2.62 3.31
Keppel Corp Buy 10.92 12.60
Stock Picks – Small Cap
Rec’n Price (S$)
7 Apr
Target Price
(S$)
Ezion Holdings Buy 2.11 3.26
Goodpack Buy 2.29 2.60
China Merchants Buy 0.96 1.32
Pacific Radiance Ltd Buy 1.09 1.20
Nam Cheong Buy 0.35 0.46
Centurion Corporation Buy 0.72 0.86
Singapore
Wired Daily
Page 2
Global Logistic Properties has signed a new build-to-suit
(BTS) agreement with Trinet Logistics, a major third-party
logistics (3PL) provider in Japan. Trinet is expanding its
operations in Western Japan and will use GLP Kobe-Nishi as
its main distribution center in Greater Osaka.
CCM Group proposed to issue up to 28.75 bn shares via an
eight-for-one rights issue and another 28.75 bn bonus
shares on the basis of one bonus share for every rights share
subscribed. The Rights Issue Price of S$0.005 represents a
discount of approximately 54.5% to last closing price. The
proceeds will be used for general working capital, to
discharge costs of its Singapore construction projects, repay
and redeem liabilities and pursue property development
opportunities overseas, particularly the United States and
Australia. CCM reported a net loss of S$22.4m for FY13.
Sino Construction proposes to issue 5% unsecured
redeemable convertible bonds due in 2017 in the principal
amount of S$16m, which can be converted into issued
ordinary shares in the capital of the Company at S$0.16 per
Conversion Share. The proceeds is intended to be used to
fund the Group’s business expansion and for general
working capital purposes.
Resale prices of Housing and Development Board (HDB) flats
crawled slightly higher last month as price increases in
smaller units offset the declines in larger ones, according to
the latest data from the Singapore Real Estate Exchange
(SRX). But transaction volumes staged a strong rebound as
buyers returned to the resale market after the Chinese New
Year lull. Flash estimates by SRX showed HDB resale prices
edged up 0.3% in March from a month ago. Overall HDB
resale prices slipped 4.9% y-o-y in March. The total number
of resale transactions, however, jumped 40% from
February's 951 units to 1,319 in March - the highest
monthly volume observed since October.
U.S. stocks fell, with the S&P500 Index erasing the year’s
gains as technology shares extended last week’s sell-off.
Bellwether names Pfizer Inc. and American Express Co. led
the decline among the Dow component stocks. An index of
homebuilder stocks was also weak. In corporate news,
Procter & Gamble declared a 7% dividend Increase,
boosting quarterly dividend to US64.36cts/share
US60.15ct/share. The LEAP-1A engines, made by GE
Aviation, Snecma JV will power 40 of Lufthansa’s A320neo
planes ordered in 2013

OCBC Report 8 Apr 14

KEY IDEA City Developments Limited: Housing bear market gaining momentum We judge CityDev’s share price to be fairly rich here, given a deteriorating outlook for its core development business, and opt to take profit at this juncture. Downgrade to SELL with a lower fair value estimate of S$8.72 (30% RNAV disc.), versus S$9.17 previously, as we incorporate softer residential ASPs and lower valuations for listed holdings into our model. From latest data-points and channel checks, we anticipate increasing headwinds in the domestic residential space as both primary and rental markets continue to suffer from weakening supply-demand dynamics. 1Q14 URA flash estimates for the private residential property index showed a 1.3% decline, indicating downward price momentum after a 0.9% dip in 4Q13. We also note the weakness was fairly broad-based, with prices in the Outside Central Region (mass-market), Rest of Central Region (mid-tier) and Core Central Region (high-end) falling 0.3%, 2.8% and 1.3% respectively. In addition, we expect pressure on rental rates ahead as the physical market heads deeper into an over-supply situation. (Eli Lee) MORE REPORTS Midas Holdings: Clinches high-speed train car orders worth CNY318m Midas announced last evening that it has secured contracts for high-speed train car body components from CNR Tangshan Railway Vehicle Co. Ltd (subsidiary of China CNR) worth an aggregate of CNY318m. This is part of China Railway Corporation’s (CRC) second round of high-speed train car tender. Midas’ YTD order wins has now reached CNY389.9m. Under the terms of the contract, Midas will supply aluminium alloy extrusion profiles and certain fabricated parts for high-speed trains which will operate at speeds of up to 350 km/h. This is Midas’ largest single announced contract win since Jan 2010, and this set of orders will be delivered fully in 2014, in-line with our expectations. We believe Midas is still working with another of China CNR’s subsidiaries CNR Changchun Railway Vehicles Co. for more high-speed train car contracts under CRC’s second round of tender, and hence has a possibility of exceeding our CNY325-380m expectation. As highlighted in our recent update on Midas (refer to our 4 Apr 2014 report), we expect the group to be a key beneficiary of China’s stimulus measures to the railway sector, and see the possibility of CRC opening its third round of high-speed train car tenders in 2H14. We expect the market to react positively to this latest development; maintain BUYand S$0.66 fair value estimate on Midas. (Wong Teck Ching Andy)

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

NEWS HEADLINES - The US stock market fell sharply on Mon as heavy selling in high-growth stocks, which began on Fri, continued to spill over the broader market. - Shares in JK Tech Holdings shot up yesterday on news of a proposed diversification that will see Ezion Holdings taking a minimum 29.81% and a possible eventual maximum 64.82% stake in the firm. - Pacific Radiance is strengthening its foothold in the Australian oil and gas sector through a new joint venture. - Companies and banks who want to hedge their exposure between the Thai baht and Malaysian ringgit are now able to do so directly at the SGX, instead of going through their banks. - Global Logistic Properties has signed a new build-to-suit agreement with Trinet Logistics Company in Japan. - Polaris announced yesterday that it has exercised conditional options to buy four properties worth about S$3.47m in total for expansion.

DBS Vickers Report

Today’s Focus
 Ezion - All indications point to a BUY, with 52% upside
potential to TP of S$3.26
We maintain our view that STI’s current rally will lose
momentum around the 3250 level this month. STI has risen
to within a hairline from the13.9x (average) 12-mth forward
PE resistance level last week. We see the transiting from the
recent ‘rally mode’ to a choppy sideways trend from c.3165
to c.3228 over the next 2 weeks as investors await the start
of the 1Q results season. Near-term resistance is at 3228-
3250, near-term support levels are at 3188 and 3165. Still,
we do not see the index declining below 3165 in the shortterm
ahead of blue chips going ‘ex-dividend’ during the April-
May period.
Among the STI component stocks that we cover, we see
profit taking opportunities for shares of CityDev, UOB and
SGX given their good performance in recent weeks and
limited upside to our fundamental TP. Technically, look to
lock in gains for CityDev shares on further marginal upside
towards $10.53 with support at $10. UOB shares have risen
to just 3.5% below our fundamental TP of $22.5. Traders can
look to lock in gains around current level, support at $21.1.
Meanwhile, shares of SGX have rebounded to just 2% from
our fundamental TP of $7.15.
With the current run-up in the Singapore market, we scanned
through our list of coverage stocks to sieve out the ones that
have exceeded our fundamental TPs with unattractive
technicals and thus avoid. We identified the following stocks:
Ascendas India Trust, Religare Health Trust, United Envirotech,
Amtek Engineering and Petra Foods.
We reiterate our conviction BUY on Ezion with 52% upside
potential to target price of S$3.26. Stock is undervalued,
trading at 8x PE, with a promising 2-year EPS CAGR of 48%
that is backed by firm charter contracts of US$1.9bn (4x
revenue coverage), and an astounding ROE of 27%. Ezion’s
first mover advantage is expected to sustain in the medium
term. Competition concern is unfounded as the industry is in
early phase of growth stage. Ezion also has the potential to
unlock value through takeover offer or securitisation of fleet.
Ezion also announced that it is proposing to acquire a
29.81% stake in JK Tech Holdings. Ezion has proposed to
subscribe 42m new shares in JK Tech at an issue price of
S$0.09 per share. This represents 29.81% of interests in the
company. In addition, Ezion also has the options to acquire
additional 260m shares at the same price, which may lift
Ezion’s shareholding to 64.82%. The consideration of
US Indices Last Close Pts Chg % Chg
Dow Jones  16,412.7 (159.8) (1.0)
S&P  1,865.1 (23.7) (1.3)
NASDAQ  4,127.7 (110.0) (2.6)
Regional Indices
ST Index  3,212.7 (7.3) (0.2)
ST Small Cap  546.2 1.6 0.3
Hang Seng  22,510.1 (55.0) (0.2)
HSCEI  10,110.0 16.2 0.2
HSCCI  4,197.9 (26.8) (0.6)
KLCI  1,856.6 1.0 0.1
SET  1,392.0 0.8 0.1
JCI  4,857.9 (33.4) (0.7)
PCOMP  6,561.2 (25.9) (0.4)
KOSPI  1,988.1 (5.6) (0.3)
TWSE  8,888.5 (16.9) (0.2)
Nikkei  15,063.8 (8.1) (0.1)
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013 2014
100-Day MA
Index
STI
Total Market cap (US$bn) 594
Total Daily Vol (m shrs) 2,085
12m ST Index High 3,454
12m ST Index Low 2,960
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price (S$)
4 Apr
Target Price
(S$)
ComfortDelgro Buy 2.03 2.19
Global Logistic Properties Buy 2.63 3.31
Keppel Corp Buy 10.93 12.60
Stock Picks – Small /Mid Cap
Rec’n Price (S$)
4 Apr
Target Price
($)
Ezion Holdings Buy 2.14 3.26
Goodpack Buy 2.33 2.60
China Merchants Buy 0.965 1.32
Pacific Radiance Ltd Buy 1.10 1.20
Nam Cheong Buy 0.36 0.46
Centurion Corporation Buy 0.755 0.86
Source: Bloomberg Finance L.P., DBS Bank
Singapore
Wired Daily
Page 3
S$3.78m will be satisfied by the issuance of 1.8m new
shares in Ezion at an issue price of S$2.0445 per Ezion
Share (which represents a 5% discount to the weighted
average price on 4 Apr). JK Tech was engaged in the
provision of IT products and services. Post the exercise, JK
Tech will diversify into exploration, exploitation and
production of oil and gas ("E&P Business"), which shall be
complementary to Ezion’s existing business. As of now, the
transaction is not material. Transaction value is small at only
0.15% of Ezion’s current market cap. The share cap
increase is only marginal at 0.15%.
XMH Holdings announced that it has secured two new
contracts worth US$3.6m. The first contract is for more
than 24 units of Mitsubishi marine engines, with the group
expecting another 10 units to be secured in the next two
months. The contract is considered a breakthrough in their
efforts to gain a foothold in Vietnam, reducing over-reliance
on the Indonesian market where their main business has
been traditionally conducted. The group also secured a
contract for a low speed Akasaka main engine contract, also
under Mitsubishi's licensing.
Gaylin Holdings has accepted a Letter of Offer from Johor
Corporation, a Malaysian state corporation to lease the land
at PLO 225 at Tanjung Langsat Industrial Complex, Sungai
Tiram, Johor Bahru, Malaysia for a registrable lease of 30
years. The Lessee has an option to renew the Lease of Land
for another thirty 30 years. The total area of the land is
approximately 439,956 square feet. The total consideration
for the Lease of Land is MYR10.1m.
The Monetary Authority of Singapore (MAS) is expected to
keep the Singapore dollar appreciating for another six
months when it reviews its policy in a week's time, to guard
against wages-led price hikes later this year, despite the
easing of inflation since Singapore's last monetary policy
statement in October. If so, this would be the fourth review
in a row at which the MAS has kept its stance unchanged,
following a series of adjustments after the global financial
crisis.
In line with the stronger economic growth this year, global
passenger traffic expanded 5.4% y-o-y in February, though
it eased from the 8.2% growth in January. Meanwhile,
capacity grew by 5.2%, nudging passenger load factor up
to 78.1%. For the first two months of this year, passenger
traffic was up 6.9%, surpassing the 5.2% in the same
period last year, according to figures released by the
International Air Transport Association (Iata).

OCBC Report

KEY IDEA Singapore Airlines: Tata-SIA JV closer to take-off The Indian civil aviation ministry has cleared Tata SIA Airlines Limited (Tata SIA), the India JV between SIA and Tata Sons. The final hurdle is approval from Directorate General of Civil Aviation (DGCA). We think Tata SIA will be crucial in growing SIA’s market share in India’s international flight, which is estimated by CAPA to be 4% in FY13. Tata SIA can value-add to SIA on two fronts: 1) serving India domestically from its home market, and 2) using India as a base to serve the region. However, we are cautious of regulatory hurdles given two previous failed collaboration attempts. Additionally, there are issues such as frequency of flights that will determine the JV’s success. Until there is more colour on the operation permit, we maintain our HOLD call with S$9.50 fair value. (Yap Kim Leng) MORE REPORTS Ezion Holdings: Proposed subscription of shares in JK Tech Ezion Holdings Limited announced that it has entered into a subscription agreement with JK Tech Holdings for the purchase of 42m ordinary shares in the capital of JK Tech at an issue price of S$0.09/share (40% discount to its last closing price), which implies a total investment cost of S$3.78m. This would be financed by the issuance of 1.85m new Ezion shares at an issue price of S$2.0445 (4.5% discount to its last closing price). Ezion has also entered into an option agreement with JK Tech for 260m share options, with each option carrying the right to subscribe to one new ordinary share in the capital of JK Tech at an exercise price of S$0.09/option. Ezion intends to introduce opportunities in the business of exploration, exploitation and production of oil and gas to JK Tech, which wishes to diversify into this segment. Hence, this is viewed as a long-term strategic investment and partnership by Ezion. The new Ezion shares to be issued represent only ~0.15% of its total enlarged issue share capital; and on a pro forma basis, this development would only marginally raise its FY13 NTA/share and EPS by 0.2% and 0.1%, respectively. Hence, we maintain our BUY rating and S$2.57 fair value estimate on Ezion for now. (Low Pei Han and Andy Wong)

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

NEWS HEADLINES - Momentum shares sold off sharply in the US for a second straight day, giving the Nasdaq its worst day since Feb and leaving investors anxious about how much further they may fall. - Market consensus is that MAS will keep the SGD appreciating for another six months when it reviews its policy in a week's time to guard against wages-led price hikes. - Buying by directors rebounded while selling fell last week based on filings on SGX from Mar to Apr. - XMH Holdings announced that it has secured two new contracts worth US$3.6m. - Surbana International Consultants has set up a branch office in Yangon to meet growing demand for its township planning services in Myanmar. - After underperforming in 2013, commodity prices are primed to pick up in 2014 with a number of drivers converging to push commodity prices higher. - Penny stock investigations widen as more than 10 top execs from seven firms and several subsidiaries are being probed for possible breaches of the Securities and Futures Act. - Indonesian curbs on tin exports are offering a prop to Chinese producers facing slumping home demand, underpinning global prices and boosting opportunity to ramp up overseas sales.