Dow and Europe were up last night. Dow
+55 closing at 15876. Dow's trend is up. Dow's future is now
+2. Europe opened marginally down.
Asian markets had a small rally. Nikkei
+290, ShanghaiC +35, Hangseng +383. STI closed +10 at 3201. Volume
was 1.7b shares. Gainers were 249 to 189 losers.
Trend of STI is levelling and making
a turn up.
Top volumes were GoldenAgr +2, YHM -0.1,
HPHTrust +0.5, WEHldg +0.2, Europtron +1.1, Vallianz +0.5, Adventus unchanged,
KLW +0.1, Digiland unchanged, Innopac -0.1.
Market opened flat and edged up slightly
to close at day high of +10. Otherwise it was a listless day of trading
with very small volumes. Blue chips were mostly up. Penny and speculatives
were firmer but lack lustre.
With Dow and Europe strengthening and
some regional bourses rallying, our market is still sleep. Do SGX and MAS
know why?
Today is Friday and Dow and Europe are
looking for a flat session.
Friday, November 15, 2013
Thursday, November 14, 2013
OCBC Report 15 Nov 13
| Olam Int’l: 1QFY14 results mostly in line Summary: Olam International Limited (Olam) posted 1QFY14 revenue of S$4321.0m, down 8% YoY, reflecting lower commodity prices and also relatively flat sales volume. Nevertheless, EBITDA improved 18% to S$243.0m, aided by margin expansion from upstream and midstream initiatives and also organic growth from core supply chain activities. As such, PATMI inched up 6% to S$45.6m; estimated core earnings (excluding bio-asset gains) climbed 25% to S$42.7m. We judge both revenue and core PATMI to be in line as these met 19% and 12% of our full-year estimates, respectively, with its first quarter being seasonally slower. As we are keeping our FY estimates unchanged, our fair value remains at S$1.45, still based on 10x FY14F EPS. Given the limited upside, we maintain our HOLDrating. (Carey Wong) MORE REPORTS Midas Holdings: 3Q13 results exceeded expectations Summary: Midas Holdings’ 3Q13 results exceeded our expectations, with revenue jumping 48.5% YoY to CNY301.0m, or 15.8% above our forecast. While gross margin of 20.8% (-10.7 ppt YoY) disappointed, bottomline reversed from a CNY6.1m net loss in 3Q12 to a PATMI of CNY16.4m and beat our projection of CNY13.3m. This was attributed largely to a share of profit of CNY10.9m from its 32.5%-owned associated company Nanjing SR Puzhen Rail Transport (NPRT) as more train cars were delivered, versus a share of loss of CNY7.0m in 3Q12. For 9M13, revenue and PATMI increased by 20.6% and 145.6% to CNY787.5m and CNY26.4m, respectively. Regarding its financial position, Midas’ net gearing rose from 42.1% as at end Jun 2013 to 49.0% as at 30 Sep 2013 due to larger borrowings to finance the purchase of PPE for its new Aluminium Alloy Plates and Sheets business. We will provide more details after speaking with management. We maintain our BUY rating but our fair value estimate of S$0.65 is under review. (Wong Teck Ching Andy) Ezion Holdings: Another steady quarter Summary: Ezion Holdings reported a 97.2% YoY rise in revenue to US$76.2m (+13% QoQ) and a 137.2% increase in net profit to US$38.2m (+5% QoQ) in 3Q13, with 9M13 net profit accounting for 77.5% of our full year estimate. Core 9M13 net profit represented 74.6% of our full year estimate. Looking ahead, we are expecting more liftboats/service rigs to be deployed in 4Q13, solidifying earnings. The group is also pursuing opportunities to support LNG related projects in Australia and its vicinity. Pending an analysts’ briefing later in the morning, we maintain our BUYrating on the stock but put our fair value estimate of S$2.42 (adjusted for bonus issue) under review. (Low Pei Han) |
For more information on the above, visit www.ocbcresearch.comfor the detailed report. |
NEWS HEADLINES - US stocks on Thu closed at record highs for a second day in a row after Janet Yellen vigorously defended the central bank’s bond-buying program. - COSCO Corp (Singapore) has secured contracts worth about US$380m to build two jack-up rigs and a bulk carrier vessel. - Singapore banks will be able to withstand even a 50% plunge in property prices here if this were to occur over the next two years, say stress tests done by IMF and MAS. - Global Logistic Properties announced the establishment of a US$3b China Logistics Fund, even as 2QFY14 net profit fell 26% YoY to US$145m. - Ho Bee Land posted a 76.7% YoY slide in 3Q13 net profit to S$7.3m due to lower revenue from property development. - Thai Beverage posted a 74% fall in its 3Q13 net profit to 4.08b baht (S$161m), on the lack of associate investment gains made in the corresponding period last year. - United Engineers posted net profit of S$12.5m for its 3Q13, down 2% YoY. |
DBS Vickers Report 15 Nov 13
Thai Beverage downgraded to Hold with TP $0.57
(previous $0.80), technical downside bias to $0.49 or
even 0.45
3Q13 core net profit for Thai Beverage grew by 36% y-o-y to
THB4.1bn, from THB3bn in 3Q12, despite revenue falling by
7% to THB35bn. The growth came largely from contribution
of its associate stake in FNN. Stripping out FNN’s profit
contribution, ThaiBev’s net profit fell by 23% to THB3.7bn.
Our analyst revises forecasts down by 17%/ 20%/15% for
FY13F/14F/15F. We expect competition to remain keen for its
NAB segment while the Beer segment is likely to continue to
see declining volumes on the back of the recent hefty price
increase. We have also lowered Spirits’ gross margin
assumption to c.32%, from 34-34.5% previously. While we
like the strong cash generation of its stable Spirits business,
the projected slow ramp up and uncertainty in its other
segments would be a drag on overall growth. We expect
growth momentum to pick up meaningfully only in FY15F,
which is still some time away. With the downward revision in
earnings, our SOP-based TP is cut to S$0.57. In view of the
limited upside, we downgrade ThaiBev to HOLD. Technically,
we see downside bias to $0.49 or even $0.45.
Croesus Retail Trust (CRT) reported maiden gross revenue of
JPY1.998bn for the period from 10 May-30 Sep 2013, which
was 0.4% ahead of forecast. NPI was 3.1% higher than
projected and came in at JPY1.269bn, translating to a higher
NPI margin of 63.5%. Distributable income of JPY1.139bn
was 8.3% higher than projections and translates to a DPU of
3.26Scts. This was ahead of prospectus forecast of 3.11Scts,
and represents an annualised yield of c9.3%. Looking ahead,
earnings are likely to be driven by organic as well as
acquisitions. In the near term, the recent completion of a
1000sm extension at the property and fully leased by Uniqlo,
should provide another uplift to income. We maintain our
Buy recommendation with a TP of S$1.02. This offers a total
return of 25%.
Excluding biological gains of S$3.3m, Olam reported
1QFY14 core profit of S$42.3m (+28% y-o-y)
representing 11% of our forecast. This is slightly better
than expectations as 1Q usually constitutes 5-10% of full
year profits. Management expressed their optimism about
the company’s FY14 outlook.
US Indices Last Close Pts Chg % Chg
Dow Jones 15,876.2 54.6 0.3
S&P 1,790.6 8.6 0.5
NASDAQ 3,972.7 7.2 0.2
Regional Indices
ST Index 3,191.1 24.3 0.8
ST Small Cap 534.3 1.2 0.2
Hang Seng 22,649.2 185.3 0.8
HSCEI 10,391.1 114.5 1.1
HSCCI 4,431.1 57.1 1.3
KLCI 1,784.2 1.7 0.1
SET 1,415.7 10.9 0.8
JCI 4,367.4 65.5 1.5
PCOMP 6,327.9 6.9 0.1
KOSPI 1,967.6 4.0 0.2
TWSE 8,134.9 30.6 0.4
Nikkei 14,876.4 309.3 2.1
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013
100-Day MA
Index
STI
Total Market cap (US$bn) 584
Total Daily Vol (m shrs) 2,343
12m ST Index High 3,454
12m ST Index Low 2,946
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price ($)
14 Nov
Target Price
($)
Hutchison Port Holdings Trust Buy 0.685 0.82
ComfortDelgro Buy 1.905 2.19
OCBC Bank Buy 10.500 12.40
Singapore Airlines Buy 10.310 11.40
Stock Picks – Small /Mid Cap
Rec’n Price ($)
14 Nov
Target Price
($)
Ezion Holdings Buy 2.110 2.60
CSE Global Buy 0.960 1.11
Frasers Centrepoint Trust Buy 1.815 2.14
Yoma Strategic Holdings Buy 0.740 1.02
Source: Bloomberg Finance L.P., DBS Vickers
Singapore
Wired Daily
Page 2
While operating environment remains challenging, Olam
is expected to see earnings growth stemming from
previous investments. Olam is trading at inexpensive
valuations of 11x FY14F PE and 1.1x P/BV against decent
ROE of 11% and EPS CAGR of 36% in FY13-15F.
However, we would like to monitor its earnings delivery
and sustainability of cash flow improvement for another
quarter or two before turning positive on the counter.
Maintain HOLD with DCF-based TP of S$1.60 (WACC
10%; terminal growth 1%).
Ezion’s 3Q13 results are slightly ahead of our above
consensus estimate. Recurring net profit climbed 137%
yoy and 5% qoq to US$38.2m on the back of fleet
expansion, commencement of two LNG projects at Curtis
Island and margin improvement. 9M recurring net profit
made up 73% of our FY13 estimate. Our implied 4Q13
net profit estimate of US$37.6 is on the low side.
Sequential growth should be expected as Ezion take
deliveries of a few more vessels in late 3Q to 4Q. More
updates pending results briefing.
Cosco Corp announced that it has secured contract
totaling over US$380m comprising: (1) newbuild contract
for two LeTourneau Supper 116E jack up drilling. To be
built at Dalian yard; scheduled for delivery by 1H16 and
2H16 respectively (2) newbuild of a 64k dwt handymax
bulk carrier for a European shipowner through the
exercise of option announced on 12 Sept 13. The vessel
will be constructed at Zhousan yard; scheduled for
delivered by 2H14. The latest wins lift Cosco's YTD new
orders to US$2.6bn, surpassing our assumption of
US$2.2bn. With these contracts, Cosco will have a total
of six jack up drilling rigs in orderbook, of which two will
be delivered to KS energy soon by end of FY13 and
1Q14. No change to our TP and recommendation. We
remain wary on its project execution in view of the
diversified product range and the shift of its Zhoushan,
Dalian and Guangzhou yards to take on more offshorerelated
projects.
US markets rose after Janet Yellen signalled she will
continue the FED’s stimulus efforts. Yellen, nominated to
be the next FED chair person, said the central bank
should take care not to withdraw QE too early from an
economy that is operating well below potential. US 10-
year treasury yield eased back to 2.69% with after rising
to as high as 2.79% in recent sessions
(previous $0.80), technical downside bias to $0.49 or
even 0.45
3Q13 core net profit for Thai Beverage grew by 36% y-o-y to
THB4.1bn, from THB3bn in 3Q12, despite revenue falling by
7% to THB35bn. The growth came largely from contribution
of its associate stake in FNN. Stripping out FNN’s profit
contribution, ThaiBev’s net profit fell by 23% to THB3.7bn.
Our analyst revises forecasts down by 17%/ 20%/15% for
FY13F/14F/15F. We expect competition to remain keen for its
NAB segment while the Beer segment is likely to continue to
see declining volumes on the back of the recent hefty price
increase. We have also lowered Spirits’ gross margin
assumption to c.32%, from 34-34.5% previously. While we
like the strong cash generation of its stable Spirits business,
the projected slow ramp up and uncertainty in its other
segments would be a drag on overall growth. We expect
growth momentum to pick up meaningfully only in FY15F,
which is still some time away. With the downward revision in
earnings, our SOP-based TP is cut to S$0.57. In view of the
limited upside, we downgrade ThaiBev to HOLD. Technically,
we see downside bias to $0.49 or even $0.45.
Croesus Retail Trust (CRT) reported maiden gross revenue of
JPY1.998bn for the period from 10 May-30 Sep 2013, which
was 0.4% ahead of forecast. NPI was 3.1% higher than
projected and came in at JPY1.269bn, translating to a higher
NPI margin of 63.5%. Distributable income of JPY1.139bn
was 8.3% higher than projections and translates to a DPU of
3.26Scts. This was ahead of prospectus forecast of 3.11Scts,
and represents an annualised yield of c9.3%. Looking ahead,
earnings are likely to be driven by organic as well as
acquisitions. In the near term, the recent completion of a
1000sm extension at the property and fully leased by Uniqlo,
should provide another uplift to income. We maintain our
Buy recommendation with a TP of S$1.02. This offers a total
return of 25%.
Excluding biological gains of S$3.3m, Olam reported
1QFY14 core profit of S$42.3m (+28% y-o-y)
representing 11% of our forecast. This is slightly better
than expectations as 1Q usually constitutes 5-10% of full
year profits. Management expressed their optimism about
the company’s FY14 outlook.
US Indices Last Close Pts Chg % Chg
Dow Jones 15,876.2 54.6 0.3
S&P 1,790.6 8.6 0.5
NASDAQ 3,972.7 7.2 0.2
Regional Indices
ST Index 3,191.1 24.3 0.8
ST Small Cap 534.3 1.2 0.2
Hang Seng 22,649.2 185.3 0.8
HSCEI 10,391.1 114.5 1.1
HSCCI 4,431.1 57.1 1.3
KLCI 1,784.2 1.7 0.1
SET 1,415.7 10.9 0.8
JCI 4,367.4 65.5 1.5
PCOMP 6,327.9 6.9 0.1
KOSPI 1,967.6 4.0 0.2
TWSE 8,134.9 30.6 0.4
Nikkei 14,876.4 309.3 2.1
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013
100-Day MA
Index
STI
Total Market cap (US$bn) 584
Total Daily Vol (m shrs) 2,343
12m ST Index High 3,454
12m ST Index Low 2,946
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price ($)
14 Nov
Target Price
($)
Hutchison Port Holdings Trust Buy 0.685 0.82
ComfortDelgro Buy 1.905 2.19
OCBC Bank Buy 10.500 12.40
Singapore Airlines Buy 10.310 11.40
Stock Picks – Small /Mid Cap
Rec’n Price ($)
14 Nov
Target Price
($)
Ezion Holdings Buy 2.110 2.60
CSE Global Buy 0.960 1.11
Frasers Centrepoint Trust Buy 1.815 2.14
Yoma Strategic Holdings Buy 0.740 1.02
Source: Bloomberg Finance L.P., DBS Vickers
Singapore
Wired Daily
Page 2
While operating environment remains challenging, Olam
is expected to see earnings growth stemming from
previous investments. Olam is trading at inexpensive
valuations of 11x FY14F PE and 1.1x P/BV against decent
ROE of 11% and EPS CAGR of 36% in FY13-15F.
However, we would like to monitor its earnings delivery
and sustainability of cash flow improvement for another
quarter or two before turning positive on the counter.
Maintain HOLD with DCF-based TP of S$1.60 (WACC
10%; terminal growth 1%).
Ezion’s 3Q13 results are slightly ahead of our above
consensus estimate. Recurring net profit climbed 137%
yoy and 5% qoq to US$38.2m on the back of fleet
expansion, commencement of two LNG projects at Curtis
Island and margin improvement. 9M recurring net profit
made up 73% of our FY13 estimate. Our implied 4Q13
net profit estimate of US$37.6 is on the low side.
Sequential growth should be expected as Ezion take
deliveries of a few more vessels in late 3Q to 4Q. More
updates pending results briefing.
Cosco Corp announced that it has secured contract
totaling over US$380m comprising: (1) newbuild contract
for two LeTourneau Supper 116E jack up drilling. To be
built at Dalian yard; scheduled for delivery by 1H16 and
2H16 respectively (2) newbuild of a 64k dwt handymax
bulk carrier for a European shipowner through the
exercise of option announced on 12 Sept 13. The vessel
will be constructed at Zhousan yard; scheduled for
delivered by 2H14. The latest wins lift Cosco's YTD new
orders to US$2.6bn, surpassing our assumption of
US$2.2bn. With these contracts, Cosco will have a total
of six jack up drilling rigs in orderbook, of which two will
be delivered to KS energy soon by end of FY13 and
1Q14. No change to our TP and recommendation. We
remain wary on its project execution in view of the
diversified product range and the shift of its Zhoushan,
Dalian and Guangzhou yards to take on more offshorerelated
projects.
US markets rose after Janet Yellen signalled she will
continue the FED’s stimulus efforts. Yellen, nominated to
be the next FED chair person, said the central bank
should take care not to withdraw QE too early from an
economy that is operating well below potential. US 10-
year treasury yield eased back to 2.69% with after rising
to as high as 2.79% in recent sessions
Daily Report 14 Nov 13
Dow was +71 last night, closing at 15822.
Europe were down. Dow's trend is still up but levelling. Dow's
future is now +30. Europe opened firmly up.
Asian bourses were mostly up. Nikkei +309, ShanghaiC +13, Hangseng +185. STI +24 at 3191. Volume was 2.3b shares. Gainers were 252 to 231 losers.
Trend of STI still down but may be turning up.
Top volumes were SingHaiyi +0.1, YHM +0.1, HPHTust -2, Digiland unchanged, KLW +0.2, Albedo +0.1, Hankore +0.5, Innopac unchanged, SIICEnv +0.2, GoldenAgr +1.5.
Market opened up and stayed up throughout the whole session. It stayed higher in the afternoon. Blue chips were mostly up while penny and speculatives were mixed. Some buying back of blue chips. Super Group fell sharply for two days but recovered 35c today.
Europe and Dow are looking positive for tonight's session.
Asian bourses were mostly up. Nikkei +309, ShanghaiC +13, Hangseng +185. STI +24 at 3191. Volume was 2.3b shares. Gainers were 252 to 231 losers.
Trend of STI still down but may be turning up.
Top volumes were SingHaiyi +0.1, YHM +0.1, HPHTust -2, Digiland unchanged, KLW +0.2, Albedo +0.1, Hankore +0.5, Innopac unchanged, SIICEnv +0.2, GoldenAgr +1.5.
Market opened up and stayed up throughout the whole session. It stayed higher in the afternoon. Blue chips were mostly up while penny and speculatives were mixed. Some buying back of blue chips. Super Group fell sharply for two days but recovered 35c today.
Europe and Dow are looking positive for tonight's session.
Wednesday, November 13, 2013
DBS Vickers Report 14 Nov 13
First Resources - Rating cut to HOLD, TP: S$2.19;
recent outperformance has priced in the strong
earnings recovery
Courts Asia – Growth and margins disappoint;
downgrade to HOLD with lower TP of S$0.77
3Q13 earnings of US$51.4m for First Resources exceeded
expectations. FFB output peaked during the quarter,
jumping 38% q-o-q. Our analyst expects sequentially
lower 4Q13 earnings on lower volumes. Rating cut to
HOLD; recent outperformance has priced in the strong
earnings recovery, TP unchanged at S$2.19.
2Q14 results for Courts Asia below expectations, growth
and margins disappoint. Lower earned interest charges led
to sharply lower gross margins and earnings. Our analyst
has cut FY14F/FY15F earnings by 32%/33%. Downgrade
to HOLD with lower TP of S$0.77 (Prev S$ 1.00).
3Q13 profit for CSE Global missed our estimates slightly
due to timing. Costs were booked for two projects, whose
revenue would accrue in 4Q13F. Post divestment of
Servlec, earnings may grow at over 12% CAGR
organically, in addition to the potential for inorganic
growth. Maintain BUY with revised TP of S$1.11 (Prev S$
1.07) as we roll over to FY14F earnings.
ComfortDelgro’s 3Q13 results in line, steady growth as
expected. 9M13 forms 77% of forecasts. CD is our
preferred land transport pick, given its geographical
diversification and steady growth profile.
Maintain BUY, TP: S$2.19.
3Q13 net profit of S$5.6m for Overseas Education in line.
9M13 profits formed 78% of FY13F. Growth was driven
by tuition fee hikes across all grades for the academic year
starting Aug 13. Based on current momentum, OEL looks
set to achieve our FY13F earnings. Maintain BUY with
S$1.01 TP.
2Q14 results for Tat Hong were in line; Australian
operations, crane utilisation and margins remained weak.
Australia operations may take time to recover. Interim DPS
of 1 Sct declared. Maintain HOLD with TP of S$1.01 (Prev
S$ 1.00).
US Indices Last Close Pts Chg % Chg
Dow Jones 15,821.6 71.0 0.5
S&P 1,782.0 14.3 0.8
NASDAQ 3,965.6 45.7 1.2
Regional Indices
ST Index 3,166.7 (13.5) (0.4)
ST Small Cap 533.1 (4.3) (0.8)
Hang Seng 22,463.8 (437.6) (1.9)
HSCEI 10,276.6 (285.0) (2.7)
HSCCI 4,374.0 (69.7) (1.6)
KLCI 1,782.5 (12.3) (0.7)
SET 1,404.8 (8.3) (0.6)
JCI 4,301.9 (78.7) (1.8)
PCOMP 6,321.0 (3.2) (0.1)
KOSPI 1,963.6 (31.9) (1.6)
TWSE 8,104.3 (91.0) (1.1)
Nikkei 14,567.2 (21.5) (0.1)
STI Index Performance
Singapore
Total Market cap (US$bn) 586
Total Daily Vol (m shrs) 2,172
12m ST Index High 3,454
12m ST Index Low 2,946
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price ($)
13 Nov
Target Price
($)
Hutchison Port Holdings Trust Buy 0.705 0.82
ComfortDelgro Buy 1.895 2.19
OCBC Bank Buy 10.400 12.40
Singapore Airlines Buy 10.280 11.40
Stock Picks – Small /Mid Cap
Rec’n Price ($)
13 Nov
Target Price
($)
Ezion Holdings Buy 2.090 2.60
CSE Global Buy 0.945 1.11
Frasers Centrepoint Trust Buy 1.800 2.14
Yoma Strategic Holdings Buy 0.740 1.02
Source: Bloomberg Finance L.P., DBS Vickers
Singapore
Wired Daily
Page 2
3Q results for Petra Food within expectations. Effects of weak
IDR felt but margins should be sustained with higher ASP and
better cost management. FY14F estimate is trimmed by 3%
to reflect higher admin expenses. Maintain HOLD, TP revised
to S$3.65 (Prev S$4.06) on PE valuation metric. Prefer to
accumulate at below c.S$3.15 for c.15% upside potential.
Excluding translational FX loss of Rp19.1bn, Bumitama Agri
reported core 3Q13 net profit of Rp187.1bn (+10% y-o-y;
+12% q-o-q) - in line with our expected range of Rp181-186
bn. This brought 9M13 earnings to Rp508.7 bn, representing
67% of our full year forecast. Including translational FX loss,
the group reported 3Q13 net profit of Rp168.8bn (-19% y-oy;
+2% q-o-q). Sequential earnings growth was mainly driven
by 48% q-o-q drop in net interest expense and 32% q-o-q
drop in income tax; as top line had declined by 8% q-o-q;
and operating profit had eased by 5% q-o-q. Our forecasts
and TP of S$1.26 are under review, pending analyst briefing
and further analysis.
SingTel’s 2Q14 results were released this morning.
Underlying profit of S$884m -0.2% y-o-y, -1.1.4% q-o-q)
was in line with our estimates. However, group topline
declined 8.9% y-o-y due to lower mobile termination fee in
Australia and weak AUD. Will provide more updates.
Yangzijiang has secured 15 bulk carriers contracts worth
US$533m in total, comprising :-
(i) four capesize 208k dwt bulk carriers
(ii) nine panamax 82k dwt bulk carriers (of which four are
exercise of options)
(iii) two handymax 64k dwt bulk carriers through the exercise
of options.
YTD wins has been lifted to US$2,6bn, exceeding our
expectation of US$2.5bn. We will raise our FY13 order win
accordingly but lower our FY14 assumption as yard is already
filling up slots in 2016. With these new wins, Yangzijiang
now has a total of eight units 208k dwt capesizes, 19 units
82k dwt panamxes, and 33 units 64k dwt handymaxes in its
orderbook. These formed 82% of its total bulk carrier orders
of 73 units. The economies of scales from building the same
vessel type is one of the key contributors to Yangzijiang's
above-industry-average margins. Maintain BUY, TP: S$1.32.
We expect stable growth for Yanlord Land Group in 2014.
Sales target set at Rmb15bn, with c.15% y-o-y growth. Backloaded
delivery to 4Q and cash collection could be a concern.
Trimmed FY13 EPS by 15%; maintain HOLD, TP S$1.24.
BH Global has won multiple contracts worth a total of
approximately S$8.1m. These contracts were awarded by
both locally and internationally renowned companies.
Asiasons WFG Capital, for and on behalf of Asia New Energy
Holding, is proposing to acquire all the shares in Asia Power
Corp for S$0.16 cash.
CCM has been awarded three (3) contracts worth an
aggregate of S$5.6m from the Bishan-Toa Payoh Town
Council, for repairs and redecoration works.
recent outperformance has priced in the strong
earnings recovery
Courts Asia – Growth and margins disappoint;
downgrade to HOLD with lower TP of S$0.77
3Q13 earnings of US$51.4m for First Resources exceeded
expectations. FFB output peaked during the quarter,
jumping 38% q-o-q. Our analyst expects sequentially
lower 4Q13 earnings on lower volumes. Rating cut to
HOLD; recent outperformance has priced in the strong
earnings recovery, TP unchanged at S$2.19.
2Q14 results for Courts Asia below expectations, growth
and margins disappoint. Lower earned interest charges led
to sharply lower gross margins and earnings. Our analyst
has cut FY14F/FY15F earnings by 32%/33%. Downgrade
to HOLD with lower TP of S$0.77 (Prev S$ 1.00).
3Q13 profit for CSE Global missed our estimates slightly
due to timing. Costs were booked for two projects, whose
revenue would accrue in 4Q13F. Post divestment of
Servlec, earnings may grow at over 12% CAGR
organically, in addition to the potential for inorganic
growth. Maintain BUY with revised TP of S$1.11 (Prev S$
1.07) as we roll over to FY14F earnings.
ComfortDelgro’s 3Q13 results in line, steady growth as
expected. 9M13 forms 77% of forecasts. CD is our
preferred land transport pick, given its geographical
diversification and steady growth profile.
Maintain BUY, TP: S$2.19.
3Q13 net profit of S$5.6m for Overseas Education in line.
9M13 profits formed 78% of FY13F. Growth was driven
by tuition fee hikes across all grades for the academic year
starting Aug 13. Based on current momentum, OEL looks
set to achieve our FY13F earnings. Maintain BUY with
S$1.01 TP.
2Q14 results for Tat Hong were in line; Australian
operations, crane utilisation and margins remained weak.
Australia operations may take time to recover. Interim DPS
of 1 Sct declared. Maintain HOLD with TP of S$1.01 (Prev
S$ 1.00).
US Indices Last Close Pts Chg % Chg
Dow Jones 15,821.6 71.0 0.5
S&P 1,782.0 14.3 0.8
NASDAQ 3,965.6 45.7 1.2
Regional Indices
ST Index 3,166.7 (13.5) (0.4)
ST Small Cap 533.1 (4.3) (0.8)
Hang Seng 22,463.8 (437.6) (1.9)
HSCEI 10,276.6 (285.0) (2.7)
HSCCI 4,374.0 (69.7) (1.6)
KLCI 1,782.5 (12.3) (0.7)
SET 1,404.8 (8.3) (0.6)
JCI 4,301.9 (78.7) (1.8)
PCOMP 6,321.0 (3.2) (0.1)
KOSPI 1,963.6 (31.9) (1.6)
TWSE 8,104.3 (91.0) (1.1)
Nikkei 14,567.2 (21.5) (0.1)
STI Index Performance
Singapore
Total Market cap (US$bn) 586
Total Daily Vol (m shrs) 2,172
12m ST Index High 3,454
12m ST Index Low 2,946
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price ($)
13 Nov
Target Price
($)
Hutchison Port Holdings Trust Buy 0.705 0.82
ComfortDelgro Buy 1.895 2.19
OCBC Bank Buy 10.400 12.40
Singapore Airlines Buy 10.280 11.40
Stock Picks – Small /Mid Cap
Rec’n Price ($)
13 Nov
Target Price
($)
Ezion Holdings Buy 2.090 2.60
CSE Global Buy 0.945 1.11
Frasers Centrepoint Trust Buy 1.800 2.14
Yoma Strategic Holdings Buy 0.740 1.02
Source: Bloomberg Finance L.P., DBS Vickers
Singapore
Wired Daily
Page 2
3Q results for Petra Food within expectations. Effects of weak
IDR felt but margins should be sustained with higher ASP and
better cost management. FY14F estimate is trimmed by 3%
to reflect higher admin expenses. Maintain HOLD, TP revised
to S$3.65 (Prev S$4.06) on PE valuation metric. Prefer to
accumulate at below c.S$3.15 for c.15% upside potential.
Excluding translational FX loss of Rp19.1bn, Bumitama Agri
reported core 3Q13 net profit of Rp187.1bn (+10% y-o-y;
+12% q-o-q) - in line with our expected range of Rp181-186
bn. This brought 9M13 earnings to Rp508.7 bn, representing
67% of our full year forecast. Including translational FX loss,
the group reported 3Q13 net profit of Rp168.8bn (-19% y-oy;
+2% q-o-q). Sequential earnings growth was mainly driven
by 48% q-o-q drop in net interest expense and 32% q-o-q
drop in income tax; as top line had declined by 8% q-o-q;
and operating profit had eased by 5% q-o-q. Our forecasts
and TP of S$1.26 are under review, pending analyst briefing
and further analysis.
SingTel’s 2Q14 results were released this morning.
Underlying profit of S$884m -0.2% y-o-y, -1.1.4% q-o-q)
was in line with our estimates. However, group topline
declined 8.9% y-o-y due to lower mobile termination fee in
Australia and weak AUD. Will provide more updates.
Yangzijiang has secured 15 bulk carriers contracts worth
US$533m in total, comprising :-
(i) four capesize 208k dwt bulk carriers
(ii) nine panamax 82k dwt bulk carriers (of which four are
exercise of options)
(iii) two handymax 64k dwt bulk carriers through the exercise
of options.
YTD wins has been lifted to US$2,6bn, exceeding our
expectation of US$2.5bn. We will raise our FY13 order win
accordingly but lower our FY14 assumption as yard is already
filling up slots in 2016. With these new wins, Yangzijiang
now has a total of eight units 208k dwt capesizes, 19 units
82k dwt panamxes, and 33 units 64k dwt handymaxes in its
orderbook. These formed 82% of its total bulk carrier orders
of 73 units. The economies of scales from building the same
vessel type is one of the key contributors to Yangzijiang's
above-industry-average margins. Maintain BUY, TP: S$1.32.
We expect stable growth for Yanlord Land Group in 2014.
Sales target set at Rmb15bn, with c.15% y-o-y growth. Backloaded
delivery to 4Q and cash collection could be a concern.
Trimmed FY13 EPS by 15%; maintain HOLD, TP S$1.24.
BH Global has won multiple contracts worth a total of
approximately S$8.1m. These contracts were awarded by
both locally and internationally renowned companies.
Asiasons WFG Capital, for and on behalf of Asia New Energy
Holding, is proposing to acquire all the shares in Asia Power
Corp for S$0.16 cash.
CCM has been awarded three (3) contracts worth an
aggregate of S$5.6m from the Bishan-Toa Payoh Town
Council, for repairs and redecoration works.
Daily Summary 13 Nov 13
Dow and Europe were slightly down last
night. Dow closed -32 at 15751. Dow's trend is still slightly
up. Dow's future is now -8. Europe opened marginally down.
Asian bourses were mostly down with Hangseng plunging 438 pts. Nikkei -22, ShanghaiC -39. STI closed -14 at 3167. Volume was 2.1b shares. Gainers were 139 to 336 losers.
Trend of STI is down.
Top volumes were Noble -3, OttoMarine -0.1, Dragon +0.4, PacificRadiance IPO closed at 92.5. GoldenAgr +0.5, KLW +0.1, MDR unchanged, Sunmoon unchanged, YHM unchanged, Transcu +0.1.
Market opened up but slid down to close near day low at -14. Blue chips were mostly weaker. Penny stocks and speculatives were also mostly down. Trading was as usual, very quiet.
Dow and Europe are likely to trade sideways tonight.
Asian bourses were mostly down with Hangseng plunging 438 pts. Nikkei -22, ShanghaiC -39. STI closed -14 at 3167. Volume was 2.1b shares. Gainers were 139 to 336 losers.
Trend of STI is down.
Top volumes were Noble -3, OttoMarine -0.1, Dragon +0.4, PacificRadiance IPO closed at 92.5. GoldenAgr +0.5, KLW +0.1, MDR unchanged, Sunmoon unchanged, YHM unchanged, Transcu +0.1.
Market opened up but slid down to close near day low at -14. Blue chips were mostly weaker. Penny stocks and speculatives were also mostly down. Trading was as usual, very quiet.
Dow and Europe are likely to trade sideways tonight.
Tuesday, November 12, 2013
OCBC Report 13 Nov 13
| KEY IDEA Singapore Residential Property: Prices to dip in 2014 but crash is unlikely While the Fed Fund rate is expected to stay at low levels until at least 2015, we expect increasing caution to set in as the overhang from government measures remains in play and the market grapple with an onerous pipeline of physical supply ahead. Over FY14, we forecast for mass-market residential prices to dip 5%-15% and for high-end residential prices to dip 0%-10%. In light of the subdued outlook for the domestic residential sector, we favor large-cap developers with strong balance sheets and diversified exposure across regional real estate markets. Our top picks in the space are CapitaLand, rated BUY with a fair value estimate of S$3.77 (30% RNAV disc.), and Keppel Land, rated BUY with a fair value estimate of S$4.09 (30% discount to RNAV). (Eli Lee) MORE REPORTS Nam Cheong: Cruising ahead Nam Cheong Limited reported a solid set of 3Q13 results, with revenue surging 140.4% YoY to MYR341.2m and PATMI jumping 86.0% to MYR58.7m. This was the highest ever bottomline achieved by Nam Cheong since its RTO listing in May 2011. Revenue was in-line with our expectations but PATMI exceeded, with 9M13 revenue of MYR851.3m (+71.1%) and PATMI of MYR135.2m (+54.9%) forming 72.4% and 83.4% of our FY13 forecasts, respectively. Looking ahead, we believe that Nam Cheong will be able to leverage on the robust industry outlook to capitalise on growth ahead. We rework our financial model and assumptions following a change in analyst coverage, and derive a new fair value estimate of S$0.37 (previously S$0.35) on Nam Cheong, which is premised on 8.5x FY14F EPS (representing one standard deviation above its historical average forward PER). Maintain BUY. (Wong Teck Ching Andy) KSH Holdings: Good earnings growth momentum 2QFY14 PATMI came in at S$12.2m, up 24% YoY and 6% QoQ, mostly due to stronger contributions from both the property development and construction segments. These results were spot on with our expectations as 1HFY14 PATMI now makes up 49.7% of our full year estimates. An interim dividend of 1.25 S-cents per share was declared. Despite a market cap of S$205m, KSH now holds S$76m in cash with a low net gearing of 6.4%. This provides sizable capital headroom for growth, and we continue to like management’s ability to execute on accretive growth opportunities (LTM ROE: 24%) and balanced approach for capital allocation (FY14F dividend yield: 4.8% yield). Maintain BUYwith an unchanged fair value estimate of S$0.73. Our fair value is based on 5 times FY14F construction earnings and 40% discount to the property segment’s RNAV. (Eli Lee) Petra Foods: A decent 3Q13 Petra Foods’ 3Q13 results met our expectations: revenue increased 10.4% YoY to US$126.9m while core operating profit and PATMI grew 5.4% to US$20.9m and 3.9% to US$14.8m, respectively. For 4Q13, we expect Petra to end the year on a positive note. An expected Indonesian ruppiah appreciation should stem currency losses and aid its gross profit margin while demand should stay stable at current levels on a QoQ basis in its key markets of Indonesia and the Philippines. In terms of its share price, we feel that Petra has over-corrected since its lacklustre 2Q13 results. With our forecasts largely unchanged, we leave our fair value estimate of S$3.95 unchanged and upgrade Petra to BUY on valuation grounds. (Lim Siyi) Noble Group Ltd: Improvement seen in 3Q13 Noble Group (Noble) reported its 3Q13 results last evening, with revenue rising 13% YoY to US$25,595m, buoyed by revenue growth from all three business segments. Excluding non-cash Associate loss of US$103m, core earnings would have come in around US$113.0m. 9M13 revenue of US$73,524m met 74% of our full-year forecast; core earnings of US$194.1m would have met around 64% of our FY13 estimate. Going forward, management says it will continue to focus on long-term efficiency gains made from recent initiatives to reduce SAO and finance cost; also taking full advantage of the current downturn to add significant off-take and marketing agreements. We are upgrading our call from Sell to HOLD with higher S$1.03 fair value (versus S$0.76 previously) to reflect improved outlook. (Carey Wong) City Developments Limited: Cautious on domestic residential space 3Q13 PATMI decreased 10.4% YoY mostly due to the absence of disposal gains booked in 3Q12 for the sale of several industrial strata assets. Due to slower than anticipated recognition at development projects, 9M13 PATMI cumulates to only 66.3% of our FY13 forecast and we judge the latest quarter to be a miss. We lower our FY13 PATMI forecast by 11.4% to S$617.0m. Management indicates that it is turning increasingly cautious of the domestic residential space and will focus on developing its overseas growth engines in London and China. In particular, the group is actively pursuing acquisition opportunities in London and is confident of securing more sites in due course. Maintain HOLD with a lower fair value estimate of S$9.98 (30% RNAV disc.), versus S$11.38 previously, as we opt to raise our RNAV discount closer in line with those at listed peers and to reflect a softer domestic residential outlook. (Eli Lee) Biosensors International Group: Another shocking quarter Biosensors International Group (BIG) turned in another poor set of results, with 2QFY14 core PATMI plunging 60.6% YoY to US$11.5m despite a 4.1% growth in revenue to US$83.0m. This was significantly below ours and the street’s expectations, as 1HFY14 core PATMI of US$23.6m (-59.0%) formed only 30.0% of our original FY14 estimates (27.4% of Bloomberg consensus). BIG also lowered its FY14 revenue guidance. While we had previously cautioned that management would have difficulty meeting its previous 15% topline growth guidance and that BIG was also facing mounting cost pressures, the situation appears to be worse than we had expected. In light of the challenging conditions surrounding BIG, we slash our FY14 and FY15 core PATMI projections by 26.9% and 19.1%, respectively. Our DCF-derived fair value estimate consequently declines from S$0.96 to S$0.80. Downgrade BIG from Hold to SELL. (Wong Teck Ching Andy) Golden Agri-Resources: Another disappointing quarter - SELL Golden Agri-Resources (GAR) continued to feel the blunt of weaker CPO prices and suffered another disappointing quarter, resulting in 9M13 earnings meeting just 51% of our original forecast. While it expects to see the sequential growth in CPO production in 4Q13, GAR now guides for a 5% contraction in CPO production this year (versus earlier 5-10% growth guidance); although it is likely to revert to this usual growth forecast next year. While our FY13 earnings estimate is probably one of the lowest on the street, we need to slash it further by 31% (FY14 by 12%), while keeping our revenue forecasts largely unchanged. No doubt that the worst may be over, we note that the recent price rally looks overdone. As such, we maintain our SELLrating with an unchanged fair value of S$0.465 (based on 12.5x FY14F EPS versus 11x blended FY13/FY14F EPS). (Carey Wong) Singapore Airlines: Competitive pressures remain Singapore Airlines’ (SIA) 2QFY14 results exceeded our expectations following a lower fuel bill and much better-than-forecasted associate performance and one-off gains. (Management also declared an interim dividend of 10 S cents vs. 6 S cents for 1H13). However, despite the improved performance, passenger yields remained depressed as sustained competitive pressures necessitated a prolonged extension of promotional fares. Although management has indicated advance bookings for 3QFY14 to be higher YoY, we feel that the increase is seasonal rather than structural and yields are still likely to stay depressed as a result. Maintain SELL on SIA with an unchanged fair value estimate of S$9.50. (Lim Siyi) ECS Holdings: 3Q13 results within our expectations ECS Holdings (ECS) reported a 4.5% YoY increase in its 3Q13 PATMI to S$8.7m on the back of a 11.4% jump in revenue to S$999.3m. After adjusting for forex and other exceptional items, we estimate that core earnings would have 4.7% higher at S$9.1m. This is in-line with our expectations. For 9M13, revenue increased 18.5% to S$3,107.1m, forming 73.1% of our FY13 forecast. Reported PATMI rose 14.9% to S$14.9m (estimated core earnings climbed 7.8% from S$22.7m to S$24.5m, or 75.3% of our full-year estimate). Looking ahead, ECS will focus on growing its mobile devices business by expanding its distribution coverage and product range to leverage on the expected increase in spending in this area in the IT industry. We will provide more details after meeting up with management. Meanwhile, we maintain our BUY rating but our S$0.56 fair value estimate is under review. (Wong Teck Ching Andy) CSE Global: 3Q13 PATMI lower than expected CSE Global Limited reported its 3Q13 results this morning, with PATMI growing 5.8% YoY to S$11.4m despite a 6.3% decline in revenue to S$122.0m. Revenue came in within our expectations but bottomline missed due largely to a higher-than-estimated effective tax rate. For 9M13, revenue fell 12.5% to S$358.1m while PATMI (before discontinued operations and one-time gains) rose 7.1% to S$36.5m. These formed 73.7% and 71.7% of our full year forecast, respectively. We will attend an analyst briefing and will provide more details thereafter. Our Buy rating and S$0.96 fair value estimate is under review due to a change in analyst coverage. (Wong Teck Ching Andy) Swiber Holdings: So-so set of 3Q13 results Swiber Holdings reported a 3.4% YoY rise in revenue to US$274.2m and a 4.5% increase in net profit to US$7.7m, such that 9M13 revenue and net profit accounted for 72% and 57% of our full year forecasts, respectively. Net profit was lower than ours and the street’s expectations – 9M13 net profit represented 54% of consensus’ full year estimate. Stripping out one-off items, 9M13 recurring net profit was 64% of our full year estimate. Gross margin was 14.2% in 3Q13 vs. 15.3% in 2Q13 and 14.1% in 3Q12; we are likely to reduce our margin assumptions following this weaker-than-expected set of results. Pending an analysts’ briefing later in the afternoon, we put our Buy rating and our fair value estimate of S$0.86 under review.(Low Pei Han) Yangzijiang Shipbuilding: Healthy set of 3Q13 results Yangzijiang Shipbuilding (YZJ) reported a 2% YoY rise in revenue to RMB3.67b and a 6% decrease in net profit to RMB820.7m, such that both 9M13 revenue and net profit accounted for about 80% of our full year forecasts, slightly better than our expectations. Gross profit margin remained healthy at 29.6% in 3Q13 vs. 29.4% in 3Q12 and 27.5% in 2Q13, while administrative expenses were contained at about 2% of revenue in the quarter. Encouragingly, there were also no vessel cessations in 3Q13. Meanwhile, time will be needed for the group to move significantly into the offshore oil and gas sector –its first jack-up rig is scheduled for delivery in mid-2015. Pending an analysts’ briefing later in the morning, we maintain our HOLD rating but put our fair value estimate of S$1.04 under review. (Low Pei Han) |
For more information on the above, visit www.ocbcresearch.comfor the detailed report. |
NEWS HEADLINES - US stocks ended with modest losses on Tue, with the Dow industrials retreating from the previous session’s record close. - Ascendas Hospitality Trust’s 2QFY14 distributable income missed its 2QFY14 IPO forecast due to higher-than-expected taxes. - Straco Corporation reported a 72% YoY surge in net profit to S$15.2m for in 3Q13. - Fraser and Neave posted FY13 net profit of S$5.4b compared with S$837.5m last year, thanks to a S$4.8b gain it made from disposing its discontinued operations. - Religare Health Trust posted a DPU of 2.06 S cents for 2QFY14, narrowly beating its projected DPU of 2.05 S cents. - SBS Transit's net profit for 3Q13 slumped 43.8% to S$3.54m, hit by losses at its two biggest businesses - bus and rail. - Courts Asia's 2QFY14 net profit plunged 55% YoY to S$7.16m. - ARA Asset Management posted a 2% rise in 3Q13 attributable net profit to S$20m on higher REIT management fees. |
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