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Monday, March 18, 2013

Local Brokerage stock call 18 March 2013

From Maybank KE:
SG Daily - Sarin Technologies: Hong Kong Show Sets Positive Tone; Buy TP $1.48

From CIMB:
Singapore Airlines  
Better traffic, but beware further yield deterioration
 NEUTRAL - Maintained | S$10.87 - Tgt. S$11.00

Sembcorp Marine 
Mexican wave
TRADING BUY - Maintained | S$4.54 - Tgt. S$5.01

From OCBC:
CDL Hospitality Trusts: Competition to increase

Summary: We believe that CDLHT’s Singapore hotels are best classified as being in the Mid-tier/Upscale range, because their FY12 RevPAR was S$211, close to the mean of S$264 and S$171, which are the RevPAR averages for Singapore Upscale and Mid-tier hotels respectively. As detailed in our hospitality sector report dated 5 Mar 2013, we project that for 2013-2015, the Economy, Mid-tier and Upscale/Luxury categories will grow +5.9% p.a., +8.5% p.a. and +4.4% p.a. respectively. As a group, the Mid-tier/Upscale/Luxury segment will grow 5.8% p.a., the same rate that the overall supply will grow. This rate is lower than the projected room demand of 5.4% p.a. over the same period, indicating that competition is likely to intensify in the segments that CDLHT is represented in. Adjusting our assumptions and removing the 10% discount to RNAV to better reflect the worth of CDLHT’s hotel properties, we are raising our fair value from S$1.93 to S$2.11; but maintain a HOLD rating since CDLHT is trading near our fair value.  (Sarah Ong)

Sembcorp Marine: Good demand from Mexico; secures two more jack-ups

Summary: Sembcorp Marine (SMM) announced this morning that its subsidiary, PPL Shipyard, has secured orders worth US$417m for the construction of two jack-up rigs from Mexican-based Integradora de Servicios Petroleros Oro Negro (Oro Negro). Scheduled for delivery at end-4Q14 and end-1Q15, the high-spec rigs will be built based on PPL’s proprietary Pacific Class 400 design. Oro Negro is a repeat customer – it ordered two similar jack-up rigs from SMM in Dec last year at a price of US$217m per unit. The strong demand coming from Mexico is within our expectations, as PEMEX plans annual capital expenditures of ~US$30b till 2019 to stem the country’s declining oil production. We see SMM as one of the beneficiaries of these developments. Maintain BUY with S$5.84 fair value estimate on SMM. (Low Pei Han) 

From UOB KH:
S’pore Telecommunications - Key takeaways from
SingTel Investor Day.
(ST SP/SELL/S$3.58/Target: S$3.41)
We attended SingTel Investor Day on 15 Mar 13. The
presentation was organised around the new organisation
structure with three business units, namely…
Hospitality Top Picks:
Ascott Residence Trust, CDL Hospitality Trusts
and Global Premium Hotels
We are optimistic on the outlook for the hospitality segment
driven by the Singapore government’s strong tourism push  

Ascott Residence Trust (ART SP, A68U) –
Beneficiary of industry dynamics, yield compression
Last price: S$1.35
Target Price: S$1.52

CDL Hospitality Trusts (CDREIT SP, J85) –
Strong occupancy, watch for more acquisitions
Last price: S$2.11
Target Price: S$2.36

Global Premium Hotels (GPHL SP, P9J) –
Resilient portfolio of mid-tier and economic hotels
Last price: S$0.265
Target Price: S$0.34

From DBS:
Overseas Union Enterprises, NOT RATED S$2.94 , Bloomberg: OUE SP Return *: 2
Risk: Moderate
Plans to unlock value
Potential Target * : 12-Month S$ 3.16 (10% upside)



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