Local Brokerage stock call 19 March 2013

From Maybank KE:
Sheng Siong Group: Potential Ace Up Its Sleeve; Maintain Buy, TP $0.70
SSG SP | Mkt Cap USD691.5m | ADTV USD1.7m
Ø Sheng Siong will launch its e-commerce platform in 1H13. Despite being a latecomer to online retailing, we believe this move is a step in the right direction as shopping on the Internet will inevitably erode traditional grocery shopping in the future.
Ø Sheng Siong has set aside SGD20m of IPO proceeds for development and expansion of grocery retailing in Singapore. In the initial stage, Sheng Siong plans to ease its E-commerce model into its Pick to Light inventory system currently in use at Mandai warehouse..
Ø While we expect the online channel will take at least a couple of quarters to gain momentum, Sheng Siong remains a BUY with a TP of SGD0.70, coupled with a 90% dividend payout fixed for the next two years.


From OCBC:
Singapore Post: Awaiting news of larger acquisitions
In recent months, Singapore Post (SingPost) has been acquiring stakes in companies to build its non-mail businesses – it completed the 100% acquisition of General Storage Company Pte Ltd (GSC) in end Jan for S$37m and the 62.5% acquisition of Famous Holdings Pte Ltd (FH) in end Feb this year for S$60m. We see synergies with the group’s logistics and e-commerce businesses, but note that these acquisitions remain on a relatively small scale as we await news of larger acquisitions. Meanwhile, the stock has been trading in a range of S$1.18-S$1.23 since we downgraded it to HOLD on 28 Jan. We like SingPost’s stable operating cash flows and consistent dividends, but see few re-rating catalysts for now. Maintain HOLD with S$1.23 fair value estimate. (Low Pei Han)

Cache Logistics Trust: Private placement to fund acquisition
Cache Logistics Trust (CACHE) has exercised the call option and entered into the S&P agreement with Precise Development Pte Ltd to acquire the fully ramp-up warehouse known as Precise Two last evening. Separately, CACHE is proposing to carry out a private placement of 70m new units to institutional and other investors at an issue price of S$1.24-S$1.265 apiece. About S$86.8m in gross proceeds are expected to be raised (based on S$1.24 issue price), of which 66.0% (~S$57.3m) will be used to wholly fund the proposed acquisition of Precise Two, while the balance will be deployed to fund future investments or pare down debt. We understand that the issue price will be determined by today. An advanced distribution of ~2.12 S cents per unit is also expected to be paid to entitled unitholders around 26 Apr. We are currently reviewing our estimates as we have previously anticipated the acquisition to be fully funded by debt. For now, we place our Buy rating and S$1.34 fair value under review. (Kevin Tan)  

ASCENDAS REIT | HOLD
ACQUIRES PROPERTY FOLLOWING PLACEMENT

- Purchase price of S$126.0m
- NPI yield at 6.8%
- Bigger presence in Science Park vicinity

Ascendas REIT (A-REIT) yesterday announced the proposed acquisition of The Galen at 61 Science Park Road for a purchase consideration of S$126.0m. The Galen is a six-storey multi-tenanted science park building located within Singapore Science Park II and has a NLA of 234,384 sqft. It is currently 97.5% occupied, with Ascendas Land and the REIT manager taking up c. 22.5% of the lease space. The property, we note, was first mentioned as a potential acquisition asset when it raised S$406.4m through a private placement of 160m new units on 8 Mar. According to A-REIT, the asset is expected to generate a NPI yield of 6.8% and add 0.052 S cents to its DPU on an annualised basis, assuming the acquisition is fully funded using the proceeds from the placement. This is in line with our initial assumptions made on the transaction. We maintain HOLD on A-REIT with an unchanged fair value of S$2.60.

From UOB KH:
Cache Logistics Trust- Building a S$200m war chest to
fund CWT Hub 3? (CACHE SP/BUY/S$1.31/Target:
S$1.45)
Maintain BUY with a lower target price of S$1.45 (from S$1.52)
factoring in the DPU dilution. We use DDM (required rate of
return: 6.5%, terminal growth: 2.0%) to value Cache.

Sabana Shari’ah Compliant REIT- Taking a breather.
Downgrade to HOLD. (SSREIT SP/HOLD/S$1.27/Target:
S$1.30)
We downgrade to HOLD (from BUY) with an unchanged target
price of S$1.30, based on DDM (required rate of return: 7.5%,
terminal growth: 2.0%). Entry price is S$1.13.

Super Group (SUPER SP, S10) –
Technical BUY with +8.6% potential return
Prices have formed a potential bullish hammer above its
potential resistance-turned-support level near its 100-day

First Ship Lease Trust (FSLT SP, D8DU) –
Technical BUY with +13.8% potential return
Prices have retraced towards its low formed during 4Q12 which
could be a support level and…
 
Midas Holdings (MIDAS SP, 5EN) –
Technical SELL with +12% potential return
Prices appear to be unable to close the gap down, which was
created on 22 Feb 13 and may continue to  

From Amfraser:
Cache Logistics Trust 
Close to being fully valued. Cache’s price-to-book ratio of 1.4 singles it out as one of the most expensive S-REITs currently (S-REITs have an average P/B of 1.15). While Cache could certainly command a slight premium to its S-REIT peers due to its earnings resilience and visibility of income stream, we believe that Cache’s growth prospects are already fully priced in. Reiterate HOLD with FV of S$1.335.

From DBS:
Yoma Strategic Holdings, Hold  S$0.775, Bloomberg: YOMA SP EQUITY Expanding hospitality business to Bagan, too early to ascertain changes to RNAV and TP Price Target : S$ 0.80  

Goodpack - Recent price weakness is a buying opportunity; upgrade to BUY with TP unchanged at S$1.95