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Tuesday, March 26, 2013

Local Brokerages Stock Call 26 March 2013

From CIMB:

Raffles Medical Group

RFMD had been hit by a series of setbacks in the last two weeks. We think this is the time to revisit its financials, operational expansion and various greenfield projects. Our conversation with management suggested that we are on the right track with this argument. No change to our EPS but our target price has been raised, now based on 25x CY14 P/E (from 22x), on par with its regional peers given its proven execution. Maintain Outperform with the resumption of operating efficiencies providing potential catalysts.  

Outperform with higher target price
Our numbers are not affected by the setback in Orchard Road as we had not
factored in growth from services there. Similarly, our numbers do not capture
sale proceeds from any sale of this real estate. We lift our target to 25x CY14
P/E (from 22x) to reflect its proven execution that should place it on par with
its regional peers. Accordingly, our target price climbs to S$3.81 (from S$3.50). 


Mid Cap Highlight: Ying Li - Deeply Discounted Asset Play
The stock is currently trading at a 46% discount to its RNAV despite gaining
21.6% ytd. With the appointment of a new CEO, we see potential new growth
drivers. Share price catalysts include a potential spin-off of its retail
properties into a REIT to recycle capital. Maintain BUY. Target price: S$0.65.  

Hafary Holdings (HAFA SP) –
Technical BUY with +26.4% potential return
Last price: S$0.435
Resistance: S$0.55
Support: S$0.375
BUY with a target price of S$0.55 with stops placed below
S$0.40. The stock may continue to form new highs after it
gapped up and is trending above its mid Bollinger band as
well as its 20-day exponential moving average. Its
Stochastics indicator has hooked up. Watch to see if its MACD
indicator could form a bullish crossover.

Yoma Strategic Holdings (YOMA SP, Z59) –
Technical SELL with +14.4% potential return
Last price: S$0.795
Resistance: S$0.925
Support: S$0.51
SELL with a target price of S$0.68 with stops placed above
S$0.83. The stock has broken below its rising trend line and
formed lower highs and lower lows. Its mid Bollinger band
could be acting as a resistance. A break below its 40-day
moving average could see more selling pressure. Watch to
see whether the stock could be supported above its 150-day
moving average.

First Resources (FR SP, EB5) –
Technical SELL with +13.6% potential return
Last price: S$1.90
Resistance: S$2.20
Support: S$1.50
SELL with a target price of S$1.64 with stops placed above
S$1.96. The stock appears to form lower highs and lower
lows as well as a potential bearish crossover. A dead cross on
its 50- and 200-day moving averages has also formed. Watch
to see whether its Stochastics and MACD indicator will form a
bearish crossover as its RSI indicator has turned down.
Our institutional research has a fundamental BUY with a
target price of S$2.35. 

From OCBC: 

UE E&C: Healthy pipeline of projects
We met the management of UE E&C last week for an update. Despite the labour crunch in the construction industry and the cooling measures introduced by the government, management remains upbeat. The group has implemented productivity enhancement measures and adopted new technologies to facilitate work processes to help mitigate the tighter manpower constraints and rising costs. Meanwhile, the group has an estimated order-book of S$600-800m, anchored by four key residential developments: Austville EC, Watercolours EC, Prince Charles Crescent and the new Punggol EC. We now roll forward our estimate to FY13F and incorporate projections for the new Punggol EC project. This increases our SOTP fair value to S$0.82 (previously S$0.68). Upgrade to BUY. (Chia Jiunyang)

Global Palm: HOLD with lower S$0.17 FV
Global Palm Resources (GPR) continues to see a rise in its inventory of CPO (crude palm oil), this time more than doubling to 7.7k tonnes from 3.4k tonnes at end 3Q12 (also up 19% YoY). And with the continued high production of CPO (which is likely to continue into Mar as company expects FFB production to increase some 11% this year), GPR may see its stock pile inching even higher going into 2Q13. Meanwhile, new planting has been slow – GPR only added 331k ha last year – and plans to plan 300-400ha this year, citing tough negotiations with the local population. Recent FY12 results were slightly disappointing – GPR reported a net loss of IDR39.8b; but if we strip out the bio-asset fair value losses, core earnings would have come in at IDR51.5b, or 10% below our forecast. In view of the still muted outlook for CPO, we cut our FY14 forecast for revenue by 13% and core earnings by 12%; this also brings our fair value down from S$0.19 to S$0.17, still based on 10x FY13F EPS. Maintain HOLD. (Carey Wong) 


CapitaCommercial Trust: Rise of another icon (Neutral, S$1.61, TP:

We visited CapitaGreen’s showroom yesterday morning and were
wowed by its: i) 40th-floor sky garden and restaurant, ii) innovative
technology which directs cool air inwards, and iii) unique dual facade
that cuts solar heat, among others. Set to be CCT’s next growth driver,
it offers c. 700,000 sq ft of Grade-A office space and is scheduled to
receive its TOP by 4Q14. Due to a dearth of immediate drivers, however,
CCT is still a NEUTRAL and its SGD1.70 TP remains unchanged as the
contribution from CapitaGreen would only stream in by FY15. 

From Maybank KE

Suntec REIT: Suntec City Mall AEI in full gear; Buy TP $1.90
SUN SP | Mkt Cap USD3.2b | ADTV USD11.5m

Asset enhancements at Suntec City Mall (SCM) have stepped up with the impending completion of Phase 1 and the commencement of Phase 2. Judging by the intensity of the refurbishment works, the overall AEI should be completed on schedule in 4Q14.
Post-AEI rental increases could also surpass expectations. We think SGD13.50 psf/pm (vs SGD12.59 psf/pm targeted by Suntec) is possible and we have thus raised FY14F DPU by 1% to reflect this. This should offset the expected FY13 dip in DPU caused by the AEI.
Reiterate BUY on a higher TP of SGD1.90. We are positive on the earnings enhancement potential of the ongoing AEI, which has seen pre-commitments hitting 83% for Phase 1 and 37% for Phase 2, which is completing at the end of 2013.

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