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Tuesday, April 23, 2013

Local Brokerages Stock Call 23 April 2013

From OCBC:
Wilmar: Acquires 27.5% stake in Cosumar SA
Wilmar International Limited (WIL) has acquired a strategic 27.5% stake in Cosumar SA – a Morocco-based sugar producer – for MAD2.3b (US$263m), funded by internal funds and bank borrowings. WIL believes that Cosumar provides the group with the opportunity to service a large and growing structural deficit in sugar in Morocco and the surrounding regions of Southern Europe, Northern and Western Africa. While we see the latest acquisition dovetailing nicely with WIL’s strategy of becoming a global sugar player, the near-term impact is likely going to be muted by still-weak sugar prices. Weaker sugar prices notwithstanding, we believe that WIL’s large distribution network in China puts the group in a good position to capitalize on the expected increase in sugar consumption there. Maintain BUY with an unchanged S$3.90 fair value (based on 15x FY13F EPS).  
Hospitality Sector: Wary about 2013
Summary: We have analyzed the relationship between the YoY change in average RevPAR and YoY change in average tourism receipts per visitor arrival. In general, the signs of both are the same for the same year, with change in RevPAR being of larger magnitude than the change in average tourism receipts. 2012 was an exception, where average tourism receipts per visitor fell ~5.5% YoY while RevPAR grew 5.7% YoY. STB’s targets imply that average tourism receipts per visitor may fall by 1% YoY. This further supports our cautious view regarding RevPAR performance in 2013. STB preliminary data supports what we have been saying since Dec: 1Q13 performance for the sector will be weak. 2M13 RevPAR fell 3.1% YoY to S$215.00. Economy hotels were the best performers. We remain NEUTRALon the hospitality sector. Our top pick is Global Premium Hotels [BUY, FV: S$0.33], which is a longer-term asset value play in the Economy space. 

From UOB KH:
Aviation Support Services- Tap here for higher yields;
raise our target price for SIAEC to S$5.60.

BUY SIAEC. On 11 April, we highlighted that SIAEC’s dividend
yield is likely to be compressed, vs that of STE and SATS. We
also highlighted the possibility of a special dividend payout.
Since then, the stock has risen 17 S cents to close at S$5.06.
We now raise our target price to S$5.60.

Indofood Agri Resources (IFAR SP, 5JS) –
Technical BUY with +11.1% potential return

Last price: S$1.125
Resistance: S$1.25
Support: S$1.07
BUY with a target price of S$1.25 with stops placed below
S$1.07. The stock closed with a potential bullish hammer
pattern pending a follow-through with prices trading above
S$1.10 with the lower Bollinger band acting as a support. Its
Stochastics indicator has formed a bullish crossover and its
RSI indicator has turned up above a reading of 20. Watch to
see if its MACD could also form one as well.
Our institutional research has a fundamental HOLD with a
target price of S$1.30.

Hongkong Land Holdings (HKL SP, H78) -
Technical SELL with +6.8% potential return

Last price: US$7.40
Resistance: US$7.65
Support: US$6.90
SELL with a target price of US$6.90 with stops placed above
US$7.65. The stock has formed a lower high and been
resisted twice near its potential support-turned-resistance
level near US$7.65 and closed below its mid Bollinger band
and its 50-day moving average. A break below US$7.40 and
its MACD centreline is likely to see more selling pressure.
Watch to see if its 200-day moving average could act as a
Our institutional research has a fundamental SELL with a
target price of US$6.43.

From Maybank KE:
CapitaMalls Asia: Positive Outlook Maintained; Maintain BUY, TP $2.57
CMA SP | Mkt Cap USD6.2b | ADTV USD12.5m

CMA  will  report  its 1Q13 results on 24 April, and we expect its core
PATMI  to  rise  12%  QoQ and 22% YoY to ~SGD44m, with higher contribution
from the malls completed last year and positive rental reversion.
Its REITs, which account for about half of its core PATMI, have reported
healthy  operating  metrics  for  1Q13.  We  would  expect  to see similar
performance  from  the rest of CMA’s portfolio, which will underpin future
rental  reversion.  In  addition, we would look out for any updates on its
acquisition outlook.
CMA  remains  our  top  pick  for  its  strong  track record and market
leadership  in  the  retail  property  segment. Reiterate BUY with a price
target of SGD2.57.

From DBS:
4Q13 results for Mapletree Commercial Trust were slightly
ahead of our expectations. Organic growth will be a main
driver for FY14. While we believe that the current price fully
reflects the positives of the current portfolio, we remain
optimistic that given the significant pipeline from its sponsor,
acquisitions will remain a key feature for MCT. Maintain BUY,
TP raised to S$1.53 (Prev S$ 1.37).

Tiong Seng Holdings: BUY; S$0.28; TSNG SP
Myanmar beckons
Price Target : 12-Month S$ 0.33
•        MOU with Shwe Taung for a JV company in Myanmar to operate a precast plant
•        Strategically positive for Tiong Seng but earnings impact is not likely to be significant in the immediate term
•        BUY, TP S$0.33

From CIMB:

Tiger Airways
Positive, but still too early
UNDERPERFORM - Maintained | S$0.66 - Tgt. S$0.63
US$520.3m | Avg.Daily Vol: US$1.19m | Free Float: 45.00%
What You Should Do
Maintain Underperform with de-rating catalysts expected from its continued cash burn. Our SOP target price is based on 13.5x CY14 EPS (LCC industry’s 5-year forward average), including proceeds from the sale.  

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