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Monday, May 20, 2013

Local Brokerages Stock Call 17 May 2013

From OCBC:
Singapore Airlines – Share gains premature
Singapore Airlines (SIA) reported a weak set of 4Q13 results as passenger yields remained depressed following weak demand for its services. Revenue fell 1.0% YoY to S$3.7b and operating loss widened to S$44.2m. On a full-year basis, revenue inched 1.6% higher but operating profit declined 19.8% to S$229.2m. Only with the gains from disposal of aircraft and parts did it manage to post an increase in PATMI for both the quarter (S$68.3m vs. –S$38.2m) and FY13 (S$378.9m vs. S$335.9m). Management declared a final dividend of 17 S cents, which brought the total dividends declared for FY13 to 23 cents (FY12: 20 cents). With the lacklustre results, continuing challenges ahead, and possible disappointment over the lack of a special dividend that some on the street had anticipated, we expect selling pressure on the counter, especially after it gained ~8% since mid-Apr. Based on a peg of 0.8x P/Book, we downgrade SIA to SELLwith a fair value estimate of S$10.00 (S$10.85 previously). 

KS Energy: Recovery will take time
KS Energy (KSE) reported a 27.6% YoY rise in revenue to S$153.4m and a net profit of S$1.1m in 1Q13, vs a net loss of S$315k in 1Q12. Though the group’s operating profit went into the red again after four previous quarters in the black, we understand that operating profit would have been about S$8.3m had it not been for a one-off foreign exchange loss from the Titan 2 disposal. We estimate core net profit of about S$0.4m in 1Q13. Overall, the group expects business and operating conditions this year to “remain similar” to 2012. We review the valuations of KSE’s closest comparables on the SGX, and note that the average P/Book valuation is about 0.7x. We ascribe a ~20% premium to arrive at a 0.85x P/Book for KSE due to its integrated operations which are larger in scale in comparison to some of its peers. As such, our fair value estimate falls to S$0.50, based on 0.85x FY13/14F NTA. Maintain HOLD

From UOB KH:
Silverlake Axis - Key takeaways from management

Grows its recurrent earnings and ventures into insurance.
Potential huge contract from a top-five Malaysian bank.
Maintain BUY; raise target price to street-high of S$0.94.

Far East Orchard (FEOR SP, O10) -
Technical BUY with +17.1% potential return
Last price: S$2.22
Resistance: S$2.60
Support: S$2.05

BUY with a target price of S$2.60 with tight stops placed
below S$2.12. The stock has closed above its rising 50-day
moving average and above its mid Bollinger band. Its bullish
momentum is likely to continue as its MACD and Stochastics
indicators look poised to form a bullish crossover and its RSI
indicator has rebounded above a reading of 40. Watch to see
if the stock could break above its recent high and its upper
Bollinger band.

DMX Technologies Group Ltd (DMX SP, 5CH) -
Technical BUY with +31.2% potential return
Last price: S$0.240
Resistance: S$0.315
Support: S$0.20

BUY with a target price of S$0.315 with tight stops placed
below S$0.21. The stock is trading above its 200-day simple
moving average and the golden cross formed earlier has yet
to be negated. Its Stochastics indicator has formed a bullish
crossover in the oversold region and its RSI indicator has
turned up above a reading of 40. Watch to see if prices could
break above S$0.27 as its 50-day simple moving average
could hook up instead.

Parkway Life REIT (PREIT SP, C2PU) -
Technical SELL with +7.8% potential return
Last price: S$2.70
Resistance: S$2.82
Support: S$2.49

SELL with a target price of S$2.49 with tight stops placed
above S$2.80. The stock could be moving sideways as prices
have been resisted by its upper Bollinger band and have
closed below its mid Bollinger band. Its MACD has formed a
bearish crossover and has hooked down, and its minus
directional indicator looks poised to cross above its plus
directional indicator. Watch to see if the stock could continue
to be supported by its rising 75-day moving average.
Our institutional research has a fundamental HOLD with a
target price of S$2.70.

From Maybank KE:
Singapore Airlines: Weak End To The Year; Upgrade to Hold, TP $11.70
SIA SP | Mkt Cap USD10.7b | ADTV USD7.3m

We upgrade SIA to Hold (from Sell) as we see limited downside with its
valuations near recession levels. Furthermore, the stock is well supported
by its net cash position of c.SGD3.7/shr.
SIA reported slightly disappointing earnings of SGD68mn in the quarter,
which was flattered by the SGD54.7mn gain on disposal of ppe.
We  expect  weakness  in the passenger yield to continue into the next
quarter  on  seasonal  factors.  However, further downside to cargo yields
should be limited by the ongoing measures to rein in capacity.
We lift our Target Price to SGD11.70, pegged to 1.0X FY14E BVPS. 

From DBS:
Tat Hong has entered into a non-binding heads of
agreement with Intraco and Mr Aung Moe Kyaw to
establish a JV in Singapore to carry out crane rental and
distribution to Myanmar. The shareholding of the
Singapore JV will be 40%/40%/20% for Tat
Hong/Intraco/Mr Aung with expected initial paid up
capital of US$3m. No impact on our call since the
development is very preliminary. We currently have a BUY
recommendation with TP of S$1.80.

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