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Thursday, May 30, 2013

Local Brokerages Stock Call 30 May 2013

From UOB KH:
Jardine Cycle & Carriage (JCNC SP, C07) -
Technical SELL with +13.4% potential return

Last price: S$46.79
Resistance: S$49.00
Support: S$40.50
SELL with a target price of S$40.50 with tight stops placed
above S$49.00. The stock appears to have failed to continue
with its rebound and prices have been resisted by its
declining 50-day moving average. A dead cross has formed at
its 50- and 200-day moving averages. Its MACD line is below
its centreline and its Stochastics indicator looks poised to
form a bearish crossover. Watch to see if the stock could
move below its recent low of S$44.70, which is also near its
lower Bollinger band.

Swing Media Technology Group (SWM SP, O2F) -
Technical BUY with +15.3% potential return

Last price: S$0.124
Resistance: S$0.143
Support: S$0.11
BUY with a target price of S$0.143 with tight stops placed
below S$0.115. The stock has formed higher lows and has
been trading above its mid Bollinger band. A golden cross
looks poised to form at its 10- and 35-day moving averages.
Its RSI has turned up above a reading of 40 and a bullish
crossover has formed at its Stochastics indicator. Watch to
see if its MACD could move above its centreline.

Sound Global (EPUR SP, E6E) -
Technical BUY with +13.6% potential return

Last price: S$0.625
Resistance: S$0.71
Support: S$0.565
Maintain BUY with a higher target price of S$0.71 with
tight/trailing stops placed below S$0.585 (previous technical
buy was featured on 21 Mar 13 with a target of S$0.615,
stops below S$0.48). The stock has attempted to close the
gap down on 4 Mar 13 and prices have been supported above
its mid Bollinger band. A golden cross looks poised to form at
its 50- and 200-day moving averages. Its MACD indicator has
crossed above its centreline and appears to be trending up.
Watch to see if the stock could continue to trade above

Singapore Mid-cap Highlight: Courts Asia
We remain sanguine on prospects post the analyst briefing. CAL remains an attractive proxy on robust consumer demand in Singapore and Malaysia. BUY with a target price of S$1.20/share.
Background on CAL. CAL is Singapore’s largest and Malaysia’s second largest electrical, IT and furniture retailer in terms of 2011 total sales. The ‘Courts’ brand is associated with quality products at affordable prices. Under ‘Courts Flexi Schemes’, CAL operates a proprietary credit business, which allows customers to make purchases through credit accounts opened directly with CAL. Besides Singapore and Malaysia, CAL holds branding rights to operate in 16 other countries in Asia Pacific.
Updates on new store openings in Malaysia and Singapore. The company expects to open its 108,000sf Megastore in Malaysia in Aug 13; their targeted expansion plan is to have an average increase of 120,000sf a year in Malaysia. CAL will also be adding two new stores in Singapore by the end of this year.
Maintain BUY with a higher target price of S$1.20 (previously S$1.14). We raised our target price by 5% to rollover valuations to 2014 and to assume a lower discount of 10% to peers (previously 20%). We believe this to be justified as the group ventures beyond Singapore and Malaysia will drive medium- to long-term growth.

From DBS:
4Q13 headline net profit of S$6.8m for United Envirotech
met our S$6.2m forecasts but fell short if we exclude the
S$1.8m of forex gain. Higher contribution from EPC drags
margins but growing Treatment supports transformation
to a recurring earnings model. Earnings estimates are
intact as higher costs offset the increase in turnover.
However, higher tariffs and capacity have lifted
Treatment’s DCF valuation and therefore, our fair value is
lifted to S$0.97 (Prev S$ 0.74). UENV’s share price has
done exceedingly well, rising 90% YTD. We believe near
term upside will be capped, but acquisitions or new
contracts are re-rating catalysts. Downgrade to HOLD.

4Q13/FY13 results for Biosensors in line, driven by product
revenue segment, but licensing revenue disappoints. Our
analyst has cut FY14F/FY15F earnings by 11% and 2% on
lower licensing revenues. Outlook remains positive for
BIG’s worldwide business. Maintain BUY with lower TP of
S$1.64 (Prev S$ 1.71).

Ezra's subsea division EMAS AMC has secured a vessel
charter contract for its incoming pipelay vessel, Lewek
Centurion, from Norwegian subsea contractor Cecon for
the installation of some 60km of pipelines in 3Q-2013.
Contract value is however, unlikely to be material, given
that EMAS AMC will not be providing the subsea
installation services and will just secure day rates for
contract of the vessel to Cecon over a short period of
about 2 months. No change to our earnings estimates,

given that the contract win is within our expectations. In
the near term, healthy order win momentum will likely be
overshadowed by execution concerns, given that earnings
have lagged expectations in the last couple of quarters.
While the road to recovery will be bumpy, we see
earnings accelerating from 2H-FY13 onwards as the
project pipeline moves into execution phase. Re-rating
should be possible when Ezra demonstrates sustainable
earnings turnaround in coming quarters. Maintain BUY
and TP of S$1.56.

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