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Thursday, May 9, 2013

Local Brokerages Stock Call 7 May 2013

From UOB KH:
Global Premium Hotel Ltd-Stable Set Of Results While
Trading Deep Below NAV
(GPHL SP/BUY/S$0.255/Target: S$0.34)

Maintain BUY with a target price of S$0.34, pegged to our
dividend discounted cashflow model (DDM). Currently, the
stock is trading at 0.66x FY12 P/B with a dividend yield of

Yongnam Holdings Ltd (YNH SP, Y02) -
Technical BUY with +26.9% potential return

Last price: S$0.315
Resistance: S$0.40
Support: S$0.29
BUY with a target price of S$0.40 with tight stops placed
below S$0.295. The stock has been trading sideways for
more than three years and has been trending above its 50-
day moving average after having formed a golden cross
earlier. Its Stochastics indicator has hooked up and its MACD
indicator looks poised to form a bullish crossover.
Our retail research has a fundamental BUY with a target price
of S$0.40.

Yamada Green Resources Ltd (YGR SP, MC7) -
Technical BUY with +34.6% potential return

Last price: S$0.26
Resistance: S$0.35
Support: S$0.22
BUY with a target price of S$0.35 with stops placed below
S$0.22. The stock appears to close above its mid Bollinger
band and could break out of the Bollinger band squeeze after
having broken above its downward sloping resistance line. Its
Stochastics has formed a bullish crossover and its RSI
indicator has turned up above a reading of 40. Watch to see
if its MACD indicator could also form a bullish crossover as

Olam International (OLAM SP, O32) -
Technical SELL with +9.7% potential return

Last price: S$1.65
Resistance: S$1.75
Support: S$1.49
SELL with a target price of S$1.49 with tight stops placed
above S$1.70. The stock appears to be resisted by its
declining 150-day moving average and prices have closed
below its mid Bollinger band. Its Stochastics indicator
appears to form a bearish crossover and its MACD indicator
appears to form a bearish crossover below its centreline.
Watch to see prices could break below S$1.57 and whether
its RSI indicator could continue to trend down.
Our institutional research has a fundamental BUY with a
target price of S$1.98.

ComfortDelGro Corporation- Diversity shines in the face of adversity.
(CD SP/HOLD/S$1.99/Target: S$1.92)

FY13F PE(x): 17.0
FY14F PE(x): 16.3
Solid returns underpinned by strong FCF. Over the past 10 years, ComfortDelGro (CD) has delivered an average return of 12.1%, of which about 3.6% was attributed to dividends. We estimate that CD’s dividends of about S$140m (6.6 S cents/share) will be
underpinned by its free cash flow (FCF) of more than S$200m p.a. in 2013-15. We forecast FCF yield at 4.9% in 2013 and 7.0% in 2014.
Value-accretive M&As. Management has a good track record of completing accretive acquisitions. As an indication, CD has executed three acquisitions in Australia since 2008 and these companies are performing well, delivering operating margins of
more than 19%.
Maintain HOLD and DCF-derived (cost of equity 6.5% terminal growth 2%) target price of S$1.92. We like CD for its consistent ability to balance the challenging domestic public transport segment with contributions from overseas operations. However, we
see challenges from near-term cost escalation ahead of the roll-out of DTL, while the current yield of 3.3% is also not particularly compelling. Entry price is S$1.67.

United Overseas Bank- Key takeaways from Corporate Day.

FY11 PE(x): 15.1
FY12 PE(x): 12.5
UOB held its Corporate Day yesterday, which was well attended by analysts and fund managers. The presentation focused primarily on Basel III capital and liquidity requirements. Head of Capital Management Leong Hong Yew presented on Basel III capital reforms while Head of Balance Sheet Risk Management Heng Li Koon presented on Basel III liquidity reform.
Management expects performance to moderate in subsequent quarters. In particular, the spectacular loans-related fee income seen in 1Q13 is unlikely to be repeated due to the chunky loan booked in Singapore. Overall, fee income is anticipated to grow at
about 15%. Management has maintained its guidance of high single-digit loan growth for 2013. UOB will continue to expand in overseas markets, which provide better margins and stronger growth. Management expects higher growth and stable NIM in Thailand and
Indonesia. It expects muted growth and NIM to be under pressure in Malaysia.

From OCBC:
Ascott Residence Trust: Acquisition of assets in China and Japan
Ascott Residence Trust (ART) has entered into conditional agreements to acquire three prime serviced residences in China and a portfolio of 11 rental housing properties in Japan for S$287.4m at an EBITDA yield of 5.4% on a pro forma basis for FY12. On a pro forma basis, these accretive acquisitions are expected to have increased FY12 distribution per unit by 2.9% from 8.76 S cents to 9.01 S cents. However, with the Japanese Yen currently ~22% weaker in SGD-terms versus the FY12 average, any accretion post-acquisition is likely to be lower. The acquisitions will be funded partly by the S$150m recently raised from an equity placement and the balance will be funded by debt. We maintain our FV of S$1.35 and HOLD rating on ART. 

Swiber Holdings: Still bidding for projects
According to Upstream, Punj Lloyd is poised to win a US$131.45m contract from India’s state-owned ONGC to lay subsea pipelines and execute topside modification work for the B-127 field development in India. We understand that Swiber was the highest bidder for the project with a 13.3% difference from Punj Lloyd’s price quote. Meanwhile, Swiber is still bidding for other work; management has been upbeat regarding its potential pipeline. Despite the positive industry outlook, we would continue to monitor operating margins and cash flows of the group. Meanwhile, the stock price has fallen by about 1.6% YTD vs the STI’s 6.9% rise. Though there is currently a more than 10% upside for the stock, we prefer to maintain our HOLD rating and fair value estimate of S$0.70 on Swiber, pending its 1Q13 results announcement next week

From Maybank KE:
Yongnam Holdings: Positive NDR affirms our conviction BUY, TP $0.45
YNH SP | Mkt Cap USD328m | ADTV USD2.3m

Our recently concluded non-deal roadshow in Singapore drew high levels of interest from institutional fund managers, with the Asian infrastructure theme of particular relevance.
Management expects the resumption of major contract wins in the 2nd half of this year, which we think will be positive stock catalysts.
Yongnam’s consortium is amongst the front-runners for the Myanmar airport projects. We reiterate BUY ahead of 2H13, which is shaping up to be an interesting period with major catalysts in store.

Sarin Technologies: Outshines Itself with New Record, Buy TP $1.66                               SARIN SP | Mkt Cap USD387m | ADTV USD0.2m
Sarin reported a record quarter with 1Q13 revenue of USD20.2m (+3% YoY, +42% QoQ) and net profit of USD8.1m (+3% YoY, +111% QoQ). 1Q13 net profit makes up 26% of our FY13F forecasts.
9 Galaxy systems were delivered in 1Q13, weaker than expected as deliveries were held back by the Passover holiday in Israel and bureaucratic issues in India on their fiscal year end. Sales should accelerate in 2Q13 as orders have almost matched that of 1Q13 already.
We upgrade our TP to SGD1.66, valuing it at a higher FY13F PER multiple of 15x as we grow more confident in its future growth prospects. We forecast a 31% CAGR in EPS over FY13-15F.

Singapore Post: A Good Yield Stock, But Too Expensive, Hold TP $1.28
SPOST SP | Mkt Cap USD2.0b | ADTV USD3.7m

SingPost’s 4QFY3/13 net profit dropped by 15% to SGD26m mainly due to intellectual property rights write-off of SGD5.7m. On full-year basis, net profit dropped by 4% to SGD136m, in line with our estimate of SGD134m.
Cost pressure remains and the investment plan could eat into margins in medium term.
We think the current 4.8% yield is not attractive. Maintain our HOLD rating but change our TP to SGD1.28 as we roll forward our valuation base to FY3/14.

From DBS:
Singapore Post’s FY13 underlying profit of S$140.9m
(+4.1% y-oy) was 3% ahead of our estimates on the back
of better organic and inorganic growth. FY14 is expected
to benefit from full-year contribution of acquired
companies. FY14/15 EPS raised by 14%/19%. Upgrade to
BUY with revised TP of S$1.56 (Prev S$ 1.14) as we see
significant growth in addition to 4.9% yield. Its strong
free cash generation supports dividends.

It has been reported that port workers at HPH Trust’s port
have ended their strike as they accepted a 9.8% wage
increase, in contrast to the 23% increase they were
seeking and the 6%-7% that was offered previously.
Whilst 2Q numbers will be somewhat affected, it is a
positive that this strike is now over. The 9.8% increase in
HK port wages is within our recently adjust numbers and
we maintain our estimates, as well as BUY
recommendation and target price of US$0.87. The stock is
currently offering c. 7% yield.

Super Group has announced its entire disposal of 35.3%
associated company Sun Resources, which develops
property in China which is non-core investment for Super,
for S$26m. Super will book in net gain of S$16m which
will increase earnings and dividend estimate by 14% for
FY13F. Dividend yield will increase from 2.2% to 2.5%
assuming minimum of 50% dividend payout is made in
FY13F. Maintain BUY and S$4.68 TP. 


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