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Thursday, June 13, 2013

Local Brokerages Stock Call 13 June 2013

From OCBC:
Midas Holdings: Metro industry gaining momentum
Summary: Midas Holdings’ JV company NPRT recently secured three metro contracts amounting to ~CNY2.45b (assuming a 70% stake for one of the contracts won together with its consortium partners) within a span of two weeks. We believe this highlights the fast growing momentum of China’s metro industry. As Midas is also a key supplier to NPRT, we expect it to benefit positively from this. Despite the share of loss of NPRT to Midas’ FY12 and 1Q13 financials, we believe that the situation would improve from 2H13. Meanwhile, Midas’ management has also set its sights on growing its exports business, such as to the Russian railway market. We maintain our BUY rating and S$0.54 fair value estimate on Midas as we are still sanguine on its long-term outlook, but believe that the major re-rating catalyst would have to come from the resumption of new high-speed train car tenders from China. 

From Maybank KE:
United Engineers: Bite the Bullet; Cut to SELL, TP $1.86
UEM SP | Mkt Cap USD651.5m | ADTV USD0.9m

Downgrade to SELL and lower our TP to SGD1.86, inclusive of WBL acquisition costs, and apply a larger discount on UE’s property earnings.
UE has proposed a 1-for-1 renounceable rights issue to raise SGD490m to reduce its borrowings for its recent acquisition of WBL and increase UE’s financial flexibility. We think the rights issue is clearly an aggressive action by the major shareholders to force the minority shareholders’ hand.  
A total of 326.6m new shares will be issued with gross proceeds of SGD490m. Major shareholders such as OCBC and the Lee Family have agreed to irrevocably undertake and subscribe for the rights issue. 

From UOB KH:
Cache Logistics Trust (CACHE SP, K2LU) –
Technical BUY with +7.3% potential return

Last price: S$1.23
Resistance: S$1.32
Support: S$1.20
BUY with a target price of S$1.32 with tight stops placed
below S$1.19. The stock is trading near its prior resistanceturned-
support level near S$1.20 and prices managed to
close near to its rising 250-day SMA. Its Stochastics indicator
looks poised to form a bullish crossover in the oversold region
and could trend up. Watch to see whether there is a follow
through of its potential bullish hammer pattern.
Our institutional research has a fundamental BUY with a
target price of S$1.52.

Ascendas REIT (AREIT SP, OR5) –
Technical BUY with +11.7% potential return

Last price: S$2.30
Resistance: S$2.57
Support: S$2.20
BUY with a target price of S$2.57 with tight stops placed
below S$2.20. The stock is trading near its prior resistanceturned-
support level near S$2.20. Its Stochastics indicator
has formed a bullish crossover in the oversold region and
could trend up. Its RSI has correspondingly rebounded from a
level of 20. Watch to see whether its 50-day moving average
could hook up near its 200-day moving average instead.
Our institutional research has a fundamental BUY with a
target price of S$2.86.

Jardine Cycle & Carriage (JCNC SP, C07) -
Take profit on previous technical SELL

Last price: S$41.47
Resistance: S$49.00
Support: S$40.50
The stock was featured as a technical SELL on 30 May 13
when it opened at S$46.45 and did not stop out above
S$49.00. The stock has since returned 10.7% on closing
prices. Some profits could be taken off the table as the stock
appears to have rebounded near S$40.50. Watch to see if the
stock could close the falling gap created two trading sessions


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