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Friday, June 7, 2013

Local Brokerages Stock Call 6 June 2013

From OCBC:
Genting Singapore: Upgrade to HOLD on valuation
Genting Singapore (GS) recently saw a pretty sharp tumble in share price, falling some 14% to a recent low of S$1.41, after we downgraded our call from Hold to Sell; this on the company posting slightly softer-than-expected 1Q13 results on 2 May. We have already pared our estimates after its 1Q13 results and we see no need for any revision for now. But we upgrade our rating from Sell to HOLD as the current share price is hovering around our unchanged DCF-based fair value of S$1.41.

Marco Polo Marine: Ceasing coverage
After BBR’s listing on the Indonesia Stock Exchange early this year, Marco Polo Marine (MPM) has been increasingly branding itself as an entity for investors to gain exposure to Indonesia’s growing offshore sector. Demand for larger sized AHTS vessels in Indonesia is expected to increase, benefitting owners such as MPM. Meanwhile, the ship repair business has seen a slow-down, which management thinks is seasonal. The ship chartering business, on the other hand, provides a steady base load of earnings. The long-term future of MPM looks bright, but time would be needed for significant earnings growth and a re-rating of the stock. We last rated MPM a HOLD with a fair value estimate of S$0.51. Due to a re-allocation of internal resources, we are ceasing coverage on this counter.

Midas Holdings: JV NPRT and consortium partners clinches CNY1.1b metro contract
Midas Holdings (Midas) announced that its 32.5%-owned JV company Nanjing SR Puzhen Rail Transport (NPRT) has, together with its consortium partners Shanghai ALSTOM Transport Electrical Equipment and ALSTOM Transport S.A., clinched a CNY1.1b metro contract. This is for the supply of 29 train sets (or 174 train cars) for the Nanjing Metro Line 4 Phase 1 project. Delivery is scheduled from 2014 to 2016. Although NPRT’s percentage share of the contract was not disclosed, we believe that it may be around the 70-75% range, after taking reference from previous contract wins by NPRT and its consortium partners. This would equate to a contract amount of ~CNY770-825m for NPRT, which is a sizeable win, in our opinion. Maintain BUY on Midas, with an unchanged fair value estimate of S$0.54, pegged to 1.1x FY13F P/B. 

From UOB KH:
Telecommunications – Singapore

Comments by Federal Reserve Chairman
triggered a reversal in US$-based
carry trades and a correction for yield
plays. QE3 could be scaled down if
incoming data show substantial and sustainable improvement in the labour
market. We believe recalibration of QE3 would be gradual and expect highly
accommodative monetary policy to be maintained for a considerable period
of time after QE3 ended. Upgrade Star Hub and M1 to BUY. Upgrade sector
From DBS:
Our analyst has raised FY14/15F earnings for Ezion by
3/15% after imputing an additional 4/8 vessels to fleet.
The group is poised to ride on the rising demand for
liftboat/service rigs in Asia and robust activities in United
States Gulf of Mexico (GOM). Ezion offers growth +
visibility. It has a unique business proposition that offers
fascinating growth and high earnings visibility, with about
90% of its revenue derived from long-term contracts,
coupled with an impressive EPS CAGR of 56% in FY12-
15F. Maintain BUY, TP raised to S$3.00 (Prev S$ 2.52).

Midas announced that its 32.5% owned JV company
Nanjing Puzhen (NPRT) and its consortium partners has
won a RMB1.1bn metro train contract to supply 174 train
cars to Nanjing Metro Line 4 Phase 1 Project, for delivery
between 2014 and 2016. This follows a recent win
announced on 29 May that NPRT had also won a 56-train
car supply project to Shenzhen Line 4 worth RMB420m,
for delivery in 2013 and 14. We estimate that these wins
would push NPRT's order book to c. RMB9.5bn, which
should lead to strong earnings for the JV from this year
onwards. At the same time, these recent wins of over 200
train cars for NPRT should also lead to supply contracts for
Midas' core business, which we estimate at RMB100m, to
add to its current c. RMB700m order book, leading the
way for an expected earnings recovery for Midas in 2H13.
Maintain BUY, TP S$0.60.

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