Local Brokerages Stock Call 18 July 2013

From DBS:
As expected, 2Q13 net profit for Keppel Land was flat y-o-y,
dragged by lower associate income. Looking ahead, there will
be more new offerings in Singapore and China in 2H13, with
balance sheet having room for more investments. Maintain
BUY, TP S$4.66 (Prev S$ 4.68).

2Q13 results for CapitaCommercial Trust in line. The expiry of
yield protection income for One George Street is expected to
negatively impact 2H13 earnings. However, management has
indicated a willingness to utilise a portion of their retained
distributable income from Quill Capita Trust in order to
stabilise the DPU going forward. CCT has also announced
new AEI works at Capital Tower. Maintain HOLD, TP revised
lower to S$1.62 (Prev S$ 1.72).

Cosco has secured a contract worth over US$200m from
repeat Mexican customer – COTEMAR, to build one Harsh
Environment Semi Submersible Accommodation Vessel. This
is an exercise of one of the two options granted to COTEMAR
together with the contract for similar vessel in May 2012. The
vessel is scheduled for delivery in 24 months. The latest
contract takes Cosco YTD wins to US$944m, forming 47% of
our order win assumption of US$2bn. Upstream reported in
early June that Cosco is signing contracts for two drillships
worth US$650-700m each with X-Drill. If this materialise,
Cosco will beat consensus' order win assumption this year.
While the recent slew of order flow is encouraging, we
remain concerned over Cosco's project execution particularly
for the new vessel types. Positive order win momentum will
likely be overshadowed by poor earnings visibility, in our
view. Hence, we maintain our FULLY VALUED call and TP:
S$0.75. Cosco's 1H13 results will be due on 1st Aug.

From UOB KH:
Jardine Cycle & Carriage (JCNC SP, C07) –
Technical SELL with +11.8% potential return
Last price: S$40.85
Resistance: S$44.00
Support: S$36.00
Maintain SELL with a revised target price of S$36.00
with tight stops placed above S$42.60. The stock could
continue to trend lower as its mid Bollinger band could
be acting as a resistance and prices are also below its
declining 50- and 200-day moving averages. Its
Stochastics indicator has formed a bearish crossover.
Watch to see if prices could break below S$40.00 for
further downside.

QAF (QAF SP, Q01) –
Technical BUY with +9.6% potential return
Last price: S$1.04
Resistance: S$1.15
Support: S$0.97
BUY with a target price of S$1.15 with tight stops placed
below S$1.00. The stock may trend higher as prices
appear to be trading above its rising 15- and 35-day
moving averages, which acted a support. Its positive
directional index looks poised to rise correspondingly
with its rising ADX. Watch to see if prices could break
above its recent high near S$1.08 for further upside as
its Stochastics indicator has hooked up.

Rotary Engineering (RTRY SP, R07) –
Technical BUY with +12.9% potential return
Last price: S$0.54
Resistance: S$0.62
Support: S$0.46
BUY with a target price of S$0.62 with tight stops placed
below S$0.50. The stock looks poised to edge higher
and the odds could increase should a golden cross form
on its 50- and 200-day moving averages. Its positive
directional index has risen correspondingly with its rising
ADX. Watch to see if the stock could break above
S$0.55 for further upside.

CapitaCommercial Trust - 2Q13: Stability in the midst of adversity.
(CCT SP/BUY/S$1.48/Target: S$1.74)
FY13F DPU (S$ Cents): 8.0
FY14F DPU (S$ Cents): 8.0
Results in line with expectations. CapitaCommercial Trust (CCT)
reported a 2Q13 distributable income of S$59.6m (+1.9% yoy, +7.0% qoq)
and a DPU of 2.07 S cents (+0.5% yoy, +5.6% qoq). 1H13 DPU is in line
with our expectations, accounting for 50.1% of our full-year DPU estimate
of 8.0 S cents. 1Q13 revenues improved 1.8% yoy to S$97.5m while net
property income dipped 0.5% yoy to S$74.9m, as better performance at 6
Battery Road and higher rental contribution from HSBC Building were
offset by lower occupancy at Capital Tower and higher property tax and
operating expenses. Revaluation gain of S$85.3m from mid-year
revaluation of properties. With cap rates unchanged at 3.75% for Grade-A
offices, gains were achieved primarily from higher signing rentals at CCT’s
properties and lower cap rates at Raffles City (down 15-20bp for retail and
hotel components). Management also highlighted that, as the government
has an option to terminate the state lease for Bugis Village in 2019 with a
minimum payout of S$6.6m inclusive of accrued interest, valuations at
Bugis Village (S$59m) will be trending down towards 2019.

Maintain BUY with a target price of S$1.74 based on DDM (required rate
of return: 7.2%, terminal growth: 2.2%). Share price catalyst includes
positive newsflow on hiring, pre-leasing activity and pick-up in office
rentals.

Keppel Land - 2Q13: Deploys its formidable balance sheet.
(KPLD SP/BUY/S$3.57/Target: S$5.11)
FY14F Dividend yield (%): 3.4
FY15F Dividend yield (%): 3.4
Results in line with expectations. Keppel Land reported 2Q13 net profit
of S$94.7m, down 2.5% yoy due to the lower bumper contributions from
Reflections at Keppel Bay, offset by contributions from The Lakefront
Residences and The Luxurie. 1H13 results were in line with our
expectations accounting for 46% of our full-year forecast of S$417m. Net
profit from property investment was up 32% yoy to S$24.5m with improved
performance from Keppel REIT (KREIT) and higher contribution from
Marina Bay Financial Centre (MBFC) Tower 3. Earnings from property
fund management fell 39% yoy to S$9m due to the absence of KREIT
acquisition fees earned in 2Q12. Geographically, Singapore accounted for
the bulk 74% of profit contributions in 1H13, due to contribution from
associates MBFC Tower 3, KREIT and development properties such as
Marina Bay Suites, with the remaining largely from China residential
projects.

Maintain BUY with unchanged target price of S$5.11/share, pegged at
5% discount to its RNAV of S$5.37/share. Key catalysts include
acquisitions, divestment of its office assets and sustained recovery in
China sales.