Local Brokerages Stock Call 9 July 2013

From OCBC:
Ascendas REIT: Under-rated industrial blue chip
We are turning positive on Ascendas REIT (A-REIT). Its unit price has fallen by 22.7% from its peak of S$2.86 on 15 Apr, due partly to concerns on an early tapering of US Federal Reserve’s quantitative easing programme and an accompanying hike in interest rates. Based on our analysis on interest rates, however, we believe that the impact on A-REIT’s DPU and book value is likely to be limited, as a considerable 74.8% of its total debt is fixed and the weighted average term of debt is a long 3.9 years. At present, A-REIT is trading at 1.14x P/B, even lower than some of its peers’ P/B ratios in the industrial REIT space, which are hovering around the 1.2x mark. In addition, A-REIT’s forward DPU yield of 7.2% is comparable to the subsector average yield of 7.5%. This is despite the fact that A-REIT is the largest Singapore-listed industrial landlord by market cap and portfolio size. We revise our fair value from S$2.63 to S$2.45 to reflect current higher risk-free rates but upgrade A-REIT from Hold to BUY on attractive upside potential.

Midas Holdings: Seeking more contract wins
Midas Holdings (Midas) recently clinched a CNY44.3m metro contract, thus bringing total YTD order wins to ~CNY423.2m. Looking ahead, Midas will continue to strive for potential new metro and international railway contract wins of ~CNY380-580m for the rest of 2013. We are buoyed by the positive news flow happening in China’s metro industry, and see Midas as a key beneficiary given its track record as a supplier to major Chinese train manufacturers. However, the time frame for new high-speed railway train car tenders by the China Railway Corporation remains uncertain, although there is optimism that it could be resumed in 3Q13. Maintain our BUY rating and S$0.54 fair value estimate on Midas, pegged to 1.1x FY13F P/B. 

From UOB:
Hongkong Land Holdings (HKL SP, H78) –
Technical SELL with +9.2% potential return
Last price: US$6.69
Resistance: US$7.09
Support: US$6.22
SELL with a target price of US$6.22 and tight stops
placed above US$6.84. The stock is likely to continue to
trend lower as it appears to be resisted by its declining
50-day moving average and its 50-day and 200-day
moving averages look poised to form a dead cross. Its
daily Stochastics has formed a bearish crossover and
could trend down. Watch to see if prices could retest the
previous low on 25 Jun 13. Our institutional research
has a fundamental SELL with a target price of US$6.43.

Triyards holdings (ETL SP, RC5) –
Technical BUY with +10.0% potential return
Last price: S$0.710
Resistance: S$0.815
Support: S$0.685
BUY with a target price of S$0.815 and tight stops
placed below S$0.685. The stock has rebounded from
its recent low and prices have closed above its mid
Bollinger band. Its daily Stochastics indicator has
hooked up and may continue to trend higher. Watch to
see if prices could break above its declining 35-day
moving average for further upside. Our institutional
research has a fundamental BUY with a target price of
S$1.11.

Jiutian Chemical Group (JIUC SP, C8R) –
Technical BUY with +16.1% potential return
Last price: S$0.109
Resistance: S$0.13
Support: S$0.10
BUY with a target price of S$0.13 and tight stops placed
below S$0.10. The stock is likely to continue to trend
higher as its rising 50-day moving average appears to
be acting as a support, with prices closing above its mid
Bollinger band. Its daily MACD indicator has formed a
bullish crossover and could continue to trend up higher.
Watch to see whether the stock could break above its
recent high at S$0.123.

From Maybank KE:
Suntec REIT: Reward Awaits The Patient Investor; Maintain Buy TP $1.75
SUN SP | Mkt Cap USD2.8b | ADTV USD14.0m
Suntec’s 2Q13 DPU is likely to be lackluster, dragged down by Suntec
City  Mall’s  (SCM)  ongoing  renovation  works.  We  estimate that the
largest  dip on FY13 DPU will occur in both 1Q & 2Q13, when Phase 1 new
tenants  have  yet  to start paying rentals and Phase 2 old tenants are
being vacated for the AEI.
We  noted  that many Phase 1 tenants (H&M, Uniqlo, etc.) have begun
operations in Jun, but they are likely to be still on rent-free periods
(1-2  mths.  We  forecast 2Q13 DPU at 2.23 SG-cts (flat QoQ; -5.5% YoY)
and FY13 DPU at 9.23 SG-cts. (-2% YoY).
Suntec  received cash proceeds of ~SGD147m from the sale of Chijmes
in  1Q12.  So  far, it has topped-up SGD2.7m in 1Q13 and we do not rule
out  another  top-up  in  2Q13,  as 1Q13/2Q13 quarters will witness the
largest  occupancy  dip.  We  raise  our risk-free rate to 3% from 1.4%
previously. Reiterate BUY with reduced TP of SGD1.75.

From DBS:
Volume growth at Hutchison Port Holdings Trust terminals in
HK has been below par so far in FY13, with the port workers’
strike in April adding to the woes. But the worst should be
over and even though Europe trade remains weak, US
volumes show relatively positive signs and upcoming peak
season should provide more visibility for investors. Our analyst
has revised down FY13/14F DPU by 8%/6% to 5.3UScts/
5.9UScts, given lower volume estimates. 1H13 DPU could be
around 2UScts, and should improve in 2H13 in line with trade
flows. Maintain BUY with lower TP of US$0.82 (Prev US$
0.87). HPHT share price has corrected significantly in line with
market sentiment, and we believe it has more than priced in
lower DPU expectations.