Local Brokerage stock call 21 March 2013

From OCBC:

Hospitality REITs: Challenging industry environment
We understand that players in the local serviced residence industry believe that demand for 2013 will remain flat, with average daily rates staying flat or declining. This corroborates our view that 1H13 is challenging for the Singapore hospitality industry. In the near term, acquisitions may be positive price catalysts. CDLHT completed the acquisition of Angsana Velavaru (Maldives) on 31 Jan and now the attention is on FEHT, which may buy the 298-room Rendezvous Hotel from Straits Trading around end 2Q13. We remain NEUTRAL on hospitality REITs. We have HOLDs on Ascott Residence Trust [FV: S$1.36], CDL Hospitality Trusts [FV: S$2.11] and Far East Hospitality Trust [FV: S$1.05]. (Sarah Ong)

OSIM International: Expect continued resiliency
We expect OSIM International’s (OSIM) business to remain resilient despite concerns resurfacing over China’s economic growth. This would be driven by continued efforts by management to enhance its product appeal through innovative new products such as the recently launched uAngel Sofa-Tranzformer and productivity gains to boost its margins. Although similar concerns over China’s economy also transpired last year, OSIM still managed to deliver positive YoY growth in its topline and bottomline for all four quarters of 2012. We maintain our BUYrating on OSIM with an unchanged fair value estimate of S$2.19, still pegged to 16.4x FY13F EPS. The stock is trading at 14.2x FY13 and 12.8x FY14 EPS, while offering FY13F dividend yield of 3.2% and ROE of 42.8%. (Wong Teck Ching Andy)

Ezion Holdings: Secures another service rig contract
Ezion Holdings (Ezion) announced that it has secured a charter contract worth about US$48.2m over a three-year period to provide a service rig for an international oil and gas major for work in the Arabian Gulf. The unit will be deployed before end 2013 after refurbishment and upgrading, and will be funded by debt and internal resources. Pending details from management, we maintain our BUY rating but put our fair value estimate of S$2.33 under review. (Low Pei Han)

From UOB KH:

Venture Corporation- Short-term negative; medium-term
positive. (VMS SP/BUY/S$8.67/Target: S$9.10)
Maintain BUY. Venture provides attractive and sustainable
dividend yield due to its high-value high-mix business model,
consistently positive free cash flow and cash-rich balance sheet

OSIM International (OSIM SP, O23) –
Technical BUY with +16.1% potential return

Sound Global (EPUR SP, E6E) –
Technical BUY with +18% potential return

Olam International (OLAM SP, O32) –
Technical SELL with +8.5% potential return

From Maybank KE:

SPH Thinking outside the box. BUY. We maintain BUY on SPH, with a raised target price of SGD4.95 based on SOTP. Dividend yield still looks attractive at 5.7% even after recent share price surge. We believe we are the first broker to highlight the possibility of potential partners that would address concerns that, as sponsor, it does not have a long enough tail of injectable assets, and extend SPH’s attraction as a property play to augment its waning media business.


From DBS:

Ezion Holdings, Buy S$1.97, Bloomberg: EZI SP Further boost to earnings Price Target : 12-Month S$ 2.42 (Prev S$ 2.38)
Maintain BUY, TP adjusted up to S$2.42. In line with higher FY14F EPS, our TP is consequently revised up to S$2.42 (prev. S$2.38), still pegged to 12x blended FY13/14 PE. With a fortified balance sheet - following the recent issue of new shares and the divestment of its stake in the OMSA JV - and a robust pipeline of potential projects, we believe Ezion will continue to grow its project backlog and earnings stream. Maintain BUY for its high earnings visibility and undemanding valuations of 13x/ 8x FY13/14 PE against a solid FY12-14F estimated EPS CAGR of 67%.

Sound Global Limited, Buy S$0.50, Bloomberg: SGL SP Attractive M&A target Price Target : 12-Month S$ 0.81 (Prev S$ 0.89)
•       Visibility backed by record EPC backlog and growing base of recurring
O&M revenue
•       FY13/14F earnings adjusted by -5%/+12% respectively
•       Surging interest expense and delayed execution are key risks;
privatization/M&A could be a catalyst
•       TP lowered to S$0.81, but there is still 62% potential upside;
valuation stands at >40% disc to regional peers, Maintain BUY

Local Brokerage stock call 20 March 2013

From CIMB Thai Beverage

The third cog

OUTPERFORM - Maintained | S$0.61 - Tgt. S$0.77 From OCBC: POTENTIAL NEW REAL ESTATE PROJECTS -  Hints of expansion into new segments -  More updates expected on spin-off plan -  Share price to remain supported TEE International recently announced the establishment of two wholly owned indirect subsidiaries, TEE Industrial Pte Ltd (yesterday) and TEE Hospitality Pte Ltd (12 Mar), under its real estate unit, TEE Land Private Limited. The principal activity of both subsidiaries will be in real estate development. Though no other details were given, the choice of names suggests that the group is preparing to expand its property business further, into the industrial and hospitality services segments. Meanwhile, TEE’s plans to spin off its real estate business appear to be on track for a listing on SGX by May and we expect more updates in the weeks ahead. Its share price should remain supported in the near term by expectations of a special dividend if the plan succeeds, but we remain cautious on TEE until we see stronger contributions from its real estate business. We maintain our fair value estimate of S$0.30 and HOLD rating for TEE. From Maybank KE: SG Daily - OSIM International: Alert: 2013 Will Be A Milestone Year; Buy  TP $2.60 From DBS: Midas – Won €22.7m overseas contract; maintain BUY, TP S$0.60 Midas has won a €22.7m (approximately RMB182.8m) contract from Ural Locomotives, a joint-venture company between Siemens and Russia’s Sinara Group. Midas will supply aluminium alloy extrusion profiles for use in the manufacture of 100 electric train sets (1 train set = 5 train cars), or 500 electric train cars for commuter passenger service. Delivery for the contract is slated to take place progressively from 2013 to 2019. This is a fairly significant win for Midas in the export market, which shows their capability to win contracts outside of China. As deliveries are spread over 7 years from 2013 to 2019, the annual contribution of this contract to the top line is relatively small at c. RMB25m but nonetheless grows the Group's order book to c. RMB700m, compared to just RMB400m at the end of Feb. This is the second significant supply contract won this month, with the first being a c. RMB110m contract to supply 5 metro train projects in China. Maintain BUY and TP S$0.60. From UOB KH: Wilmar  Upgrade Wilmar to BUY because we foresee 2013 pre-tax margin to be more stable and have better visibility. As Asia’s largest agri-commodity company, Wilmar can have better bargaining power in a high-inventory market and enjoy lower raw material prices. Upgrade to BUY with a higher target price of S$3.80 after applying 15x PE (vs 13x previously) to its oilseed business.

Local Brokerage stock call 19 March 2013

From Maybank KE:
Sheng Siong Group: Potential Ace Up Its Sleeve; Maintain Buy, TP $0.70
SSG SP | Mkt Cap USD691.5m | ADTV USD1.7m
Ø Sheng Siong will launch its e-commerce platform in 1H13. Despite being a latecomer to online retailing, we believe this move is a step in the right direction as shopping on the Internet will inevitably erode traditional grocery shopping in the future.
Ø Sheng Siong has set aside SGD20m of IPO proceeds for development and expansion of grocery retailing in Singapore. In the initial stage, Sheng Siong plans to ease its E-commerce model into its Pick to Light inventory system currently in use at Mandai warehouse..
Ø While we expect the online channel will take at least a couple of quarters to gain momentum, Sheng Siong remains a BUY with a TP of SGD0.70, coupled with a 90% dividend payout fixed for the next two years.


From OCBC:
Singapore Post: Awaiting news of larger acquisitions
In recent months, Singapore Post (SingPost) has been acquiring stakes in companies to build its non-mail businesses – it completed the 100% acquisition of General Storage Company Pte Ltd (GSC) in end Jan for S$37m and the 62.5% acquisition of Famous Holdings Pte Ltd (FH) in end Feb this year for S$60m. We see synergies with the group’s logistics and e-commerce businesses, but note that these acquisitions remain on a relatively small scale as we await news of larger acquisitions. Meanwhile, the stock has been trading in a range of S$1.18-S$1.23 since we downgraded it to HOLD on 28 Jan. We like SingPost’s stable operating cash flows and consistent dividends, but see few re-rating catalysts for now. Maintain HOLD with S$1.23 fair value estimate. (Low Pei Han)

Cache Logistics Trust: Private placement to fund acquisition
Cache Logistics Trust (CACHE) has exercised the call option and entered into the S&P agreement with Precise Development Pte Ltd to acquire the fully ramp-up warehouse known as Precise Two last evening. Separately, CACHE is proposing to carry out a private placement of 70m new units to institutional and other investors at an issue price of S$1.24-S$1.265 apiece. About S$86.8m in gross proceeds are expected to be raised (based on S$1.24 issue price), of which 66.0% (~S$57.3m) will be used to wholly fund the proposed acquisition of Precise Two, while the balance will be deployed to fund future investments or pare down debt. We understand that the issue price will be determined by today. An advanced distribution of ~2.12 S cents per unit is also expected to be paid to entitled unitholders around 26 Apr. We are currently reviewing our estimates as we have previously anticipated the acquisition to be fully funded by debt. For now, we place our Buy rating and S$1.34 fair value under review. (Kevin Tan)  

ASCENDAS REIT | HOLD
ACQUIRES PROPERTY FOLLOWING PLACEMENT

- Purchase price of S$126.0m
- NPI yield at 6.8%
- Bigger presence in Science Park vicinity

Ascendas REIT (A-REIT) yesterday announced the proposed acquisition of The Galen at 61 Science Park Road for a purchase consideration of S$126.0m. The Galen is a six-storey multi-tenanted science park building located within Singapore Science Park II and has a NLA of 234,384 sqft. It is currently 97.5% occupied, with Ascendas Land and the REIT manager taking up c. 22.5% of the lease space. The property, we note, was first mentioned as a potential acquisition asset when it raised S$406.4m through a private placement of 160m new units on 8 Mar. According to A-REIT, the asset is expected to generate a NPI yield of 6.8% and add 0.052 S cents to its DPU on an annualised basis, assuming the acquisition is fully funded using the proceeds from the placement. This is in line with our initial assumptions made on the transaction. We maintain HOLD on A-REIT with an unchanged fair value of S$2.60.

From UOB KH:
Cache Logistics Trust- Building a S$200m war chest to
fund CWT Hub 3? (CACHE SP/BUY/S$1.31/Target:
S$1.45)
Maintain BUY with a lower target price of S$1.45 (from S$1.52)
factoring in the DPU dilution. We use DDM (required rate of
return: 6.5%, terminal growth: 2.0%) to value Cache.

Sabana Shari’ah Compliant REIT- Taking a breather.
Downgrade to HOLD. (SSREIT SP/HOLD/S$1.27/Target:
S$1.30)
We downgrade to HOLD (from BUY) with an unchanged target
price of S$1.30, based on DDM (required rate of return: 7.5%,
terminal growth: 2.0%). Entry price is S$1.13.

Super Group (SUPER SP, S10) –
Technical BUY with +8.6% potential return
Prices have formed a potential bullish hammer above its
potential resistance-turned-support level near its 100-day

First Ship Lease Trust (FSLT SP, D8DU) –
Technical BUY with +13.8% potential return
Prices have retraced towards its low formed during 4Q12 which
could be a support level and…
 
Midas Holdings (MIDAS SP, 5EN) –
Technical SELL with +12% potential return
Prices appear to be unable to close the gap down, which was
created on 22 Feb 13 and may continue to  

From Amfraser:
Cache Logistics Trust 
Close to being fully valued. Cache’s price-to-book ratio of 1.4 singles it out as one of the most expensive S-REITs currently (S-REITs have an average P/B of 1.15). While Cache could certainly command a slight premium to its S-REIT peers due to its earnings resilience and visibility of income stream, we believe that Cache’s growth prospects are already fully priced in. Reiterate HOLD with FV of S$1.335.

From DBS:
Yoma Strategic Holdings, Hold  S$0.775, Bloomberg: YOMA SP EQUITY Expanding hospitality business to Bagan, too early to ascertain changes to RNAV and TP Price Target : S$ 0.80  

Goodpack - Recent price weakness is a buying opportunity; upgrade to BUY with TP unchanged at S$1.95
  


 

Local Brokerage stock call 18 March 2013

From Maybank KE:
SG Daily - Sarin Technologies: Hong Kong Show Sets Positive Tone; Buy TP $1.48

From CIMB: Singapore Airlines

Better traffic, but beware further yield deterioration

NEUTRAL - Maintained | S$10.87 - Tgt. S$11.00 Sembcorp Marine  Mexican wave TRADING BUY - Maintained | S$4.54 - Tgt. S$5.01 From OCBC: CDL Hospitality Trusts: Competition to increase Summary: We believe that CDLHT’s Singapore hotels are best classified as being in the Mid-tier/Upscale range, because their FY12 RevPAR was S$211, close to the mean of S$264 and S$171, which are the RevPAR averages for Singapore Upscale and Mid-tier hotels respectively. As detailed in our hospitality sector report dated 5 Mar 2013, we project that for 2013-2015, the Economy, Mid-tier and Upscale/Luxury categories will grow +5.9% p.a., +8.5% p.a. and +4.4% p.a. respectively. As a group, the Mid-tier/Upscale/Luxury segment will grow 5.8% p.a., the same rate that the overall supply will grow. This rate is lower than the projected room demand of 5.4% p.a. over the same period, indicating that competition is likely to intensify in the segments that CDLHT is represented in. Adjusting our assumptions and removing the 10% discount to RNAV to better reflect the worth of CDLHT’s hotel properties, we are raising our fair value from S$1.93 to S$2.11; but maintain a HOLD rating since CDLHT is trading near our fair value.  (Sarah Ong) Sembcorp Marine: Good demand from Mexico; secures two more jack-ups Summary: Sembcorp Marine (SMM) announced this morning that its subsidiary, PPL Shipyard, has secured orders worth US$417m for the construction of two jack-up rigs from Mexican-based Integradora de Servicios Petroleros Oro Negro (Oro Negro). Scheduled for delivery at end-4Q14 and end-1Q15, the high-spec rigs will be built based on PPL’s proprietary Pacific Class 400 design. Oro Negro is a repeat customer – it ordered two similar jack-up rigs from SMM in Dec last year at a price of US$217m per unit. The strong demand coming from Mexico is within our expectations, as PEMEX plans annual capital expenditures of ~US$30b till 2019 to stem the country’s declining oil production. We see SMM as one of the beneficiaries of these developments. Maintain BUY with S$5.84 fair value estimate on SMM. (Low Pei Han)  From UOB KH: S’pore Telecommunications - Key takeaways from SingTel Investor Day. (ST SP/SELL/S$3.58/Target: S$3.41) We attended SingTel Investor Day on 15 Mar 13. The presentation was organised around the new organisation structure with three business units, namely…   Hospitality Top Picks: Ascott Residence Trust, CDL Hospitality Trusts and Global Premium Hotels We are optimistic on the outlook for the hospitality segment driven by the Singapore government’s strong tourism push   Ascott Residence Trust (ART SP, A68U) – Beneficiary of industry dynamics, yield compression Last price: S$1.35 Target Price: S$1.52 CDL Hospitality Trusts (CDREIT SP, J85) – Strong occupancy, watch for more acquisitions Last price: S$2.11 Target Price: S$2.36 Global Premium Hotels (GPHL SP, P9J) – Resilient portfolio of mid-tier and economic hotels Last price: S$0.265 Target Price: S$0.34 From DBS: Overseas Union Enterprises, NOT RATED S$2.94 , Bloomberg: OUE SP Return *: 2 Risk: Moderate Plans to unlock value Potential Target * : 12-Month S$ 3.16 (10% upside)

"Singapore Stock Reports For You" is back to serve all the investor/friends/public again!

Hello All,
I am restarting this blog from tomorrow 18 March onward.
This blog was set-up by me way back in 2008, that was
about 5 years ago. Its initial purpose was explained
in the various post here. How time flies and I can still
recalled that I started the blog with a light-bulb suddenly
light-up in my mind.

Now for the sad part of the story. I posted DJ news and
some Angmo reports in the blog and I kena warned
with legal actions and measure, that I have stopped
posting them after just some months. After that,
I started to post "rumours" and eventually a stock
filter list for stocks heading toward the $1 mark.
If you are in stock market for a while, you will know that
it is rather easy to make good money from the market
for those near to $1 stock. Back then, stock below $1
move up/down by 0.005 or 0.5 ct a bid and when they
cross the $1 mark, it will be 0.01 or 1 ct a bid. It was
"easy" to make money from all these stocks way then.

This blog was "unofficially" stopped around the 2009
when I switch my stock postings to Singapore Stock Lobang.
Now, I am adding another value-added service that I
believe will benefit the members and the readers of
my blogs. I received many many research analyst stock
reports everyday, and they come from both the local
and foreign brokerages and research houses. I am
going to re-paste those local brokerages' research report's
headline in this blog.

For example, these are some of the Friday reports:
By DBSV: Today's Focus
UOB Group of Companies - Looking across the board.
BUY SingLand, UOL; upgraded UIC to HOLD, maintain
HOLD on UOB

By Maybank KE:
Singapore Daily
Far East Orchard: Brisk sales @ SBF Centre; Maintain Buy, TP $2.50

I believe that the readers will know what I mean when
they see the posts everyday. It will definitely benefit those
that has no access to even the local brokerage's research
reports. By the way, the foreign brokerage report mailing
list will still be available and intact. I will still send out the
reports to the list regularly. Hope that the readers and
members will truly benefit from this blog and the service
that I give and provide to the readers and members.
But do take note that, it is never my intention or recommendation
as a buy/sell decision from the reports that I provided.
Please make your sensible decision and act accordingly.
Also, I will update the blog whenever I am available, so the
posting may not be that timely when I am really occupied
with my own trading/investing.