Local Brokerages Stock Call 3 May 2013

From OCBC:
UOB: Above expectations 1Q
UOB Group posted 1Q13 net earnings of S$722m, ahead of consensus estimate. This was buoyed by higher Non-Interest Income, which rose 12% YoY and 13% QoQ to S$708m. Fee & Commission Income jumped 17% QoQ or 25% YoY to S$453m, supported by strong double-digit growth from loans (+63%), fund management (+19%) and Investment (+18%). As 1Q accounted for about 25% of our full year estimate, we made very slight adjustments to our FY13 earnings. Based on P/B of 1.5x, we raised our fair value estimate from S$21.30 to S$22.97. While we continue to like UOB for its good cost controls and strong quarterly performance, the stock has outperformed and appreciated some 11% YTD. It is now trading close to our fair value estimate. As such, we downgrade our rating to HOLD. 
 
Genting Singapore: 2013 outlook more cautious
Genting Singapore (GS) reported 1Q13 revenue of S$669.6m, down 15% YoY and also 16% QoQ, hit by much weaker win percentage (2.12% versus 2.85% theoretical) in the premium players’ business; net profit posted a decline of 44% YoY and 13% QoQ to S$115.9m. All in, a pretty muted set of numbers, as top-line only met 20% of our original FY13 forecast while bottom-line met 18% of our full-year number. Going forward, management has turned slightly more cautious, citing the still uncertain global economic outlook, especially with the recent muted economic data coming out of China. We pare our FY13 revenue estimates by 10% and core earnings by 16%. As such, our DCF-based fair value also slips to S$1.41 from S$1.52 previously. Recent run-up in share price seems slightly over-done; hence we downgrade to SELL from Hold on valuation grounds. However, we would buyers closer to S$1.30 or lower. Longer-term catalyst could come from a potential IR license overseas in markets like Japan.

Lippo Malls Indonesia Retail Trust: 1Q13 results in line
LMIRT posted 1Q13 gross rental income of S$39.4m, up 29.3% YoY. The increase was mainly due to the acquisition of the six new malls in 4Q12, and positive rental reversions for the existing malls. The higher gross rental income was partially offset by the effect of FX rates used for translating into SGD revenues denominated in IDR. Results for the quarter were in line with our and consensus expectations; DPU of 0.89 S cent formed 25% of ours and 26% of the street's FY13 estimate. We maintain our fair value of S$0.52 and HOLD rating on LMIRT. We estimate a FY13F yield of 6.7%. 

From UOB KH:
China Aviation Oil- Optimisation Bearing Fruit; Upgrade
To Buy (CAO SP/BUY/S$1.02/Target: S$1.30)
Upgrade to BUY with a higher target price of S$1.30. We
believe optimisation of the trading segment and an increase in
strategic acquisition seem to be bearing fruit with a 43.6%
jump in gross profit. 

Silverlake Axis (SILV SP, 5CP) -
Technical BUY with +16.1% potential return
Last price: S$0.715
Resistance: S$0.83
Support: S$0.65
Maintain BUY with a target price of S$0.83 with stops placed
below S$0.66. The stock has been trending above its mid
Bollinger band and appears to be supported above its rising
35-day moving average. Its MACD indicator is still trading
above its centreline and looks poised to form a bullish
crossover. Its RSI indicator is still above 60.
Our retail research has a fundamental BUY with a target price
of S$0.91.

Sarin Technologies (SARIN SP, U77) -
Technical BUY with +16.2% potential return
Last price: S$1.42
Resistance: S$1.65
Support: S$1.35
BUY with a target price of S$1.65 with stops placed below
S$1.35. The stock appears to trending above its 30-day
moving average and is likely to trade higher should prices
break above S$1.48. Its Stochastics indicator has formed a
bullish crossover and RSI indicator has turned up above a
reading of 40. Watch to see if its MACD indicator could form a
bullish crossover.


M1 (M1 SP, B2F) –
Technical SELL with +7.7% potential return
Last price: S$3.36
Resistance: S$3.40
Support: S$3.10
BUY with a target price of S$3.10 with stops placed above
S$3.45. Prices are likely to trend lower should there be a
follow through sell after a potential bearish harami pattern
has formed. Its RSI indicator has turned down below a
reading of 80. Watch to see if its MACD indicator could form a
bearish crossover and whether its mid Bollinger band could
act as a support.
Our institutional research has a fundamental HOLD with a
target price of S$3.04. 

Genting Singapore- 1Q13: We expect share price to react
to an exceptionally weak EBITDA, although rolling chip
volume increases. (GENS SP/SELL/S$1.61/Target:
S$1.17)
Maintain SELL and target price of S$1.17, pegged at 10x 2013F
EV/EBITDA. We reckon the time is ripe to take profit 

United Overseas Bank- 1Q13: Strong organic growth plus
tight cost control. (UOB SP/NOT RATED/S$22.00)
UOB reported a net profit of S$722m (+4.9% yoy, +3.8% qoq)
for 1Q13, above consensus of S$664m.

Ascott Residence Trust- Focus returns back to Asia. (ART
SP/BUY/S$1.41/Target: S$1.60)
Maintain BUY with a higher target price S$1.60 (from S$1.57),
based on a two-stage dividend discount model

Singapore Airlines- 4QFY13 results preview: Returning to
profitability on better loads and lower costs. Upgrade to
BUY on benign fuel outlook. (SIA SP/HOLD/S$11.10/Target: S$13.50)
We upgrade the stock to BUY and increase our target price by
26% to S$13.50, valuing the stock at 0.9x FY14F book value

From Lim & Tan:
Despite markets¡¦ expectation of a positive read through
from Las Vegas Sands earnings results, Genting Singapore
posted 1Q ¡¥13 revenue of S$669.6 million and adjusted 
EBITDA of S$249.7 million which were way below analysts
estimates.
The dip in gaming revenue (-20.5% y-o-y) was mainly
caused by a much weaker win rate within its VIP
business, despite a significant increase in the VIPs¡¦
rolling volume.
Nonetheless, Genting Singapore¡¦s non-gaming
business continued to do well, growing 17.2% y-o-y.
In particular, its recently opened Marine Life Park
remained popular and attracted approximately 7,400
visitors daily, whilst its flagship Universal Studios
Singapore recorded an average daily visitation of 8,400.
In addition, the firm¡¦s hotel business continued to
experience high occupancy rate of 92%, with an average
room rate of S$404.
The Group also continued to maintain a solid balance
sheet, with a net cash position
Given the stock¡¦s run-up leading to its earnings result,
we are likely to see considerable selling today. A strong
technical support level would be at around S$1.38-1.40. 

From Maybank:
DBS Group: A Strong 1Q13, TP Raised; Maintain Buy, TP $20.00
DBS SP | Mkt Cap USD34.7b | ADTV USD52.3m
Maintain BUY with a revised Street-high TP of SGD20, pegged to 1.4x FY13 P/BV (1.3x previously), in-line with peer averages.
DBS’ 1Q13 results were above expectations - core net profit of SGD950m was 27% of our full-year forecast and consensus due to strong fee and trading income momentum.
Valuations are still attractive with the stock trading at a prospective FY13 PER of 11.9x relative to 13.0x for peers and a long-term mean of 12.2x.
The stock also trades at a prospective FY13 P/BV of 1.3x (ROE: 11.0%) vs 1.4x for peers (ROE: 11.7%), which we believe is unjustified, given the more favourable outlook for DBS.

  
Genting Singapore: Upside Narrowing; Downgrade To Hold, TP $1.70
GENS SP | Mkt Cap USD16b | ADTV USD37m
Ø Downgrade to HOLD with new TP of SGD1.70. At 12.7x 1-year forward EV/EBITDA, GENS is trading at par to the Macau casino sector mean. We prefer 52% shareholder, Genting (GENT MK, BUY, TP: MYR11.50) for its cheaper valuations of 16x FY13 PER.
Ø GENS reported disappointing 1Q13 results due to a poor VIP win rate of 2.12%. Although 1Q13 VIP volume surged 38% YoY, this momentum may not last.
Ø We raise our earnings estimates by 2-3% on higher FY13 VIP volume growth forecast of 20% (10% previously) and EV/EBITDA based TP by 2% to SGD1.70 but with only 6% upside currently, we downgrade GENS to HOLD from Buy.
 
UOB: Decent 1Q13, Moderation Expected; Sell TP $20.50
UOB SP | Mkt Cap USD28.1b | ADTV USD38.6m
Our contrarian SELL call is maintained but with a raised TP of SGD20.50 on a FY13 P/BV of 1.3x (1.2x previously) amid higher peer valuations, but with a discount to reflect the risk of a larger impact to UOB from a slowdown in mortgage origination in 2H13, given its larger property exposure.
UOB’s 1Q13 net profit of SGD722m was broadly in line, at 26% of our full-year and 27% of consensus.
With expectations of a moderation in earnings over the subsequent quarters, our forecasts are maintained. We expect UOB’s earnings to be flat this year on the back of lower trading income and ongoing NIM compression.

From DBS:
Genting Singapore’s 1Q13 results were below expectations,
management is wary on VIP growth and visitor arrivals.
Downgrade to HOLD (from Buy), TP revised to S$1.71 (from
S$1.88) after cutting FY13-15F earnings by 11-21% on slower
VIP growth and normalising win rate. The recent strong rally is
likely to attract profit-taking. Potential Japan IR win could rerate
GENS but it may take another 2 years for the bidding
process even if Japan liberalises gaming in November.

1Q13 earnings for UOB came in above consensus but in line
with our estimates. Higher fee income and lower provisions
offset NIM decline; ex-chunky loan deal, loans grew 3-4% qo-
q. Maintain HOLD and S$20.10 TP.

Ascott Residence Trust is proposing to acquire 3 serviced
residences properties in China and 11 Rental Housing
Properties in Japan for S$287.4m from its sponsor, Ascott
Group. The properties will be acquired at a slight discount to
valuers’ valuation and the purchase price implies an initial
EBITDA yield of 5.4%. The anticipated acquisitions are to
refocus its exposure into high growth Asia and are accretive
to earnings. Maintain BUY and TP S$1.53.

AusGroup announced that Karara Mining (KML) (a company
incorporated in Perth, Western Australia) has withheld
progress payments of about AU$21.7m for structural,
mechanical and piping installation works carried out by
AusGroup’s wholly-owned subsidiary, AGC Industries (AGC)
at KML’s Karara Iron Ore Project in Western Australia
pursuant to a 2012 contract entered into between AGC and
KML. AGC is actively liaising with KML management to
attempt to resolve the current situation.

EMAS AMC, the subsea services arm of Ezra Holdings, has
secured a contract from Statoil for the Smørbukk South
Extension project in the Norwegian Sea. Valued at
approximately US$75m and expected to last through
2015, the project award is a SURF (subsea construction,
umbilicals, risers and flowlines) EPCI (engineering,
procurement, construction and installation) contract. This
is Ezra's 4th project win from Statoil. With this contract,
we estimate EMAS AMC has secured close to US$835m
of subsea work YTD in FY13 (Aug YE) vs. our full-year
assumption of US$1bn, and current backlog in the subsea
services division should stand at over US$1.1bn. Subsea
order win momentum has continued to build well in
recent months and the addition of two more subsea
vessels in July and August will further position Ezra to ride
on the surging subsea activity levels. No change to our
earnings estimates, given that the contract win is within
our expectations. Maintain BUY and TP of S$1.56.