From OCBC:
Wilmar: Decent 1Q13 showing – maintain BUY
Summary:
Wilmar International Limited (WIL) posted a pretty decent start to the
year, with revenue of US$10.2b and core earnings of US$313.7m meeting
20.5% and 23.6% of our full-year forecast, respectively. Going forward,
management remains confident that WIL will be able to overcome the
difficult environment expected for the rest of 2013. While lower palm
oil prices will continue to weigh on its Plantation business, cheaper
feedstock would boost its downstream businesses, especially Consumer
Products. WIL notes that the bird flu in China will affect meal
consumption in the short term but it does not expect to have a long-term
effect. As such, WIL remains optimistic about China’s long-term
prospects. Maintain BUY with S$3.90 fair value (based on 15x
FY13F EPS). Over the longer term, we are also cautiously positive on the
company’s expansion in Africa and potentially Myanmar.
ASL Marine: Still positive on its outlook
Summary:
ASL Marine (ASL) reported a 26.6% YoY rise in revenue to S$144.0m and a
21.0% increase in net profit to S$9.6m in 3QFY13, such that 9MFY13 net
profit accounted for about 71% of our full year estimates, within our
expectations. Gross margin dropped from 14.0% in 3QFY12 to 13.0% in
3QFY13, and this was mainly due to lower shipbuilding margins and the
inclusion of the Vosta LMG business. Looking ahead, the group expects
the outlook of the offshore and marine industry for this year to be
“good”, although competition seems to be increasing. We like ASL for its
prudent management, healthy order books, diversified business model and
growth potential from Vosta over the longer term. Maintain BUY with S$0.86 fair value estimate, based on 10x blended FY13/14F core earnings.
Far East Hospitality Trust: 1Q13 in line
Summary:
Far East Hospitality Trust (FEHT) reported 1Q13 results that were in
line with ours and the street’s expectations. Compared to forecast
numbers in its prospectus, 1Q13 gross revenue at S$28.1m was 4.2% lower.
DPU of 1.38 S cents is 3.0% higher than the 1.34 S cents forecasted,
chiefly due to lower finance costs and other trust expenses. 1Q13 hotel
RevPAR at S$161 was comparable to 1Q12 (S$162), and reasonably good
given the soft 1Q13 for the industry, which saw RevPAR fall 3%.
Adjusting our FY13F revenue assumptions downwards slightly, our RNAV-based fair value falls from S$1.05 to S$1.01 and we maintain a HOLD rating on FEHT. We estimate a FY13 yield of 5.4%.
BreadTalk Group: Still pricey for now
Summary: BreadTalk’s 1Q results came in within our expectations with revenue growing 13.4% YoY to S$120.3m on the back of broad segment increases while operating and PATMI increased by 45.6% and 46.0% to S$3.5m and S$2.1m respectively. Although BreadTalk’s move to its new headquarters next month will bring about improvements to its production efficiency and operating expenses, we do not expect cost savings to materialize in the immediate quarters due to the incurrence of transitional expenses. As such, we leave our FY13 projections unchanged. In terms of its share price, we remain cautious at this juncture as current valuations are still too expensive in our view. Coupled with an unattractive dividend yield of 1.0%, we maintain our SELL rating with an unchanged fair value of S$0.77. We will look to re-evaluate the counter once speculative interest arising from the MINT acquisition wanes.
Ezion Holdings: 1Q13 results in line
Summary: Ezion Holdings (Ezion) reported a 79.3% YoY rise in revenue to US$54.8m and a 227.8% increase in net profit to US$46.2m in 1Q13. Excluding one-off items such as US$17.8m worth of disposal gains, recurring net profit is estimated to be about US$28.4m, accounting for 20% of our full year estimate. This is within our expectations as we are expecting stronger quarters ahead as more assets are deployed, and additional contributions from the APLNG and GLNG projects. Gross profit margin remained healthy at 44.9% vs 44.4% in 1Q12. Pending an analysts’ briefing later in the morning, we maintain our BUYrating but place our fair value estimate of S$2.35 under review.
From UOB KH
Ying Li International Real Estate- New Management, New
Direction (YINGLI SP/BUY/ S$0.505/Target: S$0.65)
Maintain BUY with a target price of S$0.65, pegged at a
23.5% discount to our RNAV of S$0.85/share, in line with
the average discount for Chinese developers under our
coverage. Potential catalysts include the monetisation of its
retail assets as well as new growth initiatives of its new
CEO.
Neptune Orient Lines (NOL SP, N03) -
Technical BUY with +9.4% potential return
Last price: S$1.115
Resistance: S$1.22
Support: S$1.08
BUY with a target price of S$1.22 with stops placed below
S$1.08. The stock has rebounded from its lower Bollinger
band and broken above its declining 10-day moving average,
suggesting a potential downtrend reversal. Its Stochastics
indicator has formed a bullish crossover while its MACD
indicator looks poised to form a bullish crossover. Watch to
see if the stock could break above its 200-day moving
average.
Our institutional research has a fundamental BUY with a
target price of S$1.54.
Interra Resources Ltd (ITRR SP, 5GI) -
Technical BUY with +22.6% potential return
Last price: S$0.485
Resistance: S$0.595
Support: S$0.45
BUY with a target price of S$0.595 with stops placed below
S$0.45. The stock appears to be trending up and above its
100- and 150-day moving average and has rebounded from
its bullish harami pattern. Its Stochastics indicator has
formed a bullish crossover and its RSI indicator has turned up
above a reading of 40. Watch to see if the stock could break
above S$0.54.
Sarin Technologies (SARIN SP, U77) -
Take profit from previous technical BUY
Last price: S$1.495
Resistance: S$1.65
Support: S$1.35
The stock was featured as a technical BUY when it opened at
S$1.40 on 3 May 13. It has since returned 6.8% on closing
prices, with an intraday high of S$1.60 in the last trading
session which is near our initial target price of S$1.65. Some
profits could be taken off the table as its Stochastics indicator
has formed a bearish crossover and has turned down.
ARA Asset Management- 1Q13: A quiet quarter.
(ARA SP/HOLD/S$1.94/Target: S$1.91)
FY13F PE(x): 18.0
FY14F PE(x): 14.2
Revenues fell 6%yoy to S$32.2m due to the absence of one-off performance and acquisition fees (ARA had received fees related to Suntec REIT’s divestment of Chijmes and Fortune REIT’s acquisition of two properties in 1Q12). Adjusted recurrent net profit
excluding acquisition fees, performance fees and finance income rose 14% yoy to S$12.2m from S$10.7m due to growth in assets under management (AUM) and consequently REIT and portfolio management fees.
Maintain HOLD with a higher target price of S$1.91 (previous ex-rights S$1.70), after factoring in lower interest rates by reducing required rate of return assumption by 80bps. Our target price is based on a sum-of-the- parts (SOTP) methodology, which comprises: a) the DCF-derived enterprise value of ARA's stable fee-based earnings stream, assuming 2.0% terminal growth and 7.7% required rate of return, b) strategic stakes in REITs and APN Property Group, and c) net cash. Entry price is at S$1.66.
Sembcorp Industries- 1Q13: Long-term positive outlook on utilities remains intact. Target price lowered by 3% to S$5.90. Maintain BUY.
(SCI SP/BUY/S$4.98/Target: S$5.90)
FY13F PE(x): 11.3
FY14F PE(x): 9.9
Within expectations. Sembcorp Industries (SCI) reported a flat net profit of S$176.9m for 1Q13. Results were within our and consensus expectations. 1Q13 net profit was 23% of our 2013 net profit forecast of S$786.0m. Utilities’ net profit was S$89.4m for 1Q13, down 10% yoy due to: a) Singapore power plant shut down for maintenance (resulting in higher cost and lower volume sales), b) 1Q12 had a one-off exceptional gas sale, and 3) blended power spreads were lower by 8-10% yoy. However, the lower utilities earnings were offset by higher earnings from marine, urban development and other businesses.
Maintain BUY. Our earnings forecasts are unchanged. We reduce our target price marginally from S$6.10 to S$5.90 which is set at a 10% discount to our revised sum-of-the-parts (SOTP) valuation of S$6.59/share. We have lowered our target price for SMM from S$4.85 to S$4.60.
Wilmar International- 1Q13: Results within expectation. More significant contribution from its sugar operations, which only started in late-10.
(WIL SP/BUY/S$3.38/Target: S$3.80)
FY13F PE(x): 13.2
FY14F PE(x): 11.3
1Q13 net profit of US$315.4m (+23.3% yoy, -21.3% qoq). Results within our expectation. The most commendable portion of this
set of results would be the contribution from its sugar division. Excluding the seasonal milling division, pre-tax profit (PBT) from the sugar operations was about the same as the oilseed & grain division, and Wilmar only ventured into sugar in 2010.
Maintain BUY with target price of S$3.80 based on the sum-of-the-parts (SOTP) method, implying a blended PE of 13.6x 2013F below its historical mean of 14.8x 1-year forward PE.
From Maybank KE:
City Development: Mired By Weak Hotel Earnings; Sell TP $10.00
CIT SP | Mkt Cap USD8.4b | ADTV USD10.1m
We reiterate our SELL recommendation on CDL, as we reduce our
FY13-15F earnings forecasts by 4-18% on the back of lower expected
earnings from M&C and adjustments made to our profit recognition model.
CDL remains our top SELL, with a target price of SGD10.00.
CDL will report on 13 May. Last week, its subsidiary M&C reported a
disappointing set of 1Q13 results as the operating environment
particularly in Singapore remain challenging. We believe this will be a
drag on CDL’s earnings.
Even though CDL was a dominant force in new home sales in Singapore
during the first quarter, the earnings will only show up from FY14 and
future launches are likely to see slower sell-through rates. We still
prefer the more diversified businesses of its big-cap peers, CapitaLand
and Keppel Land.
Sembcorp Industries: Building a Strong Recurring Base; Buy TP $5.74
SCI SP | Mkt Cap USD7.2b | ADTV USD16.7m
Reiterate Buy with SOTP-based TP of SGD5.74. SCI’s pipeline of
utilities projects and marine business are well on track to support a
steady 9-12% EPS growth over FY13-15F. Utilities business is trading at
an implied PER of only 6.3x which is unjustifiably low in our opinion.
1Q13 PATMI was flat YoY, accounting for 21% of our FY13F forecast.
This is within expectations given the scheduled maintenance of its
cogen plant. We see better performance for subsequent quarters.
Long term value is in the pipeline of utilities projects, scheduled
to come onstream over 2013-2016. These are progressing well and would
add to its recurring revenue base, lending more stability to its income stream.
Wilmar International: Earnings recovery underway; Buy TP $4.60
WIL SP | Mkt Cap USD17.8b | ADTV USD23.8m
Maintain BUY with TP of SGD4.60, pegged to 16x FY13F as we keep our
forecasts largely unchanged.
1Q13 results were above expectations, with recurring net profit up
53% yoy. We remain convinced that earnings expectations are still too
low, and current stock price level represents an opportunity for
accumulation.
Even with a decline in plantation earnings, we expect the other
businesses to more than pick up the slack. This environment is positive
for its bigger palm & laurics division.
Overseas Education: Patience and Time; Not Rated
OEL SP | Mkt Cap USD235m | ADTV USD1.4m
With 23 years of track record, Overseas Family School (OEL) is
ranked third in revenue size in Foreign System Schools (FSS). The
industry is expected to grow at an estimated 3-year CAGR of 8.9% on the
back of its student population’s CAGR of 13.4% between 2013F and 2015F.
To seize this opportunity, OEL will utilise IPO proceeds to build a new
campus in Pasir Ris to propel its earnings to the next level in 2015.
In preparation for this move, OEL earnings will be flattish, given
another rental hike is due this July. Until then, assuming a 50%
dividend payout, we estimate its dividend yield would be between 3.9%
and 4.7% between FY13 and FY15F, supported by strong cash flow of over
SGD20m per annum and highly visible capex plans.
The counter is trading at 13.9x FY12 historical P/E coupled with 4.3% yield.
From DBS:
Sembcorp Industries’ Utilities earnings exceeded estimates
despite lower sales. FY13/14F earnings cut by 13%/2%
mainly for Marine earnings downgrade and fair value loss for
Gallant Venture. TP reduced to S$4.80 (Prev S$ 5.20),
maintain HOLD.
Wilmar’s 1Q13 core earnings of US$314m (+53% y-o-y; -
22% q-o-q) were in line. Oilseeds & Grains Merchandising
and Processing (M&P) performed better than expected; but
was offset by weakness in Plantations and Others. FY13F-15F
earnings tweaked by 1-2% to account for higher Sugar and
Oilseeds & Grains pretax, offset by weaker CPO average
selling price. TP remains unchanged at S$3.72; HOLD rating
maintained for 10% total return. Any weakness should be
opportunity to collect.
3Q13 earnings for ASL Marine were up 21% y-o-y but still
missed estimates. Order wins YTD have been slow but is not
much of a concern; activity will pick up in coming quarters as
yard space frees up. FY13/14F earnings cut 9%/5% due to
losses from engineering division and higher interest expenses.
But earnings recovery story is still intact; maintain BUY with
revised TP of S$0.92 (Prev S$ 0.90).
1Q13 results for ARA Asset Management in line.
Management maintains that they remain confident of hitting
their initial target of a growth of S$2bn in asset under
management (AUM) in 2013 and initiatives are underway to
meet that target. HOLD maintained, TP S$1.95, adjusted to
S$1.76 (post 1-for-10 bonus).
Adjusting our FY13F revenue assumptions downwards slightly, our RNAV-based fair value falls from S$1.05 to S$1.01 and we maintain a HOLD rating on FEHT. We estimate a FY13 yield of 5.4%.
BreadTalk Group: Still pricey for now
Summary: BreadTalk’s 1Q results came in within our expectations with revenue growing 13.4% YoY to S$120.3m on the back of broad segment increases while operating and PATMI increased by 45.6% and 46.0% to S$3.5m and S$2.1m respectively. Although BreadTalk’s move to its new headquarters next month will bring about improvements to its production efficiency and operating expenses, we do not expect cost savings to materialize in the immediate quarters due to the incurrence of transitional expenses. As such, we leave our FY13 projections unchanged. In terms of its share price, we remain cautious at this juncture as current valuations are still too expensive in our view. Coupled with an unattractive dividend yield of 1.0%, we maintain our SELL rating with an unchanged fair value of S$0.77. We will look to re-evaluate the counter once speculative interest arising from the MINT acquisition wanes.
Ezion Holdings: 1Q13 results in line
Summary: Ezion Holdings (Ezion) reported a 79.3% YoY rise in revenue to US$54.8m and a 227.8% increase in net profit to US$46.2m in 1Q13. Excluding one-off items such as US$17.8m worth of disposal gains, recurring net profit is estimated to be about US$28.4m, accounting for 20% of our full year estimate. This is within our expectations as we are expecting stronger quarters ahead as more assets are deployed, and additional contributions from the APLNG and GLNG projects. Gross profit margin remained healthy at 44.9% vs 44.4% in 1Q12. Pending an analysts’ briefing later in the morning, we maintain our BUYrating but place our fair value estimate of S$2.35 under review.
From UOB KH
Ying Li International Real Estate- New Management, New
Direction (YINGLI SP/BUY/ S$0.505/Target: S$0.65)
Maintain BUY with a target price of S$0.65, pegged at a
23.5% discount to our RNAV of S$0.85/share, in line with
the average discount for Chinese developers under our
coverage. Potential catalysts include the monetisation of its
retail assets as well as new growth initiatives of its new
CEO.
Neptune Orient Lines (NOL SP, N03) -
Technical BUY with +9.4% potential return
Last price: S$1.115
Resistance: S$1.22
Support: S$1.08
BUY with a target price of S$1.22 with stops placed below
S$1.08. The stock has rebounded from its lower Bollinger
band and broken above its declining 10-day moving average,
suggesting a potential downtrend reversal. Its Stochastics
indicator has formed a bullish crossover while its MACD
indicator looks poised to form a bullish crossover. Watch to
see if the stock could break above its 200-day moving
average.
Our institutional research has a fundamental BUY with a
target price of S$1.54.
Interra Resources Ltd (ITRR SP, 5GI) -
Technical BUY with +22.6% potential return
Last price: S$0.485
Resistance: S$0.595
Support: S$0.45
BUY with a target price of S$0.595 with stops placed below
S$0.45. The stock appears to be trending up and above its
100- and 150-day moving average and has rebounded from
its bullish harami pattern. Its Stochastics indicator has
formed a bullish crossover and its RSI indicator has turned up
above a reading of 40. Watch to see if the stock could break
above S$0.54.
Sarin Technologies (SARIN SP, U77) -
Take profit from previous technical BUY
Last price: S$1.495
Resistance: S$1.65
Support: S$1.35
The stock was featured as a technical BUY when it opened at
S$1.40 on 3 May 13. It has since returned 6.8% on closing
prices, with an intraday high of S$1.60 in the last trading
session which is near our initial target price of S$1.65. Some
profits could be taken off the table as its Stochastics indicator
has formed a bearish crossover and has turned down.
ARA Asset Management- 1Q13: A quiet quarter.
(ARA SP/HOLD/S$1.94/Target: S$1.91)
FY13F PE(x): 18.0
FY14F PE(x): 14.2
Revenues fell 6%yoy to S$32.2m due to the absence of one-off performance and acquisition fees (ARA had received fees related to Suntec REIT’s divestment of Chijmes and Fortune REIT’s acquisition of two properties in 1Q12). Adjusted recurrent net profit
excluding acquisition fees, performance fees and finance income rose 14% yoy to S$12.2m from S$10.7m due to growth in assets under management (AUM) and consequently REIT and portfolio management fees.
Maintain HOLD with a higher target price of S$1.91 (previous ex-rights S$1.70), after factoring in lower interest rates by reducing required rate of return assumption by 80bps. Our target price is based on a sum-of-the- parts (SOTP) methodology, which comprises: a) the DCF-derived enterprise value of ARA's stable fee-based earnings stream, assuming 2.0% terminal growth and 7.7% required rate of return, b) strategic stakes in REITs and APN Property Group, and c) net cash. Entry price is at S$1.66.
Sembcorp Industries- 1Q13: Long-term positive outlook on utilities remains intact. Target price lowered by 3% to S$5.90. Maintain BUY.
(SCI SP/BUY/S$4.98/Target: S$5.90)
FY13F PE(x): 11.3
FY14F PE(x): 9.9
Within expectations. Sembcorp Industries (SCI) reported a flat net profit of S$176.9m for 1Q13. Results were within our and consensus expectations. 1Q13 net profit was 23% of our 2013 net profit forecast of S$786.0m. Utilities’ net profit was S$89.4m for 1Q13, down 10% yoy due to: a) Singapore power plant shut down for maintenance (resulting in higher cost and lower volume sales), b) 1Q12 had a one-off exceptional gas sale, and 3) blended power spreads were lower by 8-10% yoy. However, the lower utilities earnings were offset by higher earnings from marine, urban development and other businesses.
Maintain BUY. Our earnings forecasts are unchanged. We reduce our target price marginally from S$6.10 to S$5.90 which is set at a 10% discount to our revised sum-of-the-parts (SOTP) valuation of S$6.59/share. We have lowered our target price for SMM from S$4.85 to S$4.60.
Wilmar International- 1Q13: Results within expectation. More significant contribution from its sugar operations, which only started in late-10.
(WIL SP/BUY/S$3.38/Target: S$3.80)
FY13F PE(x): 13.2
FY14F PE(x): 11.3
1Q13 net profit of US$315.4m (+23.3% yoy, -21.3% qoq). Results within our expectation. The most commendable portion of this
set of results would be the contribution from its sugar division. Excluding the seasonal milling division, pre-tax profit (PBT) from the sugar operations was about the same as the oilseed & grain division, and Wilmar only ventured into sugar in 2010.
Maintain BUY with target price of S$3.80 based on the sum-of-the-parts (SOTP) method, implying a blended PE of 13.6x 2013F below its historical mean of 14.8x 1-year forward PE.
From Maybank KE:
City Development: Mired By Weak Hotel Earnings; Sell TP $10.00
CIT SP | Mkt Cap USD8.4b | ADTV USD10.1m
We reiterate our SELL recommendation on CDL, as we reduce our
FY13-15F earnings forecasts by 4-18% on the back of lower expected
earnings from M&C and adjustments made to our profit recognition model.
CDL remains our top SELL, with a target price of SGD10.00.
CDL will report on 13 May. Last week, its subsidiary M&C reported a
disappointing set of 1Q13 results as the operating environment
particularly in Singapore remain challenging. We believe this will be a
drag on CDL’s earnings.
Even though CDL was a dominant force in new home sales in Singapore
during the first quarter, the earnings will only show up from FY14 and
future launches are likely to see slower sell-through rates. We still
prefer the more diversified businesses of its big-cap peers, CapitaLand
and Keppel Land.
Sembcorp Industries: Building a Strong Recurring Base; Buy TP $5.74
SCI SP | Mkt Cap USD7.2b | ADTV USD16.7m
Reiterate Buy with SOTP-based TP of SGD5.74. SCI’s pipeline of
utilities projects and marine business are well on track to support a
steady 9-12% EPS growth over FY13-15F. Utilities business is trading at
an implied PER of only 6.3x which is unjustifiably low in our opinion.
1Q13 PATMI was flat YoY, accounting for 21% of our FY13F forecast.
This is within expectations given the scheduled maintenance of its
cogen plant. We see better performance for subsequent quarters.
Long term value is in the pipeline of utilities projects, scheduled
to come onstream over 2013-2016. These are progressing well and would
add to its recurring revenue base, lending more stability to its income stream.
Wilmar International: Earnings recovery underway; Buy TP $4.60
WIL SP | Mkt Cap USD17.8b | ADTV USD23.8m
Maintain BUY with TP of SGD4.60, pegged to 16x FY13F as we keep our
forecasts largely unchanged.
1Q13 results were above expectations, with recurring net profit up
53% yoy. We remain convinced that earnings expectations are still too
low, and current stock price level represents an opportunity for
accumulation.
Even with a decline in plantation earnings, we expect the other
businesses to more than pick up the slack. This environment is positive
for its bigger palm & laurics division.
Overseas Education: Patience and Time; Not Rated
OEL SP | Mkt Cap USD235m | ADTV USD1.4m
With 23 years of track record, Overseas Family School (OEL) is
ranked third in revenue size in Foreign System Schools (FSS). The
industry is expected to grow at an estimated 3-year CAGR of 8.9% on the
back of its student population’s CAGR of 13.4% between 2013F and 2015F.
To seize this opportunity, OEL will utilise IPO proceeds to build a new
campus in Pasir Ris to propel its earnings to the next level in 2015.
In preparation for this move, OEL earnings will be flattish, given
another rental hike is due this July. Until then, assuming a 50%
dividend payout, we estimate its dividend yield would be between 3.9%
and 4.7% between FY13 and FY15F, supported by strong cash flow of over
SGD20m per annum and highly visible capex plans.
The counter is trading at 13.9x FY12 historical P/E coupled with 4.3% yield.
From DBS:
Sembcorp Industries’ Utilities earnings exceeded estimates
despite lower sales. FY13/14F earnings cut by 13%/2%
mainly for Marine earnings downgrade and fair value loss for
Gallant Venture. TP reduced to S$4.80 (Prev S$ 5.20),
maintain HOLD.
Wilmar’s 1Q13 core earnings of US$314m (+53% y-o-y; -
22% q-o-q) were in line. Oilseeds & Grains Merchandising
and Processing (M&P) performed better than expected; but
was offset by weakness in Plantations and Others. FY13F-15F
earnings tweaked by 1-2% to account for higher Sugar and
Oilseeds & Grains pretax, offset by weaker CPO average
selling price. TP remains unchanged at S$3.72; HOLD rating
maintained for 10% total return. Any weakness should be
opportunity to collect.
3Q13 earnings for ASL Marine were up 21% y-o-y but still
missed estimates. Order wins YTD have been slow but is not
much of a concern; activity will pick up in coming quarters as
yard space frees up. FY13/14F earnings cut 9%/5% due to
losses from engineering division and higher interest expenses.
But earnings recovery story is still intact; maintain BUY with
revised TP of S$0.92 (Prev S$ 0.90).
1Q13 results for ARA Asset Management in line.
Management maintains that they remain confident of hitting
their initial target of a growth of S$2bn in asset under
management (AUM) in 2013 and initiatives are underway to
meet that target. HOLD maintained, TP S$1.95, adjusted to
S$1.76 (post 1-for-10 bonus).
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