From OCBC:
OSIM International: 1Q13 results within expectations
OSIM
International (OSIM) reported a 13.2% YoY jump in its 1Q13 PATMI to
S$25.1m despite a mild 0.4% increase in revenue to S$150.6m. This formed
25.9% and 22.7% of our FY13 forecasts, respectively. Results were
within our expectations as we foresee further contribution from its
recently launched uAngel Sofa-Tranzformer and upcoming new high-end
massage chair launch (around Jul period). We expect OSIM to continue its
strategic drive of launching new innovative products with different
price points to cater to a broader group of target consumers. OSIM also
declared an interim dividend of 1 S cent/share in 1Q13, similar to 1Q12.
We make some minor adjustments after incorporating this latest set of
results in our model. Our fair value estimate is raised marginally from
S$2.19 to S$2.21, still pegged to 16.4x FY13F EPS. Maintain BUY.
ST Engineering: All-time high order book of S$13.0b
Singapore
Technologies Engineering (STE) reported 1Q13 results that were
generally in line with ours and consensus expectations. Revenue grew
0.2% YoY to S$1.54b, and PATMI fell 0.3% YoY to S$134m. Highlights
include: 1) lack of the biennial Singapore Airshow in 1Q13, which
contributed to a S$6.1m drop in share of results of associates and
jointly controlled entities, 2) growth in administrative expenses by
S$7.9m (7% YoY) due to increased headcount from new Aerospace
subsidiaries. STE's order book reached a new high of S$13.0b as of
end-Mar 2013 (4Q12: S$12.1b), of which S$3.6b is expected to be
delivered in the remainder of 2013. We forecast FY13F EPS of 19.8 S
cents. Raising our P/E peg to 22x from 20.7x, given the increased
visibility from the record order book, we raise our fair value to S$4.36
from S$4.12. We maintain a HOLD rating on STE and estimate a FY13F dividend yield of 4.1%.
Wilmar: Decent start to FY13
Wilmar
International Limited (WIL) posted revenue of US$10.2b, down 2.6% YoY
and 12.2% QoQ, meeting 20.5% of our FY13 forecast; this mainly due to
significantly lower selling prices for palm and sugar products.
Nevertheless, reported net profit rose 23.3% YoY (but fell 33.9% QoQ) to
US$315.4m; excluding non-operating items, core net profit jumped 52.6%
to US$313.7m, although down 21.8% QoQ, it still met 23.6% of our
full-year forecast. According to management, the improvement came
largely from a sharp recovery in its Oilseeds & Grains business;
Consumer Products also benefited from volume growth. Going forward,
management remains confident that WIL will overcome the difficult
environment expected for the rest of 2013. While WIL notes that the bird
flu in China will affect meal consumption in the short term, it does
not expect to have long-term effect. We will be speaking with management
later for more insights; but as results were largely in line, we keep
our BUY rating and S$3.90 fair value (still based on 15x FY13F EPS).
From UOB KH:
Overseas Union Enterprise (OUE SP)
1Q13: Rolling Ahead With OUE REIT
Results came in below expectations due to exceptional items and lower-thanexpected
contributions from investment properties. Look ahead to the
hospitality REIT and a potential special dividend as forward catalysts, while
approval for the 160,000sf serviced-apartment conversion in 6 Shenton Way
will provide an acquisition pipeline. Maintain BUY with an increased target of
S$3.63, factoring in a 50bp reduction in office cap rates.
ST Engineering (STE SP)
1Q13: Flat Net Profit But Guidance For Full-year Growth;
OrderBook At Record High Of S$13.0b
Excluding the absence of contribution from a bi-annual air show, PBT would
have risen by 5% yoy. We are encouraged by the growth in its orderbook and
raise our target price by 9% to S$4.50. Maintain HOLD. Entry price is S$4.10.
From Phillip:
expectations, largely coming from the earn-out support as
assets are still in ramp up stage. This translates to a DPU of
0.95Scts. With occupancy at Shenyang Red Star Furniture
Mall, Shenyang Longemont Office and Perennial Jihua Mall
Foshan ramping up, earnings visibility and sustainability has
improved, while downside risk is protected by the remaining
earn out support. We maintain our Buy call on PCRT with
$0.84 TP for its attractive 6% yield and 0.9x P/NAV valuation.
ST Engineering’s 1Q13 net profit of S$134m is in-line with
estimates, after adjusting for one-off items. STE announced a
record order book of S$13bil as of end-1Q13, up from
S$12.1bil at end-FY12, as they took in big orders in 1Q13.
Our analyst assumes YTD order wins to be S$2bil in FY13,
which is about half the figure recorded in FY12. This
underpins steady 6% growth in earnings over FY13/14.
Operating cash flow is strong, gross cash levels exceeded
S$2bn and future dividends appear secure. Maintain BUY
with higher TP of S$4.80 (prev. $4.40).
Sound Global’s 1Q13 net profit of RMB61.5m (-20% y-o-y, -
25% q-o-q) was 10% below forecast despite higher sales.
This is due to higher interest expenses and taxes. Finance
costs skyrocketed to RMB76.8mil from Rmb30mil because
interest for the US$ senior notes surged to S$41.7mil versus
our analyst’s forecast of S$29.3mil due to withholding tax.
The tax rate was also higher at 25% versus our assumption of
15%. Meanwhile, the RMB3bil EPC backlog continues to
offer visibility. Our analyst cuts FY13F/14F to reflect higher
finance cost and reduced valuation peg to 11xFY13 (-0.5SD).
Consequently, TP is lowered to S$0.63 (prev $0.81).
Downgrade to HOLD given limited upside to new TP.
