Monday, October 20, 2014

Singapore Airlines target cut to $8.90 from $11 by Standard Chartered

Stock Name: SIA
Company Name: SINGAPORE AIRLINES LTD
Research House: StanChartPrice Call: SELLTarget Price: 8.90



SINGAPORE (Oct 20): Standard Chartered Bank has cut its price target for Singapore Airlines from $11 to $8.90, based on 0.8 times projected FY2015 book value. Its previous target was pegged at parity to book value.

The bank has also lowered its earnings per share estimates for SIA by 35.7% and 54.1% respectively for FY2015 and FY2016 to factor in Tiger Airways' losses.

Tiger, now 40% owned by SIA, will become a subsidiary of the full-service carrier following its recently announced rights issue, which will raise as much as $234 million.

Tiger downgraded to 'underperform' with lower 23 cents target price

Stock Name: Tigerair
Company Name: TIGER AIRWAYS HOLDINGS LIMITED
Research House: StanChartPrice Call: SELLTarget Price: 0.23



SINGAPORE (Oct 20): Standard Chartered's equity research has downgraded Tiger Airways Holdings to "underperform" from "in line".

It has also cut its target price to 23 cents from 41 cents.

As Tiger Air cut its bases in the Philippines, Indonesia and Australia, it has become a LCC based only in small and competitive Singapore, sharing the market with SIA, Silkair and Scoot, says Stanchart in an Oct 17 report.

This means a turnaround of its business remains tough.

Tiger Air posted an operating loss of $25.3 million in 2QFY15.

SingPost started at 'buy' by CLSA with $2.50 target price

Stock Name: SingPost
Company Name: SINGAPORE POST LIMITED
Research House: CLSAPrice Call: BUYTarget Price: 2.50



SINGAPORE (Oct 20): CLSA Research has initiated a "buy" call on SingPost with a target price of $2.50.

SingPost, Asean's top e-commerce logistics service provider, has used the profit generated from its cash-cow mail segment to diversify its business at the right time, says CLSA analyst Paul Wan in the report dated Oct 20.

With e-commerce enjoying rapid growth in Asia, the company has also expanded its geographical exposure in the region, as consumers are no longer restricted by bricks and mortar.

CapitaMall Trust upgraded to "buy" from "hold" by CIMB

Stock Name: CapitaMall Trust
Company Name: CAPITAMALL TRUST
Research House: CIMBPrice Call: BUYTarget Price: 2.11



SINGAPORE (Oct 20): CIMB has upgraded its rating on CapitaMall Trust to "add" from "hold", saying the stock offers an "attractive" total return of 16%, based on its unchanged price target of $2.11, following its recent pullback.

Fundamentally, while the REIT's organic growth is likely to remain anaemic in the near term, tenant sales and shopper traffic are seeing some traction, with lower y-o-y declines, according to CIMB analyst Lock Mun Yee.

Wednesday, October 8, 2014

Sembcorp Marine raised to "add" from "neutral" by CIMB

Stock Name: Sembcorp Marine
Company Name: SEMBCORP MARINE LTD
Research House: CIMBPrice Call: BUYTarget Price: 4.11



CIMB has upgraded its rating on Sembcorp Marine ( Financial Dashboard) to “add” from “neutral”, saying the stock’s 18% year-to-date fall “is overly done”.

One of the main reasons for the decline has been multiple schedule shifts for SembMarine’s first drillship to be sailed off to Brazil, according to CIMB analyst Lim Siew Khee.

“Now that the drillship is finally on its way to Brazil, we believe investors should have less concern about SembMarine’s execution and delivery capability,” Lim said in a note.

“With the drillship finally out of its Jurong yard, we think SembMarine has crossed a new hurdle and could alleviate market fears of further delays.”

Despite upgrading her rating, Lim has cut her price target from $4.30 to $4.11, based on 13.5 times earnings, a 10% discount to the stock’s long-term average of 15 times.

Shares of SembMarine traded at $3.62, up 1.1%, at 0343 GMT.

Keppel Corp cut to "reduce" from "buy" by Nomura

Stock Name: Keppel Corp
Company Name: KEPPEL CORPORATION LIMITED
Research House: NomuraPrice Call: SELLTarget Price: 9.64



Nomura has downgraded its rating on Keppel Corp ( Financial Dashboard) to “reduce” from “buy” and cut its price target from $13.20 to $9.64, based on a sum-of-parts valuation.

The Japanese broking house expects a significant slowdown next year in global jack-up rig orders, and its FY2014 to FY2016 earnings estimates for Keppel are 7% to 18% below consensus forecasts.

“The key downside risk to consensus forecasts is the optimism on Keppel’s ability to replenish its rig building order book quickly and grow its offshore and marine revenue vs our view that the slowing jack-up rig orders since early 2014 will worsen in 2015,” Nomura analysts Chong Wee Lee and Abhishek Nigam said in a note today.

Keppel’s proprietary semi-submersible rig designs are unlikely to benefit from an expected recovery in orders for floaters from 2Q2015 as drill ships are preferred, they said.

Global jack-up rig orders may weaken next year because of near-term oversupply, with a 71% y-o-y rise in scheduled jack-up rig deliveries to 65 units in 2015, they said.

Of the 65 units, only 8% have been contracted.

Average charter rates for jack up rigs have also declined, while utilization rates peaked at 88.6% in April this year.

“This may affect Keppel’s order book visibility.”

The “saving grace” for Keppel’s offshore and marine division is that higher-margin offshore and conversion works and ship repair jobs provide a steady income to the group, they said.

“We expect 65% of Keppel’s order wins in 2015 to be related to conversion works on production units, which are insufficient to make up for the revenue dip from rig building projects.”

Shares of Keppel traded at $10.28, down 0.2%, at 0252 GMT.

Tuesday, September 23, 2014

Morgan Stanley upgrades Genting Singapore to "overweight"; $1.30 target

Stock Name: Genting Sing
Company Name: GENTING SINGAPORE PLC
Research House: Morgan StanlyPrice Call: BUYTarget Price: 1.30



Morgan Stanley has upgraded Genting Singapore to “overweight” from “equal-weight” and raised its price target for the gaming group to $1.30 from $1.25.

It cites an expected move by Japan to legalize casinos in 4Q2014, the likely ground-breaking of Genting Singapore’s Jeju project in South Korea in 1H2015, and the opening of Jurong Hotel in Singapore next year as catalysts for the stock.

The company’s growth profile and ability to generate cash flow also “look better than Macau’s” in the near term, Morgan Stanley analysts Praveen K Choudhary and Xin Jin Ling say in a note.

On Japan, they say a bill to legalize casinos could pass in the upcoming Diet session in 4Q2014, paving the way for gaming groups like Genting Singapore to set up shop in the country.

“Genting Singapore has focused on Osaka, which it believes has a better prospect of having the first casino to open, as Tokyo is focused on preparing for the Olympic Games in 2020.”

Meanwhile, Genting Singapore’s investment in a casino-resort in Jeju is expected to start contributing from 2017, they say.

“Genting Singapore and its partner are targeting a soft opening of the 2,800-room hotel and facilities by 2017. The stated return of 10% would be accretive and more than what the company earns on its cash currently.”

Jeju could cater to a population of 800 million Northeast Chinese within a two-hour flight time, and mainland Chinese do not require a visa to enter Jeju, they note.

The opening of Jurong Hotel next year should drive Genting Singapore’s mass-market volumes and profitability, they add.

Revenue per available room for the group’s existing hotels has risen at a 14% compounded annual growth rate in the last three years, they say.

Shares of Genting Singapore traded at $1.135, up 2.3%, at 3:20 pm Singapore time.