UOL - UOL Group target raised to $5.70 vs $5.20 by RBS

Stock Name: UOL
Company Name: UOL GROUP LIMITED
Research House: RBS

Royal Bank of Scotland raises UOL Group (U14.SG) target price to $5.70 from $5.20 to factor in higher average selling price for developer's Spottiswoode residential project in Singapore, accretion from its China land acquisition, higher market valuation for its stakes in United Industrial Corp, keeps Buy call, says Dow Jones.

RBS says recent RMB2.06 billion ($405 million) purchase of Shanghai site should prove profitable, with residential project potentially fetching RMB50,000/sq m in average selling price vs RMB24,000/sq m acquisition price.

Research house adds recent Singapore housing-market curbs have resulted in subdued government land sales, which bodes well for UOL as company hasn't acquired any sites so far this year, but contemplating active participation in government tenders. Shares off 1.5% at $4.63.

CapitaComm - CapitaCommercial target raised to $1.66 by Nomura

Stock Name: CapitaComm
Company Name: CAPITACOMMERCIAL TRUST
Research House: Nomura

Nomura lifts CapitaCommercial Trust (C61U.SG) target price to $1.66 from $1.42 after raising FY12-14 DPU estimates by 3%-18% to reflect view of significantly higher office rentals from 2012, keeps Outperform call, says Dow Jones.



Nomura flags CCT as best proxy to play recovery in Singapore office market given its 60% exposure to prime office space: “Forward leasing will accelerate as a supply gap in the office sector emerges.”

Research house says while tenants in general prefer newer office space like Marina Bay’s, “we think there is still scope for well-located office buildings such as those within CCT’s portfolio to attract tenants who do not require super-high specifications.”



REIT off 0.7% at $1.45.





 

Rotary - Rotary Engineering downgraded to Neutral by CIMB

Stock Name: Rotary
Company Name: ROTARY ENGINEERING LIMITED
Research House: CIMB

CIMB downgrades Rotary Engineering (R07.SG) to Neutral from Outperform, cuts target price to $0.95 from $1.17 after lowering FY11-FY12 earnings estimates by 14%-23%, says Dow Jones.

CIMB says plant builder hasn't secured any major order in FY10.

Cuts annual order-win forecast for FY11-FY12 to between $300 million, $500 million.

Says current valuations rich at 9x FY11 P/E, but notes industry fundamentals still positive with opportunities in Singapore, Middle East plentiful.

Shares last off 0.5% at $0.935.

SuntecReit - Suntec REIT upgraded to Outperform by Macquarie

Stock Name: SuntecReit
Company Name: SUNTEC REAL ESTATE INV TRUST
Research House: MacQuarie

Macquarie upgrades Suntec REIT (T82U.SG) to Outperform from Neutral, lifts target price to $1.68 from $1.20 after raising FY12-14 DPU estimates by 9%-25% on optimism over office rental outlook for Singapore.



“We believe Suntec will be a beneficiary of rising rents resulting from an emerging supply gap in 2012.” says Macquarie, adding Marina Bay Financial Centre could be potential investment target for Suntec if part owner Cheung Kong Holdings (0001.HK) decides to sell its stake. REIT –0.7% at $1.49.

K-REIT - K-REIT Asia upgraded to Outperform by Macquarie

Stock Name: K-REIT
Company Name: K-REIT ASIA
Research House: MacQuarie

Macquarie upgrades K-REIT Asia (K71U.SG) to Outperform from Neutral, lifts target price to $1.38 from $1.05 after raising FY12-15 DPU estimates by 7%-16% to reflect higher rental assumptions from 2012, says Dow Jones.

"K-REIT is a beneficiary of our upgraded office outlook," says Macquarie.

Research house notes 85% of its portfolio comprises Singapore office assets. Adds pace of office rent recovery stronger than expected, with prime Grade A rents reaching $9.00 psf/month as at 3Q10 after bottoming in 1Q10 at $8.00 psf/month, due to active pre-leasing activity.

Tip Marina Bay Financial Centre, 33%-owned by K-REIT's sponsor Keppel Land (K17.SG), as potential acquisition target in 2011. Price +0.8% at $1.29.

Yangzijiang - Yangzijiang target raised to $2.05 vs $1.65 by CLSA

Stock Name: Yangzijiang
Company Name: YANGZIJIANG SHIPBLDG HLDGS LTD
Research House: CLSA

CLSA lifts Yangzijiang (BS6.SG) target price to $2.05 from $1.65 after raising peer-based valuation multiple to 16.0s P/E from 11.5X to reflect firmer recovery in shipbuilding sector, says Dow Jones.

CLSA also increases forecasts for shipbuilder’s order win for FY10-12 by 50%-90%. Keeps Outperform call.



“Yangzijiang's specialization in the construction of smaller-sized handymax and panamax bulk carrier sub-segments should stand it in better stead as these vessels are more flexible than the larger capsize vessels and are more highly geared to Chinese coastal trade,” says the research house.



Shares +1.1% at $1.78. 

M1 - M1 target raised to $2.50 by DBS Vickers, keeps Buy

Stock Name: M1
Company Name: M1 LIMITED
Research House: DBS Vickers

DBS Vickers lifts M1 (B2F.SG) target price to $2.50 from $2.30 after raising FY11-12 earnings estimates by 2%-5% to factor in more optimistic assumptions for broadband business, says Dow Jones.

 

DBS Vickers tips broadband revenue growth of 50% in FY11 to $42 million on low-base effect, then $54 million in FY12, driven by demand from small, medium enterprises. Keeps Buy call.



Broker says if M1's capex-to-sales ratio for FY11 lower than 12%, free cash flow would be higher, potentially resulting in special dividends or capital management exercise. Shares flat at $2.21. 

 

SoundGlobal - Sound Global raised to Buy by DBS Vickers with $0.96 target

Stock Name: SoundGlobal
Company Name: SOUND GLOBAL LTD.
Research House: DBS Vickers

DBS Vickers upgrades Sound Global (E6E.SG) to Buy from Hold, lifts target price to $0.96 from $0.84, based on 13.2x FY11 P/E, after increasing FY11 earnings forecast by 26%, says Dow Jones.

"We believe downside is limited in view of the various positive developments in the past month," says DBS Vickers.

Broker cites China-based water treatment firm's recent announcement of potential contract worth RMB1.38 billion ($272 million), RMB885 million raised through convertible bond sale, tomorrow's dual-listing in Hong Kong. Says RMB1.38 billion contract, once finalized, will bring year-to-date contract value to record RMB1.5 billion, 48% more than whole of last year's.

Shares +9.3% at $0.885.

Venture - Venture Corp target raised to $10.93 by BNP Paribas; Buy

Stock Name: Venture
Company Name: VENTURE CORPORATION LIMITED
Research House: BNP Paribas

BNP Paribas lifts Venture Corp. (V03.SG) target price to $10.93 from $10.42 after increasing FY10-11 earnings estimates by 11.7%-14.4% to account for contract electronics manufacturer's better-than-expected recovery momentum, lower-than-anticipated raw material shortage and labour increase, says Dow Jones.

"Despite a soft July, the order momentum in August and September was holding up well, according to cross-checks with most of the industry operators, who expressed improved optimism," says BNP Paribas.

BNP says recent slowdown in demand for PCs, other consumer electronics has helped to free up many common components: "We expect the easing of the component shortage to benefit Venture's working capital management and that it will have a greater positive impact on profitability as the new raw material cost is lower than previously forecast."

Keeps Buy call. Shares +0.9% at $9.32.

FirstRes - First Resources started at Buy by Phillip Securities

Stock Name: FirstRes
Company Name: FIRST RESOURCES LIMITED
Research House: Phillip Securities

Phillip Securities starts First Resources (EB5.SG) at Buy with $1.33 target, says Dow Jones.



Phillip says company one of purest upstream planters in industry, managing about 115,000 ha of planted oil palm in Indonesia.



“The group has one of the youngest oil palms and we expect CPO production to increase with yields to continue to improve in the next few years,” says broker.

Phillip adds while FFB (fresh fruit bunch), CPO yields may sometimes decline when new plantings increase, “these operational metrics should be trending higher for the group in the next few years, given that First Resources has very little old oil palms and has the bulk of its trees in their early prime age.”



Shares +1.8% at $1.16.





 

Noble Grp - Noble target raised to $2.21 by Daiwa, Keeps Buy

Stock Name: Noble Grp
Company Name: NOBLE GROUP LIMITED
Research House: Daiwa

Daiwa raises Noble Group's (N21.SG) target price to $2.21 from $2.00 to factor in recent rise in shares of commodity supplier's peers. Keeps Buy call, says Dow jones.



"While we do not expect superb 3Q10 net-profit growth due to the challenging market conditions for soybean crushing in China, international dry-bulk shipping, and spot iron-ore trade, we do expect good things from the company's energy-trading division from 4Q10," says Daiwa.



Research house notes Noble expanding energy trading team to cover various asset classes; "in our view, Noble is trying to step into a market vacuum left by investment banks, which have generally been consolidating their operations due to new regulations and capital constraints." Shares last off 1.1% at $1.89.

Otto Marine - Otto Marine cut to Neutral by DMG; Target $0.39

Stock Name: Otto Marine
Company Name: OTTO MARINE LIMITED
Research House: DMG

DMG downgrades Otto Marine (G4F.SG) to Neutral from Buy, cuts target price to $0.39 from $0.46, based on 10x blended FY10-11 earnings, says Dow Jones.



Changes follow reduction in FY10-12 earnings forecasts by 13.3%, 4.6%, 1.9% respectively to reflect order cancelation, fewer contract assumptions.



DMG notes Norwegian customer Mosvold Supply’s intention to cancel order for vessel being built by Otto: “The highly leveraged position of Mosvold Supply has made it difficult for the company to take delivery.”



Says Otto hasn’t secured any new shipbuilding contract so far this year. Shares up 1.4% at $0.375.

UtdEnvirotech - United Envirotech target lifted to $0.63 by OCBC

Stock Name: UtdEnvirotech
Company Name: UNITED ENVIROTECH LTD
Research House: OCBC

OCBC Investment Research lifts United Envirotech (U19.SG) target price to $0.63 from $0.52 to factor in higher free cashflow growth rate as some of China-based wastewater treatment firm's newly-completed projects start contributing from October. Keeps Buy call, says Dow Jones.



OCBC expects more projects to come following recent win of RMB200 million ($39.5 million) contract to build treatment plant in Neijiang Xi Industrial Park in Sichuan province: "We view the latest development as a further endorsement of the company's market leading position in industrial MBR (membrane bio reactor) technology as well as the optimistic prospects for the wastewater industry in China."



Shares off 2.1% at $0.465.





 

 

NOL - NOL target cut to $1.94 by Nomura; Keeps Neutral

Stock Name: NOL
Company Name: NEPTUNE ORIENT LINES LIMITED
Research House: Nomura

Nomura cuts Neptune Orient Lines (N03.SG) target price to $1.94 from $2.30, based on 0.8X 2011 P/B vs 1.1x previously, to reflect lower average freight rates.



“Although container freight rates are traditionally weaker during the 4Q peak season end, we expect freight rates to continue to decline into 2011,” says Nomura.



Reseach house says rates have peaked, expected to fall 5% in 2011 as supply exceeds demand. Keeps Neutral call. Shares off 0.5% at $2.01.





 

Jardine C&C - Jardine C&C, Astra targets raised by Goldman Sachs

Stock Name: Jardine C&C
Company Name: JARDINE CYCLE & CARRIAGE LTD
Research House: Golman Sachs

Goldman Sachs raises Jardine Cycle & Carriage (C07.SG) target price to $40.00 from $38.00 after raising target for Indonesian unit Astra International (ASII.JK) to IDR49,000 ($7.2) from IDR45,500, says Dow Jones.



Change for Astra follows roll-over of NAV estimate to 2011 basis. Keeps both stocks at Neutral on valuation grounds but prefers Jardine C&C over Astra as cheaper option. Says motorcycle sales in Indonesia remain robust, driven by strong consumer credit, lower lending rates, increased consumer confidence, although car sales less robust.



Jardine C&C +2.7% at $39.08.

CDL HTrust - CDL Hospitality increases target to $2.39 by CIMB

Stock Name: CDL HTrust
Company Name: CDL HOSPITALITY TRUSTS
Research House: CIMB

CIMB lifts CDL Hospitality Trusts (J85.SG) target price to $2.30 from $2.04 to factor in contributions from potential acquisitions in near term, plus lower cost of debt, says Dow Jones.



CIMB says Studio M hotel, owned by sponsor Millennium & Copthorne (MLC.LN), likely to be injected into REIT. Notes 365-room hotel’s occupancy has already outperformed market average despite opening only in April.

“In view of the tourism boom in Singapore and Studio M’s performance thus far, we believe the gestation period for this asset is likely to be much shorter than usual,” adds CIMB.



Research house says CDL’s cost of debt expected to eventually head down to 3.5% from 4.0% in 2Q10 after recent note program to refinance $350 million. Keeps Outperform call. Price +2.9% at $2.10.

Genting SP - Genting Singapore target raised to $2.60 by Deutsche

Stock Name: Genting SP
Company Name: GENTING SINGAPORE PLC
Research House: Deutsche Bank

Deutsche Bank lifts Genting Singapore (G13.SG) target price to $2.60 from $1.93, based on 14x EV/EBITDA, after raising core FY10-12 earnings forecasts by 34%-42%, says Dow Jones.



“We believe Street expectations are still reasonable and see further upside should junkets be allowed to operate,” says Deutsche Bank.

Research house expects junkets to be licensed in Singapore by early 2011: “We understand that roughly 20 junkets have applied for a license with the Casino Regulatory Authority and an interview process has begun.”



Keeps Buy call, but expects limited upside in near term after recent strong run-up. Shares up 1.99% at $2.05.

Yangzijiang - Yangzijiang target raised to $2.20 vs $1.90 by Credit Suisse

Stock Name: Yangzijiang
Company Name: YANGZIJIANG SHIPBLDG HLDGS LTD
Research House: Credit Suisse

Credit Suisse lifts Yangzijiang (BS6.SG) target price to $2.20 from $1.90, based on 13x FY2011 P/E, to align valuation with sector average, keeps Outperform call, according to Dow Jones.



“The market is underestimating Yangzijiang’s growth potential, and the stock will be re-rated as container ship orders accelerate and strong margins are maintained,” says Credit Suisse.



Research house notes when China-based shipbuilder’s new yard ready in 2012, company will be able to construct container ships carrying 8,000 TEUs (20-foot equivalent units), allowing it to move up value chain, compete more effectively with Korean yards. Shares +1.1% at $1.78 Friday.

MapletreeLog - Mapletree raised to Buy vs Hold by OCBC; Ups target

Stock Name: MapletreeLog
Company Name: MAPLETREE LOGISTICS TRUST
Research House: OCBC

OCBC Investment Research upgrades Mapletree Logistics Trust (M44U.SG) to Buy from Hold, lifts target price to $0.90 from $0.89, says Dow Jones.



Advocates buying REITs with proven track record of taking on accretive acquisitions, competitive fund-raising exercises.



"MLT certainly falls in this category," says OCBC.



OCBC adds REIT's 3.4% fall to $0.85 yesterday not justified as MLT's latest $304.9 million cash call expected, with terms fairly competitive.



Exercise comprises private placement of 207.3 million new units at $0.825 each, preferential offering of 164.3 million new units at $0.815 each, with investors entitled to 2 new units for every 25 already held.

Tee - CIMB starts TEE Int'l at buy, $0.57 target

Stock Name: Tee
Company Name: TEE INTERNATIONAL LIMITED
Research House: CIMB

CIMB initiates coverage on TEE International (577.SG) with Buy call, $0.57 sum-of-parts target price, says Dow Jones.

CIMB says mechanical, engineering group, which also has business in property development, trades at cheap valuation of 5x FY10 P/E vs 7x industry average.

Research house notes market yet to recognise TEE's growth potential in property business, which expected to drive earnings with 2 projects planned for completion in 2014-2015, potentially contributing combined $53 million-$64 million to group revenue.

 

Adds stock now trading cum-dividend of $0.022, which translates to potential 5% dividend yield. Shares last flat at $0.455.

Hersing - Hersing Corp started at Buy by Phillip Securities

Stock Name: Hersing
Company Name: HERSING CORPORATION LTD
Research House: Phillip Securities

Phillip Securities starts Hersing Corp. (H28.SG) at Buy with $0.355 target price, says Dow Jones.



Phillip says while Singapore-based provider of real estate brokerage, consultancy services may not be spared fallout from recent government measures to cool housing market, outlook for its remittance and storage businesses appear rosy, backed partly by country’s demand for foreign labour.

“For the storage segment, it may provide a buffer against the general cyclicality of Hersing’s business, as people tend to downgrade or even lose their dwellings during a downturn. Yet, given the inexpensive solution of renting storage space, this could be a cheaper alternative for storing their precious clutter,” says Phillips.



Shares off 1.7% at $0.29.

IndoAgri - Indofood Agri Resources cut to Equalweight by Morgan Stanley

Stock Name: IndoAgri
Company Name: INDOFOOD AGRI RESOURCES LTD.
Research House: Morgan Stanly

Morgan Stanley downgrades Indofood Agri Resources (5JS.SG) to Equalweight from Overweight, cuts target price to $2.30 from $2.60, says Dow Jones.



Morgan Stanley says changes reflect reduction in FY10-FY12 earnings estimates by average 16% to reflect weaker-than-expected production outlook this year, higher costs, lower profits from branded cooking oil business.



Research house adds, valuations look full. Tips rebound in CPO price and production volumes, plus sustained decline in cost of capital as catalysts for stock.



Shares +0.4% at $2.34.

IndoAgri - Indofood Agri Resources cut to Equalweight by Morgan Stanley

Stock Name: IndoAgri
Company Name: INDOFOOD AGRI RESOURCES LTD.
Research House: Morgan Stanly

Morgan Stanley downgrades Indofood Agri Resources (5JS.SG) to Equalweight from Overweight, cuts target price to $2.30 from $2.60, says Dow Jones.



Morgan Stanley says changes reflect reduction in FY10-FY12 earnings estimates by average 16% to reflect weaker-than-expected production outlook this year, higher costs, lower profits from branded cooking oil business.



Research house adds, valuations look full. Tips rebound in CPO price and production volumes, plus sustained decline in cost of capital as catalysts for stock.



Shares +0.4% at $2.34.

SGX - SGX upgraded to Buy by DBS Vickers with $9.60 target

Stock Name: SGX
Company Name: SINGAPORE EXCHANGE LIMITED
Research House: DBS Vickers

DBS Vickers upgrades Singapore Exchange (S68.SG) to Buy from Fully Valued, lifts target price to $9.60 from $6.90 after changing valuation method to dividend discount model from P/E basis, according to Dow Jones.

DBS Vickers says recent initiatives by bourse operator positive for growth prospects.



These include allowing ADR trading in Singapore, clearing over-the-counter traded financial derivatives, launching corporate bond trading for retail investors, all due from October.



Broker says SGX remains cheapest stock exchange in Asia, trading at about 20X P/E vs 31x for Hong Kong Exchanges & Clearing (0388.HK), 25x for Bursa Malaysia (1818.KU). Shares +2.2% at $8.69.

 

 

TigerAir - Tiger Airways started at Outperform by CLSA

Stock Name: TigerAir
Company Name: TIGER AIRWAYS HOLDINGS LIMITED
Research House: CLSA

CLSA starts Tiger Airways (J7X.SG) at Outperform with $2.46 target price, says Dow Jones.



CLSA says industry fundamentals supportive of budget carrier's growth, with Asia offering airlines like Tiger large under-served population, rising incomes, improving infrastructure.



"Tiger is a focused company providing low fares to entice consumers, and like the cinemas is selling high-margin services to enhance profitability," says research house.



Forecasts 3-year EPS CAGR of 43%. Says Tiger's focus on cost control bodes well for bottomline.



Shares off 0.9% at $2.15.

 

 

MIDAS - Midas lowered to Neutral by CIMB; $1.10 target

Stock Name: MIDAS
Company Name: MIDAS HLDGS LIMITED
Research House: CIMB

CIMB downgrades Midas Holdings (5EN.SG) to Neutral from Outperform on valuation grounds, says Dow Jones.



“The market is responding well to the group’s impending Hong Kong listing...(but) we believe the recent run in its share price has priced in the positives,” says CIMB.



The research house is trimming its target price to $1.10 from $1.14 to reflect dilution stemming from sale of 220 million new shares in IPO, with over-allotment option for another 33 million shares.



Offer price expected to be finalized by September 28, won’t exceed HK$6.10 or $1.05.



Trading begins October 6. Shares off 0.9% at $1.06.

Noble Grp - Noble Group cut to Hold by Phillip Securities

Stock Name: Noble Grp
Company Name: NOBLE GROUP LIMITED
Research House: Phillip Securities

Phillip Securities downgrades Noble Group (N21.SG) to Hold from Buy on limited upside to its $1.96 target price, says Dow Jones.



Stock +8.4% yesterday on optimism over earnings visibility following US$582 million ($772.6 million) acquisition of US electricity group Sempra Energy Solutions.



Despite downgrade, house still positive on commodities supplier's prospects.



Says Sempra Energy will add breadth, retail capabilities to Noble's natural gas and power business, contributing about US$80 million annually to group's earnings.



Shares off 0.5% at $1.93.





 

CoscoCorp - Cosco raised to Buy by Citi, lifts target to $2.30

Stock Name: CoscoCorp
Company Name: COSCO CORPORATION (S) LTD
Research House: Citigroup

Citigroup upgrades Cosco (F83.SG) to Buy from Sell, lifts target price to $2.30 from $1.40 after increasing FY11-12 earnings estimates by 23%-26%, says Dow Jones.



Citi notes outlook for shipbuilding industry has improved significantly after period of large losses: “Our EPS forecasts are above consensus numbers as we believe Cosco is one of few yards that can deliver strong year-on-year growth even in an industry downturn.”



Research house says consensus view underestimates Cosco’s ability to deliver on margins: “A key development the Street has likely overlooked is the strong progress made through simple fabrication to complex integration work for both rigs and FPSO (floating, production, storage, offloading) vessels. Cosco has also penetrated into windmill vessels, tapping into growing global demand for alternative energy.”



Shares +5.2% at $1.82. 

K-REIT - K-REIT started at Outperform by Credit Suisse, $1.45 target

Stock Name: K-REIT
Company Name: K-REIT ASIA
Research House: Credit Suisse

Credit Suisse starts K-REIT Asia (K71U.SG) at Outperform with $1.45 target price, says Dow Jones.



Credit Suisse says office landlord's portfolio of prime assets well positioned to benefit from rising rents in Singapore, with downside protected as earnings cushioned by long-term leases with clauses for rental escalation.

Research house also notes 60% of K-REIT's assets are grade-A office buildings, which tend to lead during industry upturn. Says K-REIT's balance sheet among strongest in S-REIT sector, with 15% gearing vs 31.8% sector average.



Adds REIT has backing from sponsor Keppel Land (K17.SG), which can potentially inject $4.5 billion worth of completed, nearly-completed assets into property trust.



Price +0.8% at $1.29.

Wilmar - Wilmar target cut to $7.45 from $8.00 by Morgan Stanley

Stock Name: Wilmar
Company Name: WILMAR INTERNATIONAL LIMITED
Research House: Morgan Stanly

Morgan Stanley cuts Wilmar (F34.SG) target price to $7.45 from $8.00 after reducing FY10-12 earnings forecasts by average 9% to factor in plantation group’s weak 2010 results, later-than-expected 2H10 recovery in midstream margins, according to Dow Jones.



Morgan Stanley expects share price to be capped by lack of growth this year but still keeps Overweight call on view Wilmar remains most vertically integrated plantation play.



“In addition, Wilmar has significant direct exposure to China and India, which makes it a rare emerging market play,” says research house. Shares +0.2% at $6.35.

ThomsonMed - Thomson Medical cut to Neutral by DMG, ups target

Stock Name: ThomsonMed
Company Name: THOMSON MEDICAL CENTRE LIMITED
Research House: DMG

DMG downgrades Thomson Medical Centre (5FV.SG) to Neutral from Buy after 38% rally in last 2 months, with shares now trading at 19x FY10 P/E, according to Dow Jones.



“Given that Thomson Medical is a niche obstetrics and gynaecology provider, and that growth is somewhat limited by capacity, we hold the opinion that it should trade at a discount to regional peers’ average” of 21x forward P/E, says DMG.

Research house notes Thomson Medical now running at almost full capacity: “There is only so much more that Thomson Medical can do in order to accommodate more patients and deliveries. Hence, we think that growth from hospital operations would be limited.”



Still, lifts target price to $0.94 from $0.88 after raising FY10-11 earnings estimates by 8%-7% to account for higher margins on back of increased utilization. Shares off 1.0% at $0.985.

JES - JES started at Buy by DBS Vickers, $0.46 target

Stock Name: JES
Company Name: JES INTERNATIONAL HOLDINGS LTD
Research House: DBS Vickers

DBS Vickers starts JES International (EG0.SG) at Buy with $0.46 target price, based on 1.5x FY11 P/B, which implies 17x FY11 P/E, says Dow Jones.



DBS Vickers says China-based shipbuilder most undervalued shipyard in Asia, trading below book at 0.8x P/B: “We believe that JES is poised to play catch up as the wheel of fortune turns in its favour.”

Notes worst over for shipbuilding industry, with orders for bulk carriers picking up due to lower prices, robust demand from China ship owners.



Says commencement of JES’ new yard in 2H10 will be main growth driver in 2010-2011. Tips FY10 net profit of RMB60 million ($11.9 million), RMB161 million profit in FY11 vs RMB104 million loss last year. Adds low valuations, net cash position make JES ideal target for privatisation.



Shares +39.1% at $0.32.

Noble Grp - Noble upgraded to Neutral by CIMB, lifts target

Stock Name: Noble Grp
Company Name: NOBLE GROUP LIMITED
Research House: CIMB

CIMB upgrades Noble Group (N21.SG) to Neutral from Underperform, lifts target price to $1.62 from $1.27 after increasing FY11-12 EPS estimates by 15%-17% to account for earnings contributions from Sempra Energy Solutions, which company is buying for US$582 million ($776 million) (including debt).



CIMB says price tag attractive, Sempra Energy’s net margins of 5.0% higher than Noble’s. Notes, investment also provides 14.5% earnings yield vs Noble’s long-term borrowing cost of 6.625%.



Research house says funding not an issue given Noble’s recent bond sales, cash from sale of its Middlemount coal mine in Australia. Shares +6.1% at $1.90.

NOL - NOL upgraded to Outperform by Macquarie with $2.50 target

Stock Name: NOL
Company Name: NEPTUNE ORIENT LINES LIMITED
Research House: MacQuarie

Macquarie upgrades Neptune Orient Lines (N03.SG) to Outperform from Underperform, lifts target price to $2.50 from $1.25, based on 1.2x P/B, says Dow Jones.



Changes reflect stronger-than-expected recovery in container shipping freight rates, NOL’s substantial exposure to Transpacific, Asia-Europe long-haul routes.



“We believe NOL can maintain solid volume growth” supported by strong relationships with customers such as Target, Limited Brands and Kimberly Clark; “these relationships lead to less reliance on spot rates, especially on the important Transpacific routes, which account for over half of revenues.”



Shares +1.0% at $2.00.

Yangzijiang - Yangzijiang cut to Hold by OCBC; But ups target

Stock Name: Yangzijiang
Company Name: YANGZIJIANG SHIPBLDG HLDGS LTD
Research House: OCBC

OCBC Investment Research downgrades Yangzijiang (BS6.SG) to Hold from Buy on valuation grounds after recent run-up, says Dow Jones.



Still, lifts target price to $1.90 from $1.76, based on 13x blended FY10-11 earnings vs 12x previously, to account for China-based shipbuilder’s better outlook, backed by recent U$915 million ($1.2 billion) worth of contracts to build 28 vessels.



“In the short term, we believe that the group’s earnings will be supported by the securing of more orders as customers take advantage of lower ship prices,” says



Shares off 1.1% at $1.74.

StarHub - Starhub lifted to Hold by Citi; Target raised to $2.45

Stock Name: StarHub
Company Name: STARHUB LTD
Research House: Citigroup

Citigroup upgrades Starhub (CC3.SG) to Hold from Sell, lifts target price to $2.45 from $2.15 after reducing long-term capex assumptions, says Dow Jones.



Citigroup expects capex-to-sales ratio to normalse to 10%-11% from FY11 after peaking at 14% in FY10 as telco now in process of building its infrastructure to tap on Singapore’s high-speed national broadband network: “Dividends are thus better matched against free cashflow generation over the longer term, allowing sustainable (dividend) payout of $0.20/year.”



But notes valuation remains expensive while earnings growth still lacking. Shares off 0.4% at $2.48.

ST Engg - ST Engineering raised to Buy by OCBC with $3.66 target

Stock Name: ST Engg
Company Name: SINGAPORE TECH ENGINEERING LTD
Research House: OCBC

OCBC Investment Research upgrades ST Engineering (S63.SG) to Buy from Hold, lifts target price to $3.66 from $3.28, based on 21x FY11 EPS vs 20x blended FY10-FY11 EPS previously, says Dow Jones.



OCBC expects company to benefit from earlier-than-expected recovery in global aviation maintenance, repair, overhaul industry, given surge in passenger aircraft orders at recent airshows.



Research house notes, company has been clinching new contracts in past months, demonstrating “STE’s strong market position and its ability to delivery reliable and innovative solutions.”



Shares off 1.2% at $3.28.

HKLand US$ - Hongkong Land started at Reduce by BNP Paribas with US$5.42 target

Stock Name: HKLand US$
Company Name: HONGKONG LAND HOLDINGS LIMITED
Research House: BNP Paribas

BNP Paribas starts Hongkong Land (H78.SG) at Reduce with US$5.42 ($7.24) target price, according to Dow Jones.



BNP Paribas notes current share price has exceeded its 2008 peak by 33%, but rents in Central HK still 20%-25% below their 2008 levels.



Research house says Hongkong Land still faces negative reversionary pressure on rents as existing expensive leases get renewed in 2011; “even if the rise in spot rents were to maintain its momentum, greater benefits would only be seen in 2012, when we expect 10% growth in gross-rental income.”



Shares up 0.2% at US$5.98.





 

Biosensors - Biosensors started at Buy by DBS Vickers with $1.20 target

Stock Name: Biosensors
Company Name: BIOSENSORS INT'L GROUP, LTD.
Research House: DBS Vickers

DBS Vickers starts Biosensors (B20.SG) at Buy with $1.20 sum-of-parts target price, according to Dow Jones.



DBS Vickers says heart-stent maker technologically ahead of rivals, well positioned to gain market share: “Biosensors is awaiting approvals for its product to be sold in Japan and China. There could be room for earnings upgrades once these are granted.”���



Broker notes stent market in both countries worth combined U$800 million-U$1 billion ($1.1 billion-$1.3 billion). Thinks company an attractive takeover target for larger peers, while upcoming HK listing of MicroPort Scientific, which makes equipment for keyhole surgery, could help boost interest in Biosensors.���



Forecasts earnings CAGR of 24% over FY10-12. Shares +7.1% at $0.90.





 

Genting SP - Genting +0.5% at $2.04; Underestimated by market: OSK

Stock Name: Genting SP
Company Name: GENTING SINGAPORE PLC
Research House: OSK

Genting Singapore (G13.SG) +0.5% at $2.04, pausing for breather after setting record $2.06 high in early trade on continued optimism over gaming group’s Resorts World Sentosa.



“Momentum is waning and the stock has been rising on declining volume,” a dealer told Dow Jones; “it needs positive surprise to justify the rise as much of the positives appear priced in.”

Immediate support at five-day moving average, last at $1.98. OSK, which has Buy call with $2.65 target, says stock could still head higher, backed by stronger-than-expected margins, gaming volume growth.



“The market is underestimating RWS’ sustainable EBITDA run rates given the benign supply environment and low gaming tax rates over the foreseeable future, which allow the group to boost margins from future operating leverage gains,” says dealer.





 

SMRT - SMRT cut to Underperform by CIMB with $1.95 target

Stock Name: SMRT
Company Name: SMRT CORPORATION LTD
Research House: CIMB

CIMB downgrades SMRT (S53.SG) to Underperform from Neutral, cuts target price to $1.95 from $2.31 after lowering FY12-13 EPS estimates by 3%-4%, factoring in higher capex assumptions, according to Dow Jones.



“We remain wary of losses on the Circle Line with the opening of more stations in 2011, and margin pressure from rising fuel and electricity costs,” says CIMB.



Research house says Circle Line may take four years to break even vs three years for North-East Line, run by rival ComfortDelgro’s (C52.SG) SBS Transit (S61.SG) unit.



Notes North-East Line ridership supported by large population catchment, giving it edge over Circle Line. Shares off 1.0% at $2.07.





 

StarHub - Starhub target raised to $2.97 vs $2.62 by Macquarie

Stock Name: StarHub
Company Name: STARHUB LTD
Research House: MacQuarie

Macquarie lifts Starhub’s (CC3.SG) target price to $2.97 from $2.62 after increasing FY11-FY12 earnings estimates by 5% each; keeps Outperform call, according to Dow Jones.



Macquarie expects investors to be positively surprised over next 24 months with increased contributions from corporate data business on back of Singapore’s new high-speed national broadband network, better dividend outlook due to lower capex; also notes pay-TV business holding up well.



Research house expects new broadband network to boost telco’s market share in corporate data space by 4% in FY11 from 15% now. Says overall profit margins should improve in absence of English Premier League, World Cup content costs.



Shares last +0.8% at $2.50.

Genting SP - Genting Singapore target raised to $2.45 by Citi with Buy call

Stock Name: Genting SP
Company Name: GENTING SINGAPORE PLC
Research House: Citigroup

Citigroup lifts Genting Singapore (G13.SG) target price to $2.45 from $1.55, based on 15.3x 2011 EV/EBITDA vs 12.5x previously, according to Dow Jones.



Citi keeps Buy call; “given a duopoly, a significantly larger market size than we had originally anticipated and the higher margins given the low Singapore tax, we now believe it is appropriate to value Singapore at a 30% premium to Macau.”



Research house says while non-gaming attractions at Resorts World Sentosa will take considerable time to break even, they will nonetheless attract more visitors, potentially leading to more gaming revenue.



Shares +1.5% at $2.00.





 

KencanaAgri - Kencana Agri cuts to Fully Valued by DBS Vickers

Stock Name: KencanaAgri
Company Name: KENCANA AGRI LIMITED
Research House: DBS Vickers

DBS Vickers downgrades Kencana Agri (F9M.SG) to Fully-Valued from Hold as stock has breached $0.35 target price, according to Dow Jones.



DBS Vickers says investors have more than priced-in plantation group’s 3-year volume CAGR of 25%, potential spike in next year’s earnings.



Notes stock trades at all-time high P/E of 19.6x 2011 earnings, driven by bigger peer Wilmar’s (F34.SG) recent move to take 20% stake in company for $80 million.



Shares down 2.4% at $0.405.

StraitsAsia - Straits Asia started at Buy by Nomura with $2.80 target

Stock Name: StraitsAsia
Company Name: STRAITS ASIA RESOURCES LIMITED
Research House: Nomura

Nomura starts Straits Asia Resources (AJ1.SG) at Buy with $2.80 target price, says Dow Jones.



Nomura says strong coal prices, pick-up in coal volumes should lead to earnings upturn, possible stock re-rating for Indonesia-based miner.



“We expect Straits Asia’s coal sales volumes to almost double over the next five years, driven by production increases at Jembayan mines and a strong ramp-up at Northern leases,” says research house.

Notes SAR generates strong operating cashflow that can be used to fund acquisitions. Says even if there’s no acquisition, dividend yield still attractive at estimated 5.8% for FY11, 8.3% for FY12, based on 60% dividend payout ratio. Shares –0.4% at $2.29 yesterday.

SunVic - Sunvic Chemical restarted at Buy by Phillip Securities

Stock Name: SunVic
Company Name: SUNVIC CHEMICAL HOLDINGS LTD
Research House: Phillip Securities

Phillip Securities restarts Sunvic Chemical (A7S.SG) at Buy with $0.60 target price, pegged at 5.5x FY10 P/E, according to Dow Jones.



Phillip Securities says FY10 will be record year for China-based chemical maker in terms of revenue and profit, backed by strong recovery in selling prices, resilient demand.

“There is enough visibility to extend this view by a further two years to FY 2012,” says broker.



Phillip Securities notes Sunvic setting up plants to produce own raw materials for making chemicals, resulting in cost savings, better margins. Says 1H 2010 RMB156.2 million ($30.9 million) net profit has already surpassed last three years’ respective full-year earnings.



Forecasts FY10 net profit of RMB300.9 million. Shares +6.5% at $0.410.

Genting SP - Genting Singapore target raised to $2.36 by DBS Vickers

Stock Name: Genting SP
Company Name: GENTING SINGAPORE PLC
Research House: DBS Vickers

DBS Vickers lifts Genting Singapore (G13.SG) target price to $2.36 from $2.00, based on 16.5x 2011-2012 EV/EBITDA vs 15x assigned to Wynn Macau (1128.HK), according to Dow Jones.



DBS Vickers says gaming group deserves premium valuation as it has highest profitability among Asian peers, strong earnings growth, backed by Singapore’s duopoly gaming market.

Broker keeps Buy call, saying: “The next wave of re-rating will likely come from (valuation) multiple expansions as earnings visibility improves and Asian robust consumption theme continues to be in vogue.”



Shares +2.1% at $1.95.

Ascendasreit - Ascendas REIT cut to Hold on valuation by Kim Eng

Stock Name: Ascendasreit
Company Name: ASCENDAS REAL ESTATE INV TRUST
Research House: Kim Eng

Kim Eng Securities downgrades Ascendas REIT (A17U.SG) to Hold from Buy on valuation grounds given limited upside to its $2.40 target price, says Dow Jones.



“While we do not expect any decline in capital value in the near term, all the positives seem to have been priced in”, with price trading at 1.4x book.



Kim Eng says outlook for Singapore’s industrial REIT sector muted as “economic data is none too exciting, given that 2Q most likely marked the peak of Singapore’s GDP growth.”



But broker adds upcoming supply of new industrial space shouldn’t pose major risk to Ascendas given its healthy pre-commitment level of 72% as of June. REIT down 3.9% at $2.20.

BreadTalk - BreadTalk started at Overweight by JPMorgan with $0.70 target

Stock Name: BreadTalk
Company Name: BREADTALK GROUP LIMITED
Research House: JP Morgan Chase

JPMorgan starts BreadTalk Group (5DA.SG) at Overweight with $0.70 target price, based on 15x FY11 P/E, according to Dow Jones.



JPMorgan says company has transformed from bakery chain into regional food & beverage player with strong presence in Singapore, China.



Research house notes, company more than doubled number of bakeries, restaurants, food courts over FY05-FY09, delivering revenue and net profit CAGR of 27%, 81% respectively over that period.



Adds wide range of F&B offerings positions it to take advantage of higher disposable income of China’s urban households, rising trend of dining out among mass affluent consumers: “We see strong potential in BreadTalk’s restaurant business, which generates the highest operating margin and average revenue per outlet among its three segments.”



Shares +5.4% at $0.585.

OUE Ltd - Overseas Union Enterprise started at Overweight by Morgan Stanley

Stock Name: OUE Ltd
Company Name: OVERSEAS UNION ENTERPRISE LTD
Research House: Morgan Stanly

Morgan Stanley starts Overseas Union Enterprise (LJ3.SG) at Overweight with $3.34 target price, according to Dow Jones.



Morgan Stanley notes about half of property group’s gross asset value derived from Singapore office sector, which house views favourably. Says management actively extracting value by undertaking asset enhancement initiatives for existing properties, while at same time acquiring assets to expand portfolio.



“OUE’s current asset portfolio of around $5 billion offers various opportunities for enhancement and redevelopment, which, if exercised, could unlock value and further expand the company’s asset and earnings base.”



Says large $5 billion balance sheet, relatively low gearing of 39% puts OUE in good position to take on more acquisitions. Shares +1.0% at $2.96 early.

OUE Ltd - Overseas Union Enterprise started at Overweight by Morgan Stanley

Stock Name: OUE Ltd
Company Name: OVERSEAS UNION ENTERPRISE LTD
Research House: Morgan Stanly

Morgan Stanley starts Overseas Union Enterprise (LJ3.SG) at Overweight with $3.34 target price, according to Dow Jones.



Morgan Stanley notes about half of property group’s gross asset value derived from Singapore office sector, which house views favourably. Says management actively extracting value by undertaking asset enhancement initiatives for existing properties, while at same time acquiring assets to expand portfolio.



“OUE’s current asset portfolio of around $5 billion offers various opportunities for enhancement and redevelopment, which, if exercised, could unlock value and further expand the company’s asset and earnings base.”



Says large $5 billion balance sheet, relatively low gearing of 39% puts OUE in good position to take on more acquisitions. Shares +1.0% at $2.96 early.

GoldenAgr - Golden Agri-Resources raised to Trading Buy by OSK

Stock Name: GoldenAgr
Company Name: GOLDEN AGRI-RESOURCES LTD
Research House: OSK

OSK upgrades Golden Agri-Resources (E5H.SG) to Trading Buy from Neutral, reinstates target price to $0.68 from $0.50, according to Dow Jones.



OSK says previous downgrade based on concerns plantation may be probed by authorities following allegations of false information dissemination by Greenpeace; “nothing of that sort has happened and Golden Agri has confirmed that it is not under investigation by the SGX, although the exchange asked some questions. We believe this risk has dissipated.”



Expects "very strong" 3Q10 results after 2Q10 weakness due to dry weather, as production recovering. Shares off 0.8% at $0.59.





 

Yangzijiang - Yangzijiang restarted at Buy by BoA-ML, $2.26 target

Stock Name: Yangzijiang
Company Name: YANGZIJIANG SHIPBLDG HLDGS LTD
Research House: BofA Merrill Lynch

Bank of America-Merrill Lynch restarts Yangzijiang (BS6.SG) at Buy with $2.26 target, based on 14x FY11 P/E, says Dow Jones.



BoA-ML says China-based shipbuilder deserves re-rating given its sustained above-average profit margins, 3-year orderbook visibility, potential to close in on TDR price, which trades at premium to mother shares.

“We believe the market has underestimated the sustainability of Yangzijiang’s profit margins in FY10-12, despite its improving productivity, and the revenue recognition of existing orders that are largely secured at higher prices in 2007-2008,” says BoA-ML.



Research house says company could have RMB9.6 billion ($1.9 billion) in funds for acquisitions in FY11, with potential targets being established yards equipped for new business like offshore marine engineering, or new yards located near to Yangzijiang’s existing facilities. Shares -0.6% at $1.68.

Genting SP - Genting Singapore share est raised to $3 vs $2 at CLSA

Stock Name: Genting SP
Company Name: GENTING SINGAPORE PLC
Research House: CLSA

Genting Singapore Plc had its share-price forecast raised to $3 from $2 at CLSA Asia Pacific Markets, which said the casino operator’s earnings growth will remain strong.



Genting, operator of one of two casino resorts in the city- state, climbed 1.1% to $1.85 at 9:10 a.m. in Singapore, heading for another record close. CLSA maintained its “buy” rating on the stock.

Otto Marine - Otto Marine cut to Underperform by CIMB; Cuts target

Stock Name: Otto Marine
Company Name: OTTO MARINE LIMITED
Research House: CIMB

CIMB downgrades Otto Marine (G4F.SG) to Underperform from Outperform, cuts target price to $0.30 from $0.48 after lowering FY11-12 earnings estimates by 31%-23%, according to Dow Jones.



Changes reflect risk of more order cancellations by Mosvold, which accounts for 45% of shipbuilder’s orderbook. Notes Mosvold’s cancellation of its first anchor handling, towing & supply order dragged down Otto’s share price in April: “We see cancellation risks in December 2010 and June 2011.”

Notes Mosvold set up during offshore & marine boom in 2007 as “pure and highly leveraged” vehicle to own, operate high-end, large AHTS vessels; “with its vessels under construction, Mosvold is not generating any operating cash flow.” Shares flat at $0.37.

Ho Bee - Ho Bee started at Buy by Kim Eng with $1.91 target

Stock Name: Ho Bee
Company Name: HO BEE INVESTMENT LIMITED
Research House: Kim Eng

Kim Eng Securities starts Ho Bee Investment (H13.SG) at Buy with $1.91 target price, based on 30% discount to RNAV estimate, says Dow Jones.



Kim Eng says high-end developer should be able to weather uncertainties in Singapore's residential market, arising from recent housing-market curbs, by recognising additional profits of $220 million from homes already sold.

Research house notes unsold units from launched projects could generate another $350 million profits based on current market prices. Says recent acquisition of commercial site in Singapore adjacent to Buona Vista MRT station will help boost Ho Bee’s recurring income stream.



“We expect demand to be strong given the site's proximity to transport infrastructure,” says Kim Eng. Shares flat at $1.51.

Capitaland - CapitaLand raised to Outperform by Daiwa; with $4.55 target

Stock Name: Capitaland
Company Name: CAPITALAND LIMITED
Research House: Daiwa

Daiwa upgrades CapitaLand (C31.SG) to Outperform from Hold, lifts target price to $4.55 from $4.11, pegged at parity to sum-of-parts valuation, says Dow Jones.



Daiwa says recent tie-up with unit CapitaMalls Asia (JS8.SG) to acquire Singapore’s Bedok Town Centre site, which can be developed into residential-cum-retail property, is ideal way for developer to deploy excess capital in projects at time of uncertainty in local residential market due to recent housing-market curbs.



“We expect CapitaLand’s participation in investment opportunities with CMA in Singapore or abroad to continue, providing some diversification from its residential-segment exposure in Singapore and China,” says research house.



Shares off 1.3% at $3.95.

Ezra - Ezra target cut to $2.20 by DMG, But keeps Buy

Stock Name: Ezra
Company Name: EZRA HOLDINGS LIMITED
Research House: DMG

DMG cuts Ezra Holdings (5DN.SG) target price to $2.20 from $2.54 after lowering FY11 earnings estimate by 13% to reflect delay in delivery of company’s multi-function support vessel, or MFSV, expected lower utilisation rate for vessel in first year of operation, says Dow Jones.



DMG says supplier of offshore support vessel’s first MFSV won’t be ready next month vs management’s previous guidance for August delivery: “There is little clarity on when the vessel will be delivered.”



Still, research house is keeping its Buy call: “The company is one of the leading integrated oil and gas services providers in the region and the deepwater subsea market will be the next area of growth for the company.” Shares flat at $1.74.

CapMallsAsia - CapitaMalls Asia upgraded to Outperform by Daiwa

Stock Name: CapMallsAsia
Company Name: CAPITAMALLS ASIA LIMITED
Research House: Daiwa

Daiwa upgrades CapitaMalls Asia (JS8.SG) to Outperform from Hold, lifts target price to $2.65 from $2.10, pegged at parity to sum-of-parts valuation, says Dow Jones.



Daiwa says property group’s recent $788.9 million joint acquisition with CapitaLand (C31.SG) of Singapore’s Bedok Town Centre site, which can be developed into residential-cum-retail property, reinforces CMA’s dominance in local retail property market.



Research house notes move considerably reduces pressure for CMA to win, possibly overbid at forthcoming tenders. Says CMA’s focus on retail property segment in Singapore shields it from government policy risk related to residential sector.



Shares off 1.3% at $2.22.

Goodpack - Goodpack upgraded to Outperform by CIMB, raises target

Stock Name: Goodpack
Company Name: GOODPACK LIMITED
Research House: CIMB

CIMB upgrades Goodpack (G05.SG) to Outperform from Neutral, raises target price to $2.05 from $1.94, based on 19x FY11 P/E, after increasing FY11-12 earnings estimates by 5%-6% to reflect higher asset utilisation and lower logistics handling cost assumptions, says Dow Jones.



CIMB says plans by supplier of intermediate bulk containers to meet 20%-30% of its ground-trucking needs internally by FY12 expected to lower logistics costs by 3%-5%.



Research house notes Goodpack intends to deepen its presence in natural rubber market, targeting 3%-4% annual growth in market share. Shares flat at $1.86.

Olam - Olam target cut to $1.94 by CLSA; Keeps Sell

Stock Name: Olam
Company Name: OLAM INTERNATIONAL LIMITED
Research House: CLSA

CLSA cuts Olam (O32.SG) target price to S$1.94 from $2.17, based on 15x 2011 P/E, keeps Sell call, says Dow Jones.



CLSA cites high execution risks, deteriorating returns, weak balance sheet as investment risks.



Research house says commodities trader’s Queensland cotton, almond orchard segments recovering due to good rainfall in Australia, but operating risks remain high as any bad rainfall can significantly hurt profitability of cotton business.



Expects Olam to undertake more equity fund-raising exercises as it continues to acquire assets.



“This will dilute EPS growth.” Shares off 0.7% at $2.70.

BukitSem - Bukit Sembawang target raised to $5.17 by Nomura

Stock Name: BukitSem
Company Name: BUKIT SEMBAWANG ESTATES LTD
Research House: Nomura

Nomura lifts Bukit Sembawang Estates (B61.SG) target price to $5.17 from $4.79, implying 1.4x FY11 P/B, to reflect higher selling price assumptions for 3 of developer’s housing projects in Singapore but keeps Neutral call, according to Dow Jones.



Nomura says company has low percentage, around 5.3%, of projected pro-rata development gains locked in by achieved sales.

Research house notes while it built up existing land bank at relatively low costs, developer has been relatively slow in monetising such assets. Shares off 0.2% at $4.74.

PLife REIT - Parkway Life REIT target lifted to $1.91 by CIMB

Stock Name: PLife REIT
Company Name: PARKWAYLIFE REIT
Research House: CIMB

CIMB lifts Parkway Life REIT (C2PU.SG) target price to $1.91 from $1.57 after increasing 2011-2012 DPU estimates by 4.0%-20% to reflect assumptions for additional $200 million in acquisitions next year, lower cost of debt, says Dow Jones.



CIMB notes REIT’s unique rental escalation clause, pegged at inflation rate +1.0%, bodes well for its Singapore portfolio: “With the Singapore economy expected to expand 13%-15% this year, inflation risks remain. What’s more, food prices may be higher in 2H10 as a result of inclement weather.”



Keeps Outperform call. REIT +0.7% at $1.55.

ChinaMinzhong - China Minzhong Food started at Buy by DBS Vickers

Stock Name: ChinaMinzhong
Company Name: CHINA MINZHONG FOOD CORP LTD
Research House: DBS Vickers

DBS Vickers starts China Minzhong Food (K2N.SG) at Buy with $1.58 target price, implying 11.0x FY11 P/E, 8.3x FY12 P/E, according to Dow Jones.



DBS Vickers says vegetables processor well placed to gain from China’s growing importance as 1 of world’s key vegetables exporters; “the company will also benefit from the consolidation of the fragmented vegetables farming industry in China.”

Broker notes Minzhong’s cultivation bases, processing facilities well diversified across China, with customer base spanning 26 countries worldwide. Says having Government of Singapore Investment Corp. as second largest shareholder, with 17.5% stake, positive for corporate governance. Shares off 1.5% at $1.35.

Olam - Olam started at Overweight by HSBC; $3.41 target

Stock Name: Olam
Company Name: OLAM INTERNATIONAL LIMITED
Research House: HSBC

HSBC starts Olam (O32.SG) at Overweight with $3.41 target price, according to Dow Jones.



HSBC says commodities trader broadening participation across value chain by adding hard assets, capabilities that offer strategic value to existing businesses: “This should enable Olam to capture wider margins while reducing its dependence on volumes to support earnings.”

Research house notes past M&A deals have delivered 75% higher net contribution than its legacy businesses, showing management’s ability to identify deals with potential for above-normal profits.



Adds that it expects earnings to surprise on upside as Olam expands supply chain expertise to intra-country trading, especially in geographies such as India, Latin America: “In addition, its food staples-biased product mix provides it with a stable base with protection against cyclical volatility, unlike its peers who deal with industrial commodities.”



Shares off 2.2% at $2.70.

CITYDEV - CityDev raised to Neutral by Nomura; $12.26 target

Stock Name: CITYDEV
Company Name: CITY DEVELOPMENTS LIMITED
Research House: Nomura

Nomura upgrades CityDev (C09.SG) to Neutral from Reduce, lifts target price to $12.26 from $9.57, pegged at parity to fully-diluted NAV, to account for higher capital value assumptions for developer’s commercial, residential assets, according to Dow Jones.



Nomura says CityDev’s 38% asset exposure to Singapore commercial property market is defensive, although 24% exposure to prime luxury residential segment could be risk given potential headwinds arising from recent housing-market curbs.

“What mitigates CityDev’s risks is that 30% of its overall projected pro-rata development gains are already locked in with sales achieved, and the carrying cost of the land bank is relatively low,” says research house.



Shares +2.0% at $11.44.

SCGlobal - SC Global raised to Neutral by Nomura; $1.77 target

Stock Name: SCGlobal
Company Name: SC GLOBAL DEVELOPMENTS LTD
Research House: Nomura

Nomura upgrades SC Global (D2S.SG) to Neutral from Reduce, lifts target price to $1.77 from $1.52 after increasing NAV estimate to reflect higher sales, selling price assumptions, says Dow Jones.



Nomura notes high-end developer typically prices projects at significant premium to other developments in vicinity, often setting record prices in those areas.



“The flip side, however, is that such a strategy typically results in very slow sales in terms of volume, in our view. This weighs on the balance sheet and cash flows,” says research house.



Shares +1.9% at $1.58.

DBS - DBS cut to Hold by Citi; Lowers target to $14.40

Stock Name: DBS
Company Name: DBS GROUP HOLDINGS LTD
Research House: Citigroup

Citigroup downgrades DBS (D05.SG) to Hold from Buy, cuts target price to $14.40 from $16.70 to factor in slower growth momentum assumptions for 2011, according to Dow Jones.



Citi says lower short-term interest rates may impact DBS more than peers (as it’s largest lender in inter-bank market). Adds Hong Kong business remains challenging, giving funding pressure, although better customer segmentation in territory will help loan growth.



On brighter note, research house says new CEO Piyush Gupta’s growth strategy beginning to bear fruit, gaining SGD-loan market share, growing non-interest income by strengthening cross-selling capabilities. Shares flat at $14.12.

UOB - UOB cut to Sell by Citi, lowers target to $17.80

Stock Name: UOB
Company Name: UNITED OVERSEAS BANK LTD
Research House: Citigroup

Citigroup downgrades UOB (U11.SG) to Sell from Buy, cuts target price to $17.80 from $22.05, citing earnings risks in 2011, says Dow Jones.



“We still fear net interest margin pressure ahead from low rates, flat yield curves and intense competition in Singapore, and funding pressures regionally,” says Citi.



Adds UOB also lags Singapore peers in terms of new fee-, non-interest income initiatives: “We hope to see greater progress on the fee side, where its peers are pursuing tangible strategies” in wealth management, private banking, and payments, treasury cross-selling.



Shares off 0.5% at $18.52.

OCBC Bk - OCBC cut to Sell by Citi, lowers target to $8.40

Stock Name: OCBC Bk
Company Name: OVERSEA-CHINESE BANKING CORP
Research House: Citigroup

Citigroup downgrades OCBC (O39.SG) to Sell from Buy, cuts target price to $8.40 from $9.90 on view earnings growth will be hindered by slower loan expansion in 2011, ongoing net interest margin pressure, rising operating costs as bank resumes regional expansion and hiring, says Dow Jones.



Citi says non-interest income performance also faces challenges given volatile capital market conditions; “while we expect 2H10 earnings for OCBC to be far more stable versus the 2Q volatility, with increasing macro headwinds we believe it will be challenging to return to record 1Q10 profitability level without another exceptional trading performance.”



Stock -0.1% at $8.79.

StarHub - Starhub target raised to $2.41 by Phillip Securities

Stock Name: StarHub
Company Name: STARHUB LTD
Research House: Phillip Securities

Phillip Securities lifts Starhub (CC3.SG) target price to $2.41 from $2.16 after increasing earnings estimates for FY10-12 by 5.1%, 32.3%, 41.9% respectively to account for higher broadband revenue following launch of Singapore’s next-generation national broadband network, says Dow Jones.



“With NGNBN, it can reach out to all businesses and homes in Singapore. This would place it on an equal footing to compete with SingTel, which is the current leader in the broadband market”, says Phillip. Still, research house is keeping Hold call on view Starhub will continue to face stiff competition from SingTel (Z74.SG), M1 (B2F.SG); “we also believe that SingTel and M1’s NGNBN plans are at least as attractive as Starhub’s.”



Shares off 0.8% at $2.50.

FirstRes - First Resources upgraded to Hold by UOB KayHian

Stock Name: FirstRes
Company Name: FIRST RESOURCES LIMITED
Research House: UOB KayHian

UOB KayHian upgrades First Resources (EB5.SG) to Hold from Sell on improved upside to its $1.13 target price after recent price weakness, says Dow Jones.



UOB KayHian says outlook for palm oil producer turning positive with production expected to pick up in 2011 vs lower volume this year caused by tree stress, adverse weather conditions. But expects operating costs to rise next year due to aggressive planting, increased fertiliser needs. Suggests entering at $1.00.



Shares last +2.7% at $1.13.

RenewableEne - Renewable Energy Asia started at Buy by Kim Eng

Stock Name: RenewableEne
Company Name: RENEWABLE ENERGY ASIA GRP LTD
Research House: Kim Eng

Kim Eng Securities starts Renewable Energy Asia Group (5DW.SG) at Buy with $0.50 target price, based on 12x FY12 P/E, according to Dow Jones.



Kim Eng says company offers unique vertically-integrated business model spanning wind farm development, components manufacturing, plus engineering, procurement and construction.

Broker notes China’s recent approval of RMB 5 trillion ($992 billion) investment plan over 2011-2020 for new energy bodes well for REA’s prospects. Says Chinese legislation requires all power grid companies to buy electricity produced by renewable energy generators, hence benefiting players like REA.



“We like REA for its ability to generate long-term recurring income from its wind farm projects,” says Kim Eng. Shares flat at $0.340.





 

ChinaMinzhong - China Minzhong Food started at Outperorm by CIMB

Stock Name: ChinaMinzhong
Company Name: CHINA MINZHONG FOOD CORP LTD
Research House: CIMB

CIMB starts China Minzhong Food (K2N.SG) at Outperform with $1.52 target price, based on 7.5x FY11 P/E. Tips EPS CAGR of 28% over FY11-13 for vegetables processor, driven by higher selling prices, volumes, according to Dow Jones.



CIMB says management’s plan to acquire more land for cultivation should support growth, while diversification of products, increase in proportion of higher-margin offerings expected to boost profits; “potential catalysts are likely to come from announcements of land acquisitions at attractive prices and good quarterly results.”



Shares +0.8% at $1.30.

Ezra - Ezra target cut to $2.22 by BoA-ML; Keeps Buy

Stock Name: Ezra
Company Name: EZRA HOLDINGS LIMITED
Research House: BofA Merrill Lynch

Bank of America-Merrill Lynch cuts Ezra (5DN.SG) target price to $2.22 from $2.76 to factor in earnings dilution stemming from 1-for-5 rights issue priced at $1.18 each, but is keeping its Buy call, says Dow Jones.



“While equity investors, including us, do not like immediate EPS dilution, we see the recent equity issues by mid-cap offshore oil service providers as signs of increasing opportunities in the industry,” says BoA-ML.

Research house notes supplier of offshore support vessels had in past raised funds before announcing details on projects. Ezra will use $155.3 million proceeds to fund new business ventures, capex, vessel acquisitions. Shares off 5.1% at $1.68.

JMH 400US$ - Jardine Matheson, Strategic started at Neutral by JPMorgan

Stock Name: JMH 400US$
Company Name: JARDINE MATHESON HLDGS LTD
Research House: JP Morgan Chase

JPMorgan starts Jardine Matheson (J36.SG), Jardine Strategic (J37.SG) at Neutral with respective US$45.80 ($61.98), US$23.65 target prices, according to Dow Jones.



JPMorgan says both stocks trading near historical averages, but still deemed as cheaper alternatives to directly investing in their more expensive subsidiaries, such as Dairy Farm (D01.SG), Hongkong Land (H78.SG), Astra International (ASII.JK).

Research house prefers Matheson over Strategic given its better trading liquidity, higher dividend yield. Says most core businesses of Matheson, 53%-owned by Strategic, should benefit from Asia’s solid domestic demand this year, but earnings growth likely to slow in 2011-2012 given expected cyclical peak in Astra’s vehicle sales, fewer development property bookings for Hongkong Land.



Matheson off 0.1% at US$43.34, Strategic off 0.5% at US$24.76. STI +0.7%.

JSH 500US$ - Jardine Matheson, Strategic started at Neutral by JPMorgan

Stock Name: JSH 500US$
Company Name: JARDINE STRATEGIC HLDGS LTD
Research House: JP Morgan Chase

JPMorgan starts Jardine Matheson (J36.SG), Jardine Strategic (J37.SG) at Neutral with respective US$45.80 ($61.98), US$23.65 target prices, according to Dow Jones.



JPMorgan says both stocks trading near historical averages, but still deemed as cheaper alternatives to directly investing in their more expensive subsidiaries, such as Dairy Farm (D01.SG), Hongkong Land (H78.SG), Astra International (ASII.JK).

Research house prefers Matheson over Strategic given its better trading liquidity, higher dividend yield. Says most core businesses of Matheson, 53%-owned by Strategic, should benefit from Asia’s solid domestic demand this year, but earnings growth likely to slow in 2011-2012 given expected cyclical peak in Astra’s vehicle sales, fewer development property bookings for Hongkong Land.



Matheson off 0.1% at US$43.34, Strategic off 0.5% at US$24.76. STI +0.7%.

JSH 500US$ - Jardine Matheson, Strategic started at Neutral by JPMorgan

Stock Name: JSH 500US$
Company Name: JARDINE STRATEGIC HLDGS LTD
Research House: JP Morgan Chase

JPMorgan starts Jardine Matheson (J36.SG), Jardine Strategic (J37.SG) at Neutral with respective US$45.80 ($61.98), US$23.65 target prices, according to Dow Jones.



JPMorgan says both stocks trading near historical averages, but still deemed as cheaper alternatives to directly investing in their more expensive subsidiaries, such as Dairy Farm (D01.SG), Hongkong Land (H78.SG), Astra International (ASII.JK).

Research house prefers Matheson over Strategic given its better trading liquidity, higher dividend yield. Says most core businesses of Matheson, 53%-owned by Strategic, should benefit from Asia’s solid domestic demand this year, but earnings growth likely to slow in 2011-2012 given expected cyclical peak in Astra’s vehicle sales, fewer development property bookings for Hongkong Land.



Matheson off 0.1% at US$43.34, Strategic off 0.5% at US$24.76. STI +0.7%.

Ascendasreit - Ascendas REIT raised to Buy by RBS with $2.55 target

Stock Name: Ascendasreit
Company Name: ASCENDAS REAL ESTATE INV TRUST
Research House: RBS

Royal Bank of Scotland upgrades Ascendas REIT (A17U.SG) to Buy from Hold, lifts target price to $2.55 from $2.00 on optimism over Singapore's industrial property sector, says Dow Jones.



RBS expects hefty rise in Singapore industrial rents following strong growth in manufacturing sector in 1H10: “All signs suggest tenants in A-REIT's portfolio may look to expand.”

Research house notes A-REIT's tenant retention rate now close to 80%, similar to pre-crisis levels, vs 70% six months ago, with tenants now operating at close to full capacity. Expects A-REIT to acquire more assets to increase portfolio, but notes financing via equity fund raising unlikely as current gearing level comfortable at 34%.



REIT +1.9% at $2.11.

DBS - DBS raised to Buy by Goldman Sachs with $16.90 target

Stock Name: DBS
Company Name: DBS GROUP HOLDINGS LTD
Research House: Golman Sachs

Goldman Sachs upgrades DBS (D05.SG) to Buy from Neutral; “as the only Singapore bank trading below ex-growth valuations, DBS provides a buying opportunity in our view,” says Dow Jones.



Goldman Sachs expects DBS to deliver highest earnings CAGR, accelerating ROE among Singapore banks over FY10-12, driven by strong loan book growth, potentially lower provisions.

Research house says bank’s new strategic moves taking shape, with new branches set up in China and India, new heads appointed in recent months in Singapore, other Asian markets.



Lifts target price to $16.90 from $15.90 after rolling over valuation basis to 2011, increasing 2010-2012 EPS forecasts by 2%-3%. Shares +0.7% at $13.98.

OCBC Bk - OCBC cut to Neutral by Goldman, cuts target to $9.80

Stock Name: OCBC Bk
Company Name: OVERSEA-CHINESE BANKING CORP
Research House: Golman Sachs

Goldman Sachs downgrades OCBC (O39.SG) to Neutral from Buy, cuts target price to $9.80 from $10.40 after rolling over valuation basis to 2011, trimming 2011-2012 earnings estimates by 3%-9%, says Dow Jones.



Goldman Sachs expects near-term earnings momentum to slow on net interest margin pressure, limited room for provisions to come off further as these already low.

But says longer-term prospects favorable given strength in wealth management, high exposure to insurance business via Great Eastern Holdings (G07.SG): “Together with its Great Eastern life insurance business, which, like its BoS (Bank of Singapore) platform, should benefit from increasing affluence in Asean, OCBC should be able to gain revenue synergies by cross-selling a broader suite of products into its current strong personal deposit customer base and commercial SME clients to increase earnings.”



Shares +1.0% at $8.76.

StarHub - Starhub raised to Outperform by Daiwa, raised target by 22.1%

Stock Name: StarHub
Company Name: STARHUB LTD
Research House: Daiwa

Daiwa upgrades Starhub (CC3.SG) to Outperform from Hold, raising target price to $2.65 from $2.17 after changing valuation basis to dividend discount model from discounted cashflow methodology, says Dow Jones.



Daiwa says telco offers attractive dividend yield, well positioned to gain market share in corporate broadband market with launch of Singapore’s high-speed national broadband network.

“Our analysis suggests that the opportunities in the corporate market will more than offset the risks the company faces in the residential segment,” says Daiwa, who expects revenue growth for mobile business to be driven by increasing number of data-plan users, higher demand for inbound roaming services.



Shares +1.2% at $2.49.