Yangzijiang - OCBC keeps Yangzijiang at Hold; positives in price

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

OCBC keeps Yangzijiang Shipbuilding (BS6.SG) at Hold with $2.04 fair value; says technical cooperation MOU with CSBC—Taiwan’s leading shipbuilder—over joint cargo ship production “is evidence of YZJ starting to reap benefits from its (TDR) listing”; with increased publicity, credibility for group in Taiwan. 

Says closer Taiwan/China ties mean YZJ now able to learn from CSBC’s designs, “which may help in its bid to develop newer and more innovative vessel types.” House likes YZJ’s good track record, plans for future; “the group has been executing its orders well and management is keen to bring the group to a new level with its various initiatives. However, we have taken these into account in our estimates and at current price level (13X forward P/E), positives on the stock appear to have been priced in”. 

Shares flat at $1.86.  

SGX - Nomura cuts SGX fair value; tips ASX deal downside

Stock Name: SGX
Company Name: SINGAPORE EXCHANGE LIMITED
Research House: Nomura

Nomura cuts Singapore Exchange (S68.SG) fair value to $9.30 from $10.00, factoring in lower ADR volumes; keeps at Neutral. Says ASX (ASX.AU) stock implying “high probability of deal failure,” only 21% chance of deal succeeding.



“Political statements coming out post the deal have increased concerns that regulatory hurdles would be a key stumbling block.” Says if deal goes through, SGX fair value is $8.20. 

Notes, benefits from exchange sector M&A in ” Adds, current SGX fair value factors in 13% addition to market volumes from ADRs by FY12; “It was not expected that volumes will pick-up from day 1. Even so, we see the volumes in ADR trading as being very disappointing,“ adding only 0.5% to volumes. 

Reduces ADR volume assumptions, reducing FY12-13 EPS forecasts by 7% each. Shares +0.8% at $8.91.

SGX - Nomura cuts SGX fair value; tips ASX deal downside

Stock Name: SGX
Company Name: SINGAPORE EXCHANGE LIMITED
Research House: Nomura

Nomura cuts Singapore Exchange (S68.SG) fair value to $9.30 from $10.00, factoring in lower ADR volumes; keeps at Neutral. Says ASX (ASX.AU) stock implying “high probability of deal failure,” only 21% chance of deal succeeding.



“Political statements coming out post the deal have increased concerns that regulatory hurdles would be a key stumbling block.” Says if deal goes through, SGX fair value is $8.20. 

Notes, benefits from exchange sector M&A in ” Adds, current SGX fair value factors in 13% addition to market volumes from ADRs by FY12; “It was not expected that volumes will pick-up from day 1. Even so, we see the volumes in ADR trading as being very disappointing,“ adding only 0.5% to volumes. 

Reduces ADR volume assumptions, reducing FY12-13 EPS forecasts by 7% each. Shares +0.8% at $8.91.

SGX - Nomura cuts SGX fair value; tips ASX deal downside

Stock Name: SGX
Company Name: SINGAPORE EXCHANGE LIMITED
Research House: Nomura

Nomura cuts Singapore Exchange (S68.SG) fair value to $9.30 from $10.00, factoring in lower ADR volumes; keeps at Neutral. Says ASX (ASX.AU) stock implying “high probability of deal failure,” only 21% chance of deal succeeding.



“Political statements coming out post the deal have increased concerns that regulatory hurdles would be a key stumbling block.” Says if deal goes through, SGX fair value is $8.20. 

Notes, benefits from exchange sector M&A in ” Adds, current SGX fair value factors in 13% addition to market volumes from ADRs by FY12; “It was not expected that volumes will pick-up from day 1. Even so, we see the volumes in ADR trading as being very disappointing,“ adding only 0.5% to volumes. 

Reduces ADR volume assumptions, reducing FY12-13 EPS forecasts by 7% each. Shares +0.8% at $8.91.

Yangzijiang - CLSA cuts Yangzijiang to Sell; take profit

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

CLSA downgrades Yangzijiang Shipbuilding (BS6.SG) to Sell vs Outperform as 3Q results in line, sees limited upside to incremental orderflow (given large jump in new orders won YTD; 9M10 orders of US$1.3 billion ($1.69 billion) vs US$300 million 9M09), slower growth in capex by shippers, lack of near term catalysts following YZJ’s successful TDR listing. 

“The strong recovery in the past nine months has been priced in and valuations now appear rich at 15X P/E.” Adds, time to take profit, with stock having returned 62% YTD; expects potential switching into Rongsheng Heavy, a bigger private yard, when it lists in HK soon. Keeps target at $2.05, implying relative downside of 9.0%. 

Shares off 3.6% at $1.89.

SuntecReit - JPM downgrades Suntec REIT to Underweight

Stock Name: SuntecReit
Company Name: SUNTEC REAL ESTATE INV TRUST
Research House: JP Morgan Chase

JPMorgan downgrades Suntec REIT (T82U.SG) to Underweight from Neutral, cuts target price to $1.35 from $1.40, on proposed MBFC acquisition; “while MBFC is the best building in town, the estimated acquisition yield of 4.0% (inclusive of income support) is not enough compared to the trust’s cost of capital of 4.5%-4.7%.” 

Adds, buy would expose Suntec REIT to potential equity fundraising risks given that full debt financing would bring Suntec’s gearing to 47%, beyond optimal level of 40%. 

Adds, MBFC “the right asset, but not the right price," $2400 psf effective price “rather steep” given current market conditions, “especially as we expect the vacancy rate for Grade A office space to pick up in 2011 to almost 15%.” Adds, no surprises in 3Q results. 

Shares down 1.9% at $1.53.

RafflesMG - Credit Suisse cuts Raffles Medical to neutral

Stock Name: RafflesMG
Company Name: RAFFLES MEDICAL GROUP LTD
Research House: Credit Suisse

Credit Suisse downgrades Raffles Medical Group (R01.SG) to Neutral from Outperform, keeps target at $2.10; says 3Q results in line with house estimates, with revenues +10% on-year, earnings +13% on-year at $10.7 million; 9-month revenue, net profit achieving 74%, 71% of FY estimates respectively. 

Says operating margins at 21.7%, tad up from 21.5% year ago, largely due to operational efficiency gains at its flagship hospital; says 4% on-year revenue growth in healthcare segment, 15% on year improvement in hospital operations (from 11% on year in 2Q10), “reaffirms the firm underlying demand across the sector, and recovery in foreign patient load.” 

Remains positive on company’s fundamentals, downgrade due to strong outperformance, demanding valuations at 23X FY11E P/E, limited N/T catalysts. Shares down 3.2% at $2.14.

RafflesMG - Kim Eng ups target price for Raffles Medical

Stock Name: RafflesMG
Company Name: RAFFLES MEDICAL GROUP LTD
Research House: Kim Eng

Kim Eng Securities has raised its target price for Singapore healthcare provider Raffles Medical Group <RAFG.SI> to $2.55 from $2.20 and maintained its “buy” rating. 



STATEMENT: 

Kim Eng said Raffles Medical’s third-quarter results were in line with its expectations, adding that the recent takeover of hospital-operator Parkway <PARM.SI> by Malaysian state investor Khazanah highlights the value of good quality healthcare assets in the region. 

“Despite the stock returning 210% since we initiated coverage 16 months ago, we expect the stock price to continue its steady climb upward, much like its profitability,” Kim Eng said in a report. 

The brokerage expected that the expansion of Raffles Hospital over the next 24 months will allow Raffles Medical to maintain growth at the same steady rate for at least the next five years. 

Raffles Medical reported on Monday a 13% rise in third quarter net profit to $10.7 million from a year ago mainly on an increase in revenue from its hospital services division. 

At 0246 GMT, Raffles Medical shares were trading at $2.21 on a volume of 233,000 shares. Its shares have risen 58% in 2010. 

SGX - CIMB cuts SGX to Trading Sell; exposure via ASX

Stock Name: SGX
Company Name: SINGAPORE EXCHANGE LIMITED
Research House: CIMB

CIMB downgrades Singapore Exchange (S68.SG) to Trading Sell from Outperform. Says ASX (ASX.AU) deal makes much strategic sense, would propel joint entity into “league of leading exchanges in the world”, should be EPS-enhancing as it utilises debt, with share dilution from equity portion of transaction lower than EPS enhancement. 

Notes downgrade, lower target price at $8.26 from $10.86 stems from “big problems” of use of shares, premium pricing for ASX. “This creates an arbitrage gap. In the next six months, we expect the gap between SGX and ASX to weigh on SGX's share price.” 

Adds as each deal milestone reached, arbitrage gap with ASX should narrow; says offer generous “and we do not expect the deal to be scuppered. For the same reason, it now makes more sense to gain exposure to SGX, via ASX.” SGX last down 2.1% at $8.76.

RafflesMG - CIMB Keeps Raffles Medical at Outperform

Stock Name: RafflesMG
Company Name: RAFFLES MEDICAL GROUP LTD
Research House: CIMB

CIMB keeps Raffles Medical Group (R01.SG) at Outperform, says 3Q10 net profit of $10.7 million (+12.9% on-year) met consensus, house expectations; 3Q10, 9M10 EPS form 25.3%, 72.2% of FY10 estimates, respectively. 



Notes, record revenue, +9.8% on-year at $60.9 million, growth led by all divisions (Healthcare Services +4.0% on-year; Hospital +15.0% on-year). 

Raises target price to $2.64 vs $2.07 on rollover to 23X CY12 P/E vs 20X CY11 P/E, reflecting mid-cycle valuations. Notes, defensive business delivers consistent earnings; expects catalysts from addition of clinics, expansion of medical specialties, higher foreign-patient growth, higher intensity cases within hospital segment.

Shares +0.9% at $2.21. 

Ezra - Bank of America-Merrill Lynch downgrades Ezra to Underperform vs Buy

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

Bank of America-Merrill Lynch downgrades Ezra Holdings (5DN.SG) to Underperform from Buy, due to higher business risk after company Friday announced US$250 million ($323,6 million) investment in money-losing Aker Marine Contractors (AMC), is expected to spend at least US$450 million for two newbuild high specification subsea construction vessels in next three years. 

“We are uncomfortable with the high price paid for AMC (5.1X FY10 P/NTA vs Ezra’s 1.6X) and the fast increasing execution and balance sheet risks associated with its relatively new subsea division, which contributed less than 1% of group profits in FY10.” House lowers price objective to $1.24 vs $2.22.

Adds, Ezra's FY10 US$69.5 million recurring net profit in line with house view, but 4.5% below consensus; lowers FY11 EPS view to US$0.11 vs US$0.13 due to higher interest cost post-AMC buy. Shares off 2.2% at $1.78 vs STI +0.7%.

Wilmar - DBSV downgrades Wilmar to Hold; lower margins

Stock Name: Wilmar
Company Name: WILMAR INTERNATIONAL LIMITED
Research House: DBS Vickers

DBS Vickers downgrades Wilmar (F34.SG) to Hold from Buy, lowers target to $6.90 from $7.50; cuts FY10-12 earnings forecast by 1%-5% after revising down oilseeds pretax margin/MT estimate to US$33 ($42.6) from US$39-US$41; palm & lauric margin view to US$26 from US$29; consumer pretax margin forecast to US$46-US$48 from US$51-US$52/MT. 

Says Chinese government’s recent consent to rise in cooking oil prices should allow Wilmar to adjust to recent jump in soybean prices, but may not necessarily boost profitability given its efforts to maintain market share; “Wilmar should still remain the price leader in China’s cooking oil market; but we also believe that Wilmar’s relative pricing against domestically produced soybean oil would narrow in consequence to the higher imported price, and a slower pace in CNY revaluation.” 

Adds, Sucrogen buy may provide catalyst, expects final approval sometime in December. 

Shares +1.6% at $6.50 but underperforming peers.

AscottREIT - DBSV keeps Ascott Residence at Buy; 3Q in line

Stock Name: AscottREIT
Company Name: ASCOTT RESIDENCE TRUST
Research House: DBS Vickers

DBS Vickers keeps Ascott Residence Trust (A68U.SG) at Buy with $1.38 target price; says 3Q10 DPU of 1.85 cents in line; topline of $43.5 million, (+5% on year, +5% on quarter), gross profit of S$21.1 million, (down 6% on year, +2% on quarter) also in line. 

“Led by strong performances in its Singapore and Philippines operations, ART achieved a portfolio RevPAU of $130/night in 3Q10 (+7% on year, +4% on quarter) on slight uptick in occupancies to 83%,” while distributable income remained stable at $11.9 million. 

Says performance pulled ahead by Singapore, which delivered “stunning” 31% growth in topline. Says Asia to drive 53% of topline growth going forward; “with FY11-12 prospective yield of around 6.6%-6.7%, ART offers investors an attractive exposure to the recovery in global travel & business activities.” 

Shares +1.6% at $1.26.

Genting SP - UBS cuts Genting Singapore to Neutral; raises target

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

UBS downgrades Genting Singapore (G13.SG) to Neutral vs Buy, says “future still bright, but need to pause for breath.”



Expects 3Q EBITDA of $385 million vs $504 million in 2Q; “while the headline 24% sequential decline appears steep, 2Q margin was predicated on a very high VIP hold, while the (Marina Bay Sands) ramp up in both VIP and mass during 3Q has been rapid.” 

Says such result may disappoint market, considering stock’s rapid rise, but if RWS delivers EBITDA in region of $375 million-$410 million in 3Q, “the bigger picture story remains perfectly valid: this is a casino resort that can generate $1.6 billion of EBITDA in year one of a seven-year duopoly.” 

Adds, any signs that 2Q VIP volumes at RWS unsustainable on structural reasons, “would be more of an issue.” Raises target to $2.39 vs $2.02, ups 2011E EBITDA by around 11% to $1.8 billion. 

Shares off 1.3% at $2.23.  

OSIM - DMG raises target price for OSIM to $1.57

Stock Name: OSIM
Company Name: OSIM INTERNATIONAL LTD
Research House: DMG

DMG & Partners has raised its target price for massage chair maker OSIM International <OSIL.SI> to $1.57 from $1.32 and maintained its “buy” rating.



STATEMENTS:

DMG has raised its earnings estimates for OSIM’s 2010-2012 financial years by 20-24% to take into account higher margins arising from a better product mix, economies of scale and improved profitability in the firm’s GNC Australia outlets.

The brokerage raised its target price for OSIM based on 17 times the firm’s 2011 earnings, adding that it anticipated the market to raise earnings forecasts in light of OSIM’s stronger-than-expected third quarter results.

OSIM reported a 86% increase in third quarter net profit to $13 million from a year ago mainly due to higher sales and margins. 

DMG said all of OSIM’s 35 GNC Australia outlets have been converted into franchises, which has led to an increase in sales per outlet by 20-30%.

The brokerage added that OSIM’s launch of its new massage chair next month is expected to contribute to its fourth quarter earnings, and the firm's plans to open another 20-30 outlets in China are on track.

At 0206 GMT, OSIM shares were up 2.8% at $1.12 on a volume of 4.8 million shares. 

OSIM - DMG raises target price for OSIM to $1.57

Stock Name: OSIM
Company Name: OSIM INTERNATIONAL LTD
Research House: DMG

Shares of massage chair maker OSIM International <OSIL.SI> rose as much as 3.7% on Thursday after DMG & Partners raised its target price to $1.57 from $1.32 and maintained its “buy” rating.



At 0319 GMT, OSIM shares were trading at $1.13 on a volume of 6 million shares.

“DMG has a ’buy’ call on it and it recently reported strong results. Its expansion plans are also on track so its business seems to be doing well,” said a local trader.

DMG has raised its earnings estimates for OSIM’s 2010-2012 financial years by 20-24% to take into account higher margins arising from a better product mix, economies of scale and improved profitability in the firm’s GNC Australia outlets. 

CapitaComm - DMG ups CapitaCommercial Trust target to $1.55

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

DMG raises CapitaCommercial Trust (C61U.SG) target to $1.55 vs $1.24. Says 3Q results above expectations, with DPU of 1.99 cents, +7.6% on-year, +1.0% on-quarter; representing 27% of FY10 forecast of 7.2 cents; raises FY10-FY13 DPU forecast by 6.0%-8.0% to account for higher rental assumptions.



Notes, 1.0% on-year fall in net property income due to loss in rental income resulting from sale of Robinson Point, Starhub Centre. 

Adds, leasing activities gaining buoyancy; tenants are expanding; portfolio committed occupancies rose to 98.2% vs 95.6% in 2Q. Keeps Neutral rating; “at our target price, CCT trades at FY11 yield of 4.8%, a reasonable peg in our view.”

Says await better entry; “Singapore office rents are at the point of inflection and long-term rental growth prospects are likely to be robust once excess capacity is absorbed.” REIT flat at $1.44.

OSIM - DMG raises Osim target to $1.52; Keeps Buy

Stock Name: OSIM
Company Name: OSIM INTERNATIONAL LTD
Research House: DMG

DMG keeps Osim International (O23.SG) at Buy, raises target price to $1.52 from $1.37 after revising up FY10-FY12 earnings estimates by 20%-24% to take into account higher margins arising from better product mix, economies of scale, improved profitability in GNC Australia business. 

Expects Street to raise earnings forecasts in light of stronger-than-expected 3Q earnings; massage chair maker reports 3Q PATMI of $13.0 million, +85.5% on-year, +7.6% on-quarter. House says 9-month FY10 PATMI at $33.1 million, accounts for 81.5% of its full year forecast. 

Shares +2.9% at $1.08 vs STI down 0.4%.

NOL - UOB keeps NOL at Buy; ups 2010 earnings forecast

Stock Name: NOL
Company Name: NEPTUNE ORIENT LINES LIMITED
Research House: UOB KayHian

UOB KayHian reiterates Neptune Orient Lines (N03.SG) at Buy, with $2.55 target; expects 4Q10 container shipping markets to stand beyond market expectations, which “fairly low at the moment,” despite seasonal weaknesses in volume and rates. 

Notes, carriers have been more aware of significance of capacity adjustment since 2Q09 “so they are very likely to tighten capacity again if box volume falls faster than expected” consequently, rates would find support in slack season. Says NOL’s results might drive sector’s performance. 

Revises 2010-2012 earnings forecasts by +27.7%, down 2.5%, down 16.2% respectively; says target based on 1.4X 2011F P/B; “we believe NOL deserves a premium valuation vs its peers due to high value-added services, excellent operating flexibility and robust balance sheet.” Current 1.1X 2011F P/B “looks undemanding.” 

Shares +2.4% at $2.11 vs STI down 1.0%.

NOL - Phillip ups NOL to Buy vs Hold; ups target 14.6%

Stock Name: NOL
Company Name: NEPTUNE ORIENT LINES LIMITED
Research House: Phillip Securities

Phillip upgrades Neptune Orient Lines (N03.SG) to Buy from Hold, raises target to $2.36 from $2.06; says 3Q net profit of US$282 million ($370.2 million) topped house’s forecast by 80.8%, revenue 4.3% higher than estimate.



Raises 2010 net profit estimates by 52.0% to US$384 million, 2011 forecast +57.1% at US$457 million, 2012 forecast +46.5% at US$593 million due to better shipping volumes, rates. 

“We also note that NOL has placed an order for 12 new container ships that will be delivered in 2013 and 2014. This shows that NOL is confident on the outlook for the shipping industry.” 

Says 4Q10 volumes, rates expected to decline slightly as 3Q10 peak season over, “however, we believe that global trade is likely to remain firm next year and NOL will benefit from higher volumes and rates.” 

Shares +4.4% at $2.15, vs STI down 0.6%.

UOB - Nomura cuts UOB to 'neutral', lowers target price

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

Nomura has downgraded United Overseas Bank to “neutral” from ”buy” and lowered its target price to $21.30 from $22.80. The brokerage recommended that investors switch to Oversea-Chinese Banking Corp.

STATEMENTS: 

Nomura said that UOB is unlikely to sustain historical return on equity and valuation premiums in the medium term due to its conservative management, relatively narrow earnings drivers and unexciting ASEAN-centric growth strategy. 

The brokerage said that UOB has the strongest balance sheet in the sector, but its peers have a more balanced combination of growth and quality. 

Nomura added that UOB’s ASEAN strategy of serving the commercial banking needs of mostly Chinese retail customers and small and medium enterprises pales in comparison to rival OCBC’s multi-product, multi-target market strategy. 

“OCBC is increasingly better positioned to expand in high-growth, high-margin markets like Malaysia and Indonesia,” Nomura said in a report. 

At midday, UOB shares were down 1.5% at $18.62 on a volume of 1.5 million shares. 

UOB is Singapore’s third-largest bank after DBS and OCBC. 

 

Kep Corp - Credit Suisse raises Keppel Corp target to $12.10

Stock Name: Kep Corp
Company Name: KEPPEL CORPORATION LIMITED
Research House: Credit Suisse

Credit Suisse raises Keppel Corp. (BN4.SG) target price to $12.10 from $10.40, keeps Outperform. 



Expects pick-up in orders in coming quarters on recovering utilisation, day rates, “as well as on improving returns on jackup rigs. As Keppel’s share price performance has historically been closely linked with new order announcements, higher-than-expected order intake could lead to a re-rating of the sector.” 

Adds, increasingly positive news flow on deepwater segment should support sentiment. Says Keppel best positioned to win sizeable Petrobras order given its established yard in Brazil, strong relationship with Petrobras, excellent execution; tips potential US$5.95 billion ($7.78 billion) worth of orders, expects announcement 1Q11. Notes, at 2011 P/E of 12.0X, stock trading at 20% discount to historical average. 

Shares +1.0% at $9.68. 

SembMar - CIMB Ups SembMarine to Outperform; target $5.23

Stock Name: SembMar
Company Name: SEMBCORP MARINE LTD
Research House: CIMB

CIMB upgrades SembCorp Marine (S51.SG) to Outperform from Neutral, raises target to $5.23 from $4.30, says Dow Jones. After SembMarine’s Jurong Shipyard yesterday secures US$384 million ($500.6 million) of contracts for 2 premium jack-up rigs, options for another 4 from Seadrill, house says this brings YTD order wins to about $2.3 billion. 

Upgrades non-Petrobras order assumptions to $3.5 billion for 2010, $4 billion for 2011-12; keeps Petrobras order expectation of about $6.9 billion for 2011, raises earnings estimate by 10% for FY12. 

“Recent order momentum is an indicator of revived interest in the rig and drillship market.” Tips catalysts from stronger than expected non-Petrobras orders, margin expansion. 

Shares last +2.2% at $4.60. 

Olam - Nomura cuts Olam to 'neutral', keeps price target

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

Nomura has cut its rating on commodities firm Olam International <OLAM.SI> to “neutral” from “buy”, citing rich valuations.



But the brokerage said it maintained its target price of $3.40, which it will review should Olam and Louis Dreyfus announce a merger deal. 

     

STATEMENT: 

Nomura said that since Olam’s 2010 financial year results in August, it has outperformed the broader Straits Times Index and its peers Wilmar International <WLIL.SI> and Noble Group <NOBG.SI>. 

The brokerage said that while the first leg of the run was led by Olam’s strong results, which saw core earnings grow by 47%, the second leg has been fuelled by speculation over a possible merger between Olam and French commodities group Louis Dreyfus. 

Nomura said current valuations for Olam, a 21 times price-earnings ratio for the firm’s 2011 calendar year, seem rich and the stock could trade range-bound pending any announcement regarding the merger. 

“Although it may be too early to comment on whether the deal will actually happen, if it does, we think it would be positive for both as there may be scope for product, geographical and channel synergies,” Nomura said in a report. 

At 0204 GMT, Olam shares were down 0.6% at $3.30 on a volume of 708,000 shares. 

SGX - OCBC cuts Singapore Exchange to Sell from Hold

Stock Name: SGX
Company Name: SINGAPORE EXCHANGE LIMITED
Research House: OCBC

OCBC downgrades Singapore Exchange (S68.SG) to Sell from Hold on valuation grounds; says 1Q results were in line with expectations, retains FY profit estimate of $362.9 million, says Dow Jones. 

“Valuations for SGX and its regional peers have moved up and are now close to almost previous peak valuations (which went as high as 35X earnings). However, we are reluctant to accord such high valuations which were then partly fuelled by merger talks,” house says. 

Fair value estimate of stock at $8.60 vs $8.35 previous. SGX down 1.3% at $9.91%.

K-REIT - CIMB Keeps K-REIT at Underperform, $1.26 target

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

CIMB keeps K-REIT (K71U.SG) at Underperform with $1.26 target; says 3Q10 DPU of 1.69 cents meets expectations, forming 25% of full-year forecast, 9-month DPU of 4.65 cents, meets 70% forecast, “in line considering backend-loaded contributions expected from Australian assets acquired in the year”, says Dow Jones.

House fine-tunes FY10-FY12 DPU estimates by minus 1.0% to +1.0%, sees de-rating catalysts from limited accretion from recent asset swap, unattractive FY10 DPU yields of 4.8% vs Suntec REIT’s (T82U.SG) 6.5%, CapitaCommercial Trusts’ (C61U.SG) 5.2%. Adds, K-REIT’s FY11 DPU estimate of 6.68 cents for enlarged portfolio lower than house’s 7.23 cents forecast due to lower rental, occupancy assumptions for local portfolio. 

Shares down 2.2% at $1.34.

SGX - DBS, OCBC raise target price for SGX

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

DBS Vickers has raised its target price for Singapore Exchange <SGXL.SI>, Asia’s second largest listed bourse, to S$11.40 from $9.60 and maintained its “buy” rating. 



OCBC Investment Research has downgraded its rating to “sell” from “hold” on valuation grounds, but raised its target price to $8.60 from $8.35. 

     

STATEMENTS: 

DBS said SGX’s first quarter earnings were within expectations as market activity picked up only in September and did not offset the weakness in the July-August period. 

SGX said net profit for the fiscal first quarter ended Sept 30 fell 21% to $74.2 million from $94.1 million a year ago, hurt by weak trading volumes in July and August and higher technology-related costs.

However, DBS expects further acceleration in SGX’s market activity in its second and third quarters due to positive market momentum, coupled with the listing of American Depositary Receipts and other initiatives. 

The brokerage also upgraded its earnings estimates by 6-7% after lifting volume and value assumptions for SGX’s 2011-2013 financial years. 

OCBC said it has retained its $362.9 million profit estimates for SGX’s 2011 financial year, taking into account its projection of a better second quarter. 

According to Thomson Reuters’ I/B/E/S estimates, SGX’s 2011 financial year net profit is expected to be $379 million. 

However, the brokerage said valuations for SGX and its regional peers have risen and are now close to almost previous peak valuations, which went as high as 35 times earnings. 

“We are reluctant to accord such high valuations which were then partly fuelled by merger talks,” OCBC said in a report. 

At 0228 GMT, SGX shares were down 0.9% at $9.95 on a volume of 2.1 million shares. 

 

SGX - DBS, OCBC raise target price for SGX

Stock Name: SGX
Company Name: SINGAPORE EXCHANGE LIMITED
Research House: OCBC

DBS Vickers has raised its target price for Singapore Exchange <SGXL.SI>, Asia’s second largest listed bourse, to S$11.40 from $9.60 and maintained its “buy” rating. 



OCBC Investment Research has downgraded its rating to “sell” from “hold” on valuation grounds, but raised its target price to $8.60 from $8.35. 

     

STATEMENTS: 

DBS said SGX’s first quarter earnings were within expectations as market activity picked up only in September and did not offset the weakness in the July-August period. 

SGX said net profit for the fiscal first quarter ended Sept 30 fell 21% to $74.2 million from $94.1 million a year ago, hurt by weak trading volumes in July and August and higher technology-related costs.

However, DBS expects further acceleration in SGX’s market activity in its second and third quarters due to positive market momentum, coupled with the listing of American Depositary Receipts and other initiatives. 

The brokerage also upgraded its earnings estimates by 6-7% after lifting volume and value assumptions for SGX’s 2011-2013 financial years. 

OCBC said it has retained its $362.9 million profit estimates for SGX’s 2011 financial year, taking into account its projection of a better second quarter. 

According to Thomson Reuters’ I/B/E/S estimates, SGX’s 2011 financial year net profit is expected to be $379 million. 

However, the brokerage said valuations for SGX and its regional peers have risen and are now close to almost previous peak valuations, which went as high as 35 times earnings. 

“We are reluctant to accord such high valuations which were then partly fuelled by merger talks,” OCBC said in a report. 

At 0228 GMT, SGX shares were down 0.9% at $9.95 on a volume of 2.1 million shares. 

 

SIA - Daiwa raises SIA target to $18.08 from $15.23

Stock Name: SIA
Company Name: SINGAPORE AIRLINES LTD
Research House: Daiwa

Daiwa Securities raises Singapore Airlines (C6L.SG) 6-month target price to $18.08 to $15.23, says Dow Jones, upgrades rating to Outperform from Hold; says upgrade due to upward revisions in Daiwa’s traffic forecasts for FY2011, also expects $409 million net profit in 2Q. 

Notes carrier’s current valuation has lagged “high valuation” regional peers since start of year, reflecting slow traffic, yield growth; “we believe a continuous earnings and yield recovery in the coming quarters will lead to improved investor sentiment on the stock.” 

Adds, overall number of tourists flying into Singapore +20% on-year for January-July period. “We think the gradual completion of the integrated resort and strong capacity growth from FY12 onward will help boost the company's earnings.” 

Share price last down 0.4% at $16.16. 

SIA - Credit Suisse keeps SIA at Outperform; $18.50 target

Stock Name: SIA
Company Name: SINGAPORE AIRLINES LTD
Research House: Credit Suisse

Credit Suisse keeps Singapore Airlines (C6L.SG) at Outperform with $18.50 target after carrier’s September operating numbers, says Dow Jones; notes passenger demand virtually flat on year, on month, “which we believe is decent, given that September is usually one of the weakest in 2H. On the positive side, passenger load factor rebounded 2% on month, and remained high by historical standard. This should imply a favourable pricing environment, in our view.”

Adds, cargo demand +9.2% on year, +2% on month; “the Asian air cargo market is stabilising, and could see further improvement as we head into the seasonally stronger 4Q,” house says. 

Notes, forward P/B of 1.3X, EV/EBITDAR of 5.0X at or below historical averages; target implies 1.5X forward P/B. Shares down 0.6% at $16.12. 

M1 - M1 +0.9%, outperforms peers; CIMB's top telco pick

Stock Name: M1
Company Name: M1 LIMITED
Research House: CIMB

M1 (B2F.SG) +0.9% at S$2.26, outperforms vs peers with SingTel (Z74.SG) flat at $3.07, StarHub (CC3.SG) off 0.4% at $2.61, says Dow Jones. 



Interest in M1 likely due to expectations for good 3Q earnings, due after market close, also on belief Singapore's smallest telco has most to gain from rollout of Next Generation National Broadband Network (NGNBN). 

CIMB says net profits should rise at M1, Starhub, probably fall at SingTel; retains Underweight telco sector “as we remain perturbed by potential margin and pricing pressure from NGNBN, pressure on fixed broadband ARPUs and rising content costs.” 

Says M1, rated Outperform, remains top pick, raises target to $2.70 vs $2.60; tips core net profit of $42 million-$43 million, up 3.0%-6.0% on quarter, up 24%-27% on-year; “growth is expected to come from revenue growth of 2.0%-3.0% on quarter and 21%-22% on-year on rising data usage from growing smartphone usage, better roaming revenue from soaring inbound visitors, higher voice usage and growth in wireless broadband.” 

Keeps Underperform rating on StarHub, ups target to $2.24 vs $2.14. Keeps Singtel at Underperform, $3.09 target. 

StarHub - M1 +0.9%, outperforms peers; CIMB's top telco pick

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

M1 (B2F.SG) +0.9% at S$2.26, outperforms vs peers with SingTel (Z74.SG) flat at $3.07, StarHub (CC3.SG) off 0.4% at $2.61, says Dow Jones. 



Interest in M1 likely due to expectations for good 3Q earnings, due after market close, also on belief Singapore's smallest telco has most to gain from rollout of Next Generation National Broadband Network (NGNBN). 

CIMB says net profits should rise at M1, Starhub, probably fall at SingTel; retains Underweight telco sector “as we remain perturbed by potential margin and pricing pressure from NGNBN, pressure on fixed broadband ARPUs and rising content costs.” 

Says M1, rated Outperform, remains top pick, raises target to $2.70 vs $2.60; tips core net profit of $42 million-$43 million, up 3.0%-6.0% on quarter, up 24%-27% on-year; “growth is expected to come from revenue growth of 2.0%-3.0% on quarter and 21%-22% on-year on rising data usage from growing smartphone usage, better roaming revenue from soaring inbound visitors, higher voice usage and growth in wireless broadband.” 

Keeps Underperform rating on StarHub, ups target to $2.24 vs $2.14. Keeps Singtel at Underperform, $3.09 target. 

SingTel - M1 +0.9%, outperforms peers; CIMB's top telco pick

Stock Name: SingTel
Company Name: SINGTEL
Research House: CIMB

M1 (B2F.SG) +0.9% at S$2.26, outperforms vs peers with SingTel (Z74.SG) flat at $3.07, StarHub (CC3.SG) off 0.4% at $2.61, says Dow Jones. 



Interest in M1 likely due to expectations for good 3Q earnings, due after market close, also on belief Singapore's smallest telco has most to gain from rollout of Next Generation National Broadband Network (NGNBN). 

CIMB says net profits should rise at M1, Starhub, probably fall at SingTel; retains Underweight telco sector “as we remain perturbed by potential margin and pricing pressure from NGNBN, pressure on fixed broadband ARPUs and rising content costs.” 

Says M1, rated Outperform, remains top pick, raises target to $2.70 vs $2.60; tips core net profit of $42 million-$43 million, up 3.0%-6.0% on quarter, up 24%-27% on-year; “growth is expected to come from revenue growth of 2.0%-3.0% on quarter and 21%-22% on-year on rising data usage from growing smartphone usage, better roaming revenue from soaring inbound visitors, higher voice usage and growth in wireless broadband.” 

Keeps Underperform rating on StarHub, ups target to $2.24 vs $2.14. Keeps Singtel at Underperform, $3.09 target. 

KepLand - Keppel Land up on broker upgrade to 'buy'

Stock Name: KepLand
Company Name: KEPPEL LAND LIMITED
Research House: UBS

Shares of Singapore property developer Keppel Land <KLAN.SI> rose as much as 3.7% to a 32-month high on Monday after a brokerage upgraded it to a “buy”, traders said.



At around 1034 GMT, Keppel Land shares were traded at $4.46 with nearly 1.5 million shares changing hands.

UBS said it upgraded Keppel Land to “buy” from “neutral” and raised its target price to $5.08 from $4.10 to reflect the firm’s asset swap deal with its property trust K-REIT Asia.

The broker also revised up its capital values for Keppel Land’s office portfolio.

“Given abundant liquidity chasing physical assets, we believe prime capital values will end the year higher,” UBS said in a report. 

 

KepLand - Keppel Land target raised by 28% by JPMorgan; Keeps at Neutral

Stock Name: KepLand
Company Name: KEPPEL LAND LIMITED
Research House: JP Morgan Chase

JPMorgan raises Keppel Land (K17.SG) target price to $4.70 vs $3.65, incorporates higher underlying property valuation assumptions, raises end-Dec 2011E RNAV by 28% to $6.12/share vs $4.85/share, according to Dow Jones.



JPMorgan says upgrades prompted by impact of group’s proposed asset swap with 45.4%-owned K-REIT Asia (K71U.SG). But retains Neutral rating “as we see few incremental catalysts for outperformance, especially when there are now more alternatives at either end of the risk spectrum for exposure to the Singapore office sector.”

JPMorgan says S-REITs such as Suntec REIT (T82U.SG), rated Neutral, offering FY December 2011E dividend yield of 6.0%, or active developers such as Overseas Union Enterprise (LJ3.SG) not rated, now have greater exposure to Singapore office sector than KepLand (down to 32% of Gross Asset Value estimate following completion asset swap).



House prefers Singapore developers, REITs with retail exposure such as CapitaMalls Asia (JS8.SG), Overweight, CapitaMall Trust (C38U.SG) Overweight, as “offer superior risk adjusted returns.”



Keppel Land +0.2% at $4.29.

F &amp; N - F&N target raised by Nomura to $7.18; Keeps Buy

Stock Name: F & N
Company Name: FRASER AND NEAVE, LIMITED
Research House: Nomura

Nomura raises Fraser & Neave (F99.SG) target price to S$7.18 from S$6.55, reflecting increased marked-to-market valuation of its listed entities, increased valuation from recent property purchases, says Dow Jones.



Nomura is maintaining its Buy rating, highlights group’s attractive F&B franchises, property assets.

Research house says group “would not be averse to returning surplus capital back to shareholders through higher dividends.” Adds advent of Kirin Holdings as shareholder should focus investor attention on potential of group’s F&B activities; alliance could result in more product launches, leveraging distribution channels of both companies.



“We believe F&N is growing its F&B business to be as large as its property business via organic growth and possible M&A.” Raises FY10-FY12 earnings forecasts by 5%-7%.



Shares +2.3% at $6.34.

NOL - NOL upgrade to Outperform by Credit Suisse; target $2.43

Stock Name: NOL
Company Name: NEPTUNE ORIENT LINES LIMITED
Research House: Credit Suisse

Credit Suisse upgrades Neptune Orient Lines (N03.SG) to Outperform from Neutral, raises target to $2.43 from $2.35; expects strong 3Q10 earnings of over US$260 million ($337 million) vs US$100 million in 2Q10, thanks to successful Transpacific rate hike in late 2Q; says 3Q consensus expectations appear low (average around US$200 million), says Dow Jones.

“NOL’s 3Q freight rate is 12% higher than that of 2Q, and the YTD run rate is above our expectation. As a result, we raise FY10-12E blended freight rates by 1% and earnings by 7%-17% to US$407 million, US$528 million and US$611 million,” says Credit Suisse.



Adds P/B should trade closer to previous peak-cycle multiple, based on projected FY10-11E ROAE of 14%-16%, which higher than last 10-year average of 11%. Shares +1.4% at $2.10.

EzionHldg - Ezion Holdings +2.8% in good volume; Buy: OCBC

Stock Name: EzionHldg
Company Name: EZION HOLDINGS LIMITED
Research House: OCBC

Ezion Holdings (5ME.SG) +2.8% at $0.74 at 10:52 a.m.; stock among SGX’s top-10 most traded today, still benefiting from news late Wednesday provider of marine logistics, support services to oil & gas industry has entered JV with Germany’s BBC Chartering for ownership of multi-purpose vessel, has chartered vessel to BBC for US$28 million ($36.3 million) over 6 years, says Dow Jones.

OCBC, which has Buy rating, says “though the impact (from deal on Ezion earnings) may not be significant, we are positive on this development as it paves the way for larger contracts going forward, if execution is smooth. We are expecting more clarity by Feb 2011.”



Raises fair value to $0.82 vs $0.79 after tweaking FY11 earnings to account for deal; tips FY11 net profit of $56.7 million on revenue of $151.1 million. Shares off day’s high at $0.75, orderbook quotes suggest minimal upside beyond there for now.

Genting HK US$ - UOB KayHian cuts Genting Hong Kong to Hold vs Buy

Stock Name: Genting HK US$
Company Name: GENTING HONG KONG LIMITED
Research House: UOB KayHian

UOB KayHian downgrades Genting Hong Kong (S21.SG) to Hold vs Buy, raises target to US$0.39 vs US$0.31; says recent visits to Resorts World Manila (RWM), Penang cruise "provided assurance that while our optimistic earnings forecast for 2011 can be met, they leave little room for upside", according to Dow Jones.

Tips FY11 net profit of US$182.4 million, raises FY 2010 earnings forecast by 21.5%, assuming stronger gross gaming revenue at RWM, which expected to generate net profit of US$116.9 million vs US$78.3 million previously. Adds, downgrade follows stock's "spectacular" over-100% rally since initiation on June 10; implied target 2011F P/E, EV/EBITDA of 17.2X, 10.9X respectively have already priced in strong seasonal earnings rise in 3Q10, "and at this stage, we do not foresee significant upside to our new forecasts for RWM."



Highlights legalisation of Taiwan market, with media reports suggesting casino legalisation bill expected to be passed by end-2010, as potential catalyst as Genting HK expected to spearhead Genting Group's efforts in Taiwan. Shares +3.5% at US$0.445.

CITYDEV - City Developments target raised by Nomura; Keeps Neutral

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

Nomura raises City Developments (C09.SG) target price to $13.00 vs $12.26, keeps Neutral call; says CityDev’s 54%-owned M&C (MLC.LN) accounts for 13.9% of group’s intrinsic asset value, still trading below historical average, says Dow Jones.

Nomura says an asset swap deal, similar to Keppel Land (K17.SG)/K-REIT’s (K71U.SG), “could technically be replicated at City Dev and its entities.” Raises CityDev NAV to $13.00/share vs $12.26/share, chiefly to reflect higher value for Republic Plaza, gain from sale of The Corporate Office, higher ASP for NV Residences, higher valuation of M&C.



“Valuing M&C at its historical peak multiple translates into an upside of just 2.9% from the current share price. Hence, most of the optimism is probably already in the price,” house says. Shares down 0.7% at $13.60.

Biosensors - Biosensors started at Buy by OCBC; $1.30 target

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

OCBC Investment Research starts Biosensors (B20.SG) at Buy with $1.30 target price, says Dow Jones.



OCBC says company’s flagship BioMatrix stent remains the only commercialized biodegradable polymer drug-eluting stent available in market, “which highlights the technological expertise of Biosensors”.

Research house notes heart-stent maker also developing new technology called BioFreedom; “initial trials have showed encouraging results and a successful implementation will provide Biosensors with a further competitive edge.”



OCBC forecasts net profit CAGR of 48.1% over FY10-12. Says recent entry of China-based private equity group Hony Capital as major shareholder with 29.47% stake will help company tap burgeoning Chinese healthcare market.



Shares flat at $1.04.

TigerAir - Tiger Airways started at Underperform by Credit Suisse

Stock Name: TigerAir
Company Name: TIGER AIRWAYS HOLDINGS LIMITED
Research House: Credit Suisse

Credit Suisse starts Tiger Airways (J7X.SG) at Underperform with $1.85 target price, based on 15x FY11 P/E, according to Dow Jones.



Credit Suisse says Tiger is world’s most expensive budget carrier as stock trades at 16x FY11 P/E, 138%-166% premium to sector P/B, 41%-50% premium to sector EV/EBITDAR.

Research house notes while Tiger benefits from Asia’s tourism growth, near-term challenges significant. Says proposed JV budget airline with Thai Airways (THAI.TH) has met with opposition from Thailand’s transport minister; “this will be a bumpy ride at the very least and, in our view, could lead to delays in the launch.”



Cites potential start-up losses for new airline as another concern. Adds sector-wide shortage of pilots could also hurt, evident in Tiger’s recent flight cancellations.



Shares –0.5% at $1.95.

Olam - Olam up on DBS' target price increase

Stock Name: Olam
Company Name: OLAM INTERNATIONAL LIMITED
Research House: DBS Vickers

Shares of commodities firm Olam International <OLAM.SI> rose as much as 3.1% on Friday at after DBS Vickers raised its target price to $3.60 from $3.30 and maintained its “buy” rating.



At 10:23 a.m., Olam shares were trading at $3.30 on a volume of 5.7 million shares.

“It’s because of the DBS report. Olam has made a lof of acquisitions so that will help its growth. And recently all the commodity counters have been doing quite well because of the commodity prices,” said a local trader.



DBS raised its earnings estimates by 19% for Olam’s 2011 financial year and by 4% for 2012 to account for stronger contributions from the firm’s newly acquired assets.



The brokerage added that it expects Olam’s strong earnings growth momentum to continue over the next three years.

MIDAS - OCBC cuts Midas Holdings to Hold, trims target

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

OCBC Investment Research downgrades Midas Holdings (5EN.SG) to Hold from Buy on valuation grounds, cuts target price to $1.05 from $1.29 to account for dilution stemming from train parts supplier's recent Hong Kong IPO; “we are turning cautious on the stock at current levels, and prefer to seek more attractive entry levels as we await the group’s 3Q10 results and clarity over its expansion plans.” 

Says while capacity increase positive given overwhelming industry demand in China, expectations already captured in share price. 

Stock flat at $1.00.

Jaya Hldg - Jaya soars on DBS' 'buy' rating

Stock Name: Jaya Hldg
Company Name: JAYA HOLDINGS LTD
Research House: DBS Vickers

Shares of ship building and chartering firm Jaya Holdings <JAYA.SI> rose as much as 11% on Thursday after DBS Vickers reinstated coverage on the firm with a "buy" recommendation and target price of $1.15.

At 0305 GMT, shares of Jaya were trading at $0.73 on a volume of 33.8 million shares.

DBS said Jaya could be a potential takeover target due to its strong cash generation potential, low valuations and experienced management team.

"It is because of the DBS report," a local trader said of the spike in Jaya's share price. 

Jaya Hldg - Jaya soars on DBS' 'buy' rating

Stock Name: Jaya Hldg
Company Name: JAYA HOLDINGS LTD
Research House: DBS Vickers

Shares of ship building and chartering firm Jaya Holdings <JAYA.SI> rose as much as 11% on Thursday after DBS Vickers reinstated coverage on the firm with a "buy" recommendation and target price of $1.15.

At 0305 GMT, shares of Jaya were trading at $0.73 on a volume of 33.8 million shares.

DBS said Jaya could be a potential takeover target due to its strong cash generation potential, low valuations and experienced management team.

"It is because of the DBS report," a local trader said of the spike in Jaya's share price. 

OUE Ltd - CIMB raises Overseas Union Enterprise target

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

CIMB raises Overseas Union Enterprise (LJ3.SG) target price to $3.71 from $3.37, keeps Outperform call, says Dow Jones. 



Says firm “cheapest domestic landlord at 33% discount to RNAV.” Says recent sale of office properties at low initial yields in Singapore has positive implications for OUE’s asset values; lowering cap rates from 5% to 4% will boost its asset values by 20%-25%. 

Adds, undervaluation of recent DBS Towers buy “appears particularly stark;” more value to be extracted from property with asset currently under-utilised, development of new retail podium. Adds, “with a higher free float of 33% (21% previously) and average trading volumes likely to rise from the US$3 million ($3.9 million) currently after a recent placement of vendor shares, we believe the stock will feature more on the radar screens of larger institutional funds.” 

Shares last +0.6% at $2.94. 

SIA - Deutsche Bank ups SIA target to $19.90; keeps Buy

Stock Name: SIA
Company Name: SINGAPORE AIRLINES LTD
Research House: Deutsche Bank

Deutsche Bank lifts Singapore Airlines (C6L.SG) target price to $19.90 from $17.90 after increasing fiscal FY11-12 earnings forecasts by 16%-5% to reflect positive operating environment; “we are now in a strong season for business travel and forward bookings appear encouraging.” 

Says limited passenger capacity growth so far means carrier can focus on increasing yields. Adds, net cash of $3.67 billion suggests SIA can afford dividend yield of 4.0% in current FY, 5.3% next year, highest in region.



Tips fiscal 2Q11 results, due Nov. 9, as catalyst. Expects $380 million net profit vs $159 million loss year earlier. Keeps Buy call. 

Shares +0.5% at $16.46.

SGX - CS raises SGX target to $11.20; keeps Outperform

Stock Name: SGX
Company Name: SINGAPORE EXCHANGE LIMITED
Research House: Credit Suisse

Credit Suisse raises Singapore Exchange (S68.SG) target price $11.20 from $9.40, keeps Outperform; says stage set for “2005-style market rally in 2011”, says Dow Jones.



Notes study of performance of bull markets since 1994 in Singapore suggests 20%-40% turnover growth in 24 months following base set during initial 12 months of rally; now factors in 20% organic turnover growth in next 12-24 months.

Notes recent run-up in stock price in reaction to increase in turnover, stock not yet pricing in gains from new catalysts on horizon, including listing of U.S. ADRs in Singapore, OTC clearing of financial derivatives. “With many investors still sceptical, by our estimates, the stock is not yet pricing in potential gains from ADR trading - the most promising near-term catalyst.”

House increases equity turnover assumptions for FY12-13E by factoring in 20%-30% market share in ADR trading, results in 18%-19% increase in FY12-13 EPS estimates to 50 cents, 53 cents respectively.

Shares end yesterday +1.9% at $9.47. 

SPH - DBSV cuts SPH to Hold vs Buy, target to $4.37

Stock Name: SPH
Company Name: SINGAPORE PRESS HLDGS LTD
Research House: DBS Vickers

DBS Vickers downgrades Singapore Press Holdings (T39.SG) to Hold from Buy due to limited upside, lack of catalysts, says Dow Jones. 



Says FY10 results in line, 20 cents DPS “tad above consensus’ average, but below what we had hoped for”; full year DPS (includes interim dividend) at 27 cents vs 25 cents in FY09. Notes, operating profits within expectations on higher ad revenues (+9% to $733 million), economic recovery, offset partially by lower property contributions. 

Notes, management indicated they would continue their opportunistic stance to bid for investment/retail property sites; “in our view, the Group would be keen in the two commercial/mixed sites in Punggol and Paya Lebar (on reserve list) by HDB/URA. However, with keen competition in this area, we believe that share price could be susceptible to outcome of the bids put in by the Group.” 

Lowers FY11/FY12 earnings by around 2% to account for higher operating expenses, cuts target to $4.37 from $4.52. 

Shares last +0.9% at $4.26. 

Yanlord - Yanlord rises on 'buy' recommendation

Stock Name: Yanlord
Company Name: YANLORD LAND GROUP LIMITED
Research House: Deutsche Bank

Shares of Singapore-listed Chinese developer Yanlord <YNLG.SI> rose as much as 2.9% on Wednesday after Deutsche Bank initiated coverage of the firm with a “buy” rating and target price of $2.10.



At 0214 GMT, Yanlord shares were trading at $1.74 on a volume of 6.4 million shares.

“The broker initiation should have an impact on the share price,” said a local trader.

Deutsche said Yanlord should be less affected by China’s latest tightening policies compared to its peers due to its greater revenue diversification. It added that Yanlord has good margin performance and a strong balance sheet.

The brokerage said Yanlord is trading at a 44% discount to its net asset value (NAV), at the lower end of its historic valuation band. Deutsche’s target price of $2.10 was based on a 30% discount to the firm’s NAV. 

Yangzijiang - Citi starts Yangzijiang at Buy, $2.25 target

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

Citigroup initiates coverage on Yangzijiang (BS6.SG) with Buy rating, $2.25 target price, based on 13X FY11 P/E, says Dow Jones.



Says China-based shipbuilder’s strong execution track record insulates it from industry headwinds; notes it has US$5 billion ($6.53 billion) order backlog, 5th largest among Chinese yards. Forecasts EPS CAGR of 13% over 2010-2012. Says strong balance sheet, with CNY3.5 billion in net cash, enables Yangzijiang to pursue acquisitions.

Adds company taking advantage of government support in current industry downturn to expand capacity at low cost; “apart from shipbuilding, capacity can also be used for other purposes including repair, conversion and scrapping.”

 Notes company also venturing into ship-breaking business to help offset earnings volatility; “such a venture also provides a natural hedge to potential steel price volatility.” 

Shares end down 0.5% at $1.87.  

CoscoCorp - HSBC raises Cosco target; keeps at Underweight

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

HSBC says Cosco (F83.SG) “a Morris Minor at Maserati prices.” Analyst Tarun Bhatnagar says Cosco faces steep learning curve on many fronts; company acknowledges efficiency an issue as it takes about 50% more time vs industry norm to build bulk carriers, and states its cost structure is uncompetitive, says Dow Jones. 



Bhatnagar says credit policy, orderbook management has been lax with some 16 cancellations, 48 delays through GFC, while current bulk carrier fleet likely to rise 60% in 2-3 years, may put freight rates under pressure, slow new orders. 

Adds, rigbuilding ambitions face hurdles near term after Macondo disaster, given oil firms unlikely to stray from established, experienced Singaporean, Korean yards. On top of this, says disproportionately high 30%-50% of pretax income from non-core items is a concern, as is series of senior-level departures witnessed in recent months. 

Raises target to $1.35 vs $0.65 on new orders, higher estimates, change in valuation methodology; on P/E, P/B ratios, “Cosco stands out as the most expensive of its peers but offering among the lowest ROEs and margins.”

Keeps Underweight. Shares +2.2% at $1.90.

SPH - UOBKH cuts SPH to Hold; Earnings outlook flat

Stock Name: SPH
Company Name: SINGAPORE PRESS HLDGS LTD
Research House: UOB KayHian

UOB KayHian downgrades Singapore Press Holdings (T39.SG) to Hold from Buy; says final dividend priced in as share price has rallied about 4% since early September in anticipation, says Dow Jones. 



Notes, FY10’s “sterling performance” due to strong rebound in ad revenue, Sky@eleven’s contribution, low newsprint cost. Expects ad revenue growth to taper off to 7% in FY11, 5% thereafter. 

Says against single-digit top-line growth (+6.1% on year), earnings outlook flat, while costs will be a concern; forecasts SPH's average newsprint charge-out at US$700/ton by FY12 vs average US$535/ton ($698/ton) in FY10. 

House trims fair price by 3% to $4.35 from $4.50; “While the price upside to our revised fair price is a mere 3%, SPH still offers an attractive dividend yield of above 5%.” 

Shares +0.9% at $4.26.

Yangzijiang - HSBC raises Yangzijiang target to $1.90

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

HSBC raises Yangzijiang Shipbuilding (BS6.SG) target to $1.90 from $1.20, says Dow Jones.



Says new orders have rebounded to US$1.3 billion ($1.7 billion) year to date from US$460 million trough in 2009, while shipping firms signalling improving outlook, some ports have recorded sharp on-year rises in container throughput. 

Tips Yangzijiang to achieve another earnings peak in 2011, “with the company well positioned to capitalise on any potential revival in containership orders.” However, says recovery largely priced in; notes share price +49% from year-to-date low in May. “This adequately factors in the moderate cyclical recovery in new orders and earnings growth expected in 2011.” 

Adds, stock also fairly valued vs peers at 2011E EV/EBITDA of 10.3X, modestly lower vs Chinese shipbuilders’ average 11.1X, significantly higher vs Korean average of 6.1X. Says recent Taiwan Depository Receipt (TDR) listing may provide some re-rating impetus to primary Singapore listing, "but past TDRs have seen mixed results and we believe the impact will likely be modest." 

Keeps Neutral call. Shares +2.1% at $1.91. 

KepLand - RBS raises Keppel Land target to $5.20; keeps Buy

Stock Name: KepLand
Company Name: KEPPEL LAND LIMITED
Research House: RBS

RBS raises Keppel Land (K17.SG) target price to $5.20 from $4.70; keeps Buy rating, says Dow Jones. 

Says divestment of Marina Bay Financial Centre at 20% higher price than expected ($1.4 billion) while Keppel Towers, GE Tower site it's buying in asset swap with K-REIT Asia (K71U.SG) should benefit from Singapore-Malaysia land swap as buildings in area expected to be rejuvenated after swap. 

“The bundled deal could add 42 cents to Keppel Land's RNAV...while the gearing reduction should enable Keppel to acquire more NAV-accretive residential and office land bank.” Says $321 million net gain from deal, cash proceeds of $812 million will reduce gearing to 0.5% from 22%, “giving it a debt headroom for S$1.1 billion for acquisitions assuming 20% gearing.” 

Adds, Keppel Land could take advantage of fall in residential land prices, may also buy more land for office development next year to beef up its office portfolio. RBS remains positive on Singapore prime office, which accounts for 51% of KepLand's RNAV. 

Shares +1.9% at $4.19.

Asiatravel - DBSV Upgrades Asiatravel.com to Buy; $0.63 target

Stock Name: Asiatravel
Company Name: ASIATRAVEL.COM HOLDINGS LTD
Research House: DBS Vickers

DBS Vickers upgrades Asiatravel.com (5AM.SG) to Buy from Hold, lifts target price to $0.63 from $0.53, based on 20X FY11 earnings, to align with mid-cycle valuations, says Dow Jones. 

Changes reflect online hotel reservation group’s improving fundamentals amid increasing tourist-arrivals to Singapore, Thailand. Says increased sales of tickets to Universal Studios Singapore, better utilization of its shuttle buses to Resorts World Sentosa bode well for company. 

Tips company as acquisition target for larger non-Asian Internet travel portals; “Asiatravel’s debt-free balance sheet, proprietary software, in-house development capabilities, physical presence in key geographies and long-standing relationships with hoteliers are other key attractions.” 

Shares +1.1% at $0.475

NOL - CIMB keeps NOL at Outperform, $2.25 target

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

CIMB Keeps Neptune Orient Lines (N03.SG) at Outperform with $2.25 target price, pegged to 1.5X P/BV; says 2.4% sequential drop in average rates to US$3,104/FEU ($4,061/FEU) in 4 weeks to September 17 “should not prevent NOL from recording strong 3Q earnings” as 3Q average rate of US$3,120/FEU (forty-foot equivalent unit) +12% from 2Q “and is just a whisker away from the peak rate of US$3,127/FEU of 3Q08.” 

Notes, "important distinction is that in 3Q08, bunker averaged US$691/ton while in 3Q10, it averaged only US$454/ton. Even compared against 2Q this year, 3Q bunker was 4.0% cheaper." 

Adds, daily revenue in 3Q +55.5% on-year, +14% on-quarter to US$24.3 million, record high for NOL. Tips 4Q earnings likely to be sequentially lower, though expects rates in 2011 to stay strong on back of global trade growth, continued supply discipline on part of liner operators. 

Shares off 1.4% at $2.04. 

K-REIT - Macquarie raises K-REIT Asia target to $1.68 vs $1.38

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

Macquarie raises K-REIT Asia (K71U.SG) target price to $1.68 from $1.38, keeps at Outperform, says Dow Jones. 



Says asset swap with parent Keppel Land (K17.SG) increases K-REIT's exposure to prime-grade Singapore office sector, “which we believe will outperform the other property sectors over the next 2-3 years.” 

Raises FY11-13 DPU estimates by 10%-11%, including contribution from Marina Bay Finance Centre Phase 1, incorporating divestment of Keppel, GE Towers.

Notes, implied capital value of MBFC 1 at S$2,400psf “fair compared to current market transactions; implying office rents in the range of $10.50psf based on a cap rate of 4.25%.” 

Adds, additional borrowings of $820.9 million to partly fund deal, secured at 3.05%, substantially lower than average interest cost of 3.54% at June 30, 2010; post asset swap gearing of 39.1% “still comfortable.” 

Shares down 2.2% at $1.34.

Olam - Olam started at Buy by UOB KayHian, $3.80 target

Stock Name: Olam
Company Name: OLAM INTERNATIONAL LIMITED
Research House: UOB KayHian

UOB KayHian starts Olam (O32.SG) at Buy with $3.80 target price, implying 18.8x forward P/E, says Dow Jones.



UOB KayHian says investors seeking to hedge against falling USD or inflation can consider Olam as company will benefit from agri-commodity inflation; “as demand for agri-commodities is relatively inelastic, most price increases can be passed on to their customers with relative ease, resulting in higher profits, assuming similar margins are achieved.”

Broker tips FY12-FY13 earnings growth of 30%-18%, boosted by profits generated from acquisitions. Says ongoing merger talks with Louis Dreyfus Commodities, if successful, will lead to mutual benefits. Shares flat at $3.17.

SGX - SGX target raised to $10.50 by Phillip Securities; Keeps Buy

Stock Name: SGX
Company Name: SINGAPORE EXCHANGE LIMITED
Research House: Phillip Securities

Phillip Securities lifts Singapore Exchange (S68.SG) target price to $10.50 from $9.00 after raising FY11 EPS estimate by 16.8% to reflect higher revenue on back of bourse operator’s recent growth initiatives, says Dow Jones.



These include offering trading of corporate bonds for retail investors and ADRs of 19 major Chinese companies, launching dark pools.

Broker says if these ADRs successful in Singapore, SGX may enable trading of ADRs of South Korean, Taiwanese, Indian companies. Adds Singapore IPO pipeline remains healthy, with at least six companies seeking to list in 4Q10. Keeps Buy call. Shares flat at $9.47.

SGX - SGX target raised to $11.00 by BNP Paribas; Keeps Buy call

Stock Name: SGX
Company Name: SINGAPORE EXCHANGE LIMITED
Research House: BNP Paribas

BNP Paribas lifts Singapore Exchange (S68.SG) target price to $11.00 from $9.40, based on 24x FY12 P/E, to account for expected increased trading liquidity in Singapore market given bourse operator's recent growth initiatives, says Dow Jones.



BNP Paribas keeps Buy call, cites trading of ADRs in Singapore of 19 major Asian companies from Oct 22 as key driver.

"There is zero competition from any other exchanges during Asian trading hours considering the fact that these ADRs are currently exclusively listed in the US," says research house, adding Singapore stock market will be supported by increased fund flows given low bank deposit rates, firmer SGD.



Shares +0.4% at $9.51.

F &amp; N - Kim Eng cuts F&N to Hold, Ups target to $6.72

Stock Name: F & N
Company Name: FRASER AND NEAVE, LIMITED
Research House: Kim Eng

Kim Eng Securities downgrades Fraser & Neave (F99.SG) to Hold from Buy on valuation grounds after recent gains driven by strong Singapore home sales, says Dow jones.



Notes developer, F&B group gearing up to launch new soft drinks within next 12 months, beef up food business with recent investment in 23% stake in Malaysia-listed Cocoaland (7205.KU); “however, before these initiatives contribute meaningfully to earnings, property pre-sales will determine its re-rating potential.” 

Lifts target price to $6.72 from $6.50 to factor in development surplus from recently-acquired Pasir Ris land site in Singapore, marked-to-market values of subsidiaries.

Shares off 0.6% at $6.30.

 

SGX - SGX target raised to $10.50 from $9.50 by UBS

Stock Name: SGX
Company Name: SINGAPORE EXCHANGE LIMITED
Research House: UBS

UBS raises Singapore Exchange (S68.SG) target price to $10.50 from $9.50 after raising fiscal FY12-13 EPS estimates by 4.7%-12.2%, says Dow Jones.



Changes reflect increased securities trading assumptions: “We think a return to (FY08 trading) level after four years on more listings and a bigger pool of market makers is plausible.”

Says if trading of ADRs in Singapore, available from Oct 22, proves successful, Indian and Korean depository receipts could be next to list, further boosting trading volume. Keeps Buy call.



Shares +0.2% at $9.50.

Yangzijiang - Yangzijiang raises target to $2.15 vs $1.64 by CIMB

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

CIMB lifts Yangzijiang (BS6.SG) target price to $2.15 from $1.64, based on 12x FY12 P/E, after increasing FY10-12 EPS estimates by 15%-42% to reflect higher order win, margin assumptions, says Dow Jones.

CIMB expects China-based shipbuilder to maintain above-20% gross margins next year on back of stable material prices, improved productivity: “The building of larger container vessels, which typically fetch better margins, should also boost overall profitability.”



Keeps Outperform call. Shares flat at $1.81.

NOL - NOL target raised to $1.82 by UBS but keeps at Sell

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

UBS lifts Neptune Orient Lines (N03.SG) target price to $1.82 from $1.30, based on 1.15x P/B vs 0.84x previously, says Dow Jones.



UBS also upgrades FY10-12 EPS estimates to US$0.09, US$0.12, US$0.13 from US$0.01, US$0.05, US$0.06 respectively to account for strong 2Q10 results, expected robust 3Q10 earnings.

“We expect NOL’s earnings recovery momentum to continue as peak season demand brought further volume increase. In addition, we believe NOL will benefit more from contract rate increases and peak-season surcharge on the transpacific route”, where company derives more than half of its revenue, says UBS.



Still, keeps Sell call, citing unattractive valuation. Shares off 0.5% at $2.08.

TigerAir - Tiger Airways cut to Neutral by DMG with $2.00 target

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

DMG downgrades Tiger Airways (J7X.SG) to Neutral from Buy, trims target price to $2.00 from $2.13 after lowering FY11 earnings forecast by 6.2%, says Dow Jones.



Changes reflect recent slew of flight cancellations, higher staff costs as budget carrier offers higher compensation to attract pilots amid booming aviation industry.



Notes company has resorted to hiring qualified A-320 pilots on short-term contracts while its new batch of pilots undergo training, certification.



Shares off 1.0% at $1.98.

CoscoCorp - Cosco upgraded to Neutral by CIMB with $2.01 target

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

CIMB upgrades Cosco (F83.SG) to Neutral from Underperform, lifts target price to $2.01 from $1.41 after changing valuation basis to 15x FY12 P/E from sum-of-parts methodology, says Dow Jones.



CIMB says execution, default risks for shipbuilding sector have eased with steady vessel deliveries, absence of contract cancellations or deferrals since 1Q10.

Research house notes Cosco has delivered 24 vessels year to date with average of 8 units each quarter: "We think this trend is sustainable in 2011." But remains cautious on Cosco's foray into offshore & marine segment; "its execution of turnkey projects remains untested."



Shares off 0.5% at $1.86.

SembMar - SembMarine +4.6%; jack-up rig demand Up-Nomura

Stock Name: SembMar
Company Name: SEMBCORP MARINE LTD
Research House: Nomura

Sembcorp Marine (S51.SG) gaps up at opening, last +4.6% at 6-month high of $4.31, as latest US$364 million ($477.1 million) orders from Atwood Oceanics Pacific for 2 jack-up rigs ends company's dry spell of rig contracts, says Dow Jones.



Atwood also has options to buy another 3 rigs, potentially boosting total value of 5 rigs to nearly US$1 billion, largest for SembMarine since 2008 global credit crunch. 

“We are positively surprised by the rig type as we were previously negative on the demand for jack-up newbuilds given the huge backlog of uncontracted newbuilds. We think this reflects the demand for high-specification jack-ups,” says Nomura, which has Buy call with $4.73 target. 

Still, DMG, which has Sell call with $3.73 target, remains cautious; “order books are moving away from the high-margin orders secured in 2007 and 2008, and the annual rate of order replenishment remains substantially below peak levels.” Orderbook quotes suggest miminal upside beyond morning $4.38 high. 

Hyflux - Standard Chartered starts Hyflux at Outperform

Stock Name: Hyflux
Company Name: HYFLUX LTD
Research House: StanChart

Standard Chartered starts Hyflux (600.SG) at Outperform with $3.80 target price, based on discounted cashflow valuation, says Dow Jones. 



Expects sustainable earnings stream as water treatment firm’s build-operate-transfer projects in China gradually commencing operations, ramping up. 

Flags potential for mega contract in Libya, where Hyflux has already signed memorandum of agreement to build 2 desalination plants; “while only a memorandum of agreement is signed, the potential from a win on this project could enhance earnings by 19%-189% during FY11-13.” 

Says concerns over high gearing are easing given recent JVs with Japanese companies to help fund projects. Shares +1.0% at $3.16. 

SoundGlobal - StanChart starts Sound Global at outperform

Stock Name: SoundGlobal
Company Name: SOUND GLOBAL LTD.
Research House: StanChart

Standard Chartered starts Sound Global (E6E.SG) at Outperform with $1.15 sum-of-parts target price, says Dow Jones. 



Says China-based water treatment firm’s extensive R&D, technical expertise bode well for growth; “its project network, which mainly runs through China's second- and third-tier cities, where penetration rates are lower, puts it in a position to benefit from the growth of local economies.”

Says strategy of taking on build-operate-transfer projects ensures sustainable earnings stream, allows better differentiation from rivals focused only on engineering, procurement, construction; “the EPC model has low entry barriers.” 

Shares +1.2% at $0.865.

RafflesMG - OCBC initiates 'hold' for Raffles Medical

Stock Name: RafflesMG
Company Name: RAFFLES MEDICAL GROUP LTD
Research House: OCBC

OCBC Investment Research has initiated coverage of Singapore healthcare provider Raffles Medical Group <RAFG.SI> with a “hold“ rating and a target price of $2.32. 

OCBC Investment Research said that while it is positive on Raffles Medical’s growth prospects, its cost management and operating efficiency, as well as the outlook for healthcare providers, most of the positive factors have been priced in. 

The brokerage said that Raffles Medical has traded at a premium to its peers historically and this may continue due to the firm’s consistent earnings profile and expected margin expansions. 

“The increase in depth and breadth of specialties, coupled with the recruitment of more specialists, will likely provide further upside to margins in the future’, OCBC said in a report.     

OCBC valued Raffles Medical at 24 times price-earnings ratio (PER) for its 2011 financial year, in line with its historical average PER since listing. The brokerage will turn buyers of the stock at $2.10 or lower, it added. 

At 0134 GMT, shares of Raffles Medical were up 0.4% at $2.33 on a volume of 40,000 shares. 

SingPost - CLSA downgrades Singapore Post to Underperform

Stock Name: SingPost
Company Name: SINGAPORE POST LIMITED
Research House: CLSA

CLSA downgrades Singapore Post (S08.SG) to Underperform from Outperform, says Dow jones. 

“with management considering expansion into more low-profitability businesses, we remain unconvinced about the recent run-up in share price.”

Says company’s plans to expand into overseas markets, non-mail businesses could actually hurt profitability as it will be challenging incumbents in areas that inherently generate lower returns than what it currently enjoys. 

Expects ROE, down since FY06, to continue declining as company hasn’t been able to generate same level of incremental earnings on retained profits; “we foresee this trend to perpetuate due to lack of income growth drivers and a marked increase in costs.” 

Lifts target price to $1.10 from $1.00 after adjustments to dividend discount model valuation. Shares flat at $1.23.

Olam - DMG cuts Olam to Neutral, keeps $3.24 target

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

DMG downgrades Olam (O32.SG) to Neutral from Buy on limited upside to its $3.24 target price after 24.4% year-to-date gain vs STI +9.0%, driven by strong fiscal FY10 results released in August, recent merger talks with Louis Dreyfus Commodities, says Dow Jones.


Says while it’s positive about commodity supplier’s long-term acquisition-driven growth prospects, current share price has factored in earnings growth for next 2 years. While Olam could reap synergies from union with Louis Dreyfus, reckons merger unlikely as both parties may have to agree to reduced management control; “we see this as a major hurdle.” 

Shares +0.6% at $3.22. 

Yangzijiang - Yangzijiang target raised to $2.40 by Deutsche Bank

Stock Name: Yangzijiang
Company Name: YANGZIJIANG SHIPBLDG HLDGS LTD
Research House: Deutsche Bank

Deutsche Bank lifts Yangzijiang (BS6.SG) target price to $2.40 from $1.90 after raising FY11-12 forecasts for new orders by 60%-78%, keeps Buy call, says Dow Jones.



“YZJ is still seeing strength in the container ship market and appears hopeful for more orders,” says Deutsche Bank, adding China-based shipbuilder’s recent TDR listing has raised its profile among key Taiwanese shipping lines, with 1 shipyard now in talks with company to build 8,000-TEU (20-foot equivalent units) container ships.

“Any success in this area may allow the group to scale up on its capabilities and add a new line of vessels to its portfolio” as YZJ’s largest vessels so far can carry only 4,250 TEUs.



Shares +1.7% at $1.83.

CoscoCorp - Cosco raised to Buy by Deutsche Bank with $2.25 target

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

Deutsche Bank upgrades Cosco (F83.SG) to Buy from Hold, lifts target price to $2.25 from $1.77 after raising FY11-12 earnings estimates by 7%-14%, says Dow Jones.



Changes reflect 9% upgrade in new annual order assumptions for FY11-12.



Expects margins to increase in coming years given improving execution. Notes completion time for typical 57,000-deadweight ton bulk carrier now 16 months vs 18 months in 2009, with management expecting further reduction to 14 months by end-2010, 12 months by end-2011.



Says Cosco well-positioned to benefit from Chinese government support for shipbuilders in form of financing measures. Shares +1.6% at $1.88.

PEC - PEC started at Buy by Phillip Securities; with $1.50 target

Stock Name: PEC
Company Name: PEC LTD.
Research House: Phillip Securities

Phillip Securities starts PEC (IX2.SG) at Buy with $1.50 target price, based on 8.75x P/E, 1.75x P/B, says Dow Jones.



Phillip Securities says Singapore-based plant builder has established working ties on Jurong Island with key industry players including Shell Eastern, Exxon Mobil, Singapore Refining Company, allowing it to secure long-term maintenance contracts, which are less volatile than project works.

Broker says PEC’s 2 key projects in Europe, Malaysia “key milestones” as they establish new phase of growth beyond its traditional business on Jurong Island. Expects strong competition in industry to keep PEC’s profit margins flat, but notes strong cash position of $160.8 million will be useful for buying new synergistic businesses to increase returns to shareholders. Shares +4.8% at $1.10.

TCT - CIMB starts Treasury China at Buy, $1.83 target

Stock Name: TCT
Company Name: TREASURY CHINA TRUST
Research House: CIMB

CIMB starts Treasury China Trust (LG2U.SG) at Buy with $1.83 target price, based on 30% discount to $2.61 RNAV estimate, says Dow jones.



Says business trust is good proxy for China’s recovering commercial property market, especially in Shanghai, which expected to account for almost all of TCT's rental income for 2013. 

Notes management seeking to differentiate TCT from other Chinese retail players by focusing on large-scale projects such as malls instead of strata-titled type of retail formats, which are common in China; “this creates an alternative shopping experience that achieves international standards in terms of tenant choice and professional property management, which also underpins the strength of the recurrent earnings.” 

Shares last +0.7% at $1.49.

RafflesMG - Raffles Medical target raised to $2.57 by UOB KayHian

Stock Name: RafflesMG
Company Name: RAFFLES MEDICAL GROUP LTD
Research House: UOB KayHian

UOB KayHian lifts Raffles Medical Group (R01.SG) target price to $2.57 from $2.00 after adjusting discounted cashflow valuation, says Dow Jones.  

New target implies 25.9x FY11 P/E vs mean P/E of 20.6x over 2003-2010, says broker.



“RMG is deserving of its premium valuation given the scarcity of quality and investable healthcare stocks in Singapore after the de-listing of Parkway,” says UOB KayHian, adding RMG well positioned to benefit from rising demand for quality healthcare in Asia, given its good reputation, transparent pricing. 

Keeps Buy call. Shares off 0.9% at $2.31 at 11:09 a.m.

PLife REIT - Kim Eng ups Parkway Life REIT target to $1.94

Stock Name: PLife REIT
Company Name: PARKWAYLIFE REIT
Research House: Kim Eng

Kim Eng Securities lifts Parkway Life REIT (C2PU.SG) target price to $1.94 from $1.64 after rolling over estimates to FY11 valuations, says Dow Jones.



Keeps Buy call. Notes healthcare REIT stepping up efforts on its asset enhancement initiatives, eyeing acquisitions in Australia, Malaysia. Says long waiting list for PLife’s nursing homes in Japan is clear evidence of robust underlying demand; “this renders PLife the benefit of a stable rental income.” 

Expects PLife to pursue another $200 million worth of acquisitions over next 2 years. REIT flat at $1.64.