CitySpring - Cityspring Infrastructure cut to Sell by Kim Eng

Stock Name: CitySpring
Company Name: CITYSPRING INFRASTRUCT TRUST
Research House: Kim Eng

Kim Eng Securities downgrades Cityspring Infrastructure Trust (A7RU.SG) to Sell from Hold, cuts target price to $0.52 from $0.62 on prospect of lower distribution payouts, dilution risks.

Notes Cityspring setting aside A$20 million ($25.4 million) before January 2011 in escrow account for its Basslink asset in bid to avoid credit rating downgrade for Basslink’s bonds; “the bonds, totalling A$866 million, face a possible rating downgrade that will trigger a cash lock-up at Basslink and affect CitySpring’s distribution policy.”

Says while having escrow account may resolve issue, Cityspring still required to provide capital structure plan to meet Standard & Poor’s stringent risk assessment; “even if Basslink continues to pay a distribution, we think the unitholders’ yield may still suffer a dilution.”



Stock off 0.8% at $0.59.

SuntecReit - CLSA ups Suntec REIT to Buy; favours office exposure

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

CLSA upgrades Suntec REIT (T82U.SG) to Buy vs Outperform, raises target price to $1.60. Says, private placement (at 4.0% discount to VWAP) in-line with other recent equity raising discounts of around 5.0%. 



“The deal is marginally yield accretive...raising DPU marginally by 1.0%-2.0%. In the long run...the deal is a huge positive as it enables Suntec REIT to acquire one of the key office prime jewels in Singapore.”

Beyond yield accretion, REIT’s earnings profile “now skewed towards the high end office sector which we favour.” Trading at 0.8X P/B offering 6.6% yield, says REIT cheaper than most office, retail peers yet offers upside from retail operations, stability from income support. 

Post-deal, expects office to contribute 57% of earnings vs less than 50% previously; “more importantly, high-end prime grade A office now accounts for 23% of earnings, up from 10%.” REIT off 0.7% at $1.42.

GLP - Citi nudges up GLP target; 1H results strong

Stock Name: GLP
Company Name: GLOBAL LOGISTIC PROP LIMITED
Research House: Citigroup

Citigroup raises Global Logistic Properties (MC0.SG) target to $2.80 from $2.78, keeps at Buy.



Says strong fiscal 1H11 results helped by unique, policy-friendly business model, its China-Japan dual exposure.

Sets new target at par to estimated FY11E NAV/share, 1.53x FY11 P/B ratio. Says results generally in-line with expectations, strong growth in earnings mainly due to mid-teen increase in rental revenue together with good cost control.



Adds, acquisitions of logistics properties making good progress, low gearing to support further acquisitions; “current net gearing ratio will be approximately 16% based on the IPO proceeds, down from 33% right before IPO. We believe such a strong balance sheet should be able to help GLP in future acquisitions.”



Shares off 1.4% at $2.19.

LippoMapleT - Macquarie ups Lippo-Mapletree target to $0.64

Stock Name: LippoMapleT
Company Name: LIPPO-MAPLETREEINDORETAILTRUST
Research House: MacQuarie

Macquarie raises Lippo-Mapletree Indonesia Retail Trust (D5IU.SG) target price to $0.64 from $0.55 after rolling forward valuation to 2011, lowering risk-free rate assumption. Keeps Outperform call. 

Says annualized dividend yield remains attractive at 8.6%, while overall portfolio performance strong, with average occupancy at 98% in 3Q10 vs 81% industry average. 

Notes trust plans to double asset size to S$2 billion in next few years, mainly via acquisitions. 



Says funding no issue as current gearing only 13%; “LMIR will be the main beneficiary of the growth of the Indonesian economy and the stronger rupiah.”  REIT flat at $0.52.

SGX - Singapore Exchange raised to 'Buy' from 'Neutral' at Goldman

Stock Name: SGX
Company Name: SINGAPORE EXCHANGE LIMITED
Research House: Golman Sachs

Singapore Exchange had its rating raised to “buy” from “neutral” at Goldman Sachs Group Inc., saying it expects trading volumes to increase.



The brokerage also boosted its share-price forecast for the operator of the securities and derivatives exchange to $10.37 from $8.22 previously.

SGX - Singapore Exchange raised to 'Buy' from 'Neutral' at Goldman

Stock Name: SGX
Company Name: SINGAPORE EXCHANGE LIMITED
Research House: Golman Sachs

Singapore Exchange had its rating raised to “buy” from “neutral” at Goldman Sachs Group Inc., saying it expects trading volumes to increase.



The brokerage also boosted its share-price forecast for the operator of the securities and derivatives exchange to $10.37 from $8.22 previously.

 

Pac Andes - Pacific Andes Resources started at Outperform by Standard Chartered

Stock Name: Pac Andes
Company Name: PACIFIC ANDES RESOURCES DEVLTD
Research House: StanChart

Standard Chartered starts Pacific Andes Resources Development (P11.SG) at Outperform with $0.47 sum-of-parts target price.



Expects steady recurrent earnings from supply chain management business, with unit China Fishery’s (B0Z.SG) strong growth momentum, margins underpinning group prospects.

Forecasts 13% earnings CAGR over 2010-2013 for frozen fish supplier; “PARD provides a cheap proxy for the strong growth momentum of China Fishery and rising domestic consumption in China.”



Tips 5%-6% annual average profit growth in next 3 years for supply chain management arm, which accounts for 43% of group revenue. Shares +1.5% at $0.335.

Kep Corp - Keppel best placed in Petrobras tender, Buy: DMG

Stock Name: Kep Corp
Company Name: KEPPEL CORPORATION LIMITED
Research House: DMG

DMG maintains Neutral on Singapore offshore & marine sector; says pricing by local yards in Petrobras tender -- 10% below Keppel (BN4.SG), Sembcorp Marine (S51.SG) for drillship packages -- “reinforced our view that Brazilian yards are aggressive in their bids and there are risks that the Singapore yards could end up disappointed.”

Maintains estimates for Keppel, SembMarine, Sembcorp Industries (U96.SG) pending tender results (may come this week), current models account for each yard winning around US$6 billion ($8 million) orders. Rates Keppel at Buy with $11.00, “looks the best positioned amongst the two Singapore-based yards given its broad exposure in all three bid packages;” adds, has highest exposure in tender, longer operating history in Brazil.

Neutral on Sembcorp Marine with $4.70 target, on view share price fairly valued; prefers Sembcorp Industries, rated Buy, $5.65 target, “given a better risk-reward profile.” Keppel +0.2% at $10.82, Sembcorp Marine off 1.7% at $4.76, Sembcorp Industries down 0.6% at $4.84.

SembMar - Keppel best placed in Petrobras tender, Buy: DMG

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

DMG maintains Neutral on Singapore offshore & marine sector; says pricing by local yards in Petrobras tender -- 10% below Keppel (BN4.SG), Sembcorp Marine (S51.SG) for drillship packages -- “reinforced our view that Brazilian yards are aggressive in their bids and there are risks that the Singapore yards could end up disappointed.”

Maintains estimates for Keppel, SembMarine, Sembcorp Industries (U96.SG) pending tender results (may come this week), current models account for each yard winning around US$6 billion ($8 million) orders. Rates Keppel at Buy with $11.00, “looks the best positioned amongst the two Singapore-based yards given its broad exposure in all three bid packages;” adds, has highest exposure in tender, longer operating history in Brazil.

Neutral on Sembcorp Marine with $4.70 target, on view share price fairly valued; prefers Sembcorp Industries, rated Buy, $5.65 target, “given a better risk-reward profile.” Keppel +0.2% at $10.82, Sembcorp Marine off 1.7% at $4.76, Sembcorp Industries down 0.6% at $4.84.

Semb Corp - Keppel best placed in Petrobras tender, Buy: DMG

Stock Name: Semb Corp
Company Name: SEMBCORP INDUSTRIES LTD
Research House: DMG

DMG maintains Neutral on Singapore offshore & marine sector; says pricing by local yards in Petrobras tender -- 10% below Keppel (BN4.SG), Sembcorp Marine (S51.SG) for drillship packages -- “reinforced our view that Brazilian yards are aggressive in their bids and there are risks that the Singapore yards could end up disappointed.”

Maintains estimates for Keppel, SembMarine, Sembcorp Industries (U96.SG) pending tender results (may come this week), current models account for each yard winning around US$6 billion ($8 million) orders. Rates Keppel at Buy with $11.00, “looks the best positioned amongst the two Singapore-based yards given its broad exposure in all three bid packages;” adds, has highest exposure in tender, longer operating history in Brazil.

Neutral on Sembcorp Marine with $4.70 target, on view share price fairly valued; prefers Sembcorp Industries, rated Buy, $5.65 target, “given a better risk-reward profile.” Keppel +0.2% at $10.82, Sembcorp Marine off 1.7% at $4.76, Sembcorp Industries down 0.6% at $4.84.

Marco Polo - Marco Polo Marine downgraded to Hold by UOB KayHian

Stock Name: Marco Polo
Company Name: MARCO POLO MARINE LTD.
Research House: UOB KayHian

UOB KayHian downgrades Marco Polo Marine (5LY.SG) to Hold vs Buy, cuts target to $0.36 vs $0.53 after lowering FY11-FY12 earnings estimates by 33.5%-11.6%; expects margin pressure to persist in FY11.

“We believe FY10 margins were aided by project-specific shipyard work, which we believe to be unsustainable. We also expect weaker ship chartering margins to persist due to higher sale and leaseback expenses.”

Suggests $0.30 entry price.



Tips sharp improvement in vessel charter rates, operating margins as catalysts.



Shares +1.2% at $0.41.

Foreland - Foreland Fabrictech started at Buy by CIMB

Stock Name: Foreland
Company Name: FORELAND FABRICTECH HLDS LTD
Research House: CIMB

CIMB starts Foreland Fabrictech (B0I.SG) at Buy with $0.16 target; says “with margins picking up after the recent recession, capacity expansion and producing high-grade products efficiently would be its forward growth drivers,” for Fujian-based fabric maker.

Adds, customer order flows promising since beginning of 2010, expects utilization rates to reach 90% in 4Q10, early 2011 as company fulfills orders for Chinese New Year in early 2011. Prices stock at 0.6x CY11 P/BV, implied P/E for 2011 is 5.7x, “slightly higher than the sector average of Singapore-listed textile-related stocks but below the average for Hong Kong-listed textile stocks.”

Given 3-year EPS CAGR projection of 40.0%, “we believe Foreland should trade higher than its current 0.3X 2011 P/BV.” Adds, house valuation “not lofty” due to strong cash position, dividend yields. Shares flat at $0.09.

SMRT - SMRT raised to Hold by Citi; Start-up losses priced in

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

Citigroup upgrades SMRT (S53.SG) to Hold from Sell, raises target price to $2.05 from $1.90 after rolling over valuation.



Says continued losses at Singapore rail operator's new Circle Line likely priced in at current share price, with company appearing on track to recover to historic 25% ROE performance by fiscal FY13 ending March.



Expects quarterly losses of $5 million-$7 million for Circle Line over next 4-6 quarters to be manageable, with profits from other business segments, such as high-margin rental/advertising, helping to cushion overall impact on bottomline. Shares off 0.5% at $2.01.

China Fish - China Fishery target raised to $2.61 by Stanchart

Stock Name: China Fish
Company Name: CHINA FISHERY GROUP LIMITED
Research House: StanChart

Standard Chartered lifts China Fishery (B0Z.SG) target price to $2.61 from $1.90, based on 12x FY11 P/E vs 11x previously, after rolling forward valuation, increasing FY11 EPS estimate by 36%.

New earnings forecast reflects higher fishmeal prices, increased catch volumes for jack mackerel; "with leading market shares in catch volumes over diversified fishing grounds across the North Pacific, South Pacific and Peru, China Fishery is well positioned, in our view, to benefit from rising raw fish prices caused by supply scarcity."



Keeps Outperform call.



Tips 22% profit CAGR over FY10-13. Shares off 0.5% at $2.18.

Kep Corp - Keppel Corp target raised to $13 from $11.30 by RBS

Stock Name: Kep Corp
Company Name: KEPPEL CORPORATION LIMITED
Research House: RBS

Royal Bank of Scotland raises Keppel Corp. (BN4.SG) target price to $13.00 from $11.30, based on 19x 2011 EV/EBITDA forecast for offshore marine segment, to reflect higher chances of company landing rig contracts from Petrobras.

Keeps Buy call. Says outcome of Petrobras’ 28-rig tender reveals Keppel as third-lowest bidder for initial 7-rig package, second-lowest for package involving 2 floaters; “we believe Keppel’s low bids increase its chances of winning more Petrobras orders than we originally expected.”



Shares +0.2% at $10.82.

JMH 400US$ - Jardine Matheson target raised to US$54.00 by HSBC

Stock Name: JMH 400US$
Company Name: JARDINE MATHESON HLDGS LTD
Research House: HSBC

HSBC raises Jardine Matheson (J36.SG) target price to US$54.00 ($71) vs US$46.00 to reflect recent upgrades in FY11-FY12 earnings estimates for units Astra International (ASII.JK), Dairy Farm (D01.SG), Hongkong Land (H78.SG).

Keeps Overweight call.



“Jardine Matheson generates the best returns in its peer group and this drives strong cash generation. We argue this performance is sustainable given that its key businesses are market leaders and substantial barriers to entry remain.”

Forecasts 13% recurring net profit CAGR over 2011-2012. Expects group to have no net debt by 2011, “comfortably” invest up to US$2.5 billion in new projects, acquisitions. Shares +0.4% at US$45.56.

Mermaid - Mermaid Maritime off 4.6%; DBS Vickers cuts FY11 view

Stock Name: Mermaid
Company Name: MERMAID MARITIME PUBLIC CO LTD
Research House: DBS Vickers

Mermaid Maritime (DU4.SG) down 4.6% at $0.415 vs $0.40 intraday low, volume moderate at 1.2 million shares; fall comes after as oil & gas drilling group reports THB456.1 million ($19.9 million) FY loss.

DBS Vickers, which has Hold rating, lowers target to $0.49 from $0.52, says losses larger than expected, despite in-line revenue, due to Subsea division which suffered on back of lower utilisation, day rates, inherently high operating leverage.

Adds, LOIs with Keppel FELS for 2 newbuild jackups likely to be converted to firm orders soon, “however, even if Mermaid were to secure back-to-back charters today, contributions will only kick in from FY13 onwards, providing no support for near to medium term earnings.”



Expects FY11 net loss of THB96 million vs net profit of THB92 million previously. “Despite the weak earnings outlook for FY11, we believe Mermaid’s quality subsea assets should limit downside to current valuations.”

Kep Corp - Keppel target raised to $12.50 by OCBC; Keeps Buy

Stock Name: Kep Corp
Company Name: KEPPEL CORPORATION LIMITED
Research House: OCBC

OCBC Investment Research lifts Keppel Corp. (BN4.SG) target price to $12.50 from S$11.22 after increasing FY11 earnings estimate to reflect firmer prices of new jack-up rig projects, accounting for latest market values of conglomerate's listed entities. Keeps Buy call.

Says Keppel's offshore & marine arm's year-to-date orders of $2.6 billion above house's $2.5 billion forecast for entire 2010; "order flows are gaining momentum and we should see additional new orders that will benefit the entire sector with renewed capex rollouts."



Shares +1.3% at $10.92.





 

CWT - CWT target, estimates raised by CWT; Keeps Outperform

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

CIMB raises CWT (C14.SG) target to $1.72 from $1.12, maintains Outperform.



CIMB notes CWT will be acquiring 60% equity stake in South African freight forwarder, Aquarius Shipping International (ASI).



“We expect earnings accretion from FY11 onwards. CWT has also been pursuing organic growth in its commodities logistics business in Turkey and Indonesia.”

Raises FY11-12 earnings forecasts by 12.8%-12.9% to factor in higher contributions from commodities logistics; “in our view, recent corporate developments serve to launch the company onto the international commodities logistics scene.”



On higher growth potential, raises valuation to 19x CY12 P/E (from 14x), at slight discount to 2007 valuation high of 20x, when CWT announced foray into commodities logistics.



Says catalysts expected from larger-than-expected contributions from African expansion, earlier-than-expected contributions from Indonesian operations. Shares +3.3% at $0.945.





 

Pac Andes - Pacific Andes Resources target raised to $0.50 by CIMB

Stock Name: Pac Andes
Company Name: PACIFIC ANDES RESOURCES DEVLTD
Research House: CIMB

CIMB raises Pacific Andes Resources Development (P11.SG) target to $0.50 from $0.36, maintains Outperform call.



CIMB says 4Q10 core net profit of HK$110 million ($18.6 million) (down 8% on-year) was below expectations, forming 14% of FY10 estimate, FY10 core net profit of HK$771 million (+8% on-year) made up 96% of FY10 estimate.

“The variance came from lower SCM selling prices, and lower-than-forecast trawling revenue and fishmeal sales volume.”



However, raises FY11-12 EPS estimates by 2%-3% on higher profit assumptions for China Fishery (B0Z.SG). SOTP target raised following higher target for CFG ($2.55 from $1.75).



“We continue to expect catalysts from announcements of earnings-accretive expansion/acquisitions at CFG.” Shares flat at $0.335.





 

China Fish - CIMB ups China Fishery to outperform; Raises target

Stock Name: China Fish
Company Name: CHINA FISHERY GROUP LIMITED
Research House: CIMB

CIMB upgrades China Fishery Group (B0Z.SG) to Outperform from Neutral, says FY10 net profit of US$116.5 million (+24% on-year) below forecast, represents 87% of FY10 estimate; says shortfall due to lower trawling revenue, poorer-than-expected anchovy catch in Peru. 

“Nevertheless, we raise our FY11-12 EPS estimates by 4%-7% on improved operating assumptions and lower interest expense.” On back of earnings upgrade, upside potential from expansion plans, raises target price to $2.55 (based on 12.5X CY12 P/E, 20% premium to peer average of 10.2X), from $1.75. Says catalysts include announcements of earnings-accretive expansion, and higher fish and/or fishmeal prices. 

Shares flat at $2.18.

OUE Ltd - Overseas Union Enterprise target raised to $4.20 by Credit Suisse

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

Credit Suisse lifts Overseas Union Enterprise (LJ3.SG) target to $4.20 vs $3.61 after reducing discount-to-RNAV forecast to 10% vs 15%.



Change reflects property group's improved trading liquidity, smaller discounts-to-book value estimates at which peers are now trading.

Says OUE remains 1 of key landlords in Singapore with new prime office inventory to leverage on higher rents, tenants' increasing preference for higher-quality properties.



Adds, about 70% of OUE’s 760,000 sq ft of new prime office space yet to be pre-leased. Keeps Outperform call. Shares +0.6% at $3.38.

Starhill Gbl - Starhill Global REIT started at Buy by Kim Eng

Stock Name: Starhill Gbl
Company Name: STARHILL GLOBAL REIT
Research House: Kim Eng

Kim Eng Securities starts Starhill Global REIT (P40U.SG) at Buy with $0.80 target price. Notes Asia Pacific-focused commercial property landlord owns 13 prime assets in high-growth markets, with retail rental accounting for 87% of group revenue in 3Q10.



Says DPU growth underpinned by medium-, long-term leases, which provide income stability, rental upside potential; “with a clear target to double asset size and the backing of a strong and committed sponsor (Malaysia’s YTL Corp), Starhill is poised for a new beginning.”

Says Starhill eyeing assets in China, Australia, Singapore, London in bid to expand portfolio size to at least $5.0 billion in 5 years from $2.6 billion now. REIT flat at $0.615.





 

TTJ - CIMB starts TTJ Holdings at Hold; $0.17 target

Stock Name: TTJ
Company Name: TTJ HOLDINGS LIMITED
Research House: CIMB

CIMB starts TTJ Holdings (K1Q.SG) at Hold with $0.17 target price, based on 6X FY12 P/E. 

Says reputation as leading structural steel specialist in Singapore has helped company clinch contracts involving iconic projects such as Changi Airport Terminal 3, double helix bridge linking Marina Bayfront to Marina Centre, but intensifying competition starting to pose risks to TTJ's market share, profitability.

Adds, plans to expand fabrication capabilities and resources business overseas likely to result in low or even negative cashflows for next few years. Says stock deserves to trade at discount to peer Yongnam (Y02.SG) given its weaker earnings growth, lower revenue, market share.

Shares +8.6% at $0.19.

Allgreen - JPM cuts Allgreen target; no catalysts eyed M/T

Stock Name: Allgreen
Company Name: ALLGREEN PROPERTIES LTD
Research House: JP Morgan Chase

JPMorgan cuts Allgreen Properties (A16.SG) target to $1.10 from $1.14, set at 46% discount to end-December 2011E RNAV estimate of $2.07/share. Keeps Underweight, says 2010 YTD underperformance likely to persist medium term.



“There have been few positive catalysts for the stock during the year, with the market marking down the group for its China exposure (14% of GAV) and being generally capped by a policy overhang for Singapore residential property plays...we do not expect the conditions limiting the stock’s performance in 2010 to reverse in the next year.”

Raises FY11, FY12 EPS forecasts by 48%, 45% respectively on increased margin assumptions from residential property developments; raises 2011 RNAV estimates to $2.07/share (from $1.60) after adjusting ASP assumptions for residential landbank.

 

Adds “more progressive capital management approach or more active re-investment into accretive landbank in Singapore may be necessary to stimulate investor interest..” 

 

Shares +0.9% at $1.16. 

 

Ziwo - Starts Ziwo started at Buy by Phillip Securities, $0.47 target

Stock Name: Ziwo
Company Name: ZIWO HOLDINGS LTD.
Research House: Phillip Securities

Phillip Securities starts Ziwo Holdings (I9T.SG) at Buy, $0.47 target pegged at 6x FY11 earnings.



Tips strong growth potential for China-based supplier of raw materials used for making various lifestyle consumer products, given rising consumer spending.

Says, while Ziwo has huge exposure to consumer market, it’s able to keep sales, marketing costs low as it doesn’t need to spend on creating brand awareness as supplier of intermediary products; “Product quality and consistency are more important. It has built on its R&D capability to emerge as one of the bigger players amongst its peers. Therefore its net profit margin is relatively high at above 20%.”



Share +4.5% at $0.35.





 

SingTel - Singtel raised to $3.67 by Goldman Sachs, reiterates Buy

Stock Name: SingTel
Company Name: SINGTEL
Research House: Golman Sachs

Goldman Sachs raises SingTel’s (Z74.SG) target price to $3.67 from $3.53 for 18% potential return, after it upgrades associate Bharti Airtel (532454.BY) to Buy, ups its target by 25% to INR430.



Also revises SingTel’s EPS estimates for FY11, FY12, FY13 by minus 1.5%, +2.4%, +2.9%. Notes “with SingTel effectively holding 32% of Bharti’s shares, our Bharti upgrade is material to the company’s valuation.”

Adds, Bharti upgrade due to changes in regulatory environment in India, which will favor market leader.



Notes on revised SOTP, SingTel’s investment in Bharti worth $0.94/share, accounts for 26% of valuation, India/Africa now emerges as 2nd largest component of SingTel’s home market valuation.



Adds, key risks include re-farming of India’s 900 Mhz spectrum, creating greater competition for Bharti, also pay TV growth which struggling to gain traction, high content cost of BPL which hurting Singapore profitability.



Shares last +0.3% at $3.08.

ChinaMinzhong - Macquarie initiates 'outperform' on China Minzhong

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

Macquarie has initiated an “outperform” rating on Singapore-listed vegetable producer China Minzhong (CMFC.SI) and a target price of S$1.80.



Macquarie said China Minzhong, a large vegetable grower and processor in China that is part-owned by Singapore’s GIC, is gaining overseas market share as its product quality improves.

 

The brokerage said China Minzhong posted a 48% compounded annual growth rate (CAGR) in exports for its 2007-2010 financial years by aggressively investing in equipment and international quality standards.

Macquarie projected a 29% CAGR for the firm’s exports in the next two years, adding that it can effectively double its combined gross installed plant and land under cultivation in the next 12 months.

The key risks for China Minzhong include a faster-than-expected yuan appreciation and executing its growth strategy.

 

At midday, China Minzhong shares were up 1.6% at $1.29 on a volume of 1.5 million shares.

KepLand - Keppel Land target raised to $5.50 by Nomura; Keeps Buy

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

Nomura lifts Keppel Land (K17.SG) target price to $5.50 from $5.10 after raising NAV estimate by 7.8% to reflect potential gains from developer’s Tianjin Eco City project in China.



New target translates to 2.0x FY11 P/B vs stock’s mid-cycle 1.4x P/B valuation; “we believe the stock’s significant exposure to prime Grade-A office (space), which we are most bullish on, justifies the premium over the mid-cycle valuation.”

Notes company has sold more than 90% of 220 units launched at Tianjin Eco City’s Seasons Park residential project at average price of RMB11,000/sq m vs RMB9,000/sq m tipped by house; “following the strong response to Seasons Park’s soft launch, we expect Keppel Land to launch more units for sale.”



Keeps Buy call. Shares flat at $4.61.

SIA - SIA target raised to $19.50 from $16.50 by UBS

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

UBS raises Singapore Airlines (C6L.SG) target price to $19.50 from $16.50 based on target P/BV of 1.57x, keeps Buy call.



Says SIA share price has underperformed Asian peers, +7% year-to-date vs +11%, +60% in MSCI AxJ Index, Cathay Pacific’s (0293.HK) share price, respectively.



Notes, stock trading at 10x FY12E EPS, 4x EV/EBITDA, 1.2x FY12E book value, discount to mid-cycle, peer valuations, and 5% dividend yield.

“SIA has been recovering at a slower pace in this cycle. This was likely due to its modest capacity growth and fleet reconfiguration, smaller exposure to north Asia, and competition from low cost and Gulf carriers. However, we think its business model remains solid and estimate 28% year-on-year growth in pre-ex EPS in FY12.”



Raises FY11/12/13 EPS forecasts 5%-20%, revises FY11 passenger, cargo yield assumptions upward, lowers FY11/12 operating cost estimates due to stronger SGD vs USD. Shares +0.1% at $15.56.

Noble Grp - Noble upgraded to Buy by UBS, raises target to $2.70

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

UBS upgrades Noble Group (N21.SG) to Buy from Neutral, raises target price to $2.70 from $2.10 after tweaking assumptions in discounted cashflow valuation.



Says Fed’s QE2 could lend momentum to commodity supply chain manager’s earnings.



“This should lead to strong capital flows to emerging markets and reinforce commodity-intensive growth, thereby incentivising commodity prices and trade-volume growth.”

Expects improved margins for Noble’s Chinese soybean crushing business in 3Q10 to continue through 4Q10, while coal and oil prices could rise further due to winter demand from northern hemisphere.



Upgrades FY10-12 EPS estimates to US$0.08, US$0.11, US$0.12 from US$0.07, US$0.09, US$0.10 respectively. Shares +2.5% at $2.06.

FalconEne - Falcon Energy target cut to 60 cents by Kim Eng

Stock Name: FalconEne
Company Name: FALCON ENERGY GROUP LIMITED
Research House: Kim Eng

Kim Eng Securities cuts Falcon Energy (5FL.SG) target to $0.60 vs $0.85, pegged at 10x FY11 P/E, after lowering FY10-FY12 EPS estimates by 20%-40% to reflect weaker-than-expected 3Q10 performance.



3Q10 earnings down 57.2% on-year at US$2.8 million ($3.7 million) due to dry-docking of 5 vessels for major overhaul, lower vessel charter and utilization rates.

Still, keeps Buy call on valuation grounds; “despite maintaining a cautious near-term outlook, management is optimistic of a gradual recovery of the marine and offshore industry by 2Q11.”



Shares +1.2% at $0.425.

StarHub - Starhub target raised to $2.25 by Nomura; Keeps Reduce

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

Nomura lifts Starhub (CC3.SG) target price to $2.25 from $1.90 after raising FY10-11 earnings estimates by 3%-16%.



Tips “significant opportunity” in SME/enterprise segment over next few years on back of Singapore’s next-generation national broadband network.

Says current dividend yield of over 7% highest among peers, expected to be sustainable for at least next 12 months.



Still, keeps Reduce call on view stiff competition will take toll; “rising competition in the pay-TV segment could be exacerbated by cross-carriage regulations next year, and rising smart-phone penetration could impact margins adversely.”



Shares +0.4% at $2.67.



{jcomments on}

StarHub - Starhub cut to Sell from Hold by Citi on valuations

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

Citigroup downgrades Starhub (CC3.SG) to Sell from Hold as stock has breached $2.47 target price.



Says while 7% dividend yield attractive, sustainable, valuations not appealing.



Says stock trades at premium to M1 (B2F.SG), faces greater risk due to material exposure to fixed broadband market, “which will be under threat from the next-generation national broadband network.”



Adds, pay-TV business also facing increased competition from SingTel (Z74.SG), which has already secured 31% market share within 3 years of operation; “this is particularly risky for StarHub with pay-TV accounting for 17% of group revenues.”



Shares off 1.1% at $2.70; STI down 0.3%.





 

MapletreeInd - Mapletree Industrial Trust started at Buy by Citi

Stock Name: MapletreeInd
Company Name: MAPLETREE INDUSTRIAL TRUST
Research House: Citigroup

Citigroup starts Mapletree Industrial Trust (ME8U.SG) at Buy with $1.21 target price.



Expects strong growth potential for Singapore-focused REIT’s properties given favorable lease expiry profile, cessation of annual 5.5% rental cap in June next year.

Tips 3-year organic earnings CAGR of 13% vs 0%-6% for other industrial REITs; “rental rates across business parks, flatted factories, and warehouses already appear to have bottomed and are beginning to show signs of improvement. With relatively low supply compared to expected demand across industrial properties, we expect occupancies and rentals for flatted factories to move towards their 2008 peak.”



Cites highly diversified tenant base of more than 1,500 multinational corporations, local companies, plus over 2,200 leases as key strengths. REIT flat at $1.10.



{jcomments on}

 

Gallant - Gallant Venture started at Buy by Kim Eng Securities

Stock Name: Gallant
Company Name: GALLANT VENTURE LTD.
Research House: Kim Eng

Kim Eng Securities starts Gallant Venture (5IG.SG) at Buy with $0.75 target.



Says company’s land bank in Indonesia’s Bintan island grossly undervalued as overall land sales worth 36x Gallant’s book value.

Says Bintan’s previous lack of critical mass had stalled progress of company’s land sales, but rapid completion of key developments like Treasure Bay, Lagoi Bay “should provide a shot in the arm going forward”.



Adds robust tourist arrivals in Singapore have benefited Bintan, which expected to attract 440,000 visitors this year vs around 400,000 in 2009; “the increase in visitors will translate to higher revenue for Gallant’s utilities and resort operations.”



Shares +9.8% at $0.28.



{jcomments on}

Gallant - Gallant Venture rises 12% on broker's Buy call

Stock Name: Gallant
Company Name: GALLANT VENTURE LTD.
Research House: Kim Eng

Shares of Singapore-listed Gallant Venture, which develops industrial parks and resorts, rose as much as 12% on Tuesday after a broker initiated coverage of the firm with a "buy" and noted its assets were "grossly undervalued", local traders said.

At 9:39 a.m., its shares were up 9.8% at $0.28 with over 18.4 million shares changing hands.

Kim Eng Securities started Gallant at "buy" with a target price of $0.75, and said the firm, which has several ongoing projects to build resorts in Bintan, Indonesia, will benefit from rising tourist arrivals on the island.

Gallant currently trades at half its book value, which Kim Eng said ignores the growth potential of its Lagoi Bay project, a resort development in Indonesia, as well as other investments.



{jcomments on}

 

NOL - NOL raised to Hold by Citi; Less pessimistic on 2011

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

Citigroup upgrades Neptune Orient Lines (N03.SG) to Hold from Sell, says FY11E P/B at 1.2x looks fair vs liner peers, fair vs FY11E 11% ROE.

Raises target price to $2.40 from $1.80 due to higher BVPS estimates in line with higher earnings forecasts, which Citi raises by 23% in FY11E, 178% in FY12E (off low base).

"We turn less pessimistic on 2011E outlook (for freight rates) on hopes of increased capacity discipline. We turn more constructive on 2012+ outlook, as new supply appears to be limited and shipyards' 2012 slots are fully booked. We see upside to 2012+ freight rates."

Adds, key downside risks for stock include faster-than-expected U.S. consumer slowdown, less-than-expected supply, capex discipline by major industry players, faster-than-expected onset of additional capacity.

Shares down 0.9% at $2.16.

{jcomments on}

Ezra - Ezra cut to Hold by Deutsche Bank, lowers target

Stock Name: Ezra
Company Name: EZRA HOLDINGS LIMITED
Research House: Deutsche Bank

Deutsche Bank downgrades Ezra (5DN.SG) to Hold from Buy, cuts target price to $1.90 from $2.80 after lowering FY11-12 earnings estimates by 35%-24% to account for vessel delays, integration of Aker Marine Contractors, which it recently proposed to buy for US$250 million ($326 million).



Says delay in delivery of several vessels will affect profitability of offshore oil & gas support company.

Adds, while Aker Marine will enhance Ezra’s sub-sea capability, company “may have its hands full trying to turn AMC profitable”.



Says 2H11 may be better time to revisit stock to get better clarity.



Shares off 2.9% at $1.69.



{jcomments on}

Sp Land - Singapore Land target lifted to $9.24 by CIMB

Stock Name: Sp Land
Company Name: SINGAPORE LAND LIMITED
Research House: CIMB

CIMB lifts Singapore Land’s (S30.SG) target price to $9.24 from $8.54 to account for contributions from recent China site purchase.



Property group in September acquired RMB2.06 billion land parcel in Shanghai with JV partners to develop residential-cum-retail complex. Keeps stock at Outperform call. Says company poised to benefit from improving Singapore office market, which accounts for bulk of its book value.

Notes while Singapore Land may face negative rental reversion when leases signed during market peak expire next year, “the gap should narrow as rents rise.”



Shares last +0.1% at $7.37.



{jcomments on}

GLP - Global Logistic Properties started at Buy by Nomura

Stock Name: GLP
Company Name: GLOBAL LOGISTIC PROP LIMITED
Research House: Nomura

Nomura starts Global Logistic Properties (MC0.SG) at Buy with $2.58 price target. Says current book value of GIC spinoff doesn’t reflect GLP’s intrinsic development pipeline value. “GLP’s scalable business model, leveraging off its first-mover advantage in China, should help to reinforce its market-leading position in the burgeoning logistics facilities market.” Adds, GLP’s “conservative residual land valuation approach” excludes potential profit from future developments, suggesting further upside to valuations. Shares last +2.3% at $2.27.

MapletreeInd - Mapletree Industrial Trust started at Neutral by Goldman Sachs

Stock Name: MapletreeInd
Company Name: MAPLETREE INDUSTRIAL TRUST
Research House: Golman Sachs

Goldman Sachs starts Mapletree Industrial Trust (ME8U.SG) at Neutral with $1.12 target price. Expects Singapore-focused REIT to deliver sector-leading organic DPU CAGR of 9.5% over FY10-12, but says this already reflected in current price. Says MIT will benefit from Singapore’s stable economic growth, with 44% of its income derived from multinational companies, listed firms, 56% from SMEs, which form backbone of economy “and have shown resilience in the past as a source of rental income.” Says portfolio under-rented, at average 21% below market average, which offers ample opportunities for organic growth over FY10-12. REIT flat at $1.10.

HL Asia - Hong Leong Asia started at Hold by Phillip

Stock Name: HL Asia
Company Name: HONG LEONG ASIA LTD.
Research House: Phillip Securities

Phillip Securities starts Hong Leong Asia (H22.SG) at Hold with $3.62 SOTP-based target price, translating to 10.0x FY11E P/E, 20% discount to 5-year historical 12.5x P/E. Says outlook for 4Q10 “looks rather challenging,” advises investors stay on sidelines. Outlook bleak due to additional marketing expenses in bid to boost sales at Xinfei, sales of refrigerators will be impacted by winter months, stiff competition, increased raw material costs, higher wages in China, also demand for building materials will be highly dependent on weather conditions. “However, on a brighter note we are still very bullish on the prospects of China Yuchai which will benefit strongly from the strong recovery of industrial production and record automobile sales in China.” Adds various JVs will also start commercial production in FY11 which will contribute positively to HLA’s earnings. Shares –0.9% at $3.29.

GLP - Global Logistic up on brokers'

Stock Name: GLP
Company Name: GLOBAL LOGISTIC PROP LIMITED
Research House: UBS

Shares of Singapore’s Global Logistic Properties (GLPL.SI), which owns logistics facilities in China and Japan, rose as much as 3.2% in morning trade on Monday after UBS and Nomura initiated “buy” ratings on the stock.



At 0240 GMT, GLP shares were up 1.8% at $2.26 on a volume of 9.3 million shares.

“Recently a few foreign brokers had started covering the stock favourably and the market reacted to it,” a local trader said.

Nomura initiated coverage with a “buy” rating and a target price of $2.58, noting that GLP’s scalable business model, leveraging off its first-mover advantage in China, may help to reinforce its market-leading position in the logistics market.

UBS said it expects GLP to benefit from growth in logistics demand amid rising consumerism, greater outsourcing of distribution to third-party logistics companies and continued expansion of its market share.

The broker initiated a “buy” call and a target price of $2.65 on GLP stock.

GLP made its debut last month, opening at $2.16 against an issueprice of $1.96.

GLP - Global Logistic up on brokers' buy calls

Stock Name: GLP
Company Name: GLOBAL LOGISTIC PROP LIMITED
Research House: Nomura

Shares of Singapore’s Global Logistic Properties (GLPL.SI), which owns logistics facilities in China and Japan, rose as much as 3.2% in morning trade on Monday after UBS and Nomura initiated “buy” ratings on the stock.



At 0240 GMT, GLP shares were up 1.8% at $2.26 on a volume of 9.3 million shares.

“Recently a few foreign brokers had started covering the stock favourably and the market reacted to it,” a local trader said.

Nomura initiated coverage with a “buy” rating and a target price of $2.58, noting that GLP’s scalable business model, leveraging off its first-mover advantage in China, may help to reinforce its market-leading position in the logistics market.

UBS said it expects GLP to benefit from growth in logistics demand amid rising consumerism, greater outsourcing of distribution to third-party logistics companies and continued expansion of its market share.

The broker initiated a “buy” call and a target price of $2.65 on GLP stock.

GLP made its debut last month, opening at $2.16 against an issueprice of $1.96.

GLP - Global Logistic up on brokers' buy calls

Stock Name: GLP
Company Name: GLOBAL LOGISTIC PROP LIMITED
Research House: UBS

Shares of Singapore’s Global Logistic Properties (GLPL.SI), which owns logistics facilities in China and Japan, rose as much as 3.2% in morning trade on Monday after UBS and Nomura initiated “buy” ratings on the stock.



At 0240 GMT, GLP shares were up 1.8% at $2.26 on a volume of 9.3 million shares.

“Recently a few foreign brokers had started covering the stock favourably and the market reacted to it,” a local trader said.

Nomura initiated coverage with a “buy” rating and a target price of $2.58, noting that GLP’s scalable business model, leveraging off its first-mover advantage in China, may help to reinforce its market-leading position in the logistics market.

UBS said it expects GLP to benefit from growth in logistics demand amid rising consumerism, greater outsourcing of distribution to third-party logistics companies and continued expansion of its market share.

The broker initiated a “buy” call and a target price of $2.65 on GLP stock.

GLP made its debut last month, opening at $2.16 against an issueprice of $1.96.

GoldenAgr - Golden Agri, Indofood started at Overweight at HSBC

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

HSBC starts Golden Agri-Resources (E5H.SG) at Overweight, sets target at $0.90, starts Indofood Agri Resources (5JS.SG) at Overweight with $3.38 target, Wilmar International (F34.SG) at Neutral with $7.01 target.



HSBC says structural, regulatory drivers mean house estimates 2011 demand growth for crude palm oil will be at decade high, with bottlenecks in expanding acreage, unfavourable weather pressuring supply ahead.

“We expect FY11e CPO prices to rise 24% year-on-year, which will favour upstream plays.”



Cites Indofood Agri, Kuala Lumpur Kepong (2445.KU) as top picks. Golden Agri flat at $0.72, Indofood down 0.8% at $2.64, Wilmar off 0.7% at $6.14.

Roxy-Pacific - Roxy Pacific target raised to 55 cents by DBS Vickers

Stock Name: Roxy-Pacific
Company Name: ROXY-PACIFIC HOLDINGS LIMITED
Research House: DBS Vickers

DBS Vickers lifts Roxy-Pacific (E8Z.SG) target price to $0.55 vs $0.44, based on 30% discount to higher RNAV estimate of $0.79 vs $0.63 previously, to factor in higher average selling price for developer’s Spottiswoode Park Singapore residential project and contributions from 2 upcoming launches. Keeps Trading Buy call.



DBS Vickers says Roxy also expected to benefit from Singapore’s strong hospitality sector as it owns 558-room Grand Mercure Roxy Hotel, which accounted for 19.5% of group revenue for first 9 months of 2010; “contributions from the hotel segment can help to smoothen out the lumpy contributions from the property development segment.”



Shares +6.7% at $0.40.

Kep Corp - Keppel Corp target raised to $12.50 by Deutsche Bank

Stock Name: Kep Corp
Company Name: KEPPEL CORPORATION LIMITED
Research House: Deutsche Bank

Deutsche Bank lifts Keppel Corp. (BN4.SG) target price to $12.50 from $11.45 after increasing FY10-12 earnings estimates by 7.5%, 7.1%, 6.8% respectively to factor in higher margin assumptions for offshore & marine unit; “previously outsourced work is now performed by their own yards, efficiencies have continued to increase and input costs have declined.”



Keeps Buy call. Says rig-builder in strong position to benefit from increasing order momentum driven by replacements of jack-up fleet, strong demand for high-specification rigs.



Shares +0.4% at $10.92.

Noble Grp - Noble Group upgraded to Buy by OCBC; Target $2.59

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

OCBC upgrades Noble Group (N21.SG) to Buy from Hold, raises target to $2.59 from $1.97; after strong 3Q10, says earnings to accelerate in FY11 as group begins to reap fruits of recent pipeline investments, earnings will remain buoyed by strong underlying fundamentals for commodities such as energy, agriculture. “The group has spent US$2.8 billion ($3.6 billion) expanding its pipeline since 2007 and several of these investments are nearing maturity, adding a further boost to earnings from 4Q10 onwards.” Notes, Noble has reaffirmed target of US$1 billion earnings over next 3 years, implying 24% CAGR FY09-FY13; house raises FY10, FY11 earnings estimates by 25%, 12% respectively. Adds “with its strong balance sheet, the group remains well-positioned to capture any investment opportunities that may arise.” Notes key risks include longer-than-expected gestation periods for investments, continued USD/SGD weakness, which could lead to translation losses. Shares +0.5% at $2.09.

F & N - Goldman Sachs starts F&N at Neutral; positives priced in

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

Goldman Sachs starts Fraser & Neave (F99.SG) at Neutral with $6.54 target; says differentiated mix, restructuring taking shape but now priced in.



“F&N’s unique pairing of Property and F&B enables the group to enjoy outsized development profits in an upcycle and find shelter in stable F&B income in a softer property market.” 

Notes, F&B is core to its roots, with market leading platform in beer driving earnings into 2011-2012 as property slows. 

Says there is further value in FNN commercial property, most tangible could be efforts to integrate China Square Central, Far East Square, given both of which located in bustling catchment area with potential to transform into new major downtown development. 

Adds, share price has outperformed STI by 41% YTD, owing to ongoing restructuring success; investors pricing in property arm spin-off will be disappointed medium-term. 

Shares off 0.2% at $6.37.

SembMar - SembCorp Marine lowered to 'Hold' from 'Buy' at Citigroup

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

SembCorp Marine was lowered to “hold” from “buy” at Citigroup Inc., which said the valuations are less attractive after a strong rally. The brokerage raised the share-price estimate to $5.60 from $4.60, according to the report by analysts Horng Han Low and Si Xian Goh.

RafflesMG - Raffles Medical kept at Hold by OCBC

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

OCBC says Singapore's medical tourism business growing more slowly than some regional competitors, according to data from consultant Frost & Sullivan.



Keeps Raffles Medical Group (R01.SG) at Hold with $2.35 fair value; notes 35% of patient load made up of foreign patients.



Says 2010-2012 foreign patient arrival CAGR expected at 9%, “much lower than that earmarked for other regional countries.”



Adds, while this highlights intensifying regional competition, RMG competes largely on higher value-added services; says RMG will continue to strive to stay ahead of competition by rolling out more advanced medical techniques focused on depth, quality.



“We continue to like RMG’s good track record and cost effectiveness, but believe that current valuations already reflect these qualities and more (trading at 28.8x/25.0x FY10/FY11F EPS).



Shares +0.8% at $2.47.





 

SuntecReit - Suntec REIT kept at Buy by OCBC; Best office proxy

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

OCBC notes Suntec REIT’s (T82U.SG) acquisition of one-third stake in MBFC Phase 1, subject to unitholder approval, to be funded by $1.105 billion debt (72%), $428.2 million equity (28%).



Debt facility secured at very competitive all-in cost of debt of 3.12%; timing, issue price of private placement equity portion dependent on market conditions. Says acquisition translates to “fairly tight” initial yield of 4%, “nevertheless, we believe this is a sound acquisition for Suntec from a long-term, strategic perspective.”

Revises issue price assumption down to $1.30 per unit from $1.50, but fair value estimate slips only marginally to $1.63 from $1.64 due to lower-than-expected cost of debt.



“Suntec is one of the best proxies...to the office market/revitalisation of the Marina Bay area today in terms of both exposure and valuations.” With an estimated total return of 19.1%. Keeps at Buy. REIT off 0.7% at $1.44.

FirstRes - UOB KayHian upgrades First Resources to Buy

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

UOB KayHian upgrades First Resources (EB5.SG) to Buy from Hold, raises target to $1.62 from $1.40. Says, company one of fastest-growing pure CPO producers in Southeast Asia, with over 116,000 hectares under management (25.1% CAGR since 1992).


Expects earnings to rise on higher CPO prices, recovering yields; “We have already begun to see a recovery in the Group’s fresh fruit bunch (FFB) production with a stark increase (+16.5% on-year) in 3Q10 due to the estate’s young tree age,” yields will pick up in 2011, 2012. 



Adds, expectation of higher CPO ASPs due to tight demand-supply situation (raises CPO ASP forecasts for both 2011, 2012 to MYR2,650/ton from MYR2,500/ton) will also spur earnings, while FR expected to continue with aggressive new planting in Kalimantan. 

Shares +0.7% at $1.41.

 

KepLand - Phillip starts Keppel Land at Hold, $5.04 target

Stock Name: KepLand
Company Name: KEPPEL LAND LIMITED
Research House: Phillip Securities

Phillip Securities initiates Keppel Land (K17.SG) at Hold with $5.04 target; says Keppel Land poised to benefit from positive office rental outlook with extensive holdings of prime office space in Singapore, has established strong foothold in fast growing China, Vietnam. 


“Residential projects in China continue to see healthy take-up. We see cooling measures from the Chinese government aimed at curbing excessive price rises in tier-one cities. Sales in other parts of China are supported by real demand.” 

In Vietnam, says property market recovering with strong interests in Villas projects; “Keppel Land is in good position to capitalize on the recovering economy with its strong branding.” 

Shares flat at S$4.76.

Kep Corp - Citi ups targets for Keppel, Sembcorp Industries

Stock Name: Kep Corp
Company Name: KEPPEL CORPORATION LIMITED
Research House: Citigroup

Citigroup has raised its target prices for rigbuilders Keppel Corp (KPLM.SI) and Sembcorp Industries (SCIL.SI) and kept its "buy" ratings on both firms.



Citi expects Keppel to hit $12.80, from a previous target of $11.10, while it says Sembcorp Industries can rise to $5.60 from $4.73.

STATEMENT:

Citi has raised its 2010 earnings per share estimate for Keppel by 2% due to higher offshore and marine revenue, and by 4% in 2011 because of higher expected margins.

“We remain upbeat on the offshore and marine sector, and recent conversations with various industry players suggest that the current outlook is significantly stronger compared to early 2010," said Citi in a report.

The brokerage has also raised its earnings per share estimate for Sembcorp Industries by 17% this year due to stronger earnings outlook for its offshore and marine arm Sembcorp Marine.

At 0250 GMT, shares of Keppel were flat at $10.88, while Sembcorp Industries rose 1.2% to $4.91. Both have gained 32% so far this year.

Semb Corp - Citi ups targets for Keppel, Sembcorp Industries

Stock Name: Semb Corp
Company Name: SEMBCORP INDUSTRIES LTD
Research House: Citigroup

Citigroup has raised its target prices for rigbuilders Keppel Corp (KPLM.SI) and Sembcorp Industries (SCIL.SI) and kept its "buy" ratings on both firms.



Citi expects Keppel to hit $12.80, from a previous target of $11.10, while it says Sembcorp Industries can rise to $5.60 from $4.73.

STATEMENT:

Citi has raised its 2010 earnings per share estimate for Keppel by 2% due to higher offshore and marine revenue, and by 4% in 2011 because of higher expected margins.

“We remain upbeat on the offshore and marine sector, and recent conversations with various industry players suggest that the current outlook is significantly stronger compared to early 2010," said Citi in a report.

The brokerage has also raised its earnings per share estimate for Sembcorp Industries by 17% this year due to stronger earnings outlook for its offshore and marine arm Sembcorp Marine.

At 0250 GMT, shares of Keppel were flat at $10.88, while Sembcorp Industries rose 1.2% to $4.91. Both have gained 32% so far this year.

Genting SP - Macquarie cuts Genting Singapore to Underperform

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

Macquarie downgrades Genting Singapore (G13.SG) to Underperform from Neutral; “we believe the current consensus expectations for Genting Singapore are overly aggressive. In our view, they do not capture the risk of competition from Marina Bay Sands, rising political risk and limited impact from junket approvals.” 

Says sequential fall in 3Q10 earnings “showed how quickly MBS closed the competitive gap with RWS in the VIP segment.” Net profit at $187.8 million vs 2Q10’s $396.5 million. Adds risk of government intervention can’t be ruled out as “Singapore could take more aggressive measures to curb local gambling.” 

Still, lifts target price to $1.83 from $1.75 to account for higher estimates for Singapore gaming market. 

Shares off 1.4% at $2.07.

Kep Corp - Credit Suisse reiterates Singapore rig builders at Outperform

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

Credit Suisse keeps Singapore offshore & marine sector at Overweight, notes order momentum for rigs strengthened with contracts, letters of intent for 12 jackup rigs placed for 4Q. 



“We believe that the cyclical recovery in the jackup market could continue going forward as: 1) returns on jackups of 12.3% for recent contracts remain significantly ahead of long-term average returns of 10.9%. 2) financing costs have come down to 5%-6%, and 3) utilisation rates remain close to 100% for high-spec jackups.” 

Expects at least another 7 jackup rig orders over next 2 quarters, likely from Maersk, Transocean, Noble. Tips sector re-rating with recovery in jackup newbuild orders, increasingly positive newsflow on deepwater segment. 

Reiterates Outperform rating on Keppel (BN4.SG) with $12.10 target, Sembcorp Marine (S51.SG), $5.50 target, Sembcorp (U96.SG), $5.80 target. Shares outperforming today, +0.8% at $10.68, +1.0% at $5.01, +1.5% at $4.80 respectively. 

Semb Corp - Credit Suisse reiterates Singapore rig builders at Outperform

Stock Name: Semb Corp
Company Name: SEMBCORP INDUSTRIES LTD
Research House: Credit Suisse

Credit Suisse keeps Singapore offshore & marine sector at Overweight, notes order momentum for rigs strengthened with contracts, letters of intent for 12 jackup rigs placed for 4Q. 



“We believe that the cyclical recovery in the jackup market could continue going forward as: 1) returns on jackups of 12.3% for recent contracts remain significantly ahead of long-term average returns of 10.9%. 2) financing costs have come down to 5%-6%, and 3) utilisation rates remain close to 100% for high-spec jackups.” 

Expects at least another 7 jackup rig orders over next 2 quarters, likely from Maersk, Transocean, Noble. Tips sector re-rating with recovery in jackup newbuild orders, increasingly positive newsflow on deepwater segment. 

Reiterates Outperform rating on Keppel (BN4.SG) with $12.10 target, Sembcorp Marine (S51.SG), $5.50 target, Sembcorp (U96.SG), $5.80 target. Shares outperforming today, +0.8% at $10.68, +1.0% at $5.01, +1.5% at $4.80 respectively. 

SembMar - Credit Suisse reiterates Singapore rig builders at Outperform

Stock Name: SembMar
Company Name: SEMBCORP MARINE LTD
Research House: Credit Suisse

Credit Suisse keeps Singapore offshore & marine sector at Overweight, notes order momentum for rigs strengthened with contracts, letters of intent for 12 jackup rigs placed for 4Q. 



“We believe that the cyclical recovery in the jackup market could continue going forward as: 1) returns on jackups of 12.3% for recent contracts remain significantly ahead of long-term average returns of 10.9%. 2) financing costs have come down to 5%-6%, and 3) utilisation rates remain close to 100% for high-spec jackups.” 

Expects at least another 7 jackup rig orders over next 2 quarters, likely from Maersk, Transocean, Noble. Tips sector re-rating with recovery in jackup newbuild orders, increasingly positive newsflow on deepwater segment. 

Reiterates Outperform rating on Keppel (BN4.SG) with $12.10 target, Sembcorp Marine (S51.SG), $5.50 target, Sembcorp (U96.SG), $5.80 target. Shares outperforming today, +0.8% at $10.68, +1.0% at $5.01, +1.5% at $4.80 respectively. 

Tat Hong - Tat Hong cut to Underperform vs Outperform by CLSA

Stock Name: Tat Hong
Company Name: TAT HONG HOLDINGS LTD
Research House: CLSA

CLSA downgrades Tat Hong (T03.SG) to Underperform vs Outperform on limited upside to $1.06 target, few catalysts near term, according to Dow Jones.



CLSA says crane company’s outlook stable but unexciting; “the project pipeline is healthy but with timelines outside Tat Hong’s control, and with cost issues affecting the Chinese business, we reserve our enthusiasm.”

Research house adds, number of large projects in Australia facing delays, while competition also increasing. Also says, Tat Hong grappling with management issues at some China subsidiaries; “while the company is clearly making efforts to bring the house to order, this is taking longer than expected. And in our view, until these issues are resolved, it will be difficult for Tat Hong to focus single-mindedly on growing its franchise and fleet in China.”



Shares off 2.5% at $0.995.

ChinaAniH - China Animal Healthcare cut to Hold by AmFraser

Stock Name: ChinaAniH
Company Name: CHINA ANIMAL HEALTHCARE LTD.
Research House: AmFraser

AmFraser downgrades China Animal Healthcare (EP4.SG) to Hold (previous rating not available), fair value to $0.34 vs $0.39, according to Dow Jones.



AmFraser says, delay in obtaining HFMD vaccine license caused “significant difference” to house model, means they missed February, August biddings for 2010, “something we didn’t count on.”

Research house adds, management trying to salvage some sales this FY “but we’re not too hopeful that this will have a significant effect. We believe it’s wise to assume negligible HFMD vaccine sales for FY10.”



AmFraser says, 3Q sales of RMB160.9 million ($31.5 million) good, +23.7% on-year, +16.4% on-quarter, but far below expectations due to lack of HFMD contributions. Reduces FY10-FY12 revenue forecasts by 20.8%, 13.1%, 15.3% respectively. “However, we believe that the delay has not disrupted the fundamentals of the company. Moreover, there is a potential re-rating opportunity when the Company successfully lists on the Hong Kong exchange by introduction.” Shares flat at $0.365.





 

ComfortDelGro - ComfortDelgro up on DBS's upgrade to

Stock Name: ComfortDelGro
Company Name: COMFORTDELGRO CORPORATION LTD
Research House: DBS Vickers

Shares of Singapore-listed transport operator ComfortDelgro (CMDG.SI) rose as much as 2.1% on Monday after DBS Vickers upgraded the firm to “buy” from “hold” and raised its target price to $1.79 from $1.65.



At 0333 GMT, ComfortDelgro shares were up 1.4% at $1.48 on a volume of 2.3 million shares. The broader Straits Times Index, on the other hand, was down 0.3%. 

“DBS had an upgrade and ComfortDelgro is a defensive play because it is in the more stable business of transport,” said a local trader.

DBS said ComfortDelgro is the likely candidate to clinch Singapore’s Downtown Line rail network contract and the firm’s Singapore operations are poised to benefit from the improved public transport infrastructure.

Ho Bee - Phillip Securities downgrades Ho Bee to Hold

Stock Name: Ho Bee
Company Name: HO BEE INVESTMENT LIMITED
Research House: Phillip Securities

Phillip Securities downgrades Ho Bee Investment (H13.SG) to Hold from Buy, citing limited upside for shares given no additional sales from housing project launches in near term. 



Keeps target price at $1.91; “earnings for the remaining of FY10 will still depend mostly on its sales recognition according to construction progress. While we continue to see support in the luxury residential segment, sales volume is expected to remain low in 4Q 2010.” 

Adds, developer won't be launching any projects in 4Q10, will resume launches in 1H11.

Shares +0.6% at $1.69.

SingTel - SingTel cut to Neutral by Nomura; $3.45 target

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

Nomura downgrades SingTel (Z74.SG) to Neutral from Buy on limited upside to $3.45 target price, according to Dow Jones.



Nomura says “along with rising competitive headwinds in its key markets, we do not see many near-term catalysts for outperformance or earnings upgrades”.



Research house adds Australian unit Optus continues to be star performer but earnings from other businesses will likely be volatile. Notes higher dividend payout ratio positive (55%-70% vs 45%-60% previously) but “still appears conservative” given telco’s strong cash flows.



Shares last off 0.3% at $3.30.

F & N - HSBC starts F&N at underweight, $5.97 target

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

HSBC starts Fraser & Neave (F99.SG) at Underweight with $5.97 target price, based on 10% discount to sum-of-parts valuation. 

Says stock fully valued after outperforming STI by 40% over last 12 months. adds, diversified business group traditionally not favoured by institutional investors or brokers due largely to conglomerate structure, which comprises residential, food & beverage, printing, publishing businesses; “the current structure is unappealing to institutional investors who prefer investing in pure play non-conglomerates.” 

Says any downturn in property markets where F&N has presence could impair earnings growth. 

Shares off 0.3% at $6.78.

SIA - JPMorgan raises SIA target to $20 from $17

Stock Name: SIA
Company Name: SINGAPORE AIRLINES LTD
Research House: JP Morgan Chase

JPMorgan raises Singapore Airlines (C6L.SG) target to $20.00 from $17.00 on rollover to 1.6X December 2011 P/BV. Keeps at Overweight. Trims FY11-13 earnings estimates by around 11%, mainly to factor in higher average fuel prices. 

“Even then, we expect SIA to return to peak cycle earnings in FY12 with an ROE of 14%.” Says valuations attractive at only 10% above break-up value (estimates potential ‘liquidation’ value of SIA around $15/share) also trading at 25% discount to Asian airline sector average on adjusted EV/EBITDAR basis despite its above sector average margins. 

Shares down 0.6% at $16.22.

Noble Grp - Credit Suisse upgrades Noble to Outperform, ups target

Stock Name: Noble Grp
Company Name: NOBLE GROUP LIMITED
Research House: Credit Suisse

Credit Suisse upgrades Noble Group (N21.SG) to Outperform vs Neutral, raises target to $2.55 vs $1.65, given expectations of stronger 4Q, 37% EPS growth in FY11. Says Noble’s 3Q10 results “were strong, with 9-month earnings achieving 76%/78% of consensus/our FY10 estimates.” 

Adds, 178% on-quarter jump in core earnings supported by normalisation of SGA costs (down 17% on-quarter) driven by strength in the agricultural, energy segments, which generated 87% of total profit. 

Says tie-up with Berau Coal in Indonesia should in aggregate support expansion of energy pipeline going forward; raises forecasts by 7%-13% on stronger volumes, margin assumptions. 

“We see opportunities for Noble to utilise its strong balance sheet with the announcements of further earnings-enhancing deals.” 

Shares +3.3% at $2.20. 

Sp Land - CIMB ups Singapore Land to Outperform; ups target

Stock Name: Sp Land
Company Name: SINGAPORE LAND LIMITED
Research House: CIMB

CIMB upgrades Singapore Land (S30.SG) to Outperform from Neutral, raises target price to $8.54 from $7.28 after increasing FY10-12 EPS estimates by 8%-16% to reflect stronger revenue contributions from property group’s hotels, residential project The Trizon. 



Tips company as beneficiary of improving Singapore office sector; “with the strengthening office market, management expects demand for office space to improve.” 

Adds, valuations not demanding with stock trading at 29% discount to RNAV estimate. 

Shares +0.7% at $7.22.

 

Li Heng - Kim Eng cuts Li Heng to Hold, lowers FY10-12 estimates

Stock Name: Li Heng
Company Name: LI HENG CHEM FIBRE TECH LTD
Research House: Kim Eng

Kim Eng downgrades Li Heng Chemical Fibre Technologies (E9A.SG) to Hold vs Buy, lowers target to 0.24 vs $0.35.



Says, excluding CNY16.6 million forex gain 3Q10 results slightly below expectations, core net profit of CNY54.5 million fell 16.3% on-quarter as gross profit margin came under pressure due to anti-dumping tariffs on imported PA chips by Chinese government in April. 

Cuts FY10F-FY12F EPS estimates 15%-25% to factor in lower gross profit margin assumption. Says sequentially, gross profit margin shrank 3 percentage points to 10.7% as group failed to pass on extra costs to customers. 

Adds, to mitigate impact of rising raw material costs (+39.2% on-year), Li Heng has started building 100,000 capacity PA chip plant; upon completion in 4Q11, group expects to be self-sufficient in PA chips for production of nylon yarn products. 

Shares flat at $0.225. 

DBS - DMG keeps DBS at Neutral, reviews target post 3Q

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

DMG keeps DBS (D05.SG) at Neutral after bank’s 3Q results. Notes DBS reported slowest sequential loan growth among peers, while net profit +28% on-year at $722 million, excluding 2Q’s one-time goodwill charges of $1.02 billion, core net profit +1% on-quarter. 

Says earnings above market, house expectations of $656 million, $660 million respectively, “largely due to higher-than-expected trading and investment gains.” 

House reviewing earnings forecast, $13.40 target. Notes sequential loan growth slowed to 1.2% vs 2Q’s 9.1%, milder than OCBC’s (O39.SG) 6.6%, UOB’s (U11.SG) 3.2% while NIM at 1.80%, 4 bps narrower on quarter. 

Shares +0.7% at $14.20.

SATS - DBSV keeps SATS at Buy; 2H outlook bright

Stock Name: SATS
Company Name: SATS LTD.
Research House: DBS Vickers

DBS Vickers keeps SATS (S58.SG) at Buy with $3.13 target price; says 2Q results within expectations, with net profit +10.5% on year at $45.2 million on revenue +11% at $401.2 million. 



Notes EBIT off 4%, EBIT margin down 1.6 ppt on year, due to higher raw materials cost as food prices up due to poorer harvest, natural disasters; this mitigated by stronger Associates/JV contribution of $15.9 million (+51% on year). 

Outlook positive; notes “we are expecting a seasonally stronger 2H on further pick-up in activities on increased air travel, airlines yields/load factor improvement, as well as better contribution from SATS’s Daniel's food business. 

However, rising food prices could be a dampener on our earnings estimates” though effects will be minimised through SATS's diversified supply base.

Stock last down 1.0% at $2.86. 

StraitsAsia - Nomura reaffirms Straits Asia at Buy; laggard play

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

Nomura reaffirms Straits Asia Resources (AJ1.SG) at Buy with $2.80 target price after 3Q profit after tax at US$23 million, topping house's estimate by 10%, mostly on lower tax rate (31%). 



Tips around US$80 million ($103.1 million)PAT for FY10; says stock attractively valued, laggard play, has underperformed peers by 30% year-to-date; notes strong volumes at Jembayan mine, while costs, tax have come down. 

Expects delay in Northern Leases mine permit, but says any positive surprise there would substantially impact FY11 forecasts, as expects mine to be high margin production; expects volume uptick from further reserve upgrades at Jembayan, Northern Leases while M&A would still be key catalyst; “even if there is no acquisition, with a 60% dividend payout ratio, we estimate its dividend yield will be 5% in FY11F and 7% in FY12F - much higher than regional peers.” 

Shares off 0.4% at $2.31.

Noble Grp - Noble started at Buy by CLSA; Deserves rerating

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

CLSA starts Noble (N21.SG) at Buy with $2.42 target; says natural resources supply chain group a proxy to increasing demand for both hard, soft commodities in China, India “with established footprints in resource-rich and resource-hungry countries.”



CLSA adds, Noble “a sound and quality growth business” with excellent liquidity ratios, impressive track record (profits +23x since 2000).



Tips 22% EPS CAGR 2010-2013. Notes group generates 28% gross profits from agriculture, 51% energy, 9.0% metals and minerals, 12% logistics. Says stock deserves rerating, company will be more solid, stable business in 2013 “as it harvests the fruits of the investments made in last three years.



Given a strong balance sheet (for a supply chain manager) growth can be funded by debt rather than equity issuances;” target based on 17x 1-year forward P/E. Shares +0.5% at $1.94.

UOB - UOB target raised to $19.70 by OCBC; Keeps Hold rating

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

OCBC keeps United Overseas Bank (U11.SG) at Hold with fair value of $19.70, up from $19.40; says 3Q earnings higher than expected, helped by better non-interest income, lower costs, says Dow Jones.



OCBC cautiously optimistic, notes management remains comfortable with quality of portfolio, NPLs remain stable. “However, margin appears to be under pressure and looks likely to stay so, especially in the current low interest rate environment.”

Research house raises FY10 earnings to $2.642 billion from $2.485 billion, ups FY11 earnings to $2.786 billion; expects interest income to remain relatively flat, non-interest income to grow about 9.5% in FY11.



“Overall, we are expecting cost ratio to move up from a projected 39.7% in FY10 to about 40.6% in FY11. Together with lower impairment charges of about $250 million, we expect the bottomline to grow about 5.4%.”



House says will turn buyers at $18.40 or lower. Shares +0.5% at $18.74.

UOB - UOB kept at Neutral by Credit Suisse with $23.00 target

Stock Name: UOB
Company Name: UNITED OVERSEAS BANK LTD
Research House: Credit Suisse

Credit Suisse says UOB (U11.SG) 3Q10 core net profit of $688 million ahead of estimates. Likes that bank maintained market share in Singapore mortgage loans, gained in Malaysia; deposits increased nicely, by 5.4% on-quarter, says Dow Jones.



But says bank continues to lose overall loan market share in Singapore; NIM pressure more than expected; NPLs saw first increase since 2Q09, but from non-core OECD market.

“Looking forward, UOB should continue to be the most conservative among peers on loan growth, with growth mainly from overseas. Margin pressure expected to continue near term. We expect cost pressure as war for talent pushes up staff costs.”



Cuts 2011/12 EPS estimates by 5.0%-6.0%, driven by lower margins. “UOB remains the best ROE bank in Singapore and valuations are starting to look attractive, but the stock lacks catalysts.” Maintains $23.00 target price, Neutral rating. Shares down 0.1% at $18.62.