OCBC starts Tiger Airways at hold

Stock Name: TigerAir
Company Name: TIGER AIRWAYS HOLDINGS LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.65

OCBC Investment Research has initiated coverage of Singapore budget carrier Tiger Airways Holdings (TAHL.SI) at hold with a target price of $0.65.

Although the suspension of Tiger Airways’ Australia operations has been lifted, the airlines will likely be hurt by consistently high jet fuel prices, said OCBC in a report.

“Tiger Airways needs time to recover from the aftermath of the suspension of its Australian operations. As such, it is likely to trade at a discount to its peers,” said OCBC.

However, the brokerage also noted that Tiger Airways may benefit as its Philippines partner Southeast Asian Airlines has been allowed to start flying from Manila to Cebu and Davao.

At 11:26 a.m., Tiger Airways shares were flat at $0.615. They have fallen about 54% since the start of the year.

Kim Eng cuts SC Global to hold from buy

Stock Name: SCGlobal
Company Name: SC GLOBAL DEVELOPMENTS LTD

Research House: Kim Eng

Price Call: HOLD

Target Price: 1.05

Kim Eng Securities has downgraded luxury property developer SC Global Developments to hold from buy and cut its target price to $1.05 from $2.37.

The latest move by Singapore to make buyers who are not Singapore citizens or permanent residents pay an additional 10% stamp duty when they buy a home, has dimmed the outlook for the luxury home market, where non-locals form the majority of buyers.

“Although SC Global’s current depressed valuation suggests that the adverse impact of the new cooling measures might have been priced in, we remain wary of luxury developers as negative sentiment continues to swirl around the residential property market,” said Kim Eng in a report.

The brokerage has also cut its average selling price estimate for Hilltops, one of SC Global’s developments, by 10%, as sales were at a standstill.

At 11:02 a.m., shares of SC Global were up 2% at $1.00, and have plunged about 40% since the start of the year.

Kim Eng cuts SMRT target price to $1.50

Stock Name: SMRT
Company Name: SMRT CORPORATION LTD

Research House: Kim Eng

Price Call: SELL

Target Price: 1.50

Kim Eng has downgraded Singapore’s biggest train operator SMRT Corp (SMRT.SI) to sell from hold and lowered its target price to $1.50 from $1.85, citing frequent operational hiccups and higher earnings risk.

Singapore suffered three major subway disruptions last week, each lasting several hours. Last Thursday, hundreds of commuters were trapped underground without light and ventilation for over an hour before they heard from SMRT.

Kim Eng said it had lowered its earning per share forecasts for SMRT’s 2012-2014 fiscal years by 2-3% as repair and maintenance costs will likely increase.

Other one-off expenses that may be incurred include refunds and provision of free shuttle bus services to help affected passengers, as well as punitive fines by Singapore’s Land Transport Authority (LTA) of up to $1 million, Kim Eng said.

The LTA may also take into consideration the recent train disruptions, particularly service reliability, when awarding tenders in the future, Kim Eng added.

United Engineers rated "outperform" by CIMB

Stock Name: UE
Company Name: UNITED ENGINEERS LTD ORD

Research House: CIMB

Price Call: BUY

Target Price: 2.14

CIMB in a Dec 9 research report says: "We expect stronger operating cash flows in 2012/13 with recurring income from the one-north mixed development and UE BizHub East. Cash flows should be further boosted by proceeds from completion of The Rochester residential development.

"With operating cash balances more than sufficient to meet capex requirements, net gearing is estimated to drop to 0.4x (from 0.5-0.7x in 2008/09). This leaves ample room for acquisitions to 2008's net gearing of 0.7x and management's target of 1x, with a $500 million MTN programme as an available funding facility.

"We factor in less bearish assumptions for mixed developments, offset by lower ASPs for its Bendemeer site, resulting in +2%/-30% EPS adjustments, and a slightly higher RNAV and target price of $2.14 (still at 45% disc to RNAV). MAINTAIN OUTPERFORM."

FJ Benjamin Holdings downgraded to 'hold' by DBS

Stock Name: FJBen
Company Name: F J BENJAMIN HOLDINGS LTD

Research House: DBS Vickers

Price Call: HOLD

Target Price: 0.33

DBS Vickers Securities in a Dec 9 research report says: "1Q12 results met our expectations, supported by contributions from HK timepieces. We will be keeping tabs on FJB's performance over the seasonally stronger 2Q12 (Christmas shopping and year-end holiday season) as well as retail sales generally, as an indicator to 2H12's performance.

"We believe consumer sentiment will weaken on expectations of slower economic growth, and we expect discretionary spending to be affected. Management is targeting for 190 stores by FY12F vs 165 currently.

"Given the poorer regional economic outlook, we are reducing our earnings expectations for FY2012F/FY2013F by 11%/12%. The stock currently trades at 11x FY2012F PE. Given the lowered earnings estimates, target price lowered from 48 cents to 33 cents based on 12x FY2012F earnings, in line with peer average. DOWNGRADE TO HOLD."

Combine Will Int'l Holdings rated 'hold' by Phillip Securities

Stock Name: CombWill 100
Company Name: COMBINE WILL INTL HLDGS LTD

Research House: Phillip Securities

Price Call: HOLD

Target Price: 2.25

Phillip Securities Research in a Dec 9 research report says: "Gross profit margin for 3Q11 came in at 11.2%; 2Q11 came in at 12.1%. Nine quarters before these 2 quarters, margins were between 13.7% and 18.8% (average 16.3%). There was only one bad quarter before these nine - 4Q08. That was 10.8%.

"While we had only one bad quarter in 4Q08, we are already having two bad quarters in 1Q11 and 2Q11. Worse is that management is guiding "increased inflation", "weaker demand", and "sharp increase of labour cost" for the coming 12 months.

"Briefly, we have shrunk our revenue estimates by between 4% to 25% (average 16.7%); gross margins by between 1.1%age to 5.3%age points (average 3.1%age points); and, postponed capex from 2011 and 2015 to 2013 and 2020 respectively. Fair value is now calculated to be $2.25. This is lower than our previous forecast of $2.95 by 24%. MAINTAIN HOLD."

Goodpack upgraded to 'outperform' by CIMB

Stock Name: Goodpack
Company Name: GOODPACK LIMITED

Research House: CIMB

Price Call: BUY

Target Price: 1.50

CIMB in a Dec 12 research report says: "Goodpack has been trying to penetrate deeper into its existing markets, boosting margins and breaking into the auto-parts transportation industry. Thus far, it has succeeded in increasing its market share in the natural and synthetic rubber transportation segments.

"We expect Goodpack to generate US$50 million-60 million of operating cash flows annually, which should be used to pare down debt. Balance sheet will only get stronger, in our view. This will be a major plus in an environment of uncertainties.

"Precipitated by French investor Amundi's decision to trim its stake below 5%, the stock has shed 13.5% since Nov 28, to underperform the index by 14%. It is now trading at 9.6x CY13 P/E, 1 standard deviation below its 10-year historical average. Target price of $1.50. UPGRADE TO OUTPERFORM."

Tiger Airways Holdings rated 'hold' by DBS

Stock Name: TigerAir
Company Name: TIGER AIRWAYS HOLDINGS LIMITED

Research House: DBS Vickers

Price Call: HOLD

Target Price: 0.71

DBS Vickers Securities in a Dec 12 research report says: "Tiger Airways reported its November operating statistics, which showed that the number of passengers flown dropped 13% y-o-y to 402k.

"Likewise, the average load factor for the month declined 8ppt y-o-y to 78%. For the 12 months to November 2011, total passengers carried grew 3% y-o-y to 5.8 million passengers whilst average load factor for the period declined 3ppt y-o-y to 83%.

"Whilst Tiger Airways Australia has received approval to increase the number of daily sectors from 22 currently to 32, we believe it will take some time to turn things around in Australia and it will continue to be a drag on overall Group's operations for at least the next few quarters. Target price of 71 cents. MAINTAIN HOLD."

United Overseas Bank rated 'sell' by Kim Eng

Stock Name: UOB
Company Name: UNITED OVERSEAS BANK LTD

Research House: Kim Eng

Price Call: SELL

Target Price: 14.20

Kim Eng Research in a Dec 12 research report says: "While mortgages account for about 30% of UOB's Singapore loan portfolio, the bank has a higher 90% exposure to private residential, which is a segment that is likely to be harder hit by the government's recent imposition of the additional buyer's stamp duty.

"At 9.4% of shareholders' funds, UOB's Eurozone exposure is likely to remain a drag on sentiment relative to peers, in our view. UOB's share price has declined by 27% from its peak of $21 this year, and has just about breached our previous target price of $15.60.

"We nevertheless continue to expect headwinds ahead, not least because the latest round of housing curbs will compound the negatives. Target price lowered to $14.20, pegged at a lower FY12F P/BV of 1x (1.1x previously). UOB traded at a GFC trough P/BV of 0.8x. MAINTAIN SELL."

CIMB upgrades China XLX to 'outperform'

Stock Name: China XLX
Company Name: CHINA XLX FERTILISER LTD.

Research House: CIMB

Price Call: BUY

Target Price: 0.43

CIMB Research has upgraded Singapore-listed Chinese fertilizer producer China XLX Fertiliser (CXLX.SI) to ’outperform’ from ’trading buy’ and raised its target price to $0.43 from $0.39.

A US$51 million ($66.3 million) investment from Primavera Capital will boost China XLX’s financial flexibility, CIMB said, adding that the combination of Primavera’s experience in capital markets and China XLX’s strengths in operations can help the firm grow its business.

China XLX is likely to benefit from the Chinese government’s efforts to consolidate the country’s urea industry aimed at reducing inefficient production capacity, improving the competitiveness of domestic producers as well as decreasing emissions and energy consumption, CIMB said.

Easing coal prices will also provide cost relief to China XLX, CIMB added. China XLX stock has fallen around 45% so far this year.

Goodpack Limited: Upgrade to BUY - price correction overdone

Stock Name: Goodpack
Company Name: GOODPACK LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 1.70

Sharp price correction but no cause for alarm bells. Since our last report issued on 14 Nov (See report here), the share price of Goodpack Limited fell by almost 21% to its lowest level since Feb last year. Although the weak macro economic conditions, broad market sell-offs and reduction in holdings of a major shareholder have mainly contributed to this drastic slide, we deem any further selling of the share to be unwarranted.

One-in one-out. On 1 Dec, Amundi Group reduced its holdings from 5.36% to 4.94% (approximate reduction of 2.05m shares). Although the move would suggest a dip in confidence over Goodpack's prospects, it is probably in response to recent struggles by the Amundi itself. Amundi had suffered

from declining operating profits over the past two quarters despite the implementation of cost cutting measures, and speculation over possible job cuts have also emerged recently. Furthermore, another investor group, Universities Superannuation Scheme Ltd, took advantage of the price correction to increase their holdings from 4.97% to 5.19%, making them one of the top holders of the stock.

Business as usual; FY12 forecasts unchanged. In an update from the company, we note that their main revenue segment, the natural and synthetic rubber business, remains as stable as before. Although demand for natural rubber has come off recently, a corresponding pick-up in demand from the synthetic rubber component pretty much leveled out any drop-offs. These segments together accounted for about 87% of their FY11 revenue and we expect FY12's revenue share to be similar. In terms of their automotive initiatives, the company has managed to procure its first account within that industry to utilize their services. While its revenue contribution is expected to be immaterial compared to the company's other revenue segments for FY12, it is a positive step in the right direction for the company. As such, we are leaving our FY12 forecasts unchanged.

Overdone price correction; upgrade to BUY. Goodpack's share price is now trading close to one standard deviation below its historical average. Barring any severe deterioration of global economic conditions, we expect this level to provide some support to Goodpack at least through to the end of the year. In addition, given the sharp price correction, the company will most likely initiate share buybacks that would provide further interim price support. Therefore, we upgrade our call to BUY at a fair value estimate of

S$1.70 on valuation grounds.  (Read full report)

See also : CIMB Research - Christmas comes early for bargain hunters

Source : OCBC Research

DBS downgrades F J Benjamin to hold

Stock Name: FJBen
Company Name: F J BENJAMIN HOLDINGS LTD

Research House: DBS Vickers

Price Call: HOLD

Target Price: 0.33

DBS Vickers has downgraded Singapore’s fashion retailer F J Benjamin Holdings (FJBN.SI) to hold from buy and cut its target price to $0.33 from $0.48.

As a mid- to high-end fashion and apparel distributor and retailer, DBS Vickers said it expects F J Benjamin’s earnings to be sensitive to changes in consumer demand, which may be affected by the worsening economic outlook.

“Consumer sentiment is expected to weaken, hence we are turning cautious on F J Benjamin’s mid-term outlook,” said DBS in a report.

The brokerage also reduced its earnings estimates for the firm in fiscal 2012 by 11% and by 12% in 2013, it said.

At 11:12 a.m., shares of F J Benjamin were 1.8% higher at $0.285, and have fallen about 33% since the start of the year.

 

Market Pulse: Ascendas REIT, Raffles Medical & Rotary Engineering (9 Dec 2011)

Stock Name: Ascendasreit
Company Name: ASCENDAS REAL ESTATE INV TRUST

Research House: OCBC

Price Call: BUY

Target Price: 2.24

Stock Name: RafflesMG
Company Name: RAFFLES MEDICAL GROUP LTD

Research House: OCBC

Price Call: BUY

Target Price: 2.61

Stock Name: Rotary
Company Name: ROTARY ENGINEERING LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.61

Market Pulse: Ascendas REIT, Raffles Medical & Rotary Engineering (9 Dec 2011)

FOCUS

Ascendas REIT: Acquisition of two Singapore assets

Summary: Ascendas REIT (A-REIT) yesterday announced that it had completed the acquisition of two Singapore assets, namely Corporation Place and 3 Changi Business Park Vista, for a purchase consideration of S$99m (S$159.6 psf NLA) and S$80m (S$487.0 psf NLA), respectively. The acquisitions are expected to be yield accretive, adding an annualized 0.10 S cents per unit to its DPU. We estimate that the blended NPI yield for the acquisitions to come in at around 7% (above the overall FY11 NPI yield of 6.5%), and the group's aggregate leverage to rise to around 36%, up from 31.5% as at 30 Sep. Factoring in the contributions from the two acquisitions, our DDM-based fair value is now raised marginally to S$2.24 (S$2.23 previously). We maintain our BUY rating on A-REIT. (Kevin Tan)

Raffles Medical Group: Strong track record; still a BUY

Summary: Raffles Medical Group's (RMG) consistent core earnings growth places it in a good position to weather the macroeconomic uncertainties in 2012. RMG's earnings are fairly defensive, although not entirely immune to an economic slowdown. This is underpinned by demographic changes and rising affluence in the region. Growth will come from higher patient load and revenue intensity as well as expansion of its specialist services. The creation of ~15,000 sf of new medical space in 1H12 would also assuage some of the space constraints faced by the group before its new Specialist Medical Centre and Raffles Hospital expansion comes on stream. While competitive pressures are intensifying with two new hospitals in Singapore, we reckon that this could raise Singapore's reputation as a medical hub. Given undemanding valuations, we maintain BUY and S$2.61 fair value estimate on RMG. (Wong Teck Ching Andy)

Rotary Engineering: To jointly develop oil terminal in Johor

Summary: Rotary Engineering (Rotary) has signed a memorandum of understanding (MOU) with Benalec Holdings Bhd to develop an independent deepwater storage terminal for oil products in Tanjung Piai, which is located at the south-western tip of Johor. The proposed terminal will have an initial capacity of 1m cubic metres, along with subsequent phases to increase capacity to 3m cubic metres. Rotary will form a JV with Benalec Holdings to own the terminal as well as other projects. Details such as the contract value and the time in which work will commence for Rotary have not been disclosed and it is likely that more time would be needed for the terms to be firmed up. Pending further details from the management, we maintain our HOLD rating and fair value estimate of S$0.61 on the stock. (Chia Jiun Yang)

For more information on the above, visit www.ocbcresearch.comfor detailed report.


NEWS HEADLINES

- According to latest US Commerce Department figures, inventories at US wholesalers rose by 1.6% (the biggest increase in five months) during October.

- The European Central Bank announced yesterday that the benchmark rate will be cut to 1% and it will offer banks long term funding with loosened collateral rules.

- China Environmental Resources Group announced that it has signed a sale and purchase agreement to acquire a forest plantation business in Guangdong, China for HK$180m.

- Construction services firm, Keong Hong Holdings has launched its IPO for a listing on SGX's Catalist board. The firm is offering 27m placement shares at S$0.24 to raise S$6.48m and the issue has a historical P/E of about 3.8x based on FY10 earnings.

Starhill Global REIT rated 'buy' by DBS

Stock Name: Starhill Gbl
Company Name: STARHILL GLOBAL REIT

Research House: DBS Vickers

Price Call: BUY

Target Price: 0.76

DBS Vickers Securities in a Dec 6 research report says: "SGREIT's two retail malls - Starhill Gallery and Lot 10 - have a strong foothold in KL's prominent Bukit Bintang shopping district. After completing Starhill Gallery's AEI, its modern iconic facade will cement its cr'me de la creme position.

"Occupancy rates at both malls are >95%. The government's efforts to rejuvenate Bukit Bintang will have positive impact on the malls. Construction of a new MRT station located adjacent to Lot 10 will start next year, and is expected to be ready in 4-5 years.

"AEI works at Wisma Atria will be completed in 3Q12, and underpin FY12 earnings growth. SGREIT is now trading at attractive 0.6x P/BV, and offers 7.4%-7.7% DPU yields for FY11/12. Target price of 76 cents. MAINTAIN BUY."

Swiber Holdings rated 'hold' by OCBC

Stock Name: Swiber
Company Name: SWIBER HOLDINGS LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.58

OCBC Investment Research in a Dec 6 research report says: "Swiber has secured new contracts worth about US$758m YTD for work in South Asia, SE Asia and the Middle East, and bidding activity in the industry remains active.

"Looking ahead, the group has an order book of about US$1 billion (as of Nov 2011), which is expected to contribute to its performance over the next two years. Though the overall industry outlook is favourable, competition is also intense, which may weigh on margins for new projects; meanwhile Swiber is guiding for a 15-20% gross margin range going forward.

"The group has disappointed the market with its core earnings this year and we are not ready to up our margin assumptions without a consistent showing of cost control. Fair value estimate of 58 cents. MAINTAIN HOLD."

Wilmar International rated 'hold' by DBS

Stock Name: Wilmar
Company Name: WILMAR INTERNATIONAL LIMITED

Research House: DBS Vickers

Price Call: HOLD

Target Price: 5.40

DBS Vickers Securities in a Dec 6 research report says: "FY2011F-2013F earnings revised by -9% to +6%. We lowered the group's Palm & Lauric M&P pretax margin as we expect high inventory carried forward from end Sep11 to erode margins in a declining price environment in 4Q11.

"We have also adjusted our estimates of the group's Plantations segment to account for the impact of new Indonesian export tax which was previously underestimated, while sugar segment EBITDA was adjusted on added merchandising volume. Proserpine is now included from FY2012 onwards.

"While Wilmar is aggressively expanding its oleochemicals capacity in East Java, we believe the group's sugar plantations in Papua (not included in our forecast) could face further delays. Our revised target price of $5.40 now implies FY12F PEmultiple of 14.9x, with 3-year earnings CAGR of 19%. MAINTAIN HOLD."

Parkson Retail Asia rated 'outperform' by CIMB

Stock Name: Parkson
Company Name: PARKSON RETAIL ASIA LIMITED

Research House: CIMB

Price Call: BUY

Target Price: 1.50

CIMB in a Dec 7 research report says: "Parkson has been in the department-store business since 1987, and has established a unique footprint with its home base in Malaysia, market leadership in Vietnam, and recent entry into Indonesia via an acquisition.

"Parkson Retail Asia (PRA) also plans to open its first store in Cambodia in 2013, and seeks similar opportunities in Indochina (e.g., Myanmar) longer term. Despite its 27% run since IPO, we think the stock is still inexpensive at 15x CY12 EPS, vs. the high teens or more for other Southeast Asian retailers and the 16x for sister company in Hong Kong (3368.HK).

"Our target price of $1.50 is based on 16x CY13 EPS, in line with its peers. OUTPERFORM (initiating coverage)."

CIMB starts Parkson Retail with outperform

Stock Name: Parkson
Company Name: PARKSON RETAIL ASIA LIMITED

Research House: CIMB

Price Call: BUY

Target Price: 1.50

CIMB Research has initiated coverage of Singapore-listed department store operator Parkson Retail Asia (PRAL.SI) with an outperform rating and a target price of $1.50.

Parkson Retail’s valuations are low given it is a well-known retailer, has exposure to different countries and has a proven track record, CIMB said.

The brokerage said it expects Parkson Retail to deliver around 20% annual earnings growth over the next several years as it steps up store openings to about 7-8 a year and sees steady same-store sales growth.

The Vietnam and Indonesia markets will also provide the firm with higher growth opportunities from rising income and domestic consumption.

At 9:34 a.m., shares of Parkson Retail were untraded. It last closed at $1.19 on Tuesday, and have gained about 5.3% since it listed on Nov 3.

Nam Cheong rated 'increase exposure" by SIAS

Stock Name: Nam Cheong
Company Name: NAM CHEONG LIMITED

Research House: SIAS

Price Call: BUY

Target Price: 0.23

SIAS Research in Dec 5 research report says: "Nam Cheong Limited is one of the few offshore support vessel (OSV) shipbuilders that can benefit from rising O&G activities in Malaysia. Particularly, Petronas is slated to ramp up its capex to RM300 billion over the next five years.

"For 4Q FY2011, we expect the company to generate revenue and profit after tax of RM233 million and RM27.8 million on the back of current healthy order book. Revenue for FY2012F and FY2013F is projected to soar to RM968 million and RM1,259 million respectively due to anticipated orders from O&G operators in Malaysia.

"Priced at 3.9X FY12F P/E and 0.89X P/B, we reckon that the counter is significantly undervalued now. Adopting an Economic Profit Valuation, we arrive at an intrinsic value of 23 cents, representing an upside of 96.6%. INCREASE EXPOSURE."

Hiap Hoe rated 'buy' by DMG

Stock Name: Hiap Hoe
Company Name: HIAP HOE LIMITED

Research House: DMG

Price Call: BUY

Target Price: 0.61

DMG & Partners Research in a Dec 5 research report says: "Hiap Hoe started out as a construction firm and has accumulated over 40 years of experience in the construction industry. The company diversified into property development in the early 1990s and has since evolved into a niche integrated property developer engaged in mid-tier and luxury residential properties.

"At the current price, the stock is trading at a steep discount of 66% to our RNAV estimate of $1.22. Over $120 million of net earnings will be progressively recognised over the next few years as construction of its development projects progressed, driving NAV growth.

"Such a deep discount is unwarranted in our view, as the company has substantially de-risked and pre-sold most of its development projects. We ascribe a fair value of 61 cents on the stock, based on 50% discount to RNAV. BUY"

Asiatravel.com rated 'buy' by DMG

Stock Name: Asiatravel
Company Name: ASIATRAVEL.COM HOLDINGS LTD

Research House: DMG

Price Call: BUY

Target Price: 0.44

DMG & Partners Research in a Dec 5 research report says: "Asiatravel.com recorded a net loss of $0.7 million in 4QFY11, as revenue slid 3.8% y-o-y to $24.6 million, largely due to one-off expenses relating to the cessation of subsidiary's business.

"In the absence of one-off expenses, profitability in FY2012 is likely to improve, even with flat revenue growth. On top of that, there is also the full-year consolidation of FNE's results (Asiatravel recently increased its stake from 19.9% to 50%) for FY2012.

"Asiatravel is an attractive partner for travel operators looking to expand into Asia, in our view, as it has a comprehensive online travel reservation platform and a wide customer base. We are estimating profit of $0.9 million for FY2012. As we roll forward our valuation, our DCF-based target price is 44 cents. MAINTAIN BUY."

ComfortDelgro Corp (S) rated 'buy' by DBS

Stock Name: ComfortDelGro
Company Name: COMFORTDELGRO CORPORATION LTD

Research House: DBS Vickers

Price Call: BUY

Target Price: 1.95

DBS Vickers Securities in a Dec 6 research report says: "CD has announced revisions to its taxi fare structure. Given that CD has about 66% of the taxi market share in Singapore, we expect other operators to soon follow suit.

"We expect demand for taxis to drop off initially before gradually recovering and that eventually taxi drivers should see higher income. This is only a fare revision which will affect taxi passengers' travelling costs and hirers' income. We don't expect an immediate change to hire out rates and lease out rates so we keep our earnings estimates for now.

"We continue to like CD as our preferred Singapore land transport play over SMRT with its geographical diversity and more attractive valuations. Target price of $1.95. MAINTAIN BUY."

Golden Agri-Resources rated 'buy' by Phillip Securities

Stock Name: GoldenAgr
Company Name: GOLDEN AGRI-RESOURCES LTD

Research House: Phillip Securities

Price Call: BUY

Target Price: 0.795

Phillip Securities Research in a Dec 6 research report says: "The Indonesian government announced a change in export tax rates for CPO products a bid to encourage the development of downstream industries in Indonesia. Being both a refiner as well as producer of crude palm oil, we expect Golden Agri to benefit from the change in export tax structure.

"Golden Agri reported 3Q11 turnover at US$1.56 billion (+62% y-o-y) and 3Q11 PATMI at US$110 million (+10.5% y-o-y). Year-on-year, operating margin fell from 13.8% to 10.7% mainly due to higher export taxes (due to higher CPO prices as Indonesia has a progressive tax structure).

"Our target price of 79.5 cents implies 10.6x eFY12 P/E which is slightly above its mean historical forward P/E of 10.4x and represents a potential upside of 13% from previous closing price. MAINTAIN BUY."

Neptune Orient Lines rated 'hold' by Kim Eng

Stock Name: NOL
Company Name: NEPTUNE ORIENT LINES LIMITED

Research House: Kim Eng

Price Call: HOLD

Target Price: 1.10

Kim Eng Research in a Dec 6 research report says: "NOL reported a large widening in its net loss to US$91.1 million in 3Q11 from US$57.0 million in 2Q11 despite revenue improvement of 2.9% q-o-q, which generally disappointed the market.

"Falling freight rates due to excess capacity on key routes and higher bunker fuel prices have combined to hurt container shipping lines. The group's quarterly losses could further widen in the off-peak season in 4Q11.

"Though current stock valuation is inexpensive, we think investors should ideally wait for more positive signs of moderating freight rate decline before taking the plunge. Target price of $1.10, based on 0.8x FY12F P/BV. HOLD (reinitiating coverage)."

Kim Eng resumes NOL coverage with hold, $1.10 target

Stock Name: NOL
Company Name: NEPTUNE ORIENT LINES LIMITED

Research House: Kim Eng

Price Call: HOLD

Target Price: 1.10

Maybank Kim Eng has resumed coverage of Singapore’s container shipping firm Neptune Orient Lines (NOL) (NEPS.SI) with a hold rating and a target price of $1.10.

NOL’s quarterly losses, due to falling freight rates and higher bunker fuel prices, could widen further in the off-peak season in the fourth quarter, Maybank Kim Eng said.

It also added that softening demand in the industry and a glut of new vessels in the pipeline is set to challenge the shipping industry well into the first half of 2012. 

“Though current stock valuation is inexpensive, we think investors should ideally wait for more positive signs of moderating freight rate decline before taking the plunge,” the brokerage said in a report.

At 9:26 A.M., shares of NOL were 1.8% lower at $1.10. The shares have fallen about 50% since the start of the year.

BoAML cuts CapitaLand to neutral

Stock Name: Capitaland
Company Name: CAPITALAND LIMITED

Research House: BofA Merrill Lynch

Price Call: HOLD

Target Price: 3.40

Bank of America Merrill Lynch has downgraded its rating on Southeast Asia's largest property developer, CapitaLand (CATL.SI), to neutral from buy and cut its target price to $2.75 from $3.40.

Bank of America Merrill Lynch has cut its 2011-2013 earnings estimates for CapitaLand by an average of 22% as it expects overall sales volume and prices of residential units in China to fall by about 10% next year due to an oversupply.

“Our downgrade is based on more bearish view on China residential (sector), the lack of share price reaction to capital deployment and earnings uncertainty,” the brokerage said.

It also noted that as CapitaLand increased its exposure to China assets, the firm has seen a deterioration of its core return on equity.

At 9:41 a.m., shares of CapitaLand were 0.8% lower at $2.59 and have fallen about 30% since the start of the year.

DBS Group Holdings rated 'buy' by Nomura

Stock Name: DBS
Company Name: DBS GROUP HOLDINGS LTD

Research House: Nomura

Price Call: BUY

Target Price: 15.80

Nomura Research in a Dec 2 research report says: "Ample SGD liquidity (3Q SGD LDR at just 62%) continues to allow DBS to actively leverage the SGD-USD swap market, giving it a crucial edge in USD funding that is driving loan growth (YTD: 22%) as well as market share and customer acquisition (especially Chinese corporates).

"Given stronger-than-expected YTD loan growth and non-interest income performance, we raise FY2011-2013F earnings by 2-7%. However, elevated dependence on potentially volatile USD funding, as well as on Greater China assets (c.30% of group) and corporate clients translates into an increased risk profile (and hence higher risk premium) for the franchise.

"Reflecting net impact of forecast adjustment and increase in cost of equity input (to 9.5%), new GGM-derived target price is $15.80 or 1.2x FY12F book. MAINTAIN BUY."

Singapore Airlines rated 'hold' by OCBC

Stock Name: SIA
Company Name: SINGAPORE AIRLINES LTD

Research House: OCBC

Price Call: HOLD

Target Price: 10.85

OCBC Investment Research in a Dec 2 research report says: "The Australian Competition and Consumer Commission gave the final approval to the alliance between Singapore Airlines (SIA) and Virgin Australia (VBA), Australia's number two carrier.

"On top of code-sharing on one another's international and domestic flights under this alliance, SIA and VBA will be able to work together closely on schedule planning so as to provide passengers with seamless flight connections. VBA sees this alliance as a way to capture a larger market share of the lucrative business travel segment from Qantas Airways (QAN), Australia's flag carrier.

"While the alliance with VBA is a positive development for SIA, it is too early to quantify its impact to SIA's bottom line. We maintain our fair value estimate of $10.85. MAINTAIN HOLD."

Lian Beng Group rated 'buy' by OCBC

Stock Name: Lian Beng
Company Name: LIAN BENG GROUP LTD

Research House: OCBC

Price Call: BUY

Target Price: 0.51

OCBC Investment Research in a Dec 2 research report says: "Lian Beng (LBG) announced earlier this week that it has won two new construction contracts, worth a total of almost $98 million.

"The bigger $84.5 million contract relates to construction work for Mandai Estate, for which LBG holds a 55% stake in. The smaller, but not less significant, $13.2 million contract was awarded by HDB. With the latest contracts win, LBG's net order book goes above S$850m.

"We continue to like LBG for its strong order book, track record in both public and private residential projects and undemanding valuations. We find that despite applying a discount rate to capture the likely economic slowdown ahead, LBG still appears attractively priced.

"The updated fair value estimate of 51 cents (previously 55 cents, lower due to change of valuation method) still shows potential upside of about 46%. MAINTAIN BUY."

OKP Holdings rated 'buy' by OCBC

Stock Name: OKP
Company Name: OKP HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.64

OCBC Investment Research in a Dec 1 research report says: "We recently caught up with OKP's management for an update of their outlook of 2012 and also as a check of our contract win assumptions for the next two years.

"We understand that the group has been working on a number of tenders. Given its high tender success rate (c.94% success rate for tenders the group participated in during 2010) and track record, we believe that the group will be successful in some of its tenders, and add more contracts in the near future.

"Given OKP's order book of more than $400 million and its gainful position if Singapore government increases infrastructure spending, we continue to believe that the near-term prospects of OKP should remain healthy. We maintain our fair value estimate at 64 cents, implying potential upside of c.22%. MAINTAIN BUY."

Kim Eng cuts Midas to sell from hold

Stock Name: MIDAS
Company Name: MIDAS HLDGS LIMITED

Research House: Kim Eng

Price Call: SELL

Target Price: 0.30

Kim Eng Securities has downgraded its rating for Singapore-listed Midas Holdings (MIDA.SI), which makes aluminium components for trains, to sell from hold and cut its target price to $0.30 from $0.44.

Kim Eng said it expects Midas’ quarterly earnings to remain poor for the next few quarters, hurt by uncertainty in China’s rail industry following the dismissal of the former head of the Ministry of Railways and recent accident investigations.

Midas reported has month its third-quarter net profit fell 59.8% to 27.4 million yuan, hurt by rising production costs.

The brokerage has cut its 2011-2012 earnings estimates by 30 percent to account for slower execution on its orders.

With no new orders in sight, Midas will also be affected for at least the next three quarters as its main customer, Chinese state-owned train manufacturer CNR, delivers fewer trains to the Ministry of Railways, Kim Eng said.

At 10:12 a.m., shares of Midas were 1.4% lower at $0.345, and have plunged about 63% since the start of the year.

Julius Baer downgrades Hyflux to hold

Stock Name: Hyflux
Company Name: HYFLUX LTD

Research House: Julius Baer

Price Call: HOLD

Target Price: 1.30

Julius Baer has downgraded water treatment firm Hyflux (HYFL.SI) to hold from buy and cut its target price to $1.30 from $2.30.

Julius Baer has cut its rating for Hyflux to reflect its disappointing third quarter earnings and a stagnanat order book.

Hyflux posted in November a 34% fall in its third-quarter net profit, hurt by lower contributions from the Middle East and North Africa.

“We believe that Hyflux will face challenges in winning projects to catalyse its share price due to its current stretched balance sheet,” Julius Baer said in a report.

It also noted that the company was re-focusing its efforts from the Middle East to Asia, namely in Singapore and China, where the poltical climate is more stable.

At 2:01 p.m., shares of Hyflux were 0.83% lower at $1.20, and have fallen about 48% since the start of the year.

Tiong Seng Holdings rated 'buy' by DBS

Stock Name: Tiong Seng
Company Name: TIONG SENG HOLDINGS LIMITED

Research House: DBS Vickers

Price Call: BUY

Target Price: 0.24

DBS Vickers Securities in a Nov 29 research report says: "Tiong Seng announced that they have been awarded a $189.5 million contract for the proposed construction of a Bedok Condominium development from United Venture Development (Bedok).

"Stock trades at a 60% discount to our estimated SOTP of 43 cents. Backed by strong earnings visibility from a solid construction orderbook over the next 2-3 years, the group's investment in its pre-cast prefabrication factory will enable it to enhance cost efficiencies and stay ahead of its peers in the years ahead.

"Concerns on the group's China property development arm should be allayed as most are located in 3rd Tier cities and a majority of project phases will only be launched towards 2H12-2013 onwards. Target price of 24 cents based on 45% discount to SOTP valuation. MAINTAIN BUY."

Starhub rated 'buy' by DBS

Stock Name: StarHub
Company Name: STARHUB LTD

Research House: DBS Vickers

Price Call: BUY

Target Price: 3.05

DBS Vickers Securities in a Nov 29 research report says: "StarHub has clinched the exclusive rights for the UEFA Euro 2012 football tournament. This would trigger Singapore's cross-carriage law for the first time since it took effect in August 2011.

"This is not the most popular piece of content and there was absence of bidding. As such we assume that content-cost should not be a big burden for StarHub. SingTel appears to have stayed away as they paid a huge price tag for English Premier League (EPL) rights.

"Consumers can subscribe directly to StarHub (with or without sports package) rather than going through SingTel's mio TV to enjoy savings through bundling discounts. We continue to like StarHub for its 7% yield. Target price of $3.05. MAINTAIN BUY."

Hisaka Holdings rated 'fully valued' by SIAS

Stock Name: HISAKA
Company Name: HISAKA HOLDINGS LTD.

Research House: SIAS

Price Call: SELL

Target Price: 0.475

SIAS Research in a Nov 29 research report says: "Hisaka reported a 30.5% decline in net attributable profit to $6.4 million for FY2011 ended Sep 2011. This works out to cash of $0.151 per share that can redistributed to shareholders or invested in new business opportunities.

"The company has declared a 0.5 cent final dividend per share for FY2011. Our Q&A with the management led us to conclude a weak outlook for Hisaka's core semiconductor equipment and components business; with a very modest recovery expected only after CNY in late Jan 2012.

"In the interim, Hisaka plans to maintain its extremely robust balance sheet while continuing to develop new income streams from new medical products and new markets, e.g. India. Our updated model yields an intrinsic value of 47.5 cents. FAILY VALUED."

Pacific Andes rated 'hold' by DBS

Stock Name: Pac Andes
Company Name: PACIFIC ANDES RESOURCES DEVLTD

Research House: DBS Vickers

Price Call: HOLD

Target Price: 0.23

DBS Vickers Securities in a Nov 29 research report says: "Net profit of HK$623 million was below our forecast of HK$721 million due to one-off expense of HK$116 million for early repayment of debt at China Fishery Group (CFG).

"On a normalised basis, net profit of HK$699 million was also below our forecast and lower than FY2010's core earnings of HK$796 million. Revenue was 30% higher at HK$9.7 billion, driven by 35% growth in Supply Chain Management (SCM) to HK$4.4 billion and 27% rise at CFG to HK$5.3 billion.

"PAH has declared a dividend of 1.08 cents per share, translating to 5% dividend yield. PAH currently trades at 5.1x FY2012F earnings. FY2012F earnings lowered by 8% as we are cautious on CFG. Our target price of 23 cents values the stock at 5.5x prospective earnings or -0.5 std deviation. MAINTAIN HOLD."

Fraser and Neave rated 'buy' by Nomura

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

Research House: Nomura

Price Call: BUY

Target Price: 7.29

Nomura Research in a Dec 1 research report says: "Although F&N lost the Coke bottling franchise in October this year, it should be able to partially recover the lost volumes through expanding into Singapore, organic growth in Malaysia and expanding into ASEAN.

"One new market that it intends to tap is Myanmar, while expanding further into Indonesia. In the absence of provisioning for royalties made in 4Q, the dairies division is likely to see improved profitability.

"F&N has remained disciplined in its landbanking in Singapore to mitigate downside risks and is well positioned to hold on to its properties in China and Australia given the low land costs. Target price remains at $7.29. MAINTAIN BUY."

Biosensors International Group rated 'buy' by Nomura

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

Research House: Nomura

Price Call: BUY

Target Price: 1.70

Nomura Research in a Dec 1 research report says: "Biosensors announced that Shangdong Weigao has converted its US$120 million 4% Convertible Notes into shares of Biosensors. The conversion will raise Shangdong Weigao's stake in Biosensors from 16.2% to 21.6%, effectively converting the notes at a price of $1.40.

"Biosensors's equity capital will rise further following the conversion of the notes and save an annual interest cost of US$4.8 million per year. Our SOTP-based target price of $1.70 has 24% implied upside, supported by 12.5x FY13F P/E on EPS growth of 36.0% over FY2012F-FY2013F. Target price of $1.70. MAINTAIN BUY."

CNMC Goldmine Holdings rated 'increase exposure' by SIAS

Stock Name: CNMC
Company Name: CNMC GOLDMINE HOLDINGS LIMITED

Research House: SIAS

Price Call: BUY

Target Price: 0.677

SIAS Research in a Dec 1 research report says: "CNMC is a producing gold mining company with 372,700oz of gold resources. What's promising is that the company is not only pursuing resource growth via exploration efforts, but also expanding production capacity to raise output.

"We expect CNMC to make about US$6.4 million from gold sales in 2011. CNMC plans to commence mining at an additional deposit and raise ore processing capacity by 10x in 2012.

"Based on a cost of equity of 11% and a cost of debt of 4%, we value CNMC at 80 cents. By varying cost of equity between 10% and 12%, our valuation will range between 67.7 cents and 89.3 cents. INCREASE EXPOSURE (initiating coverage)."

STX OSV jumps after order win

Stock Name: STXOSV
Company Name: STX OSV HOLDINGS LIMITED

Research House: DMG

Price Call: HOLD

Target Price: 1.20

Shares of Singapore-listed shipbuilder STX OSV Holdings (STXO.SI) rose as much as 4% on Wednesday to a one-month high after the company said it secured a contract worth 1.2 billion Norwegian crowns ($264.71 million) for the construction of a research vessel.

At 9:45 a.m., shares of STX OSV were 3.1% higher at $1.16 with about 4 million shares changing hands.

“The new order is a positive surprise,” said DMG & Partners in a report, adding that it now expects STX OSV's order wins so far this year to be more than 7.4 billion Norwegian crowns, boosted by the latest contract.

DMG also raised its fiscal 2011 earnings-per-share estimate for STX OSV by 7%, and increased its share-price target to $1.20 from $1.14. It kept its neutral rating on the stock.

Ascott Residence Trust rated 'hold' by DBS

Stock Name: AscottREIT
Company Name: ASCOTT RESIDENCE TRUST

Research House: DBS Vickers

Price Call: HOLD

Target Price: 1.13

DBS Vickers Securities in a Nov 28 research report says: "Ascott REIT has entered into a conditional sale and purchase agreement to acquire a 60% interest in 160-unit Citadines Shinjuku Tokyo from Mitsubishi Estate Co Ltd (MEC).

"Purchase consideration amounts to JPY 2.6 billion ($45.7 million), implying an initial yield of 4.5%yield. While this is lower compared against our estimated WACC of 7.3% for the REIT, as the acquisition will be fully funded by debt, it should be accretive to earnings. Post acquisition ART's gearing level is expected to head slightly upwards to 42% (vs 41% previously).

"While stock offers a relatively attractive yield of 8.6, there exists potential downside risk in the event of a worsening European crisis, given that 42% of its assets are in Europe. Our target price has been revised to $1.13. DOWNGRADE TO HOLD."

UMS Holdings rated 'increase exposure' by SIAS

Stock Name: UMS
Company Name: UMS HOLDINGS LIMITED

Research House: SIAS

Price Call: BUY

Target Price: 0.79

SIAS Research in a Nov 24 research report says: "UMS ended the quarter with cash, net of leases, of S$32.4m, which is equivalent to 9.43 cents per share. Net cash now accounts for 24.8% of UMS's market value.

"As UMS has no bank borrowings except for $3.56 million of finance leases, the company can lever its balance sheet to make acquisitions of decent size. While UMS may be setting aside cash for potential M&As, we expect the company to maintain its quarterly dividends as its cash conversion ratio remained high at 94% in 3Q 2011. In a nutshell, the company is paying dividends out of its cash flow, which is a sustainable policy.

"We have reduced our earnings forecast for FY2011 and revised our valuation downwards to 79 cents in view of the last two quarters' results. MAINTAIN INCREASE EXPOSURE."

Macquarie Int'l Infrastructure Fund rated 'buy' by DBS

Stock Name: MacqIntInfra
Company Name: MACQUARIE INT'L INFRA FUND LTD

Research House: DBS Vickers

Price Call: BUY

Target Price: 0.64

DBS Vickers Securities in a Nov 28 research report says: "Over the years, MIIF has divested its non-Asian assets, and repaid corporate level loans with the sale proceeds, rendering a cleaner balance sheet with current net cash of about $115 million.

"The sale of stakes in other funds also eliminated the black box problem (assets with limited financial visibility) and the fund now focuses purely on key Asian infrastructure assets. MIIF paid out 3 cents dividend in FY2010. Post restructuring of its portfolio, MIIF is now guiding for 5.5 cents dividend per share in FY2011, based on expected cash flow generation plus existing cash reserves (2.75 cents already declared for 1H11).

"We expect this is achievable and given the healthy implied yield of close to 10.5% at current prices. Target price of 64 cents, based on DCF valuation of underlying assets. BUY (reinstating coverage)."

C&G Environmental Protection Holdings rated 'increase exposure' by SIAS

Stock Name: C&G EP
Company Name: C&G ENV PROTECT HLDGS LTD

Research House: SIAS

Price Call: BUY

Target Price: 0.21

SIAS Research in a Nov 28 research report says: "We like C&G exposure to the growing China waste to energy (WTE) industry which will benefit from rising waste generation per capita, rapid urbanization, limited land space around cities and energy shortage.

"Coupled with more upcoming projects over the next four years and preferential treatments such as better electricity tariff and tax reduction, the company is poised to benefit from these favorable industry developments. The company is merely trading at a FY12F P/B of 0.43X, which is significantly lower than its peers and does not reflect the industry's defensive nature.

"The company had also announced its intention to reward shareholders by distributing at least 20% of operating net profit between 2011 and 2013. Intrinsic value of 21 cents per share, upside of 61.5%. INCREASE EXPOSURE.

Tat Hong Holdings upgraded to 'outperform' by CIMB

Stock Name: Tat Hong
Company Name: TAT HONG HOLDINGS LTD

Research House: CIMB

Price Call: BUY

Target Price: 0.77

CIMB in a Nov 28 research report says: "Tat Hong has finally turned the corner, with growth finding footing. Its Australian operations are set to prosper in 2H12 from an ongoing re-building programme. We believe the next stock catalyst will hinge on that, potentially throwing up positive surprises in 2H12.

"Apart from rebuilding work following floods in Queensland that will be rolling in the dough, the lucrative oil & gas (O&G) industry in Australia may commence some projects after delays.

Once commenced, utilisation and rental rates could climb for Tat Hong. Earnings estimates are unchanged, so is our target price of 77 cents (10x CY13 P/E). UPGRADE TO OUTPERFORM."

Global Logistics Properties rated 'outperform' by CIMB

CIMB in a Nov 29 research report says: "GLP is the largest modern logistics provider in Asia, with the largest GFA (sq m) in China and Japan. We estimate that core EBIT will rise by 29% to US$520 million by FY14 vs. FY11, backed by stable rents in Japan and a growing portfolio in China.

"Operating cash flows are expected to cover known capex needs; a high cash conversion rate (short development cycle) allows available surpluses to be swiftly redeployed for new investments. A low net gearing of 0.3x implies additional investment capacity of US$1.7 billion, by our estimates.

"Target price/RNAV of $2.24. It trades at a 20% discount to RNAV and at more attractive multiples than its logistics peers. OUTPERFORM (initiating coverage)."

HG Metal Manufacturing rated 'overweight' by NRA Capital

Stock Name: HG Metal
Company Name: HG METAL MANUFACTURING LTD

Research House: NRA Capital

Price Call: BUY

Target Price: 0.138

NRA Capital in a Nov 29 research report says: "Revenue in 4QFY11 jumped 76% y-o-y (-2% q-o-q) to $66.1 million due to higher sales volume. Operating profit improved by about 350% to $1.7 million from a year ago, but declined 27% sequentially.

"Thanks to $1.5 million contribution from associate, HG Metal ("HGM") recorded $1.4 million PATMI, compared to $10.2 million loss last year arising from massive inventory write-down. HGM declared 0.6 cents of interim dividend, beating our estimate of 0.25 cents. We adjust FY2012-2013 earnings 20% lower.

"We keep our valuation method unchanged, pegging at 1x FY12NTA and thus deriving target price of 13.8 cents (prev 15.1 cents). Potential return is 69% (62% capital appreciation and 7% dividend yield). MAINTAIN OVERWEIGHT."

SG:Global Palm- Not expecting much expansion in 2012

Stock Name: Global Palm
Company Name: GLOBAL PALM RESOURCES HLGS LTD

Research House: OCBC

Price Call: HOLD

Target Price: 0.195

29 November 2011 : Global Palm Resources

Summary: Global Palm Resources (GPR) continues to disappoint with the pace of its new planting in 3Q11, where it added just 176 ha, bringing its YTD increase to 621 ha. Even though GPR has slashed its new planting target from 1.6-1.7k ha this year to 1k ha, it could still be a tall order as GPR would need to achieve 379 ha of new plantings in 4Q11. Management explained that the slowdown in new planting is an industry-wide trend, arising from Indonesia's two-year moratorium on new permits to clear primary forests and greater public and NGO scrutiny over new land opening. GPR has also lowered its new planting target for 2012 to just 770 ha. In view of the slow expansion so far and also the muted new planting target next year, we have reduced our FY12 revenue forecast by 9.3% and earnings by 8.4%. Applying an unchanged valuation of 10x against its FY12F EPS, versus blended FY11/FY12F EPS previously, our fair value drops to S$0.195 from S$0.21. Maintain HOLD.




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Please visit www.iocbc.comand click on 'Research' option at the top bar of the homepage.

Pacific Andes target cut to $0.263 by OCBC

Stock Name: Pac Andes
Company Name: PACIFIC ANDES RESOURCES DEVLTD

Research House: OCBC

Price Call: BUY

Target Price: 0.263

OCBC Investment Research has cut its target price for Singapore-listed frozen fish supplier Pacific Andes Resources Development to $0.263 from $0.344 and kept its buy rating.

Pacific Andes’ full-year earnings, excluding a one-time charge for the early redemption of its sister firm China Fishery’s senior notes, was still lower than expectations due to a fall in gross profit margin to 21.5%.

OCBC has cut its fiscal 2012 earnings forecast by 17.6% to HK$705 million ($118 million), citing deteriorating outlook for the global economy and muted demand.

“While fish demand is fairly resilient, we expect current weak market conditions to translate into lower average selling prices later on,” said OCBC in a report.

At 11:11 a.m., shares of Pacific Andes were flat at $0.205, and have fallen 43% since the start of the year.

GLP started at outperform by CIMB

Stock Name: GLP
Company Name: GLOBAL LOGISTIC PROP LIMITED

Research House: CIMB

Price Call: BUY

Target Price: 2.24

CIMB Research has started coverage of Global Logistic Properties, which owns warehouses in Japan and China, with an outperform rating and a target price of $2.24.

GLP has the size and network in logistics to multiply its tenant base, given its ability to lease space to multinational corporations in important cities under the same landlord, said CIMB in a research report.

The company also works closely with the Chinese government to acquire land, which provides GLP with a development pipeline on top of the 5.1 million square meters of space it already has.

"It has unique exposure to China’s growth, backed by stable Japan cashflows and a highly competitive capital structure," said CIMB in a report.

It also added that GLP is trading at a 20% discount to its restated net asset value and at more attractive multiples compared to its peers.

At 11 a.m., shares of GLP were 0.3% higher at $1.795, but have fallen 16.4% since the start of the year.

Market Pulse: ST Engin, FCOT, Marco Polo Marine (25 Nov 2011)

Stock Name: ST Engg
Company Name: SINGAPORE TECH ENGINEERING LTD

Research House: OCBC

Price Call: BUY

Target Price: 3.01

Stock Name: Frasers Comm
Company Name: FRASERS COMMERCIAL TRUST

Research House: OCBC

Price Call: BUY

Target Price: 0.87

Stock Name: Marco Polo
Company Name: MARCO POLO MARINE LTD.

Research House: OCBC

Price Call: HOLD

Target Price: 0.43

Market Pulse: ST Engin, FCOT, Marco Polo Marine (25 Nov 2011)

FOCUS

ST Engineering: Recent decline provides better entry point

Summary: Despite Singapore Technologies Engineering's (STE) recent contract win worth S$441m, its share price has fallen in line with the weakness in the Singapore equities. The latest contract win constitutes the construction of eight 97.2m long Offshore Supply Vessels (OSV) with additional options for up to 24 vessels. STE's EPS growth has been relatively stable through the years, largely buoyed by its strong order book. As the global environment remains challenging, we continue to favour stocks with resilient earnings. At current price level, and with an estimated dividend yield of 5.6%, we reiterate our BUYrating on STE and maintain our fair value estimate of S$3.01. (Eric Teo)

Frasers Commercial Trust: Expecting better performance in FY12

Summary: Frasers Commercial Trust's (FCOT) FY11 DPU of 5.75 S cents came in within our and consensus expectations. Going into FY12, we maintain our view that FCOT may continue to post improvement in its operating performance, barring any fallout in the office rental market. According to management, China Square Central's average passing rents is below the recently contracted rents. With management's intention not to renew the lease but to take over the management of the property upon its expiry, we are likely to see further rental growth on this front. We also note that the group had recently secured a new A$105m loan facility. This facility, which will be used to repay the outstanding amount relating to its existing A$150m loan facility, has an interest rate based on Australian BBSY rate plus margin of 1.55% (vs. existing 2.65%). Hence, we may expect DPU uplift from interest savings. We make minor adjustments to our FY12 forecasts to factor in these recent developments. Retain BUY and DDM-based fair value of S$0.87. (Kevin Tan)

Marco Polo Marine: Declares S$0.01 special dividend

Summary: Marco Polo Marine (MPM) reported a 38% YoY rise in revenue to S$20.3m and a 27% increase in net profit to S$3.5m in 4QFY11, such that FY11 figures accounted for 101% and 93% of our full year estimates, respectively. Net profit was lower than expected mainly due to a higher effective tax rate of 28.4% in 4QFY11 compared to an average rate of 12.2% in 9MFY11; this was because of higher contributions from Indonesia and Australia which had higher corporate tax rates. Looking ahead, MPM expects its ship chartering results to be supported by its relatively young offshore business, while its shipyard is expected to deliver two additional units of offshore support vessels by 3QFY12. The group has declared a special dividend of S$0.01 per share for FY12, which will be paid on 22 Dec 2011.Our Hold rating and fair value estimate of S$0.43 is under review, pending an analyst briefing later in the afternoon. (Low Pei Han)

For more information on the above, visit www.ocbcresearch.comfor the detailed report.


NEWS HEADLINES

- German Chancellor, Angela Merkel, stated that joint euro bonds would send a "wrong signal", dampening optimism about a potential remedy for the region's debt problems. The euro (against the dollar) touched a seven-week low after her comments.

- According to DTZ, buyers from mainland China have been snapping up homes in Singapore, accounting for 30.6% of all private home transactions in Q3, vs. 26% in Q1 and Q2.

- NH Ceramics posted net profit of S$511k for FY11, down c.44%. This is partly due to lower sales from supplying building materials.

- Heng Long International, the crocodile skin tannery, moves closer to delisting as SGX raised no objections against its proposal. LVMH launched a takeover bid for Heng Long in Oct, offering S$160.8m.

- SingTel Optus has priced an A$75m, seven-year fixed rate note issue. The notes are to be issued on 5 Dec 2011 and will extend Optus's maturity profile as well as add diversity to its debt structure, according to SingTel.

- Even as liquidators of MF Global reported progress in winding down the business, customers of MF Global Singapore are still waiting to recover approx. US$307m, before monies and assets can be released.

IIFL downgrades SGX to sell from reduce

Stock Name: SGX
Company Name: SINGAPORE EXCHANGE LIMITED

Research House: IIFL

Price Call: SELL

Target Price: 5.44

IIFL has downgraded Asia’s second-largest listed bourse Singapore Exchange (SGX) (SGXL.SI) to sell from reduce and cut its target price to $5.44 from $6.12.

IIFL has cut its net profit estimate for SGX by 7% for fiscal 2012 and 2% for 2013 to reflect a decline in securities volume.

The brokerage has also lowered its estimate for the average daily turnover for SGX’s securities business for 2012 by 13% to $1.4 billion, which is 14% below the year ago.

“Gloomy outlook for global and Asian stock markets continues to weigh down on SGX securities turnover,” said IIFL in a report.

 

At 10:04 a.m., shares of SGX were 0.33% higher at $6.06, but have fallen 28% since the start of the year.

Ramba Energy rated 'increase exposure' by SIAS

Stock Name: Ramba
Company Name: RAMBA ENERGY LIMITED

Research House: SIAS

Price Call: BUY

Target Price: 0.80

SIAS Research in a Nov 21 research report says: "Ramba 3Q revenue grew by a robust 100.5% y-o-y to $25.8 million mainly due to higher contribution from the logistic services segment.

"Over the past two months, Ramba announced (1) the production of gas from JRR-7 development well which is reported to have sales gas flow of about 4.0m std cubic feet per day (mmscfd) and (2) the drilling of JRR-6 development well to its target depth of 1298m with production testing to follow up. The former's production rate exceeded the management's expectation by 100% and the Jatirarangon Block is projected to produce 8.8mmscfd by end of the year.

"Ramba has about $12.8 million cash as of 3Q 2011 and may generate another $10 million operating cash flow next year from the Jatirarangon Block and the logistic business. Intrinsic value of 80 cents.MAINTAIN INCREASE EXPOSURE."

Noble Group rated 'buy' by Nomura

Stock Name: Noble Grp
Company Name: NOBLE GROUP LIMITED

Research House: Nomura

Price Call: BUY

Target Price: 1.70

Nomura Research in a Nov 22 research report says: "Noble's weak 3Q (losses of USD27 million, gross profit declined 45% y-o-y and 45% q-o-q) and the CEO's exit has led to sharp negative sentiment. The stock has traded 6% of its market cap over last week and is down 30% since results.

"Though we think earnings will rebound sharply in CY12 (4Q may see some recovery), the poor results and the management departure overhang may prevent significant re-rating in the near term. Positively, 3Q volume growth was strong (34% y-o-y and 25% q-o-q), showing strong business reach.

"After correcting recently, Noble now trades at YTD lows and post-crisis trough valuations. We think the floor is near, and these are good entry points for long-term exposure. We cut our CY12F earnings by 14%. Target price of $1.70. MAINTAIN BUY."

Cambridge Industrial Trust rated 'buy' by DBS

Stock Name: Cambridge
Company Name: CAMBRIDGE INDUSTRIAL TRUST

Research House: DBS Vickers

Price Call: BUY

Target Price: 0.58

DBS Vickers Securities in a Nov 21 research report says: "Cambridge REIT (CREIT) announced the proposed acquisition of 3C Toh Guan Road East, an industrial building comprising of a 5-storey warehouse building and an ancillary office for a consideration of $35.5 million ($36 million, including attributable fees).

"We understand that the acquisition will be mainly funded by cash on its balance sheet, which we view as a positive catalyst, since this has been a drag on share price performance; the REIT faced a couple of delays in completing its acquisitions announced previously, resulting in lower than optimal distributions.

"This acquisition is estimated to boost DPU by 0.24 cents when completed in 1Q12, which we have already factored in our numbers. CREIT currently offers a FY2011-2013F DPU yield of 9.1-10.7%. Target price of 58 cents. MAINTAIN BUY."

OCBC raises Lian Beng target price

OCBC Investment Research has raised its target price for Singapore construction firm Lian Beng Group (LIBG.SI) to $0.55 from $0.51 and maintained its buy rating.

OCBC has raised its earnings estimates for Lian Beng in 2012 by 8% and 17% for 2013, to account for strong sales in its industrial development in Mandai, Singapore.

Lian Beng has also acquired a new residential development site in the city-state for $130 million, and OCBC said it was confident the firm will be able to execute its commercial and housing projects well.

“We believe these developments are positives for Lian Beng, as both are good locations and offer Lian Beng chances to add construction projects to their order books,” said OCBC in a report.

At 9:46 a.m., shares of Lian Beng were flat at $0.345, and have gained 13.1% since the start of the year.

Market Pulse: Commodity Sector & Lian Beng (24 Nov 2011)

Stock Name: Lian Beng
Company Name: LIAN BENG GROUP LTD

Research House: OCBC

Price Call: BUY

Target Price: 0.55

Market Pulse: Commodity Sector & Lian Beng (24 Nov 2011)

FOCUS

Commodities Sector: Outlook remains mixed at best

Summary: Looking back at the Sep quarter results, soft commodity plays under our coverage generally did better, with most coming close to our expectations. Meanwhile, the biggest surprise came from Noble, which reported a net loss of US$17.5m - its first in 14 years. In any case, even for those companies that performed within expectations, we note that there were increased signs of margin pressures, despite healthy volume growths. Renewed weakness in the US economy and uncertainties over the EU sovereign debt issues have exacerbated the risk of the economy slipping into a "down cycle". Even though we maintain a NEUTRAL weight on the sector, we attach a downside bias to our rating, as we could see a faster-than-expected deterioration in the global economies, especially in China. Our pick in the sector is Golden Agri. (Carey Wong)

Lian Beng: Another new addition for development.

Summary: Lian Beng recently announced that it has acquired the site of Dragon Mansion at Spottiswoode Park Road for S$130m. Together with its recent Midlink Plaza acquisition, the group has deployed around S$260m in recent months to acquire land resources. Given these sites' good locations and the potential opportunity for LBG's construction arm to win the related construction contracts, we believe these additional development resources are positive for the group. We factor in the financial impacts of these new sites and its strong sales so far for Mandai Industrial development and this raises our earnings estimates for FY12/FY13 by around 8% and 17% respectively. This in turn raises our fair value estimate to S$0.55, implying potential upside of 60%, therefore, maintain BUY. (Benjamin Lim)

For more information on the above, visit www.ocbcresearch.comfor detailed report.

NEWS HEADLINES

- The European crisis worsened further after a German government bond auction flopped with only EUR 3.64b out of EUR 6b worth of 10-year bunds taken up by investors.

- European banks clamoured for emergency funds from the ECB on Tuesday, borrowing the most since early 2009 in a clear sign that the eurozone's financial institutions are having trouble obtaining credit at reasonable rates in the open market.

- Singapore's inflation remains stubbornly high at 5.4% in October, on the back of higher rentals, transport and food costs.

- On the first day of the property's launch, Capitaland sold more than 350 apartments in its 583-unit Bedok Residences condominium with an average selling price of S$1,350 psft.

- Newly listed property and construction group TA Corporation has secured two new construction contracts from Allgreen Properties and its subsidiary worth S$271m.

- Hisaka Holdings' net profit for the fiscal year ended Sep 30, 2011 dropped 30.5% YoY to S$6.4m, mainly due to the slowdown in global manufacturing. It has also proposed a final dividend of half a cent per share.

Samsung starts NOL at buy, target $1.50

Stock Name: NOL
Company Name: NEPTUNE ORIENT LINES LIMITED

Research House: Samsung Securities

Price Call: BUY

Target Price: 1.50

Samsung Securities has initiated coverage of Singapore container shipping firm Neptune Orient Lines (NOL) (NEPS.SI) with a buy rating and a target price of $1.50.

Samsung said it expects NOL to be one of the companies most positively affected by the short-term improvement in sentiment towards the liner sector, which could begin early next year due to tighter supply in the industry.

NOL has also increased its exposure to the growing intra-Asian trade lanes, which should benefit the company in the face of upcoming capacity constraints, Samsung said.

In the longer term, the brokerage said it also expects NOL’s fleet replacement programme and the flexibility it has over controlling its capacity should lower its costs by about 15%.

At 10:24 a.m., shares of NOL were 2.5% higher at $1.03, but have plunged 53% since the start of the year.

STX OSV Holdings rated 'buy' by DBS

Stock Name: STXOSV
Company Name: STX OSV HOLDINGS LIMITED

Research House: DBS Vickers

Price Call: BUY

Target Price: 1.54

DBS Vickers Securities in a Nov 21 research report says: "STX OSV announced that the contract for 8 LPG carriers for Petrobras Transportes S.A. (Transpetro) has been made effective. This contract will boost the group's FY2011 YTD order wins to NOK8.6 billion, forming 91% of our full year order wins assumption of NOK9.5 billion.

"We estimate STX OSV's orderbook now stands at NOK17.1 billion, vs. NOK13.6 billion as of end 3Q11, after including the Transpetro contract and the other 2 contracts secured in 4Q11 to date. Book-to-bill has been lifted to c. 1.5x from 1.2x previously. No change to our numbers, as this contract was already in our forecasts.

"However, this removes an ongoing concern among investors over the repeated delays in the contract being made effective. Target price unchanged at $1.54. MAINTAIN BUY."

Super Group rated 'outperform' by RHB

Stock Name: SuperGroup
Company Name: SUPER GROUP LTD.

Research House: RHB

Price Call: BUY

Target Price: 1.70

RHB Research in a Nov 18 research report says: "Super Group, based in Singapore, is an instant F&B brand owner and manufacturer of more than 200 instant beverages and convenient food products which is distributed worldwide.

"For FY2011-2013, we are forecasting an earnings CAGR of 17.3%, on the back of a revenue CAGR of 16.1%, driven by: (1) stable growth and market share across its key markets of 9-10% for Malaysia, Singapore, and Thailand and 1% for Myanmar; (2) Increased sales of its ingredients segment sales with a CAGR of 22.9%; and (3) Revenue boost from sales in Indonesia through its JV with Petra Foods.

"We are valuing Super at $1.70 based on a target of 14.5x FY12 PER. Our target PER is in line with Super's regional F&B peers which are currently averaging 14.5x FY12 PER. OUTPERFORM. (initiating coverage)."

Lian Beng Group rated 'buy' by Kim Eng

Stock Name: Lian Beng
Company Name: LIAN BENG GROUP LTD

Research House: Kim Eng

Price Call: BUY

Target Price: 0.62

Kim Eng Research in a Nov 22 research report says: "Lian Beng's 50:50 joint venture with Centurion Properties bought the 68-unit, freehold Dragon Mansion at Spottiswoode Park for $130 million last week.

"The redevelopment can yield 118,943 sq ft of GFA, implying a sale price of $1,093 psf ppr and an estimated breakeven of $1,580 psf. With the addition of Dragon Mansion, Lian Beng has an attributable unsold landbank of 84,574 sq ft.

"We expect the group's earnings to continue to be largely (over 60%) driven by construction, backed by a strong orderbook of $761 million excluding the expected contracts from Mandai Estate ($66 million including the construction of worker's dormitory), Midlink Plaza ($45 million) and Dragon Mansion ($42 million). Target price of 62 cents, pegged at 6x FY May12F PER. MAINTAIN BUY."

PEC rated 'trading buy' by CIMB

Stock Name: PEC
Company Name: PEC LTD.

Research House: CIMB

Price Call: TRADING BUY

Target Price: 0.84

CIMB in a Nov 23 research report says: "Backed by net cash of 61 cents per share and net working capital of 55 cents per share, we see value emerging after its recent underperformance.

"PEC is only trading 11% above its net cash and 23% above its net working capital, implying an attractive risk-reward trade-off. We do not expect current net cash of $156 million to slip. We believe net cash can be sustained at $140 million-$160 million for FY2012-2014, even after factoring in some normalisation of working-capital management.

"It is the only stock trading at a 20% discount to book, even though its projected ROE could pass the COE hurdle rate. We cut our FY2012-2014 EPS by 4-27% as we dampen our margin expectations. Target price of 84 cents, still based on 1x CY12 P/BV. TRADING BUY."

Sapphire Corporation rated 'increase exposure' by SIAS

Stock Name: Sapphire Corp
Company Name: SAPPHIRE CORPORATION LIMITED

Research House: SIAS

Price Call: BUY

Target Price: 0.60

SIAS Research in a Nov 22 research report says: "Sapphire is currently trading at just 0.41x its common equity per share of 33 cents - more than fully discounting the book value (and upside potential) of its unlisted investments.

"Sapphire's 70% owned core vanadium and steel operations turned in an estimated net profit of >$4.0 million at the subsidiary level in 3Q FY2011. From 2012, more profit will accrue to Sapphire as it raises its stake in core subsidiary (Special Steel) from 70% to 100%.

"Growth for 2013 is being put in place with plans to introduce new products, e.g. silicon steel at the end of 2012, being ironed out at the moment. Sapphire's cash flow remains robust with $6.1 million and $22.2 million of operating cash flow before working capital changes for 3Q 2011 and 9M 2011 respectively. Intrinsic value of 60 cents. MAINTAIN INCREASE EXPOSURE."

ISDN Holdings rated 'overweight' by NRA Capital

Stock Name: ISDN
Company Name: ISDN HOLDINGS LIMITED

Research House: NRA Capital

Price Call: BUY

Target Price: 0.22

NRA Capital in a Nov 23 research report says: "9M11 net profit of $7.4 million (18% y-o-y) is slightly below our expectation of $7.9 million due mainly to lower-than-expected revenues and gross profit margins. However, these were partially off-set by gains from forex and properties sold by a subsidiary. 9M11 result represents 69% of our full-year forecast.

"Sales inched up 10% y-o-y to $129.8 million, on the back of higher motion control demand in China. We have cut our FY2011 forecasts by 24% and trimmed FY2012-2013 by 5-7% given the sharp fall in semiconductor sales was greater than our expectation.

"Our fair value has lowered from 29 cents to 22 cents after changing our valuation model from 8x FY11 PER to 1x FY12 P/NTA, lowest range of its 6 years historical. Upside of 64% with reasonable yield of 3.8%. OVERWEIGHT."

Anwell Technologies rated 'overweight' by NRA Capital

Stock Name: AnwellTech
Company Name: ANWELL TECHNOLOGIES LIMITED

Research House: NRA Capital

Price Call: BUY

Target Price: 0.43

NRA Capital in a Nov 18 research report says: "Despite higher-than-expected sales and excluding the gains on revaluation, 3Q11 core net loss of HK$217 million was 380% wider than our net loss forecast.

"The key variances were lower-than-expected gross margins, higher operating expenses, depreciation & amortisation, finance costs and taxation. 3Q11 sales surged 99% yoy to HK$453m with increased contribution from all its business divisions.

"We have revised our FY2011 net loss from HK$23 million to net profit HK$55 million after factoring in gains on revaluation but revised to net loss in FY2012 due to start-up costs and higher depreciation for its Dongguan plant that management expects to come onstream in 2H12. Our fair value has been lifted by 4 cents to 43 cents, still pegged at 0.9x P/NTA. OVERWEIGHT."

Serial System rated 'increase exposure' by SIAS

Stock Name: Serial
Company Name: SERIAL SYSTEM LTD

Research House: SIAS

Price Call: BUY

Target Price: 0.172

SIAS Research in a Nov 7 research report says: "Serial made three proposed acquisitions over the last three weeks.

"The three acquisitions, costing a total of $5.6 million, will allow Serial to (a) penetrate the Korean automotive industry and "small manufacturer market", (b) acquire two major branded Taiwan manufacturing customers and (c) take over a ready customer base in Korea to distribute the National Semiconductor brand of products.

"Serial reported a 2.3% y-o-y decline in revenue for 3Q FY11 - from $195.0 million in 3Q FY10 to $190.4 million in 3Q FY11. We adjusted our revenue and PATMI forecasts for FY2011 to $770.0 million and $13.1 million respectively and reduced our intrinsic value to 17.2 cents per share.MAINTAIN INCREASE EXPOSURE."