Fw:RESEND - DMG - SGX: All day trading from 1 Aug (BUY)

Stock Name: SGX
Company Name: SINGAPORE EXCHANGE LIMITED

Research House: DMG

Price Call: BUY

Target Price: 8.90

SGX: S$7.41 BUY (TP: S$8.90)

All day trading from 1 Aug

SGX announced that its securities market will trade continuously all day
from 1 Aug. This will mean a greater overlap with those of other Asian
exchanges, which will enable investors trading pan-Asian securities to
better respond to regional market movements and news flow. Continuous
all-day trading will also enhance Singapore's competitiveness as an
international financial centre.

We remain bullish on SGX given its various initiatives to stimulate
trading. Besides continuous all-day trading, SGX is also reducing the
securities market minimum bid size, effective 4 Jul 2011 - SGX estimates S
$1.7b in annual savings for investors. Effective 8 Jul 2011, Singapore
government bonds can also be traded on SGX, which is expected to improve
price transparency and liquidity in SGS bonds.

Whilst recent securities market average daily turnover (ADT) numbers are
weak, with Jun 11 ADT of S$1.24b (versus Jan-Mar 2011 ADT of S$1.71b), we
believe these new initiatives could drive ADT higher as we move into FY12
(SGX year-end is Jun). We maintain BUY on SGX with a target price of S
$8.90, which is pegged to 22x FY13 EPS, on our assumed FY13 ADT of S$2.02b.

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OCBC lowers target on NOL to $1.63; keeps hold

Stock Name: NOL
Company Name: NEPTUNE ORIENT LINES LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 1.63

OCBC Investment Research has lowered its target price on Singapore container shipping firm Neptune Orient Lines (NOL) (NEPS.SI) to $1.63 from $1.95 and maintained its hold rating.

OCBC said NOL’s average revenue per forty-foot equivalent unit has continued to fall in May due to lower rates on the Asia-Europe trade lane. The brokerage expects the rates to remain weak in the second half of 2011 due to fierce competition among carriers and poorer utilisation levels.

Even with the growth in volume demand during the peak season, it will be insufficient to offset the drag caused by the growth in excess capacity, OCBC added.

NOL announced earlier this month it had signed letters of intent for 12 new vessels and is also upgrading an order placed last year for 10 ships for a total of US$1.54 billion ($1.90 billion).

OCBC said it views the expansion plan positively as NOL seeks to take advantage of the current low-cost environment for shipbuilding to reduce its average costs over time and to keep pace with competitors who had made orders for similar vessels.

However, the brokerage warned that unless the global economic recovery can keep up with the expected increase in vessels in 2012-2013, rates in the container shipping industry are likely to remain depressed.

At 11:01 a.m., NOL shares were flat at $1.54 on a volume of 9.4 million shares. The stock has fallen around 29% so far this year.

DMG ups StarHub to $2.90, keeps neutral

Stock Name: StarHub
Company Name: STARHUB LTD

Research House: DMG

Price Call: HOLD

Target Price: 2.90

DMG & Partners has raised its target price for Singapore telecommunications firm StarHub (STAR.SI) to $2.90 from $2.80 and kept its neutral rating.

DMG has raised its target price for StarHub after the firm said it would increase its subscription rate for its cable TV subscribers by $2 a month with effect from August 1.
DMG estimates that the rate hike would raise StarHub’s cable TV revenue by 4-13% for 2011-2012, and its overall revenue forecasts for the same period by about 2%, it said in a report.

“While there is always risk of customers downtrading to cheaper packages, we expect the majority of viewers to retain their existing plans given that Starhub still offers the most compelling pay-tv content,” said DMG.

At 10:01 a.m., shares of Starhub were up 0.36% at $2.76, and have gained 4.9% since the start of the year.

CIMB starts Keppel T&T at outperform, target $1.57

Stock Name: KepT&T
Company Name: KEPPEL TELE & TRAN

Research House: CIMB

Price Call: BUY

Target Price: 1.57

CIMB Research has initiated coverage of logistics firm Keppel Telecommunications & Transportation (KPTT) (KTEL.SI) with an outperform rating and a target price of $1.57.

KPTT’s data-centre operations is a key growth driver and the firm is also expected to increase warehouse capacity in Singapore and China, CIMB said.

The brokerage also noted that KPTT could also expand its interest in its Vietnamese logistics joint venture following a lifting of foreign investment restrictions in the country. Management is also eyeing acquisitions in Asia.

KPTT’s stock remains undervalued, and catalysts for a re-rating could come from major acquisitions and contract wins, CIMB said.

At 10:44 a.m., shares of KPTT were 2.3% higher at S$1.34. They have fallen about 5% since the start of the year.

Venture Corporation rated 'buy' by OCBC

Stock Name: Venture
Company Name: VENTURE CORPORATION LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 10.59

OCBC Investment Research in a June 27 research report says: "From our recent update with VMS, we gathered from management that its customers are still somewhat cautious in terms of their near-term outlook, citing the debt situation in Europe, the anemic economic recovery in the US and also mounting inflation rates in Asia.

"We believe that some customers may also have been affected by the twin disasters in Japan which disrupted the global electronics supply chain. However, management added that the overall sentiment is not overly negative and many of its customers are still looking to ramp up their programs in 2H11.

"We see the need to pare our forecasts for FY11, shading our revenue estimate lower by 3.1% and earnings by 6.3%. Our fair value also drops from $12.10 to $10.59, now based on 14x FY11F EPS (versus 15x previously) to reflect the more muted market sentiment. MAINTAIN BUY."

Indofood Agri Resources rated 'buy' by DMG

DMG & Partners Securities in a June 27 research report says: "We revise Indofood Agri's (IFAR) FY2011 earnings downwards by 13.8%, on the back of a dilution of its stake in 72%-owned (down from 90%) subsidiary, PT Salim Ivomas Pratama (PT SIMP) post listing.

"The stock had been sold down on concerns over earnings dilution and the implied lower valuation of IFAR with PT SIMP's listing. However, there are re-rating catalysts in sight, such as earnings accretive acquisitions. We are lowering our FY2011 earnings by 13.8% from IDR1.9t to IDR1.6t, on the back of shareholding dilution in PT SIMP post listing.

"However, valuation is looking inexpensive with IFAR trading at 10x FY11 EPS, against its peers of around mid teens. Target price of $2.41, based on 15x FY11 EPS and a CPO price assumption of RM3,200/tonne. MAINTAIN BUY."

Overseas Union Enterprise rated 'neutral' by JP Morgan

Stock Name: OUE Ltd
Company Name: OVERSEAS UNION ENTERPRISE LTD

Research House: JP Morgan Chase

Price Call: HOLD

Target Price: 4.58

J P Morgan Research in a June 25 research report says: "OUE is a mid-cap Singapore property developer with a focus on prime real estate in the office, hospitality, retail and residential sectors.

"OUE's shares rose 81% in 2010 and significantly outperformed the Singapore property developer index by 70%, with the stock re-rating propelled by greater stock liquidity and robust rent and room rate recoveries in the office and hospitality sectors in Singapore, which comprise the bulk of OUE's GAV.

"The next step change for the group will likely come upon the redevelopment of DBS Towers 1&2 and the One Raffles Place retail podium in 2013 onwards. Our target price is at a 25% discount to our end Dec 2012 RNAV estimate of $4.58 per share. NEUTRAL (initiating coverage)."

Raffles Education Corporation upgraded to 'hold' by DBS

Stock Name: Raffles Edu
Company Name: RAFFLES EDUCATION CORP LTD

Research House: DBS Vickers

Price Call: HOLD

Target Price: 0.52

DBS Vickers Securities in a June 27 research report says: "Raffles Ed has entered into a Sales & Purchase agreement to sell 50% of a subsidiary, Value Vantage Pte Ltd, for S$46m. We understand that the sale will have no impact on its NES education operations in Shanghai, China.

"We are not surprised by this move and view this as mildly positive, as management has previously indicated its desire to "unlock" the value of its real estate to complement its anemic education business growth. We trimmed our forecasts by c.11-12% to factor in FX losses in FY11F and lower enrollment arising from the fall in Gao Kao takers in FY12/13F.

"Consequently, our SOP-based target price is lowered marginally to 52 cents (58 cents previously). After c.30% decline in share price post its dismal 3Q results, the counter now looks oversold at 0.7x P/BV. UPGRADE TO HOLD."

Nomura raises target on M1 to $3.30; keeps buy

Stock Name: M1
Company Name: M1 LIMITED

Research House: Nomura

Price Call: BUY

Target Price: 3.30

Nomura has raised its target price on Singapore telecommunications firm M1 (MONE.SI) to $3.30 from $2.51 and maintained its buy rating.

Nomura said M1 expects to maintain its current share of the wireless market of around 26% but it sees broadly flat average revenue per user (ARPU) as 60% of the firm’s subscriber base is now made up of smartphone customers.

Most of the incremental growth is currently coming from consumers taking on additional devices, which offer only marginal ARPU uplift potential, Nomura said.

M1’s costs of handset sales had risen sharply mainly due to iPhone sales which attracted higher subsidies, but the firm now expects costs to remain broadly in check with iPhones accounting for less than 50% of new sales.

Nomura said there is also scope for M1 to win customers in the fibre segment as well as pay-TV, though content will remain a key differentiator.

At 11:20 a.m., M1 shares were down 0.8% at $2.48 on a volume of 199,000 shares. The stock has risen 5.5% so far this year.

BNP Paribas starts Yangzijiang at hold; target $1.55

Stock Name: Yangzijiang
Company Name: YANGZIJIANG SHIPBLDG HLDGS LTD

Research House: BNP Paribas

Price Call: HOLD

Target Price: 1.55

BNP Paribas has initiated coverage of Singapore-listed Chinese shipbuilder Yangzijiang (YAZG.SI) with a hold rating due factors such as declining return on equity and a target price of $1.55.

BNP Paribas said that although it sees Yangzijiang as one of the best managed yards with strong operating efficiency and market reputation, the firm’s return on equity (ROE) has been declining.

The bank said Yangzijiang’s ROE is down from about 50% in 2009 to 30% currently, and expects it to fall further to 21% in 2013.

BNP Paribas estimates that Yangzijiang’s capital expenditure or investment will increase from 160 million yuan ($30.7 million) in 2010 to over 2 billion yuan in 2011 partly due to its shipyard acquisition and construction.

However, despite the cost inflationary pressures and ship-building margin concerns, BNP Paribas still expects Yangzijiang to maintain double-digit earnings growth in 2011 on strong orders and a boost to interest income generated from lending operations.

At 10:41 a.m., Yangzijiang shares were up 0.7% at $1.47 on a volume of 7.3 million shares. The stock has fallen around 23% so far this year.

STX OSV up after JP Morgan starts at overweight

Stock Name: STXOSV
Company Name: STX OSV HOLDINGS LIMITED

Research House: JP Morgan Chase

Price Call: BUY

Target Price: 2.00

Shares of STX OSV (STXO.SI) rose as much as 7.7% on Tuesday after JPMorgan initiated coverage of the firm with an overweight rating and said it expects STX OSV to benefit from the industry’s next leg of capacity expansion, traders said.

At 9:58 a.m., shares of STX OSV were 5.4% higher at $1.37 with over 12.7 million shares changing hands.

JPMorgan, which has a target price of $2.00 on the firm, said that STX OSV stands to benefit if oil and gas services firms start placing more orders for offshore support vessels.

STX OSV’s valuations are attractive, given that it is trading at a steep discount of 6.9 times its estimated 2011 price-earnings ratio, compared to about 14-16 times for its Singapore peers, JPMorgan said.

DMG cuts Indofood Agri target to $2.41, keeps buy

Stock Name: IndoAgri
Company Name: INDOFOOD AGRI RESOURCES LTD.

Research House: DMG

Price Call: BUY

Target Price: 2.41

DMG & Partners has cut its target price for Singapore-listed palm oil firm Indofood Agri Resources (IFAR.SI) to $2.41 from $2.79 but kept its buy rating.

DMG & Partners has cut its 2011 earnings forecast for Indofood by 13.8%, due to the dilution of its stake in 72% owned subsidiary PT Salim Ivomas Pratama (PT SIMP) after its listing in Indonesia.

However, DMG noted that Indofood is committed to spending $230 million to acquire new palm oil businesses outside Indonesia, which could be a catalyst for the stock to re-rate.

Indofood’s valuations also look attractive as it is trading at 10 times its 2011 earnings per share, compared to around mid-teens levels for its peers.

At 9:34 a.m., shares of Indofood were 0.63% higher at $1.16. They have lost 42.5% since the start of the year.

Kim Eng lowers target on Olam to $3.38; keeps buy

Stock Name: Olam
Company Name: OLAM INTERNATIONAL LIMITED

Research House: Kim Eng

Price Call: BUY

Target Price: 3.38

Olam announced earlier this month that it was raising $740 million through a placement of new shares with an eye on future acquisitions.

The stock had fallen to as low as $2.52 on June 17. At midday on Monday, Olam shares were down 0.7% at $2.71 on a volume of 4.2 million shares.

Kim Eng said it views the equity-raising exercise negatively because of the high discount offered, which could be dilutive to minority shareholders.

However, the brokerage said the share price correction was overdone and it sees a good entry opportunity. Olam management is likely to have identified attractive investment targets and is building up a huge warchest, Kim Eng said.


 

Broadway Industrial Group rated 'neutral' by CIMB

Stock Name: Broadway
Company Name: BROADWAY INDUSTRIAL GROUP LTD

Research House: CIMB

Price Call: HOLD

Target Price: 0.47

CIMB in a June 22 research report says: "Our discussions with Broadway suggest that its Hitachi Global Storage Technologies (HGST) business was weak in the June quarter. Management also concurred that its HGST's business may be affected by HGST's ongoing merger exercise with Western Digital (WD).

"On the other hand, business from its other HDD customer, Seagate, and non-HDD components has been fairly stable. The foam packaging business continues to improve qoq, thanks largely to capacity expansion and the closure of loss-making Xinjiang operations. We are lowering our FY2011-2013 profit forecasts by 13-14%.

"We have also applied its 5-year historical P/BV average of 0.8x to derive our new target price of 47 cents, down from 61 cents previously (1x CY11 P/BV, slight premium to its historical average). MAINTAIN NEUTRAL."

Frasers Centrepoint Trust rated 'buy' by DMG

Stock Name: FrasersCT
Company Name: FRASERS CENTREPOINT TRUST

Research House: DMG

Price Call: BUY

Target Price: 1.77

DMG & Partner Securities in a June 21 research report says: "Despite the Asset Enhancement Initiatives (AEI) at Causeway Point (CWP) which saw occupancy fell to 69% during 1Q11, FCT's DPU were not affected much due to contribution from its Northpoint 2 and Yew Tee Point which were acquired in Feb 2010.

"Backed by (1) strong pre-commitment for CWP's space being redeveloped under AEI, (2) strong rental reversion, and (3) potential acquisition of Bedok Point in 2H11, we believe FCT is primed for growth at cheap valuation.

"At $1.49, FCT is trading at a yield of 3.8% to Singapore's 10-year bond yield of 2.3%, which is significantly higher than its pre-crisis mean spread of 1.8%. Target price of $1.77 based on DDM. MAINTAIN BUY."

Mapletree Logistics Trust rated 'buy' by OCBC

Stock Name: MapletreeLog
Company Name: MAPLETREE LOGISTICS TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.01

OCBC Investment Research in a June 22 research report says: "Mapletree Logistics Trust (MLT) announced on June 17 that it has completed the acquisition of KPPC Pyeongtaek Centre in South Korea. Given the sizeable acquisition, the contribution of South Korea to the total portfolio's gross revenue is expected to increase from 2.7% to 5.6%.

"Assuming that the purchase price and other acquisition costs of the property are fully funded by debt, we estimate that MLT's gearing should increase to about 41.3% in FY2011 from 37.7% in FY2010 (after taking into account all acquisitions and divestments announced to date). Unchanged RNAV-derived fair value of $1.01. MAINTAIN BUY."

Singapore Exchange rated 'hold' by Kim Eng

Stock Name: SGX
Company Name: SINGAPORE EXCHANGE LIMITED

Research House: Kim Eng

Price Call: HOLD

Target Price: 7.55

Kim Eng Research in a June 22 research report says: "With FY Jun11 coming to a close, we expect SGX to register a full-year net profit of $305 million ($287 million pre-adjustments for exceptional items). This takes into account an average daily trading value of $1.6 million in 4QFY Jun11, which is lower q-o-q and y-o-y.

"We expect the 85-90% dividend payout policy to remain intact and this will work out to a final dividend of 11 cents per share. In the meantime, securities trading will continue to account directly for 45% of group revenue. We assume FY Jun12 and FY Jun13 ADT of $1.8 billion and $2 billion, respectively, which are mid-peak levels of the last cycle.

"We peg our target price of $7.55 at 25x FY Jun12F (historical PER cycle). At this juncture, we see downside risks to our assumptions. MAINTAIN HOLD."

M1 rated 'neutral' by CIMB

Stock Name: M1
Company Name: M1 LIMITED

Research House: CIMB

Price Call: HOLD

Target Price: 2.63

CIMB in a June 21 research report says: "M1's "soft launch" of LTE is not expected to have much impact on either its revenue or costs given the limited coverage and devices on offer. Moreover, the cost of the dongles is not too hefty at this point.

"We view this launch more as a publicity campaign to drum up support as coverage is widened and more devices are available as M1 typically likes to be the first to launch new services. There should not be any issue over spectrum as it, together with StarHub, has the highest amount of 1800 MHz spectrum.

"This should be sufficient for M1 to cope with any upsurge in data traffic. We make no changes to our earnings forecasts or DCF-based target price of $2.63 (WACC 8.5%). MAINTAIN NEUTRAL."

BNP Paribas starts Golden Agri at buy; target $1.03

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

Research House: BNP Paribas

Price Call: BUY

Target Price: 1.03

BNP Paribas has initiated coverage of Singapore palm oil producer Golden Agri-Resources (GAGR.SI) with a buy rating and a target price of $1.03.

Golden Agri has an average daily traded value in the last three months of US$42 million, placing it among the most liquid plantation plays in Asia, BNP Paribas said, adding that the stock is highly leveraged to crude palm oil prices.

BNP Paribas said it is positive on the oil palm sector as oilseed supply in the 2011-2012 planting season is expected to be tight due to weather damage to corn, soybeans and rapeseed in China, the United States and the European Union.

It added that 20% of Golden Agri’s trees are likely to mature in three years and drive production. BNP Paribas added that the firm has embraced sustainability, such as by engaging Greenpeace openly.

Golden Agri told Reuters earlier this month that its output of crude palm oil could rise by more than 10% this year if weather conditions remain favourable, exceeding the firm’s earlier production forecasts.

At 10:10a.m., Golden Agri shares were flat at $0.675 on a volume of 10.6 million shares.

Credit Suisse raises Keppel Corp to $14.60; keeps outperform

Stock Name: Kep Corp
Company Name: KEPPEL CORPORATION LIMITED

Research House: Credit Suisse

Price Call: BUY

Target Price: 14.60

Credit Suisse has raised its target price on Singapore’s Keppel Corp (KPLM.SI), the world’s largest oil rig builder, to $14.60 from $14.18 and maintained its outperform rating.

Keppel has secured $7.1 billion of orders year-to-date and has options for additional rigs worth $2.5 billion, Credit Suisse said, adding that it has raised its 2011 order forecast to S$10 billion from $8 billion.

Credit Suisse said that it believes there will be a high conversion rate of jack-up rig options into firm contracts, driven by a shift towards more complex wells as well as a need for established drillers to regain market share.

The brokerage added that Keppel is well-positioned to win orders from Brazilian oil company Petrobras’ tender for 21 rigs due to the Singapore firm’s established operations in Brazil, strong execution capabilities and relationship with Petrobras.

At 9:42 a.m., Keppel shares were up 1.7% at $10.92 on a volume of 2.4 million shares. The stock has risen around 6% so far this year.

Gallant Venture rated 'buy' by Kim Eng

Stock Name: Gallant
Company Name: GALLANT VENTURE LTD.

Research House: Kim Eng

Price Call: BUY

Target Price: 0.75

Kim Eng Research in a June 20 research report says: "The group's plans to bring tourism in Bintan to a new phase were well-received by the fund managers. In particular, they were delighted when management said it aims to cut travelling time between Singapore and Bintan to just 30 minutes, from the current 50 minutes, by moving its ferry services to the upcoming International Cruise Terminal at Marina South and by purchasing highspeed ferries.

"The group's earnings for this year and next will be underscored by the recognition of land sales of $55 million. PT Silo will start to contribute earnings once the convertible bond is converted to 29% equity stake, expected to be within this year. The Shanghai project is slated for completion in two phases over 2013-2014, for which an estimated $300 million in net profit will be recognised.

"Target price of 75 cents, based on SOTP valuation. MAINTAIN BUY."

Hisaka Holdings rated 'increase exposure' by SIAS

Stock Name: HISAKA
Company Name: HISAKA HOLDINGS LTD.

Research House: SIAS

Price Call: BUY

Target Price: 0.581

SIAS Research in a June 21 research report says: "Hisaka Holdings Ltd's (Hisaka) TDRs will start trading on this Friday 24 June 2011, following the completion of its book building exercise. Response was relatively strong with the TDRs going at NT$11.90 or 3.5% above the midpoint of the indicated range of NT$10.50 to NT$12.50.

"At the equivalent of 51 cents, the TDRs were priced at a >7% premium above its previous close of 47.5 cents. Inputing the new data into our model, we arrived at an updated intrinsic value of 58.1 cents versus 57.8 cents previously.

"By securing a high issue price, Hisaka had minimised the dilutive impact of the exercise to existing shareholders, while raising funds to develop its new product - the portable blood warmer system. MAINTAIN INCREASE EXPOSURE."

ComfortDelgro Corp rated 'buy' by Phillip Securities

Stock Name: ComfortDelGro
Company Name: COMFORTDELGRO CORPORATION LTD

Research House: Phillip Securities

Price Call: BUY

Target Price: 2.01

Phillip Securities Research in a June 21 research report says: "Being a land transport operator, we opine that ComfortDelGro (CDG) has valuable defensive characteristics against a backdrop of uncertain economic environment.

"Currently, we see relatively little downside risk to our profit growth estimates of 2% for FY2011. In fact, the company's bus business could even see improved profitability resulting from lower oil prices in a global economic slowdown. With its global exposure, the key risk for CDG lies with potentially lower earnings from weaker forex translation.

"We used a blended valuation model of DCF and P/E (17X FY11e PATMI) to arrive at our target price of $2.01. CDG could potentially return 52.1% after incorporating our forecasted dividends of 6.1 cents over the next 12 months. MAINTAIN BUY."

IIFL starts Yangzijiang at Add, target $1.63

Stock Name: Yangzijiang
Company Name: YANGZIJIANG SHIPBLDG HLDGS LTD

Research House: IIFL

Price Call: BUY

Target Price: 1.63

IIFL has initiated coverage of Singapore-listed Chinese shipbuilder Yangzijiang (YAZG.SI) with an Add rating and a target price of $1.63.

For IIFL, Add means the stock is expected to give a positive return of above 10% within 12 months.

With a large cash position to cushion a possible downturn and a net outstanding order book of $6 billion, IIFL said it expects Yangzijiang’s core earnings to grow at an annual average rate of 9% over 2011-2013.

“Yangzijiang is one of the most efficient shipbuilders in China. The company is among the pioneers to break the dominance of Korean yards in large containership building,” said IIFL in a report.

 

It also noted that although the bulk carrier market is facing weaker new orders due to over-supply in the medium term, the container ship market is recovering.

Yangzijiang’s recent container ship orders from Seaspan provides visibility to its order book till 2015, IIFL said.

At 10:04 a.m., shares of Yangzijiang were 2% higher at $1.43, but have fallen by about 26% since the start of the year.

 

Nordic Group rated 'buy' by AmFraser

Stock Name: Nordic
Company Name: NORDIC GROUP LIMITED

Research House: AmFraser

Price Call: BUY

Target Price: 0.26

AmFraser Research in a June 20 research report says: "Nordic is in the business of automating ship control systems. Nordic recently bought Multiheight Scaffolding (MHS), an onshore oil-and-gas play with bigger margins and even bigger net profits than Nordic itself, paving the way for a quantum leap in earnings.

"While the acquisition will bring a significant boost to Nordic's EPS, its share price has in fact fallen with the general market, giving us greater confidence that this is an unnoticed gem. We value the enlarged Nordic Group using a DCF approach, thus avoiding the impairment loss problem (which is non-cash in nature).

"Our key assumptions include: (i) Risk free rate of 2.27%; (ii) Equity risk premium of 8.63%, (iii) Adjusted beta of 1.66; (iv) Zero growth for 7 years beyond forecast horizon; and (v) 3% terminal growth rate. We arrive at a fair value of 26 cents (upside: +63%). BUY (initiating coverage)."

China Taisan Technology Group Holdings rated 'buy' by AmFraser

Stock Name: ChinaTaisan
Company Name: CHINA TAISAN TECH GRP HLDGSLTD

Research House: AmFraser

Price Call: BUY

Target Price: 0.25

AmFraser Research in a June 17 research report says: "Management has announced a 2-phase expansion plan - the acquisition of new machinery that will expand capacity by 3,500 tonnes per annum and the construction of a new factory that will add 12,000 tonnes of capacity per annum.

"Gross margins will improve in the remaining 3 quarters in FY2011 to reach 23.4% for the full financial year and stabilise at 26% for FY2012/2013. Average selling price will improve marginally in the remaining 3 quarters for FY2011 to reach RMB80,900/tonne in the final quarter.

"With their scale of operation, China Taisan ranks as one of the largest performance fabric manufacturers in the PRC. We ascribe a 7x P/E on the Group's FY2011E EPS of 3.6 cents, in line with the average forward P/E of their HK peers. This gives us a fair value of 25.0 cents. BUY"

Foreland Fabrictech Holdings rated 'buy' by AmFraser

Stock Name: Foreland
Company Name: FORELAND FABRICTECH HLDS LTD

Research House: AmFraser

Price Call: BUY

Target Price: 0.215

AmFraser Research in a June 17 research report says: "Foreland's new plant is expected to be completed in Q1 FY2012. Thereafter, the existing plant will be re-located to the new facility.

"Capacity is expected to increase from the current 45.3 million yards per annum to 58 million yards per annum. While entering the umbrella fabric business, management took care not to alienate their existing apparel customers.

"Gross margins will maintain at between 28% - 30% going forward. As Foreland is a relatively small - capitalisation stock, we believe it should trade at a discount to their HK-listed peers. Ascribing a not-very demanding 5x P/E on the Group's FY2011E EPS of 4.3 cents gives us a fair value of 21.5 cents. BUY."

UMS Holdings rated 'increase exposure' by SIAS

Stock Name: UMS
Company Name: UMS HOLDINGS LIMITED

Research House: SIAS

Price Call: BUY

Target Price: 1.08

SIAS Research in a June 17 research report says: "UMS Holdings Ltd (UMS) recently announced that it will invest US$1 million, spread over four tranches, for a 5% stake in Terra Verde Technologies LLC (TVT).

"Essentially, UMS is paying a relatively low price for (a) investment gains and (b) exclusive manufacturing rights if TVT successfully develops its product. Essentially, we see this initial investment as a route for UMS to gain influence over products in development and channel their future manufacturing needs to the company.

"UMS has already submitted its application for a listing on the Korean Stock Exchange (KRX). Intrinsic value of $1.08. UMS Holdings
MAINTAIN INCREASE EXPOSURE."

Neptune Orient Lines rated 'hold' by DBS

Stock Name: NOL
Company Name: NEPTUNE ORIENT LINES LIMITED

Research House: DBS Vickers

Price Call: HOLD

Target Price: 2.10

DBS Vickers Securities in a June 16 research report says: "Close on the heels of its recently announced S$300m 4.40% notes issue, NOL Group announced the signing of LOIs for 12 new ships with Korean shipyards due for delivery in 2013-14.

"While there is no immediate impact on earnings from these new orders, we view the industry-wide phenomenon of placing new orders to gain market share in the 2013-14 period with caution, as even the long-term demand-supply dynamics now begin to look increasingly fragile.

"2Q11 will likely be another loss-making quarter for NOL, as well as the industry at large, and whether 3Q11 will be strong enough to recover the losses will remain to be seen. Target price of $2.10. MAINTAIN HOLD."

CIMB - SIN: Ezion Holdings Limited - Good returns; more surprises to come

Stock Name: EzionHldg
Company Name: EZION HOLDINGS LIMITED

Research House: CIMB

Price Call: BUY

Target Price: 1.22

	16 Jun 2011 Singapore
Quick Takes
Ezion Holdings Limited [ PDF]
Good returns; more surprises to come -
(EZI SP / EZHL.SI, OUTPERFORM - Maintained, S$0.65 - Tgt. S$1.22, Offshore & Marine)
Atlantic Labrador (Atlantic), a 50:50 JV between Ezion and Treatmil, has secured a US$73m contract for four years to provide an accommodation jack-up to a European oil major. Although rig conversion jobs would appear to mark a diversification from Ezion's core liftboats business, we note that there are synergies between the lifeboat and rig conversion businesses as expertise required is similar. Besides, return on equity for such jobs are attractive. Incorporating this project, partially lessened by work stoppage for a 2,000 dwt PSV operating in South America, we adjust our earnings estimates for FY11-13 by -5% to 5%. Our target price accordingly rises to S$1.22, still based on 11x CY12 P/E (5-year small-mid cap industrial average). Stock catalysts could include on-schedule delivery of liftboats, marine logistics work for Australian LNG projects and more of such rig conversion jobs.

---

CIMB ups Ezion target to $1.22 vs $1.16

CIMB Research has raised its target price for Singapore oil and gas services firm Ezion Holdings (EZHL.SI) to $1.22 from $1.16 and kept its outperform rating.

CIMB has raised its earnings estimates to account for Ezion’s new contract win worth US$73 million ($90.3 million) to supply an accommodation jack-up rig to a European oil major.

The brokerage noted that with Ezion’s core liftboat business facing competition and limited growth prospects, management has decided to pursue near-term earnings growth through other projects.

“Although rig conversion jobs would appear to mark a diversification from Ezion’s core liftboats business, we note that there are synergies between the lifeboat and rig conversion businesses as expertise required is similar,” said CIMB in a report.

At 9:35 a.m., shares of Ezion were 1.6% higher at $0.655. They have fallen about 7.8% since the start of the year.

OIR Bites: Ezion's JV secures a US $73m value contract

Stock Name: EzionHldg
Company Name: EZION HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.84

OIR Bites: Ezion's JV secures a US $73m value contract

Dear TRs,

- Ezion Holdings announced that its JV has secured a charter contract with a value of up to USD73.0m over a 4-year period to provide an accommodation jack-up rig to support a European Oil Major in the North Sea.

- The project will be funded by internal resources as well as bank borrowings.

- The group believes that this transaction is not expected to have a material impact on its EPS or NAV for the financial year 31 Dec 2011. However, we deem this as a positive development and could open up more opportunities in this area.

- We continue to like Ezion and have a BUY rating at S$0.84 fair value.

SG: Residential Sector - Private sales update for May

Stock Name: UOL
Company Name: UOL GROUP LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 5.57

16 June 2011: Residential Sector - Private sales update for May

Summary: The number of non-landed units sold increased 48.7% YoY in May 11 to 1,557 units. Only 1,208 non-landed units were launched in May (up 8.6% YoY), resulting in an exuberant take-up rate of 128.9%. Sales volume continued to be dominated by mass-segment units, with 60% of sales in the OCR. We analyze caveats lodged in Apr-May and estimate that psf prices, on a transaction-weighted basis, increased 0.63% MoM in May - indicating steady momentum in OCR prices. In our view, liquidity continues to be an over-arching impetus for property price momentum and policy overhang remains a concern. We maintain our NEUTRAL rating on the residential property sector. Our pick in this sector is UOL due to its limited residential exposure and the potential to pick up accretive acquisitions in a softer market ahead. Maintain BUY on UOL with a fair value estimate of S$5.57 (at 20% discount to RNAV).

Sunny Side Up - ST Engineering, Popular Holdings (KIM ENG)

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

Research House: Kim Eng

Price Call: HOLD

Target Price: 3.15

Sunny Side Up - ST Engineering, Popular Holdings

What's cooking ST Engineering (STE SP, $2.89, HOLD, TP $3.15) - ST Engineering's share price has hit new one-year lows and is off by 13.5% year-to-date. While some recent negative news has had an impact, its earnings were relatively intact. Its current forecast dividend yield of 5.7% warrants a relook at the stock. However, we maintain our HOLD recommendation as its forward PER still stands at 15.7x. Our target price of $3.15 is unchanged, with upside of 9%. Hot stock Popular Holdings Limited (POP SP, $0.165, NOT RATED) - Popular is an established player in the book retailing and publishing business in the region. Its stock trades at 0.7x NTA and FY10 PER of just 3.6x against the peer average of 12x. The company has a strong net cash position of $0.11/share and a track record of stable and high dividend payout. Its small property development business may pay bumper dividends to shareholders within the next 3-4 years. Top news in bite-sized pieces OVERNIGHT… US stocks fell sharply Wednesday, taking their harshest beating in two weeks on a toxic combination of concern about Europe's debt crisis and data pointing to a slower economy recovery. The Dow closed down 179 points, or 1.5%. LOCAL… Lian Beng clinched contract valued at $128.8m. The new contract is for the construction of the 561-unit Waterfront Isle at Bedok Reservoir Road, a joint venture project between Frasers Centrepoint and Far East Organisation.

UOB cuts target on IndoAgri to $1.95; keeps buy

Stock Name: IndoAgri
Company Name: INDOFOOD AGRI RESOURCES LTD.

Research House: UOB KayHian

Price Call: BUY

Target Price: 1.95

UOB Kay Hian has lowered its target price on Singapore-listed palm oil producer Indofood Agri Resources (IndoAgri) (IFAR.SI) to $1.95 from $2.65 but maintained its buy rating.

IndoAgri raised net proceeds of around 3.35 trillion rupiah ($483.3 million) from the listing of its unit Salim Ivomas Pratama (SIMP) (SIMP.JK) on the Indonesia Stock Exchange. It offered 3.163 billion shares at 1,100 rupiah each.

Around 51% of the proceeds will be used to reduce debt, 39% is earmarked for plantations such as expanding new planting and building processing mills, and 10% for the edible oils and fats division.

UOB said it had cut its net profit forecast for IndoAgri by 11.2% to 1.451 trillion rupiah for 2011 and by 15.2% to 1.625 trillion rupiah for 2012 to factor in the reduction of IndoAgri’s stake in SIMP to 72% from 90% after the listing.

The brokerage also said that the strong recovery in crude palm oil supplies from Indonesia and Malaysia is likely to limit the upside in prices in the next 10-12 months.

However, UOB said it expects IndoAgri’s crude palm oil production to grow 9% year-on-year in 2011, compared with a 3% fall in 2010, due to better weather as well as more mature areas coming on stream.

IndoAgri plans to complete two palm oil mills in Kalimantan and Sumatra in Indonesia, on top of expanding its edible oils and fats division, UOB said, adding that potentially lower debt will give the company more flexibility to pursue growth.

At 9:45 a.m., IndoAgri shares were up 0.6% at $1.61 on a volume of 1.2 million shares. The stock has fallen more than 40% so far this year.

SG: Spore Press Hldgs - Upgrade to BUY; awaiting capital deployment

Stock Name: SPH
Company Name: SINGAPORE PRESS HLDGS LTD

Research House: OCBC

Price Call: BUY

Target Price: 4.32

15 June 2011: Spore Press Hldgs - Upgrade to BUY; awaiting capital deployment

Summary: Singapore Press Holdings (SPH) recently bid S$917m for a 99-year white site beside Jurong East MRT station and came just 5.4% below the top bid. We think management is committed to expanding their retail landlord business and could be interested in three GLS sites in 2H11, or TripleOne and 313@Somerset which are likely to come onto the market. We visited Clementi Mall and found that it has opened for operations smoothly with good foot traffic. Our S$4.32 fair value indicates an upside of 13.4% against the current price of S$3.81. Also, we think the downside is limited by an attractive dividend yield of 7.1%, which is underpinned by a core newspaper segment yielding solid recurrent cash. Upgrade SPH to BUY with a fair value estimate of S$4.32.

DBS Vickers (Spore) Daily Focus 15 Jun 2011

Stock Name: Consciencefood
Company Name: CONSCIENCEFOOD HOLDING LIMITED

Research House: DBS Vickers

Price Call: BUY

Target Price: 0.35

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

Research House: DBS Vickers

Price Call: BUY

Target Price: 3.85

Comments
ConscienceFood Hldgs: BUY; S$0.24; Price Target: S$0.35; CSF SP
Commences cup noodle business


ST Engineering: BUY; S$2.92; Price Target: S$ 3.85; STE SP
ST Engineering's Marine arm wins S$171m contract to build 4 AHTS vessels


Highlight
SunVic Chemical Holdings: NOT RATED S$0.73: SVC SP
Return *: 1; Risk: Moderate;
Potential Target * : 12-Month S$ 0.96
AA chemical producer




-----------------------------------

SIN: CIMB TraderAM - Q&M Dental Group

Stock Name: Q&M Dental
Company Name: Q & M DENTAL GROUP (S) LIMITED

Research House: CIMB

Price Call: BUY

Target Price: 0.98

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

Research House: CIMB

Price Call: BUY

Target Price: 3.88

Stock Name: TCT
Company Name: TREASURY CHINA TRUST

Research House: CIMB

Price Call: BUY

Target Price: 3.38

15 June 2011 / Singapore

Trades of the Day...

Fundamentally:

When was the last time you saw your dentist?- Not yesterday at our Corporate Focus Series Lunch Talk we hope. Well, even if it was, the dentists at Q&M (QNM SP; S$0.83, BUY, TP S$0.98)had good news for you. China expansion remains on track and IFC recently gave QNM its vote of confidence by taking a stake in the dental Group.

What's Relevant...

Singapore's lack of market moving newsflow in saw the STI ending just 1.65 points lower yesterday. Top 20 actives saw familiar names, Genting Singapore, Golden Agri, Cosco Corp and Dyna-Mac.Technically, the chart suggests that the index could push higher towards 3,180 though low trading volumes are a negative. No reason for the STI not to open higher given the positive close on the US markets overnight.

Corporate News...

STX OSV. Faster-than-expected improvements in North Sea demand reaffirm our belief in a stronger order momentum for STX OSV in 2H11. Longer-term, STX OSV's growth is underpinned by booming Brazil demand. Take note that the North Sea rebound is not merely seasonal. It signals a sustained recovery. Our FY11 order target of NOK10bn (excluding Transpetro orders) has a high chance of being achieved. OUTPERFORM, Target Price S$1.70, based on 11x CY12 P/E (15% discount to rigbuilders' 5-year mean). ST Engineering has secured four AHTS orders worth S$171m from Swire Pacific. Vessels are expected to be delivered progressively from 1H13 to 1H14. Judging from the contract prices, we believe that the AHTS are of 12,000 bhp or in the medium class range. This order may seem surprising given that this asset class remains plagued by oversupply. However, we note that the medium class of AHTS consist only 3% of global AHTS fleet and is not as overcrowded as the smaller classes. Although a recovery in aviation MRO spending has somewhat been blunted by macro issues (Europe debt contagion, U.S growth concerns), we remain optimistic about a gradual recovery. Stronger quarters ahead and a pick-up in Aerospace could catalyse the stock. OUTPERFORM, Target Price S$3.88. Empty vessels make the loudest noise.Well, you'll sure be glad that Treasury China Trust is not one. The Company has been showing its confidence in its own business with unit buy backs recently. The latest was yesterday with 78,000 units bought back at S$2.00 per unit. So far, the Company has bought back 1.04% of its issued units. BUY, Target Price S$3.38.

Yongnam Holdings rated 'outperform' by CIMB

Stock Name: Yongnam
Company Name: YONGNAM HOLDINGS LIMITED

Research House: CIMB

Price Call: BUY

Target Price: 0.40

CIMB in a June 14 research report says: "YNH's contract wins had picked up strongly in 2Q11, with the group securing more than $190 million worth of contracts or 40% of our target for this year.

"Coupled with profit margins which had been sustained over the four quarters of 2010 (with a positive surprise in 1Q11), we believe YNH is on track to meet our FY2011 earnings target. No change to our EPS estimates or target price of 40 cents, still based on 8x CY12 P/E, a 20% discount to its mid-cycle multiples.

"We also like YNH's undemanding valuations against peers, at 5.2x CY12 P/E vs. the peer average of 7.6x. We expect stock catalysts from contract wins for projects such as the MRT Downtown Line and structural steelwork projects in the Middle East. MAINTAIN OUTPERFORM."

Singapore Press Holdings rated 'buy' by KIm Eng

Stock Name: SPH
Company Name: SINGAPORE PRESS HLDGS LTD

Research House: Kim Eng

Price Call: BUY

Target Price: 4.60

Kim Eng Research in a June 14 research report says: "Two failed bids at recent land tender exercises could prompt the Singapore Press Holdings (SPH) to become more aggressive in seeking future projects.

"Or, it could just put property acquisition plans on the back burner as there are fewer sites that meet its investment criteria. On our part, we prefer SPH to focus on boosting its digital media revenue stream and returning surplus cash to shareholders.

"We also identify a revaluation boost for Paragon as a potential catalyst, even though the chances of it occurring are still remote for now. At FY Aug12F PER of 15x and a sustainable dividend yield of 6.4%, the stock still warrants a buy rating but at a lower target price of $4.60. MAINTAIN BUY."

Biosensors Int'l Group rated 'buy' by OCBC

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

Research House: OCBC

Price Call: BUY

Target Price: 1.60

OCBC Investment Research in a June 14 research report says: "Biosensors International Group (BIG) has proposed to acquire the remaining 50% stake in JW Medical Systems (JWMS) from Shandong Weigao Group Medical Polymer (Shandong Weigao).

"We believe that this move would help to support BIG's earnings momentum moving forward. Management estimates that this acquisition would be completed by the later part of the year (assuming shareholder approval is obtained), implying that JWMS is likely to be consolidated from 2H12 onwards.

"We take into account the dilutive impact caused by the enlarged share base and also update our required return on equity assumption to 9.1%. Fair value estimate increases from $1.55 to $1.60. MAINTAIN BUY."

Keppel Corporation rated 'buy' by DMG

Stock Name: Kep Corp
Company Name: KEPPEL CORPORATION LIMITED

Research House: DMG

Price Call: BUY

Target Price: 13.80

DMG & Partners Securities in a June 10 research report says: "Keppel announced that they have secured a US$142 million ($175 million) order for a semi-submersible drilling tender from Seadrill. We estimate that total YTD order wins climbed to $6.8 billion and outstanding order book is now at $9.9 billion.

"We think Keppel is on track to hit our full-year new order forecast of $9 billion. The outlook for the offshore marine sector remains robust current high crude oil prices are significantly above the investment threshold of major exploration and production companies.

"We maintain our EPS estimates and SOTP-derived target price of $13.80. The stock is now trading at 14.8x FY11 P/E and 13.7x FY12 P/E. MAINTAIN BUY."

Noble Group rated 'buy' by DBS

Stock Name: Noble Grp
Company Name: NOBLE GROUP LIMITED

Research House: DBS Vickers

Price Call: BUY

Target Price: 2.60

DBS Vickers Securities in a June 14 research report says: "Territory Resources' (TTY) board unanimously recommended the acceptance of Noble's offer to acquire up to 100% of the fully paid ordinary shares in TTY at A$0.50 per share by way of an unconditional on-market takeover.

"TTY's board believes that the Noble offer is superior to the bid by Exxaro announced on May 23, which offered to acquire TTY at A$0.46 per share. TTY's share price is currently trading at A$0.515, above Noble's takeover offer price. Furthermore, without a formal response from Exxaro, there is no guarantee that Noble will be able to complete the takeover of TTY.

"Until the takeover is finalised, there is no change in our forecasts - to which we do not expect any significant change. Twelve-month target price of $2.60. MAINTAIN BUY."

SG: Golden Agri-Resources - Higher CPO output expected this year

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

Research House: OCBC

Price Call: BUY

Target Price: 0.96

15 June 2011: Golden Agri-Resources - Higher CPO output expected this year

Summary: Golden Agri-Resources (GAR) was recently quoted by newswires as saying that its output of crude palm oil (CPO) could grow by >10% this year if weather conditions remain favourable. The group had earlier guided that it should be able to achieve a 5-10% increase in CPO production. Meanwhile, management was also quoted as saying that "there is continued tightness in supply, so whatever is produced by the sector in Indonesia and Malaysia is taken by the market", where China and India continue to be the group's core markets. We note that this is supported by the current market demand-supply situation, given that CPO prices have been fairly stable, despite the recent volatility in crude oil prices. While we are expecting CPO prices to ease in 2H11, we believe that the price decline would be more than offset by the expected production increase. Maintain BUY with S$0.96 fair value (based on 16x FY11F EPS).

Sunny Side Up - City Developments, The Hour Glass (KIM ENG)

Sunny Side Up - City Developments, The Hour Glass

What's cooking City Developments Limited (CIT SP, $10.70, BUY, TP $13.45) - After being shelved for three years, construction work at South Beach has started and is scheduled for completion in 2015. Malaysia-listed IOI Corporation is now onboard and will hold a 49.9% stake in this mega project, with City Developments holding the remaining 50.1%. We believe it is timely to revisit this iconic development and review our assumptions, given an increase in our RNAV estimate by 11 cents a share. Maintain BUY. Hot stock The Hour Glass (HG SP, $1.20, NOT RATED) - Riding on the recovering demand for luxury watches in Asia, net profit for The Hour Glass grew by 29% YoY in FY Mar11. This stellar performance did not go unnoticed as its share price rose steadily after the release of its financial results. At current valuations, the stock appears to be at comparable levels with its peers. Watch retailers, however, seem to be trading at lower valuation levels compared to fashion and lifestyle retailers like FJ Benjamin and Osim.

CIMB - SIN: STX OSV - Signs of improvement in North Sea

Stock Name: STXOSV
Company Name: STX OSV HOLDINGS LIMITED

Research House: CIMB

Price Call: BUY

Target Price: 1.70

	15 Jun 2011 Singapore
Company Update
STX OSV [ PDF]
Signs of improvement in North Sea
(SOH SP / STXO.SI, OUTPERFORM - Maintained, S$1.19 - Tgt. S$1.70, Offshore & Marine)
Faster-than-expected improvements in North Sea demand reaffirm our belief in a stronger order momentum for STX OSV in 2H11. The North Sea is an important yardstick for utilisation and day rates for the rest of the world. Also, while STX OSV's longer-term growth is underpinned by booming Brazil demand, its near-term orders are backed by the North Sea. We believe the rebound is not merely seasonal, but signals a sustained recovery. Hence, STX OSV's order momentum should strengthen in 2H to meet our FY11 order target of NOK10bn (excluding Transpetro orders), providing stock catalysts. No change to our earnings estimates or target price of S$1.70, based on 11x CY12 P/E (15% discount to rigbuilders' 5-year mean).

Market Pulse: SPH, Golden Agri & ST Engineering (15 Jun 2011)

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

Research House: OCBC

Price Call: BUY

Target Price: 3.57

Market Pulse: SPH, Golden Agri & ST Engineering (15 Jun 2011)

FOCUS

Singapore Press Holdings: Upgrade to BUY; awaiting capital deployment

Summary: Singapore Press Holdings (SPH) recently bid S$917m for a 99-year white site beside Jurong East MRT station and came just 5.4% below the top bid. We think management is committed to expanding their retail landlord business and could be interested in three GLS sites in 2H11, or TripleOne and 313@Somerset which are likely to come onto the market. We visited Clementi Mall and found that it has opened for operations smoothly with good foot traffic. Our S$4.32 fair value indicates an upside of 13.4% against the current price of S$3.81. Also, we think the downside is limited by an attractive dividend yield of 7.1%, which is underpinned by a core newspaper segment yielding solid recurrent cash. Upgrade SPH to BUY with a fair value estimate of S$4.32. (Eli Lee)

Golden Agri-Resources Ltd: Higher CPO output expected this year

Summary: Golden Agri-Resources (GAR) was recently quoted by newswires as saying that its output of crude palm oil (CPO) could grow by >10% this year if weather conditions remain favourable. The group had earlier guided that it should be able to achieve a 5-10% increase in CPO production. Meanwhile, management was also quoted as saying that "there is continued tightness in supply, so whatever is produced by the sector in Indonesia and Malaysia is taken by the market", where China and India continue to be the group's core markets. We note that this is supported by the current market demand-supply situation, given that CPO prices have been fairly stable, despite the recent volatility in crude oil prices. While we are expecting CPO prices to ease in 2H11, we believe that the price decline would be more than offset by the expected production increase. Maintain BUY with S$0.96 fair value (based on 16x FY11F EPS). (Carey Wong)

ST Engineering: Secures S$171m contract from Swire Pacific

Summary: ST Engineering (STE) announced that its marine arm - ST Marine (STM) - has won a shipbuilding contract worth S$171m from Swire Pacific Offshore Operations (SPO); this entails the building and outfitting of four AHTS (Anchor Handling Tug Supply) vessels, where STM will commence work immediately and deliver the first AHTS by 1H13 and the fourth by 1H14. SPO will furnish the major equipment for STM's installation and this includes main engines, thrusters, cranes and other deck machinery. As the contract is likely to be recognized progressively until 1H14, we do not expect it to have any material impact on the group's NTA and EPS for FY11; in any case, we have allowed for such contract wins in our estimates. Maintain BUY with S$3.57 fair value (based on 21x FY11F EPS). (Carey Wong)

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

NEWS HEADLINES

- China's central bank upped bank reserve ratios to 21.5% yesterday for the ninth time since Oct to try to curb inflation

- CIMB has put Asia Petroleum Hub under receivership. The latter, mandated by the Malaysian government to develop an oil terminal, was given RM1.4b loan.

- K1 Ventures invested US$100m in Guggenheim Capital, a US-based financial services firm.

- CapitaMalls Malaysia Trust agreed to buy Kuantan Mall for MYR310m

- Olam extended the offer to buy the rest of the shares it does not own in NZ Farming Systems Uruguay.

- Territory Resources, which received a takeover bid from Noble, has recommended that investors accept Noble's offer and spurn the first offer from Exxaro Resources.

Sunny Side Up - Singapore Press Holdings, Koon Holdings (KIM ENG)

Sunny Side Up - Singapore Press Holdings, Koon Holdings

What's cooking Singapore Press Holdings (SPH SP, $3.81, BUY, TP $4.60) - Two failed bids at recent land tender exercises could prompt the Singapore Press Holdings (SPH) to become more aggressive in seeking future projects. Or, it could just put property acquisition plans on the back burner as there are fewer sites that satisfy its investment criteria. On our part, we prefer SPH to focus on boosting its digital media revenue stream and returning surplus cash to shareholders. At FY Aug12F PER of 15x and a sustainable dividend yield of 6.4%, the stock still warrants a BUY rating. However, we lower our target price to $4.60. Hot stock Koon Holdings (KOON SP, $0.265, NOT RATED) - Koon has been in the news recently as a model for other construction companies to follow, as its precast business allows for production cost savings in the face of rising labour costs in the industry. The company continues to win new orders and is poised to convert its sizeable orderbook into earnings in the coming year.

SG: ST Engineering - 10% cap on Ropax contract claims

14 June 2011: ST Engineering - 10% cap on Ropax contract claims

Summary: ST Engineering (STE) has just updated that its marine arm - ST Marine (STM) - has received a letter of claim (dated 10 Jun 2011) from the lawyers of Louis Dreyfus Armateurs (LDA) in respect of the shipbuilding contract for the Roll-on/Roll-of Passenger (Ropax) ferry that was contracted in Jul 2007 for around S$179m. STM intends to dispute the claim. Furthermore, STM's position is that if it is liable, its total liability under the Ropax contract is capped at 10% of the contract price. STE believes that the ongoing Ropax dispute will not have any material impact on its NTA or EPS for FY11. As before, we think that it is still early days to assess if STE/STM has to pay damages and hence we hold off adjusting our FY11 estimates. Our worst case scenario could see a <5% impact on FY11F pre-tax profit. We are still positive on the group's overall prospects, defensive nature and do not believe that this incident will affect its strong payout (around 90% of core earnings) ability; hence we maintain our BUY rating and S$3.57 fair value (21x FY11F EPS).

Phillip - Keppel Corporation - ( Downgraded to Hold )

Keppel Corporation

• Awarded US$260 million accommodation semi-submersible contract from Floatel International.
• Wins semi-submersible drilling tender contract from Seadrill worth US$142 million.
• Expect moderation in margins going forward.
• We lower FY11e and FY12e EPS from 88 cts and 92 cts to 65 cts and 73 cts respectively.
• Downgrade from Buy to Hold following a change of analyst with change in fair value from $11.58 to $10.84.

---

SIN: CIMB TraderAM - Dukang Distillers

Stock Name: Serial
Company Name: SERIAL SYSTEM LTD

Research House: CIMB

Price Call: BUY

Target Price: 0.24

Stock Name: Q&M Dental
Company Name: Q & M DENTAL GROUP (S) LIMITED

Research House: CIMB

Price Call: BUY

Target Price: 0.98

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

Research House: CIMB

Price Call: BUY

Target Price: 3.88

14 June 2011 / Singapore

Trades of the Day...

Fundamentally:

Dukang Distillers Holdings Ltd (DKNG SP; S$0.56) - We visited Dukang's plant in China last week. We like Dukang for its (i) strategic initiatives (ii) strong industry traction (iii) attractive valuation with a lower CY11 P/E of 19.1x relative to its peer average of 23.4x (iv) strong net cash position of RMB587.7m. Growth catalyst to stem from the (i) introduction of new products (ii) penetration into new geographic regions (iii) development of the Dukang village which will increase the visibility of its brand (iv) optimization of utilization rate at the Dukang plant.

What's Relevant...

Singapore shares closed weaker on Monday with the blue-chip STI down 19.3pts (0.6%) to 3,059. Decliners outnumbered advancers 4 to 1 in a volume of 1bn shares worth $1.2bn. Following S&P's downgrade of Greece by three notches and warned of a potential default, we expect the STI to fall at open. We would avoid O&M counters like Keppel Corp and SembMarine this morning after US energy plays faltered in overnight trade after a drop in oil prices.

Corporate News...

Low Keng Huat. 1Q11's net profit of S$21.6m was up 14% yoy, despite a 56% yoy decline in revenue to S$40m. Construction revenue fell 64% to S$27m after the completion of NEX at Serangoon central mall, while turnover for hotel & F&B businesses decreased 5.5% to S$12m. Serial System announced that its 91% owned Hong Kong subsidiary, Serial Microelectronics (HK) has been appointed as a distributor for Greater China and Taiwan by Fingerprint Cards AB (FPC). Serial is FPC's 2nd distributor appointed for the Greater China and Taiwan market. We have a BUY call on the stock with a TP of S$0.24. Q&M Dental has entered into another joint venture arrangement with a new Chinese partner. It signed a non-binding memorandum of understanding with the shareholders of Beijing Le Le Jia Medical Solutions (LLJ) where LLJ shareholders shall transfer 49% of their shares to Q&M China for RMB25m (S$4.8m). Maintain BUY, TP S$0.98. ST Engineering has received a letter of claim by lawyers of Louis Dreyfus Armateurs (LDA) in respect of shipbuilding contract for the Roll-on/Roll-off Passenger ferry contracted in Jul 07 for S$179m. LDA is claiming for both liquidated (S$4.8m) and unliquidated (approx Euro33m) damages from ST Marine's purported breach. ST Marine is taking legal advice on the claim which it intends to dispute. Maintain OUTPERFORM, TP S$3.88. Yongnam's contract wins had picked up strongly in 2Q11, with the group securing more than S$190m worth of contracts or 40% of our target for this year. Coupled with profit margins which had been sustained over the four quarters of 2010 (with a positive surprise in 1Q11), we believe YNH is on track to meet our FY11 earnings target. Maintain OUTPERFORM, TP S$0.40.

Market Pulse: Biosensors & ST Engineering (14 Jun 2011)

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

Research House: OCBC

Price Call: BUY

Target Price: 1.60

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

Research House: OCBC

Price Call: BUY

Target Price: 3.57

Market Pulse: Biosensors & ST Engineering (14 Jun 2011)

FOCUS

Biosensors International Group: Acquiring remaining 50% stake in JWMS

Summary: Biosensors International Group (BIG) has proposed to acquire the remaining 50% stake in JW Medical Systems (JWMS) from Shandong Weigao Group Medical Polymer (Shandong Weigao). The purchase consideration amounts to ~S$625.4m, comprising of (i) a cash payment of S$160m; (ii) issuance of 260m new ordinary shares to Shandong Weigao at S$1.2215 per share and (iii) issuance to Shandong Weigao of US$120m principal amount of 4% convertible notes due 2014. Shandong Weigao would own 21.6% of BIG, assuming full conversion of the notes. We view this move positively from a strategic standpoint as BIG would now be able to strengthen its position in the fast growing China DES market. Management estimates that this acquisition would be completed by the later part of the year (assuming shareholder approval is obtained), implying that JWMS is likely to be consolidated from 2H12 onwards. We take into account the dilutive impact caused by the enlarged share base and also update our required return on equity assumption to 9.1%. However, our FCFE model also captures the accretive earnings growth potential of the combined entity. As such, our fair value estimate increases from S$1.55 to S$1.60. Maintain BUY. (Wong Teck Ching Andy)

ST Engineering: 10% cap on Ropax contract claims

Summary: ST Engineering (STE) has just updated that its marine arm - ST Marine (STM) - has received a letter of claim (dated 10 Jun 2011) from the lawyers of Louis Dreyfus Armateurs (LDA) in respect of the shipbuilding contract for the Roll-on/Roll-of Passenger (Ropax) ferry that was contracted in Jul 2007 for around S$179m. STM intends to dispute the claim. Furthermore, STM's position is that if it is liable, its total liability under the Ropax contract is capped at 10% of the contract price. STE believes that the ongoing Ropax dispute will not have any material impact on its NTA or EPS for FY11. As before, we think that it is still early days to assess if STE/STM has to pay damages and hence we hold off adjusting our FY11 estimates. Our worst case scenario could see a <5% impact on FY11F pre-tax profit. We are still positive on the group's overall prospects, defensive nature and do not believe that this incident will affect its strong payout (around 90% of core earnings) ability; hence we maintain our BUY rating and S$3.57 fair value (21x FY11F EPS). (Carey Wong)

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

NEWS HEADLINES

- Property stocks with significant exposure to the Chinese market fell yesterday as data from China raised concerns that a slowdown in the world's second largest economy could lead to an easing of demand for loans.

- Singapore's GDP growth may slow to 6.7%, according to the latest BT-UniSIM Business Climate Survey.

- Pace of hiring expected to remain healthy in Q3 according to the latest Manpower Employment Outlook Survey,

- Q&M strikes RMB 25m deal for 49% of China dental lab.

- SingPost ups its stake to 50% in Malaysia company, Efficient, which provides primarily outsourcing solutions in data and document processing.

- Keppel Fels clinches US$260m rig contract to build a semi-submersible rig from Floatel International.

Singapore Press Holdings - Be content with stability (BUY, $3.81 - TP$4.60, SPRM.SI / SPH SP, MEDIA) (KIM ENG)

Stock Name: SPH
Company Name: SINGAPORE PRESS HLDGS LTD

Research House: Kim Eng

Price Call: BUY

Target Price: 4.60

Singapore Press Holdings - Be content with stability (BUY, $3.81 - TP $4.60, SPRM.SI / SPH SP, MEDIA)

Two failed bids at recent land tender exercises could prompt the Singapore Press Holdings (SPH) to become more aggressive in seeking future projects. Or, it could just put property acquisition plans on the back burner as there are fewer sites that meet its investment criteria. On our part, we prefer SPH to focus on boosting its digital media revenue stream and returning surplus cash to shareholders. We also identify a revaluation boost for Paragon as a potential catalyst, even though the chances of it occurring are still remote for now. At FY Aug12F PER of 15x and a sustainable dividend yield of 6.4%, the stock still warrants a BUY rating but at a lower target price of $4.60.

CIMB - SIN: Yongnam Holdings Ltd - All systems in place

Stock Name: Yongnam
Company Name: YONGNAM HOLDINGS LIMITED

Research House: CIMB

Price Call: BUY

Target Price: 0.40

	14 Jun 2011 Singapore
Company Update
Yongnam Holdings Ltd [ PDF]
All systems in place -
(YNH SP / YNAM.SI, OUTPERFORM - Maintained, S$0.26 - Tgt. S$0.40, Construction)
YNH's contract wins had picked up strongly in 2Q11, with the group securing more than S$190m worth of contracts or 40% of our target for this year. Coupled with profit margins which had been sustained over the four quarters of 2010 (with a positive surprise in 1Q11), we believe YNH is on track to meet our FY11 earnings target. No change to our EPS estimates or target price of S$0.40, still based on 8x CY12 P/E, a 20% discount to its mid-cycle multiples. We also like YNH's undemanding valuations against peers, at 5.2x CY12 P/E vs. the peer average of 7.6x. We expect stock catalysts from contract wins for projects such as the MRT Downtown Line and structural steelwork projects in the Middle East.

Phillip - Morning Note - 14 June 2011

Stock Name: Kep Corp
Company Name: KEPPEL CORPORATION LIMITED

Research House: Phillip Securities

Price Call: HOLD

Target Price: 10.84

Phillip Securities Research Pte Ltd Singapore 14 June 2011
(MICA (P) 048/11/2010) Ref No: SGMN2011_0114
	Fundamental Call
	Keppel Corporation Ltd - Company Update (Nicholas Low) Recommendation: HOLD Previous close: S$11.06 Fair value: S$10.84 · Awarded US$260 million accommodation semi-submersible contract from Floatel International. · Wins semi-submersible drilling tender contract from Seadrill worth US$142 million. · Expect moderation in margins going forward. · We lower FY11e and FY12e EPS from 88 cts and 92 cts to 65 cts and 73 cts respectively. · Downgrade from Buy to Hold following a change of analyst with change in fair value from $11.58 to $10.84.
	Source: Phillip Securities Research Pte Ltd

Company Results
S/N	Company Name	Q/HY/FY	Currency, Units	Revenue			Net Profit
				Current	Previous	Change (%)	Current	Previous	Change (%)
1	Low Keng Huat (S) Ltd	1Q	S$'000	39,796	89,820	(55.7)	22,483	19,313	16.4
Source: SGX Masnet

Company Highlights

United Fiber System Limited announced that Poh Lian Construction (Pte.) Ltd, a wholly owned subsidiary of the Company has been awarded a building contract from Impac Holdings Pte Ltd, a member of the City Development Limited Group, for the construction of condominium comprising of 5 blocks (19, 21, 22, 23-storey) residential flats (total 521 units) with 2 basement carparks, swimming pool and communal facilities at Sengkang West Ave / Fernvale Link. The total contract sum of the project is S$166,820,493.00 and the construction period is 156 weeks commencing from 1 August 2011. (closing price: S$0.045) BreadTalk Group Limited announced that Shanghai BreadTalk Co., Ltd, a wholly owned subsidiary of BreadTalk International Pte. Ltd. which in turn is a wholly owned subsidiary of the Company, has entered into a 50:50 joint venture agreement with Ajinomoto Bakery Co., Ltd, a company incorporated in Japan, to register a company in Shanghai, PRC under the name of Shanghai ABPan Co., Ltd. Shanghai ABPan will carry on the business of manufacturing and selling frozen dough for bread and Danish pastries to bakery outlets within China. This partnership will take advantage of SBT's store development expertise and brand power and AJB's manufacturing technology to build a strong value chain in the Chinese bread market. During the tenor of the JV Agreement, it was agreed that SBT and AJB would collectively contribute an investment amount of up to RMB46.4 million in Shanghai ABPan. (closing price: S$0.605) Singapore Post Ltd announced that it has today entered into a non-binding Memorandum of Understanding with Efficient, concerning the proposed collaboration and co-operation between the parties in data and document management business in Indonesia (and such other countries as may be mutually agreed between the parties). Pursuant to the MOU, it is contemplated that Efficient and SingPost (i) will jointly invest in setting up of data and document management business operations in Indonesia; (ii) will jointly identify business opportunities relating to data and document management in such countries as may be mutually agreed in writing between parties; and (iii) may mutually agree to engage in discussions and negotiations with other potential investors and/ or business partners in relation to the Proposed Collaboration. (closing price: S$1.16) Hoe Leong Corporation Ltd refers to the announcement dated 11 March 2011 in respect of the option agreement entered into with RBC Dexia Trust Services Singapore Limited (acting in its capacity as trustee of Cambridge Industrial Trust) in respect of the sale and leaseback of the property known as 4 & 6 Clementi Loop. The company announced that the Company has completed the sale of the Property to the Purchaser today. Concurrently, the Company has also today entered into a lease agreement with the Purchaser to lease the Property. (closing price: S$0.30) Q & M Dental Group (Singapore) Limited announced that Q & M Dental Group Holdings (China) Pte. Ltd, a 100% owned subsidiary of the Company, has on 13 June 2011 entered into a non-binding memorandum of understanding with the shareholders of Beijing Le Le Jia Medical Solutions Co., Ltd, Mr. Wang Jia Lei and Ms Wang Jia Bei. The MOU relates to a proposed joint venture which will complement the Group's expansion plans of its dental healthcare business into the People's Republic of China. (closing price: S$0.815) Keppel Corp to build new generation accommodation semi worth US$260 million for Floatel. Keppel FELS Limited has been awarded a contract worth about US$260 million by returning customer, Floatel International Ltd, to build a new generation accommodation semisubmersible (semi) for delivery in 1Q 2014. This new rig developed by Keppel O&M's Deepwater Technology Group, will be built to the SSAU4000NG design with Dynamic Positioning (DP) 3 capability. It marks Keppel FELS' third accommodation semi project with Floatel, after the delivery of Floatel Reliance (SSAUTM 3600 with DP2) and Floatel Superior (DSSTM 20NS with DP3) last year. (closing price: S$11.06)

Source: SGX Masnet

Local and Regional Markets Headlines

Shares in Singapore retreated 0.63 per cent by closing on Monday. The benchmark Straits Times Index gave up 19.31 points to end the day at 3,059.04. A total of 1,034.60 million shares changed hands on a market turnover of S$1,173 million (US$947.83 million). Decliners outnumbered advancers 4 to 1. Hong Kong shares snapped a seven-day losing streak on Monday as beaten-down banking shares posted gains, setting up the market for a possible bounce from oversold conditions if inflation data from China comes in better than expected. The benchmark Hang Seng Index rose 0.4 per cent to 22,508.1. Turnover on the Hong Kong stock exchange fell to their lowest this month. China's stocks dropped, driving the benchmark index to a more than four-month low, before the release of economic data tomorrow that may show industrial output is slowing as inflation accelerates. The index ended last week at 2,705.14 and sank 0.2 percent to 2,700.38 at the 3 p.m. close today, the lowest close since Jan. 25. The CSI 300 Index slipped 0.39 percent to 2,950.35. The Nikkei stock average lost ground on Monday, hurt by a surprise fall in Japanese machinery orders, further signs of a global economic slowdown and a drop in shares of Toyota Motor after a weaker-than-expected earnings forecast. Japan's core machinery orders unexpectedly dropped in April in a sign that disruptions to energy supplies are impeding capital expenditure although demand should later rise when the country rebuilds its earthquake-ravaged northeast coast. The benchmark Nikkei fell 0.7 per cent to 9,448.21, while the broader Topix shed 0.6 per cent to 812.26.

Source: BT Online, Bloomberg, Reuters

US Market News

U.S. stocks drifted sideways on Monday, in what is likely a temporary pause in a sell-off brought on by growing fears of another economic downturn. The benchmark S&P 500 rose for only the second time in the past nine sessions while the Nasdaq 100 managed to survive a fall below its 200-day moving average at 2,218, quickly reversing those losses.Investors remained noncommittal about whether stocks have become cheap enough after six weeks of selling to pour some money back into equities again. The Dow Jones industrial average gained 1.06 points, or 0.01 percent, to end at 11,952.97. The Standard & Poor's 500 Index added just 0.85 of a point, or 0.07 percent, to 1,271.83. But the Nasdaq Composite Index dropped 4.04 points, or 0.15 percent, to close at 2,639.69.

Source: Reuters

Director / Substantial Shareholders' Transactions
Company	Substantial Shareholder	From (%)	To (%)
Multi-Chem Ltd	Han Juat Hoon	27.992	28.131
Perennial China Retail Trust	Cosmo Top Limited	0	12
Osim International Ltd	Ron Sim Chye Hock	41.28	41.35
Pacfic Andes Resources Devl Ltd	N.S. Hong Investment (BVI) Limited	65.57	65.59
Aspial Corporation Ltd	Koh Wee Seng	13.70	13.72
Fraser and Neave Ltd	Prudential Asset Management (Singapore) Ltd	7.99	7.97
Kim Eng Holdings Ltd	Malayan Banking Berhad	90.20	92.47
Capitamalls Asia Ltd	The Capital Group Companies, Inc.	7.98	6.984
Goodpack Ltd	Amundi S.A.	4.85	5.09
Allgreen Properties Ltd	Kuok (Singapore) Limited	51.52	51.58
JK Yaming International Holdings Ltd	Citigroup Inc.	93.34	94.06
China Minzhong Food Corp Ltd	GAM Group AG	5.99	6.15
Olam International Ltd	UBS AG	5.18	6.01
Capitacommercial Trust	ING Clarion Real Estate Securities LLC	4.99	5.13
Nobel Design Holdings Ltd	Kho Choon Keng	5.30	6.28
Source: SGX Masnet

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