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. |
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