Osim International rated 'buy' by DMG

Stock Name: OSIM
Company Name: OSIM INTERNATIONAL LTD

Research House: DMG

Price Call: BUY

Target Price: 1.84

DMG & Partners Research in a July 27 research report says: "OSIM reported a 55% y-o-y jump in 2Q11 PATMI to $19 million, which were in-line with expectations with 1H11 PATMI of $39 million (+93% y-o-y) accounting for 53% of our FY2011F estimates.

"Looking forward we expect 2H sales to be driven by new product launches which includes uDivine Sport, uJazz, uPapa Music Synch and Zhi, an energy drink. We expect its cash coffers to grow to $300 million by year end, which will come in handy for M&As. It is currently trading at an attractive 15x/13x FY11/12F P/E, below the average 18x its regional peers are trading at.

"We continue to like the stock for its strong stable of speciality brands in which it has dominant market positions in. Target price of $1.84, pegged to 18x FY11F earnings. MAINTAIN BUY."

Leader Environmental Technologies rated 'buy' by DMG

Stock Name: LeaderEnv
Company Name: LEADER ENVIRONMENTAL TECH LTD

Research House: DMG

Price Call: BUY

Target Price: 0.47

DMG & Partners Research in a July 27 research report says: "LET posted a strong set of 2Q11 results with RMB31.3 million in revenue (+69.8% y-o-y) and RMB6.8 million in net earnings (+55.9% y-o-y). Desulphurisation Engineering, Procurement and Construction (EPC) business continues to power growth, making up 85.5% of the group's 1H11 sales.

"The bulk of its earnings (>80%) come in the second half. EPC order book currently stands at RMB100 million, and we expect the group to secure another RMB250 million worth of EPC contracts by the end of August. Target price of 47 cents (previously 53 cents), based on 8.9x P/E (-1 SD industry P/E).

"The next key rerating catalysts of the stock are likely to be the green light to commence the Operate, Own and Transfer (OOT) business as well as its maiden contract breaking into the denitrification industry. MAINTAIN BUY."

Cache Logistics Trust rated 'outperform' by CIMB

Stock Name: CACHE
Company Name: CACHE LOGISTICS TRUST

Research House: CIMB

Price Call: BUY

Target Price: 1.24

CIMB in a July 27 research report says: "2Q11 DPU of 2.09cts is slightly below our expectation though in line with consensus, at 21% of our FY2011 estimate and 25% of consensus's. 1H11 DPU of 4.0 cents forms 43.1% of our estimate.

"We sense an emphasis on prudence during the analysts' briefing and have deferred part of our acquisition assumptions for FY2011 to FY2012. Accordingly, we lower our FY2011-2013 DPU estimates by 3-18%. Our DDM-based target price of S$1.32 (discount rate 8.4%) also falls to $1.24.

"Nevertheless, we continue to see attractive valuations (P/B 1.09x, 8.3% yield) as compared to peers (P/B average 1.09, 7.1% yield). We continue to see catalysts from accretive acquisitions. MAINTAIN OUTPERFORM."

Singapore Air falls on disappointing Q1 net

Stock Name: SIA
Company Name: SINGAPORE AIRLINES LTD

Research House: Credit Suisse

Price Call: HOLD

Target Price: 14.40

Stock Name: SIA
Company Name: SINGAPORE AIRLINES LTD

Research House: Deutsche Bank

Price Call: HOLD

Target Price: 13.20

Shares of Singapore Airlines (SIA) (SIAL.SI), the world’s second-largest airline by market value, fell as much as 3.9% on Friday after it reported a worse-than-expected quarterly profit, prompting analysts to slash their ratings on the firm.

At 8:03 a.m., SIA shares were 3.5% lower at $14.19 with more than 2.3 million shares changing hands. This was 1.3 times its average daily volume in the last five sessions.

SIA said on Thursday it faced significant challenges as soaring jet fuel prices slashed first-quarter profit by a worse-than-expected 82% from a year ago and economic uncertainties plagued key markets.

Several analysts cut their target prices and recommendations on the airline.

Credit Suisse downgraded its recommendation on the stock to “neutral” from “overweight” with a lower target price of $14.40 compared to $15.90, while Deutsche Bank cut to “hold”  from “buy” and reduce the target price to $13.20 from $16.90. 

OCBC ups DBS target to $17.80 from $16.00; keeps buy

Stock Name: DBS
Company Name: DBS GROUP HOLDINGS LTD

Research House: OCBC

Price Call: BUY

Target Price: 17.80

OCBC Investment Research has raised its target price on DBS (DBSM.SI), Southeast Asia’s largest bank, to $17.80 from $16.00 and maintained its buy rating.

OCBC has raised its 2011 net earnings estimate for DBS to S$2.98 billion from $2.85 million, to account for a more stable net interest margin.

DBS posted second quarter net profit of $735 million, against a net loss of $300 million a year earlier.

The brokerage reported that DBS’s Hong Kong operation is expected to continue growing and its results are reflective of the bank’s strategy to use Hong Kong as a base for its Greater China operations.

“While the uncertainty in the global market is likely to persist, we are of the view that it should not significantly impact DBS’s earnings in Singapore and Hong Kong,” OCBC said in a statement.

At 10:10 a.m., DBS shares were up 0.9% at $15.47. The stock has risen about 8% since the start of the year. 

Ascott Residence Trust rated 'buy' by DBS

Stock Name: AscottREIT
Company Name: ASCOTT RESIDENCE TRUST

Research House: DBS Vickers

Price Call: BUY

Target Price: 1.42

DBS Vickers Securities in a July 25 research report says: "Revenues and gross profits were higher by 65% and 98% respectively to $73.1 million and $41.2 million. This was largely due to the contribution from its acquisition of 28 serviced residences in Oct'10, which more than offset the divestment of Ascott Beijing and Country Woods Jakarta.

"The group wrote up its book value by $82.8 million, resulting in a 4% hike in NAV per share to $1.33. Our forward DPU estimates are raised c6.0% from (i) higher RevPAU assumptions in London and Singapore; and (ii) lower than expected interest costs achieved.

"Trading at an attractive forward yield of 7.2-7.3%, >100bps above the S-REIT sector peers. Target price upped to $1.42 per share and offers 24% total return. BUY"

OKP Holdings rated 'increase exposure' by SIAS

Stock Name: OKP
Company Name: OKP HOLDINGS LIMITED

Research House: SIAS

Price Call: BUY

Target Price: 0.98

SIAS Research in a July 27 research report says: "OKP reported a strong set of 2Q FY2011 results that exceeded our high expectations, with PATMI growing by 60.6% y-o-y and 31.6% q-o-q.

"We reiterate that OKP currently sits on cash of $98.6 million or net current assets of $54.5 million and leases of just $1.3 million. This cash reserve can be used to fund inorganic growth and maintain profitabiliity. Excluding its cash of 32.4 cents per share, OKP trades at an attractive multiple of 4.5x trailing 12M earnings.

"We raised our FY11F PATMI forecast from $22.8 million to $23.1 million following OKP's strong performance in 2Q FY2011. Incorporating the higher margins into our model, we arrived at a higher intrinsic value of 98 cents. MAINTAIN INCREASE EXPOSURE."

Starhill Global REIT rated 'buy' by OCBC

Stock Name: Starhill Gbl
Company Name: STARHILL GLOBAL REIT

Research House: OCBC

Price Call: BUY

Target Price: 0.70

OCBC Investment Research in a July 26 research report says: "Starhill Global REIT reported 2Q11 revenue of $44.2 million, up 18.9% y-o-y. This came in broadly in line with the street's and our estimates and constituted 24% of our FY2011 forecast.

"The incremental revenue was mainly attributed to the contribution from the Malaysian properties acquired Jun 10, and improved performance from Renhe Spring Zongbei and David Jones Building, offset by lower numbers from the Singapore and Japan assets.

"Distributable income for 2Q11 came in at $20.2 million which was 14.3% higher y-o-y. This translates to a DPU of 1.04 cents, bringing 1H11 DPU to 2.11 cents. Based on the last unit price of 65.5 cents, this represents an annualized yield of 6.49%. Fair value estimate of 70 cents. MAINTAIN BUY."

SIA Engineering Co rated 'buy' by Phillip Securities

Stock Name: SIA Engg
Company Name: SIA ENGINEERING CO LTD

Research House: Phillip Securities

Price Call: BUY

Target Price: 5.01

Phillip Securities Research in a July 27 research report says: "SIAEC reported a marginal decline in revenue and profits of $277.6 million and $68.1 million respectively. 1QFY12 forms 24% of our full year estimates. SIAEC has a strong cash balance of $645 million as of end June 11.

"If we adjust this cash balance by the recent dividend payment of c.$265 million, the company still has strong cash holdings of $380 million. If our free cash flow estimates for the year is met, SIAEC's cash account would build up to beyond $500 million once again, thus offering substantial room for further capital distributions.

"We value the stock of SIAEC using the DCF model to derive our target price of $5.01. Incorporating forecasted dividends of 34 cents, we expect total returns of 28.7% from the current market price. MAINTAIN BUY."

DBS ups Mapletree Commercial target to $1.09; keeps buy

Stock Name: MapletreeCom
Company Name: MAPLETREE COMMERCIAL TRUST

Research House: DBS Vickers

Price Call: BUY

Target Price: 1.09

DBS Vickers has raised its target price for Singapore’s Mapletree Commercial Trust (MACT.SI), which owns mall and office assets, to $1.09 from $1.05 and maintained its buy rating.

DBS said Mapletree Commercial Trust’s (MCT) maiden earnings were better than expected, with the 0.96 cents distribution per unit (DPU) for the first quarter coming in 8.7% above forecast.

“We continue to like MCT for its visible earnings growth and strong acquisition pipeline (Mapletree Business City). We have revised up our FY11 and FY12 DPU by 5-6% to 5.3 cents and 5.95 cents,” DBS said in a statement.

The completion of Alexandra retail centre at the end of December and step-up rents from Merrill Lynch Harbour Front, an office complex, should underpin earnings growth.

At the midday break, Mapletree Commercial units were down 0.56% at $0.88. The units have traded in a narrow range of 85 to 90 cents since their listing in late April.

Macquarie cuts SMRT target to $1.59 vs $1.75

Stock Name: SMRT
Company Name: SMRT CORPORATION LTD

Research House: MacQuarie

Price Call: SELL

Target Price: 1.59

Macquarie has cut its target price for Singapore public transport operator (SMRT.SI) to $1.59 from $1.75 and kept its underperform rating.

Macquarie has cut its earnings forecasts for SMRT in fiscal 2012 and 2013 by 10% each, after the firm reported weak first quarter earnings, hit by high staff and fuel costs.

SMRT said net profit for the first quarter ended June fell 8.9% to $34.8 million from $38.2 million a year ago. 

The brokerage said it expects SMRT's earnings in 2012 to decline by 6%, as its margins come under pressure from weak ridership on one of its rail lines, the Circle Line.

“Management also expects higher repair and maintenance expenses on train operations, while volatility in diesel and electricity prices and an inability to pass through (higher costs to consumers) remain a concern,” Macquarie said in a report.

Shares of SMRT have fallen 7.4% since the start of the year to close at $1.88 on Wednesday.

Biosensors up after Q1 net jumps seven-fold

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

Research House: OCBC

Price Call: BUY

Target Price: 1.68

Shares of Singapore medical technology firm Biosensors Group (BIOS.SI) rose as much as 2% to a two-week high after it reported quarterly earnings that beat expectations, bucking the fall in the broader market.

At 9:52 a.m., shares of Biosensors were 1.5% higher at $1.355 with over 7 million shares changing hands.

Biosensors said its net profit for the first quarter ended June jumped seven-fold to US$22.6 million ($27.2 million) from US$3.2 million a year ago, helped by higher revenue from licensing and royalties.

OCBC said Biosensor’s results exceeded its expectations, and “a better product mix and increased economies of scale in manufacturing also helped to boost its margins.”

The brokerage also raised its target price to $1.68 from $1.60, and kept its buy rating.

Citi cuts CSE Global target to $1.45, keeps buy

Stock Name: CSE Global
Company Name: CSE GLOBAL LTD

Research House: Citigroup

Price Call: BUY

Target Price: 1.45

Citigroup has cut its target price for Singapore’s CSE Global (CSES.SI), a systems integrator for the global oil industry, to $1.45 from $1.50 and kept its buy rating.

    

Citi said it has cut its 2011 earnings estimates for CSE Global by 12.5 and by 5%for 2012 to account for weakness in its Middle East business.

However, the brokerage said losses in CSE Global’s business in the Middle East are likely to be minimal after the second quarter, and expects the firm to see a strong rebound compared to the first half of the year.

Several mid to large-size contracts could materialise over the next 6-12 months for CSE Global, Citi said.

At 9:13 a.m., shares of CSE Global were 0.41%lower at $1.225, and have fallen 5.8%since the start of the year.

 

Ascendas Reit eyes $1b in China assets over 3-5 yrs

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

Research House: HSBC

Price Call: BUY

Target Price: 2.30

Ascendas Real Estate Investment Trust’s (A-REIT) (AEMN.SI) Singapore industrial properties will continue to make up the bulk of the portfolio even as it hopes to grow its China assets to about $1 billion over the next 3-5 years.

A-REIT CEO Tan Ser Ping said the property trust’s target is to have 80% of its portfolio in Singapore and the remainder in China. A-REIT, which announced its maiden China deal in February, has no plans to expand into other countries.

“We are continuing to scout for opportunities in China. Over the next 3-5 years, if we find enough opportunities we could have about $1 billion (in assets),” Tan told Reuters in an interview on Tuesday.

China’s booming growth has spurred both local and foreign companies to expand their presence in the world’s second-largest economy, driving up demand for industrial space.

According to Tan, A-REIT’s push into China was partly in response to existing Singapore tenants desire to expand their operations there.

“China has developed to such a stage where every business is looking at that market. Within our customer base there’re many that are operating in China,” he said.

Tan added that there were relatively few developers that were familiar with industrial parks in China, providing A-REIT with an opportunty to grow its presence.       

A-REIT is managed by Ascendas Group, a real estate firm that is wholly owned by Singapore industrial infrastructure planning agency JTC Corp. The REIT has a large presence in Singapore with 93 properties worth $5.5 billion.

A-REIT announced in February it had signed a deal to purchase a business park in Shanghai for $117.6 million upon its completion at the end of next year.

The REIT hopes to buy its second asset in China by the end of this year, and is keen to acquire business parks that cater to technology companies from parent Ascendas, Tan said. 

“We note that while the move to China is likely to be at a measured pace, it dilutes A-REIT’s Singapore exposure, which has traditionally been a draw for investors,” HSBC said in a report.

HSBC remains bullish on A-REIT, however, with an overweight call and $2.30 target price.  A-REIT was traded at $2.07 around 2:05 a.m.

Turning to Singapore, Tan said the REIT’s properties will continue to command higher rents in line with the city-state’s efforts to grow its knowledge-intensive industries and high-end manufacturing services sectors.

Amongst the properties owned by A-REIT, the business and science parks properties are expected to enjoy the strongest rental increases, Tan said.

Property services firm DTZ said in a report earlier this month that rental growth for hi-tech industrial space in Singapore rose at a faster pace in the second quarter, as some office tenants opted for cheaper premises.

The average monthly gross rent for private high-tech space, which includes business parks, rose 4.5% quarter-on-quarter to $3.45 per square foot per month after rising 3.1% in the preceding three-month period, according to DTZ.

Shares up at midday but NOL underperforms

Singapore shares rose by midday on Tuesday, but traders expect volatility in the market to continue in the near term as the deadlock over the U.S. debt situation persisted.

By the lunch break, the Straits Times Index (STI) <.FTSTI> was up 0.2%, or 6.26 points, at 3,177,81. The total volume of shares traded in the morning session was 755.5 million shares and turnover was $584.9 million.

This compares with the volume of 638.2 million shares and turnover of $629.3 million in Monday’s morning session. Traders said the STI is expected to trade sideways in the afternoon.

“Most people do expect the U.S. debt deal to be ironed out because they can’t be shooting themselves in the foot. It’s a matter of who gets more concessions,” said Carey Wong, an analyst at OCBC Investment Research.

“There is no major sell-off, but we also haven’t really seen long-term buying,” he said. ”A lot of people are still going into defensive stocks such as REITs, telcos and utilities so they are expecting volatility to continue for a while.”

Shares of Singapore oil rig builder Sembcorp Marine (SCMN.SI) rose as much as 2.1% on hopes for more orders and an uptrend in margins. At midday, the stock was traded at $5.44 on a volume of 1.3 million shares.

DnB NOR said Sembcorp has beaten its margin expectations for the past four quarters up to the January-March period, and the firm has secured nearly $2.2 billion of new orders year-to-date.

The bank upgraded Sembcorp stock to hold from sell and raised its target price to $5.30 from $5.00.

However, Singapore container shipping firm Neptune Orient Lines (NOL) (NEPS.SI) fell as much as 1.4%. At midday, the stock was down 0.7% at $1.44 with 3.2 million shares changing hands.

The firm posted a 5% rise in its cargo in the four weeks period to July 1 from a year ago, but weakness in Asia-Europe rates pushed its average revenue per forty-foot equivalent unit lower by 13%.

“The period saw the sharpest year-on-year decline in freight rates since end-2009. Volumes sequentially improved, but this is in line with expectations and highlights a lack of pricing discipline, in our view,” Nomura said in a report.

Nomura expects NOL, which will announce its second-quarter results on Aug 12, to report a net loss of $35 million, compared with a net loss of $10 million in the first quarter.

DnB NOR upgrades Sembcorp Marine to hold from sell

Stock Name: SembMar
Company Name: SEMBCORP MARINE LTD

Research House: DnBNOR Markets

Price Call: HOLD

Target Price: 5.30

DnB NOR has upgraded Singapore oil rig builder Sembcorp Marine (SCMN.SI) to hold from sell and raised its target price to $5.30 from $5.00.

DnB NOR said Sembcorp has beaten its margin expectations for the past four quarters up to January-March period, and the second-quarter results of the firm’s rival oil rig builder Keppel Corp (KPLM.SI) last week suggest uptrend in margins.

Sembcorp will report its second-quarter earnings on Aug 2.

Sembcorp has secured nearly $2.2 billion of new orders year-to-date compared with Keppel’s $7.4 billion, DnB NOR said.

It added that across the industry, the order momentum in the second half is expected to be slower than the first half due to tighter yard slots for 2013 delivery.

But Sembcorp could benefit as it still has available slots for delivery in the second half of 2013, DnB Nor said. 

At 11:49 a.m., Sembcorp shares were up 1.9% at $5.43. The stock has risen around 1% so far this year.

Suntec Real Estate Inv Trust rated 'buy' by DMG

Stock Name: SuntecReit
Company Name: SUNTEC REAL ESTATE INV TRUST

Research House: DMG

Price Call: BUY

Target Price: 1.72

DMG & Partners Securities in a July 22 research report says: "Suntec reported 2Q11 DPU of 2.532 cents (+6.0% q-o-q; +0.2% y-o-y), which represents 26% of our FY2011 estimate. Net property income declined by 1.1% y-o-y (+0.5% q-o-q) mainly due to lower rental income from retail space.

"Suntec City Mall's average passing rent fell for the 9th quarter out of the last 11 quarters due to negative rental reversion. Meanwhile, total income from JV rose 132% y-o-y to $26.9 million (+14.6% q-o-q) on the back of strong contribution from MBFC, marginally offset by drop in ORQ contribution due to decline in income support.

"Our slightly higher target price of $1.72 was raised due to half-year rollover of our DDM valuation, marginally offset by higher COE (prev 8.4%) and lower terminal growth rate (prev 2.9%). MAINTAIN BUY."

CapitaMalls Asia rated 'buy' by Phillip Securities

Stock Name: CapMallsAsia
Company Name: CAPITAMALLS ASIA LIMITED

Research House: Phillip Securities

Price Call: BUY

Target Price: 1.75

Phillip Securities Research in a July 22 research report says: "CapitaMalls Asia (CMA) reported lower 2Q11 top-line of $62.8mil, a decrease of 13.9% y-o-y.. PATMI was however boasted by revaluation gain on properties of $142.3 million to $164.9 million, a 100.8% y-o-y increase.

"CMA opened one mall each in China and India in 2Q11, and 3 more in the malls opening pipeline for 2H11. The management declared an interim dividend of 1.5 cents to be paid in Sept 2011 and guided that shareholders can expect total dividend of 3 cents for FY2011.

"We adjust our estimates to factor in the total dividend of 3 cents for FY11 instead of 2 cents in our previous forecast. As a result of the payout, RNAV is lowered to $1.94 from 1.95. Fair value is thus lowered from $1.76 to $1.75 pegged at the same 10% discount to RNAV to reflect its inherent long capital commitment period. MAINTAIN BUY."

Dyna-Mac Holdings rated 'sell' by AmFraser

Stock Name: Dyna-Mac
Company Name: DYNA-MAC HOLDINGS LTD.

Research House: AmFraser

Price Call: SELL

Target Price: 0.42

AmFraser Research in a July 22 research report says: "Full-year revenue was $167.9 million against $218.5 million in 2010, a drop of 23.2%. PATMI was $24.8 million against $25.5 million last year. EPS fell from 3.56 cents per share in 2010 to 3.24cps. Gross margin rose from 23% to 30%.

"The order book was reported as $117 million, significantly higher than our previous estimate of $65 million. DM has declared a 2cps dividend for FY2011, translating into a yield of 3.6% based on the current price. This represents a payout ratio of 62%, which is somewhat high in our opinion.

"DM is trading at a P/E of 17.3x based on FY11 EPS of 3.2cps, and this P/E will rise to 18.4x given our EPS estimates. Fair value of 42 cents. MAINTAIN SELL."

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 July 22 research report says: "Excluding $1.4 million forex and impairment losses, Broadway's 2Q core earnings were 3% below our estimate and 19% below consensus because higher-than-expected sales were offset by higher opex and effective tax rate.

"1H net profit accounted for 42% of our full-year forecast and 35% of consensus. EBITDA margin shrank 5.1% pts yoy to 8.9% in 2Q11. It declared an interim dividend of 1 cent (same as 1H10 after adjusting for the 1-for-1 bonus issue), translating into a decent annualised yield of 4.8%.

"We adjust FY2011-2013 EPS by -4% to +1% for this set of results, higher sales and lower gross profit margin. But we retain our target of 47 cents, still based on its 5-year historical P/BV average of 0.8x. MAINTAIN NEUTRAL."

RBS cuts Ezra's target price to $2.00 from $2.20, keeps buy

Stock Name: Ezra
Company Name: EZRA HOLDINGS LIMITED

Research House: RBS

Price Call: BUY

Target Price: 2.00

RBS has lowered its target price for Singapore oil and gas services firm Ezra Holdings (EZRA.SI) to $2.00 from $2.20, but maintained its buy rating.

RBS said it expects Ezra’s subsea division to report losses till the fourth quarter due to the low utilisation of two of its vessels, but forecasts the losses to reverse starting from the first quarter of fiscal 2012 as it acquires more contracts. 

RBS has lowered its 2011 net profit by 62% to reflect initial consolidation losses from acquiring Aker Marine Contractors.

Ezra’s existing offshore divisions is expected to grow at a stable rate of 9-10% year-on-year in fiscal 2012 and 2013 as it adds more vessels to its fleet, the brokerage said in a statement.

RBS said it has kept its buy rating as Ezra’s shares are undervalued given its future earnings growth potential. 

At 11:27 a.m., Ezra shares were down 1.57% at $1.25 and have lost about 30% so far this year. 

 

Citi lowers target on Olam to $3.10; keeps buy

Stock Name: Olam
Company Name: OLAM INTERNATIONAL LIMITED

Research House: Citigroup

Price Call: BUY

Target Price: 3.10

Citi has lowered its target price on Singapore commodities trader Olam International (OLAM.SI) to $3.10 from $3.39, but maintained its buy rating.

Citi said it has cut its target price to account for Olam’s additional 286 million new shares, or a dilution of 13.4%.

However, Olam’s equity fund raising of $731.8 million positions it well for further acquisitions, Citi said, adding that the firm has a good track record of past acquisitions.

The brokerage said Olam’s adjusted gearing is now lower at 0.4 times versus 0.9 times previously, giving it more room for growth and removing an overhang as investors have been concerned about the impact of the fund raising on the stock price.

“With risks to global growth on the downside, Olam’s exposure which is approximately 80% towards food products is a beneficial factor,” Citi said in a report. 

Olam shares closed on Friday at $2.65. The stock has fallen around 15% so far this year.

Keppel Corporation rated 'hold' by Phillip Securities

Stock Name: Kep Corp
Company Name: KEPPEL CORPORATION LIMITED

Research House: Phillip Securities

Price Call: HOLD

Target Price: 12.16

Phillip Securities Research in a July 22 research report says: "Keppel Corp reported 2Q11 revenue of $2,288 million (-3.7% y-o-y) and PATMI of $385 million (+9.3%) respectively.

"The decline in revenue was mainly due to lower revenue from the offshore& marine division (lower vol. of work) and property division (change in accounting treatment) partly offset by higher revenue from infrastructure division (stronger results from Co-gen plant). As of 2Q11, Keppel Corp has chalked up an impressive offshore and marine orderbook of $9.1 billion.

"We raise our fair value to $12.16 from $10.84 due to stronger than expected margins from the offshore and marine sector. We are apprehensive about placing a higher valuation on Keppel Corp until there is more visible return of semi-submersible drilling rigs orders. MAINTAIN HOLD."

Mapletree Logistics Trust rated 'outperform' by CIMB

Stock Name: MapletreeLog
Company Name: MAPLETREE LOGISTICS TRUST

Research House: CIMB

Price Call: BUY

Target Price: 1.05

CIMB in a July 21 research report says: "At 25% of our full-year forecast, MLT's 2Q11 DPU of 1.60 cents (+6.6% y-o-y) met our and consensus estimates. 1H11 DPU of 3.15 cents works out to 48% of our full-year estimate.

"The positives were occupancy improvements and upward rental reversions, which offset higher operating costs stemming from repairs in Japan and property conversion in Singapore. Management is actively looking for acquisition and redevelopment opportunities and has identified a local property with redevelopment potential.

"We incorporate the change in year-end in FY3/12 but keep our $500 million acquisition assumption, DPU estimates and DDM-based target price of $1.05 (8.6% discount rate) pending the analyst briefing. MLT continues to offer an attractive yield of 7%. MAINTAIN OUTPERFORM."

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: 7.60

Nomura Research in a July 21 research report says: "The recent pullback in F&N's share price reflects concerns about its property exposure but overlooks the group's expanding F&B franchise.

"At a 27% discount to our sum-of-the-parts valuation, we believe the shares have more than priced in these concerns, especially given the group's low-cost land bank and relatively small inventory in Singapore. FY2012F profit is 12% below consensus, likely due to our recognition of the change in accounting rules for Australia.

"Our sum-of-the-parts analysis suggest a value of $8.00 per share, but we ascribe a 5% holding company discount to arrive at our target price of $7.60. We highlight the dividend yield of 3% as an additional source of returns. MAINTAIN BUY."

Keppel Land rated 'outperform' by CIMB

Stock Name: KepLand
Company Name: KEPPEL LAND LIMITED

Research House: CIMB

Price Call: BUY

Target Price: 4.73

CIMB in a July 21 research report says: "2Q11 core net profit of $47 million was below expectations at 13% our FY11 estimates and consensus. 1H11 core earnings of $123 million formed 34% of our full year.

"Despite the recent accounting rule change, the Street appeared to have over-recognised sales from its Singapore projects sold under the DPS, and overseas projects yet to be completed - a recognition issue. We adjust our FY11-13 core EPS by +39%/-32% to reflect this change.

"Operationally, China sales have expectedly slowed with slowing office leasing momentum leading to status quo for pre-commitments. Trading at a 38% discount to RNAV, we believe the market has overly discounted these cyclical blips. Target price of S$4.73 (20% discount to RNAV of $5.92). MAINTAIN OUTPERFORM."

Pacific Shipping Trust rated 'buy' by DBS

Stock Name: PacShipTr US$
Company Name: PACIFIC SHIPPING TRUST

Research House: DBS Vickers

Price Call: BUY

Target Price: 0.44

DBS Vickers Securities in a July 22 research report says: "2Q11 revenue of US$15.4 million and operating profit of US $9.3 million remained steady on a y-o-y and q-o-q basis, as the existing fleet of 12 container ships continued to generate predictable income levels.

"Net profit was up 2.3% to US$6.8 million, as interest expenses decreased 6.3% on the back of PST's regular debt repayment schedule. The Trust paid out 71% of distributable cash, which amounted to US$4.8m or 0.809 US cents per unit in 2Q11, a 2% increase y-o-y and flat q-o-q.

"he Trust has secured a total of US$282 million in bilateral financing commitments from six banks to finance the above deals, which implies a high debt-to-value ratio of close to 85% and signals the faith of lenders in PST's ability to sustain cash flows. Target price of 44 US cents. BUY"

IT products distributor ECS up on strong Apple sales

Stock Name: ECS
Company Name: ECS HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 1.08

Shares of Singapore’s ECS Holdings (ECSH.SI), which distributes iPads and iPhones in China, rose much as 2.7% on Thursday, extending gains from the previous session, on upbeat sentiment after Apple recorded blockbuster sales. 

At 10:44 a.m., ECS shares were up 2.1% at $0.745 on a volume of 320,000 shares, around 1.8 times the average daily volume so far this year.

“Apple’s results were great so counters with links to Apple are lifted,” said a local trader.

Blockbuster sales of the iPhone and strong Asian business again helped Apple Inc (AAPL.O) crushed Wall Street’s expectations, driving its shares up to a record high.

OCBC has initiated coverage of ECS with a buy rating and a target price of $1.08, citing ECS’ diverse product offerings, extensive distribution channels, as well as greater penetration in higher growth markets.

“We expect ECS’s earnings momentum to gain traction moving forward, as it had recently clinched new distributorship agreements with Dell and also nationwide distribution rights for Apple’s iPad and iPhone in China,” OCBC said.

It added that ECS is set for a record year in its 2011 fiscal year, though the firm would have to depend on strong volume growth to improve profitability due to the thin margins in the distribution business.

Boustead Singapore rated 'buy' by Kim Eng

Stock Name: Boustead Sp
Company Name: BOUSTEAD SINGAPORE LIMITED

Research House: Kim Eng

Price Call: BUY

Target Price: 1.36

Kim Eng Research in a July 18 research report says: "Boustead's share price has been range-bound ever since it was hit by news that a company project in Libya was adversely affected after unrest erupted in the country in February.

"Granted, there was no significant price catalyst so far. But we would argue that the market has not priced in the growth in its property leasing portfolio, following the shift in business strategy by the Real Estate Solutions division, resulting in earnings which are more recurring in nature.

"Boustead remains capable of making strategic acquisitions with its strong net cash position of $185 million, which would serve as a potential catalyst. Sum-of-the-part-based target price of $1.36. BUY"

CapitaRetail China Trust rated 'hold' by DBS

Stock Name: CapitaRChina
Company Name: CAPITARETAIL CHINA TRUST

Research House: DBS Vickers

Price Call: HOLD

Target Price: 1.29

DBS Vickers Securities in a July 18 research report says: "Gross revenue (in RMB) grew 10.9% y-o-y and NPI 11.3%. But a 7% stronger SGD led to smaller 3.8% and 4.1% reported numbers, respectively. The trust also recorded a 4.8% revaluation gain from December 2010.

"Excluding that, 2Q11 DPU increased by 3.9% to 2.15 cents. Result was relatively flat q-o-q. Balance sheet remains robust with 29.7% gearing post-placement. We nudged down DPU by <1% after imputing the enlarged unit base, which lowered our DCF-value by 1 cent to $1.29.

"We are pleased with the result of the trust's efforts to revamp its malls into multi-tenanted properties for better leverage to rising rents and retail sales, but its near-term performance is likely to continue to be affected by the strong SGD. MAINTAIN HOLD."

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: 0.15

NRA Capital in a July 19 research report says: "HG Metal ("HGM") is a leading steel stockist in Singapore. HGM suffered a long stretch of losses in FY2009 and FY2010, but that is finally over. It staged a slower recovery than its peers, partly due to internal restructuring and the fact it was over leveraged. It reported a remarkable set of results in 1HFY11.

"We view the risk reward ratio for the counter to be attractive, given (1) stock is trading at historical lows, (2) attractive 5.5x FY11 PER and 5.4x FY12 PER, (3) 30% discount to book value, and (4) long term synergy from OCS.

"Our target price of 15 cents is based on 1x FY12 NTA, representing an upside potential of 58%. OVERWEIGHT (initiating coverage)."

K-Reit Asia rated 'neutral' by CIMB

Stock Name: K-REIT
Company Name: K-REIT ASIA

Research House: CIMB

Price Call: HOLD

Target Price: 1.49

CIMB in a July 19 research report says: "K-REIT's 2Q11 DPU of 1.93 cents met both our and consensus expectations as it came in at 26% of our full-year forecast, taking 1H11 DPU to 49% of forecast.

"K-REIT also announced the A$154 million-170 million forward purchase of a 50% interest in 8 Chifley Square in Sydney. The acquisition will be structured to provide a steady 6.65% yield. But there are risks associated with going overseas and with a rise in aggregate leverage to above 40% for the downpayment for the purchase.

"Factoring in the acquisition, we raise our FY12-13 DPU estimates by 2-5%. But our DDM-based target price is trimmed from $1.52 to $1.49 as we raise our cost of equity to 7.5% to factor in higher overseas exposure. MAINTAIN NEUTRAL."

Keppel Telecommunications &amp; Transportation rated 'outperform' by CIMB

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

Research House: CIMB

Price Call: BUY

Target Price: 1.61

CIMB in a July 20 research report says: "2Q11 core net profit ($17.6 million, +27.8% y-o-y) came largely in line with our expectations. 1H11 core net profits formed 42% of our FY2011 estimates.

"Key variances came from (i) slightly lower-than-expected topline offset by lower-than-expected operating costs leading to higher-than-expected margins and (ii) higher-than-expected depreciation and interest expense. Therefore, we tweak our operating expense assumptions, leaving our FY2011-2013 estimates largely unchanged.

"However, our target price rises to $1.61 (from $1.57), still based on sum-of-the parts valuations, helped by M1's recent price increase. KPTT achieved record operating profit this quarter, which reflects success in its efforts to strengthen its core operations. MAINTAIN OUTPERFORM."

Mermaid Maritime Plc upgraded to 'outperform' by CIMB

Stock Name: Mermaid
Company Name: MERMAID MARITIME PUBLIC CO LTD

Research House: CIMB

Price Call: BUY

Target Price: 0.49

CIMB in a July 18 research report says: "We believe that the worst could be over with Mermaid bottoming out in terms of q-o-q earnings. Utilisation for 2QFY11 has climbed to 54% vs. 28% for 2QFY10. Based on an order book of over US$100 million, subsea should achieve above 60% utilisation for 2HFY11.

"We lower our FY2011 net loss forecast by 8% and raise our estimate for FY2013 by 114%. As we believe that losses could be contained, we raise our target price to 49 cents, based on 0.8x CY11 P/BV (previously 41 cents, based on 0.7x CY11 P/BV, its average since 2009).

"As it is trading at 0.6x CY11 P/BV, we believe that downside risks are limited and see its share price supported by value in subsea assets. UPGRADE TO OUTPERFORM."

TEE International rated 'increase exposure' by SIAS

Stock Name: Tee Intl
Company Name: TEE INTERNATIONAL LIMITED

Research House: SIAS

Price Call: BUY

Target Price: 0.45

SIAS Research in a July 18 research report says: "TEE delivered a spectacular FY2011 results with revenue and PATMI rising 62.7% and 52.2% y-o-y to $253 million and $17.3 million respectively, largely in line with expectations.

"The former's increment was due to the engineering division's robust order book and greater contribution from the integrated real estate segment. Despite higher raw material expenses (COGS climbed 69.4% y-o-y), well controlled operating expenses supported margins and assisted TEE in ending the financial year with yet another record PATMI.

"The company is trading attractively at a FY12F P/E of 6.19X (assuming full conversion of warrants). Upgraded intrinsic value of 45 cents. MAINTAIN INCREASE EXPOSURE."

Yangzijiang Shipbuildings Holdings rated 'buy' by DMG

Stock Name: Yangzijiang
Company Name: YANGZIJIANG SHIPBLDG HLDGS LTD

Research House: DMG

Price Call: BUY

Target Price: 1.98

DMG & Partner Research in a July 19 research report says: "Yangzijiang (YZJ) issued a statement clarifying that: (1) it has no plans for convertible bonds in the pipeline; (2) existing European customers are long-term customers with strong financial standing and payment track record; (3) YZJ reported timely delivery of vessels in 1H11 and is confident of delivering at least 30% earnings growth in 1H11 (to be announced on 11 Aug 2011); (4) Management may use share buyback to protect the interest of minority shareholders.

"Assuming 30% net profit growth in 1H11, YZJ should report at least RMB848 million net profit (+6% y-o-y) in 2Q11 and 1H11 earnings should account for at least 54% of our forecast. Unchanged target price of $1.98 based on 12x FY11F P/E. Stock is now valued at 7.5x FY11F P/E and offers 3.6% net dividend yield. MAINTAIN BUY."

SATS rated 'underperform' by CIMB

Stock Name: SATS
Company Name: SATS LTD.

Research House: CIMB

Price Call: SELL

Target Price: 2.60

CIMB in a July 19 research report says: "We expect SATS to be swept into some turbulence ahead with headwinds arising from (1) margin squeeze from food inflation and inability to pass through costs in an environment of struggling profitability for main airline clients, and (2) the emergence of a third ground handler in Changi Airport, which could stiffen competition and further erode pricing power.

"At 13.7x CY12 P/E, SATS is trading slightly above its average forward P/E. A slowing aviation industry and margin pressure could spark a de-rating of its share price. We resume coverage with new forecasts. Target price of $2.60, based on 13.1x CY12 P/E, its historical mean since 2004. UNDERPERFORM."

UBS starts Mapletree Industrial at buy, target $1.36

Stock Name: MapletreeInd
Company Name: MAPLETREE INDUSTRIAL TRUST

Research House: UBS

Price Call: BUY

Target Price: 1.36

UBS has initiated coverage of Singapore’s Mapletree Industrial Trust (MAPI.SI), which owns factories and other industrial properties, at buy with a target price of $1.36.

UBS said it expects Mapletree Industrial to record a distribution per unit (DPU) in 2012 of 7.79 cents and to see its DPU grow at an average 5.4% a year over 2012-2015, the highest amongst industrial real estate investment trusts in Singapore.

“The industrial property sector (in Singapore) is the only commercial segment where rentals have exceeded the 2008 peak, recovering more strongly than office and retail,” said UBS in a report.

The brokerage also noted that rents for multiple-user factories are at a 20-year high, and Mapletree Industrial offers exposure to this segment as 85% of its net lettable area is multiple-user factories.

At 11:12 a.m., shares of Mapletree Industrial were 0.88% higher at $1.15, and have gained 5.9% since the start of the year.

Deutsche downgrades Genting Singapore to hold; target $1.90

Stock Name: Genting SP
Company Name: GENTING SINGAPORE PLC

Research House: Deutsche Bank

Price Call: HOLD

Target Price: 1.90

Deutsche Bank has downgraded casino operator Genting Singapore (GENS.SI) to hold from buy and lowered its target price to $1.90 from $2.43.

Deutsche said it expects Genting’s second quarter earnings before interest, taxes, depreciation and amortisation to be around $332 million, a 34% fall quarter-on-quarter, citing factors such as seasonality and more intense competition in the mass market.

The bank said it forecast Genting’s rival, Marina Bay Sands (LVS.N), to gain significant market share, up from 40% in the first quarter.

The initial ramp-up of a new gaming market appears to be easing and the sector is entering a more sustainable growth phrase, Deutsche said, adding that it has pushed its junket approval estimate in the city-state to 2012.

At 9:05 a.m., Genting shares were up 0.55% at $1.84. The stock has fallen around 16% so far this year.

JPMorgan ups Wilmar to overweight, target $6.50

Stock Name: Wilmar
Company Name: WILMAR INTERNATIONAL LIMITED

Research House: JP Morgan Chase

Price Call: BUY

Target Price: 6.50

JPMorgan has upgraded Singapore’s Wilmar International (WLIL.SI), the world’s largest listed palm oil firm, to overweight from neutral and raised its target price to $6.50 from $5.40.

JPMorgan said it expects Wilmar to raise prices in the near term to improve its margins for both oilseeds and consumer products in the second half of this year and next year.

The brokerage raised its earnings forecast for Wilmar by 2% for 2011 and by 10% for 2012 and 2013, to reflect better margins.

Wilmar will also benefit from higher sugar prices in 2012, JPMorgan said.

Wilmar’s shares, which closed at $5.65 on Monday, have gained 0.36% since the start of the year.

DMG ups A-REIT to buy from neutral; target $2.42

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

Research House: DMG

Price Call: BUY

Target Price: 2.42

DMG & Partners has upgraded Singapore’s Ascendas Real Estate Investment Trust (A-REIT) (AEMN.SI), which owns industrial properties in the city-state, to buy from neutral and raised its target price to $2.42 from $2.09.

DMG upgraded A-REIT to account for future earnings contributions from its $32.3 million project to build a training facility for Unilever Asia.

The broking firm also said A-REIT’s risk profile has improved due to the strong outlook for industrial rents in Singapore.

“The latest project strengthens A-REIT’s credential as a premium-grade industrial REIT, as the global development centre for Unilever Asia will be the second of its kind globally,” DMG said in a report.

The brokerage also said it expects A-REIT to renew its leases at higher rents in 2012-2013, as average spot rent for business parks, warehouses and factories have shown strong increases.

At 9:36 a.m., shares of A-REIT were flat at $2.14. They have gained 4% since the start of the year.

Goldman downgrades SGX to neutral; target $7.68

Stock Name: SGX
Company Name: SINGAPORE EXCHANGE LIMITED

Research House: Golman Sachs

Price Call: HOLD

Target Price: 7.68

Goldman Sachs has cut Singapore Exchange (SGXL.SI), Asia’s second-largest listed bourse operator, to neutral from buy and lowered its target price to $7.68 from $10.37.

Goldman has cut its estimates for SGX’s average daily turnover and earnings per share, citing the bourse’s muted turnover or initial public offering activities so far. 

The bank said that although weak volumes are largely reflected in SGX’s year-to-date share price underperformance, it has downgraded the stock given the uncertain global macro outlook, lack of near-term catalysts and weak volume trends.

While Goldman said SGX management has continued its focus on innovation through measures such as new derivative products, the net improvements to turnover or derivative volumes appear marginal.

Upside catalysts include a rise in turnover and clarity on capital deployment, Goldman said. At 11:01 a.m., SGX shares were down 0.3% at $7.19 and have fallen nearly 15% so far this year.

BAML starts UOL at buy, target $6.20

Stock Name: UOL
Company Name: UOL GROUP LIMITED

Research House: BofA Merrill Lynch

Price Call: BUY

Target Price: 6.20

Bank of America Merrill Lynch has initiated coverage of Singapore property developer UOL Group (UTOS.SI) at buy with a target price of $6.20.

Although Merrill said it remains cautious on the property sector, it likes UOL for its exposure to Singapore’s commercial and hotel sectors, as well as its pre-sold residential land bank.

“Under current market conditions, we have a preference for property companies with commercial assets given the stable nature of recurring income and the ability of asset values to hold under a slowing growth environment,” said Merrill in a report.

Although UOL trades at a discount of 44% to its restated net asset value, compared to 22% for its peers, UOL is expected to benefit as investors shift their property portfolio towards one that is more defensive in nature in the second half, Merrill said.

At 2:28 p.m., UOL shares were 0.2% at $4.97, and have gained 4.6% since the start of the year.

Nomura cuts target on Noble to $2.50; keeps buy

Stock Name: Noble Grp
Company Name: NOBLE GROUP LIMITED

Research House: Nomura

Price Call: BUY

Target Price: 2.50

Nomura has lowered its target price on Singapore commodities trader Noble Group (NOBG.SI) to $2.50 from $2.75, but maintained its buy rating.

Nomura said operating conditions for Noble year-to-date remain challenging with weak crush margins, carbon credits and logistics, as well as muted contribution from its agriculture business due to seasonally low harvest.

However, Nomura said the firm may look to spin off or sell down the agriculture business, which would unlock value as it commands a premium to the non-agriculture segment.

The brokerage added that Noble is trading at around 11.3 times price-earnings ratio for 2012, which looks attractive. At 3:58 a.m., Noble shares were down 3.4% at $1.725 on a volume of 31 million shares.

CIMB ups Mermaid Maritime to outperform, target $0.49

Stock Name: Mermaid
Company Name: MERMAID MARITIME PUBLIC CO LTD

Research House: CIMB

Price Call: BUY

Target Price: 0.49

CIMB Research has upgraded Singapore-listed offshore oil and gas firm Mermaid Maritime Pcl (MMPC.SI) to outperform from neutral and raised its target price to $0.49 from $0.41.

CIMB has cut its fiscal 2011 net loss forecast for Mermaid Maritime by 8% and raised its earnings estimate for 2013 by 114% to take into account higher utilisation rates and improvements in its subsea business.

“Improvements mainly stem from a shift in strategic bidding, which has led the subsea arm to tender much competitively than before,” CIMB said in a report.

The brokerage said it expects Mermaid Maritime to achieve utilisation rate of 67% in the third quarter and 62% in the fourth quarter.

At 9:01a.m., shares of Mermaid Maritime were flat at $0.34 and have fallen about 21% since the start of the year.

Sembcorp Marine rated 'buy' by DBS

Stock Name: SembMar
Company Name: SEMBCORP MARINE LTD

Research House: DBS Vickers

Price Call: BUY

Target Price: 6.30

DBS Vickers Securities in a July 15 research report says: "As highlighted in our flash note "Possible award of PTTEP's Zawtika platform project" dated June 13, Sembcorp Marine has secured the contract worth c.$600 million for an integrated processing and living quarters platform from PTTEP International Limited (PTTEP), through its wholly-owned subsidiary, SMOE Pte Ltd.

"While orders have been slow YTD, we remain optimistic that our FY2011 $5 billion order wins assumption can be met, implying $2.9 billion worth of orders in the next 6 months. This should be underpinned by the exercise of at least a portion of the 8 outstanding jackup options worth an estimated US$1.6 billion, and other potential jackup orders from Capital Ship Management Corp and DryShips, as flagged up previously. Target price of $6.3. MAINTAIN BUY."

ECS Holdings rated 'buy' by OCBC

Stock Name: ECS
Company Name: ECS HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 1.08

OCBC Investment Research in a July 15 research report says: "ECS Holdings (ECS) is a leading Information and Communications Technology (ICT) products and services provider with a strong presence in six regional countries.

"We expect ECS's earnings momentum to gain traction moving forward, as it had recently clinched new distributorship agreements with Dell and also nationwide distribution rights for Apple's iPad and iPhone in China. We value ECS based on a PER methodology and ascribe its historical median PER of 7x to our FY11F core EPS forecast.

"This represents a 25% discount to its peers' CY11 PER of 9.3x, which we think is justifiable due to its low free float (10.3%) and trading liquidity. Nevertheless, our fair value estimate of $1.08 still implies an attractive upside potential of 41.2%, supported by a healthy prospective dividend yield of 5.0%. BUY (initiating coverage)."

Sabana Shari'ah Compliant Reit rated 'buy' by Phillip Securities

Stock Name: Sabana REIT
Company Name: SABANA SHARI'AH COMPLIANT REIT

Research House: Phillip Securities

Price Call: BUY

Target Price: 1.11

Phillip Securities Research in a July 18 research report says: "Sabana REIT is a Singapore-based REIT with a mandate to invest in income-producing industrial real estate and real estate-related assets in Singapore and Asia with compliance to Shari'ah investment principles.

"Freight Link's expertise in chemical warehouse & logistics give them an edge over its peers. Triple net master lease structures provide some form of security as the rental income is locked-in and likely to be stable and visible for the next three years. Ample debt headroom leaves Sabana REIT in good position to take advantage of acquisition growth.

"In view of the short land tenure for industrial properties, we ascribe a 9.5% discount rate to Sabana REIT. Fair value of $1.11, representing a potential upside of 29% with the inclusion of FY2011 dividend yield of 10%. BUY (initiating coverage)."

M1 rated 'neutral' by CIMB

Stock Name: M1
Company Name: M1 LIMITED

Research House: CIMB

Price Call: BUY

Target Price: 2.63

CIMB in a July 15 research report says: "Annualised, M1's 1H11 results are within expectations, at 2% below our forecast and 1% above consensus. M1 declared a 6.6 cents dividend per share for 2Q11, in line with our forecast.

"Highlights were slower revenue q-o-q due to lower handset sales and a q-o-q recovery in margins. 1H11 growth of 7% y-o-y is fairly indicative of the full year and it is reasonable to assume the same run rates. We forecast y-o-y growth of 11% for 2011 profit after tax (PAT).

"M1 also keeps its 80% payout and would be monitoring the economy, its free cash flow, and gearing before deciding on any capital management. We make no changes to our earnings forecasts for FY2011-2013 or DCF-based target price of $2.63. M1 lacks re-rating catalysts though downside should be limited by its dividend yields of 6-7%. MAINTAIN NEUTRAL."

Olam falls on worries of higher borrowing costs

Stock Name: Olam
Company Name: OLAM INTERNATIONAL LIMITED

Research House: HSBC

Price Call: BUY

Target Price: 3.21

Shares of Singapore commodity firm Olam International (OLAM.SI) fell as much as 3% on Monday, on concerns that a failure to raise the U.S. debt ceiling could increase borrowing costs for commodity traders, traders said.

At 10:42 a.m., shares of Olam were 2.4% lower at $2.48 with over 4.7 million shares changing hands.

“Of the U.S. does not raise its debt ceiling or ratings agencies downgrade its rating, this will be negative to commodity traders like Olam because their borrowing costs would increase,” said an analyst.

HSBC also cut its target price for Olam to $3.21 from $3.63 to reflect the firm’s larger equity base after it raised $740 million in June through a share placement exercise.

Shares of fellow commodity trader Noble Group (NOBG.SI) also fell, and were 1% lower at $1.765.

JPMorgan raises CapitaRetail China Trust to $1.30

Stock Name: CapitaRChina
Company Name: CAPITARETAIL CHINA TRUST

Research House: JP Morgan Chase

Price Call: HOLD

Target Price: 1.30

JPMorgan has raised its target price on Singapore’s CapitaRetail China Trust (CRCT) (CRCT.SI), which owns shopping malls in China, to $1.30 from$1.25 and maintained its neutral rating.

JPMorgan said the key near-term share price catalyst would be the large-scale improvement or upgrading of CRCT’s existing portfolio.

CRCT reported second-quarter distribution per unit of $0.0215 per unit at an annualised yield of 7.1%, slightly above consensus but below JPMorgan estimates, the brokerage said.

Rental reversions for the firm’s overall portfolio came in%at a historical high of 17% against preceding rents, with%the two biggest assets — CapitaMall Wangjing and Xizhimen — moving towards stabilisation, JPMorgan said.

It added that contributions from the newly acquired Minzhon Leyuan mall in China could help to sustain the growth in net property income.

At 11:29 a.m., CCRT was up 0.8% at $1.24 on a volume of 109,000 units. It has risen around 3% so far this year.

Market Pulse: ECS Holdings, M1, Ezra, CCT, Sembcorp Marine (15 Jul 2011)

Stock Name: ECS
Company Name: ECS HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 1.08

Stock Name: M1
Company Name: M1 LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 2.79

Stock Name: Ezra
Company Name: EZRA HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 1.87

Stock Name: CapitaComm
Company Name: CAPITACOMMERCIAL TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.67

Stock Name: SembMar
Company Name: SEMBCORP MARINE LTD

Research House: OCBC

Price Call: BUY

Target Price: 6.30

Market Pulse: ECS Holdings, M1, Ezra, CCT, Sembcorp Marine (15 Jul 2011)

FOCUS

ECS Holdings: Set for a record year; initiate with BUY

Summary: ECS Holdings (ECS) is a leading Information and Communications Technology (ICT) products and services provider which thrives on developing a strategic partnership with major IT vendors. Earnings momentum is expected to gain traction moving forward, as it had recently secured new distributorship agreements, notably Apple's iPad and iPhone distribution rights in China. Moreover, ECS's diverse product offerings and extensive distribution channels, coupled with an increasing focus and penetration in higher growth markets, lend support to our belief that it is poised for a record performance in FY11. We are forecasting double-digit growth for both its revenue and core earnings in FY11 and FY12. We value ECS by ascribing its historical median PER of 7x to our FY11F core EPS forecast. This valuation peg represents a 25% discount to its peers' CY11 PER of 9.3x, which we think is justifiable due to its low free float (10.3%) and trading liquidity. Nevertheless our fair value estimate of S$1.08 still implies an attractive upside potential of 41.2%, supported by a healthy prospective dividend yield of 5.0%. As such, we initiate coverage on ECS with a BUY rating. (Wong Teck Ching Andy)

M1: 2Q11 results mostly in line

Summary: M1 Ltd's 2Q11 results came in within our expectations. Revenue climbed 10.0% YoY to S$245.4m, or 0.2% ahead of our estimate; net profit climbed 5.0% YoY (+0.6% QoQ) to S$42.8m, or around 1.9% ahead of our forecast. M1 has also declared an interim dividend of S$0.066/share, up from S$0.063 for the same period last year. M1 continues to guide for earnings growth in 2011, buoyed by continued customer additions and increasing mobile data usage; it has also kept its S$100m capex guidance. Interestingly, M1 also revealed that it plans to set up its own corporate OpCo (Operating Company) for NBN in 3Q11. Given that the 1H11 results were in line with our expectations, we are leaving our FY11 estimates unchanged. We continue to like M1 for its defensive earnings and attractive dividend yield. Maintain BUY with an unchanged DCF-based fair value of S$2.79. (Carey Wong)


Ezra Holdings: AMC integration remains on track

Summary: Ezra Holdings (Ezra) reported a 51% YoY increase in revenue to US$164.8m but saw a 75% fall in net profit to US$6.6m in 3QFY11, mainly due to a fall in gross profit margin with the consolidation of newly acquired AMC and higher administrative expenses. Excluding AMC's net loss of about US$7.5m to US$10m in the last quarter, Ezra's 3QFY11 net profit would have accounted for about 21% of our full year estimate. With slightly more clarity on the AMC front, we have adjusted our earnings estimates for FY11 and FY12, and deem FY12 to be more reflective of the group's earnings after further integration. As such, we roll forward our valuation to 14x FY12F earnings (from blended FY11/12F previously) for the offshore marine and energy business, and our fair value estimate slips to S$1.87 (prev. S$2.05). A potential catalyst would be higher-than-expected contract wins with healthy margins for the subsea business, which has amassed a decent order book of more than US$300m YTD. Maintain BUY. (Low Pei Han)


CapitaCommercial Trust (CCT): 2Q11 results above expectations

Summary: For 2Q11, CapitaCommercial Trust (CCT) reported a distributable income of S$54.4m or a DPU of 1.92 S cents, bringing the total DPU for 1H11 to 3.77 S cents. 1H11 gross revenue constituted 51% of our annual estimate while distributable income came in above expectations due to a sharper-than-expected dip in operating costs. Management refinanced S$964m of RCS debt with S$800m notes at 3.1% and a $164m term loan facility at 3.0%, versus an estimated cost around 4.2% previously. CCT also announced that it would take a 40% stake in the Market St office development with JV partners, CapitaLand (50%) and Mitsubishi Estate Asia (10%), with a call option to purchase the property within three years after TOP. We update our assumptions and increase our distribution forecast to reflect lower operating costs. As such, we also adjust our fair value upwards to $1.67 from $1.63 previously. Maintain BUY. (Research Team)


Sembcorp Marine: LOI to build S$600m platform becomes effective

Summary: Sembcorp Marine (SMM) announced yesterday that its wholly-owned subsidiary SMOE has secured a contract close to S$600m from PTTEP International for the engineering, procurement, construction, transportation, installation, offshore hook-up and commissioning of an integrated Processing and Living Quarters platform. According to Upstream, SMOE and Saipem had earlier been awarded a letter of intent (LOI) for this large central processing platform, in which platform fabrication work is expected to take place in SMOE's Batam facility and Saipem's Karimun yard in Indonesia. The platform will be installed at a water depth of 150m in Block M9 in offshore Myanmar, and construction is expected to start in Oct 2011 with offshore completion in Nov 2013. We will be obtaining more details on the split of work between SMOE and Saipem, but assuming a 50-50 split, this would boost SMM's new order wins to about S$1.8b YTD, forming 40% of our full year estimate. Maintain BUY with S$6.30 fair value estimate. (Low Pei Han)

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



NEWS HEADLINES

- US debt ceiling talks between President Obama and Republican Congressional leaders stall even as Moody's issued a warning of a possible cut to the US' credit rating.

- US retail sales remained flat in June as rising unemployment held back consumer spending.

- Italy's borrowing costs jumped higher as yields on its five-year bond hit 5.9% and that of its 15-year bond hit 4.93%.

- According to the Malaysian Institute of Economic Research, Malaysia's inflation likely rose to a 28-month high of 3.8% in June after the government authorised an increase in power tariffs.

- The Housing & Development Board (HDB) yesterday launched 3,600 units across seven build-to-order (BTO) projects to meet public housing demand.

- CapitaLand said it is looking at the possibility of buying or having the option to buy some components of the Khazanah-Temasek mixed-development in the Ophir-Rochor area.

- Far East Organization plans to raise at least S$500m through listing of some its hotel and serviced residence assets in a REIT next year, according to sources familiar with the deal.

Ezion Holdings rated 'buy' by Kim Eng

Stock Name: EzionHldg
Company Name: EZION HOLDINGS LIMITED

Research House: Kim Eng

Price Call: BUY

Target Price: 0.99

Kim Eng Research in a July 14 research report says: "Ezion continues to develop its liftboat business with two project-specific contracts in the last three months and the ongoing delivery of its newbuilds. Its improved capital structure allows it to take full advantage of the opportunities that its liftboat business provides.

"As of its 1Q11 reporting, the company has a net cash balance of just over US$10m. Ezion certainly has demonstrated that it has the resources, capability and balance sheet to further build on its liftboat business, which will drive earnings beyond our current three-year forecast core net earnings CAGR of 30%.

"While core FY2011 earnings are muted due to start-up costs, FY12 will be boosted by liftboat deployments. Target price of 99 cents, based on PEG of just 0.5x or FY11F core PER of 12.5x. MAINTAIN BUY."

Ezra Holdings rated 'outpeform' by CIMB

Stock Name: Ezra
Company Name: EZRA HOLDINGS LIMITED

Research House: CIMB

Price Call: BUY

Target Price: 1.80

CIMB in a July 15 research report says: "9M11 core net profit of US$27.7 million (-46% y-o-y) forms only 37% of our FY2011 forecast and 41% of consensus.

"The shortfall stemmed from: (1) US$10 million losses from AMC; (2) lower-than-expected gross margins for offshore support; (3) higher-than-expected interest expense; and (4) lower-than-expected earnings from EOCL. We cut our earnings estimates by 5-38% for FY11-13% after factoring in the weak quarter. This reduces our target price to $1.80 (from $2.44), still based on SOP.

Despite the earnings disappointment, we keep our outperform rating as we believe the worst could be over for AMC on the back of improved integration, stronger project execution and sizeable contract wins in the near term. MAINTAIN OUTPERFORM."

Capitacommercial Trust rated 'underperform' by CIMB

Stock Name: CapitaComm
Company Name: CAPITACOMMERCIAL TRUST

Research House: CIMB

Price Call: SELL

Target Price: 1.46

CIMB in a July 15 research report says: "2Q11 results met expectations, at 25% of our FY11 forecast and consensus estimate. Despite a 15bp cap-rate compression for its Grade-A assets, operational indicators continued to decline with revenue down 9.2% y-o-y on negative rental reversions from 6BR and OGS.

"This trend is expected to persist in 2H11 with expiring leases locked in at peak levels in 2008. Plans for MSCP redevelopment have been finalised with CCT potentially gaining full stakes by 2015. However, the DPU uplift is also not expected until then.

"We raise our DDM-based target price by 7% to $1.46 (8% discount rate) to account for this. Valuations (1x P/BV), with limited near-term catalysts in sight for organic growth in the next 6-12 months. MAINTAIN UNDERPERFORM."

Ezra falls on disappointing earnings

Stock Name: Ezra
Company Name: EZRA HOLDINGS LIMITED

Research House: CIMB

Price Call: BUY

Target Price: 1.80

Shares of Singapore oil and gas services firm Ezra Holdings (EZRA.SI) fell 3.4% on Friday to a two-week low after it reported worse-than-expected quarterly earnings, traders said.

At 9:06 a.m., shares of Ezra were traded at $1.435 with over 1 million shares changing hands.

Ezra said its net profit for the third quarter fell 75% to US$6.6 million ($8 million) from US$26.3 million a year ago, due to higher expenses resulting from its expansion.

Brokerages DMG & Partners and CIMB Research have cut their target prices for Ezra to $1.80 on the back of its disappointing earnings, due to lower than expected gross margins for its offshore support business and higher-than-expected interest expense.

CIMB has cut its earnings estimates for Ezra by 5-38% for 2011-2013, but has kept its outperform rating on the firm as it expects stronger project execution and sizeable contract wins from the firm in the near term.

Singapore Press Holdings rated 'neutral' by CIMB

Stock Name: SPH
Company Name: SINGAPORE PRESS HLDGS LTD

Research House: CIMB

Price Call: HOLD

Target Price: 4.24

CIMB in a July 13 research report says: "3Q11 core net profit of $114.8 million is in line with our forecast and consensus, accounting for 30% of our FY2011 estimate. 9M11 core net profit forms 77% of our full-year estimate.

"Though profit is in line, earnings quality is weaker with a decline in the print business propped up by stronger investment income. Though we had been expecting margin pressures for its print business, we were slightly surprised by the y-o-y weakening in ad revenue.

"We fine-tune our FY2011-2013 EPS estimates by 1%, with higher investment income assumptions offset by higher taxes and opex. Accordingly, our sum-of-the-part target price falls to $4.24 from $4.29. SPH should, however, be supported by dividend yields of about 6. MAINTAIN NEUTRAL."

KS Energy Services rated 'buy' by DnBNOR Markets

Stock Name: KS Energy
Company Name: KS ENERGY LIMITED

Research House: DnBNOR Markets

Price Call: BUY

Target Price: 1.30

DnBNOR Markets in a July 13 research report says: "The partnership with NOC-backed PT Pertamina Drilling Services is positive, in our view, as this may present further working opportunities with them in Indonesia. However, there is limited information on the contract details to assess its economics.

"We have yet to determine: (1) which drilling assets (if any) KS Energy would deploy; (2) whether this contract is an onshore or offshore work; and (3) The contract nature, if it is bareboat, time charter, or pure management services contract. Based on the fleet of KS Energy, we are not able to clearly identify a drilling asset that can fit the contract schedule.

"We expect limited impact on estimates and will revert with more details later. Net asset value of $1.32 per share. Target price of $1.30. BUY"

Keppel Land rated 'buy' by UOB KayHian

Stock Name: KepLand
Company Name: KEPPEL LAND LIMITED

Research House: UOB KayHian

Price Call: BUY

Target Price: 4.55

UOB KayHian in a July 8 research report says: "Keppel Land will be a key beneficiary of the positive outlook for the office segment (rentals expected to grow 15-20% in 2011) as it derives nearly 31% of its value from the Singapore office portfolio.

"Keppel Land's share price has fallen by 24% from the beginning of the year on concerns of policy overhang on its Singapore and China residential portfolios. At current share price levels, the stock is trading at 1.29x P/B and a steep 33% discount to our RNAV, presenting more room for upside.

"Keppel Land's net gearing as at 1Q11 stood at 0.24x, with a cash position of $1.4 billion. Target price of $4.55 pegged at a 15% discount to its FY2011 RNAV of $5.37 per share, presenting a 27% upside potential from current share price levels. MAINTAIN BUY."

Hyflux rated 'buy' by Kim Eng

Stock Name: Hyflux
Company Name: HYFLUX LTD

Research House: Kim Eng

Price Call: BUY

Target Price: 2.37

Kim Eng Research in a July 11 research report says: "During a technical sharing session, Hyflux again showcased its proprietary ultrafiltration Kristal membrane, which has been gaining traction in the last few years both in terms of market share and industry recognition.

"The $890 million SingSpring Desalination Plant in Tuas, has significantly lifted Hyflux's orderbook visibility. Funding worries have been eased, too, after a $150 million project financing facility was secured and the recent $400 million preference share issue.

"We expect the Tuas SingSpring plant to start contributing to earnings this year and raise our FY2011/1202 estimates by 6-10%. Accordingly, our SOTP-based target price rises from $2.25 to $2.37. MAINTAIN BUY."

Foreland Fabrictech Holdings rated 'buy' by Phillip Securities

Stock Name: Foreland
Company Name: FORELAND FABRICTECH HLDS LTD

Research House: Phillip Securities

Price Call: BUY

Target Price: 0.191

Phillip Securities Research in a July 8 research report says: "Foreland is a vertically integrated manufacturer of normal and functional fabric.

"Reasons why we are featuring the stock are: (a) An inflexion point was observed in 1Q10, profitability since then has rebounded strongly. Future earnings are premised on strong demand for functional fabrics. (b) Current entry point looks attractive relative to 2 previous batches of placees. 1st batch paid $0.1235, 2nd batch paid 16 cents. (c) A top 10 customer took a 3.9% stake in the company at 16 cents, signifying confidence in a long term business relationship.

"We price Foreland at 4.35x FY11E earnings. This represents a hefty 70% discount to broad market PE of around 14.5x. Target price of 19.1 cents. BUY (initiating coverage)."

DBS Group Holdings rated 'neutral' by DMG

Stock Name: DBS
Company Name: DBS GROUP HOLDINGS LTD

Research House: HSBC

Price Call: HOLD

Target Price: 15.00

DMG & Partners Research in a July 11 research report says: "We are forecasting DBS 2Q11 net profit of $720 million, representing a 11% q-o-q decline from 1Q11's $807 million. This factors insequentially lower net trading income and slightly higher provisioning.

"We see net interest income remaining unexciting. As we expect SIBOR to remain soft till mid-2012, we see little catalyst driving DBS share price. We note that 1Q11 provisioning of $125 million was lower than the 2010 quarterly average of $228 million.

"Whilst we note that Singapore economic conditions remain good, we assume that DBS may book in sequentially higher 2Q11 provisions. Target price of $15.00, pegged to 1.3x 2011 book, close to the historical average of 1.35x P/B. NEUTRAL."

City Developments rated 'sell' by UOB KayHian

Stock Name: CITYDEV
Company Name: CITY DEVELOPMENTS LIMITED

Research House: UOB KayHian

Price Call: SELL

Target Price: 9.80

UOB KayHian in a July 8 research report says: "CDL is the largest listed proxy to the Singapore residential segment, deriving about 45% of its value from this segment.

"The residential segment's performance is likely to be capped as policy measures intensify with the government further reviewing its housing policies that were a hot issue in the recently-concluded elections. We expect a 20-30% slowdown in monthly volumes and a 5-15% fall in prices in the next one year as the government measures take a toll, capping CDL's share price performance.

"CDL's share price has corrected by 25% from the peak in Oct 10 and is currently trading at a P/B of 1.5x, closer to its 10-year long-term average. Target price of $9.80, pegged at 20% discount to FY2011 RNAV of $12.40 per share. MAINTAIN SELL."

Barclays ups NOL to equal-weight, cuts target to $1.61

Stock Name: NOL
Company Name: NEPTUNE ORIENT LINES LIMITED

Research House: Barclays

Price Call: HOLD

Target Price: 1.61

Barclays Capital has upgraded Singapore container shipping firm Neptune Orient Lines (NOL) (NEPS.SI) to equal-weight from underweight, but has cut its target price to $1.61 from $1.80.

Barclays has upgraded NOL to equal-weight as its shares have fallen to a two-year low and are trading at 0.9 times its estimated 2011 price-to-book value.

The brokerage also said it expects NOL’s second half earnings to be stronger than the preceding six months, driven by stronger freight rates due to a seasonal recovery in volumes and resilient demand.

However, Barclays has cut its 2011-2013 earnings per share estimates following worse-than-expected operating data so far this year, as fuel costs have risen 44% from a year ago.

“The largest risk is that the unfolding debt problems in Europe and the U.S. start to slow retail spending and container volume growth in the second half of 2011,” Barclays said in a report.

 

At 11:01 a.m., shares of NOL were 0.35% lower at $1.435, and have fallen about 34% since the start of the year.

OCBC cuts SPH to hold, lowers target to $4.19

Stock Name: SPH
Company Name: SINGAPORE PRESS HLDGS LTD

Research House: OCBC

Price Call: HOLD

Target Price: 4.19

OCBC Investment Research has lowered its rating for publishing and property firm Singapore Press Holdings (SPRM.SI) ‘hold’ from ‘buy’ and cut its target price to $4.19 from $4.32.

OCBC said SPH’s third quarter earnings were boosted by investment income. However its advertising revenues declined year-on-year due to weaker sales from display and classified advertisements.

The brokerage also noted that this was SPH’s first year-on-year decline in advertising revenues over the last five quarters and has cut its estimates to reflect lower-than-expected advertising sales.

“Nevertheless, we believe price downside is limited at this juncture due to an attractive dividend yield estimated at 6.9% and the potential for accretive retail mall acquisitions in fiscal 2011-2012,” said OCBC in a report.

Shares of SPH have fallen about 1.8% since the start of the year to close at $3.91 on Tuesday.

Ying Li International rated 'buy' by DBS

Stock Name: Ying Li
Company Name: YING LI INTL REAL ESTATE LTD

Research House: DBS Vickers

Price Call: BUY

Target Price: 0.52

DBS Vickers Securities in a July 8 research report says: "Ying Li recently announced that it has topped out its IFC building, and with secured sales of 20,000sqm of office space and some prominent tenants for its retail space, the Group is moving closer to fully crystallizing the value of this project.

"We estimate that the gain in fair value upon completion of the IFC alone could be worth as much as 14 cents per share, which means the stock would be trading at c. 1x P/BV if it remains at this level in six months time. At nearly 60% discount to RNAV currently, upside risk is much higher than downside risk.

"The successful launch of the IFC and other projects would act as further catalysts for Ying Li's share price to re-rate. Target price of 52 cents (40% discount to RNAV of 87 cents). MAINTAIN BUY."

Portek International rated 'buy' by DMG

Stock Name: Portek
Company Name: PORTEK INTERNATIONAL LIMITED

Research House: DMG

Price Call: BUY

Target Price: 1.56

DMG & Partners Research in a July 8 research report says: "On June 1, International Container Terminal Services, Inc (ICTSI) launched an unsolicited voluntary conditional offer to acquire Portek at $1.20/share, representing a 69% premium to the last traded price.

"While ICTSI's offer appears attractive on a historical basis, we believe it undervalues the stock by as much as 30%. We derive a fair value of $1.56 per share using a sum-of-parts approach, valuing its port business at 14x, in line with its regional peers' average. We observed that recent port deals are sealed at P/E multiples ranging from 20-26x.

"We value the engineering business at 10x P/E. Portek's attractiveness as a takeover target and the potential 27% upside makes the stock compelling at current levels. Effectively, investors are paying a 2-3 cents option for the opportunity to partake in the upside of a higher offer price. BUY"