Stock Name: Swiber
Company Name: SWIBER HOLDINGS LIMITED
Stock Name: GoldenAgr
Company Name: GOLDEN AGRI-RESOURCES LTD
Stock Name: PEC
Company Name: PEC LTD.
Market Pulse: Consumer sector, Swiber, Golden Agri, PEC (16 Sep 2011)
FOCUS
Consumer Sector: Slower sales coming
Summary: July saw a 10.9% YoY and 2.1% MoM (seasonally adjusted) increase in retail sales on the back of improvements in the petrol service stations, medical goods and toiletries and wearing apparel and footwear segments. Although it appears that Singaporeans are defying weakening global sentiment, it must be noted that it was in early August when equity markets took a significant tumble. Given the consumer sector's dependence on tourist arrivals, which has a relatively high correlation with global sentiment, we expect retail sales to start tapering off gradually going forward, and continue to advocate caution and maintain a NEUTRAL view on the overall consumer sector. In terms of our coverage, we remain positive on BreadTalk [BUY; FV: S$0.66] with its strong fundamentals. Furthermore, it has proven that it can weather crisis events as it managed to post healthy YoY top-line growth during the previous downturn in 2009. (Lim Siyi)
Swiber Holdings: Looking to issue perpetual preference shares
Summary: Swiber Holdings (Swiber) will be seeking shareholders' approval at an EGM (to be held on 3 Oct 2011) to allot and issue cumulative non-voting perpetual preference shares that are convertible in nature. This does not come as a surprise to us as there already has been talk of the group possibly undertaking a fund raising exercise. However, whether there will be a preference share issue in the near term is still subject to market conditions, which seems increasingly uncertain due to the broader economic environment. Though the issue may not be earnings dilutive for common shareholders now, this may be the case in the future should the shares be converted to common shares. Meanwhile, we would continue to monitor Swiber's core earnings which have disappointed the market. Maintain HOLD on Swiber with a fair value estimate of S$0.51. (Low Pei Han)
Golden Agri: Nestle to resume CPO purchases
Summary: Golden Agri-Resources (GAR) yesterday announced that Nestle has placed an order to resume palm oil purchases from its subsidiary PT SMART. The group says it views this order as an acknowledgement of its ongoing sustainability commitments and efforts to find solutions to continuously produce palm oil in a sustainable, environmentally and socially responsible manner. Recall in Mar 2010, Nestle ceased CPO purchases from SMART due to alleged draining of peat lands and violations of environmental laws. We view the move very positively as it means that the group's effort (undertaken in late 2010) to improve the sustainability of its CPO plantations has borne fruit and this news is a strong endorsement of its "green" progress. However, we are unlikely to adjust our estimates, as we understand that Nestle probably contributes less than 0.5% of its FY09 sales. But further catalysts could come from the resumption of CPO purchases by other food giants such as Unilever. For now, we maintain our BUY rating and S$0.80 fair value. (Carey Wong)
PEC Ltd: Secured contract from ExxonMobil
Summary: PEC announced yesterday evening that it has secured a tankage maintenance and repair services contract in Singapore. The contract is effective for 5 years beginning Sep 2011 and involves ExxonMobil's Jurong Refinery, Pulau Ayer Chawan Refinery and Singapore Chemical Plant. The actual value of the maintenance works will depend on the amount and scope of work to be carried out, but the group expects positive contribution to its earnings and financial performance for the FY12. We will speak to the management to understand more about the development. In the meantime, we keep our BUY rating and fair value estimate of S$1.12. (Chia Jiunyang)
For more information on the above, visit www.ocbcresearch.comfor the detailed report.
NEWS HEADLINES
- The EU has cut its quarterly growth forecasts for 2H11 to reflect a worsening outlook from the debt crisis and warned the euro area economy may come 'close to standstill at year-end'.
- UBS shocked markets yesterday with a warning that it had suffered some US$2b in losses from unauthorised trades that could drag the entire group into a 3Q loss.
- HDB and URA yesterday launched four 99-year leasehold condominium residential sites for sale by tender, which can potentially yield up to 1,955 housing units.
- CapitaLand is planning to launch its 99-year condominium in Bishan Central by 1Q12 with a likely price of S$1,450 psf.
- SIA has signed a lease deal for 15 additional A330-300 jets from Airbus and will take delivery of the planes over 2013-2015.
- Sembcorp will be co-developing a 1,000-hectare innovation park in Chengdu Hi-tech Zone. It said the transaction is not expected to have a material impact on the EPS and NTA per share for the current financial year.
- Koon Holdings has secured S$40.1m JTC contract for works on a landfill site off Tampines Rd.
Company Name: SWIBER HOLDINGS LIMITED
| Research House: OCBC | Price Call: HOLD | Target Price: 0.51 |
Stock Name: GoldenAgr
Company Name: GOLDEN AGRI-RESOURCES LTD
| Research House: OCBC | Price Call: BUY | Target Price: 0.80 |
Stock Name: PEC
Company Name: PEC LTD.
| Research House: OCBC | Price Call: BUY | Target Price: 1.12 |
Market Pulse: Consumer sector, Swiber, Golden Agri, PEC (16 Sep 2011)
FOCUS
Consumer Sector: Slower sales coming
Summary: July saw a 10.9% YoY and 2.1% MoM (seasonally adjusted) increase in retail sales on the back of improvements in the petrol service stations, medical goods and toiletries and wearing apparel and footwear segments. Although it appears that Singaporeans are defying weakening global sentiment, it must be noted that it was in early August when equity markets took a significant tumble. Given the consumer sector's dependence on tourist arrivals, which has a relatively high correlation with global sentiment, we expect retail sales to start tapering off gradually going forward, and continue to advocate caution and maintain a NEUTRAL view on the overall consumer sector. In terms of our coverage, we remain positive on BreadTalk [BUY; FV: S$0.66] with its strong fundamentals. Furthermore, it has proven that it can weather crisis events as it managed to post healthy YoY top-line growth during the previous downturn in 2009. (Lim Siyi)
Swiber Holdings: Looking to issue perpetual preference shares
Summary: Swiber Holdings (Swiber) will be seeking shareholders' approval at an EGM (to be held on 3 Oct 2011) to allot and issue cumulative non-voting perpetual preference shares that are convertible in nature. This does not come as a surprise to us as there already has been talk of the group possibly undertaking a fund raising exercise. However, whether there will be a preference share issue in the near term is still subject to market conditions, which seems increasingly uncertain due to the broader economic environment. Though the issue may not be earnings dilutive for common shareholders now, this may be the case in the future should the shares be converted to common shares. Meanwhile, we would continue to monitor Swiber's core earnings which have disappointed the market. Maintain HOLD on Swiber with a fair value estimate of S$0.51. (Low Pei Han)
Golden Agri: Nestle to resume CPO purchases
Summary: Golden Agri-Resources (GAR) yesterday announced that Nestle has placed an order to resume palm oil purchases from its subsidiary PT SMART. The group says it views this order as an acknowledgement of its ongoing sustainability commitments and efforts to find solutions to continuously produce palm oil in a sustainable, environmentally and socially responsible manner. Recall in Mar 2010, Nestle ceased CPO purchases from SMART due to alleged draining of peat lands and violations of environmental laws. We view the move very positively as it means that the group's effort (undertaken in late 2010) to improve the sustainability of its CPO plantations has borne fruit and this news is a strong endorsement of its "green" progress. However, we are unlikely to adjust our estimates, as we understand that Nestle probably contributes less than 0.5% of its FY09 sales. But further catalysts could come from the resumption of CPO purchases by other food giants such as Unilever. For now, we maintain our BUY rating and S$0.80 fair value. (Carey Wong)
PEC Ltd: Secured contract from ExxonMobil
Summary: PEC announced yesterday evening that it has secured a tankage maintenance and repair services contract in Singapore. The contract is effective for 5 years beginning Sep 2011 and involves ExxonMobil's Jurong Refinery, Pulau Ayer Chawan Refinery and Singapore Chemical Plant. The actual value of the maintenance works will depend on the amount and scope of work to be carried out, but the group expects positive contribution to its earnings and financial performance for the FY12. We will speak to the management to understand more about the development. In the meantime, we keep our BUY rating and fair value estimate of S$1.12. (Chia Jiunyang)
For more information on the above, visit www.ocbcresearch.comfor the detailed report.
NEWS HEADLINES
- The EU has cut its quarterly growth forecasts for 2H11 to reflect a worsening outlook from the debt crisis and warned the euro area economy may come 'close to standstill at year-end'.
- UBS shocked markets yesterday with a warning that it had suffered some US$2b in losses from unauthorised trades that could drag the entire group into a 3Q loss.
- HDB and URA yesterday launched four 99-year leasehold condominium residential sites for sale by tender, which can potentially yield up to 1,955 housing units.
- CapitaLand is planning to launch its 99-year condominium in Bishan Central by 1Q12 with a likely price of S$1,450 psf.
- SIA has signed a lease deal for 15 additional A330-300 jets from Airbus and will take delivery of the planes over 2013-2015.
- Sembcorp will be co-developing a 1,000-hectare innovation park in Chengdu Hi-tech Zone. It said the transaction is not expected to have a material impact on the EPS and NTA per share for the current financial year.
- Koon Holdings has secured S$40.1m JTC contract for works on a landfill site off Tampines Rd.
No comments:
Post a Comment