OCBC starts Tiger Airways at hold

Stock Name: TigerAir
Company Name: TIGER AIRWAYS HOLDINGS LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.65

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

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

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

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

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

Kim Eng cuts SC Global to hold from buy

Stock Name: SCGlobal
Company Name: SC GLOBAL DEVELOPMENTS LTD

Research House: Kim Eng

Price Call: HOLD

Target Price: 1.05

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

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

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

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

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

Kim Eng cuts SMRT target price to $1.50

Stock Name: SMRT
Company Name: SMRT CORPORATION LTD

Research House: Kim Eng

Price Call: SELL

Target Price: 1.50

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

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

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

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

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

United Engineers rated "outperform" by CIMB

Stock Name: UE
Company Name: UNITED ENGINEERS LTD ORD

Research House: CIMB

Price Call: BUY

Target Price: 2.14

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

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

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

FJ Benjamin Holdings downgraded to 'hold' by DBS

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

Research House: DBS Vickers

Price Call: HOLD

Target Price: 0.33

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

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

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

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

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

Research House: Phillip Securities

Price Call: HOLD

Target Price: 2.25

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

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

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

Goodpack upgraded to 'outperform' by CIMB

Stock Name: Goodpack
Company Name: GOODPACK LIMITED

Research House: CIMB

Price Call: BUY

Target Price: 1.50

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

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

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

Tiger Airways Holdings rated 'hold' by DBS

Stock Name: TigerAir
Company Name: TIGER AIRWAYS HOLDINGS LIMITED

Research House: DBS Vickers

Price Call: HOLD

Target Price: 0.71

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

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

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

United Overseas Bank rated 'sell' by Kim Eng

Stock Name: UOB
Company Name: UNITED OVERSEAS BANK LTD

Research House: Kim Eng

Price Call: SELL

Target Price: 14.20

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

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

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

CIMB upgrades China XLX to 'outperform'

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

Research House: CIMB

Price Call: BUY

Target Price: 0.43

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

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

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

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

Goodpack Limited: Upgrade to BUY - price correction overdone

Stock Name: Goodpack
Company Name: GOODPACK LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 1.70

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

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

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

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

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

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

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

Source : OCBC Research

DBS downgrades F J Benjamin to hold

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

Research House: DBS Vickers

Price Call: HOLD

Target Price: 0.33

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

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

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

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

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

 

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

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

Research House: OCBC

Price Call: BUY

Target Price: 2.24

Stock Name: RafflesMG
Company Name: RAFFLES MEDICAL GROUP LTD

Research House: OCBC

Price Call: BUY

Target Price: 2.61

Stock Name: Rotary
Company Name: ROTARY ENGINEERING LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.61

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

FOCUS

Ascendas REIT: Acquisition of two Singapore assets

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

Raffles Medical Group: Strong track record; still a BUY

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

Rotary Engineering: To jointly develop oil terminal in Johor

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

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


NEWS HEADLINES

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

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

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

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

Starhill Global REIT rated 'buy' by DBS

Stock Name: Starhill Gbl
Company Name: STARHILL GLOBAL REIT

Research House: DBS Vickers

Price Call: BUY

Target Price: 0.76

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

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

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

Swiber Holdings rated 'hold' by OCBC

Stock Name: Swiber
Company Name: SWIBER HOLDINGS LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.58

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

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

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

Wilmar International rated 'hold' by DBS

Stock Name: Wilmar
Company Name: WILMAR INTERNATIONAL LIMITED

Research House: DBS Vickers

Price Call: HOLD

Target Price: 5.40

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

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

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

Parkson Retail Asia rated 'outperform' by CIMB

Stock Name: Parkson
Company Name: PARKSON RETAIL ASIA LIMITED

Research House: CIMB

Price Call: BUY

Target Price: 1.50

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

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

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

CIMB starts Parkson Retail with outperform

Stock Name: Parkson
Company Name: PARKSON RETAIL ASIA LIMITED

Research House: CIMB

Price Call: BUY

Target Price: 1.50

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

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

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

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

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

Nam Cheong rated 'increase exposure" by SIAS

Stock Name: Nam Cheong
Company Name: NAM CHEONG LIMITED

Research House: SIAS

Price Call: BUY

Target Price: 0.23

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

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

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

Hiap Hoe rated 'buy' by DMG

Stock Name: Hiap Hoe
Company Name: HIAP HOE LIMITED

Research House: DMG

Price Call: BUY

Target Price: 0.61

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

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

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

Asiatravel.com rated 'buy' by DMG

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

Research House: DMG

Price Call: BUY

Target Price: 0.44

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

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

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

ComfortDelgro Corp (S) rated 'buy' by DBS

Stock Name: ComfortDelGro
Company Name: COMFORTDELGRO CORPORATION LTD

Research House: DBS Vickers

Price Call: BUY

Target Price: 1.95

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

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

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

Golden Agri-Resources rated 'buy' by Phillip Securities

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

Research House: Phillip Securities

Price Call: BUY

Target Price: 0.795

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

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

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

Neptune Orient Lines rated 'hold' by Kim Eng

Stock Name: NOL
Company Name: NEPTUNE ORIENT LINES LIMITED

Research House: Kim Eng

Price Call: HOLD

Target Price: 1.10

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

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

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

Kim Eng resumes NOL coverage with hold, $1.10 target

Stock Name: NOL
Company Name: NEPTUNE ORIENT LINES LIMITED

Research House: Kim Eng

Price Call: HOLD

Target Price: 1.10

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

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

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

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

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

BoAML cuts CapitaLand to neutral

Stock Name: Capitaland
Company Name: CAPITALAND LIMITED

Research House: BofA Merrill Lynch

Price Call: HOLD

Target Price: 3.40

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

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

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

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

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

DBS Group Holdings rated 'buy' by Nomura

Stock Name: DBS
Company Name: DBS GROUP HOLDINGS LTD

Research House: Nomura

Price Call: BUY

Target Price: 15.80

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

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

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

Singapore Airlines rated 'hold' by OCBC

Stock Name: SIA
Company Name: SINGAPORE AIRLINES LTD

Research House: OCBC

Price Call: HOLD

Target Price: 10.85

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

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

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

Lian Beng Group rated 'buy' by OCBC

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

Research House: OCBC

Price Call: BUY

Target Price: 0.51

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

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

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

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

OKP Holdings rated 'buy' by OCBC

Stock Name: OKP
Company Name: OKP HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.64

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

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

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

Kim Eng cuts Midas to sell from hold

Stock Name: MIDAS
Company Name: MIDAS HLDGS LIMITED

Research House: Kim Eng

Price Call: SELL

Target Price: 0.30

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

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

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

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

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

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

Julius Baer downgrades Hyflux to hold

Stock Name: Hyflux
Company Name: HYFLUX LTD

Research House: Julius Baer

Price Call: HOLD

Target Price: 1.30

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

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

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

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

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

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

Tiong Seng Holdings rated 'buy' by DBS

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

Research House: DBS Vickers

Price Call: BUY

Target Price: 0.24

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

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

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

Starhub rated 'buy' by DBS

Stock Name: StarHub
Company Name: STARHUB LTD

Research House: DBS Vickers

Price Call: BUY

Target Price: 3.05

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

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

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

Hisaka Holdings rated 'fully valued' by SIAS

Stock Name: HISAKA
Company Name: HISAKA HOLDINGS LTD.

Research House: SIAS

Price Call: SELL

Target Price: 0.475

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

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

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

Pacific Andes rated 'hold' by DBS

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

Research House: DBS Vickers

Price Call: HOLD

Target Price: 0.23

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

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

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

Fraser and Neave rated 'buy' by Nomura

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

Research House: Nomura

Price Call: BUY

Target Price: 7.29

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

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

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

Biosensors International Group rated 'buy' by Nomura

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

Research House: Nomura

Price Call: BUY

Target Price: 1.70

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

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

CNMC Goldmine Holdings rated 'increase exposure' by SIAS

Stock Name: CNMC
Company Name: CNMC GOLDMINE HOLDINGS LIMITED

Research House: SIAS

Price Call: BUY

Target Price: 0.677

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

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

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