MARKET PULSE: Budget 2012, LMIRT, Raffles Med and OCBC (20 Feb 2012)

Stock Name: LippoMalls
Company Name: LIPPO MALLS INDO RETAIL TRUST

Research House: OCBC

Price Call: BUY

Target Price: 0.45

Stock Name: RafflesMG
Company Name: RAFFLES MEDICAL GROUP LTD

Research House: OCBC

Price Call: BUY

Target Price: 2.61

MARKET PULSE: Budget 2012, LMIRT, Raffles Med and OCBC

20 Feb 2012

KEY IDEA Budget 2012: For an inclusive society Summary: As expected, the Singapore Budget 2012 included numerous measures that were aimed at building a more inclusive society. This post-election budget saw several measures aimed at building a stronger Singapore over the longer term. For the corporates, SMEs continue to receive some goodies. There were measures to boost the local tourism industry as well as beef up the healthcare sector. The transport sector also received a boost with the addition of 800 buses. Overall, the key beneficiaries are the transport, healthcare and tourism industries. (Research Team) MORE REPORTS Lippo Malls Indo Retail Trust: Poised for further growth Summary: Lippo Malls Indonesia Retail Trust (LMIRT) reported 4Q11 NPI of S$24.6m and DPU of 0.53 S cent, consistent with our quarterly forecasts of S$23.7m and 0.58 S cent respectively. Moving forward, we believe that LMIRT's financial performance in the coming quarters is likely to remain favorable, especially with full-quarter contributions from recently-acquired Pluit Village and Plaza Medan Fair going forward. As at 31 Dec 2011, LMIRT's aggregate leverage was at low 8.7% (10.1% in 3Q). In addition, approximately S$931m (60.4%) of its assets are unencumbered. This gives LMIRT the financial capacity and flexibility to realize its growth plans. Maintain BUY with unchanged fair value of S$0.45 on LMIRT. (Kevin Tan) Raffles Medical Group: 4Q11 results within expectations Summary: Raffles Medical Group (RMG) reported its 4Q11 results this morning which were within our expectations. Revenue rose 13.9% YoY and 4.6% QoQ to S$72.3m. Net profit increased 10.3% YoY and 39.9% QoQ to S$16.5m. For FY11, revenue of S$272.8m represented a 14.1% increase, and just 0.5% shy of our forecast. Reported PATMI rose 11.3% to S$50.4m. Excluding fair value gains on investment properties of S$2.2m, we estimate that core PATMI rose 14.1% to S$48.2m, forming 99.2% of our earnings projection. The improved performance was attributed to growth from its Hospital Services and Healthcare Services divisions, which both saw a double-digit jump in revenue (14.6% and 10.9% respectively). The former was led by higher patient loads, a wider range of medical specialties on offer and the recruitment of more specialist consultants. A final dividend of 3 S cents was declared, bringing full-year dividends to 4 S cents and an implied yield of 1.7%. This was higher than both our FY11 dividend forecast and FY10's declared dividends of 3.5 S cents. We will provide more details after the analyst briefing. Our Buy rating and S$2.61 fair value estimate is currently under review. (Wong Teck Ching Andy) OCBC: Better than consensus earnings Summary: Oversea-Chinese Banking Corporation (OCBC) released its full year results this morning. Net earnings came in at S$2312m, up 3% YoY, and better than consensus estimate of S$2237m. Excluding the divestment of non-core assets, core net profit amounted to S$2,280m, up 1% YoY. Net interest income rose a strong 16% YoY to S$3,410m, while Non-interest Income fell 5% to S$2251m. Overall total income improved 6% to S$5661m. Net Interest Margin (NIM) was flat at 1.85% in 4Q11, same as 3Q11. Net allowances increased from S$134m in FY10 to S$221m in FY11. Management has declared a final dividend of 15 cents per share, making full year dividend of 30 cents which is unchanged from last year. We do not have a rating on OCBC. Based on Bloomberg, there are currently 10 Buys, 9 Holds and 8 Sells on the stock with an average target price of S$8.97. (Carmen Lee)

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

NEWS HEADLINES - The People's Bank of China announced a cut to banks' reserve ratio requirements by 50 basis points to spur growth. The Australian and New Zealand dollars rose on prospects that the move will increase demand for commodities. - Iran said on Sunday that it has halted crude oil exports to British and French companies, a move that seems likely to have limited impact on European supplies. The UK does not import oil from Iran, and Total SA, the main importer of Iranian oil to France, stopped purchases in late 2011. - Aspial Corporation recorded revenue of S$420m for FY11, a 50% increase, while net profit surged to S$47.6m, vs. S$5.6m a year ago. - Fortune REIT, which holds a portfolio of retail malls in HK, announced that it has completed the acquisition of two new malls, bringing its total portfolio to 16 properties.