MARKET PULSE: MLT, Fortune REIT, OKP, CCT, Raffles Med (23 Jul 2012)

Stock Name: MapletreeLog
Company Name: MAPLETREE LOGISTICS TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.19

Stock Name: Fortune Reit HK$
Company Name: FORTUNE REAL ESTATE INV TRUST

Research House: OCBC

Price Call: BUY

Target Price: 5.33

Stock Name: CapitaComm
Company Name: CAPITACOMMERCIAL TRUST

Research House: OCBC

Price Call: HOLD

Target Price: 1.31

Stock Name: OKP
Company Name: OKP HOLDINGS LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.53

Stock Name: RafflesMG
Company Name: RAFFLES MEDICAL GROUP LTD

Research House: OCBC

Price Call: BUY

Target Price: 2.73

MARKET PULSE: MLT, Fortune REIT, OKP, CCT, Raffles Med

23 Jul 2012

KEY IDEA Mapletree Logistics Trust: Robust 1QFY13 performance Summary: Mapletree Logistics Trust (MLT) delivered DPU of 1.70 S cents for 1QFY13. This is largely in line with both our and consensus expectations, as it formed 24.2% and 24.6% of the respective full-year forecasts. Going forward, MLT expects business sentiments to remain cautious in view of the slowing growth in Asia and concerns over the Eurozone debt crisis. While it is expecting its portfolio assets to stay resilient, management intends to focus on strengthening its fundamentals through active asset and lease management and prudent capital management. We maintain our BUY rating with an unchanged fair value of S$1.19 on MLT. (Kevin Tan) MORE REPORTS Fortune Real Estate Investment Trust: Highest DPU growth in nine years Summary: FRT achieved a record-breaking 1H12, with revenue and net property income climbing by 20.3% and 19.6% YoY to historic highs of HK$537.4m and HK$382.1m respectively. 1H12 DPU rose by 23.6% YoY, the highest growth in FRT's nine-year operating history, to 15.82 HK cents, slightly better than our expectations. The strong results are attributable to FRT's three-pronged growth strategy: active lease management, yield-accretive acquisitions of Provident Square and Belvedere Square in mid-Feb and good returns on AEIs of Fortune City One and Ma On Shan Plaza. We maintain our BUY rating and raise our fair value from HK$5.22 to HK$5.33. (Sarah Ong) CapitaCommercial Trust: Most positives priced in Summary: CapitaCommercial Trust (CCT) reported 2Q12 distributable income of S$58.5m - 7.5% higher YoY. This translates to a DPU of 2.06 S-cents per share which is broadly in line with expectations. 2Q12 revenues came in at S$95.8m - up 5.2% YoY mostly due to revenue contribution by Twenty Anson, higher revenues from Raffles City and HSBC Building, and higher yield protection income for One George Street.Though Grade A office rentals have dipped a further 4-5% in 2Q12, we see short-term vacancy rates likely stabilizing for the remainder of FY12 due to limited CDB additions till 2H13. We continue to like CCT's portfolio of prime office assets, and also note limited lease renewals of only 4.1% of office leases for the rest of FY12. At current price levels, however, we believe most positives are already priced in. Maintain HOLD with a higher fair value estimate of S$1.31, versus S$1.14 previously, due to stronger cap rate assumptions. (Eli Lee) OKP Holdings: Possible delay in new project Summary: OKP Holdings (OKP) reported that its 2Q12 revenue fell 17% YoY to S$23.6m, while PATMI sank 55% to S$3.1m. For the rest of 2012, management guided that revenue recognition is likely to remain slow and gross margin should remain in the range of low twenties. Management also said the fall in revenue is due to slower revenue recognition from some recently awarded projects. While management has not confirmed this, it is likely that the design-and-build project to expand the CTE/TPE/SLE interchange has experienced some execution delays, resulting in the slower recognition of revenue in 2Q12. Despite the delays, we expect the execution of this project to ramp up by the end of this year. Based on our 12-month investment horizon, we maintain our fair value estimate of S$0.53/share and HOLD rating on OKP. (Eric Teo) Raffles Medical Group: 2Q12 PATMI slightly below expectations Summary: Raffles Medical Group (RMG) reported its 2Q12 results this morning with revenue within our expectations but PATMI was slightly below due to higher-than-expected operating expenses. Revenue rose 14.9% YoY and 5.5% QoQ to S$76.9m. PATMI was up 6.8% YoY and 6.9% QoQ to S$12.4m. Growth during the quarter was driven by a higher patient load and patient acuity. Both RMG's core divisions contributed to its topline increase, with its Hospital Services and Healthcare Services segments growing 19.1% and 9.1%, respectively. For 1H12, revenue jumped 14.0% to S$149.9m, forming 48.0% of our full-year estimates; while PATMI increased 8.7% to S$24.0m, or 42.8% of our FY12 forecast. Note that 2H is typically a seasonally stronger half for RMG, and we expect this trend to be maintained in FY12. An interim dividend of 1 S cent/share was declared (payable on 31 Aug 2012), similar to 2Q11 and is in line with our expectations. RMG also continued to generate strong operating cashflows of S$22.4m in 2Q12, as compared to S$9.4m in 2Q11. We will provide more details after the analyst briefing. For now we place our Buy rating and S$2.73 fair value estimate under review. (Wong Teck Ching Andy)

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

NEWS HEADLINES - Spain's debt worries caused US stocks to slide, led by a decline in financial stocks. The Dow and the S&P 500 Index lost 0.9% and 1% respectively. - A subsidiary of AusGroup Limited has formalised a contract with BHP Billiton Iron Ore for the Jimblebar Project, valued at AU$48m for structural, mechanical and piping works for the inflow circuit of the plant. - A subsidiary of Full Apex (Holdings) Ltd has acquired 22% of the total issued share capital of Favour Development Ltd, which is engaged in the manufacture of PET performs and PET resin, at a purchase consideration of HK$90.5m. - SGX Catalist-listed AsiaMedic Limited has entered into a Memorandum of Understanding with Myanmar's Ni Ni Diagnostics And Healthcare to explore the possible establishment of a joint venture in Myanmar. - Mermaid Maritime Public Company Ltd has entered into a share purchase agreement to acquire the remaining equity in Seascape Surveys Pte. Ltd. and Seascape Surveys (Thailand) Ltd.