MARKET PULSE: Tat Hong, Viz Branz, KepCorp, Tiger (11 Jul 2012)

Stock Name: Tat Hong
Company Name: TAT HONG HOLDINGS LTD

Research House: OCBC

Price Call: BUY

Target Price: 1.21

Stock Name: VizBranz
Company Name: VIZ BRANZ LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.52

Stock Name: Kep Corp
Company Name: KEPPEL CORPORATION LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 13.38

Stock Name: TigerAir
Company Name: TIGER AIRWAYS HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.76

MARKET PULSE: Tat Hong, Viz Branz, KepCorp, Tiger

11 Jul 2012

KEY IDEA Tat Hong Holdings: Prime beneficiary to infrastructure boom Summary: According to media reports, the Hong Kong government is considering a proposal to ramp up the number of new flats to 50,000 a year (over a two to three year period). This far exceeds the 18,000 flats built in the last fiscal year ending March. If the plan passes, there may be a surge in the territory's crane demand; and Tat Hong Holdings (Tat Hong) - with one of the largest crane fleet in Asia - would be one of the prime beneficiaries. Even without the proposal to increase new flats, ASEAN countries are already experiencing strong and sustained infrastructure activities over the near and medium term horizons. Tat Hong's business in Australia and China should also improve, driven by post-disaster reconstruction activities and successful restructuring of business operations respectively. Maintain BUY rating with an unchanged S$1.21 fair value estimate. (Chia Jiunyang) MORE REPORTS Viz Branz Limited: General offer in the works? Summary: Viz Branz (VB) announced that a third party (offeror) approached a substantial VB shareholder for preliminary discussions on the possibility of acquiring his stake. Although discussions are still in the early stages and non-binding - and the amount of shares to be acquired are not disclosed - it holds interesting consequences for the company. This news came after VB recently announced that the long-running tussle between its CEO and its previous CEO (son and father relationship) had been resolved. In the interim, we believe VB's share price will rally further following the announcement. We will be speaking to management later and will update according. For now, we put our S$0.52 fair value and Hold rating under review. (Lim Siyi) Keppel Corporation: Secures US$242m jackup rig from Kazakhstan Summary: Keppel Corporation announced that Keppel Kazakhstan and its consortium partner have secured a contract from Teniz Burgylau LLP, a unit of JSC NC "KazMunayGas", for a KFELS B Class jackup rig worth US$242m. Keppel O&M is a 50% shareholder of Keppel Kazakhstan and the work scope of the rig will be shared equally between Keppel Kazakhstan and its consortium partner. The rig is scheduled for delivery in 1Q15 and will be deployed in the Caspian Sea when completed. As mentioned in our previous reports, the Caspian Sea is one of the areas of focus for oil and gas activity going forward, given its vast reserves which remains relatively untapped. Including the LOI from Sete Brasil secured earlier this year, Keppel has secured about S$7b worth of new orders this year, accounting for 68% of our full year estimate. Maintain BUYwith S$13.38 fair value estimate. (Low Pei Han) Tiger Airways: Jun 2012 operating statistics Summary: Tiger Airways (TGR) yesterday announced its Jun 2012 operating statistics. The group's passenger traffic (RPK) increased 3% YoY to 831m while passenger capacity (ASK) grew slightly faster at 4% YoY to 977m. Geographically, Tiger Singapore's passenger traffic grew 15% YoY but Tiger Australia's fell 23% YoY. TGR added that Tiger Australia commenced operations from its second base in Sydney on 1 Jul 2012 and is expected to return to its previous operating levels, before flying restrictions were imposed by Australian authorities last year, by Oct 2012. We maintain our fair value estimate of S$0.76/share and BUY rating on TGR. (Eric Teo)

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NEWS HEADLINES - US stocks fell for a fourth session as concerns about 2Q earnings increased after Cummins Inc., a manufacturer of natural gas engines, reduced its sales forecast. The S&P 500 Index and the Dow shed 0.8% and 0.7% respectively. - European leaders have moved to bolster Spain's banks, agreeing to provide as much as EUR100b (US$123b) in rescue loans. - Home-grown food caterer Neo Group's IPO, which closed yesterday, was 15 times subscribed. The counter begins trading on Catalist today. The IPO offer price was S$0.30. - Condensed milk manufacturer Etika International has made its maiden entry into the fast food segment with exclusive rights to develop the "Texas Chicken" franchise in Malaysia and Brunei. The first restaurant is scheduled to open in Klang Valley by Dec 2012. - Duty Free International posted 1Q13 net profit of MYR13.1m (~S$5.2m), down 0.9% YoY. Revenue fell 4% to MYR134m due to persistent flood issues and the recent bombings in Thailand.