MARKET PULSE: MLT, Karin (30 Aug 2012)

Stock Name: MapletreeLog
Company Name: MAPLETREE LOGISTICS TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.19

Stock Name: Karin
Company Name: KARIN TECHNOLOGY HLDGS LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.25

MARKET PULSE: MLT, Karin

30 Aug 2012

KEY IDEA Mapletree Logistics Trust: Portfolio optimization via capital recycling Summary: Mapletree Logistics Trust (MLT) announced on 28 Aug that it will acquire Hyundai Logistics Centre in Gyeonggi-do, South Korea for a consideration of ~S$24.6m. Separately, MLT entered into an agreement to divest 30 Woodlands Loop in Singapore for S$15.5m. We understand that the sale proceeds will be redeployed to partially fund the acquisition in South Korea. We view both transactions positively as it clearly reflects MLT's capability to optimize portfolio returns through proactive asset management. The capital recycling initiative and overseas acquisition were also spot on with projections made in our S-REIT sector published a week ago. We now tweak our forecasts to accommodate the two transactions. Our FY13-14F DPUs are raised by 0.3-0.7%, but there is no change to our fair value of S$1.19. Maintain BUY. (Kevin Tan) MORE REPORTS Karin Technology: Good proxy to Apple Summary: Karin Technology (Karin) reported a 35.3% YoY surge in revenue to HK$1,712.9m and a 22.0% jump in PATMI to HK$36.9m for 2HFY12. After adjusting for exceptional items, we estimate that core PATMI would instead have declined 12.1% YoY to HK$21.4m, which was below our expectations. For FY12, revenue of HK$3,232.3m (+49.1%) was 1.8% above our forecast; while estimated core PATMI of HK$46.9m (-7.2%) was 14.1% below our projections. A final dividend of 7.1 HK cents/share was declared, bringing total FY12 dividends to 14.1 HK cents/share, or a yield of ~8.4%. Looking ahead, we believe that Karin's Consumer Electronics Products segment would remain as its main revenue driver given its license to sell the full range of Apple products at its retail stores. We raise our FY13 revenue forecast by 6.9% but lower our core PATMI estimate by 7.6% on lower margin assumptions. Maintain HOLD, with a lower fair value estimate of S$0.25 (previously S$0.265). (Wong Teck Ching Andy)

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NEWS HEADLINES - US stocks on Wednesday closed slightly up. The Federal Reserve reported gradual economic expansion across its 12 districts. The Dow ended at 13,107.48, less than 0.1% higher. The S&P 500 Index rose 0.1% to 1,410.49. - GuocoLeisure announced FY12 PATMI of US$77.7m, down 3.6%. Revenue had slipped 5.4% to US$369.8m. - GuocoLand's FY12 PATMI of S$63.2m was down 48%. Revenue had declined 1% to 678.5m. - Dukang Distillers' FY12 net profit was RMB218.1m, up 29.8%. Revenue had increased 28.1% to RMB1.827b. - Lum Chang's FY12 PATMI of S$21.0m was up 31% versus restated FY11. Revenue had increased 48% to S$282.9m. - Swee Hong posted FY12 net profit of S$5.48m, down 55.5%. Revenue had increased by 15.2% to S$97.3m. - CFM Holdings reported FY12 PATMI of S$543k, up 33.1%. Revenue had declined by 9.3% to S$47.4m.