DBS Vickers (Spore) Yoma Strategic Holdings: Scaling Yoma's golden heights (BUY; S$0.48; Price Target : 12-Month S$ 0.60; YOMA SP)

Stock Name: Yoma
Company Name: YOMA STRATEGIC HOLDINGS LTD

Research House: DBS Vickers

Price Call: BUY

Target Price: 0.60

Yoma Strategic Holdings: BUY; S$0.48; Bloomberg Code: YOMA SP
(Initiating Coverage)
Scaling Yoma's golden heights
Price Target : 12-Month S$ 0.60



• Initiate Buy for potential return of 25% to TP of S$0.60, based on
parity to RNAV
• Earnings growth from property sales is strong and would get stronger
given limited supply in the market against overwhelming demand
• Acquisitions and partnerships would drive upsides; political &
dilutive fund-raising exercise are key risks


Yoma is a direct proxy to Myanmar's booming real estate sector. With close
to 100% of its land bank in Yangon, Myanmar's Yoma Strategic Holdings
("Yoma") is strategically positioned to benefit from Yangon's booming
demand for residential, office, hotel / serviced apartment properties.
Prices have risen 20% in the past nine months. We believe this uptrend will
continue as overall supply remains tight due to the dearth of new
developments over the past few decades.

Though FY13 earnings to double, growth is still at nascent stage. While
Yoma's share price has had an exceptional run YTD, helped along by Yangon's
surging property prices, we believe believe value will continue to increase
1) a steady stream of pro-business policy reforms from the government,
which should attract yet more foreigners in search of business
opportunities in Myanmar. Near term, a strong increase in home prices and
take-up rates should see the group's earnings grow by 100% this year; 2)
land acquisitions, including a highly sought after prime site in downtown
Yangon, likely to expand RNAV, and 3) its ability to forge strategic
partnerships with foreign players (such as the recent JV with Parkson
giving Yoma a 20% stake in all of Parkson's shops in Myanmar). Such
arrangements bode well for long term recurrent earnings.

Initiate with Buy, TP $0.60. Our TP is based on parity to RNAV of S$0.60,
similar to property stocks in emerging markets. Upside is possible as our
valuation is based on ASPs which are flat against still soaring property
prices in Yangon. Our analysis showed that every 10% rise in property
prices will raise RNAV by 5cts. Yoma has a small net cash position and
cashflow is positive. But for future land acquisitions, Yoma may have to
either form strategic partnerships or to tap capital markets for funding.

ST Engineering set to climb further: OCBC

Despite ST Engineering’s significant outperformance vs the STI year-to-date, the stock offers a safe haven in turbulent times and it can climb further, OCBC says.

“STE’s earnings are fairly stable given its four main diversified businesses, which help to reduce its exposure to sector-specific risks. With an attractive FY12F dividend yield of around 4.8%, STE should continue to perform in today’s uncertain but liquidity-rich global economic environment.”

It notes STE’s orderbook stood at $12.9 billion at end-1H12 and expects it will be above $13 billion by end-3Q12, adding it projects continued orderbook growth. It notes the orderbook grew 16% p.a. between end-2005 and end-2010, while annual revenue grew 6% p.a. from FY06-FY11, suggesting the average contract tenure has been increasing and implying increasing earnings visibility.

It raises its fair value to $3.81 from $3.50, after rolling forward to blended 2H12-1H13 EPS and raising its P/E multiple to 20.5x from 20x; it keeps a Buy call. The stock is up 1.4% at $3.52, outperforming the STI’s 0.3% rise.

Goldman starts Far East Hospitality at Neutral

Stock Name: Far East HTrust
Company Name: FAR EAST HOSPITALITY TRUST

Research House: Golman Sachs

Price Call: HOLD

Target Price: 1.02

Goldman Sachs initiates Far East Hospitality Trust at Neutral with $1.02 target. It says FEHT’s key strengths include being well-positioned in the mid-tier/upscale segments, which are the fastest growing and most scalable, and its master-lease structure, which generates more efficient rental revenue flow-through vs peers.

The house expects 9.5% DPU CAGR over 2011-14 and 5.2% over 2012-2014 vs hospitality S-REIT peers’ 2.6%. “We believe Far East H-Trust offers a good mixture of organic and acquisition growth drivers.” But it adds FEHT’s high-growth potential and strengths are largely priced in.

It notes the unit trades at 2012-13 dividend yields of 5.4%-5.8%, vs closest peer CDL Hospitality Trusts trading at 6.0%-6.1% and hospitality S-REITs’ average 6.6%-6.9%. It adds, while Singapore’s hospitality sector outlook remains robust, it is past its golden years, forecasting 2011-14 average RevPAR growth per annum of 4%-5%. FEHT is up 0.5% at $1.03.

MARKET PULSE: ST Engin, SingPost, ART (28 Sep 2012)

Stock Name: ST Engg
Company Name: SINGAPORE TECH ENGINEERING LTD

Research House: OCBC

Price Call: BUY

Target Price: 3.81

Stock Name: SingPost
Company Name: SINGAPORE POST LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 1.20

Stock Name: AscottREIT
Company Name: ASCOTT RESIDENCE TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.30

MARKET PULSE: ST Engin, SingPost, ART

28 Sep 2012

KEY IDEA ST Engineering: Defensive play with room to climb A safe haven in turbulent times, STE has outperformed the STI significantly since the beginning of the year, rising 29.0% versus the 15.6% increase by the index. The stock reached its 52-week high of S$3.55 last Friday. The counter is trading at a historical P/E multiple of 20.1x and should still have room to climb. With the win of S$179m worth of contracts by ST Marine announced in 3Q12 so far, we think that STE's order book may be greater than S$13b by the end of 3Q12. We note that the order book has been growing faster than annual revenues, implying increasing earnings visibility into the future. Rolling forward our valuation to blended 2H12/1H13 EPS and increasing our P/E multiple from 20.0x to 20.5x, we raise our fair value from S$3.50 to S$3.81 and maintain a BUY. (Sarah Ong) MORE REPORTS SingPost: Not just a "dividend" stock The steady climb of Singapore Post's (SingPost) stock has continued since the start of the year when we upgraded the stock to BUY. Cautiously improving market sentiment and the flood of liquidity searching for safe havens with respectable yields has supported performance, along with greater expectations of further growth opportunities in SingPost after the issuance of perpetual capital securities in Feb. Though spectacular gains are unlikely to be enjoyed by investors in the stock, SingPost's total return has been attractive since 2010 in an uncertain environment. The group has launched new initiatives over the years and diversified into other business areas, but the next leg of growth is heavily dependent on management's astute use of the group's cash pile. We update our valuation assumptions (lower cost of equity: 6.49%, terminal growth unchanged: 1.5%), and our DDM-derived fair value estimate rises from S$1.14 to S$1.20. Maintain BUY. (Low Pei Han) Ascott Residence Trust: Acquires property in Hamburg, Germany ART has entered into the agreement for the acquisition of a 166-unit serviced residence for a consideration of EUR37.5m (~S$59.4m). The property ("Madison Hamburg") is strategically located at the junction of three prime areas in the city centre of Hamburg, Germany. Madison Hamburg will continue to be managed under a master lease arrangement by a local operator, who has been managing the property since it opened in 1993. The acquisition is not expected to have any material impact on the NTA, EPU or DPU of ART for FY12. We maintain our BUYrating and S$1.30 fair value. (Sarah Ong)

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

NEWS HEADLINES - US stocks rose on Thursday after Spain revealed an austerity plan that centres on spending cuts as opposed to tax increases and better-than-expected US jobs market data. The Dow climbed 0.5% to 13,485.97. The S&P 500 rose 1.0% to 1,447.15. - Vicplas International posted FY12 net profit of S$6.34m, up 354%. Revenue had increased 0.5% to S$73.5m. - TTJ Holdings registered a 15% rise in FY12 net profit to S$16.6m. Revenue grew 48% to S$142.9m. - Grand Banks Yachts signed an agreement with Pen-Marine Sdn Bhd to sell Grand Banks yachts in Malaysia. The company has also signed an agreement with Ocean Alexander to represent each other's brands and boats at sales offices in China and Australia. - ECS Holdings signed a US$90 million three-year term loan financing facility.

Maybank-KE tips Super Group as attractive M&A target

Maybank-Kim Eng upgrades Super Group to Buy from Hold, saying it sees evidence its branded consumer products’ sale growth will be better than expected. “This is a testament to Super’s defensible market share and the potential of a fast-growing Asean consumption market.”

It expects 12%-15% sales CAGR over the next three years, adding an early-2013 rebranding exercise may provide an immediate tangible sales uplift. Maybank-KE adds, “given its position as a market leader across fast-growing Asean markets, with a fully-integrated model from manufacturing to distribution, we believe Super may become an attractive M&A target for other F&B players.”

It notes Yeo Hiap Seng’s restructuring may lead to a sale of its 12% Super stake; “This may attract strategic investors or even trigger a possible tussle for control down the road.” It raises its target to $2.85 from $1.95, based on 20x FY13 PER, after increasing FY12-14 estimates by 10%-12%, adding it expects heightened F&B segment M&A interest to provide a re-rating catalyst above the historical PER range.

Recent segment M&A transactions have been between 20x-35x PER, it notes. The stock is up 2.5% at $2.06.

Nomura cuts Global Logistic Properties to Neutral, Ups target 12.9%

Stock Name: GLP
Company Name: GLOBAL LOGISTIC PROP LIMITED

Research House: Nomura

Price Call: BUY

Target Price: 2.80

Nomura downgrades Global Logistic Properties to Neutral from Buy. “Notwithstanding GLP’s leading market share in China and Japan where we remain sanguine on demand for high quality logistics space, further upside to the current share price in the near term is likely to be more modest.”

It adds, one of the reasons for the stock’s outperformance is the potential monetisation of Japan assets; the house estimates spinning off 30% of GLP’s Japan assets into a property fund would add US$0.07/share to NAV.

Nomura raises its target to $2.80 from $2.48 after rolling its valuation forward to FY14, ascribing a 15x P/E multiple to the fund-management business, vs 10x previously, and imputing a 5% NAV premium, vs parity previously, on potential accretion from any asset-monetization exercise.

The house tips possible upside risks from better-than-expected gains from any asset-monetisation or a higher-than-expected dividend payout, with potential downside risks if logistics-space demand is below expectations, especially in China, where most of GLP’s growth is projected. The stock is flat at $2.51.

CIMB downgrades K-REIT to 'neutral'

Stock Name: K-REIT
Company Name: K-REIT ASIA

Research House: CIMB

Price Call: HOLD

Target Price: 1.23

CIMB Research downgraded K-REIT Asia, which owns commercial assets, to ‘neutral’ from ‘outperform’, citing limited further upside, but raised its target price to $1.23 from $1.21 to reflect the debt-equity funded acquisition of a Perth office development.

Units in K-REIT were flat at $1.19, and have surged 43.6% since the start of the year, compared to the FTSE ST Real Estate Industrial Trust Index’s 29.6% gains.

K-REIT agreed to buy a 50% stake in a new office tower development in Perth, Australia, for A$165 million ($211 million), which could be accretive but mainly because of funding using cheapSingapore dollar debt, said CIMB.

The brokerage also said it likes the visibility of the long lease with a 3-5% annual rental step-up, but the longlease could result in limited upside for K-REIT in a buoyant Perth office market.

However, CIMB downgraded K-REIT due to limited upside in its share price and as equity fundraising needs are likely to limit any value added from a potential acquisition of Marina Bay Financial Centre office tower in Singapore.

ThaiBev plan to veto cap reduction positive: CIMB

Stock Name: THBEV
Company Name: THAI BEVERAGE PUBLIC CO LTD

Research House: CIMB

Price Call: BUY

Target Price: 0.60

ThaiBev’s decision to veto F&N’s capital-reduction plan is strategic, CIMB says. “Although ThaiBev misses the chance to reduce its gearing, we believe this is a positive move as it increases the likelihood that F&N shareholders will accept TCC Assets’ $8.88 offer.” CIMB says.

F&N shareholders must either accept the $8.88/share offer to realise returns or run the risk F&N’s share price will collapse without the capital reduction’s backing if the Thai group’s offer is allowed to lapse. CIMB adds, the Thai group could also be eyeing more of the cash from the APB sale as it would receive only 30.4%, or $1.2 billion, if the capital reduction proceeds.

If the Thais mop up more of F&N or gain control, they would be entitled to a greater portion and could even propose a larger payout, helping finance the F&N takeover, it says. CIMB remains positive on ThaiBev as it will reap strategic benefits if the F&N offer succeeds; “the current share price, even after the run-up year to date, does not fully reflect the value of its spirits business, let alone the full sum-of-parts.”

It keeps ThaiBev at Outperform with $0.60 target. The stock is down 2.4% at $0.415, but remains up around 69% year-to-date.

MARKET PULSE: Industrial REITs, SingTel (27 Sep 2012)

Stock Name: SingTel
Company Name: SINGTEL

Research House: OCBC

Price Call: BUY

Target Price: 3.61

MARKET PULSE: Industrial REITs, SingTel

27 Sep 2012

KEY IDEA Industrial REITs: Still hot on portfolio management activities Summary: Industrial landlords continue to be very engaged in their capital management activities. For 3Q to-date, we note that a number of industrial REITs have launched several debt facilities, where the proceeds will be used to refinance part of their existing borrowings. This is in line with our view that the industrial REIT subsector's debt maturity profile will remain healthy, with limited refinancing risks in the near term. We also observe that there was a pickup in investment activity during the period. We estimate that the total subsector acquisition value for 3Q will be at S$182.9m. This significantly exceeds the S$66.0m acquisition size clocked in 2Q, albeit still lower than the S$678.2m value registered in 1Q. We are currently maintaining our view that the subsector acquisition activity is likely to be skewed more towards smaller REITs. Reiterate OVERWEIGHTview on the industrial REIT subsector. Cache Logistics Trustremains our preferred pick, given its robust portfolio, healthy financial position and attractive forward DPU yield of 7.1%. (Kevin Tan) MORE REPORTS SingTel: Don't read too much into share sale - BUY Summary: Temasek Holdings has entered into an agreement to sell 400m shares in SingTel as part of its portfolio rebalancing, likely done at S$3.20 each according to newswires, or 3.9% discount to Tuesday's S$3.33 close. As expected, the news resulted in a negative knee-jerk reaction, causing SingTel's share price to open some 5.1% lower at S$3.16. But we believe that investors should not read too much into the share sale. Instead, we continue to like its defensive business and relatively decent dividend yield of ~5%. Maintain BUY with an unchanged S$3.61 fair value. (Carey Wong)

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

NEWS HEADLINES - US stocks fell Wednesday, with the S&P 500 Index chalking a fifth day of losses, its longest such streak since Jul, with austerity unrest in Europe a concern for investors. The Dow fell 0.3% to 13,413.51. The S&P 500 slipped 0.6% to 1,433.32. - The Thai consortium seeking control over Fraser & Neave has declared that it will block a proposed capital reduction by F&N. - Hock Lian Seng, TA Corporation, King Wan Corporation and Far East Distillers have been jointly awarded a S$244.3m Dairy Farm Rd residential site, which is proposed for development into a mid-range condominium of ~400 units. - Ryobi Kiso Holdings said it has recently won contracts worth S$24m, bringing the total value of contracts secured since the start of the year to S$132m. - Xpress Holdings has advised that the company will record a consolidated loss for the 4th quarter and may record a consolidated loss for the FY ended 31 Jul 2012. - STATS ChipPAC will be divesting its entire 25% stake in Micro Assembly Technologies for HK$80.8m (S$12.8m).

CIMB raises target price on Ezion

CIMB Research raised its target price on Ezion Holdings, an offshore services firm, to $1.65 from $1.19 and kept its ’outperform’ rating, citing strong contract wins.

At 11:39 a.m., Ezion shares were up 3.1% at $1.33 in a broader market that was down 0.7%. Its shares have more than doubled since the start of the year, compared with the FTSE ST Oil & Gas Index’s 29.5% rise.

Ezion said on Tuesday it secured a charter contract worth about US$201 million ($247 million) and a letter of intent valued up to US$82.1 million to provide two service rigs to a national oil company based in Southeast Asia.

CIMB said Ezion has secured 12 contracts worth over $1 billion in 10 months, underscoring its growing traction with Southeast Asian national oil companies.

The brokerage also likes Ezion for its growing track record and its management’s networking in Australia and Denmark, and resourcefulness in securing funding.

DMG starts AusGroup with 'buy' rating

Stock Name: AusGroup
Company Name: AUSGROUP LIMITED

Research House: DMG

Price Call: BUY

Target Price: 0.75

DMG & Partners initiated coverage of AusGroup, which provides services to the mining and oil and gas industries, with a ‘buy’ rating and a target price of $0.755, citing a positive industry outlook.

By 10:10 a.m., AusGroup shares were up 2% at $0.505, and have surged 60% since the start of the year, compared to the FTSE ST Industrials Index's 20.5% rise.

A record A$261 billion ($333 billion) has been committed towards capital expenditure in 98 major minerals and energy projects between 2012 and 2016 in Australia, DMG said, which will benefit AusGroup.

The brokerage expects AusGroup to see net profit growth of 29% on an average a year over the next three years, helped by improving net margins.

The company also said it was planning to spin off its operating subsidiaries in a listed entity on the Australian Securities Exchange.

“If this plan goes through, AusGroup shareholders stand to gain as the industry average forward price-to-earnings on the ASX is 10 times versus AusGroup’s 5.4 times today,” said DMG.

MARKET PULSE: Far East Hosp Trust, Office REITs (26 Sep 2012)

Stock Name: Far East HTrust
Company Name: FAR EAST HOSPITALITY TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.08

Stock Name: Frasers Comm
Company Name: FRASERS COMMERCIAL TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.23

Stock Name: CapitaComm
Company Name: CAPITACOMMERCIAL TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.53

MARKET PULSE: Far East Hosp Trust, Office REITs

26 Sep 2012

KEY IDEA Far East Hospitality Trust: Largest pure Singapore hospitality REIT Far East H-Trust's portfolio consists of 11 properties in Singapore, including seven hotels and four serviced residences, giving a total of 2,531 rooms/units. The trust has the largest diversified hospitality portfolio in Singapore by asset value, equaling S$2.14b. With a mix of hotels and serviced residences, the portfolio is able to ride on the up-cycle in the hotel industry, while the serviced residences would provide downside protection during economic slowdowns. The Sponsor is part of Far East Organization, which is the largest private property developer in Singapore. Three hotels and four serviced residences have been identified by the Sponsor as Sponsor Right of First Refusal (ROFR) properties which could be offered to Far East H-Trust. These properties could significantly increase the number of hotel rooms/serviced residence units in the trust by 1,242 rooms/units, or 49.1%, to 3,773. We initiate with BUY and a RNAV-based fair value of S$1.08. (Sarah Ong) MORE REPORTS Office REITS: Rental declines likely slowing in 3Q12 Due to limited supply coming online and better than expected demand, we believe office fundamentals are more benign than expected. In our view, office rentals are likely to show a more subdued dip in 3Q12 after three consecutive quarters of declines since 3Q11. In addition, core CBD vacancies also showed a reversal from a rising trend in 2Q12 to register a 0.9 ppt dip to 8.4%, and expect a similar trend for vacancies ahead. Note that since our upgrade of Office REITs to OVERWEIGHT on 21 Aug 2012, our top pick CCT has appreciated 4.0% versus the STI's 0.2% gain. Maintain OVERWEIGHT on Office REITs. Our top picks in the sector are CCT [BUY, FV: S$1.53] and FCOT [BUY, FV: S$1.23].

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

NEWS HEADLINES - US stock indexes fell Tuesday after a non-voting Federal Reserve member gave a negative take on the central bank's newest round of quantitative easing. The Dow fell 0.8% to 13,457.55. The S&P 500 Index slipped 1.1% to 1,441.59. - Temasek Holdings has entered into an agreement to sell 400m shares in SingTel as part of its portfolio rebalancing; but SingTel will continue to be the largest company in its portfolio. - Joint owners Mirvac Group (ASX: MGR) and K-REIT Asia held a topping off ceremony to celebrate the completion of the main structural works for the Sydney office building, 8 Chifley Square. - Metro Holdings has been jointly awarded the tender for a 99-year leasehold land parcel located at Prince Charles Crescent, Singapore, having an approximate site area of 23.8k sqm at the price of S$516.3m.

OIR BITES: Temasek to sell 400m SingTel shares

Stock Name: SingTel
Company Name: SINGTEL

Research House: OCBC

Price Call: BUY

Target Price: 3.61

For OPSL clients ONLY

OIR BITES: Temasek to sell 400m SingTel shares 26 Sep 2012

Temasek Holdings has entered into an agreement to sell 400m shares in SingTel as part of its portfolio rebalancing that it does from time to time. According to BT, the sale is for 400m shares at a price of S$3.22-3.25 each, or a discount of 2.4-3.3%, and it comes with an upsize option of 100m shares. BT also reported that the sale was a result of a "reverse inquiry" from bankers. If 500m shares are sold, Temasek's stake in SingTel will fall from 54.4% to 51.3%, still making SingTel the largest company in Temasek's portfolio by market capitalization. We do not think that the share sale is any indicator of SingTel's business prospects - and we also believe that it is just part of a normal portfolio rebalancing, given that SingTel is up 6.7% YTD. We have a BUY on SingTel with a fair value of S$3.61; and we are also expecting a dividend yield of ~5% for this FY ending Mar 2013.

Best Regards, Company Registration No: 198301152E

Good growth headroom for Wilmar-Kellogg JV: Citi

Stock Name: Wilmar
Company Name: WILMAR INTERNATIONAL LIMITED

Research House: Citigroup

Price Call: BUY

Target Price: 4.08

Wilmar’s JV with Kellogg is a move to tap opportunities in the packaged and processed food segments before China fully matures, recycling Wilmar’s market and network strength from primary foods, Citigroup says.

It notes these were the “supporting thoughts” on Wilmar taking a 10% stake in Australian consumer-brand-maker Goodman Fielder earlier this year. The house notes Wilmar’s consumer segment is among the smallest of its five divisions, contributing only 4%-12% of pretax earnings.

“While contributions from this JV will take time, growth at its consumer division will help reduce the earnings volatility at Wilmar, especially as processed foods unlike primary foods are less impacted by government anti-inflation policies. There is good growth headroom for the JV as Kellogg-Wilmar believes that sales in cereals/snacks alone in China is estimated at US$12 billion (or $14.7 billion versus US$6.8 billion for Wilmar’s consumer packs last year).”

Citigroup rates Wilmar at Buy with a $4.08 target. The stock is up 2.2% at $3.26.

MARKET PULSE: Ezra, Triyards, Rotary (25 Sep 2012)

Stock Name: Rotary
Company Name: ROTARY ENGINEERING LIMITED

Research House: OCBC

Price Call: SELL

Target Price: 0.43

MARKET PULSE: Ezra, Triyards, Rotary

25 Sep 2012

KEY IDEA Ezra Holdings: Progress on all fronts As tendering activity in the subsea market continues to be buoyant and the industry outlook is set to remain positive, we increase our FY13 subsea new order wins estimate for Ezra Holdings to US$900m, increasing our fair value estimate from S$1.35 to S$1.48. At the same time, we are positive on the impending listing of Ezra's engineering and fabrication arm, Triyards, as this will allow the latter to tap the debt and equity capital markets independently from Ezra to pursue future growth opportunities. The move may also allow Ezra and Triyards to leverage on each other for business opportunities. Finally, an equity carve-out increases information transparency, improving investors' understanding of the parent's firm value. Assuming Triyards trades at 9x FY13F earnings with a share price of S$0.78, we estimate that this would lower our fair value estimate for Ezra from S$1.48 to S$1.40. Shareholders' approval still has to be sought at an EGM this week. Maintain BUY. (Low Pei Han) MORE REPORTS Triyards Holdings Ltd: Specialist yard branching out With two yards in Vietnam and a fabrication facility in the US, Triyards Holdings Ltd (Triyards) is an engineering and fabrication solutions provider focused on the offshore oil and gas industry. Unlike many shipyards, the group has a strategic focus on the construction of self-elevating units (liftboats), having established a significant track record. Originating from Ezra Holdings which will hold a 67% stake post listing, Triyards may be able to be involved in some of the projects that Ezra undertakes and tap into Ezra's clientele base. Based on 9x FY13F earnings, we derive a fair value estimate of S$0.78. We do not have a rating on Triyards. (Low Pei Han) Rotary Engineering Ltd: Profit warning Rotary Engineering Ltd (Rotary) issued a profit warning of net losses for the coming quarter and FY12F. According to management, losses were mainly due to the SATORP project. This should not come as a total surprise as Rotary had previously reported that it faced "major challenges" in its execution and warned that "additional costs … will be incurred to rectify" certain issues. The group's ability to manage the cost over-run issue may be limited given the shortage of subcontractors in Saudi Arabia market and the tight deadline for completion. We now project a net loss of S$2.5m in FY12F and a subsequent recovery in FY13F. We also lowered our P/B peg to 0.8x (previously 1.0x) and fair value estimate to S$0.43 (previously S$0.50). Downgrade to SELL. (Chia Jiunyang)

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

NEWS HEADLINES - The Dow and the S&P 500 Index both slipped 0.2%. Stocks fell globally after German Chancellor Merkel and French President Hollande reportedly failed to agree on a time frame to start joint oversight of Europe's banking system. - Apple dropped 1.3% as opening-weekend iPhone 5 sales missed some analysts' targets. - The Securities & Industry Council has rejected Fraser & Neave's bid to make the Thai consortium raise its general offer to adjust for a proposed capital reduction. - Chasen Holdings has signed a deal for a transfer-operate-transfer project involving a purified water treatment plant and a waste water treatment plant in Jilin City, China. This marks the group's first such project in China. - SunRight's FY12 net profit fell 87% to S$615k. Revenue slid 9% to S$105.55m. - Courage Marine Group is selling a vessel for US$3.86m. It expects net proceeds of US$3.76m from the disposal.

SG: Ezra Holdings - Progress on all fronts

Stock Name: Ezra
Company Name: EZRA HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 1.48

Ezra Holdings | BUY 25 Sep 2012

PROGRESS ON ALL FRONTS - Higher subsea order wins estimate - Up fair value to S$1.48 - May drop to S$1.40 post Triyards listing As tendering activity in the subsea market continues to be buoyant and the industry outlook is set to remain positive, we increase our FY13 subsea new order wins estimate for Ezra Holdings to US$900m, increasing our fair value estimate from S$1.35 to S$1.48. At the same time, we are positive on the impending listing of Ezra's engineering and fabrication arm, Triyards, as this will allow the latter to tap the debt and equity capital markets independently from Ezra to pursue future growth opportunities. The move may also allow Ezra and Triyards to leverage on each other for business opportunities. Finally, an equity carve-out increases information transparency, improving investors' understanding of the parent's firm value. Assuming Triyards trades at 9x FY13F earnings with a share price of S$0.78, we estimate that this would lower our fair value estimate for Ezra from S$1.48 to S$1.40. Shareholders' approval still has to be sought at an EGM this week. Maintain BUY.

DMG starts Ausgroup At Buy, Target $0.755

Stock Name: AusGroup
Company Name: AUSGROUP LIMITED

Research House: DMG

Price Call: BUY

Target Price: 0.755

DMG & Partners initiates AusGroup at Buy with $0.755 target.

“AusGroup has effected a turnaround that has gone unnoticed by the market,” it says, estimating it trades at 6.6x historical and 4.9x forward P/Es. DMG forecasts 29% net profit CAGR for the next three years, noting fiscal-FY12 net profit of A$23.3 million ($29.8 million) was its highest ever.

“With a strong earnings growth profile, AusGroup joins our top picks with a high potential to double in two years.” DMG notes its forecasts are based on conservative FY13-15 net margin estimates of 4.3%-5.2%, compared with AusGroup’s price target increase to 6%-7%; it notes net margins have improved over the last four quarters. It says the industry backdrop is strong, with a record A$261 billion committed to capex for 98 major mineral and energy projects between 2012-2016, with another A$243 billion in uncommitted capex for 295 potential projects.

It notes its target price is based on 9X FY13 EPS, undemanding compared with Civmec’s 19x P/E. “We expect both the earnings growth and multiples re-rating to drive a massive share price outperformance.” The stock is up 20.7% at $0.495.

DBS only Singapore bank to own: JPMorgan

Stock Name: DBS
Company Name: DBS GROUP HOLDINGS LTD

Research House: JP Morgan Chase

Price Call: BUY

Target Price: 18.50

Stock Name: UOB
Company Name: UNITED OVERSEAS BANK LTD

Research House: JP Morgan Chase

Price Call: HOLD

Target Price: 19.50

Stock Name: OCBC Bk
Company Name: OVERSEA-CHINESE BANKING CORP

Research House: JP Morgan Chase

Price Call: HOLD

Target Price: 9.40

DBS is the only stock to own in an otherwise lackluster Singapore banking sector, JPMorgan says, tipping switching out of UOB and OCBC.

DBS’ “bottom-up improvements will have bigger impact on ROE over next two years as top-down trends remain unpromising. Year-to-date, DBS has returned 30%, despite trailing peers post Danamon deal announcement. We expect that overhang to be addressed in the next three to six months, which along with ongoing turnaround should lead to re-rating.”

It rates DBS at Overweight with $18.50 target price. It raises UOB’s target to $19.50 from $18.10 after revising earnings, keeping a Neutral call and recommending investors book profit. It rates OCBC at Neutral with $9.40 target, noting the stock’s rally was based on factors with a low probability of recurrence.

UOB is down 0.1% at $19.64, OCBC is down 0.9% at $9.27 and DBS is down 0.8% at $14.39.

CIMB downgrades UOB to Neutral amid NIM concerns

Stock Name: UOB
Company Name: UNITED OVERSEAS BANK LTD

Research House: CIMB

Price Call: HOLD

Target Price: 22.47

CIMB downgrades UOB to Neutral from Outperform. “With the highest SGD LDR among local peers, UOB should be the hardest hit in the war for deposits. UOB is probably in deposit gathering mode right now and has been offering attractive fixed deposit promotions. We anticipate above-peers’ NIM compression.”

It notes SME and mortgage competition has capped lending yields in UOB’s typical lending markets, expecting UOB’s NIM gap with peers to gradually close. But it adds, catalysts could come from sustained fee strength, with the bank attempting to monetize relationships from its regional platform.

The stock’s outperformance post-results has largely captured positives from a strong 2Q12, trading at 1.26x 2013 P/BV, which appears fair on a regional comparison basis. It lowers its FY12-14 earnings by 0.2%-0.7% in anticipation of NIM erosion, but raises its target to $22.47 from $21.97 after rolling to 2013 valuations. The stock is down 0.2% at $19.62.

MARKET PULSE: Global Premium Hotels, UE E&C, Dyna-Mac (24 Sep 2012)

Stock Name: GP Hotels
Company Name: GLOBAL PREMIUM HOTELS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.29

Stock Name: UE E&C
Company Name: UE E&C LTD.

Research House: OCBC

Price Call: BUY

Target Price: 0.71

Stock Name: Dyna-Mac
Company Name: DYNA-MAC HOLDINGS LTD.

Research House: OCBC

Price Call: BUY

Target Price: 0.62

MARKET PULSE: Global Premium Hotels, UE E&C, Dyna-Mac

24 Sep 2012

KEY IDEA Global Premium Hotels: Dominant player with track record of growth Summary: Global Premium Hotels (GPH) develops, owns and operates Economy-tier and Mid-tier hotels, and is the second largest operator of Economy-tier hotels in Singapore. GPH currently operates 23 hotels in Singapore with a total of 1,738 rooms under the well-known "Fragrance" (Economy-tier - 22 hotels) and the "Parc Sovereign" brands (Mid-tier - 1 hotel). Out of the 23 hotels, 22 are wholly owned by the group, and 19 of them are on freehold land. From 2006 to 2011, GPH grew its portfolio of rooms by an impressive CAGR of 10.9% p.a. from 1,034 rooms to 1,738 rooms. GPH will continue its expansion with the development of a ~260-room Parc Sovereign hotel at the Tyrwhitt Road site which it has recently acquired from its parent, Fragrance Group. The hotel will expand the total room count under GPH's management by ~15% and based on third party valuers' and management's estimates, could potentially result in a S$42m accretion. We initiate with a BUY and a fair value of S$0.29. (Sarah Ong) MORE REPORTS UE E&C: Top bid for Prince Charles Crescent Summary: A consortium comprising Wing Tai's Wingstar Investment, Metro Australia Holdings and UE E&C's Maxdin put in a top bid of S$516.3m, or S$960 psf ppr, for a 99-year leasehold residential site at Prince Charles Crescent, beating the next closest bid by a mere 1.45%. Based on our estimates, the break-even price for the new development would be around S$1,450 psf ppr and the selling price S$1,650 psf ppr. We also expect UE E&C to provide construction services (worth an estimated S$150-200m) for the new development. We expect URA to announce the winning bid in the coming weeks. In the meantime, we are keeping our projections and S$0.71 fair value estimate unchanged. Maintain BUY. (Chia Jiunyang) Dyna-Mac: US$42m of fabrication orders Summary: Dyna-Mac Holdings has secured three fabrication orders worth a provisional sum of US$42m from SBM Offshore, Subsea 7 and Keppel Offshore and Marine. The orders were for the fabrication and assembly of topside modules, metering skids, subsea spools and other accessories. After deducting work done in the current quarter and new orders received from customers, we estimate Dyna-Mac's current order-book to be around S$200m and would last to 4Q12 or 1Q13. We currently have a BUYrating with S$0.62 fair value estimate. (Chia Jiunyang)

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

NEWS HEADLINES - US stocks edged lower Friday, with the Dow registering its first weekly loss in three weeks after a late-afternoon selloff. The Dow fell 0.1% to 13,579.47. The S&P 500 Index slipped less than 0.1% to 1,460.15. - First REIT is to acquire an integrated hospital and hotel in Manado and a hospital in Makassar, Indonesia for a total of S$143m, which will raise its total asset size to S$782m. - Gul Technologies Singapore has received a formal proposal from Greenwich Pacific Pte. Ltd. seeking the voluntary delisting of the company from SGX-ST. - Perennial China Retail Trust has issued S$130.0m in principal amount of 6.375% fixed rate notes due 2015 under its S$500m Multicurrency MTN programme. - TA Corporation announced that ~90% of the units were snapped up at the preview of its latest development, Gambir Ridge.

MARKET PULSE: KSH Holdings, ASL Marine (21 Sep 2012)

Stock Name: KSH Hldg
Company Name: KSH HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.50

Stock Name: ASL Marine
Company Name: ASL MARINE HOLDINGS LTD

Research House: OCBC

Price Call: BUY

Target Price: 0.82

MARKET PULSE: KSH Holdings, ASL Marine

21 Sep 2011

KEY IDEA KSH Holdings: Earnings growth at deep value - upgrade to BUY Summary: Due to a rapid sales pickup at a key project, Cityscape@Farrer Park, we now forecast for FY13 (ending Mar 13) earnings to surge 68%. Similarly, we expect FY14 earnings to increase 73%. We see sustained earnings growth as a key price catalyst ahead, particularly as continued market liquidity seeks out deep value laggards like KSH (0.6x trailing PB, 3x FY13E PE). We also note KSH has been actively buying back shares near current levels - which management views as severely undervalued - and has a mandate to purchase up to a quarter of its free float, with ample cash (S$53m) to do so. Finally, we see a major re-rating as likely imminent given KSH's transition, over the last two years, from a cash-hoarding contractor to an property player actively managing shareholders' capital - deploying capital into accretive site acquisitions and returning excess cash via dividends and share buy-backs. Upgrade KSH to BUY as our key small-cap conviction idea. Our FV increases to S$0.50, from S$0.26 previously, as we lower the RNAV discount to 50% to reflect active capital management, better-than-expected real estate execution, and a still resilient construction order book. (Eli Lee) MORE REPORTS ASL Marine: A worthy stock amidst the rising tide Summary: Announcement of QE3, while long-expected, has helped buoy sentiment across the board. However, amidst the rising tide, investors are well-advised to pick stocks that can stand the test of time. In the small-mid cap space, ASL Marine's (ASL) diversified business model means it is positioned to capitalise on the recovering newbuild market (driven by offshore support vessels), while still being supported by its healthy shiprepair and chartering operations. Management has turned more positive but more importantly, we also expect the group to double its capex to about S$115m (mainly to expand shipcharter fleet and deepen waterfront) in FY13 compared to just S$67m in FY12. With an upside potential of about 27%, we maintain our BUY rating on the stock with S$0.82 fair value estimate. (Low Pei Han)

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

NEWS HEADLINES - The Dow rose 0.14% to 13,596.93, posting its third consecutive gain. The S&P 500 Index fell 0.05% to 1,460.26. Stocks dropped in early Thursday trading, with weak China economic data and higher-than-expected US jobless claims. Indexes reclaimed most of the lost ground. - United Envirotech's 70%-owned subsidiary has signed a deal to acquire an industrial wastewater treatment plant in Shandong, China. The first phase of the project will cost RMB120m (S$23.2m). - Sarin Technologies has launched a new version of its best-selling rough-diamond planning software - the AdvisorTM 5.0, which can further improve the value of the polished diamonds derivable from the rough raw material. - TA Corporation will preview the group's latest residential development, Gambir Ridge, which is located close to the Bartley and Woodleigh MRT stations. - Advanced Systems Automation has agreed to acquire 45% of the issued shares of Auramas Teknologi Sdn Bhd for a consideration of MYR7.7m, to be satisfied by a MYR100k cash payment and an allotment and issue of shares for the remaining MYR7.6m. - Texchem-Pack Holdings has subscribed for an additional six million shares in Texchem Polymers Sdn Bhd for MYR6m (S$2.4m).

F&N's valuations still undemanding: Deutsche Bank

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

Research House: Deutsche Bank

Price Call: BUY

Target Price: 9.42

Corporate action around F&N is likely to slow near term as the APB divestment is now likely to proceed and with the takeover offer from ThaiBev and TCC Assets ongoing, Deutsche Bank says, expecting F&N’s
shares to be rangebound around the $8.88/share offer price.

It believes F&N’s 12-month valuations remain undemanding at a 14% discount to its current sum-of-the-parts estimate of $10.46.

“Synergies with TCC/ThaiBev’s consumer and property operations or value crystallization from F&N’s assets could narrow NAV discounts and/or unlock further value for shareholders in the longer term.”

It keeps a Buy call with $9.42 target. The stock is flat at $8.88.

DBS downgrades China Fishery to 'hold'

Stock Name: China Fish
Company Name: CHINA FISHERY GROUP LIMITED

Research House: DBS Vickers

Price Call: HOLD

Target Price: 0.72

DBS Vickers downgraded China Fishery Group to‘hold’ from ‘buy’ and cut its target price to $0.72 from $1.15, citing greater regulatory risks for its North Pacific operations.

By 11:26 a.m., shares of China Fishery were down 2.6% at $0.75, and have fallen 17.6% so far this year, compared to the FTSE ST Consumer Goods Index's 16.4% decline.

A Russian regulator has expressed concerns over foreign companies establishing control over Russian fishery companies and intends to implement measures to address the issue, which could have an impact on supply of fishes to China Fishery, said DBS.

The brokerage estimated that a 10% drop in the company's fish volumes or sales could have a 9.5% impact on its 2013 earnings.

“We believe regulatory concerns could cap share price performance, at least in the near term," DBS said.

CIMB ups target price for Overseas Union Enterprise

CIMB Research raised its target price for property developer Overseas Union Enterprise to $3.38 from $2.98 and kept its ‘outperform’ rating, citing expected gains from the potential sale of its hotel and shopping mall assets.

By 11:45 am, OUE shares were down 0.7% at $2.93, having surged 39.5% so far this year, compared with the FTSE ST Mid Cap Index’s 25% rise.

OUE said on Wednesday it has offered a potential buyer exclusivity to do due diligence Marina Orchard hotel and Marina Orchard shopping mall in Singapore, which CIMB said could fetch higher-than-expected prices and special dividends from the disposal gains.

“Divestment of Mandarin Orchard at this stage of the cycle when room rates and occupancy are at historical highs will allow OUE to extract near maximum value from this asset,” said CIMB in a report, Sale of OUE’s Mandarin Orchard hotel, which is valued at $1.18 billion, would lead to a divestment gain of about $1.06 billion and an increase in OUE’s book value by 27%.

DBS ups Genting Singapore target price

Stock Name: Genting SP
Company Name: GENTING SINGAPORE PLC

Research House: DBS Vickers

Price Call: HOLD

Target Price: 1.45

DBS Vickers raised its target price for Genting Singapore PLC to $1.45 from $1.17 and kept its ‘hold’ rating after the casino operator said it was selling a 4.8% stake in Australia's Echo Entertainment Group.

By 11:43 a.m., Genting shares were down 0.7% at $1.4 and have dropped 7% so far this year, compared with the Straits Times Index’s 15.7% rise.

The development is positive as Genting’s stock was sold down on concerns about Genting getting entangled in an expensive takeover tussle against Crown, which owns 10% of Echo, DBS said.

However, DBS said it expects softness in Singapore’s gaming business to continue, given the cautious lending to VIPs and slower growth in tourist arrivals.

MARKET PULSE: Tiger Airways, Tat Hong (20 Sep 2012)

Stock Name: TigerAir
Company Name: TIGER AIRWAYS HOLDINGS LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.81

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

Research House: OCBC

Price Call: BUY

Target Price: 1.42

MARKET PULSE: Tiger Airways, Tat Hong

20 Sep 2012

KEY IDEA Tiger Airways: Momentum hindered While new Tiger Airways' (TGR) CEO, Mr. Koay Peng Yen, outlined a new initiative to focus on customer satisfaction and TGR's passenger data for Aug revealed MOM increases of 4% and 5% for the number of passengers carried on its Singapore and Australian operations respectively, a full recovery for TGR remains an optimistic proposition. Tiger Australia currently faces a challenging environment with an influx of excess capacity in the market following Qantas's plans to increase capacity in response to Virgin's additions. With profitability for Tiger Australia negatively impacted and fuel prices creeping upwards, we lower our projections accordingly. Therefore, our fair value estimate falls to S$0.81/share from S$0.83/share previously. Downgrade to HOLD. (Lim Siyi) MORE REPORTS Tat Hong Holdings: Investing for growth Tat Hong Holdings (Tat Hong) announced the placement of 70m new ordinary shares at S$1.20 per share, or a discount of 8% to Monday's closing price (S$1.30). This represents a 13.9% enlargement of Tat Hong's ordinary share capital (excluding treasury shares). About half of the net proceeds will be used to expand Tat Hong's highly profitable crane fleet (with ~60% gross margins). The remaining half of the net proceeds will be used to fund acquisition of land and buildings in Singapore and Malaysia as well as refinancing purposes. In our view, Tat Hong will continue to benefit from growing demand in the infrastructure, oil & gas and resources sectors in the medium to longer term, and raised our fair value estimate to S$1.42 (previously S$1.39) on 12x (previous 11x) FY13F EPS. Maintain BUY. (Chia Jiunyang)

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

NEWS HEADLINES - US stocks made slight gains Wednesday, supported by strength in the housing sector, while energy stocks dragged on the market as oil futures dropped. The Dow rose 0.1% to 13,577.96. The S&P 500 Index climbed 0.1% to 1,461.05. - Kitchen Culture Holdings is proposing to diversify its business to include property development, investment and trading business. - OUE has disclosed that while it has offered a potential buyer exclusivity to conduct preliminary due diligence on Mandarin Orchard Singapore and Mandarin Gallery, at this stage it is uncertain if any transaction will be concluded. - Raffles Education agreed to purchase a plot of land in Iskandar Malaysia for ~MYR75m (S$30m) to house Raffles American School, its first entry into pre-tertiary education. - STATS ChipPAC expects that its 3Q12 net revenues to be 3% to 5% lower from 2Q12 due to weakness in the PC end market and delay in supply of wafers for high-end smartphones.

DJ MARKET TALK: Triyards In Sweet Spot For SEU Demand -CIMB (2012-09-19 08:35:00)

DJ MARKET TALK: Triyards In Sweet Spot For SEU Demand -CIMB (2012-09-19 08:35:00) 0835 GMT [Dow Jones] STOCK CALL: CIMB says it is positive on Triyards, Ezra''s (5DN.SG) fabrication division, after a management meeting. It notes Triyards'' orderbook is US$200 million; "it is in a sweet spot to benefit from growing demand for niche self-elevating units (SEUs). Our checks on the ground with several Singapore O&M operators confirm Triyards'' good reputation for execution, especially in the construction of turnkey SEUs." It estimates Triyards'' market cap could amount to S$250 million, or S$0.86/share, based on 11X 2013 P/E, after its listing. CIMB is neutral on Ezra''s recent issues of S$200 million three-year 5% fixed-rate bonds and S$150 million perpetual bonds at 8.75%; while net gearing should improve, FY13 ROEs could be diluted to about 8%, leaving little room for error as it is near the coupon rates, it says. But it adds, "investors should look beyond 4Q12 to focus on FY13 as Ezra is on track to deliver 125% earnings growth. The growth would be led by better subsea utilization, a recovery in day rates for its offshore division and stronger orders for niche self-elevating units, benefiting Triyards." It keeps an Outperform call with S$1.38 target. Ezra is up 4.2% at S$1.23.

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MARKET PULSE: Lippo Malls Indo, Cache Logistics, Tat Hong (19 Sep 2012)

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

Research House: OCBC

Price Call: HOLD

Target Price: 0.45

Stock Name: CACHE
Company Name: CACHE LOGISTICS TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.26

MARKET PULSE: Lippo Malls Indo, Cache Logistics, Tat Hong

19 Sep 2012

KEY IDEA Lippo Malls Indonesia Retail Trust: Interest expense likely to hit DPU We have incorporated assumptions into our model about potential acquisitions that may be funded by the S$250m raised by LMIRT in early Jul under its S$750m MTN programme. We assume the acquisitions will be yield-accretive with initial net property yields of ~8.5%. The S$200m 3-year bonds were priced at 4.88% while the S$50m bonds were priced at 5.875%, giving a blended interest rate of ~5.1%. Since no proposed acquisitions have been announced yet, we believe that the end of this year is the earliest any acquisitions are likely to be completed. Before the acquisitions are completed, there is likely to be a drag on DPU due to the additional interest expense. We also have some concern about growth in the Jakarta retail space supply over 2012 and 2013 (+12.1% YoY and +18.2% YoY). We maintain our fair value of S$0.45 but downgrade LMIRT to a HOLD since the share price is close to our fair value. (Sarah Ong) MORE REPORTS Cache Logistics Trust: On strong footing We continue to favour Cache Logistics Trust (CACHE) for its resilient portfolio. The REIT currently owns 12 logistics warehouse properties, of which eight of them have ramp-up features. Such warehouse space is limited in Singapore as specialized planning and design specifications are required for the development. CACHE's portfolio has also remained 100% occupied since its listing in Apr 2010. In addition, the bulk of its leases are based on triple-net master lease structures with built-in annual rental escalation of 1.5-2.5%. This arrangement provides CACHE not only with high NPI margins but also stable income streams and a long weighted average lease to expiry of 4.4 years. For the rest of FY12, we expect CACHE to turn in a better set of results. While its 2Q12 DPU eased 5.0% YoY, we believe CACHE will see a lift in its DPU going forward when rental income from Pandan Logistics Hub starts to kick in from 2H12 onwards. Reiterate BUY on CACHE with a revised fair value of S$1.26 (S$1.18 previously). (Kevin Tan)

Tat Hong Holdings: Placement of 70m new ordinary shares at S$1.20 Tat Hong Holdings (Tat Hong) announced the placement of 70m new ordinary shares at S$1.20 per share, or a discount of 8% to yesterday's closing price (S$1.30). Assuming the 70m placement shares are allotted and issued, Tat Hong's share capital will be enlarged by 13.9%. The net proceeds of S$82m will be used to increase the group's crane fleet and expand the group's participation in infrastructure and oil & gas projects in the Asia-Pacific region. We will be speaking with the management later. In the meantime, we keep our BUY rating but put our S$1.39 fair value estimate under review. (Chia Jiunyang) For more information on the above, visit www.ocbcresearch.comfor the detailed report.

NEWS HEADLINES - Most US stocks fell for a second day. A gauge of home-builder sentiment showed improvement in Sep and FedEx Corp. reduced its profit forecast. The S&P 500 Index slipped 0.1% to close at 1,459.32. The Dow gained 0.1% to close at 13,564.64. - An ASEAN Trading Link connecting Bursa Malaysia and Singapore Exchange went live yesterday. - ThaiBev and TCC Assets Ltd agreed to support the sale of Fraser and Neave's stake in Tiger beer maker Asia Pacific Breweries Ltd to Heineken NV. - Olam International has won a bid for a full stake in Zambia's Northern Coffee Corporation Ltd for US$6.15m. Olam said it will commit a further US$40m as capital expenditure and pre-operative expenditure. - Ascendas India Trust has priced the S$65m 3.80% notes due 2018 to be issued by the trust.

SembMarine's SLP buy targets North Sea market: Daiwa

Stock Name: SembMar
Company Name: SEMBCORP MARINE LTD

Research House: Daiwa

Price Call: BUY

Target Price: 5.58

SembMarine’s acquisition of 70% of unlisted SLP Engineering for GBP2.5 million ($4.98 million) is an opportunistic way to target the North Sea market, Daiwa says.

While it is difficult to find a suitable comparison due to SLP’s size and highly specialized market segment, the house believes the pricing of 5.1x 2012 PBR is fair, primarily as the seller was distressed.

It notes SLP has extensive experience in projects that can withstand the North Sea’s harsh operating environment, with the segment’s highly specialized and technical nature creating high barriers to entry for SembMarine’s Chinese competition.

“The SLP acquisition will benefit SembMarine as it will open up areas where Keppel does not have a strong presence. Among Keppel’s contract wins, we have yet to see North Sea-related projects.”

It keeps SembMarine at Outperform with $5.58 target. The stock is up 0.6% at $5.11.

Triyards in sweet spot for SEU demand: CIMB

CIMB says it is positive on Triyards, Ezra’s fabrication division, after a management meeting.

It notes Triyards’ orderbook is US$200 million ($245 million); “it is in a sweet spot to benefit from growing demand for niche self-elevating units (SEUs). Our checks on the ground with several Singapore O&M operators confirm Triyards’ good reputation for execution, especially in the construction of turnkey SEUs.”

It estimates Triyards’ market cap could amount to $250 million, or $0.86/share, based on 11x 2013 P/E, after its listing.

CIMB is neutral on Ezra’s recent issues of $200 million three-year 5% fixed-rate bonds and $150 million perpetual bonds at 8.75%; while net gearing should improve, FY13 ROEs could be diluted to about 8%, leaving little room for error as it is near the coupon rates, it says.

But it adds, “investors should look beyond 4Q12 to focus on FY13 as Ezra is on track to deliver 125% earnings growth. The growth would be led by better subsea utilisation, a recovery in day rates for its offshore division and stronger orders for niche self-elevating units, benefiting Triyards.”

It keeps an Outperform call with $1.38 target. Ezra is up 4.2% at $1.23.

OCBC raises target on Wilmar to $3.06

OCBC Investment Research raised its target price on Singapore palm oil firm Wilmar International to $3.06 from $2.90, saying the market is less averse to taking risk after the U.S. stimulus, but maintained its 'hold' rating.

Wilmar shares were down 0.6% at $3.27 on Tuesday. The stock has jumped 9% since the company launched its first-ever share buyback and the U.S. Federal Reserve stimulus sparked a rally in commodities stocks last week.

OCBC said while “the market is adopting a more risk-on approach on the back of QE3”, Wilmar's fundamental outlook is still rather muted. It advised investors to take profit when Wilmar's share price hits $3.40 or higher.

Crush margins in China for Wilmar's oilseeds business remain sub-optimal due to excess capacity in the industry, while prices of soy and other raw materials are still volatile, OCBC said.

It added that cooking oil products could continue to face price freeze given the growing unemployment and inflationary concerns in China. Cooking oil makers like Wilmar could face margin compression due to rising input prices, OCBC noted.

DMG says Hi-P is top pick for tech sector

Stock Name: Hi-P
Company Name: HI-P INTERNATIONAL LIMITED

Research House: DMG

Price Call: BUY

Target Price: 1.28

DMG & Partners Securities said it continues to favour Hi-P International, which supplies parts to companies such as Apple Inc, as the top pick in the Singapore technology sector.

On Tuesday, Hi-P shares were up 0.5% at $1.065. The stock has surged 76% so far this year versus the 23% gain in the FT ST Small Cap Index.

Apple booked orders for over two million iPhone 5 models in the first 24 hours, reflecting a higher-than-expected demand for the consumer device giant’s new smartphone and setting it up for a strong holiday quarter.

“Despite some criticism over the lack of the ‘wow’ factors, we remain bullish over the demand for iPhone 5 as we have consistently argued that, rather than competing purely on hardware specifications, Apple focuses on providing a better and holistic user experience,” DMG said.

The broker has a ’buy’ rating and $1.28 target price on Hi-P.

Nomura raises SPH target to $4.28

Stock Name: SPH
Company Name: SINGAPORE PRESS HLDGS LTD

Research House: Nomura

Price Call: HOLD

Target Price: 4.28

Nomura raised its target price on Singapore Press Holdings to $4.28 from $4.15 after updating its earnings estimates and valuation for the Singapore media and property firm’s retail mall assets, but maintained its ‘neutral’ rating.

SPH shares were flat at $4.01 on Tuesday. The stock has increased nearly 9% so far this year versus the 16% gain in the broader Straits Times Index.

In the third quarter of 2012 fiscal year, property profit before tax grew 42% to $26.4 million from a year earlier on higher rental income from SPH’s Paragon and Clementi shopping malls, Nomura said, noting that both are enjoying full occupancy.

But Nomura said SPH’s August newspaper weekly page count was down 4.6% year-on-year, based on its monthly average, indicating that display advertising was weaker last month.

“While dividend yields remain attractive at 5.5%, given the tepid growth outlook and just 6.7% upside to our revised target price, we maintain our neutral rating on the stock,” Nomura said.

MARKET PULSE: Wilmar, Singapore Residential Property (18 Sep 2012)

Stock Name: Wilmar
Company Name: WILMAR INTERNATIONAL LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 3.06

MARKET PULSE: Wilmar, Singapore Residential Property

18 Sep 2012

KEY IDEA Wilmar: Share buyback boost but outlook still muted Wilmar International Limited (WIL) bought back some 7.4m shares at S$3 each on 13 Sep (mandate to buy up to 10% of issued shares). Also buoyed by recent QE3 initiatives, the share price rebounded some 10% over the past two sessions. However, we are still not convinced that there is a structural improvement in WIL's near-term fundamentals. Nevertheless, we note that the market is adopting a more risk-on approach on the back of QE3. Hence we raise our valuation peg from 12.5x to 13.5x, which sees our fair value edging up from S$2.90 to S$3.06 (still based on blended FY12/13F EPS). But as the fundamental outlook is still rather muted, we maintain HOLD; and investors may consider taking profit around S$3.40 or higher. (Carey Wong) MORE REPORTS Singapore Residential Property: Traditionally quiet period URA data yesterday showed a headline total of 1,539 new private residential sales (including 118 EC units) in Aug 12, down 26% MoM over a traditionally lull period of the Hungry Ghosts' Month of the lunar calendar. Excluding EC and landed-units, sales volume similarly fell 26% MoM to 1,383 units while units launched dipped 38% MoM to 1,047 units. Overall take-up rate, however, remained healthy at 132% (up from 110% previous month). Of note, RCR sales came up 103% MoM to 367 units sold (versus 181 units in Jul 12), partially attributable to a successful launch at One Dusun Residences (153 units out of 154 total units sold at S$1,532 psf). Maintain OVERWEIGHT on residential developers. Top stock picks are City Developments [FV: S$13.10, BUY], CapitaMalls Asia [FV: S$1.85, BUY] and Roxy-Pacific [FV: S$0.54, BUY]. (Eli Lee)

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

NEWS HEADLINES - US stocks ended lower Monday for the first session in five following a winning streak that brought the indexes to multi-year highs. The Dow fell 0.3% to 13,553.10. The S&P 500 Index slid 0.3% to 1,461.19. - Cambridge Industrial Trust has entered into separate agreements for the proposed acquisitions of two properties totaling S$56.3m. - CWT Limited has entered into a share sale and purchase agreement to acquire the entire 100% stake in global physical merchant LN Metals International Limited for a total consideration of US$12.31m. - Grand Banks Yachts has agreed to place out 19.223m new shares worth S$5.238m (27.25 S cents each) to two parties, including a trust linked to Genting Group's Lim Kok Thay. The post-placement enlarged capital base consists of 115.33m shares. - Courage Marine Group has entered into an agreement to purchase 10% of the shareholdings of Santarli Realty Pte Ltd and the shareholder's loans. The consideration for the purchase of the shares will be S$100k.

J.P. Morgan starts Ezion at 'overweight'

Stock Name: EzionHldg
Company Name: EZION HOLDINGS LIMITED

Research House: JP Morgan Chase

Price Call: BUY

Target Price: 1.60

J.P. Morgan initiated coverage of Ezion Holdings with an ‘overweight’ rating and a target price of $1.60, saying the company owns the largest and most sophisticated class of liftboats in the world and is one of the first to promote their usage in Asia and the Middle East.

Ezion shares were up 1.2% at $1.275 on Monday. The stock has nearly doubled so far this year, versus the 23% gain in the FT ST Small Cap Index.

Increased offshore construction activities and ageing platforms are likely to drive demand for liftboats, J.P.Morgan said, adding that US$1.3 billion ($1.6 billion) worth of charters will drive a 33% earnings per share compound annual growth rate for Ezion.

The proceeds from Ezion’s issue of perpetual securities can also be used for an additional 3-5 liftboat contracts to be announced over the next 3-6 months, J.P. Morgan said.

It added that Ezion is well positioned to benefit from Australia’s need for liquefied natural gas infrastructure.

MARKET PULSE: PEC, Telecoms Sector (17 Sep Jul 2012)

Stock Name: PEC
Company Name: PEC LTD.

Research House: OCBC

Price Call: BUY

Target Price: 0.86

MARKET PULSE: PEC, Telecoms Sector

17 Sep 2012

KEY IDEA PEC Ltd: Bottom fishing Summary: PEC Ltd's (PEC) share price has fallen by almost half from its peak of S$1.37 per share in Jan 2011 and may have already bottomed out. We now see very deep value in the group, with its stock trading at 15% discount to its book value of S$0.79 per share with a net cash of S$0.44 per share or 64% of its market capitalization. Excluding its net cash value, it is trading at just 3x PER. Meanwhile, our channel checks inform us that the current pricing levels are too tight for the downstream EPC subcontractors to bear, and are unsustainable in the long run. We agree and therefore believe that a margin reversion may be possible in the near- to medium- term horizon. Upgrade to BUYwith a higher fair value estimate of S$0.86 (previously S$0.64). (Chia Jiun-Yang) MORE REPORTS Telecoms Sector: iPhone 5 to help LTE adoption Summary: Apple has unveiled the latest reiteration of the hotly popular iPhone, which will be available in Singapore from 21 Sep, which is 4G LTE-enabled and will work on the 4G networks being implemented here. As with the previous versions of the iPhone, we expect the demand for the new iPhone 5 to be pretty strong. We also expect the smartphone's popularity to help drive LTE adoption over the medium to longer term; this could eventually lead to a gradual recovery in margins as the faster LTE speeds are likely to encourage higher data usage. While we expect the iPhone 5 to help subscribers make the jump from 3G to 4G LTE, we still opine that LTE is still a 2013 story at best. Nevertheless, we continue to like the overall telco sector for its defensive earnings and attractive dividend yields (backed by strong operating cashflows). Maintain OVERWEIGHT. (Carey Wong)

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

NEWS HEADLINES - The Dow rose 0.4% to 13593.37, its fourth-straight daily gain, reaching another multi-year closing high, with investors encouraged by the Fed's additional stimulus announced Thursday. The S&P 500 Index climbed 0.4% to 1465.77. - Fraser and Neave has accepted an unsolicited offer for its entire 56.05% stake in Frasers Property (China) Limited for a total consideration of HK$1.654b(S$261m). - CapitaLand has priced the offering of US$400m 4.076% notes due 2022. - Sembcorp Marine has acquired from Smulders Group the entire share capital in its wholly-owned subsidiary SLP Engineering Limited. Sembcorp will pay about £2.5m for both shares and settlement of the intercompany loans of SLP. - Tritech Group intends to spin-off its subsidiaries in the business of quarrying, extraction and production of dimension stones and other marble-related products. - SGX Catalist-listed, Chaswood Resources Holdings has opened "Paradise Dynasty", which is its first franchised and flagship Chinese casual dining restaurant at Siam Paragon in Bangkok.

SG: Ezion Holdings - S$1b company and growing

EZION HOLDINGS | BUY 14 Sep 2012

S$1B COMPANY AND GROWING - Good performance warranted - Upside still there - But recent run-up has been fast and furious The stock of Ezion Holdings (Ezion) has performed very well in the past few months, rising more than 75% since early Jun. This has been due to the clinching of contracts at attractive rates of return, smooth execution of projects, and commendable earnings. In addition, Ezion may be the first O&M company in Singapore to list perpetual securities, projecting management's strong sense of confidence in the company's growth. The proposed listing of Triyards and increased frequency of LNG-related news reports and conferences may have also helped sentiment. Ezion has been our small-mid cap pick since we highlighted it in our strategy report last year, but it should henceforth be better classified as a mid-cap counter. We roll forward our valuation with an unchanged peg of 9x FY13F earnings, increasing our fair value estimate from S$1.20 to S$1.53. Maintain BUY with a one-year horizon, but be cautious of a near-term pull back given the recent run-up.

MARKET PULSE: Ezion, OSIM (14 Sep 2012)

Stock Name: EzionHldg
Company Name: EZION HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 1.53

MARKET PULSE: Ezion, OSIM

14 Sep 2012

KEY IDEA Ezion Holdings: S$1b company and growing The stock of Ezion Holdings (Ezion) has performed very well in the past few months, rising more than 75% since early Jun. This has been due to the clinching of contracts at attractive rates of return, smooth execution of projects, and commendable earnings. In addition, Ezion may be the first O&M company in Singapore to list perpetual securities, projecting management's strong sense of confidence in the company's growth. The proposed listing of Triyards and increased frequency of LNG-related news reports and conferences may have also helped sentiment. Ezion has been our small-mid cap pick since we highlighted it in our strategy report last year, but it should henceforth be better classified as a mid-cap counter. We roll forward our valuation with an unchanged peg of 9x FY13F earnings, increasing our fair value estimate from S$1.20 to S$1.53. Maintain BUY with a one-year horizon, but be cautious of a near-term pull back given the recent run-up. (Low Pei Han) MORE REPORTS OSIM International: Strong execution to tide through uncertainties We opine that one of OSIM International's (OSIM) core strengths lies in its ability to constantly drive its product innovation. Coupled with its keen focus on improving its productivity and rationalising non-performing outlets, we believe that these would allow OSIM to buffer the macroeconomic slowdown. However, we ease our FY12/FY13 revenue estimates by 1.1/2.2% and PATMI projections by 0.9%/2.2% as we input more conservative assumptions. Since we highlighted OSIM as a possible laggard play during our 27 Jul 2012 report, its share price has outperformed the STI by 13.1ppt. We still see value in OSIM's current share price despite our reduced forecast. Maintain BUY, with a revised fair value estimate of S$1.79, versus S$1.82 previously (still based on 14.3x blended FY12/13F EPS). (Wong Teck Ching Andy)

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

NEWS HEADLINES - The US Fed has launched a third round of quantitative easing, saying it will buy US$40b of MBS a month till the labour market improves. The Dow gained 1.55% to 13,539.86 and the S&P 500 Index rose 1.63% to 1,459.99. - IHH Healthcare replaces NOL in the Straits Times Index with effect from 24 Sep 2012. - Dragon Group Intl will dispose its entire shareholding interest in a wholly-owned subsidiary. The group is expected to record a net loss of ~US$4.9m from the disposal. - Freight Link's 1QFY13 net profit doubled to S$6.6m from S$3.33m a year ago. Revenue rose 18% YoY to S$44.03m. - XMH Holdings' 1QFY13 net profit rose 42% YoY to S$2.17m. Revenue rose 79% YoY to S$21.92m, mainly due to clearing of backlog orders. - A subsidiary of Lian Beng Group has disposed of its 15% stake in Emerald Land - developer of residential development 111 Emerald Hill - and a shareholder loan of S$6.48m for a sum of S$16.98m.

MARKET PULSE: CapitaRetail China, Roxy-Pacific (13 Sep 2012)

Stock Name: CapitaRChina
Company Name: CAPITARETAIL CHINA TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.70

Stock Name: Roxy-Pacific
Company Name: ROXY-PACIFIC HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.54

MARKET PULSE: CapitaRetail China, Roxy-Pacific

13 Sep 2012

KEY IDEA CapitaRetail China Trust: China aiming for 15% p.a. retail sales growth According to the 12th Five-year Development Plan for Domestic Trade released by the State Council recently, China aims to grow its retail sales of consumer goods at an average annual growth rate of 15% for 2011-2015. Beijing, which accounted for 67% of CRCT's 2Q12 gross property revenue, saw overall retail sales grew 13.0% in 1H12. While Beijing's 1H12 expenditure per capita only expanded by 3.6%, disposable income climbed 6.4%, which means that consumers have growing amounts of unutilized "firepower". We are confident that CRCT can achieve healthy double-digit positive rental reversions for 2012 for its multi-tenanted malls. The only listed pure-play China retail REIT globally, CRCT is our top pick in the overseas retail REIT space. We maintain our BUY rating on CRCT and our fair value of S$1.70. (Sarah Ong) MORE REPORTS Roxy-Pacific Holdings: Limited impact from new shoebox rules The URA recently enacted caps on the number of units, based on an average 70 sqm size, in non-landed residential projects outside the central area. In addition, a cap based on a 100 sqm average, originally for the Telok Kurau estate, was extended to Kovan and Joo Chiat/Jalan Euno. We see limited impact for ROXY's pipeline of projects as two of the five recent acquisitions lie in the central area, with the remaining three sites subject to an unchanged 70sqm average. Since we had upgraded ROXY to a buy rating on 20 Mar 2012, the share price has appreciated 32.4% to date, significantly outperforming the STI (up 0.9%). We believe, however, that management's execution remains spot on and further upside likely lies ahead. Maintain BUY with a higher fair value estimate of S$0.54 (25% RNAV disc), versus S$0.50 previously, as we lower the RNAV discount to reflect a higher sell-through in existing projects and careful execution. (Eli Lee)

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

NEWS HEADLINES - US stocks finished slightly higher Wednesday after Germany's top court declined to block a euro-zone rescue fund. The Dow climbed 0.08% to 13,333.35, its highest finish since Dec 2007. The S&P 500 Index rose 0.2% to 1,436.56. - Thai Beverage and TCC Assets have increased their combined stake in Fraser & Neave to 30.36%, thus triggering a mandatory general offer to buy the remaining F&N shares at S$8.88 each. - Low Keng Huat reported a 54% YoY rise in net profit to S$26.9m for 2Q13. Revenue rose 17% to S$35.2m. - SembCorp will be investing a total of RMB326.6m (~S$63.5m) to develop centralised utilities facilities in the Fushun Petrochemical and Fine Chemical Park in Liaoning Province, China. - STATS ChipPAC has announced the launch of its Quad Flat No-Lead package design kit for Agilent Technologies' Advanced Design System, which is an electronic design automation software.