MARKET PULSE: Dyna-Mac, M1 (12 Sep 2012)

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

Research House: OCBC

Price Call: BUY

Target Price: 0.62

Stock Name: M1
Company Name: M1 LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 2.80

MARKET PULSE: Dyna-Mac, M1

12 Sep 2012

KEY IDEA Dyna-Mac Holdings: Well-positioned to capture new orders Dyna-Mac Holdings' (DMH) share price has jumped by about 29% since we upgraded our call to BUY ("Upgrade to BUY", 6/7/2012), outperforming STI's flattish performance over the same period. Looking ahead, we believe there is further upside as the group is well-positioned to benefit from possible new order wins. Recent orders for floating production systems are emerging at near record pace and the current backlog globally was at a peak of 67 units as of Apr 2012. To meet the growing demands, DMH recently acquired a 70% stake in a fabrication yard in Guangzhou, and rented another yard in Johor. In view of the improving outlook, we raised our fair value estimate to S$0.62 (previously S$0.52). Maintain BUY. (Chia Jiunyang) MORE REPORTS M1: LTE is still 2013 story at best M1 Ltd will launch its nationwide 4G LTE network in Singapore on 15 Sep, where it will offer 95% coverage for indoor and outdoor areas. M1 is also pricing its 4G services at a premium to its 3G bundles. While the 4G premiums could be a minor stumbling block (but unlikely to deter early adopters), the bigger stumbling block is likely to come from limited 4G handsets that are available. Hence, we believe that 4G LTE is still more of a 2013 story, as the mass market may still take some time to convert their 3G handsets to 4G. As such, we have not factored in any significant contribution from LTE until 2014 in our model. We continue to like M1 for its defensive earnings and relatively attractive dividend yield of 5.3%. Maintain BUY with an unchanged DCF-based fair value of S$2.80. (Carey Wong)

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