MARKET PULSE: Yoma, UE E&C, Midas (5 Sep 2012)

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

Research House: OCBC

Price Call: BUY

Target Price: 0.71

Stock Name: Yoma
Company Name: YOMA STRATEGIC HOLDINGS LTD

Research House: OCBC

Price Call: BUY

Target Price: 0.45

Stock Name: MIDAS
Company Name: MIDAS HLDGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.41

MARKET PULSE: Yoma, UE E&C, Midas

5 Sep 2012

KEY IDEA Yoma Strategic Holdings: Entering the Golden Land Yoma Strategic Holdings Ltd (Yoma) was listed on the SGX in Aug 2006 and is primarily involved in the real estate business in Myanmar. It is the only publicly listed company globally today providing almost pure exposure to Myanmar with an average daily liquidity over USD7m. Given the clear political will shown by President Thein Sein so far, we believe the process of economic liberalization in Myanmar will likely be meaningful and sustainable, which bodes well for Yoma's long term outlook. Yoma is also an affiliate of the SPA Group (SPA), an established conglomerate in Myanmar with a track record in acquiring, developing and marketing large residential projects. This gives Yoma a clear competitive edge and a first mover advantage in the Myanmar real estate sector. We initiate coverage with a BUY rating and a fair value estimate of S$0.45, based on a scenario-weighted RNAV methodology. (Eli Lee) MORE REPORTS UE E&C: Undervalued, but buy for the right reasons Since we upgraded UE E&C Ltd to BUY (in Nov 2011), the stock has jumped by a massive 63%. Previously, we argued that the stock, although undervalued, suffers from a lack of market attention due to its small size and short listing history. With the recent surge in trading volume, there could be further upside ahead arising from a possible market re-rating. However, due to the nature of its business, its earnings streams are likely to remain lumpy. Maintain BUY with an unchanged S$0.71 fair value estimate. (Chia Jiun-yang)

Midas Holdings: Secures CNY123.4m of new power industry contracts Midas Holdings (Midas) announced that it has been awarded two new contracts totalling CNY123.4m for the supply of aluminium alloy tubings to two power industry players Xian XD Switchgear Electric (CNY100.3m) and Xian XD High Voltage (CNY23.1m). Delivery is scheduled to take place between 2012 and 2013. Although the power industry contributed only 6.1% of its 1H12 revenue, we believe that these latest contract wins would allow the group to buffer the current standstill in high-speed passenger train car contracts and diversify its business beyond China's railway sector. Management would likely seek to secure more contracts in this area. Meanwhile, Midas also said that it has signed a Strategic Cooperation Agreement with Xian Switchgear Electric for a tenure of one year, with an option to renew for another one year upon expiry. This would allow Midas to enjoy a preferred supplier status as long as it maintains its competitive pricing on its products and its high standard of manufacturing. We see more potential for near-term contract wins in the power, metro and international rail transport sector for Midas. Maintain BUY and S$0.41 fair value estimate.(Wong Teck Ching Andy) For more information on the above, visit www.ocbcresearch.comfor the detailed report.

NEWS HEADLINES - The Dow dropped 0.4% to 13,035.94 and the S&P 500 Index fell 0.1% to 1,404.94 over concern about data showing that the US manufacturing activity contracted in Aug for a third month. - Speculation over Apple Inc.'s next iPhone launch pushed the counter up 1.5% and the Nasdaq Composite rose 0.3% to 3,075.06. - StarHub Ltd has announced that it intends to issue S$220m 3.08% fixed rate notes due 2022. - LionGold Corp is proposing to undertake a renounceable non-underwritten rights issue of up to 224m warrants on the basis of one warrant for every four existing ordinary shares. The issue price for each warrant is S$0.065. - SBI Offshore is in a dispute with one its principals over a commission income. The company said that it is entitled to a commission income of about US$12m for the assistance it rendered to the principal in securing a substantial order for offshore equipment.