MARKET PULSE: CMT, MLT, Dyna-Mac, Raffles Med, Yoma (22 Oct 2012)

Stock Name: CapitaMall
Company Name: CAPITAMALL TRUST

Research House: OCBC

Price Call: BUY

Target Price: 2.38

Stock Name: MapletreeLog
Company Name: MAPLETREE LOGISTICS TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.24

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

Research House: OCBC

Price Call: BUY

Target Price: 0.57

Stock Name: RafflesMG
Company Name: RAFFLES MEDICAL GROUP LTD

Research House: OCBC

Price Call: BUY

Target Price: 2.82

Stock Name: Yoma
Company Name: YOMA STRATEGIC HOLDINGS LTD

Research House: OCBC

Price Call: HOLD

Target Price: 0.51

MARKET PULSE: CMT, MLT, Dyna-Mac, Raffles Med, Yoma

22 Oct 2012

KEY IDEA CapitaMall Trust: Value emerging from strong execution Summary: CapitaMall Trust's (CMT) 3QFY12 results exceeded our expectations. NPI was up 4.0% to S$332.3m whereas DPU was up 0.4% to 7.10 S cents. This forms 77.6% and 76.1% of full-year NPI and DPU projections respectively. CMT's occupancy remained largely stable at 98.4% (98.6% in 2Q), despite a 4.6ppt drop QoQ at IMM building as a result of repositioning of the mall. For YTD, 6.1% positive rental reversions were achieved, largely unchanged from 6.4% seen in 1H. Looking ahead, we believe CMT is likely to sustain its growth profile, given the smooth execution of its AEIs and strong leasing activities. The development of Westgate, of which CMT has 30% stake, is also expected to start contributing to its income by end-2013. We now revise our assumptions to incorporate the better-than-expected results and rental uplift resulting from its AEIs. Rolling our valuations to FY13, our fair value is raised from S$2.04 to S$2.38. Upgrade CMT to BUY from Hold as we see an attractive upside potential. (Kevin Tan) MORE REPORTS Mapletree Logistics Trust: Pursuing growth on all fronts Summary: Mapletree Logistics Trust (MLT) reported 2QFY13 DPU of 1.71 S cents, up 1.2% YoY. This brings the 1HFY13 DPU to 3.41 S cents, forming 48.3%/48.7% of our/consensus full-year DPU projections. Operationally, we note that MLT's portfolio occupancy improved 0.2ppt QoQ to 99.2%, driven by stronger take-up rates in China, Hong Kong and Singapore. Leases renewed/replaced also achieved positive rental reversions of 8% on average. Looking ahead, management expects the overall acquisition activity to moderate, citing competitive cap rates in Singapore and relatively muted growth in Japan. Hence, it intends to turn more aggressive on capital recycling and asset enhancement initiatives (AEIs)/ asset redevelopment. We are currently keeping our forecasts unchanged. However, our fair value is raised to S$1.24 from S$1.19 as we lower MLT's cost of equity to 8.5% from 9.3% to align with the current low interest rate environment. Maintain BUY. (Kevin Tan) Dyna-Mac Holdings: Looking for more projects Summary: Dyna-Mac Holdings Ltd (DMHL) recently completed a placement of up to 139.5m ordinary shares, consisting of (i) 93m new shares issued and (ii) 46.5m vendor shares owned by current CEO Mr. Desmond Lim, at S$0.50 per share. This enlarges DMHL's existing share capital would by about 10%. Mr. Desmond Lim is still the largest shareholder with a 40.8% stake (previously: 49.9%). The net proceeds of S$45.7m from issuance of new shares will be used for working capital purposes. We continue to like DMHL for its prudent management style and its exposure to the FPSO topside market. After adjusting for the new shares, our fair value drops to S$0.57 (previously S$0.62). Maintain BUY. (Chia Jiunyang) Raffles Medical Group: 3Q12 PATMI slightly below expectations Summary: Raffles Medical Group (RMG) reported its 3Q12 results this morning with revenue meeting our expectations but PATMI was slightly below due to higher-than-expected operating expenses. Revenue rose 13.9% YoY and 2.4% QoQ to S$78.7m. PATMI increased 6.6% YoY and 1.2% QoQ to S$12.6m. Growth during the quarter was driven by a higher patient load as RMG continued to expand the depth and breadth of its specialist services. Both RMG's core divisions contributed positively to its topline increase, with its Hospital Services and Healthcare Services segments growing 14.5% and 14.8% YoY, respectively. For 9M12, revenue jumped 14.0% YoY to S$228.6m, forming 73.3% of our full-year estimates; while PATMI increased 8.0% to S$36.6m, or 68.0% of our FY12 forecast. We note that the fourth quarter is typically RMG's strongest quarter and we expect this trend to continue in FY12. RMG also maintained its strong financial position, improving its net cash position from S$63.9m in 2Q12 to S$68.7m in 3Q12. We will provide more details after the analyst briefing later. For now, we place our Buy rating and S$2.82 fair value estimate under review. (Wong Teck Ching Andy) Yoma Strategic Holdings: Hit by one-time charges Summary: Yoma Strategic Holdings (Yoma) reported a negative 2Q13 PATMI of -S$4.2m, mostly due to a S$5.4m one-time non-cash share-based payment to the CEO, partially offset by increased sales of residences and land development rights. Accounting for one-time non-operating expenses, net operating profit would have been S$1.8m - up 33% YoY - which we judge to be mostly in line with expectations. 2Q13 revenue was S$11.6m, increasing 59% YoY mainly due to stronger sales at Pun Hlaing Golf Estate and Star City. Management reports that, since Star City's acquisition, 249 units out of a total of 528 units in building 3 & 4 have been sold as of 30 Sep 2012. We would speak with management further regarding these results and, in the meantime, maintain HOLDwith an unchanged fair value estimate of S$0.51. (Eli Lee)

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NEWS HEADLINES - Technology stocks led the fall in the US market on Friday. The Dow fell 1.5%, the S&P 500 Index declined 1.7%, and the Nasdaq dropped 2.2%. Microsoft, Google, IBM and Intel all posted poor quarterly results earlier in the week. - UPP Holdings, in collaboration with Myan Shwe Pyi Tractors Limited, has signed a memorandum of understanding with the Department of Electric Power of Myanmar, for the establishment of the 50 megawatt class new gas generating power plant project in Yangon. - Hi-P International expects lower revenue and profit for FY2012 as compared with FY2011. - Berger International posted 1H13 PATMI of S$1.636m, up 93% YoY. Revenue climbed 6% YoY to S$59.3m.