MARKET PULSE: OSIM, ART, FCT, LMIR, OKP (24 Oct 2012)

Stock Name: OSIM
Company Name: OSIM INTERNATIONAL LTD

Research House: OCBC

Price Call: BUY

Target Price: 1.87

Stock Name: AscottREIT
Company Name: ASCOTT RESIDENCE TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.37

Stock Name: FrasersCT
Company Name: FRASERS CENTREPOINT TRUST

Research House: OCBC

Price Call: BUY

Target Price: 2.13

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

Research House: OCBC

Price Call: HOLD

Target Price: 0.45

Stock Name: OKP
Company Name: OKP HOLDINGS LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.53

MARKET PULSE: OSIM, ART, FCT, LMIR, OKP

24 Oct 2012

KEY IDEA OSIM International: Another step towards a record year OSIM International reported 3Q12 results which were within our expectations, with revenue and PATMI growing by 15.1% and 49.3% YoY to S$142.3m and S$19.6m, respectively. An interim dividend of 1 S cent/share was also declared, bringing YTD DPS to 4 S cents. Looking ahead, management remains confident of extracting more value from China's huge consumer market. We expect this to be driven by its strong product innovation, focus on middle-to-high income consumers and continued efforts to improve its productivity per man and per store. We make some minor downward adjustments to our forecasts. But as we roll forward our valuations to 14.3x FY13F EPS, we lift our fair value estimate from S$1.79 to S$1.87. Maintain BUY. (Wong Teck Ching Andy) MORE REPORTS Ascott Residence Trust: Results in-line, upping FV to S$1.37 Ascott Residence Trust's (ART) 3Q12 revenue increased by 6% YoY to S$77.4m, chiefly due to the contribution of Citadines Shinjuku and Citadines Kyoto, and better performance in the UK and China. Gross profit rose by 2% YoY to S$40.7m. 3Q12 DPU inched up 0.4% to 2.24 S cents. YTD 2012 DPU of 6.76 S cents is in-line with our expectations, forming 77% of our prior FY12 estimate of 8.8 S cents, which we now raise to 8.9 S cents. We find it encouraging that significant fractions of YTD apartment rental income are contributed by stays of <1 month and >12 months. This indicates that ART's properties are able to compete with hotels and apartments (excluding serviced residences). Updating our model, we raise our fair value from S$1.30 to S$1.37 and maintain our BUY rating on ART. (Sarah Ong) Frasers Centrepoint Trust: Ready for next growth phase Frasers Centrepoint Trust (FCT) reported a strong set of 4QFY12 results yesterday. Expectedly, the performance was driven by Causeway Point (CWP) following the substantial completion of the mall's refurbishment and full-year contribution from Bedok Point. Positive rental reversion of 8.9% was also achieved during the quarter. As at 30 Sep, FCT's portfolio occupancy was largely unchanged at 93.6% (93.7% in 3Q), but looks set to improve the asset enhancement works at CWP complete in Dec. We continue to like FCT for its pure suburban mall exposure and growth potential. Based on our understanding, the business park at One@Changi City may possibly obtain TOP by end-2012, while its retail mall occupancy may have already stabilized above 90%. Hence, we believe the injection of Changi City Point may likely happen in FY13, which should provide FCT with next level of growth. Maintain BUY with higher fair value of $2.13 (S$1.97 previously) as we update our model to incorporate firmer cap rates. (Kevin Tan) Lippo Malls Indonesia Retail Trust: Proposes two more acquisitions LMIRT has announced the proposed acquisitions of two retail properties, Pejaten Village, located in Jakarta, and Binjai Supermall, located in Binjai, North Sumatra. As at 30 Jun, the occupancy rates are 95.2% and 91.4% respectively. The purchase consideration for Pejaten Village is IDR748.0b (~S$96.0m), a 12.6% discount to the average of its independent valuations. The purchase consideration for Binjai Supermall is IDR237.5b (~S$30.5m), 5.2% less than the average of its independent valuations. Management is proposing to finance the acquisitions from the proceeds raised from the issuance of S$250 worth of notes in early Jul. These two proposed acquisitions come shortly after the announcement of the proposed acquisitions of four properties - Palembang Square, Palembang Square Extension, Tamini Square and Kramat Jati Indah Plaza (KJI) - on 10 Oct. The completion of the acquisitions of Palembang Square Extension and KJI took place on 15 Oct. We put our fair value of S$0.45 and our Hold rating on LMIRT UNDER REVIEW pending our speaking with management. (Sarah Ong) OKP Holdings Limited: 3Q12 PATMI down 50% from slower recognition OKP Holdings Limited (OKP) reported 3Q12 PATMI of S$2.4m, which was 50% lower YoY, but mostly in line with our expectations. 9M12 PATMI now cumulates to S$8.6m, decreasing 50% YoY mostly due to a slower pace of revenue recognition from construction projects, and lower gross profit margins (from 32.5% in 9M11 to 22.6% in 9M12) from current projects and cost overruns from a sewer project. Top-line for the quarter came in at S$28.5m - up 12% YoY - again mostly within expectations. We would speak with management further regarding these results and, in the meantime, maintain our HOLD rating but our S$0.53 fair value estimate is under review. (Research team)

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NEWS HEADLINES - US stocks slumped on Tuesday, hurt by weak earnings from chemical maker DuPont and bleak outlook statements from 3M and United Technologies Corp. The Dow fell 1.8%, the biggest drop since 21 Jun, while the S&P500 Index slid 1.4% and the Nasdaq ended 0.9% lower. - Singapore inflation accelerated to 4.7% in Sep from 3.9% in Aug, driven by a sharp rise in housing and transportation costs. - Mapletree Industrial Trust's 2Q13 distributable income rose 18.4% YoY to S$37.5m, driven by contributions from acquisitions, positive rental revisions and stable occupancies across key property segments. DPU for 2Q13 increased 11.7% to 2.29 cents. - Travelite Holdings expects to report a net loss for the six months to 30 Sep due to lower demand for its products and pressure on its profit margins from rising costs.