MARKET PULSE: Banking, Healthcare, Viz Branz, SembMarine, TEE (7 Dec 2012)

Stock Name: DBS
Company Name: DBS GROUP HOLDINGS LTD

Research House: OCBC

Price Call: BUY

Target Price: 15.94

Stock Name: UOB
Company Name: UNITED OVERSEAS BANK LTD

Research House: OCBC

Price Call: BUY

Target Price: 21.30

Stock Name: Biosensors
Company Name: BIOSENSORS INT'L GROUP, LTD.

Research House: OCBC

Price Call: BUY

Target Price: 1.69

Stock Name: RafflesMG
Company Name: RAFFLES MEDICAL GROUP LTD

Research House: OCBC

Price Call: BUY

Target Price: 2.82

MARKET PULSE: Banking, Healthcare, Viz Branz, SembMarine, TEE

7 Dec 2012

KEY IDEA Banking Sector: Warrants an overweight Banking stocks have done well in 2012, outperforming the STI. Going into 2013, and despite the prevailing cautious mood, we believe that most of the negatives have been priced into the stock prices and low earnings growth for the local banks, and as such, there is a good likelihood that earnings could surprise on the upside. We are going for average earnings growth of 5.5% in 2013 for DBS and UOB versus consensus of only 3.3%, effectively pricing in almost flat growth in 2013. Asia remains the core base for the three banks, and there are still opportunities to cross-sell and leverage on their existing products and services, translating into better fee and other income. We expect corporate activities to also pick up in line with the more optimistic outlook. We have an OVERWEIGHT for the sector and medium term BUY ratings for both DBS [BUY, Fair Value of S$15.94] and UOB [BUY, Fair Value of S$21.30].(Carmen Lee) MORE REPORTS Healthcare Sector: Resilience the key to success As we move into 2013, we remain sanguine on the growth prospects of the healthcare sector, as robust industry fundamentals are structural and entrenched in nature. This implies that the underlying drivers such as a growing and fast-aging population, rising affluence, growing incidence and morbidity of diseases and burgeoning medical tourism activities would likely persist in the long run. The healthcare sector offers investors a unique investment proposition, given its resilient and defensive earnings, while growth opportunities are also favourable in light of the aforementioned factors. The sector also saw the high profile IPOs of IHH Healthcare Berhad and Religare Health Trust in 2012, thus giving investors more options to gain exposure to the thriving regional healthcare scene. We reiterate our OVERWEIGHT rating on the healthcare sector, and recommend Biosensors International Group [BUY; FV: S$1.69] as our top pick, given its superior stent technology, healthy financial position and compelling valuations. We also like Raffles Medical Group [BUY; FV: S$2.82] for its capable management team and strong track record. (Wong Teck Ching Andy) Viz Branz Limited: