MARKET PULSE: Ezion, Olam (3 Jan 2013)

Stock Name: EzionHldg
Company Name: EZION HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 2.05

Stock Name: Olam
Company Name: OLAM INTERNATIONAL LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 1.44

MARKET PULSE: Ezion, Olam

3 Jan 2013

KEY IDEA Ezion Holdings: Higher valuations are justified Since our last report on Ezion Holdings on 21 Nov 2012, its share price has appreciated by about 26%. There was hardly any major news on the company within this short period, except for the announcement in mid Dec that EDB Investments (EDBI) had invested S$19m in Ezion. This allows Ezion to leverage on EDBI's extensive network of resources, and also enhances Ezion's reputation in the global scene. With growing market recognition of Ezion's capabilities, we believe that the group has successfully graduated to the mid-cap league which generally enjoys higher valuations. We increase our peg to 12x FY13F earnings (prev. 9x), and also take into account a mild 1.6% dilution in the share base with EDBI's entry. As such, our fair value estimate rises from S$1.70 to S$2.05. Maintain BUY. (Low Pei Han) MORE REPORTS Olam Int'l: Temasek now owns 19% stake Olam International (Olam) recently revealed that Temasek Capital (Private) Limited has increased its deemed interest in the company to 19% as of 28 Dec 2012; this up from around 16% before the Muddy Waters allegation on 20 Nov 2012. However, we continue to believe that there are still several medium- to long-term issues that need addressing. We also foresee potential economic headwinds for the commodity sector as a whole. As such, we maintain our HOLD rating and S$1.44 fair value for now. (Carey Wong)

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NEWS HEADLINES - US stocks surged on Wed after a budget deal to avoid the fiscal cliff was reached. The Dow rose 2.4% to 13,412.55, the S&P 500 index gained 2.5% to 1,462.42 and the Nasdaq finished 3.1% higher at 3,112.26. - Global Logistic Properties has leased ~112k sq ft of space at its GLP Park Jiashan logistic facility in Zhejiang Province in eastern China to supermarket giant Tesco. - Tritech Group has been awarded two contracts worth S$4.22m for site investigation works related to the proposed construction of a cable tunnel from the northwest of Jurong Island to Pioneer Road on mainland Singapore. - Jackspeed Corp has completed the sale of its leasehold property at Tampines Industrial Avenue 5.