MARKET PULSE: OSIM, Global Premium Hotels, Yoma (1 Feb 2013)

Stock Name: OSIM
Company Name: OSIM INTERNATIONAL LTD

Research House: OCBC

Price Call: BUY

Target Price: 2.19

Stock Name: GP Hotels
Company Name: GLOBAL PREMIUM HOTELS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.33

Stock Name: Yoma
Company Name: YOMA STRATEGIC HOLDINGS LTD

Research House: OCBC

Price Call: SELL

Target Price: 0.71

MARKET PULSE: OSIM, Global Premium Hotels, Yoma

1 Feb 2013

KEY IDEA OSIM International: Ends FY12 on a high OSIM International (OSIM) reported a strong set of 4Q12 results which were within our expectations. For FY12, revenue and PATMI of S$601.7m (+8.7%) and S$86.9m (+25.9%) formed 99.7% and 100.9% of our projections, respectively. A positive surprise in the form of a special dividend of 1 S cent/share was declared, on top of a final dividend of 1 S cent/share. This brings total FY12 DPS to 6 S cents, or a yield of 3.3%. Looking ahead, OSIM's focus would remain on driving product innovation and improving productivity. We raise our FY13 EPS forecast by 2.2% on higher margin assumptions, which in turn bumps up our fair value estimate from S$2.14 to S$2.19, still pegged to 16.4x FY13F EPS. Maintain BUY. (Wong Teck Ching Andy) MORE REPORTS Global Premium Hotels: Asset value play, raise FV to S$0.33 Global Premium Hotels (GPH) performed in line with our expectations in 4Q12. 4Q12 revenue increased by 6.8% YoY to S$15.2m. EBIT margin fell 1.4 ppt YoY to 50.7%, partially due to increase in staff costs in relation to the general wage increases and additional staff required for Fragrance Riverside. As part of comprehensive income in 4Q12, revaluation of the land and hotel buildings led to a gain of S$83.7m, equivalent to 10.1% of 30 Sep 2012's PPE. The revaluation gain contributed to a dramatic 25% QoQ climb in NAV per share to 38.98 S cents. Lowering our capitalisation rates, which were previously too conservative, especially given that the majority of GPH's properties are freehold, we raise our FV from S$0.29 to S$0.33 (using a 10% discount to RNAV) and maintain a BUY on GPH. GPH is trading at an undemanding P/B of 0.69x. (Sarah Ong) Yoma Strategic Holdings: Most positives priced in - Downgrade to SELL Yoma Strategic Holdings (Yoma) reported 3QFY13 PATMI of S$3.7m, increasing by S$2.3m YoY mostly due to higher sales of residences and land development rights. This brings 9MFY13 PATMI to S$1.9m, which is mostly in line with our expectations but below consensus estimates. Topline for the quarter came in at S$13.0m, up 32.1% YoY, again driven by stronger property sales. At current price levels, while we acknowledge that the company holds meaningful franchise value as a leading developer in Myanmar, we see most positives to be already priced in, even under our most optimistic assumptions. We downgrade our rating on the company to a SELL based on a 12-month fair value estimate of S$0.71 (20% premium to RNAV), but caution that the anticipated 1-for-4 rights issue ahead would likely be supportive of the share price over the nearer term. (Eli Lee)

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NEWS HEADLINES - US stocks fell on Thu after a report showing a rise in jobless claims, but benchmark indexes still ended the month higher. The Dow slid 0.4%, the S&P 500 index fell 0.3% and the Nasdaq ended flat. - Companies in both the manufacturing and services sectors expect business prospects to be weak in 1H13 as global economic growth remains sluggish, a survey by the EDB showed. - Private education provider Overseas Education Limited, owner of the Overseas Family School at Paterson Road, launched its IPO yesterday. It aims to raise S$56.1m and will be the first mainboard listing this year. - Residential property and hotel developer Fragrance Group's FY12 net profit rose 24% to S$102m, supported by a 36% increase in turnover to S$420m. - Innopac Holdings is launching a bid to take over Australian diamond mining and exploration company Merlin Diamonds for up to A$59.4m.