MARKET PULSE: Venture Corp, Roxy-Pacific, CapitaLand, Ezion, OKP (21 Feb 2013)

Stock Name: Venture
Company Name: VENTURE CORPORATION LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 9.22

Stock Name: Roxy-Pacific
Company Name: ROXY-PACIFIC HOLDINGS LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.61

Stock Name: Capitaland
Company Name: CAPITALAND LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 4.29

Stock Name: EzionHldg
Company Name: EZION HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 2.05

MARKET PULSE: Venture Corp, Roxy-Pacific, CapitaLand, Ezion, OKP

21 Feb 2013

KEY IDEA Venture Corp: 4Q12 results preview Venture Corporation (VMS) is slated to release its 4Q12 results on 28 Feb after trading hours. We are projecting revenue to remain flat YoY at S$34.9m and PATMI to decline 8.1% YoY to S$633.2m. This is approximately 4.5% and 14.8% below the Bloomberg consensus estimates, respectively, due to lower operating margin assumption. However, a key highlight would be expectations for a first and final dividend of 55 S cents/share, which translates into an attractive yield of 6.5%. Looking ahead, conditions for VMS are likely to pick up gradually after the seasonally slow 1Q13, with stronger financial performance expected in 2H13 when contribution from new product launches gain traction. Maintain BUY, with an unchanged fair value estimate of S$9.22. (Wong Teck Ching Andy) MORE REPORTS Roxy-Pacific Holdings: 4Q results in line The group announced 4Q12 PATMI of S$23.3m, up 96% YoY mostly due to S$11.2m of fair-value gains on investment properties. Excluding one-time gains, we estimate core 4Q12 PATMI at S$13.9m which cumulates to full year earnings of S$48.9m - in line with our FY12 estimates. A final cash dividend of 0.92 S-cents is proposed. Though we see the shares to be fairly priced currently, a re-rating could come through if management shows active and accretive capital redeployment ahead, particularly with an anticipated cash capital in excess of S$200m flowing back into the balance sheet over FY13. Maintain HOLD with an increased fair value estimate of S$0.61 (25% discount to RNAV), versus S$0.54 previously. (Eli Lee) CapitaLand Limited: Earnings dip from lower fair value gains CapitaLand (CAPL) announced 4Q12 PATMI of S$262.7m - down 45% YoY mostly due to lower fair value gains recognized over the quarter. Full year PATMI cumulates to S$930.3m, forming 103% of our FY12 forecast which we judge to be mostly in line. FY12 topline came in at S$3,301m which increased 9.3% YoY mainly due to higher contributions from development projects in Singapore and Australia, its retail mall businesses and a stronger fee-based income. In Singapore, 681 residential units were sold in FY12, dipping 19% from 844 units the previous year. Over 3,000 units were sold in China over FY12 - a strong pickup from ~1,500 units in FY12. Over FY12, the group committed S$4.1b of new investments, 71% of which is in Singapore and China. We could speak with management regarding these results later today and, in the meantime, maintain BUY with an unchanged fair value estimate of S$4.29 (20% discount to RNAV). (Eli Lee) Ezion Holdings: Results in line with our expectations Ezion Holdings (Ezion) reported a 91.8% YoY rise in revenue to US$52.3m and a 95.7% increase in net profit to US$20.5m in 4Q12, bringing full year revenue and net profit to US$158.7m and US$78.8m, respectively. FY12 revenue and net profit were in line with our expectations, accounting for 100% and 105% of our full year estimates, respectively. However, FY12 net profit was 22% higher than the street's US$64.3m forecast. More assets will be deployed in 2013, and higher contributions are also expected from Australia with the commencement of two major LNG projects as well. Same as last year, a 0.1 S cent dividend per share has also been declared. Pending an analysts' briefing later this morning, we maintain our BUY rating but put our fair value estimate of S$2.05 under review. (Low Pei Han) OKP Holdings: Weak 4Q12 results, as expected OKP Holdings' 4Q12 results were in line with our expectations, with net profit falling 60.3% YoY to S$3.8m (taking FY12 net profit to S$12.4m, 6% above our forecast and 53.4% lower than in FY11), due mainly to a surge in costs. Revenue rose 18.4% YoY to S$27.5m in 4Q12 (taking FY12 revenue to S$104.5m, slightly below our full-year revenue forecast), but its gross profit margin narrowed to 21.9% in 4Q12 from 64.8% a year earlier. OKP declared a final cash dividend of 1.5 S cent/share, down from 2 S cents for FY11. Its construction orderbook remains strong at S$376.6m, with contracts lasting up to FY15, but its narrowing margins and feeble 4Q12 showing suggest difficulties in converting future revenue growth into profits. We place our previous Hold rating and fair value estimate of S$0.46 on the company UNDER REVIEW pending a change in analyst. (Research Team)

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NEWS HEADLINES - Broadway Industrial Group swung to a net profit of S$3.25m for the 4Q12 from a net loss of S$10.16 million a year earlier. - Yeo Hiap Seng reported a 46% YoY decrease in net profit to S$5.24m for 4Q12. - Intraco Limited saw its FY12 losses widen to S$8.9m from S$7.2m a year earlier, dragged down by doubtful receivables, claims and an inventory write-down. - Koh Brothers has secured a S$99.8m contract from PUB to carry out improvement works to the Bukit Timah First Diversion Canal for a period of three years. - A fire incident has broken out at one of Hi-P International's buildings in its manufacturing plant in Shanghai. The incident is not expected to have any material impact on the company's operations and financial performance. - Office rents in Singapore's central business district were 51.7% lower than Hong Kong's last year, according to Cushman & Wakefield's Office Space Across the World 2013 report released Wednesday.