OSPL - Good Morning S'pore - Central Dealing Desk

Stock Name: Capitaland
Company Name: CAPITALAND LIMITED

Research House: UBS

Price Call: BUY

Target Price: 4.46

Stock Name: Starhill Gbl
Company Name: STARHILL GLOBAL REIT

Research House: UBS

Price Call: BUY

Target Price: 1.03

Stock Name: Yangzijiang
Company Name: YANGZIJIANG SHIPBLDG HLDGS LTD

Research House: DBS Vickers

Price Call: HOLD

Target Price: 1.02

Market Compass

30 April 2013~ Good Morning Singapore!

Singapore Idea Snippets:

30 April 2013~ Good Morning Singapore! Central Execution Team - The Excellence of Execution This product is made available by your Central Execution Team, for you as TRs of OCBC Securities to help you with your business and therefore it is confidential and only for internal circulation. It is not intended for onward circulation to non-OSPL TRs, clients or any other third party in this or any other version. Neither is this intended to be relied upon as a sole basis for any recommendation. TRs must also consider their clients' investment objectives, financial position and needs when intending to make or making any recommendation. For the front desk, by the front desk. All feedback to make this a better product is welcome. Global Flash: While You Were Sleeping Source: Marketwatch Quote for the day : Wisdom is not wisdom when it is derived from books alone. - HORACE Singapore: The Day Ahead SINGAPORE DAYBOOK:Reit IPOs set to take the market by storm. All signs suggest that it's going to be a record year with several promising offerings [SINGAPORE] The stars have aligned this year for a record-breaking initial public offering market for real estate investment trusts (Reits) and business trusts. But quality will be key. "There will be deals that are close to a billion, and potentially more as well. This is a healthy trend for the market," Credit Suisse Asia Pacific head of investment banking Helman Sitohang told The Business Times. The keen interest in the IPOs of Reits follows a successful flotation by Mapletree Greater China Commercial Trust (MGCCT) on March 7, which raised over S$1.6 billion amid strong demand from institutional investors. The stock, which was almost 30 times subscribed, has risen 20 per cent above its IPO price of 93 cents. Since then, other firms such as Overseas Union Enterprise (OUE) and Singapore Press Holdings (SPH) have also indicated plans for the listing of Reits. MARKET SCOOP OCBC'sQ1 net profit down 16% at S$696m SMRT'sQ4 slips into red with S$11.9M loss, slashes dividend Fragrance Group Q1 profit falls 20.2% Wheelock Properties post S$105.3m Q1 profit A-HTrust posts DPU of 1.68 cents in Q4 Singapore GIC to sell Glencore bonds, to buy shares UBS SECURITIES says... CAPITALAND LTD | BUY | TP: S$4.46 Apart from reduced segmental visibility as a result of the streamlined business units, it was difficult to fault CapitaLand's Q113 results with PATMI of S$188.2m, +41.2% YoY Singapore and China residential were key contributors while divestment gains from a Beijing site provided a S$47.5m boost We expect China earnings to contribute more meaningfully in H213 as the group hands over 2,800 units to buyers (versus 230 units in Q113) Singapore home sales displayed strong take-up with 544 units sold in Q113, mainly from d'Leedon Achieved sales of S$1.3bn for the quarter is encouraging and similar to that recorded for the entire 2012 China sales was also strong with 955 units sold and the challenge would be maintaining the momentum through H213 given policy headwinds We think major strategic initiatives, capital management and good acquisitions will help narrow the RNAV discount The Australand review has been ongoing for over 2 months and a favourable outcome soon would be a rerating catalyst, in our view Our price target is based on 0.9x RNAV UOB KAY HIAN says... STARHILL GLOBAL REIT | BUY | TP: S$1.03 Starhill Global REIT (SGREIT) reported a 1Q13 distributable income of S$26.6m (+28.0% yoy, +20.9%qoq) and a DPU of 1.18cents (10.3% yoy, +4.4% qoq) Revenues up on Wisma AEI and strong Singapore portfolio performance Positive resolution of Toshin rent review resulted in a 10% upward revision in rentals for the term from Jun-2011 to Jun-2013, while rental arrears of S$3.8m (S0.19c per unit) are included in 1Q13 distributions No debt due for refinancing until 2015 after SGREIT successfully secured JPY 7b (S$100m) and S$600m unsecured 3-year and 5-year loan facilities to refinance S$513m debt maturing in September and December 2013 Portfolio occupancy up 30bps to 99.7%, supported by full occupancies in Singapore retail and offices We anticipate further acquisitions, offset against divestments in Japan as SGREIT embarks on its next stage of growth Debt headroom of S$450m for acquisitions from current gearing of 30.5% assuming a target gearing of 40% Target price of S$1.03 based on DDM (required rate of return: 6.5%, terminal growth: 2.0%) DBS VICKERS Securities says... YANGZIJIANG SHIPBUILDING HOLDINGS | HOLD | TP: S$1.02 Yangzijiang's 1Q13 net profit fell 30% y-o-y to Rmb717m on the back of slower shipbuilding activities and a higher tax rate Results came in below our above consensus estimate of Rmb750-800m due to lower revenue recognition Yangzijiang terminated a 2500-TEU container contract (secured pre-GFC), whose construction was almost completed, bringing the total cancellation to 13 vessels On a positive note, the gross margin inched up 1.8ppt q-o-q to 25.9%, thanks to softer raw material prices, particularly steel Recent yen depreciation of 20% wiped out the cost advantage of Chinese yards over Japanese peers While Japanese yards are relatively full till 2015, we reckon this will intensify the competition in the dry bulk segment going into 2014 We have brought FY14 order win assumptions down from US$3bn to US$2bn We have also tweaked our orderbook recognition schedule and margin assumptions, resulting in an earnings cut of 8.2%/0.2% for FY13/14 Our TP is reduced to S$1.02, based on 1.1x revised NBV, which is fair against the lower ROE of 9 % by FY14

SG: MARKET PULSE: FCOT, Global Premium, SMRT, OCBC (30 Apr2013)

Stock Name: Frasers Comm
Company Name: FRASERS COMMERCIAL TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.66

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

Research House: OCBC

Price Call: BUY

Target Price: 0.33

Stock Name: SMRT
Company Name: SMRT CORPORATION LTD

Research House: OCBC

Price Call: HOLD

Target Price: 1.51

MARKET PULSE: FCOT, Global Premium, SMRT, OCBC

30 Apr 2013

KEY IDEA Frasers Commercial Trust: Advancing steadily Frasers Commercial Trust's (FCOT) 2QFY13 DPU came in at 1.9883 S cents, representing a 14.4% YoY growth. This is slightly above our expectations, as 1HFY13 DPU of 3.5715 S cents already formed 51.4% of our full-year DPU forecast. Key rental growth drivers for the quarter came from FCOT's Australia properties. As at 31 Mar, the portfolio occupancy remained strong at 95.3%, with weighted average lease to expiry at 4.8 years. Looking ahead, we hold our view that FCOT will continue to perform strongly. While the actual occupancy at China Square Central stood at 73.0%, a high committed occupancy of 92.6% was secured. The passing rents for several of its properties are also below the market rates, thus presenting potential for rental upside. In addition, the redemption of another 157.1m CPPUs in Apr is likely to provide further uplift in DPU. We maintain our BUY rating with a higher fair value of S$1.66 (S$1.52 previously) on FCOT. (Kevin Tan) MORE REPORTS Global Premium Hotels: No surprises in 1Q13 Global Premium Hotels (GPH) performed in line with our expectations in 1Q13. Revenue fell 2.1% YoY to S$14.6m and gross profit declined 2.9% YoY to S$12.6m. Interest expense was S$1.3m higher YoY due to the restructuring exercise undertaken by GPH pursuant to the IPO in 2Q12 and this was the primary reason that net profit contracted 32.0% to S$4.3m. Revenue and net profit came out to 23% and 24% of our full-year estimates respectively. 1Q13 hotel room revenue decreased 1.1% YoY was mainly due to the lower average occupancy rate (AOR) of 89.6%, down 2.1ppt YoY. We expect slightly better YoY performance in the remaining quarters, especially because 1Q13 was slow for the industry because of the later occurrence of Chinese New Year, which pushed back corporate travel. Using a 10% discount to RNAV, we maintain our fair value of S$0.33 and BUY rating on GPH. (Sarah Ong) SMRT Corporation: A loss-making quarter to end the year As expected, SMRT reported a loss-making 4Q13 to end the year. Although revenue grew 2.4% YoY to S$281.3m, increases in operating expenses namely staff (+28.5% YoY) and repair costs (+41.6% YoY) resulted in a net loss of S$12.1m. For FY13, SMRT reported a 30.6% YoY decline in net profit to S$83.2m despite a 5.9% YoY increase in revenue to S$1,119m. SMRT also declared a final dividend of 1 S cent (versus 5.7 S cents last year) to bring its total dividends declared to 2.5 S cents. Pending a results briefing with management, we maintain our HOLD rating on SMRT as we feel that much of the negatives have been priced in by the street. Nonetheless, we place our fair value estimate of S$1.51 under review. (Lim Siyi) OCBC: 1Q net earnings of S$696m OCBC posted net earnings of S$696m, -16% YoY or +5% QoQ, and above market expectations of S$640m (based on a Bloomberg poll). Net Interest Income fell 4% YoY and 1% QoQ to S$912m. NIM was 1.64% in 1Q13 versus 1.70% in 4Q12 and 1.86% in 1Q12. Non Interest Income fell 20% YoY and 11% QoQ to S$676m (1Q12 included higher trading income and mark-to-market investment gains from the insurance business). Loans grew 4% from the previous quarter to S$146.8b. Loans to deposits ratio also moved up from 86.2% in 4Q12 to 87% in 1Q13. We do not have a rating on OCBC. DBS and UOB will be releasing 1Q results on 2 May 2013 (Thu). The consensus 1Q13 net profit estimates are S$824m for DBS and S$660m for UOB. (Carmen Lee)

For more information on the above, visit www.ocbcresearch.comfor the detailed report.

NEWS HEADLINES - U.S. stock climbed on Monday, and the S&P 500 closed on a record high as investors were heartened on the latest corporate earnings. - Jardine Cycle & Carriage has been appointed as Daimler AG's official partner to distribute Mercedes-Benz passenger cars and commercial vehicles and Fuso trucks in Myanmar. - Lian Beng's construction order book has reached a new high of S$1.2b after being awarded three new contracts worth a total of about S$211m. - Fragrance Group reported a 20% YoY decline in 1Q13 PATMI to S$17.6m, despite revenue climbing 17% to S$110.5m. - BH Global Marine has won a series of contracts worth a total of ~S$11m. - Hu An Cable has issued a profit guidance for 1Q13 due to a decrease in sales and an increase in expenses from the operation of the group's new plant in Yixing City, Jiangsu Province.

OSPL - Good Morning S'pore - Central Dealing Desk

Stock Name: MapletreeInd
Company Name: MAPLETREE INDUSTRIAL TRUST

Research House: UOB KayHian

Price Call: BUY

Target Price: 1.66

Stock Name: Nam Cheong
Company Name: NAM CHEONG LIMITED

Research House: DBS Vickers

Price Call: BUY

Target Price: 0.30

Stock Name: TigerAir
Company Name: TIGER AIRWAYS HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.79

Market Compass

25 April 2013~ Good Morning Singapore!

Singapore Idea Snippets:

25 April 2013~ Good Morning Singapore! Central Execution Team - The Excellence of Execution This product is made available by your Central Execution Team, for you as TRs of OCBC Securities to help you with your business and therefore it is confidential and only for internal circulation. It is not intended for onward circulation to non-OSPL TRs, clients or any other third party in this or any other version. Neither is this intended to be relied upon as a sole basis for any recommendation. TRs must also consider their clients' investment objectives, financial position and needs when intending to make or making any recommendation. For the front desk, by the front desk. All feedback to make this a better product is welcome. Global Flash: While You Were Sleeping Source: Marketwatch Quote for the day :When you are courting a nice girl an hour seems like a second. When you sit on a red-hot cinder a second seems like an hour. That's relativity. - ALBERT EINSTEIN Singapore: The Day Ahead SINGAPORE DAYBOOK:Fans will have to pay more, says SingTel [SINGAPORE] SingTel's top executive, Allen Lew, said that the Media Development Authority's (MDA) decision yesterday will drive Barclays Premier League (BPL) prices up, and has vowed to fight its finding to the very end. If SingTel shares the content with StarHub as per MDA's instruction, the subscription cost of content will be "substantially higher", an irate Mr Lew warned last night. Currently, mio TV customers pay $34.90 for its sports package, the bulk of which is BPL content. Apart from existing mio TV customers with BPL subscriptions that extend beyond the start of BPL season this August, all football viewers - mio TV's and StarHub's - will have to pay more because of this decision. "If (viewers) are on StarHub's platform . . . I cannot upsell them other content that I have. (So), for them, I have to charge a higher price for BPL," he said. MARKET SCOOP Olam plan may slam the brakes on growth to appease investors MDA: SingTel has to share BPL content QAF Q1 profit up 14% on lighter tax load Hotung Group Q1 net profit falls 13% Cache Logistics Trust posts DPU of 2.234 cents in Q1, up 7.1% AVJennings to raise up to A$41.2m in 2- for-5 entitlement offer Singapore Airlines lifts stake in Virgin Australia to 19.9% UOB KAY HIAN says... MAPLETREE INDUSTRIAL TRUST | BUY | TP: S$1.66 Mapletree Industrial Trust (MIT) reported a 4QFY13 distributable income of S$38.9m (+8.7% yoy, +3.4% qoq) and a DPU of 2.37cents (+6.8% yoy, +2.2% qoq) The DPU of 9.24cents for FY2013 is above expectations, accounting for 102.7% of our full year estimate of 9.0 cents 4QFY13 revenues increased to S$72.1m (+8.8%yoy, +4.2% qoq) while Net Property Income increased to S$49.6m (+7.8% yoy, +1.0%qoq), driven by positive rental reversions at flatted factories (+30%), business parks (+13%) and stack-up/ramp-up buildings (+36%), partially offset by a 12% qoq rise in property expenses 6.3% rise in portfolio valuations, which are up S$183m to S$2,880m The increase is attributable to a portfolio revaluation gain of S$134.9m, arising from higher NPI and occupancies, and capitalized development costs of S$48.4m Aggregate leverage has fallen 2.3ppt qoq to 34.8% due to higher portfolio valuations AEIs and BTS to drive income growth over next 2 years With the positive results surprise, we are likely to review our DPU estimates We currently have a BUY on MIT with a target price of S$1.66 per unit based on DDM (required rate of return: 6.8%, terminal growth: 2.0%) DBS VICKERS Securities says... NAM CHEONG | BUY | TP: S$0.30 Nam Cheong announced another round of vessel sales worth US$59m for two accommodation work barges to be delivered in 1H-2014 The pricing is within expectations and the vessels were sold to repeat customer Perdana Petroleum, one of the major offshore services providers in Malaysia Nam Cheong has won orders for 6 vessels across its build-to-stock and build-to-order business models and is on track to achieve FY13/14 sales targets Orderbook now stands at about RM1.4bn We expect Nam Cheong to secure order wins for another 8-10 vessels in FY13, which will cover FY13 completions and half of FY14 completions Maintain BUY with TP of S$0.30, expect the stock to firm up after holding at $0.245-0.25 over the past 2-3 weeks OCBC Securities says... TIGER AIRWAYS | BUY | TP: S$0.79 Tiger Airways (TGR) announced yesterday that it received approval from the Australian ACCC to sell 60% of TGR AU to Virgin Australia Following this approval, TGR will record a one-time gain on disposal of S$119.8m and shore up its balance sheet More importantly, investors can now look to TGR SG as the main growth driver for the Group Although operating losses have narrowed, TGR AU remains loss-making and this trend could continue until the new entity incorporates complimentary services with Virgin Australia Similarly, TGR's other associate - South East Asian Airlines (SEAir) - is still in its infancy stage and operating losses could still hit TGR's books in the nearterm Despite the risk of a drag on performance by its associates, we continue to stand by our assertion that TGR's turnaround is ongoing Maintain BUY rating on TGR with a lower fair value estimate of S$0.79 (S$0.86 previously) after taking into consideration the recent rights and PCCS issuance

SG: MARKET PULSE: Cache, CMA, SingTel & StarHub (25 Apr 2013)

Stock Name: CACHE
Company Name: CACHE LOGISTICS TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.45

Stock Name: CapMallsAsia
Company Name: CAPITAMALLS ASIA LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 2.55

Stock Name: SingTel
Company Name: SINGTEL

Research House: OCBC

Price Call: BUY

Target Price: 3.68

Stock Name: StarHub
Company Name: STARHUB LTD

Research House: OCBC

Price Call: HOLD

Target Price: 4.00

MARKET PULSE: Cache, CMA, SingTel & StarHub

25 Apr 2013

KEY IDEA Cache Logistics Trust: Promising start to FY13 Cache Logistics Trust (CACHE) reported 1Q13 DPU of 2.234 S cents, up 7.1% YoY. This is in line with our expectations, given that the quarterly DPU made up 26.5% of our DPU forecast. The strong performance was mainly attributable to upward rental adjustments and incremental contribution from its past acquisitions. As at 31 Mar, the portfolio assets remained 100% occupied, with a healthy weighted average lease to expiry of 3.7 years. We also understand that CACHE has secured a new tenant, Agility Logistics, for its lease at APC Distrihub during the quarter. With this, CACHE has fully addressed its lease expiry in 2013, with zero renewals due for the rest of the year. CACHE currently has an aggregate leverage of 29.2% and a stable all-in financing cost of 3.52%. This provides CACHE with ample flexibility and firepower to pursue its growth opportunities. We are maintaining our BUY rating with a higher fair value of S$1.45 (S$1.33 previously) on CACHE. (Kevin Tan) MORE REPORTS CapitaMalls Asia: Sharp execution bearing fruit CMA's 1Q13 PATMI came in at S$73.2m - up 9.6% YoY mostly due to contributions from Star Vista, four malls in Japan and Queensbay Mall, a S$6.6m gain from warehousing of two assets sold to CCDFII, better performance from CMT, ION Orchard and the China Funds, and a sale at The Orchard Residences. Excluding one-time items, we judge 1Q13 results to be somewhat above expectations. Given the H7N9 bird flu outbreak, shopper traffic for CMA's Chinese malls showed a decrease of -0.9% YoY. On a same mall basis, however, tenant sales were up +15.9% YoY. We see worsening H7N9 fears potentially reducing retail traffic over the nearer term but a sustained long-term business impact, in our view, is unlikely. Maintain BUY with an unchanged fair value estimate of S$2.55. (Eli Lee) Telecom Sector: StarHub to get BPL on cross carriage basis Summary: StarHub Ltd (STH) will be able to broadcast "live" matches of the much-coveted Barclays Premier League (BPL) for the upcoming 2013-2016 season. This after the MDA (Media Development Authority) asked SingTel to cross-carry the matches over the next three seasons even though SingTel had earlier secured the rights on a non-exclusive basis. Understandably, SingTel said it was "gravely disappointed" with the decision, adding that "it disadvantages both consumers and the industry". SingTel has also said it intends to appeal the decision and seek legal recourse if necessary. The decision came as a bit of a surprise, given that SingTel had earlier secured the rights on a non-exclusive basis. However, the MDA has ruled that the agreement between SingTel and FAPL (content owner) had restrictions that prevent other Pay TV retailers from offering the same content, thus triggering the cross-carriage ruling. It is also unclear as to how FAPL would respond to the decision. We will be speaking further with both companies to get a clearer picture on this. In the meantime, we put our ratings on SingTel [BUY, S$3.68 fair value] and StarHub [HOLD, S$4.00 fair value] under review. (Carey Wong)

For more information on the above, visit www.ocbcresearch.comfor the detailed report.

NEWS HEADLINES - United Engineers (UE) has extended the deadline for WBL Corporation shareholders and convertible bondholders to accept their takeover offer to 5.30pm on 10 May. As at 23 Apr, UE controlled 39.64% of WBL. - Fewer development properties available for sale led Yeo Hiap Seng to report 1Q13 net profit that was 69% lower at S$15.5m versus the same period a year ago. - Courts Asia's maiden bond foray was a "blowout" - it received an overwhelming S$2.1b orders for its three-year S$125 million bonds. - Food manufacturer QAF's 1Q net profit grew 14% YoY with only a modest improvement in sales as its tax burden eased. - Hotung Investment Holdings saw its net profit for 1Q13 falling 13% YoY to NT$73m (S$3m). - Singhaiyi Group will be launching its Cosmoloft project, a 17-storey apartment tower comprising 56 units of freehold, designer lofts, on May 1.

OSPL - Good Morning S'pore - Central Dealing Desk

Stock Name: MapletreeCom
Company Name: MAPLETREE COMMERCIAL TRUST

Research House: CIMB

Price Call: HOLD

Target Price: 1.47

Stock Name: Wilmar
Company Name: WILMAR INTERNATIONAL LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 3.90

Stock Name: TigerAir
Company Name: TIGER AIRWAYS HOLDINGS LIMITED

Research House: UOB KayHian

Price Call: SELL

Target Price: 0.63

Market Compass

24 April 2013~ Good Morning Singapore!

Singapore Idea Snippets:

24 April 2013~ Good Morning Singapore! Central Execution Team - The Excellence of Execution This product is made available by your Central Execution Team, for you as TRs of OCBC Securities to help you with your business and therefore it is confidential and only for internal circulation. It is not intended for onward circulation to non-OSPL TRs, clients or any other third party in this or any other version. Neither is this intended to be relied upon as a sole basis for any recommendation. TRs must also consider their clients' investment objectives, financial position and needs when intending to make or making any recommendation. For the front desk, by the front desk. All feedback to make this a better product is welcome. Global Flash: While You Were Sleeping Source: Marketwatch Quote for the day : Everyone here has the sense that right now is one of those moments when we are influencing the future. - STEVE JOBS Singapore: The Day Ahead SINGAPORE DAYBOOK:China knocked back by weak PMI. New export orders fall, hinting at tepid growth in Q2. IN a sign that China is heading for stagnant growth in the second quarter, advance indications released show that growth in its manufacturing sector fell this month, dragged down by new export orders. China's flash purchasing managers' index (PMI) compiled by Markit and HSBC came in at 50.5 points, against 51.6 points in March. Societe General economist Yao Wei said, following publication of the data: "This release paints a picture of a painfully slow recovery in China's manufacturing sector." Asian shares mostly fell yesterday after the data was released. Shanghai tumbled 2.57 per cent to 2,184.54; Hong Kong was down 1.08 per cent at 21,806.61. MARKET SCOOP Hong Leong Finance Q1 net profit falls 8.9% MIT posts Q4 DPU of 2.37 cents, up 6.8% First Reit posts DPU of 1.74 cents in Q1 JTC awards sites in Tuas Bay Walk, Buroh Crescent S'pore inflation eases to 3.5% in March, down from 4.9% in Feb Synear temporarily shuts Sichuan plant, warns production and sales will be affected F&N falls to 9-mth low as listing to be kept Passenger traffic hits a new high at 4.6 m CIMB Securities says... MAPLETREE COMMERCIAL TRUST | NEUTRAL | TP: S$1.47 4QFY13/FY13 DPUs came in slightly above our and consensus expectations, forming 27/102% of our FY13 forecast We expect upside from rental reversions at VivoCity to peter out in FY14 4Q DPU was up 12% yoy, thanks to positive rental reversions off a lumpy lease expiry profile and higher occupancy on existing assets VivoCity, a star performer, remains in the pink of health as it booked a 33% increase in fixed rents, while shopper traffic and tenant sales grew by 3.0% and 3.7% respectively Further leasing progress was made at PSAB Office and ARC, taking their committed occupancy to 100% and 81.9% respectively With strong rental reversions and acquisition accretion, we believe that MCT has set a high growth benchmark in FY13 that will be difficult to replicate in FY14 Trading at 1.4x P/BV and forward yields of 4.7%, we think that positives are largely priced in and further upside will have to come from major AEIs and acquisitions OCBC Securities says... WILMAR INTERNATIONAL | BUY | TP: S$3.90 Wilmar International Limited (WIL) has acquired a strategic 27.5% stake in Cosumar SA - a Morocco-based sugar producer; Cosumar is also the sole sugar supplier in Morocco and the third largest sugar producer in Africa WIL intends to focus the MAD2.3b (US$263m) acquisition with internal resources and bank borrowings WIL further believes that Cosumar provides the group with the opportunity to service a large and growing structural deficit in sugar in Morocco and the surrounding regions of Southern Europe, Northern and Western Africa While we see the latest acquisition dovetailing nicely with WIL's strategy of becoming a global sugar player, the near term impact is likely going to be muted by still-weak sugar prices Nevertheless, sugar experts believe that Asia will now be the engine for consumption growth, noting that the average level of sugar consumed in China is still very low at 10-11kgs compared to 24kgs globally Weaker sugar prices not withstanding, we believe that WIL's large distribution network in China puts the group in a good position to capitalize on the expected increase in sugar consumption there Maintain BUY with an unchanged S$3.90 fair value (based on 15x FY13F EPS) UOB KAY HIAN says... TIGER AIRWAYS | SELL | TP: S$0.63 Australian authorities approve Tiger Airways, 60% sale of Tiger Australia to Virgin Australia Tiger Airways s will book in approximately S$120m in gain on disposal of Tiger Australia, which will now become an associate Tiger Airways and Virgin Australia have committed to invest a further A$62.5m to fund growth in Tiger Australia Tiger Australia will pay Tiger Airways an annual licence fee based on % of revenue for 20 years Operationally, this is however positive as Tiger Australia will take over some of Tiger Airways fleet delivery and thus free it from capital constraints Tiger Airways is now free to focus on growing its business out of Singapore and its associates in Indonesia and Philippines We have valued Tiger Airways at 1.4x 2014 P/B, which is a premium to most airlines and have derived a fair value of S$0.63 The low fuel price environment remains the primary positive for the airline in the near term

SG: MARKET PULSE: Tiger Airways, First REIT, Nam Cheong (24 Apr 2013)

Stock Name: TigerAir
Company Name: TIGER AIRWAYS HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.79

Stock Name: First REIT
Company Name: FIRST REAL ESTATE INV TRUST

Research House: OCBC

Price Call: HOLD

Target Price: 1.31

Stock Name: Nam Cheong
Company Name: NAM CHEONG LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.30

MARKET PULSE: Tiger Airways, First REIT, Nam Cheong

24 Apr 2013

KEY IDEA Tiger Airways: Core strengths will emerge Following the TGR AU sale approval, investors can now look to TGR SG as the main growth driver for the Group. As a recap, TGR SG recorded an impressive set of growth figures for 9MFY13 (revenue +30.7% YoY to S$444m) while its operating statistics for the quarter just ended has been equally positive and encouraging. Although TGR will continue to experience some drag from TGR AU - albeit at a lower 40% proportion - and SEAir (which is still in its infancy), we expect TGR SG's performance to more than offset any draw-downs and continue to lead the ongoing recovery process for TGR. We reiterate our BUY rating on TGR with a lower fair value estimate of S$0.79 (S$0.86 previously) after taking into consideration the recent rights and PCCS issuance. (Lim Siyi) MORE REPORTS First REIT: Full-quarter of contributions from new assets First REIT (FREIT) reported its 1Q13 results which were within our expectations. Gross revenue grew 25.0% YoY to S$17.5m, underpinned by a full-quarter of contribution from the two properties it acquired on 30 Nov 2012. Distributable amount to unitholders and DPU increased by 16.5% and 9.4% YoY to S$11.6m and 1.74 S cents, respectively, if we exclude a special distribution made in 1Q12. Although FREIT is currently finalising its proposed acquisition of two hospitals from its sponsor Lippo Karawaci (subject to unitholders' approval at an EGM), we expect it to continue its search for more yield accretive assets in the near future. We reiterate our HOLD rating and S$1.31 fair value estimate on FREIT as we believe that its valuations are not compelling (trading at 1.6x FY13F P/B). (Wong Teck Ching Andy) Nam Cheong Ltd: Wins US$59m sale contracts Nam Cheong Ltd has secured two sale contracts with a total value of US$59m for two units of accommodation work barges (AWBs). The AWBs were sold to Perdana Petroleum Berhad, an established offshore marine service provider in Malaysia. The vessels are constructed as part of Nam Cheong's build-to-stock series in its subcontracted yards in China and are scheduled for delivery in 1H14. With this latest win, Nam Cheong's order book stands at RM1.4b. We currently have a BUYrating with S$0.30 fair value estimate on the counter. (Chia Jiunyang)

For more information on the above, visit www.ocbcresearch.comfor the detailed report.

NEWS HEADLINES - In a sign that China is heading for stagnant growth in 2Q, Apr flash purchasing managers' index compiled by Markit and HSBC came in at 50.5 points, against 51.6 points in Mar. - Boustead Singapore has secured contracts worth $60m to design, engineer and construct key process systems and waste heat recovery units for downstream oil refineries and gas processing plants in Canada, Finland, Nigeria and Saudi Arabia. These deals raised the group's orderbook backlog to $415m. - Hong Leong Finance yesterday announced an 8.9% drop in 1Q13 net profit to $15.3m, from $16.7m a year ago. - Synear Food Holdings has temporarily shut down its production plant in Sichuan as a precautionary move due to the numerous aftershocks in the Chinese province. The plant suffered minor physical damage, it said. - Sino Construction expects to report a loss for FY2012 due to intense competition among construction players, a slowdown in the Chinese economy and property cooling measures introduced by the Chinese government. - Transit-Mixed Concrete's net profit for full year ended Feb 28, 2013 rose 15% to S$2.76m, spurred by an increase in construction activities.

SG: MARKET PULSE: CapitaMall, CapitaCommercial, CapitaRetail China (22 Apr 2013)

Stock Name: CapitaMall
Company Name: CAPITAMALL TRUST

Research House: OCBC

Price Call: BUY

Target Price: 2.43

Stock Name: CapitaComm
Company Name: CAPITACOMMERCIAL TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.80

Stock Name: CapitaRChina
Company Name: CAPITARETAIL CHINA TRUST

Research House: OCBC

Price Call: HOLD

Target Price: 1.76

MARKET PULSE: CapitaMall, CapitaCommercial, CapitaRetail China

22 Apr 2013

KEY IDEA CapitaMall Trust: Results from AEIs now apparent Summary: CapitaMall Trust (CMT) turned in a strong set of 1Q13 results last Friday. DPU increased by 7.0% YoY to 2.46 S cents, despite a retention of S$8.4m in income for the quarter. This is slightly ahead of our expectations, as S$6.6m in taxable income may be distributed in FY13 (1Q DPU already formed 25.2% of our FY13F DPU). Operationally, we note that CMT continued to deliver on various fronts. CMT also updated that the repositioning of IMM Building has been gaining traction, while the space vacated by Carrefour in 4Q12 at Plaza Singapore has been leased to Cold Storage and John Little and British retailer George. As previously guided, CMT announced a new AEI at Bugis Junction, which is expected to last from 2Q13 to 3Q14. We remain positive on CMT's performance going forward, in view of these positive developments. We maintain BUYon CMT with a higher fair value of S$2.43 (previously S$2.32). (Kevin Tan) MORE REPORTS CapitaCommercial Trust: 1Q13 DPU up 3.2% YoY Summary: CapitaCommercial Trust (CCT) reported 1Q13 distributable income of S$55.7m - up 3.3% YoY. This translates to a 1Q13 DPU of 1.96 S-cents, which is 3.2% above the 1.90 S-cents paid in 1Q12. We see this to be in line with expectations and 1Q13 distributable income now makes up 24% of our full year forecast. The growth in distributable income was mainly due to a full contribution from 20 Anson (acquired in Mar-12) and higher rentals at HSBC Building. CCT's portfolio occupancy remained fairly stable at 95.3% in 1Q13, down marginally from 97.2% in 4Q12, mainly due to Cisco's relocation from Capital Tower. We continue to see positive rental reversion in the portfolio - average monthly portfolio rents increased from $7.64 psf in 4Q12 to $7.83 psf in 1Q13. In addition, CapitaGreen remains on track for completion in 4Q14. Maintain BUY with a fair value estimate of S$1.80. (Eli Lee) CapitaRetail China Trust: 1Q13 in-line Summary: CRCT's 1Q13 results were generally in line with ours and the street's expectations. Gross revenue climbed 3.7% YoY to S$39.3m and net property income rose 1.8% YoY to S$25.9m. On a QoQ basis, NPI at CapitaMall Minzhongleyuan (MZLY) fell 32% to RMB4.7m. We expect NPI from MZLY to dip further in the coming quarters since the AEI there is being fast-tracked, with temporary closure of the mall from Jul 2013 to 2Q14. According to management, CRCT has secured offers at favorable terms to refinance S$150.5m due in Jun 2013. Adjusting our estimates slightly, we increase our fair value from S$1.72 to S$1.76 but we maintain our HOLDrating on CRCT on valuation grounds. (Sarah Ong)

For more information on the above, visit www.ocbcresearch.comfor the detailed report.

NEWS HEADLINES - Shares of Fraser and Neave (F&N) will resume trading on Monday, and the company will have three months, or until July 19, to restore its public float to above 10 per cent. - Sembcorp Industries will be developing new energy from a waste facility in Teeside, Britain, the group's first energy-producing waste facility outside of Singapore. Total investment for facility is expected to cost S$473.5m - Power company, SP AusNet, has won approval from The Australian Energy Regulator (AER) to apply to recover costs from customers for all insured events. - Elektromotive Group has resolved its dispute with the final vendor involved in the reverse takeover deal that saw the failed share transfer of 80m shares of the mainboard-listed firm. - Entry-level salaries for Singaporeans have been stagnant over the past five years and this cannot continue, Acting Manpower Minister Tan Chuan-Jin said.

CIMB tips Frasers Centrepoint on resilience

Stock Name: FrasersCT
Company Name: FRASERS CENTREPOINT TRUST

Research House: CIMB

Price Call: BUY

Target Price: 2.31

Frasers Centrepoint Trust's (J69U.SG) fiscal 2Q and 1H DPUs were broadly in line with expectations, CIMB says, noting 2Q13 NPI rose 10% on-year as higher NPI margins added to an 8% revenue increase.

"Causeway Point and NorthPoint remain the key drivers of FCT's performance. We continue to like FCT for its resilient retail exposure, and see catalysts from the accretive acquisition of a larger Changi City Point, which should provide FCT with its next prong of growth."

It raises its target to $2.31 from $2.29, keeping an Outperform call. The stock is down 0.5% at $2.23.
 

HPHT faces concerns on labour flexibility: Citi

Stock Name: HPH Trust US$
Company Name: HUTCHISON PORT HOLDINGS TRUST

Research House: Citigroup

Price Call: SELL

Target Price: 0.71

The labour disruptions at HPHT’s Hong Kong port are spurring concerns over the impact on labour flexibility and likely wage-rate pressure, Citigroup says, noting wage rates could be pressured upward by 10% this year on an annual basis, above the 5% the house originally considered.

“More important, we believe that the notable flexibility that HIT enjoys regarding its current subcontractor labor structure (pertaining to roughly two-thirds of its operational staff) could also be in jeopardy, particularly in the current volume environment and what we believe to be structural longer-term headwinds for export growth out of South China/HK.” It cuts its target to US$0.71 ($0.91) from US$0.74 to reflect the selloff in Cosco Pacific and China Merchants, resulting in lower peer P/E multiples of 14.4X and 9X respectively, compared with HPHT’s 23.8X. It keeps a Sell call.

“While we do appreciate the relatively higher dividend/distribution yield, uninspiring fundamentals (and now a labor disruption) will weigh on the name.” The stock is down 3.6% at US$0.81.

SGX may face weaker fiscal-4Q: OSK-DMG

Stock Name: SGX
Company Name: SINGAPORE EXCHANGE LIMITED

Research House: OSK

Price Call: SELL

Target Price: 6.80

Singapore Exchange's (S68.SG) fiscal-3Q13 showed a good pickup, with net profit of $98 million, up 26% on-year, at the upper end of the estimate range, led by stronger securities and derivatives, OSK-DMG says.

The house raises its FY13-14 net profit forecast by 4% each after lowering operating cost projections as the company continued to show good cost discipline and maintained its operating expense guidance.

It raises its fair value to $6.80 from $6.50. But it adds, while the stock's current 24.5x 2013 PER isn't particularly expensive, it prefers Bursa Malaysia (1818.KU) on its cheaper 22x 2013 PER valuation and stronger earnings growth.

"Furthermore, we note that April's average daily turnover has softened to around $1.26 billion, potentially suggesting a weaker 4Q13 is in store. Thus, despite the commendable results, we have maintained our Sell call." The stock is up 1.0% at $7.78.
 

SG: MARKET PULSE: CWT, Rigbuilders, SGX, M1, FCT, KepLand (17 Apr 2013)

Stock Name: CWT
Company Name: CWT LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 2.08

Stock Name: SGX
Company Name: SINGAPORE EXCHANGE LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 6.80

Stock Name: M1
Company Name: M1 LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 3.10

Stock Name: Kep Corp
Company Name: KEPPEL CORPORATION LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 12.68

Stock Name: SembMar
Company Name: SEMBCORP MARINE LTD

Research House: OCBC

Price Call: BUY

Target Price: 5.64

Stock Name: FrasersCT
Company Name: FRASERS CENTREPOINT TRUST

Research House: OCBC

Price Call: HOLD

Target Price: 2.13

Stock Name: KepLand
Company Name: KEPPEL LAND LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 4.53

MARKET PULSE: CWT, Rigbuilders, SGX, M1, FCT, KepLand

17 Apr 2013

KEY IDEA CWT: Growth from warehouse assets and Commodity SCM CWT is a leading provider of logistics solutions for worldwide customers in the commodities, chemical, petrochemical, marine, oil & gas, defense and industrial sectors. A competitive edge is its global logistics network which connects customers to around 200 direct ports and 1,500 inland destinations. The group is currently developing two large warehouses, estimated to add another 50% to its owned warehouse space in Singapore. In total, we estimate its entire warehouse portfolio to be worth about S$800m. Meanwhile, the recently acquired Commodity SCM business is also expected to scale up quickly, taking advantage of the group's strong global logistics network and reputation as an established commodity collateral manager. Our SOTP fair value estimate for CWT is S$2.08 per share. Given the ample upside, we initiate coverage with BUY.(Chia Jiunyang) MORE REPORTS Singapore Exchange: Strong 3Q, but likely QoQ slowdown in 4Q Singapore Exchange (SGX) generated above market expectation 3QFY13 net earnings of S$97.7m, up 25.6% YoY. The strong performance came from several units, especially its core Securities and Derivatives businesses. A 3Q dividend of 4 cents has been declared and is payable on 2 May 2013. The final quarter is likely to see some slowdown, largely due to prevailing macro economic uncertainties, and we expect volatility to come back again as sentiment is likely to turn more cautious especially after the good gains for the key equity indices since the start of the year. We have raised our fair value estimate slightly from S$6.80 to S$7.16 based on the same 23x blended earnings. With an estimated dividend yield of 3.5%, total return is -3.5% and we are buyers only at S$6.80 or lower. Maintain HOLD. (Carmen Lee) M1: 1Q13 results in line; downgrade to HOLD M1 Ltd reported its 1Q13 revenue of S$243.0m (-7.4% YoY, -25.8% QoQ) which met just 21.3% of our full-year forecast, mainly due to lower handset sales and also the mix of handsets (Android now makes up >50% of its postpaid subscriber base). Nevertheless, net profit grew 1.7% YoY and 8.2% QoQ to S$41.0m, meeting 26.5% of our FY13 forecast. It may have also gotten a one-off boost from recognizing the unused credit in expired pre-paid cards that were periodically terminated. While we are not making any chances to our FY13 estimates as 1Q13 results were largely in line, our DCF-based fair value improves to S$3.10 (from S$2.89) as we tweak our interest rate expectations slightly lower in view of the still sluggish global economic performance. But as there is now <10% total return from here, we downgrade the stock to HOLD. (Carey Wong) Rigbuilders: Who has been ordering from the Chinese yards? There have been recent reports on Chinese yards surpassing Singapore yards in terms of jack-up rig orders YTD. Indeed, we find that jack-up orders for the former have totaled ~US$2.3b so far, compared to ~US$2.1b for the latter. However, we note that many of the contracts that Chinese yards have won so far are mostly from newcomers in the offshore industry, including speculators who sell the rigs later for a profit. Meanwhile, Keppel Corp (KEP) and Sembcorp Marine (SMM) have been diversifying their product range and innovating to stay ahead in certain niche areas. Maintain BUY on both KEP [FV: S$12.68] and SMM [FV: S$5.64]; we note that markets may be increasingly volatile ahead, providing an opportune time to enter such quality stocks. (Low Pei Han) Frasers Centrepoint Trust: 2QFY13 results broadly in line Frasers Centrepoint Trust (FCT) announced its 2QFY13 results this morning. NPI and distributable income grew by 9.7% YoY and 10.4% YoY to S$28.7m and S$23.5m respectively. DPU for the quarter came in at 2.7 S cents, up by a slightly slower 8.0% YoY due to retention of S$1.2m in distributable income. For 1HFY13, DPU rose by 8.5% YoY to 5.1 S cents. This is broadly in line with both ours and consensus expectation, with 1HFY13 DPU forming ~47% of our full-year DPU forecasts. FCT's portfolio assets continued to exhibit resilience. Average occupancy improved to 98.2% as at 31 Mar from 97.2% in the prior quarter, and positive rental reversion of 6.6% was achieved for 1HFY13. We will be speaking to management during the analyst briefing scheduled later in the morning. For now, we keep our S$2.13 fair value and HOLD rating on FCT unchanged. (Kevin Tan) Keppel Land: Diversifying stake in Tanah Merah site Keppel Land (KPLD) announced yesterday that it would join China Vanke (Vanke) in a strategic alliance to develop property in China and Singapore. In addition, Vanke would take a 30% interest in a KPLD's Tanah Merah GLS site for S$135.5m. Recall that KPLD had won this site with a S$434.6m bid last Oct and Vanke's entry price is only marginally above that of KPLD's cost. We believe this price is reasonable and, all considered, expect a neutral market reaction to this transaction. In our view, the potential loss of accretion to KPLD's RNAV from this divestment is limited and mostly offset by the benefits of diversification in an increasingly uncertain domestic residential space. Maintain BUYwith an unchanged fair value estimate of S$4.53. (Eli Lee)

For more information on the above, visit www.ocbcresearch.comfor the detailed report.

NEWS HEADLINES - US equities rallied Tuesday, on the back of optimism from a bounce in gold prices, good corporate earnings and positive housing data. - Moody's has cut its outlook for China's credit rating from stable to progressive, citing risk from local government debt and credit growth from shadow banking. - From Jun 24, commuters who exit MRT stations in the city area before 7.45am on weekdays will travel for free. - Grand Banks Yachts is on track to complete five luxury yachts for buyers from Singapore, Japan and Micronesia in FY13 (ending Jun 2013). This marks the highest-ever sales to the region since the 2008-2009 global financial crisis. - The payable consideration by Europtronic Group for the proposed acquisition of Gold Impact is S$160m. - Sabana REIT has established a S$500m Multicurrency Islamic Trust Certificates Issuance Programme.

OSPL - Good Morning S'pore - Central Dealing Desk

Stock Name: First REIT
Company Name: FIRST REAL ESTATE INV TRUST

Research House: OCBC

Price Call: HOLD

Target Price: 1.31

Stock Name: Wilmar
Company Name: WILMAR INTERNATIONAL LIMITED

Research House: UOB KayHian

Price Call: BUY

Target Price: 3.80

Market Compass

17 April 2013~ Good Morning Singapore!

Singapore Idea Snippets:

17 April 2013~ Good Morning Singapore! Central Execution Team - The Excellence of Execution This product is made available by your Central Execution Team, for you as TRs of OCBC Securities to help you with your business and therefore it is confidential and only for internal circulation. It is not intended for onward circulation to non-OSPL TRs, clients or any other third party in this or any other version. Neither is this intended to be relied upon as a sole basis for any recommendation. TRs must also consider their clients' investment objectives, financial position and needs when intending to make or making any recommendation. For the front desk, by the front desk. All feedback to make this a better product is welcome. Global Flash: While You Were Sleeping Source: Marketwatch Quote for the day :I've failed over and over and over again in my life and that is why I succeed. - MICHAEL JORDAN Singapore: The Day Ahead SINGAPORE DAYBOOK:Free MRT rides to city before morning rush hour. One-year trial will start from June 24; programme likely to cost govt $10m. [SINGAPORE] Commuters who travel early into the city area by train will pay nothing at all from June 24. The Land Transport Authority (LTA) announced yesterday that it is embarking on a one-year trial to offer completely free trips to those who end their weekday journeys at any of the 16 designated MRT city stations before 7.45am. Commuters who exit these stations just slightly after 7.45am will also not be left out. Those who alight between 7.45am to 8am can still enjoy a discount of up to 50 cents off their train fares. This pilot programme, which will be fully funded by the government, is likely to cost $10 million, said Minister for Transport Lui Tuck Yew during a visit to Raffles Place MRT Station during the pre-peak period yesterday morning. He added that the LTA hopes to see 10 to 20 per cent of commuters make changes to their daily schedules to travel into the city earlier. Currently, the SMRT Early Travel Discount scheme only offers a reduction of up to 50 cents for commuters arriving at 14 designated SMRT stations in the city area before 7.45am. This discount is limited to travel on SMRT lines only. MARKET SCOOP Keppel Land and China Vanke enter strategic partnership Singapore Exchange Q3 net profit surges as trading volume jumps Perennial consortium gets S$1.4b Beijing Tongzhou Phase 2 proj M1's Q1 profit up 1.8% S'pore Index edges up; Keppel REIT jumps to 5-yr high AIMS AMP Reit Q4 DPU up 16.3% Breadtalk invests S$14.5m in Beijing property JV OCBC Securities says... FIRST REIT | HOLD | TP: S$1.31 News agency Reuters reported that Lippo Karawaci (Lippo), which is First REIT's (FREIT) sponsor, is seeking to raise at least US$200m in an IPO of its Siloam Hospitals healthcare division1 Should this IPO materialise, we believe that proceeds would be used to fund Lippo's aggressive healthcare expansion plans, which includes the construction of a large number of hospitals We also expect Lippo to retain a strong majority of the controlling stake of the listed entity, given that it has earmarked its healthcare division as one of its core growth drivers As the Siloam Hospitals entity would likely continue to be consolidated in Lippo's financial statements, we believe that future hospitals will still be injected into FREIT Lippo also has a deemed interest of ~28.7% in FREIT An EGM has been scheduled on 29 Apr to obtain unitholders' approval for the forementioned acquisitions, issuance of new units to Lippo as partial payment for SHTS and proposed whitewash resolution for a waiver of a mandatory offer from Lippo As we expect the acquisitions to be DPU accretive and value-enhancing to unitholders, we expect unit-holders to vote in favour of the proposed conditions Meanwhile, we retain our HOLD rating and S$1.31 fair value estimate on FREIT UOB KAY HIAN says... WILMAR INTERNATIONAL | BUY | TP: S$3.80 Wilmar International is acquiring a 27.5% equity stake in Cosumar SA (Cosumar) from Societe Nationale d'Investissement (SNI) for a total cash consideration of MAD2.3b (US$263m) Cosumar is the sole sugar supplier in Morocco, one of the largest sugar producers in Northern Africa and third largest sugar producer in Africa With this, Wilmar will have sugar operation in Australia, New Zealand, Indonesia and Africa Wilmar is paying about MAD 2.3b (US$263m) for the 27.5% stake in Cosumar, representing 11.5x 2012 PE and 2.6x 2012 P/NTA Wilmar has about US$8.56b cash on hands to fund the acquisition and adjusted net gearing of 0.36x In line with company strategy to expand in Africa. Africa region contributed 3.3% of Wilmar's revenue in 2012 Also, sugar business is the fifth largest business in Wilmar and contributed about 7% of 2012's total PBT Maintain BUY and SOTP target price of S$3.80 based on sum-of-the-parts (SOTP) methodology, implying a blended PE of 13.6x 2013F, below its historical mean of 14.8x 1-year forward PE DBS VICKERS Securities says... FAR EAST HOSPITALITY TRUST | BUY | TP: S$1.13 Far East Hospitality Trust (FEHT) announced that they have signed a conditional sales and purchase agreement with Straits Trading Company limited (STC) for the acquisition of Rendezvous Grand Hotel Singapore and Rendezvous Gallery The agreed acquisition price for the property is S$264.5m, which is a 2-5% discount to appraised values from 2 appointed valuers (Colliers: S$277m, JLL : S$268.5m) Upon completion of this acquisition, the property will be master leased to the sponsor, Far East Organization, under a management contract as the operator of the hotel for a initial period of 20 years, with an option to renew for another 20 years We estimate the hotel component to be valued at close to S$225m (after attributing S$40m for the gallery wing based on S$1,600 psf) which works out to a valuation/key of close to S$755,000/key The purchase will be funded through a combination of debt and newly issued equity (to STC and sponsor Far East Organization) Based on the above funding scenario, this acquisition is expected to result in a net accretion of c1.5% for distributions We expect further upside to our TP as we have not factored in this acquisition in our numbers.

Wilmar's Moroccan sugar acquisition positive: CIMB

Stock Name: Wilmar
Company Name: WILMAR INTERNATIONAL LIMITED

Research House: CIMB

Price Call: BUY

Target Price: 3.74

CIMB is positive on Wilmar’s  Moroccan sugar acquisition. “Wilmar’s acquisition of a strategic 27.5% stake in Cosumar gives the group exposure to the regulated Moroccan sugar industry and access to Africa’s structurally sugar-deficient market.

It can add value by introducing better techniques for farming and procuring raw sugar.” It views the asset valuations are fair, estimating the deal values Cosumar at US$956 million ($1.05 billion), representing a historical P/E of 11X, below the 14X-17X historical P/E for leading Malaysian sugar refiner MSM Malaysia.

It expects the deal to enhance Wilmar’s future earnings base by around 1% in FY14. It keeps the stock at Outperform with $3.74 target. The stock is up 0.6% at $3.29.

SG: MARKET PULSE: Property Sector, First REIT, A-REIT, KepCorp, FEHT (16 Apr 2013) - Resend

Stock Name: Capitaland
Company Name: CAPITALAND LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 4.29

Stock Name: KepLand
Company Name: KEPPEL LAND LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 4.53

Stock Name: CapMallsAsia
Company Name: CAPITAMALLS ASIA LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 2.55

Stock Name: First REIT
Company Name: FIRST REAL ESTATE INV TRUST

Research House: OCBC

Price Call: HOLD

Target Price: 1.31

Stock Name: Ascendasreit
Company Name: ASCENDAS REAL ESTATE INV TRUST

Research House: OCBC

Price Call: HOLD

Target Price: 2.63

Stock Name: Kep Corp
Company Name: KEPPEL CORPORATION LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 12.68

MARKET PULSE: Property Sector, First REIT, A-REIT, KepCorp, FEHT

16 Apr 2013

KEY IDEA Singapore Residential Property: Wave of launches driving firm Mar sales Summary: URA reported that a headline total of 3,072 new private homes (including 279 EC units) were sold in Mar 13, which was up 235% MoM and 1% YoY. These healthy numbers were driven by a wave of new launches after the Lunar New Year, including D'Nest (912 total units, Pasir Ris) 699 units sold at a median S$963 psf, Bartley Ridge (868 total units, Mt Vernon Rd) 367 units sold at S$1,296 psf and Urban Vista (582 total units, Tanah Merah) 348 units sold at S$1,503 psf. We see sales reflecting still firm residential demand and an environment of continued liquidity but remain cognizant of potential incremental curbs should the housing sector show excessive activity going forward. Maintain NEUTRAL on the residential property sector and we prefer developers with strong balance sheets and diversified exposure. Our top picks are CapitaLand [BUY, S$4.29], Keppel Land [BUY, S$4.53] and CapitaMalls Asia [BUY, S$2.55]. (Eli Lee) MORE REPORTS First REIT: No major impact from possible Siloam Hospitals IPO Summary: News agency Reuters reported that Lippo Karawaci (Lippo), which is First REIT's (FREIT) sponsor, is seeking to raise at least US$200m in an IPO of its Siloam Hospitals healthcare division. We do not foresee any major impact to FREIT's prospects, as we believe that FREIT would remain as an important vehicle for Lippo to implement its asset-light strategy. Moreover, FREIT has a right-of-first-refusal for the purchase of healthcare assets from its sponsor and/or any of its subsidiaries. Meanwhile, FREIT will hold an EGM on 29 Apr to seek unitholders' approval in relation to its two proposed acquisitions from Lippo. As we expect the acquisitions to be DPU accretive and value-enhancing to unitholders, we expect unit-holders to vote in favour of the proposed conditions. Maintain HOLD and S$1.31 fair value estimate on FREIT. (Wong Teck Ching Andy) Ascendas REIT: Strength reflected in price Summary: Ascendas REIT's (A-REIT) FY13 DPU totalled 13.74 S cents, up 1.3%. This is somewhat below our and street's full-year estimates of 14.0-14.2 S cents. Excluding performance fee, however, we note that DPU would have grown 3.6% to 14.05 S cents, closer to our projections. Looking ahead, A-REIT expects the positive rental reversions to persist, albeit at a slower pace. Management also pointed out there is ~10% vacancy in the multi-tenanted portion of its portfolio, which may provide upside if these spaces are leased out. During the quarter, A-REIT announced the development of DBS Asia Hub Phase 2 for S$21.8m and two new asset enhancement projects totalling S$14.0m. These initiatives, together with the announced investments, are likely to maintain its stable performance in FY14, in our view. We incorporate the results into our forecasts and roll over our valuation to FY14. Maintain HOLD with a marginally higher fair value of S$2.63 (previously S$2.60) on A-REIT. (Kevin Tan) Keppel Corporation: Secures US$226m jack-up rig contract from Falcon Summary: Keppel Corporation (KEP) announced that its O&M arm has secured a US$226m contract from Falcon Energy to construct a KFELS Super B Class jack-up rig. Recall that KEP won a US$820m contract for four jack-up rigs from Grupo R in Mar (KFELS B Class design) and a US$225m contract from Ensco in early Apr (KFELS B Class design). The latter figure includes the construction cost, commissioning, systems integration testing and project management costs. Meanwhile, the last time Keppel secured a KFELS Super B Class jack-up rig was in Mar 2011 for US$210m. This latest order brings KEP's YTD orders to about S$2.2b, accounting for about 43% of our full year order win estimate. Maintain BUY with S$12.68 fair value estimate on KEP; the group will also be announcing its results on 18 Apr 2013. (Low Pei Han) Far East Hospitality Trust: Agreement to acquire Rendezvous Grand Hotel Singapore Summary: Far East Hospitality Trust (FEHT) has entered into an agreement with The Straits Trading Company Limited (STC) to acquire Rendezvous Grand Hotel Singapore and Rendezvous Gallery (70-year old leasehold estate) for an estimated total cost of acquisition of S$270.1m. The acquisition will be financed by the proposed issue proposed issue of new stapled securities in FEHT to STC (S$68.0m), the Sponsor (S$67.8m), as well as debt facilities (S$132.2m). The pro forma effects of the acquisition for FY12 (27 Aug-31 Dec) would have been an increase in DPU from 2.09 S-cents to 2.12 S-cents. Pro-forma effect on NAV per stapled security as of 31 Dec 2012 would have been an increase from 97 S-cents to 98 S-cents. This is Far East H-Trust's first acquisition since its initial public offering in August 2012. The master leasee will be a member of the Far East Organization group of companies. We maintain a HOLD rating but place our fair value of S$1.05 under review. (Sarah Ong)

For more information on the above, visit www.ocbcresearch.comfor the detailed report.

NEWS HEADLINES - US equity indexes fell the most in five months, with the prices of commodities dropping after disappointing growth numbers from China and bomb blasts at the Boston Marathon. - Keppel REIT's net property income increased 20.7% YoY to $34.4m primarily due to improved performance from Ocean Financial Centre and 77 King Street. - Qian Hu's 1Q13 net profit fell 88% YoY to S$62k. Revenue declined 2% YoY to S$20.2m. - K-Green Trust achieved 1Q13 profit after tax of $3.2 m, down 10% YoY. Cash flow from operating activities was S$9.8m, down 16% YoY. - Sino Gradness has reported that it received tremendous response at a Chengdu trade exhibition, with indicative orders for "Garden Fresh" juices received to-date exceeding RMB290m, ~45% more than last year.

Keppel may top contract-win forecast

Stock Name: Kep Corp
Company Name: KEPPEL CORPORATION LIMITED

Research House: UOB KayHian

Price Call: BUY

Target Price: 12.55

Keppel’s jack-up rig order from new customer Falcon Energy, appears to be the highest price paid so far for a KFELS B Class jack-up at US$226 million, UOB KayHian says. With Keppel’s year-to-date new contracts already at $2.15 billion, the company could exceed UOB-KH’s 2013 target for $5 billion, it says. It rates the stock at Buy with a $12.55 target. The stock is down 1.0% at $11.28.

SG: MARKET PULSE: KSH, Rotary, ST Engineering (11 Apr 2013)

Stock Name: KSH Hldg
Company Name: KSH HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.73

Stock Name: ST Engg
Company Name: SINGAPORE TECH ENGINEERING LTD

Research House: OCBC

Price Call: HOLD

Target Price: 4.12

MARKET PULSE: KSH, Rotary, ST Engineering

11 Apr 2013

KEY IDEA KSH Holdings: More earnings growth momentum likely We recently met with KSH management and keep intact our FY13E and FY14E forecasts at S$30.7m (up 68% YoY) and S$53.0m (up 72% YoY), respectively, which are underpinned by progress billings for already-sold projects in Singapore. Beyond FY14, we see earnings growth momentum likely continuing due to the upcoming launch of its Beijing condo project this year (Liang Jing Ming Ju Phase 4) which would contribute an estimated S$23m net earnings upon TOP. We also understand management is also focused on launching Phase 1 of its 533-hectare Gaobeidian township project (GBD), located 30 mins away from Beijing city via high-speed rail. For upcoming FY13E results, we expect final dividends in the range of 0.5 - 1.5 S-cents and possibly a bonus share issue as well. Maintain BUYwith an increased fair value estimate of S$0.73, versus S$0.62 previously, as we now incorporate accretion from Liang Jing Ming Ju into our SOTP valuation model and raise our PE multiple for the construction segment from 4x to 5x, in line with peers trading at 5-7 times. (Eli Lee) MORE REPORTS Rotary Engineering Ltd: Ceasing coverage Rotary Engineering Ltd (Rotary) had a difficult year in 2012, as it battled escalating cost over-runs on its US$745m SATORP mega-project and repeated delays on its S$260m Fujairah Oil Terminal project. In 4Q12, the group appeared to be making progress on its SATORP project, although the non-controlling deficit is still a thorny issue. The group recently secured S$42m of project work in Singapore's Jurong Island, and S$300m of EPC work in Pulau Busing. However, the tighter foreign labour market in Singapore could mean lower project margins over the medium term horizon. Coupled with the uncertainty at its SATORP JV, it may still be too early for investors to buy its shares, which are currently trading at 1.4x PBR. Meanwhile due to a reallocation of resources, we have decided to CEASE COVERAGE. (Chia Jiunyang) ST Engineering: ST Aerospace won S$480m of contracts in 1Q13 ST Engineering (STE) announced that its aerospace arm, Singapore Technologies Aerospace Ltd (ST Aerospace) has secured new contracts worth about $480m in 1Q13. The contracts are for airframe, component and engine maintenance, as well as engineering and development, which will be carried out through its global maintenance, repair and overhaul (MRO) network. As this is in line with our expectations, we maintain our fair value estimate of S$4.12 and HOLD rating on STE. (Sarah Ong)

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NEWS HEADLINES - Malaysians will choose their next government on May 5 after the Election Commission fixed the nomination of candidates on April 20. - Forterra Trust, formerly Treasury China Trust (TCT), is set to divest itself of its Central Plaza property in Shanghai for US$266.7m. - Resale prices of non-landed private residential properties edged up in the first quarter, despite fewer transactions taking place, data from the Singapore Real Estate Exchange showed. - GKE Corporation, previously Van der Horst Energy Limited, has injected an additional HK$31.3m (S$5m) into its wholly owned subsidiary GKE Holdings (HK) through a share subscription at HK$1 per ordinary share.