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)

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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.