31 May 2013~ Good Morning Singapore!
Central Execution Team - The Excellence of Execution
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Global Flash: While You Were Sleeping
Source: Marketwatch
Quote for the day :A man always has two reasons for doing anything: a good reason and the real reason.
- J.P. MORGAN
Singapore: The Day AheadSINGAPORE DAYBOOK:SIA places US$17b order for 60 passenger planes. It commits to 30 A350-900s and 30 787-10Xs; deliveries to take place from FY2016/17 SINGAPORE] In one of the biggest aircraft orders in its history, Singapore Airlines (SIA) is committing to 30 additional Airbus A350-900s and 30 Boeing 787-10Xs worth over US$17 billion, as it fights to keep its position as an industry leader and fend off intensifying competition from rivals.
Under the new deal with Europe-based Airbus, SIA's firm order for the 30 A350-900s comes with options for 20 more planes, although these can be converted into larger A350-1000s. Delivery is slated to take place from FY2016/17.
This is SIA's third order for the A350-900, which can be operated on medium and long-haul routes. This takes its total order for this aircraft type to 70 planes. Prior to this, it had 40 A350-900s valued at US$11.5 billion on order.
The carrier's order for the B787-10X could make it the launch customer of this longer version of Boeing's Dreamliner. However, the deal is contingent on the planemaker officially rolling out the programme. (Source: The Business Times)
MARKET SCOOP
WBLstays listed after UEL offer
A-HTRUST to raise S$200 million
TEE Land launches IPO to raise S$57.8m
WE to place 80m new shares at 10.224 cts/shr
Sembcorp Marine unit gets US$220.5m contract
Qingjian Realty bids S$330.65 psf ppr for EC site in Sengkang
8,000 BTO, SBF flats for sale in latest launch: HDB
ExxonMobil starts Singapore chemical complex after expansion
(Source: The Business Times)
UOB KAY HIAN says...
COURTS ASIA | BUY | TP: S$1.20
We attended the FY13 analyst briefing for Courts Asia (CAL)
CAL remains an attractive proxy on robust consumer demand in Singapore and Malaysia
CAL is Singapore's largest and Malaysia's second-largest electrical, IT and furniture retailer in terms of 2011 total sales
Under "Courts Flexi Schemes", CAL operates a proprietary credit business that allows customers to make purchases through credit accounts opened directly with CAL
The company expects to open its 108,000sf Megastore in Malaysia in Aug 13; their targeted expansion plan is to have an average increase of 120,000sf a year in Malaysia
CAL will also be adding two new stores in Singapore by the end of this year
Biggest-ever store to be opened in Indonesia next year
The company has identified Indonesia as one of its key markets, along with Malaysia, in driving its revenue in the mid to long term given the growing middle class and fragmented retail market
The recent drop in proportion of credit sales/total sales (from 27% to 22% over three years) has been in line with the company's tightening credit policy to manage risk
Delinquency rates have been improving over 2007-13 (especially in Malaysia where delinquency rate has fallen from 16% to 8%)
We have tweaked our FY14-15F net profit by less than 1% following the release of 4QFY13 results
In our view, key risks that could impede the stock from reaching our target price include: a) credit risk, in the event of rising consumer defaults affecting the company's profitability, and b) weakening consumer demand for CAL's non-essential products in the event of prolonged weak economic environment
Maintain BUY with a higher target price of S$1.20 (previously S$1.14)
DBS VICKERS Securities says ...
BIOSENSORS INTERNATIONAL GROUP | BUY | TP:S$1.64
Revenue and earnings for FY13 came in at US$336m and US$115.4m, respectively, in line with our estimates
Product revenue grew 32% y-o-y while licensing and royalties revenue fell 29% in FY13
Product revenue growth (+17% y-o-y) in 4Q13 was driven by increase in market shares in Europe and Asia, while the decline in licensing and royalties (US$12.4m, -46% y-o-y) was due to Terumo losing market share in Japan
BIG has proposed a maiden dividend of 2 UScts per share for FY13, representing 30% payout ratio and 2% yield
We factor in lower licensing revenue (flat growth) in our earnings estimate for FY14F/FY15F given the weak outlook
This leads us to lower our FY14F/15F earnings by 11%/2%
Outlook remains positive for BIG's worldwide DES business
BioFreedom is targeted for release in late 2013 worldwide
BIG is also rolling out several products for approvals in the next two years including peripheral products such as "DES for below the knee applications" and the "drug eluting balloon" to supplement growth
Following our earnings cut, our SOTP valuation for BIG is lowered to S$1.64
This values BIG at 20x FY14F PE
We maintain our BUY recommendation for the stock
OCBC Securities says...
MIDAS HOLDINGS | BUY | TP:S$0.54
Midas Holdings (Midas) announced last evening that its 32.5%-owned JV company Nanjing SR Puzhen Rail Transport (NPRT) has clinched a train contract worth CNY420m
This is for the supply of 56 train cars for the Shenzhen Metro Line 4 project
Delivery is scheduled to take place from 2013 to 2014, and we believe this may lead to potential contract wins for Midas as it is a key supplier of NPRT
We note that this is the third announced contract order of the year for NPRT, with cumulative contract wins amounting to ~CNY1.47b YTD
While NPRT had been a drag on Midas' recent 1Q13 results, we believe that its contribution to Midas could improve in 2H13, given its order book schedule on hand
Maintain BUY and S$0.54 fair value estimate, pegged to 1.1x FY13F P/B
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