SG: MARKET PULSE: Dyna-Mac, CDLHT (27 May 2013)

Stock Name: Dyna-Mac
Company Name: DYNA-MAC HOLDINGS LTD.

Research House: OCBC

Price Call: HOLD

Target Price: 0.44

Stock Name: CDL HTrust
Company Name: CDL HOSPITALITY TRUSTS

Research House: OCBC

Price Call: HOLD

Target Price: 2.05

MARKET PULSE: Dyna-Mac, CDLHT

27 May 2013

KEY IDEA Dyna-Mac Holdings: Stay cautious Summary: Dyna-Mac Holdings reported 1Q13 results that were slightly below our expectations. 1Q13 revenue fell by 19% QoQ to S$60.1m, while net profit fell 24% QoQ to S$6.7m. The group's order-book continued to fall to S$113m (27 Feb-13: $134m), providing cover for under two quarters. To be fair, delays in the award of contracts is quite common in the industry and Dyna-Mac is currently tendering for a number of large projects. Nonetheless, the low order-book still makes Dyna-Mac vulnerable to potential yard under-utilization should contracts be further delayed. After adjusting our model to incorporate the 1Q13 results, our fair value estimate declined to S$0.44 (previously S$0.50). Maintain HOLD. (Chia Jiunyang) MORE REPORTS CDL Hospitality Trusts: AEI for Orchard Hotel Shopping Arcade Summary: CDLHT has announced asset enhancement plans for Orchard Hotel Shopping Arcade (OHSA). The AEI will comprise an overhaul of the property facade and existing amenities to enhance its user-friendliness. Scheduled to commence in late 2013, the AEI is expected to complete in 12 months, during which the mall will be closed. A soft opening of the revamped mall is expected by end 2014. The AEI is expected to cost approximately S$25.0m, including construction cost which will be fully funded by debt, estimated disruption costs to the adjoined Orchard Hotel, and the loss of rental income during the period of mall closure. Upon completion of the AEI, OHSA will boast an increased NLA of ~10k sq ft. Incremental rental income of OHSA is expected to be more than S$2.0m on an annualised basis, translating into an estimated gross ROI of more than 8.0%. For now, we maintain our HOLD rating and fair value of S$2.05 on CDLHT. (Sarah Ong)

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

NEWS HEADLINES - US stocks fell for the first week in five as the prospects of the Federal Reserve starting to reduce its bond-buying stimulus rattled a market trading at historic highs. - Singapore reported a surprise expansion in its economy in the first quarter, helped by a surge in financial services as trading in stocks and foreign exchange soared. - The government's cooling measures for motor vehicles sales in Singapore has helped moderate inflation, which eased to 1.5% in Apr from 3.5% in Mar. - Security, cloud solutions, analytics and agile software are the four thrusts behind the Singapore government's plans to call for S$1.2b in new infocomm tenders in fiscal 2013. - Global Logistic Properties reported 4QFY13 profit of US$224m, +43% YoY, driven by revaluation and foreign exchange gains. - Stamford Land posted a net profit of S$31.7m for FY13, down 40.6%, as revenue fell 45.1% to S$266.7m.