SG: MARKET PULSE: Wilmar, ASL Marine, FEH Trust, Breadtalk, Ezion (9 May 2013)

Stock Name: Wilmar
Company Name: WILMAR INTERNATIONAL LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 3.90

Stock Name: ASL Marine
Company Name: ASL MARINE HOLDINGS LTD

Research House: OCBC

Price Call: BUY

Target Price: 0.86

Stock Name: BreadTalk
Company Name: BREADTALK GROUP LIMITED

Research House: OCBC

Price Call: SELL

Target Price: 0.77

Stock Name: EzionHldg
Company Name: EZION HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 2.35

Stock Name: Far East HTrust
Company Name: FAR EAST HOSPITALITY TRUST

Research House: OCBC

Price Call: HOLD

Target Price: 1.01

MARKET PULSE: Wilmar, ASL Marine, FEH Trust, Breadtalk, Ezion

9 May 2013

KEY IDEA Wilmar: Decent 1Q13 showing - maintain BUY Summary: Wilmar International Limited (WIL) posted a pretty decent start to the year, with revenue of US$10.2b and core earnings of US$313.7m meeting 20.5% and 23.6% of our full-year forecast, respectively. Going forward, management remains confident that WIL will be able to overcome the difficult environment expected for the rest of 2013. While lower palm oil prices will continue to weigh on its Plantation business, cheaper feedstock would boost its downstream businesses, especially Consumer Products. WIL notes that the bird flu in China will affect meal consumption in the short term but it does not expect to have a long-term effect. As such, WIL remains optimistic about China's long-term prospects. Maintain BUY with S$3.90 fair value (based on 15x FY13F EPS). Over the longer term, we are also cautiously positive on the company's expansion in Africa and potentially Myanmar. (Carey Wong) MORE REPORTS ASL Marine: Still positive on its outlook Summary: ASL Marine (ASL) reported a 26.6% YoY rise in revenue to S$144.0m and a 21.0% increase in net profit to S$9.6m in 3QFY13, such that 9MFY13 net profit accounted for about 71% of our full year estimates, within our expectations. Gross margin dropped from 14.0% in 3QFY12 to 13.0% in 3QFY13, and this was mainly due to lower shipbuilding margins and the inclusion of the Vosta LMG business. Looking ahead, the group expects the outlook of the offshore and marine industry for this year to be "good", although competition seems to be increasing. We like ASL for its prudent management, healthy order books, diversified business model and growth potential from Vosta over the longer term. Maintain BUY with S$0.86 fair value estimate, based on 10x blended FY13/14F core earnings. (Low Pei Han) Far East Hospitality Trust: 1Q13 in line Summary: Far East Hospitality Trust (FEHT) reported 1Q13 results that were in line with ours and the street's expectations. Compared to forecast numbers in its prospectus, 1Q13 gross revenue at S$28.1m was 4.2% lower. DPU of 1.38 S cents is 3.0% higher than the 1.34 S cents forecasted, chiefly due to lower finance costs and other trust expenses. 1Q13 hotel RevPAR at S$161 was comparable to 1Q12 (S$162), and reasonably good given the soft 1Q13 for the industry, which saw RevPAR fall 3%. Adjusting our FY13F revenue assumptions downwards slightly, our RNAV-based fair value falls from S$1.05 to S$1.01 and we maintain a HOLD rating on FEHT. We estimate a FY13 yield of 5.4%. (Sarah Ong) BreadTalk Group: Still pricey for now Summary: BreadTalk's 1Q results came in within our expectations with revenue growing 13.4% YoY to S$120.3m on the back of broad segment increases while operating and PATMI increased by 45.6% and 46.0% to S$3.5m and S$2.1m respectively. Although BreadTalk's move to its new headquarters next month will bring about improvements to its production efficiency and operating expenses, we do not expect cost savings to materialize in the immediate quarters due to the incurrence of transitional expenses. As such, we leave our FY13 projections unchanged. In terms of its share price, we remain cautious at this juncture as current valuations are still too expensive in our view. Coupled with an unattractive dividend yield of 1.0%, we maintain our SELL rating with an unchanged fair value of S$0.77. We will look to re-evaluate the counter once speculative interest arising from the MINT acquisition wanes. (Lim Siyi) Ezion Holdings: 1Q13 results in line Summary: Ezion Holdings (Ezion) reported a 79.3% YoY rise in revenue to US$54.8m and a 227.8% increase in net profit to US$46.2m in 1Q13. Excluding one-off items such as US$17.8m worth of disposal gains, recurring net profit is estimated to be about US$28.4m, accounting for 20% of our full year estimate. This is within our expectations as we are expecting stronger quarters ahead as more assets are deployed, and additional contributions from the APLNG and GLNG projects. Gross profit margin remained healthy at 44.9% vs 44.4% in 1Q12. Pending an analysts' briefing later in the morning, we maintain our BUYrating but place our fair value estimate of S$2.35 under review. (Low Pei Han)

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NEWS HEADLINES - Sembcorp Industries recorded 1Q13 net profit of S$176.9m, little changed from a year earlier. - WBL Corporation reported a loss of S$11.4m for 2Q13, compared to net profit of S$20m for the corresponding period a year ago. - ARA Asset Management's 1Q13 net profit fell 16% YoY to S$16.8m, mainly due to lower acquisition, divestment, and performance fees. - Pacific Andes Resources Development has reported a 3% drop in 2QFY13 net profit to HK$322.2m (S$51m). - Sing Holdings Ltd's 1Q13 net profit more than doubled to S$15.8m on higher revenue recognition from its freehold development project - The Laurels, at Cairnhill Road. - Tiong Woon Corporation returned to the black with a net profit of S$3.92m for 3QFY13, compared with a net loss of $373,000 a year earlier. - Investors have overwhelmingly backed the listing of Croesus Retail Trust, with the total placement tranche and public offer 22.4x subscribed. - Oxley Holdings' S$150m bond issue has been oversubscribed some 17x by investors.