07 June 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 : When you forgive, you in no way change the past - but you sure do change the future.
- BERNARD MELTZER
Singapore: The Day AheadSINGAPORE DAYBOOK:Sembcorp plans IPO of water, power JV in Oman SEMBCORP, which inaugurated its new US$1 billion independent water and power project (IWPP) in Salalah, Oman, last month, is preparing for an initial public offering of the IWPP's JV company on the Muscat Securities Market.
The Sembcorp Salalah Power and Water Company, in which Sembcorp Utilities holds a majority 60 per cent stake, will see its stake diluted by 35 per cent after the IPO, reports said.
Other stakeholders are Oman Investment Corporation with a 35 per cent stake, and Bahrain-based Instrata Capital with 5 per cent.
The Times of Oman reported this week that company officials have started discussions with the Capital Market Authority (CMA) on the share issue. (Source: The Business Times)
MARKET SCOOP
Civil servants to get 0.4-month mid-year bonus
Singapore's Aaa rating reflects very sound fundamentals: Moody's
STI falls to 4-1/2 month low; banks drag
DBSraises Ezion Holdings earnings forecast
Potential offer to buy 51% Ramba at 60-70 cts/shr: Ramba
(Source: The Business Times)
DBS VICKERS Securities says...
EZION HOLDINGS | BUY | TP: S$3.00
We revisited our earnings model for Ezion in an attempt to estimate its growth potential beyond its existing fleet and FY14
In our base case scenario, Ezion could add a further 4 vessels to its fleet during the rest of FY13 and another 8 in FY14 if it gears up to 1.3x, resulting in a 3/15% increase in our FY14/15F core earnings
Our recurring 3-year EPS CAGR will rise from 49% to 56%
There is room for further upside to our revised numbers from JV projects, sales & leaseback and equity raising exercises, which we have not factored in yet
As a relatively young player that started off in 2007, Ezion has made a significant breakthrough by securing liftboat/service rig contracts from national and independent oil companies for offshore Malaysia, Indonesia, Brunei, Myanmar, Vietnam, India, Middle East, and even as far as Denmark and Mexico
Given the low penetration rate of liftboats in Southeast Asia, Ezion is well positioned to ride the potential rising substitution for liftboats and service rigs over workboats in the region. In addition, its strengthening ties with Pemex would allow Ezion to tap into the robust offshore activities in GOM
We like Ezion's unique business model that offers fascinating growth and high earnings visibility supported by long term contracts of 3-5 years
Ezion deserves to trade above the average of its small-mid-cap O&G service provider peers (10x PE) and closer to its 5-year peak of 19x
Hence, we are lifting our valuation peg from 12x to 14x, on revised blended FY13/14F recurring EPS, to arrive at a higher TP of S$3.00
UOB KAY HIAN says ...
OVERSEAS UNION ENTERPRISE | BUY | TP: S$3.63
Overseas Union Enterprise (OUE) received the "eligibility to list" letter for the IPO of OUE REIT on the SGX
OUE also confirmed that Mr Chong Kee Hiong, the former CEO of The Ascott Limited, will be the CEO and Director of the manager of OUE REIT, if the offering occurs
We believe that the initial portfolio will comprise the Mandarin Orchard hotel and Mandarin Gallery with a combined portfolio value of S$1.77b
We understand that the debt for these two portfolio assets is about S$750m leaving significant room for special dividend
Management has also hinted at the possibility of a special dividend for shareholders post the listing of the REIT
Crowne Plaza Changi hotel and Serviced residence at DBS Tower One will form the key pipeline assets
Reuters reported that OUE is planning to begin pre-marketing for the REIT from next Monday in a deal that could raise up to US$800m (S$999m)
Mr Chong Kee Hiong brings immense experience in the hospitality industry having served as the Chief Executive Officer of The Ascott Limited in his last appointment, the Chief Executive Officer of Ascott Residence Trust from March 2006 to February 2012 and the Chief Financial Officer of Raffles Holdings Limited prior to that
We have a BUY recommendation on OUE with a target price of S$3.63/share, pegged at 20% discount to our RNAV of S$4.54/share
OUE is trading at a steep 33% discount to its RNAV
OCBC Securities says...
MIDAS HOLDINGS | BUY | TP: S$0.54
Midas Holdings (Midas) announced that its 32.5%-owned JV company Nanjing SR Puzhen Rail Transport (NPRT) has, together with its consortium partners Shanghai ALSTOM Transport Electrical Equipment and ALSTOM Transport S.A., clinched a CNY1.1b metro contract
This is for the supply of 29M train sets (or 174 train cars) for the Nanjing Metro Line 4 Phase 1 project
Delivery is scheduled from 2014 to 2016
Although NPRT's percentage share of the contract was not disclosed, we believe that it may be around the 70-75% range, after taking reference from previous contract wins by NPRT and its consortium partners
This would equate to a contract amount of ~CNY770-825m for NPRT, which is a sizeable win, in our opinion
Maintain BUY on Midas, with an unchanged fair value estimate of S$0.54, pegged to 1.1x FY13F P/B |
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