SG: Market Pulse: ComfortDelgro, KepLand (20 Jun 2013)

Stock Name: ComfortDelGro
Company Name: COMFORTDELGRO CORPORATION LTD

Research House: OCBC

Price Call: BUY

Target Price: 1.95

Stock Name: KepLand
Company Name: KEPPEL LAND LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 4.59

MARKET PULSE: ComfortDelgro, KepLand

20 Jun 2013

KEY IDEA ComfortDelGro: Good entry point Summary: We are upgrading ComfortDelgro to BUY as its share price has shown signs of stabilising since the partial stake sale by the SLF about a month ago. In our view, the group remains a high-quality counter with unchanged fundamentals and positive growth drivers from its overseas operations. Furthermore, while the group continues to face domestic challenges in the absence of a fare increase, we view the recent fare review delay as an indication of a more sustained and beneficial fare review structure in the long-run. We leave our fair value estimate of S$1.95 unchanged. (Lim Siyi) MORE REPORTS Keppel Land: Secures residential site in Shanghai Summary: KPLD announced that it has acquired a 17.5ha residential site in Shanghai's Seshan area for RMB1.33b (S$266m) on which it would develop ~200 landed homes with 250-350 sqm GFA each. The site is 20km away from Shanghai Hongqiao International Airport and 32km from the city centre and is KPLD's ninth project in the city of Shanghai. Assuming a total net saleable area of 60k sqm and construction costs of RMB6k psm, we estimate an RNAV accretion of 3.5 S-cents per share. We update our model for this acquisition and latest assumptions and our fair value estimate increases marginally to S$4.59 (25% discount to RNAV) from S$4.53 previously. Maintain BUY. (Eli Lee)

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

NEWS HEADLINES - US stocks fell sharply and Treasury yields surged on Wednesday after Federal Reserve Chairman Ben Bernanke said the central bank may scale back its bond purchases this year, depending on the economic outlook. - The Singapore government will make another 22 plots of industrial land available in 2H13, to moderate land prices and provide sufficient space for industrial end-users. - Companies in Singapore are more upbeat now about business prospects for the next six months than they were in the first quarter of the year. - Fitch Ratings has affirmed Genting Singapore's long- term foreign and local currency debt rating at A- and its SGD denominated perpetual capital securities at BBB. - Investment sales of property, which cover big-ticket deals of S$10m and above, continued to drop in 2Q13. - Iskandar Malaysia's appeal remains intact for investors optimistic about its long-term prospects, but some are turning cautious on the sustainability of the skyrocketing property prices in light of ample supply in the coming couple of years. - Tat Hong Holdings has established a S$500m multicurrency medium term note (MTN) programme. - Smog levels in Singapore from Indonesian forest fires hit the highest level on record as the air pollutant index breached the "hazardous" level.