SG: MARKET PULSE: Golden Agri, ASL Marine, Swiber (10 Jun 2013)

Stock Name: GoldenAgr
Company Name: GOLDEN AGRI-RESOURCES LTD

Research House: OCBC

Price Call: BUY

Target Price: 0.63

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

Research House: OCBC

Price Call: BUY

Target Price: 0.86

Stock Name: Swiber
Company Name: SWIBER HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.86

MARKET PULSE: Golden Agri, ASL Marine, Swiber

10 Jun 2013

KEY IDEA Golden Agri-Resources: Modestly firmer CPO boost Summary: Golden Agri-Resources (GAR), being one of the largest palm oil plantation owners in the world, should benefit from the recent rebound in CPO (crude palm oil) prices to MYR2450/ton; we note that there is a strong historical correlation of nearly 0.7 between CPO prices and GAR share price. While the general outlook for commodities is still uncertain (as China's economic growth continues to sputter along), we believe that headwinds appear to be dissipating. Furthermore, management remains fairly upbeat about its prospects as it continues to expand its integrated operation capabilities to benefit from the firm industry outlook. Maintain BUY with an unchanged S$0.63 fair value (based on 12.5x FY13F EPS). (Carey Wong) MORE REPORTS ASL Marine: Ceasing coverage Summary: Among the various offshore and marine stocks, ASL Marine (ASL) is one of the counters with a more diversified business model. Its shipbuilding operations accounted for 46% of gross profit in 9MFY13, ship-repair and conversion accounted for 22%, while ship-chartering contributed 32%. The group expects the outlook of the offshore and marine industry for this year to be "good", but margins may be impacted by stiffer competition from Chinese shipyards. The long-term future of ASL looks bright, but more time would likely be needed for significant earnings growth and a re-rating of the stock. In particular, the liquidity of the stock is relatively low, partly due to the free float of ~37.8%. We last rated ASL a Buy with a fair value estimate of S$0.86. Due to a re-allocation of internal resources, we are ceasing coverage on this counter. (Low Pei Han) Swiber Holdings: More work coming up? Summary: According to Upstream, PEMEX is preparing to begin a bid process that aims to offer a contract to deliver and install four Ayatsil platforms. The group is in the pre-qualification phase for the contract, and heavy-lift contractors such as Saipem, Heerema and Swiber Holdings are said to be interested. The entire package is estimated to be worth ~US$300m. Swiber recently saw its share price run up about 23% from 14 May (pre-1Q13 results announcement) to its close on Friday, after we upgraded our rating from Hold to Buy. However we still see an upside potential of about 12% over a one-year time frame. Maintain BUYwith S$0.86 fair value estimate. (Low Pei Han)

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

NEWS HEADLINES - Sembcorp Industries Ltd. reports solid waste management unit getting a S$299m contract from NEA to provide refuse collection and recycling services to the City-Punggol sector of Singapore. - British automaker Rolls-Royce has won a contract to supply engines and support 50 of Singapore Airlines' Boeing Dreamliner jets in a deal worth US$4b at list prices. - Asian Pay Television says asset manager Thornburg Investment to raise stake in the company; buying 73.8m shares for S$53.6m. - Halcyon Agri Corp. (HACL SP) reports listing of 40m new shares at S$0.5175 each. - Armarda Group (AMDA SP) names Chu Yin Ling Karen as CFO. Chu Yin Ling was previously the Financial Controller of Armarda Group Ltd since July 2009.