SG: MARKET PULSE: Goodpack, Petra Foods, Keppel Corp (5 Jun 2013)

Stock Name: Goodpack
Company Name: GOODPACK LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 1.80

Stock Name: Petra
Company Name: PETRA FOODS LIMITED

Research House: OCBC

Price Call: SELL

Target Price: 3.88

Stock Name: Kep Corp
Company Name: KEPPEL CORPORATION LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 12.68

MARKET PULSE: Goodpack, Petra Foods, Keppel Corp

5 Jun 2013

KEY IDEA Goodpack Limited: A buying opportunity With the official opening of Lanxess's synthetic rubber plant in Singapore, we expect production to commence in 1QFY14, and Goodpack will be able benefit corresponding given the additional IBCs that it had procured earlier. In addition, the plant will only reach full capacity utilization by 2015, so that means Goodpack will be able to enjoy incremental earnings until the plant reaches a steady state of production. With another deal in the pipeline (Asahi Kasei), its prospects look positive in the coming quarters. That said, as its share price fell by as much as 4.4% since our last update, we deem that a buying opportunity has emerged for the stock. Therefore, we are upgrading Goodpack to BUYwith an unchanged fair value estimate of S$1.80. (Lim Siyi) MORE REPORTS Petra Foods: Time to cool off for summer A potential inflection point may be emerging for Petra Foods as a result of a possible slowdown in consumer demand growth in Indonesia and a larger-than-expected loss from its cocoa ingredients segment in 2Q13. For the former, the suggested removal of fuel subsidies could adversely affect consumer spending due to the higher level of dependency by the lower-income groups, which make a larger proportion of the population. In addition, Petra could experience greater cost pressures related to distribution, etc. For the latter, a larger-than-expected loss could materialize as other cocoa processors in the industry have issued profit warnings recently, and this could lead to a bigger drag for Petra in terms of its FY13 performance. Therefore, we downgrade Petra to SELL with an unchanged fair value estimate of S$3.88. (Lim Siyi) Keppel Corporation: Secures US$800m semi-sub rig for the Caspian Sea Keppel Corporation (KEP), through its subsidiaries, has secured a US$800m contract from Caspian Drilling Company, a unit of the State Oil Company of Azerbaijan Republic (SOCAR), to build a semi-submersible drilling rig which includes owner furnished equipment. Scheduled for delivery in 4Q 2016, the rig will be built to Keppel FELS' proprietary DSSTM 38M design, which has been customised for the harsh environment in the Caspian Sea. Having operated in Azerbaijan since 1997, KEP has built a strong relationship with SOCAR, and understand the requirements of rigs for the Caspian region. With this win, KEP has secured orders worth about S$3.1b YTD, accounting for 63% of our full year estimate. Maintain BUY with S$12.68 fair value estimate. (Low Pei Han)

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

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