15 July 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 :Love of beauty is taste. The creation of beauty is art.
- RALPH WALDO EMERSON
Singapore: The Day AheadSINGAPORE DAYBOOK : No to bank-developer tie-ups. New MAS rule prohibits preferential rates for property loans to clients buying designated properties [SINGAPORE] The government is clamping down on a common practice where property developers and agents tie up with banks to sell property: it has introduced a wide-ranging rule that will, among several things, stop banks from offering preferential interest rates for loans to clients who buy designated properties.
BT understands that the Monetary Authority of Singapore (MAS) informed financial institutions (FIs) of this new rule in a letter sent out on the same day the new property loan rules were announced in late June. All forms of tie-ups with property developers and agents are not allowed under this new rule, which took effect from June 29.
Asked about the regulation, an MAS spokesman told BT: "MAS is of the view that, except for the granting of property loans, FIs should not be offering any property-related services to customers in general. FIs should therefore not engage in property advertisements or tie-ups with property developers/agents.
"This is regardless of the location of the property (in Singapore or overseas) or the type of the property (residential, commercial or industrial). MAS will take into account an FI's compliance on this issue, in its supervisory assessment of the FI."
(Source: The Business Times)
MARKET SCOOP
Ezra dips after earnings disappoint
Sale-and-leaseback deal "a poor sale" for AusGroup: DMG
Sales at Vue 8 launch tempered by new home loan curbs
FDI cap in Indian telcos to be lifted soon
Update: S'pore Q2 growth surges but economy still not out of woods
Singapore dollar turns higher after solid Q2 growth
(Source: The Business Times)
UOB KAY HIAN says...
TRIYARDS HOLDINGS | BUY | TP: S$1.11
Triyards reported a net profit of US$7.5m for 3QFY13, in line with our forecast of US$7.3m
9MFY13 net profit of US$21.1m formed 70.3% of our full-year profit forecast
3QFY13 revenue and profit declined by 61% yoy and 55% yoy respectively, mainly due to lower revenue recognised for the construction of the subsea construction vessel Lewek Constellation (Constellation)
The Constellation is currently berthed in Vietnam and is expected to leave the yard in September for final outfitting work
3QFY13 gross profit margin of 19% was 6ppt higher than 3QFY12, as: a) certain SEU projects achieved cost savings from fabrication as well as procurement of material and equipment, b) two ship repair projects were completed, and c) one offshore fabrication project was completed in 3QFY13
Triyards' reported end-3QFY13 net gearing was 29%, compared with 60% at end-FY12
Triyards net orderbook stands at US$264m, which will be fully recognised by FY14
Triyards recently commissioned afloating dock for ship repair and has completed its first ship repair work for the Mermaid Challenger
According to management, the floating dock will be able to service up to 20-30 offshore support vessels (OSV) per year and we estimate incremental full-year earnings contribution of US$2m-3m
Management indicated that after a round of roadshows in the US, Triyards is seeing strong interest for their proprietary third-generation self-elevating units (SEU).
These third-generation units (TDU-400) will incorporate drilling and construction capabilities, unlike the previous generation units which can only perform servicing work
The third-generation units will have the capabilities of a full-fledged jack-up rig, but at a 20% discount
These units will cost up to US$160m-180m, compared with US$60m and US$90m for third-party designed first- and second-generation liftboats respectively
No change in earnings forecast
Maintain BUY and unchanged target price of S$1.11, pegged at 7.9x FY14F PE, a 10% discount to peers' average of 8.8x FY14F PE, due to Triyards' shorter operating track record and lumpy profit recognition from Ezra's Constellation, which comprises 17% of FY14F net profit
CREDIT SUISSE Securities says ...
VARD HOLDINGS LTD | UNDERPERFORM | TP: S$0.80
Following a profit warning on 28 June, Vard reported a 2Q13 net loss of NKr20 mn driven mainly by execution challenges in its Brazil operations
While 2Q13 EBITDA margin of 4.1% was in line with our forecast, the company was further impacted by a NKr70 mn write-down of goodwill for its Niteroi yard in Brazil
In Niteroi, the remaining four vessels are expected for be delayed by a quarter on average
Vard was also impacted by higher start-up costs in its new Promar yard, as well as cost escalations for two LPG carrier hulls subcontracted to CGU-Rio Nave on a cost-plus contract
During the analyst briefing, management provided little clarity on the individual factors driving margins decline
There was also no margin guidance provided for 2H13, as profit could continue to be impacted until the last vessel in Niteroi is delivered in 4Q14
While consensus 2013 EPS has been reduced by 14% since the profit warning, we believe there could be further 30% downside
Given limited earnings visibility until the challenges are resolved, we maintain our UNDERPERFORM rating and TP of S$0.80
OCBC Securities says...
ST ENGINEERING | HOLD | TP: S$3.97
ST Engineering (STE) announced that its aerospace arm, ST Aerospace, has secured new contracts worth about S$430m in 2Q13
This includes the exclusive component Maintenance-By-the-Hour contract worth S$32.25m awarded by Spring Airlines Japan, and the five-year Multi-crew Pilot Licence training contract from Qatar Airways announced in June 2013
In the VIP cabin reconfiguration business, ST Aerospace secured three deals involving Boeing Business Jets (BBJ): a cabin design contract in Eastern Europe, a 12-year maintenance check and interior refurbishment project on a Boeing 737 belonging to a returning Middle Eastern customer, and a maintenance and interior modification contract awarded by a US customer
The magnitude of the contract wins is in line with our expectations
We maintain our fair value estimate of S$3.97 and HOLD rating on STE |
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