30 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 : You may not be able to read a doctor's handwriting and prescription, but you'll notice his bills are neatly typewritten.
- EARL WILSON
Singapore: The Day AheadSINGAPORE DAYBOOK :China cash homes in on S'pore property. Big jump in Chinese investments here and it's not limited to the residential sector. [SINGAPORE] An influx of Chinese capital is making itself felt in Singapore real estate, and not just in the residential segment.
Looking at investment transactions above $50 million, CBRE has found that since the global financial crisis (GFC), Chinese capital invested in Singapore has been just short of $5 billion.
Petra Blazkova, CBRE head of research for Singapore and South-east Asia, noted that in the first half of 2013, Chinese money represented 69 per cent of all foreign capital invested in Singapore (for investments above $50 million).
In H1 2012, Chinese money accounted for 27 per cent of all foreign capital invested while in H2 2012, it was 67 per cent. (Source: The Business Times)
MARKET SCOOP
OKP Holdings Q2 profit plunges 77%
Swiber jumps on contract wins, Islamic bond set-up
GIC, Mitsubishi weigh Urenco bid: paper
Prices of completed private homes dipped 0.4% in June
Otto Marine signs US$170m sale and leaseback deal for two vessels
(Source: The Business Times)
DBS VICKERS Securities says...
CDL HOSPITALITY TRUSTS | BUY | TP: S$1.89
Gross revenue and NPI declined by 3% and 4% y-o-y to S$35.6m and S$32.6m respectively
The weaker operational performance from its Singapore hotels was the main culprit, which saw RevPAR declining by 8.5% y-o-y to S$193/night), while earnings from its Australian hotels were impacted by a weaker AUD-S$ exchange rate
The contribution from Angsana Velavaru (cS$1.9m), acquired in 1Q13, mitigated the fall in income. Income available for distribution (after retained income) was 6.4% lower y-o-y at S$26.4m, translating to a DPU of 2.72 Scts ( -6.8% y-o-y)
Faced with a weak corporate market and competition from new hotels, CDREIT's Singapore hotels, contributing c75% of topline, have performed fairly well in our view - portfolio occupancies for its Singapore portfolio remained fairly firm at 87.7% but average daily rate was 6.8% lower at S$220/night (-6.8% y-o-y), which might have been a result of the substitution effect from sourcing replacement demand from leisure travelers which typically pays lower rates
Looking ahead, the group is seeing demand stabilizing in 3Q13 with bookings for the Sept'13 Formula One race looking brighter compared to a year ago
Thus, 2H13 performance is likely see a sequential improvement
Albeit short term uncertainties, we believe that the stock offers a re-look at close to 1x P/BV, forward yields of c6.5-6.8%
Acquisitions are a likely feature as management undertakes a more aggressive stance towards growth, with an aim to achieve further portfolio diversification, which is not factored in our forecasts
Stock offers a total return of 18% to our revised TP of S$1.89 (adjusted for higher risk free of 2.8% vs 2.1%)
NOMURA Securities says ...
BIOSENSORS INTERNATIONAL | BUY | TP: S$1.80
We caught up with the management of Biosensors at its AGM yesterday and highlight the following takeaways:
Management indicated that it will continue to be on the lookout for M&A opportunities to grow the group into a global medical devices platform group
The acquisition of Spectrum Dynamics (SD) provides an opportunity for the group to broaden its offering in the cardiovascular space
The SD imaging machine could potentially help doctors ascertain the appropriate treatment for patients with heart disease
A trial is being conducted in Japan to confirm the applications that the SD imaging machine can offer
As at 31 March 2013, Biosensors has a net cash position of US$337m
Management appeared confident of its guidance of 15% growth in product revenue, underpinned by its core DES business as it gains market share in spite of a stagnating global DES market
Biosensors will launch 4 new products this year including Biomatrix Neoflex, BioFreedom and two balloon catheters under license from Eurocor
Through joint marketing efforts with Terumo, Biosensors hopes to stabilize its market position in Japan and improve sales
Plans are underway to seek regulatory approval for BioFreedom in Japan
To a question from a shareholder if the group will address the US market, management indicated that while the US market is attractive, the group will need to find the best way to address the market eventually
Enrolment for both its LEADERS FREE and GLOBAL LEADERS trials are progressing well
(LEADERS Free is a prospective, randomized double blind trial between a DES and a bare metal stent involving patients with high risk of bleeding
The primary end point is safety with one month course of DAPT.)
The data from LEADERS FREE will be used to support the marketing of BioFreedom
We reiterate our Buy Rating for Biosensors with price target of S$1.80
The shares look attractively valued at 12x FY2014 EPS with an earnings CAGR of 11% over the next 3 years
UOB KAY HIAN says...
SWIBER HOLDINGS | BUY | TP: S$0.86
Swiber has announced it has secured US$435m of new contracts, of which US$350m worth of contracts were secured by the Swiber Group while US$105m were clinched by a Swiber Group JV company
We have assumed US$800m worth of new contracts for 2013 in our 2013-15F earnings forecasts
Prior to today's announcement, contract wins were lagging expectations
Swiber had won only US$153m worth of new contracts - announced in February - as the group was bidding for three large projects (worth US$300m each) which were taking a while to conclude
With today's announcement, Swiber's gross contract wins ytd now stand at US$588m (including external JV shares)
We are maintaining our contract win projection of US$800m (net basis, excluding external JV shares) for 2013
No change in our earnings forecasts and target price of S$0.86, which is pegged at 6.2x 2014F fully-diluted EPS |
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