31 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 : Music is everybody's possession. It's only publishers who think that people own it.
- JOHN LENNON
Singapore: The Day AheadSINGAPORE DAYBOOK :Bid for Jurong EC plot raises the roof and breaks record [SINGAPORE] An all-time record price for executive condominium land has been set for a plot in Jurong, an area which has been starved of new EC supply. Located near Jurong Country Club, the 99-year leasehold plot received a top bid of $418.53 per square foot per plot ratio (psf ppr) amid strong participation from 16 bidders. The buzz in the location, following strong sales at J Gateway condo last month, also contributed to the strong demand for the EC plot.
However, two other EC sites - both in Punggol - whose tenders also closed yesterday in a bid by the authorities to rein in bullish bids for EC land - fetched top bids of about $355 psf ppr and $356 psf ppr, just a shade above the $351 psf ppr that a plot at Punggol Field Walk/Punggol East drew in December. Analysts said this was probably because developers were mindful of a possible saturation of EC and 99-year private condo projects in the Punggol/Sengkang location.
ECs are a public-private housing hybrid with initial buyer eligibility and resale restrictions which are completely lifted 10 years after the completion of an EC project.
Some analysts said the government's attempt to have simultaneous tender closings for three EC sites does not seem to have had its desired impact of tempering tender bids, while others suggest it may be too early to declare the experiment a failure.
(Source: The Business Times)
MARKET SCOOP
SMRT's Q1 profit plunges 55.2%
UOI's Q2 net profit down 32.1%, keeps dvd of 3cts
OsimQ2 profit up 16%
DBS offers protection for mortgages against rising rates
Soilbuild Business Space REIT plans to offer 586.53m units at 77-80 cts each
Fortune Reit plans to buy HK property for HK$5,849m, plans placement
Q & M to buy 60% of Chinese dental group for S$21.6m
LionGold to buy Canadian gold firm for up to S$9.1m
(Source: The Business Times)
DBS VICKERS Securities says...
OKP HOLDINGS | FULLY VALUED | TP: S$0.35
2Q13 net profit plunged 77% y-o-y, 70% q-o-q to S$0.7m
While revenue came in at S$30.1m (+27.5% y-o-y, -6% q-o-q), gross margins declined by 16.1ppts as a result of higher subcontracting costs and low margin work
1H13 earnings amounted to S$3.1m, accounting for just 30% of our previous forecast (net profit: S$10.1m)
Margins to be depressed for another quarter
The collapse in margins was affected by higher subcontracting costs, in particular construction work on Angullia Park
The project was mostly subcontracted to third parties, and yielded very low margins but yet contributed close to 20% of 2Q13 revenue
Angullia Park will continue to book in revenue till next quarter and we expect margins to continue to be depressed in 3Q13 as well
Weak visibility for project wins
Project rollout by the government has been slow in 1H13
To date, OKP has secured only S$52m of contracts compared to our S$130m project win expectations for FY13F at the start of the year
Going forward, we expect project wins to come from the low value, low margin maintenance segment from 1) slow roll out of road works by LTA as it prepares to tender out work for the Thomson Line MRT; 2) continued roll out of drainage works by PUB to address flooding issues
We cut FY13F/14F earnings by 42%/12% as we expect to see weak margins for at least another quarter
Growth for FY14F will be driven by projects secured in FY12 and FY13, but we see pace of project wins slowing that will cause earnings decline in FY15F
Our SOTP-based TP is reduced to S$0.35
Maintain Fully Valued
We will be suspending coverage on OKP
CIMB Securities says ...
SWIBER HOLDINGS | OUTPERFORM | TP: S$0.91
Swiber has announced contracts of US$435m, comprising US$330m under the Swiber Group and US$105m from its JVs
We understand that the US$330m itself is split into two major contracts:US$200m+ and US$100m(areas of work and customer details undisclosed)
The above contracts will be largely executed in 2014-15
Earlier this year, Swiber's tender book was about US$2bn,with jobs from Mexico (US$500m), India (US$100m-200m), Brunei (US$300m) and Indonesia (US$1bn)
We believe some of these bids have come to fruition and see more orders in the next quarter
Given the nature of the industry, contract awards could be lumpy
We keep our US$800m target for the year
We see catalysts from more orders and stronger-than-expected quarterly earnings
Swiber beat our expectations in 1Q13 with a core profit of US$22m from higher-than-expected revenue
We expect net profit in 2Q13 to be about US$15m-18m
Results will likely be announced in mid-Aug
Maintain Outperform and target price at 0.9x CY13 P/BV (30% below its 5-year mean)
YTD contracts have reached US$578m or 72% of our US$800mtarget
No change to our EPS as the above orders form part of our assumptions
We still see catalysts from stronger-than-expected orders and quarterly earnings
UOB KAY HIAN says...
GENTING HONG KONG | HOLD | TP: US$0.41
GENHK's 43.4% jointly-controlled entity, NCL Holdings, reported its 2Q13 results, with EBITDA of US$149m (+11.6% yoy)
1H13 EBITDA of US229m (+1.5% yoy) is in line with our full year EBITDA forecast of US$639m, after taking into account the seasonally strong 3Q13, and additional contribution from its newest vessel, the 4,000 berth Norwegian Breakaway, which commenced deployment in May 13
Revenue rose 10.5% yoy to US$644m in 2Q13, driven by an 8.2% yoy increase in capacity days
The improved passenger ticket and on-board and other revenues, along with slower growth commissions, transportation and on board expenses rose at a slower 6.3% yoy lifted net yields
NCL again booked a US$70.1m exceptional charge in 2Q13 relating to write offs and expenses related to two refinancing transactions
While the transactions will strengthen NCL's balance sheet and reduce interest expense going forward, the expenses in relation to these transactions dragged 2Q13's bottomline to a net loss of US$8.8m for 2Q13 (recall that NCL recognized US$110.4m in expenses in relation to pre-payments and debt redemptions and related expenses)
This brings 1H13's cumulative reported net loss US$105m, weighing down contributions to GENHK (we had forecast a full year net profit contribution of US$107m)
Look forward to a stronger 2H13, lifted by the seasonally strong 3Q13 (3Q typically accounts for 40% of full year EBITDA)
We maintain our HOLD call on GENHK pending the release of its 1H13 results
Our conservative valuations mainly factor in uncertainties at RWM - the current tax liability issue and a sharp rise in industry capacity that could erode RWM's dilute returns
Nevertheless, in the near term, GENHK's valuation could temporarily improve as its near term earnings momentum remains intact, driven by NCL and the resilience of RWM |
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