SG: MARKET PULSE: Raffles Med, Tiger, SIAE, ART, Osim (23 Jul 2013)

Stock Name: RafflesMG
Company Name: RAFFLES MEDICAL GROUP LTD

Research House: OCBC

Price Call: BUY

Target Price: 3.42

Stock Name: TigerAir
Company Name: TIGER AIRWAYS HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.79

Stock Name: SIA Engg
Company Name: SIA ENGINEERING CO LTD

Research House: OCBC

Price Call: HOLD

Target Price: 5.00

Stock Name: AscottREIT
Company Name: ASCOTT RESIDENCE TRUST

Research House: OCBC

Price Call: HOLD

Target Price: 1.31

Stock Name: OSIM
Company Name: OSIM INTERNATIONAL LTD

Research House: OCBC

Price Call: BUY

Target Price: 2.21

MARKET PULSE: Raffles Med, Tiger, SIAE, ART, Osim

23 Jul 2013

KEY IDEA Raffles Medical Group: Solid double-digit growth Summary: Raffles Medical Group's (RMG) 2Q13 revenue of S$86.8m (+12.9% YoY; +7.1% QoQ) and PATMI of S$14.4m (+15.9% YoY; +6.8% QoQ) were within our expectations. Topline growth was driven by both its Hospital Services and Healthcare Services divisions, which increased 16.8% and 6.5% YoY, respectively. As expected, an interim dividend of 1 S cent/share was declared, similar to 1H12. Management is currently evaluating the bids for its commercial property and will make a decision on the sale in the coming weeks. Looking ahead, we expect further operating leverage improvement by RMG as management will continue to grow its revenue, underpinned by the expansion of its specialist services. We retain our projections, and reiterate our BUY rating and S$3.42 fair value estimate on RMG, pegged to 29x blended FY13/14F EPS. (Wong Teck Ching Andy) MORE REPORTS Tiger Airways: Look beyond the bottom-line Summary: Tigerair (TR) reported weaker-than-expected 1Q14 results following continued losses from its associate airlines, which masked overall improvements in performance from Tigerair SG (TRS) and Tigerair AU (TRA). The group's operating loss had narrowed to S$6.2m from S$11.8m over the same period a year ago but 1Q14 net loss came in at S$32.8m (versus -S$13.7m in 1Q13). Nonetheless, we derive some positives from the figures as losses from its associates had actually narrowed during the quarter, and we believe the outlook for TR in FY14 remains encouraging. Adjusting our figures to account for TRA's deconsolidation and aircraft deliveries for TRS, we maintain our BUY rating on TR with an unchanged fair value estimate of S$0.79. (Lim Siyi) SIA Engineering: Uninspiring 1Q14 but within expectations Summary: SIA Engineering Company's (SIAEC) 1Q14 results were generally in line with ours and the street's expectations. Basic EPS of 6.22 S cents formed 25% of ours and 24% of the street's FY14 estimates. Revenue decreased 3.7% YoY to S$289.4m, chiefly due to lower material and fleet management revenue. Operating profit fell 19.5% YoY to S$27.7m. Share of profits from associated and JV companies increased 14.0% YoY to S$45.6m, representing a contribution of 58.0% of the group's pre-tax profits. PATMI was down 1.6% YoY to S$69.0m. We maintain our fair value of S$5.00 (EPS forecast of 25.0 S cents for FY14 and 20.0X peg) and HOLD rating on SIAEC. (Sarah Ong) Ascott Residence Trust: 2Q13 in line with street Summary: Ascott Residence Trust (ART) reported 2Q13 results that were better than our expectations but in line with the street's. Revenue fell 2% YoY to S$77.4m and gross profit dropped 4% YoY to S$41.0m. However, unitholders' distribution grew 14% YoY to S$30.9m (including a reversal of over-provision of prior years' tax expense of S$2.7m), which lead DPU rising 3% YoY to 2.45 S cents. Excluding the placement units issued in 1Q13, DPU for 2Q13 would be 2.70 cents. We place our FV of S$1.31 and Hold rating on ART UNDER REVIEW pending a briefing with management. (Sarah Ong)

OSIM International: Increases stake in TWG Tea by 10% to 45% Summary: OSIM announced that it has increased its stake in associated company TWG Tea Company Pte Ltd (TWG Tea) from 35% to 45%. The astonishing element is that the 10% stake was acquired for a total purchase consideration of only S$2. This was because the founding members of TWG Tea had failed to meet the agreed performance target for the year ended 31 Mar 2013; although we believe that the TWG Tea business is doing well. As a recap, OSIM bought a 35% stake in TWG Tea for ~S$31.36m in Apr 2011. We estimate that this additional 10% stake will have an incremental 0.6% and 0.9% impact to our FY13 and FY14 PATMI forecasts for OSIM, respectively. We maintain our BUY rating and S$2.21 fair value estimate on OSIM for now as the group is scheduled to release its 2Q13 results next Tue, 30 Jul. (Wong Teck Ching Andy) For more information on the above, visit www.ocbcresearch.comfor the detailed report.

NEWS HEADLINES - US equities climbed slightly on Monday, with the S&P 500 reaching its 23rd record close this year, as financial and healthcare counters led the market up. - Courts Asia has entered into an MOU with Sinar Mas Land, the property development part of Sinar Mas Group, to build its first two "Big-Box" outlets in Indonesia. - MFG Integration Technology expects to report a loss for 1H13 due to the weak market for semiconductor equipment worldwide. - According to the Wall Street Journal, Lotte Department Store, South Korea's largest department-store operator by revenue, is seeking to list some of its retail mall assets in the form of a trust in Singapore and could raise at least US$1b. - Aspial Corporation has issued S$50m 5% notes due 2016.