18 Oct 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 : Architecture should speak of its time and place, but yearn for timelessness.
- FRANK GEHRY
Singapore: The Day AheadSINGAPORE DAYBOOK : Improving tertiary education not just a numbers game: PM Lee. Unis must provide skills relevant in the future and which lead to good jobs [SINGAPORE]The government's efforts to improve Singapore's tertiary education system cannot be just about increasing the number of university places, says Prime Minister Lee Hsien Loong.
Some countries have found that having a large proportion of their students going to universities "does not necessarily guarantee happy outcomes", he said at the opening ceremony of the National University of Singapore's (NUS) University Town campus last night.
About 27 per cent of each cohort of students currently get a place in one of Singapore's publicly funded universities, and the target is to hit 40 per cent by 2020.
In his speech, Mr Lee talked about the situation in South Korea, where more than 70 per cent of each cohort attend university. (Source: The Business Times)
MARKET SCOOP
Cosco Shipyard unit bags contracts worth US$233.3m
SGX Q1 net profit rises 24% as revenue gains
Grow-Tech Properties is top bidder for both Gambas Crescent plots
Qian Hu reports S$88,000 Q3 profit
Keppel Corp Q3 net profit rises 32% on property earnings
Planned OUE Reit to include Shanghai's Lippo Plaza
Asiasons to relook Black Elk deal after SGX rejects new share issue
Singapore NODX contracts 1.2% in Sept
(Source: The Business Times)
DBS VICKERS Securities says ...
PAN-UNITED CORPORATION | BUY | TP: S$1.21
Post acquisition of MIIF's 34.2% stake for S$101m (out of MIIF's 38% in CXP), CXP now contributes more significantly to PAN's earnings (27% vs 18% previously)
Based on our estimates, the acquisition is earnings accretive and will improve FY14F's earnings by 10%
We visited CXP port to gain further insight to its operations and have confidence that CXP is capable of contributing a sustainable stream of earnings to PAN going forward
CXP is strategically located along the Yangtze River and is capable of serving 100,000 dwt vessels
CXP enjoys a low 30% breakeven utilisation for its operations with port operational functions outsourced to third parties
Cargo volumes have grown at 9% CAGR since 2005
We expect cargo volumes to be supported by robust log demand and expansion of steel and paper mills in the area
As there is no longer a requirement that was made by MIIF to pay out 100% of earnings as dividends at CXP's level, management has more financial resources available to further develop the port in areas such as warehousing
The CXP visit has given us confidence that earnings will be sustainable going forward We have not made any major changes to our forecast and outlook for now
PAN should be able to maintain DPS despite retaining some portion of CXP's earnings for port development
Reiterate BUY and S$1.21 TP
UOB KAY HIAN says ...
SINGAPORE AIRLINES | HOLD | TP: S$11.50
Pax traffic rose 1.8% in Sep and 4.9% for 2QFY14. 2Q loads improved 1.3ppt on the back of strong demand during Hari Raya period coupled with summer holiday leisure travel
Cargo traffic declined 6.7% in sep and 7.2% during the quarter
Key highlight was the 4.5ppt improvement in Europe loads for the quarter
SIA attributed the improvement to better capacity management rather than a demand pickup
SIA noted that efforts to boost loads continue to place downward pressure on yields
Yields fell 2.6%yoy in 1Q due to competition and forex impact
Loads fell 4ppt for Sep and 3.5ppt for 2Q marking the seventh consecutive month of decline
Key reason was the 11.8ppt decline in West Asia loads as capacity growth far outpaced demand increase
Overall some encouragement on the pax front with loads improving 4.9%yoy and 2.1%qoq
2Q loads are 1.3ppt above 2Q13 break-even loads indicating better results if yields remain firm.SIA will be reporting the results on 12th Nov(after market close)
We will do a detailed results preview closer to the announcement date
Maintain HOLD fair price of S$11.50, valuing it at 0.8x FY14's book value(ex- SIAEC)
NOMURA Securities says...
ASCENDAS REIT | BUY| TP: S$2.61
AREIT reported its 2QFY14 results on 16 October after the market closed
2QFY14 DPU of 3.6Scts (+2%y-y; +1.4%q-q) brought the 1HFY14 DPU to 7.2Scts (+1.3%y-y), which met 53.1% of our full year forecast of 13.5Scts
The better-than-expected 1H performance was principally on account of: 1) marginally higher NPI; 2) lower net interest expense and 3) higher distribution from AREIT's China investment
AREIT's aggregate leverage was 29.7% as of end-September (from 28.6% as of end-June; 30.5% if committed but yet-to-be-funded capex of SGD73mn were to be included)
The SGD395mn CMBS due in mid-2014 could be refinanced by drawing from the SGD1.2bn revolving credit facility (33% drawn as of end-September), according to management
The 2.1-3.7%q-q decline in market rents for AREIT's Business and Science Park (BSP) as well as light industrial and flatted factory portfolios during the quarter suggests a still challenging operating environment
That being said, AREIT's overall portfolio appears to have held up quite well despite the challenges
New and expansion leases of 53,461 sq m were signed during the quarter (vs. 44,873 sq m in 1QFY14 and 28,628 sq m in 2QFY13) with an increase of 1.5-14% in new take up rates (vs. a decline of 2.6-8% during the previous quarter)
On a same-store basis, overall portfolio occupancy was slightly higher at 94.9%, vs. 94.8% at the end of the previous quarter
With the exception of the previous Ultro Building (no pre-commitment yet) and the LogisTech new annex block (still in negotiation with prospective tenant), leasing for newly created space within the portfolio also appears brisk
Commitment at Nexus increased to 73.9% by end-September (from 55.7% at end-June) and management expects commitment to exceed 80% soon
The new factory block at Techplace II is now 22% committed
Pre-commitment of the upgraded space at 31 IBP improved to 81.5% as of end-September (from 76.7% at end-June)
Including leases under offer, the new warehouse space at Xilin Districentre Building D is almost fully committed
In our view, AREIT's valuation remains relatively undemanding at P/B of 1.2x, based on the end-September book value of SGD1.90/unit, compared to the historical trading average of 1.3x
Maintain Buy |
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