SG: MARKET PULSE: Raffles Med, ST Eng, TEE (29 Oct 2013)

Stock Name: RafflesMG
Company Name: RAFFLES MEDICAL GROUP LTD

Research House: OCBC

Price Call: BUY

Target Price: 3.61

Stock Name: ST Engg
Company Name: SINGAPORE TECH ENGINEERING LTD

Research House: OCBC

Price Call: HOLD

Target Price: 4.11

Stock Name: Tee Intl
Company Name: TEE INTERNATIONAL LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.35

MARKET PULSE: Raffles Med, ST Eng, TEE

29 Oct 2013

KEY IDEA Raffles Medical Group: Still delivering growth Raffles Medical Group (RMG) reported 3Q13 revenue and PATMI growth of 8.0% and 10.3% YoY to S$85.1m and S$13.9m, such that 9M13 figures formed 72.8% and 68.7% of our full-year estimates, respectively. This was within our expectations. Looking ahead, RMG is seeking to finalise the negotiations for its proposed China hospital expansion plans with its partners; while the completion of sale of its Thong Sia building in 4Q13 would boost its FY13F net cash balance to S$241m (based on our estimates). We incorporate the gain in sale of the property in our forecasts and our FY13 PATMI estimate is bumped up by 35.2% to S$82.1m. Nevertheless, we view this gain as exceptional in nature and our valuation on RMG is also unaffected as it is premised on 29x FY14F EPS. Maintain BUY and fair value estimate of S$3.61 on RMG. (Wong Teck Ching Andy) MORE REPORTS ST Engineering: ST Aerospace wins Jetstar Asia line maintenance contract ST Aerospace, the aerospace arm of ST Engineering (STE), and Jetstar Asia have announced the signing of a three-year line maintenance contract. The agreement covers a full suite of line maintenance support for Jetstar Asia's existing and future fleet of Airbus A320 aircraft. ST Aerospace has been supporting Jetstar Asia since 2004 for a wide range of maintenance services on their fleet of A320 aircraft. The contract is not expected to have any material impact on the consolidated net tangible assets per share and EPS of STE for the current financial year. Hence, we maintain our fair value estimate of S$4.11 and HOLD rating on STE. (Sarah Ong) TEE International: Conditional LOI for Marina South Project Tee International announced that it has signed a conditional letter of intent with Hyundai Mechanical and Construction Co., Ltd to deliver a S$142m Mechanical and Electrical (M&E) Package for the Marina South Mixed Development Project. The package is expected to have a duration of 28 months. We see this as a positive development which would significantly replenish the group's order book. Together with the Marina One Package, the group's current outstanding order book would stand at approximately S$317m. Maintain HOLD on Tee International with a fair value estimate of S$0.35. (Eli Lee)

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