SG: MARKET PULSE: Wilmar, ART, First REIT, StarHill REIT, Ezion, Raffles Med, Triyards (28 Oct 2013)

Stock Name: Wilmar
Company Name: WILMAR INTERNATIONAL LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 3.33

Stock Name: AscottREIT
Company Name: ASCOTT RESIDENCE TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.39

Stock Name: First REIT
Company Name: FIRST REAL ESTATE INV TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.18

Stock Name: Starhill Gbl
Company Name: STARHILL GLOBAL REIT

Research House: OCBC

Price Call: BUY

Target Price: 0.95

Stock Name: EzionHldg
Company Name: EZION HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 2.90

Stock Name: RafflesMG
Company Name: RAFFLES MEDICAL GROUP LTD

Research House: OCBC

Price Call: BUY

Target Price: 3.61

Stock Name: Triyards
Company Name: TRIYARDS HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.88

MARKET PULSE: Wilmar, ART, First REIT, StarHill REIT, Ezion, Raffles Med, Triyards

28 Oct 2013

KEY IDEA Wilmar: Downgrade to HOLD on valuation Summary: Wilmar International Limited's (WIL) share price has done very well since we upgraded our rating to Buy on 6 Sep, rising as much as 14% to a recent high of S$3.50. As the current price is also 4% above our S$3.33 fair value (still based on 12.5x blended FY13/FY14F EPS), we downgrade our call to HOLD on valuation grounds. We also do not see any strong near-term catalysts to justify a re-rating before its 3Q13 results due 7 Nov. (Carey Wong) MORE REPORTS Ascott Residence Trust: 3Q13 ahead of expectations Summary: ART announced 3Q13 results that were ahead of ours and the street's expectations. Revenue climbed 11% YoY to S$86.1m, chiefly due to additional revenue of S$14.1m from the properties acquired in second half last year and on 28 Jun 2013. The increase was partially offset by the decrease in revenue of S$4.7m from the divestment of Somerset Grand Cairnhill in Sep 2012 and lower contribution of S$0.7m from the existing properties, mainly properties in Philippines and Japan. The group achieved a RevPAU of S$133 in 3Q13, a decrease of 10% as compared to 3Q12. The decrease in RevPAU was mainly due to divestment of Somerset Grand Cairnhill Singapore and weaker performance from Philippines and Japan. Gross profit climbed 10% YoY to S$44.8m. Unitholders' distribution increased 17% YoY to S$30.0m. DPU rose 6% YoY to 2.37 S cents, bringing 9M13 DPU to 7.07 S cents, versus full year estimates of ours and the street of 8.9 S cents and 9.0 S cents respectively. Adjusting our assumptions, our FY13F DPU forecast increases from 8.9 S cents to 9.1 S cents and our FV increases to S$1.39 from S$1.37. We maintain our BUY rating on ART. (Sarah Ong) First REIT: 3Q13 DPU below expectations Summary: First REIT (FREIT) reported 3Q13 revenue of S$22.8m and DPU of S$0.0196, representing an increase of 60.7% and 16.7% YoY, respectively. For 9M13, revenue jumped 43.1% to S$60.4m and was within our expectations. However, DPU of S$0.0555 (+14.2% after excluding exceptional distributions) was below due to higher-than-estimated expenses. Looking ahead, FREIT will continue to seek opportunities at expanding its footprint in Indonesia, given her growing healthcare market and the strong pipeline of possible acquisition targets from its sponsor Lippo Karawaci. We maintain our revenue estimates but tweak our DPU forecasts for FY13 and FY14 downwards by 4.4% and 1.9%, respectively. This correspondingly lowers our DDM-derived fair value estimate from S$1.20 to S$1.18. Given a decent FY14F dividend yield of 7.5%, we maintain our BUY rating for FREIT. (Wong Teck Ching Andy) Starhill Global REIT: Delivering as promised Summary: Starhill Global REIT (SGREIT) reported 3Q13 DPU 1.21 S cents, up 9.0% YoY. This brings the 9M13 DPU to 3.77 S cents, in line with our expectations. SGREIT's Singapore portfolio continued to benefit from Wisma Atria (WA) redevelopment and upward rent reviews at Ngee Ann City (NAC). For its overseas properties, Australia portfolio was the key performer, raking up a 25.7% increase in NPI due to incremental income from Plaza Arcade. This more than offset the lower contributions from the other overseas properties due to unfavourable forex movements and increased competition. On the capital management front, we note that SGREIT has completed the drawdown of new unsecured loan facilities to refinance its debts due in 2013, leaving it with no refinancing needs until Jun 2015. As at 30 Sep, gearing stood largely unchanged at 30.6%, while the fixed/hedged debt ratio improved to 94.0% from 81.0% seen in 2Q. We maintain BUY and S$0.95 fair value on SGREIT as we continue to like its clear growth drivers, robust financial standing and compelling valuation. (Kevin Tan) Ezion Holdings: Secures US$65m LOI for service rig Summary: Ezion Holdings announced this morning that it has received a letter of intent with a contract value of up to about US$65m over a three-year period to provide a service rig for an oil major to support its oil & gas activities in SE Asia. The unit is expected to be deployed by late 3Q15, and will be funded through internal resources and borrowings, like Ezion's earlier projects. The group is in the process of forming a JV to order and own an additional service rig in conjunction with this project, and pending more details from management, we maintain our BUY rating and fair value estimate of S$2.90 on the stock. (Low Pei Han) Raffles Medical Group: 3Q13 results in-line with expectations Summary: Raffles Medical Group (RMG) reported its 3Q13 results this morning which were within our expectations. Revenue rose 8.0% YoY to S$85.1m. PATMI was up 10.3% to S$13.9m. Growth during the quarter was driven largely by a higher patient load. Both of RMG's core divisions contributed to its topline increase, with its Hospital Services and Healthcare Services segments growing 9.4% and 5.7% YoY, respectively. For 9M13, revenue and PATMI increased 10.7% and 14.0% to S$253.0m and S$41.7m, forming 72.8% and 68.7% of our full-year estimates, respectively. 4Q is traditionally RMG's strongest quarter and we expect this trend to continue in FY13. We will provide more details after the analyst briefing. Maintain BUY and S$3.61 fair value estimate. (Wong Teck Ching Andy) Triyards Holdings: Secures contracts worth US$59m Summary: Triyards Holdings announced this morning that it has secured two contracts worth US$59m, including its 10th Self-Elevating Unit (SEU) order. The SEU order is with an Asian-based client and is for TRIYARDS' BH 335, which has a leg length of more than 100m (~335ft). The other contract is for the construction of a turret for a Floating Storage Offloading (FSO) unit in Indonesia. As at 31 Aug 2013, the group's net order book stood at US$217m. Pending more details such as the delivery date of the SEU, we maintain our BUY rating with S$0.88 fair value estimate on the stock. (Low Pei Han)

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NEWS HEADLINES

- US stocks finished another week of gains with the S&P 500 index at a record high after earnings from large technology companies wowed investors with revenue growth. - Singapore's industrial production for Sep outstripped even the most bullish of market forecasts to grow 9.3% from a year ago. - Property consultants have given mixed reactions to the latest 3Q13 private housing data released by the Urban Redevelopment Authority. - Fraser and Neave's move to shed its property arm and focus on its other core businesses took a step forward after Frasers Centrepoint Limited got the go-ahead for its planned listing. - The units of three local firms - Tat Hong Holdings, Boustead Singapore and CSC Holdings - have set up a joint venture with AME Group to develop land in Iskandar Malaysia.