11 Nov 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 :Love is moral even without legal marriage, but marriage is immoral without love.
- ELLEN KEY
Singapore: The Day AheadSINGAPORE DAYBOOK :'Tis the season not to see declines A STRONG jobs report on Friday lifted the major stock indices within a hair's breadth of record highs last week, and now US Federal Reserve chairman Ben Bernanke is the only potential spoiler to the stock market's best year since 1997.
While pundits warn of more budget scares early next year, the latest bull run has too much momentum and seasonal advantages to bet against in the short term. It will soon be time for fund managers to begin "window dressing" end-of-year statements by loading up on this year's winners, and for workers to allocate retirement investments for 2014.
"The closer we get to December, the louder history sings 'Tis the season not to see declines'," said Sam Stovall, strategist for Standard & Poor's Capital IQ, in a note to clients. "So, while history says a correction is due, it doesn't say whether it will be on time. As a result, investors will likely get to enjoy their holiday festivities before fretting over the post-New Year fireworks."
On Friday, the Labour Department reported that US employers added 204,000 workers to payrolls in October - far more than the 120,000 economists had forecast.
(Source: The Business Times)
MARKET SCOOP
BBR cautious despite Q3 profit jump
Venture Corp Q3 profit up 7.7%
Higher margins push UOL's Q3 net profit up 6%
Hackers exploited vulnerability in PM Office's website: IDA
Pacific Radiance, affiliate seek listings in bet on offshore energy boom
Cosco wins Prosafe deal of over US$400m
MAS urged to make firms disclose diversity policy
(Source: The Business Times)
DBS VICKERS Securities says ...
CHINA MERCHANT HOLDINGS (PACIFIC) | BUY | TP: S$1.07
3Q13 net earnings rose 46% y-o-y to HK$145.8m as revenue rose 37% to HK$486m, due to contribution of newly acquired Ningbo-Beilun Port E'way. Contribution from JV roads also rose 12% y-o-y to HK$68.7m in the quarter
For 9M13, net earnings rose 40% y-o-y to HK$450m on 34% top line growth to HK$1.4bn, as JVs also contributed 23% more at HK$207.8m
This is a strong set of results against our FY earnings forecast of 489m and we will be looking to revise our earnings estimates in a full note to be issued at a later date
Top line is roughly in line with our FY estimate of HK$1.83bn
The outperformance is due to stronger than expected traffic growth on all roads while costs (finance and operating) were also lower than projected
Year-to-date, the company has generated free cash flows of nearly HK$1.1bn, and over HK$1.3bn if we include dividends from associates
Whilst the Group's current portfolio of roads should provide steady earnings growth, we believe CMHP continues to look for more acquisitions to further boost its prospects
This will be aided by the impending completion of the sale of its non-core New Zealand property businesses, which will further strengthen its balance sheet
Maintain BUY and TP of S$1.07 for now
OCBC Securities says ...
ST ENGINEERING | HOLD | TP: S$4.32
STE reported 3Q13 results that missed ours and the street's expectations
9M13 EPS of 13.34 S cents formed only 66% and 68% of the street's and our prior FY13 forecast
While 3Q13 revenue grew 0.5% YoY to S$1.55b, PATMI fell 9.9% to S$131.4m
PBT margin for the group declined from 12% to 11%
Highlights include: 1) lower gross profit from Aerospace and Land Systems; 2) an impairment of S$23.7m for ROPAX due to the prolonged softness in the shipping
market in Europe, partially offset by a write-back of warranty provisions of S$14.4m that were no longer required; 3) an increase in net finance costs of S$5.1m (driven by a S$3m lower FX gain and a S$2.8m lower gain on disposal of investments)
STE's order book fell slightly from S$12.7b as of end Jun to S$12.5b, of which S$1.5b is
expected to be delivered in 4Q13
Management indicated that the US government shutdown may indirectly push some milestone completions and contract wins from 4Q13 into 2014 due to slower approval of permits, etc
Three of the four sectors registered higher revenue YoY in 3Q13: Aerospace (+1%), Electronics (+2%), Land Systems (-11%; all three business groups recorded lower revenue) and Marine (+25%). PBT for two of the sectors rose YoY: Aerospace (-6%; absence of a S$10.1m write-back of allowance for inventory obsolescence recognised in
3Q12), Electronics (+7%), Land Systems (-9%) and Marine (+12%)
STE has lowered its FY guidance and now anticipates achieving comparable revenue and PBT for FY13 versus FY12 (as opposed to expecting higher revenue and PBT as it did previously)
We adjust our assumptions and cut our FY13F EPS to 18.0 S cents from 19.6 S cents
Using the same peg of 21x against FY14F EPS of 20.6 S cents (as opposed to FY13 EPS previously), our fair value rises to S$4.32 from S$4.11
Maintain HOLD on STE. FY14F dividend yield is 4.1%
OSK DMG Securities says...
BBR HOLDINGS | BUY | TP: S$0.35
BBR's 3Q13 PATAMI soared 252% y-o-y to SGD8.4m as revenue shot up 161% y-o-y, propelled by a higher number of projects entering the active stage of construction
Its associate recorded significant profits following the sale of two units at its upmarket development
However, margins were hit by provisions for losses in a project, and are expected to remain under pressure as labour cost rises
Gross profits higher, but margins thinner
During the quarter, construction on Bliss @Kovan reached the active construction stage and BBR started to recognise profits on the units sold from this development
However, this positive effect was somewhat offset by lower profits from general construction, as manpower and subcontractor costs rose
As a result, 3Q13 gross margin contracted to 9.9% vs 3Q12's 19.5%
Overall earnings boosted by property development segment
Apart from the profits recognised from sales of Bliss @Kovan units, BBR's 48%-
owned JV also recorded SGD3.3m in profit from the sale of three units at 8 Nassim Hill
It subsequently sold two more units and recognized the profits from these units in 4Q13 This helped to boost BBR's profits to SGD8.4m in 3Q13
BBR's SGD1.0bn strong orderbook as at end-3Q13 is expected to last it till FY16
Although the company's pipeline of infrastructure projects is healthy, the construction
industry is currently facing increasing challenges from intensifying competition and rising labour cost
We had initially assumed that construction at Bliss @Kovan would progress at a faster pace and that all the penthouses would be sold by year-end
Following a discussion with management, we are tweaking our revenue and margin assumptions
We maintain our earnings forecast of SGD21.4m and SGD0.35 TP, which is based on a 5x FY13F P/E |
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