08 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 : Most of us are consumed with our own thoughts and desires and are not always thinking about what other people may want. This is not necessarily being egocentric; it is just being human.
- BO BENNETT
Singapore: The Day Ahead
SINGAPORE DAYBOOK :Update: #TwitterIPO a huge hit on Wall Street [NEW YORK CITY] Twitter debuted on Wall Street with a bang Thursday as shares in the fast-growing social network soared amid investor frenzy over the most-anticipated listing since Facebook.
The shares shot up by more than 90 per cent in early trade to as high as US$50.00. The stock closed with a spectacular one-day gain of 72.69 per cent at US$44.90, from the initial public offering (IPO) price of US$26 per share set on Wednesday.
While some analysts cautioned about the fast-changing nature of social media, the debut led to a stampede for Twitter, known for its one-to-many messages of up to 140 characters.
Appropriately, #TwitterIPO was among the top trending topics on the social network.
(Source: The Business Times)
MARKET SCOOP
Singapore's Wilmar Q3 net profit rises 2.5%
Roxy's Q3 net gets fillip from strong development business
StarHub's Q3 net profit dips 1%
ST Engineering Q3 net profit falls 10%
Hyflux's Q3 net profit jumps 74%
SIAEC net profit up 5.8% at $71m
SGX selects London Stock Exchange's MillenniumIT for new post-trade system
Singapore Windsor to issue up to 24.48m new shares at 22 cts/shr
Parkway Life Reit posts Q3 DPU of 2.66 cents
DBS to buy back up to S$800m of its S$1.7b preference shares callable in 2020
(Source: The Business Times)
DBS VICKERS Securities says ...
VARD HOLDINGS LTD | HOLD | TP: S$0.84
3Q13 results disappointed again, with no significant improvement in EBITDA margin of 4.3% compared to 4.1% in 2Q13
While net profit of NOK76m represented a sequential turnaround from the NOK20m loss in 2Q13, this was mainly due to the absence of impairment losses
Revenue was down 4% y-o-y and net earnings were down 67% y-o-y as operational challenges at the Niteroi yard in Brazil continued, leading to further delays and cost overruns
The scheduled deliveries of the remaining 4 vessels from the Niteroi yard have now been moved back by at least a quarter on average and the losses there are likely to continue depressing group EBITDA margins over the next few quarters
At the end of 3Q13, Vard's orderbook had expanded to NOK19.6bn, boosted by the NOK6.5bn pipelay vessel contract
YTDFY13, Vard has secured more than NOK12bn worth of new contracts, close to our new order win assumption of NOK12.5bn for FY13
We continue to expect good demand from the subsea support and construction vessels market, although AHTS and PSV orders from the North Sea could still be slow because of volatility in day rates
We continue to expect another NOK11bn/12bn in new orders for FY14/15
While most of the cost overruns related to Brazilian yards have been provided for in 2Q13 and 3Q13, we are unlikely to see normalised margins anytime soon
The pace of margin recovery is still uncertain and as such, we cut our FY13/14F earnings by 24%/ 18% respectively to factor in lower margins and delays in orderbook recognition
Maintain HOLD with a lower TP of S$0.84 (pegged to 9x FY14 EPS)
NOMURA Securities says ...
SEMBCORP MARINE | BUY | TP: S$5.20
SMM reported 3Q13 PATMI of SGD130mn, up 12% y-y mainly due to strong revenue increase in the rigbuilding segment (+167%), while EBIT margins came in at 10.1%, down from 14.1% in 3Q12 and 13% in 2Q13, below our and consensus expectations
Management attributed the strong rigbuilding revenue increase and lower margins to initial revenue recognition for a number of new products
During the quarter, SMM recognized initial revenue for five rigs comprising a well intervention semi-sub, a harsh environment semi-sub and three jack-ups. In comparison, only one jack-up had achieved initial revenue recognition in 3Q12
Ship repair revenue increased to SGD204mn (+34% y-y and +29% q-q) as the Tuas yard commenced operations in August 2013
We believe this confirms management's annual ship repair revenue guidance of
SGD1.0-1.1bn
Results were also impacted by a sharp y-y decline in associate contribution (SGD4.2mn, down 67% y-y) and a higher effective tax rate during the quarter
The lower associate contribution was mainly attributable to start-up operations at Sembmarine Kakinada
Net orderbook stands at SGD13.5bn currently with deliveries extending to 2019, while new orders secured in 2013 total SGD3.9bn
Management remains positive on the sector and believes the demand for high-specification rigs with advanced technology will continue to be robust
At the analyst meet, management again highlighted the abilities of the new Tuas yard such as undertaking FPSO conversions and servicing a wide range of vessels including VLCCs, LNG carriers, new generation of mega containerships etc
We reiterate our Buy rating on Sembcorp Marine with a TP at SGD5.20 based on our sum-of-the-parts valuation (SOTP; methodology unchanged)
At current prices, on our estimates SMM trades at 17.7x and 15.7x FY13F and FY14F earnings, respectively, vs. the historical P/E band of 8-28x
OSK DMG Securities says...
OSIM INTERNATIONAL | BUY | TP: S$2.60
Our consumer analysts visited 14 OSIM, four Ogawa (OGAW MK, NR) and two OTO (6880 HK, NR) retail outlets in Hong Kong, Indonesia, Singapore and Malaysia earlier this month
Findings from our channel checks suggest that: i) uInfinity is seeing good response - eg its beige color option in an Hong Kong outlet is sold out, with the next available delivery date being December, ii) uAngel remains a fast moving item, and iii) its closest competitor in Singapore is likely to be Ogawa, whose latest product's sales seem to have normalised after its launch in May
All in all, these developments augment well for OSIM as its peak sales season nears
We believe OSIM's strategy of riding on celebrity appeal and multiple product price points will help to capture existing and new opportunities created by growing wealth in the region
We note that the number of households with annual disposable income of >USD35,000 (and >USD100,000 in China) is expected to expand by 69% from 11m households in 2010 to 18m by 2020, with China accounting for most of this gain
To raise consumer awareness and product penetration rates, OSIM has engaged Hong Kong artistes Andy Lau and Sammi Cheng as its brand ambassadors, as well as introduced tier pricing for different market segments, eg uAngel ~SGD1,888, uDivine (~SGD5,288) and uInfinity (SGD6,988)
The positive findings from our channel checks fuel our excitement on the coming year-end shopping season and belief that OSIM would be able to maintain its mid-teen growth pace into FY14
We lift our FY14F earnings by 4% to SGD116m and introduce our FY15F earnings of SGD133m, which correspondingly move up our DCF-derived TP to SGD2.60 (previously SGD2.38) |
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