Showing posts with label ComfortDelGro. Show all posts
Showing posts with label ComfortDelGro. Show all posts

Tuesday, June 9, 2015

Comfortdelgro's cash gives it firepower, says CIMB

Stock Name: ComfortDelGro
Company Name: COMFORTDELGRO CORPORATION LTD
Research House: CIMBPrice Call: BUYTarget Price: 3.42



SINGAPORE (June 9): CIMB reiterates its add recommendation and $3.42 target on Comfortdelgro, saying it remains its preferred pick in Singapore's land transport sector.

The broker it thinks the Singapore public transport firm's strong balance sheet means it can make earnings-accretive.

The key catalysts include earnings contribution from a new train line in Singapore and overseas expansion, CIMB says after the meeting.

Comfortdelgro is down 1.3% at $3.04, while the benchmark FTSE Straits Times Index is down 0.6%.

Friday, February 13, 2015

ComfortDelGro upgraded to 'neutral' with target price of $2.90 by OSK DMG

Stock Name: ComfortDelGro
Company Name: COMFORTDELGRO CORPORATION LTD
Research House: OSK-DMGPrice Call: HOLDTarget Price: 2.90



SINGAPORE (Feb 12): OSK DMG has upgraded ComfortDelGro to "neutral" from "take profit" with a target price of $2.90 on expectation of a turnaround in Singapore bus and real operations.

"FY2014's $284 million profit was in line with expectations, aided by revenue growth across all business segments," said OSK DMG.

It pointed out that while Singapore bus revenue continued to grow, the core bus operations remained loss-making with a loss of $13.5 million in 2014.

ComfortDelGro kept at 'add' by CIMB with $3.42 target price

Stock Name: ComfortDelGro
Company Name: COMFORTDELGRO CORPORATION LTD
Research House: CIMBPrice Call: BUYTarget Price: 3.42



SINGAPORE (Feb 12): CIMB is maintaining its "add" call on ComfortDelGro with a target price of $3.42.

In a report out today, analysts Roy Chen and William Tng say ComfortDelGro's FY14 net profit was broadly in line with their expectations, coming in at 98% of forecast.

Meanwhile, the potential for higher operating margin and capital efficiency under the new Government Contracting Model (GCM), cost savings from low energy prices, as well as reduced losses from the Downtown Line could mean a rerating of its call on the transport operator.

Wednesday, February 4, 2015

ComfortDelGro price target raised 10% to $3.42 by CIMB

Stock Name: ComfortDelGro
Company Name: COMFORTDELGRO CORPORATION LTD
Research House: CIMBPrice Call: BUYTarget Price: 3.42



SINGAPORE (Feb 3): CIMB has raised its price target for ComfortDelGro Corp to $3.42 from $3.11 after increasing its earnings per shares estimates by 10% for FY2015 and 18% for FY2016 to reflect lower energy costs and smaller losses at the public transport operator's Downtown rail line (DTL).

DTL has been loss-making since it started operation in December 2013.

With the second phase of the rail line slated to begin operation in 1Q2016, ComfortDelGro should break even, according to CIMB analysts Roy Chen and William Tng.

Wednesday, January 14, 2015

ComfortDelGro raised to "buy", target lifted to $2.93 by DBS Vickers

Stock Name: ComfortDelGro
Company Name: COMFORTDELGRO CORPORATION LTD
Research House: DBS VickersPrice Call: BUYTarget Price: 2.71



SINGAPORE (Jan 14): DBS Vickers has upgraded ComfortDelGro Corp to "buy" from "hold" and raised its price target to $2.93 from $2.71 after increasing its earnings estimates for FY2015 and FY2016 by 4% and 9% respectively.

The changes reflect lower oil prices, which should aid the transport group's profit margins, according to DBS Vickers analyst Andy Sim, who now expects fuel costs for ComfortDelGro to average US$80 a barrel this year and US$70 a barrel in 2016.

Thursday, November 27, 2014

ComfortDelGro kept at 'buy' by OCBC with $3.03 fair value

Stock Name: ComfortDelGro
Company Name: COMFORTDELGRO CORPORATION LTD
Research House: OCBCPrice Call: BUYTarget Price: 3.03



SINGAPORE (Nov 27): OCBC Investment Research is maintaining its "buy" call for ComfortDelGro with a fair value price of $3.03.

In a Nov 27 report, analysts Eugene Chua and Wong Teck Ching said they expect the transport operator to deliver steady growth into 2015.

"Stability is ComfortDelGro's key strength thus far for FY14 and we think its ability to remain so is attractive," say the analysts.

Friday, November 14, 2014

ComfortDelGro kept at 'take profit' by OSK-DMG with $2.66 target price

Stock Name: ComfortDelGro
Company Name: COMFORTDELGRO CORPORATION LTD
Research House: OSK-DMGPrice Call: SELLTarget Price: 2.66



SINGAPORE (Nov 14): OSK-DMG has maintained its "take profit" call on ComfortDelGro with a target price of $2.66.

In a Nov 14 report, OSK-DMG analyst Shekhar Jaiswal says the positive outlook for its Singapore bus operations from 2H16 may already have been priced into the stock and while he expects all business segments to keep growing over 2015-16F, current valuations look less attractive.

Thursday, November 14, 2013

SG: MARKET PULSE: ComfortDelgro, Tat Hong, SingTel, KS Energy, Dyna-Mac (14 Nov 2013)

Stock Name: ComfortDelGro
Company Name: COMFORTDELGRO CORPORATION LTD
Research House: OCBCPrice Call: BUYTarget Price: 2.20

Stock Name: Tat Hong
Company Name: TAT HONG HOLDINGS LTD
Research House: OCBCPrice Call: HOLDTarget Price: 0.90

Stock Name: SingTel
Company Name: SINGTEL
Research House: OCBCPrice Call: HOLDTarget Price: 3.81

Stock Name: KS Energy
Company Name: KS ENERGY LIMITED
Research House: OCBCPrice Call: HOLDTarget Price: 0.50

Stock Name: Dyna-Mac
Company Name: DYNA-MAC HOLDINGS LTD.
Research House: OCBCPrice Call: HOLDTarget Price: 0.44




MARKET PULSE: ComfortDelgro, Tat Hong, SingTel, KS Energy, Dyna-Mac
14 Nov 2013
KEY IDEA

ComfortDelGro: Excellent set of 3Q13 results
ComfortDelGro's (CDG) 3Q13 results exceeded our expectations with revenue increasing 8.6% YoY to S$978.4m while operating profit and PATMI grew 4.8% YoY to S$122.4m and 5.4% YoY to S$76.7m, respectively. The newly acquired Metroline West bus service in UK was the main contributor to the improved results although the group also enjoyed a better showing by SBS Transit. We expect ComfortDelgro to end FY13 with another record PATMI figure as continued strong performances from its taxi, bus and vehicle inspection operations should offset any weakness in the other segments such as rail (due to the DTL start-up costs) and driving centre operations. Based on our higher adjusted FY13/14 earnings, our fair value estimate increases to S$2.20 (S$1.95 previously). Maintain BUY. (Lim Siyi)

MORE REPORTS

Tat Hong Holdings: No surprises in 2QFY14 results
Tat Hong's 2QFY14 results remained weak as expected. Revenue fell 14.2% YoY to S$185.3m while operating profit declined by 33.9% to S$18.6m. Despite the poorer showing, management declared an interim dividend of 1 S cent vs. 1.5 S cents last year. Entering 2HFY14, we expect Tat Hong's performance to stay weak. Its Australian operations are unlikely to produce any turnaround until early FY15 (at its earliest) as sentiment remains poor. Nonetheless, some positives from stability in Singapore, Hong Kong and China operations should help to cushion some of the declines. As the street had factored in expectations for a weakened performance, we should not see sustained selling pressure on the counter. Adjusting our forecasts downwards slightly, our fair value falls to S$0.90 (S$0.96 previously). Maintain HOLD. (Lim Siyi)

SingTel: In-line 1HFY14, no change to outlook
Summary: SingTel posted 2QFY14 revenue of S$4163.1m, down 9% YoY and 3% QoQ, again weighed by weaker regional currencies (AUD, IDR and INR depreciated 10% YoY against SGD). Reported net profit was flat YoY and down 14% QoQ at S$870.4m; excluding exceptional items, core earnings was flat YoY and +1.4% QoQ at S$884.0m. 1HFY14 revenue slipped 7% to S$8456.4m, meeting 50% of our FY14 forecast, while reported net profit gained 4% to S$1881.4m; core earnings rose 3% to S$1781.0m, or 48% of full-year forecast. SingTel declared an interim dividend of 6.8 S cents, same as 1HFY13, representing a payout ratio of 61%. Meanwhile, SingTel has kept its FY14 guidance unchanged - it expects consolidated group revenue to decline by mid-single digit level and EBITDA to decline by low single digit level; EBIT will also fall by mid-single digit level. We will have more after the analyst teleconference later. For now, we maintain our HOLD rating but place our S$3.81 fair value (based on SOTP) under review. (Carey Wong)

KS Energy: Business as usual
KS Energy (KSE) reported a 7.4% YoY rise in revenue to S$173.3m and a net profit of S$320k in 3Q13 vs. S$14k in 3Q12, such that 9M13 revenue and net profit accounted for 81% and 47% of our full year estimates, respectively. The lower-than-expected net profit was mainly due to a higher-than-expected share of minority interest. However, we would not read too much into this, as small changes in items above the line can bring about huge swings in PATMI given the relatively small quantum of net profit; our fair value is also based on P/NTA instead of P/E valuation. Gross profit margin was similar at 25.7% in 3Q13 compared to a year ago. Pending more details from management, we maintain our HOLD rating but put our fair value estimate of S$0.50 under review. (Low Pei Han)

Dyna-Mac Holdings: 3Q13 PATMI below expectations
Dyna-Mac Holdings announced 3Q13 PATMI of S$5.3m, which was a decline of 47.9% YoY and also below our expectations. This was despite revenue growing 11.7% YoY to S$66.8m. The miss was largely attributed to a larger-than-estimated increase in administrative expenses, which jumped 36.0% YoY to S$10.1m. For 9M13, revenue rose 44.2% to S$203.5m but PATMI was relatively flat (-0.2%), coming in at S$19.6m. Total YTD new order wins for Dyna-Mac was S$318m, and this has already surpassed that for FY12. Net order book stood at a healthy S$346m as at 13 Nov 2013 (versus S$215m as at 8 Nov 2012). We will meet up with management later for more details. Due to a change in analyst coverage, our previous Hold rating and S$0.44 fair value estimate is under review. (Wong Teck Ching Andy)

For more information on the above, visit www.ocbcresearch.comfor the detailed report.


NEWS HEADLINES

- US stocks climbed on Wed, lifting the S&P 500 and Dow to record closes, on hopes about Janet Yellen's testimony at a Senate confirmation hearing on Thu.

- Olam International is selling nearly 12,000 hectares of almond orchards in Victoria, Australia for A$200m (S$232m) in cash.

- Oxley Holdings has made it to the big boys' table, with net profit for 1QFY14 surging to a record S$250.8m, from just S$6.6m a year ago.

- Rotary Engineering posted 3Q13 net profit of S$7.9m, reversing from its net loss of S$66.2m a year ago.

- Banyan Tree Holdings reported a S$1.4m net loss for 3Q13, but half of the S$2.8m net loss a year ago.

- Otto Marine posted a net profit of US$4.12m for 3Q13, down 13.1% YoY.

- Croesus Retail Trust's DPU of 3.26 S cents for the 144 days ended 30 Sep beat its IPO forecast by 4.6%.

- Singapore's casino regulator has for the third time this year hit the country's two casinos hard on the wallet for various regulatory breaches.

- WBL Corporation's 4QFY13 net profit halved to S$8.6m, from S$17m a year ago.





Friday, August 30, 2013

SG: MARKET PULSE: ComfortDelGro (30 Aug 2013)

Stock Name: ComfortDelGro
Company Name: COMFORTDELGRO CORPORATION LTD
Research House: OCBCPrice Call: BUYTarget Price: 1.95




MARKET PULSE: ComfortDelGro
30 Aug 2013
KEY IDEA

ComfortDelGro: Recent weakness creates buy-in opportunity
ComfortDelgro (CDG) was re-awarded the region 4 contract by the New South Wales transport ministry on Thursday, and this should remove any negative overhang for the group's future in one of its key markets of Australia. However, its share price has failed to react to the news and remains weak, which is unwarranted in our view. Although investors may have concerns over rising fuel prices and the potential for rate hikes, CDG is unaffected given its substantial hedge (80%) on fuel requirements for the rest of the year and low gearing position. Therefore, we feel that this recent share weakness creates an attractive opportunity for investors to allocate into this fundamentally healthy company with earnings stability. We upgrade CDG to BUY with an unchanged fair value estimate of S$1.95. (Lim Siyi)


For more information on the above, visit www.ocbcresearch.comfor the detailed report.


NEWS HEADLINES

- Better-than-expected US economic data has increased the odds that the Fed will scale back bond purchases next month.

- Higher taxation levels and challenging market conditions caused Olam's 4QFY13 PATMI to plunge 48% YoY to S$56.8m, in spite of a rise in revenue.

- Lum Chang Holdings' FY13 PATMI rose a marginal 2% YoY to S$21.5m despite a 75% YoY increase in turnover to S$494.6m.

- Fraser and Neave's JV partner in Myanmar Brewery Ltd is trying to oust the conglomerate from the partners' promising beer-making business.

- Guocoland Limited saw its net profit for FY13 tumble 49% to S$32.22m.

- Chinavision Media Group Ltd posted a 30% rise in net profit to HK$133m (S$22m) for 1H13, (versus HK$102.3m in 1H12).

- Oxley Holdings boosted its PATMI to S$38m for 4QFY13 (versus S$1.7m in 4QFY12)as it started to recognise inflows from the more than two dozen projects it launched over the past year.

- Genting Bhd reported a 12.7% YoY fall in 2Q13 net profit to RM466.3m (versus RM534.5m in 2Q12).

Thursday, August 15, 2013

SG: MARKET PULSE: Swiber, SingTel, Petra Foods, Comfort, CSE, Midas, KSE (15 Aug 2013)

Stock Name: Swiber
Company Name: SWIBER HOLDINGS LIMITED
Research House: OCBCPrice Call: BUYTarget Price: 0.86

Stock Name: SingTel
Company Name: SINGTEL
Research House: OCBCPrice Call: HOLDTarget Price: 3.81

Stock Name: Petra
Company Name: PETRA FOODS LIMITED
Research House: OCBCPrice Call: HOLDTarget Price: 3.95

Stock Name: ComfortDelGro
Company Name: COMFORTDELGRO CORPORATION LTD
Research House: OCBCPrice Call: HOLDTarget Price: 1.95

Stock Name: CSE Global
Company Name: CSE GLOBAL LTD
Research House: OCBCPrice Call: BUYTarget Price: 0.96

Stock Name: MIDAS
Company Name: MIDAS HLDGS LIMITED
Research House: OCBCPrice Call: BUYTarget Price: 0.54

Stock Name: KS Energy
Company Name: KS ENERGY LIMITED
Research House: OCBCPrice Call: HOLDTarget Price: 0.50




MARKET PULSE: Swiber, SingTel, Petra Foods, Comfort, CSE, Midas, KSE
15 Aug 2013
KEY IDEA

Swiber Holdings: Softer 2Q13 but still executing well
Swiber Holdings (Swiber) reported a 5.4% YoY rise in revenue to US$242.1m and a 13.7% increase in gross profit to US$37.1m in 2Q13. However, higher admin, finance and other operating expenses contributed to a 72.5% fall in net profit to US$4.2m in the quarter. Stripping out one-off items, core net profit was US$3.7m in the quarter, such that 1H13 recurring income accounted for 45% of our full year estimate. Gross margins remained healthy at 15.3% in 2Q13. Swiber's order book stood at US$1.2b as at 14 Aug 2013. Looking ahead, more orders are expected to be awarded by the end of this year. Its net gearing remains high at 0.92x, but the group is now executing well compared to its peers, and has improved substantially since its relatively difficult period in 4Q08-4Q09. Maintain BUY with S$0.86 fair value estimate. (Low Pei Han)

MORE REPORTS

SingTel: Decent FY14 start; but outlook muted
Summary: SingTel posted 1QFY14 revenue of S$4293.3m, down 5.3% YoY and 4.2% QoQ, meeting about 24% of our full-year forecast; this largely weighed by lower revenue in Australia and the weaker AUD. Reported net profit though climbed 7.0% YoY and 16.4% QoQ to S$1011.0m, boosted by stronger EBITDA margins and higher associate contributions. Core net profit (excluding exceptional items) rose 5.5% YoY (but fell 10.4%) to S$897m, also meeting 24% of FY14 forecast. But going forward, the group's outlook remains somewhat muted, as SingTel expects lower overall revenue (mainly from Group Consumer), with likely EBITDA compression as well. In view of the latest guidance, we pare our FY14F revenue forecast by 5% and core earnings by 1.3%. Also accounting for weaker AUD forecast, our SOTP-based fair value slips from S$3.82 to S$3.81. Maintain HOLD. (Carey Wong)

Petra Foods: A mixed 2Q13
Losses from Petra Foods' discontinued cocoa ingredients division in 2Q13 were smaller than expected, and PATM came in at US$4.8m with management declaring an improved interim dividend of 2.36 US cents (vs. 2.11 US cents in 2Q12). However, sales growth for the quarter was a bit disappointing and that leaves us concerned over a possible slowdown in consumption growth in Petra's core markets for 2H13. As a result, we maintain HOLD on Petra on account of the limited upside at this juncture. Our fair value estimate increases to S$3.95 (based on 28x FY14F PE) from S$3.88 previously following the much smaller cocoa losses. (Lim Siyi)

ComfortDelGro: Fairly valued at this point
ComfortDelGro's (CDG) 2Q13 results were in-line with expectations. Revenue grew 2.7% YoY to S$908.4m while operating profit improved 6.0% YoY to S$112.6m. An interim dividend of 3 S cents (vs. 2.9 S cents for 1H12) was announced. For 2H13, we expect a similar growth trend: continued top-line growth across most segments and manageable operating expenses. However, we view the lack of a SG fare increase in FY13 and anticipation of lower operating margins for Aussie bus operations as dampeners for upside potential at this juncture. Keeping our FY13 forecasts intact given the in-line results, we downgrade CDG to HOLD on valuation grounds but maintain our fair value estimate at S$1.95. (Lim Siyi)

CSE Global: Simplifying CSE
CSE Global Limited reported 2Q13 results that were generally in-line with ours and the street's estimate. 2Q core net profit increased 12% YoY to S$12m, mainly due to (i) the lower level of zero-margin revenue in the Middle East and (ii) higher level of more profitable offshore work in the Americas. Separately, the group disclosed that it intends to divest 100% of its ownership in its UK subsidiary through a separate listing on the London Stock Exchange. We are positive on the move. Besides unlocking value, we believe the spin-off would simplify and improve oversight of CSE's different businesses. Maintain BUY with an unchanged S$0.96 FV. (Chia Jiunyang)

Midas Holdings: 2Q13 results above expectations
Midas Holdings' 2Q13 results came in above our expectations, with revenue and PATMI soaring 29.2% and 834.1% YoY to CNY284.0m and CNY14.9m, respectively. This was due largely to a reversal of a hefty share of loss of CNY14.1m from its associated company, Nanjing SR Puzhen Rail Transport (NPRT) in 2Q12 to a share of profit of CNY3.1m in 2Q13. While we note that profit from operations actually fell 15.2% YoY to CNY35.9m, it was still ahead of our forecast. For 1H13, revenue grew 8.0% to CNY486.4m, while PATMI fell 40.8% to CNY10.0m due to a net loss in 1Q13. This constituted 53.4% and 28.6% of our FY13 projections, respectively. We are expecting 2H13 PATMI to improve significantly on a HoH basis. An interim DPS of 0.25 S cents was declared, similar to 1H12 and our forecast. We will provide more updates after the analyst conference call. For now we have a BUY rating on Midas. We will likely raise our 1.1x P/B target peg and S$0.54 fair value estimate given the improved sentiment within China's rail transport sector, with expectations that the high-speed train tenders may be resumed soon. (Wong Teck Ching Andy)

KS Energy: S$1.6m net profit in 2Q13
KS Energy (KSE) reported a 29.4% YoY rise in revenue to S$196.2m and a net profit of S$1.6m in 2Q13 vs S$0.7m in 2Q12, such that 1H13 revenue and net profit accounted for 54% and 42% of our full year estimates, respectively. Gross profit margin was 22.8% in 2Q13 compared to 27.5% in 2Q12 and 23.3% in 1Q13, while operating profit was S$9.7m vs a loss in 1Q13. The group mentioned that it continues to experience "improving demand" from the oil and gas industry in Asia and believes that it is well positioned to tap into new opportunities in the oil and gas market. Pending more details from management, we maintain our HOLD rating but put our S$0.50 fair value estimate under review. (Low Pei Han)

For more information on the above, visit www.ocbcresearch.comfor the detailed report.


NEWS HEADLINES

- US stocks fell sharply, with the first triple-digit drop for the Dow since Jun, as investors worried about the recent spike in borrowing costs as well as the potential reductions in the Fed's bond purchases.

- Global Logistic Properties reported 33% YoY increase in PATMI to US$204m for 1QFY14, which is boosted by revaluation gains despite a fall in revenue.

- Thai Beverage Public Co posted a flat second quarter as lacklustre sales persisted in most business segments.

- Liongold Corp is proposing a private placement of up to 180 million new shares at S$1.10907 apiece, a 10% discount on the volume-weighted average traded price on Tue.





Thursday, June 20, 2013

OSPL - Good Morning S'pore - Central Dealing Desk

Stock Name: Capitaland
Company Name: CAPITALAND LIMITED
Research House: UOB KayHianPrice Call: BUYTarget Price: 4.41

Stock Name: ComfortDelGro
Company Name: COMFORTDELGRO CORPORATION LTD
Research House: Credit SuissePrice Call: BUYTarget Price: 2.10

Stock Name: SPH
Company Name: SINGAPORE PRESS HLDGS LTD
Research House: OSKPrice Call: SELLTarget Price: 4.00




Market Compass


20 June 2013~ Good Morning Singapore!


Singapore Idea Snippets:
20 June 2013~ Good Morning Singapore!

Central Execution Team - The Excellence of Execution

This product is made available by your Central Execution Team, for you as TRs of OCBC Securities to help you with your business and therefore it is confidential and only for internal circulation. It is not intended for onward circulation to non-OSPL TRs, clients or any other third party in this or any other version. Neither is this intended to be relied upon as a sole basis for any recommendation. TRs must also consider their clients' investment objectives, financial position and needs when intending to make or making any recommendation. For the front desk, by the front desk. All feedback to make this a better product is welcome.

Global Flash: While You Were Sleeping


Source: Marketwatch

Quote for the day : A gentle word, a kind look, a good-natured smile can work wonders and accomplish miracles.
- WILLIAM HAZLITT
Singapore: The Day Ahead

SINGAPORE DAYBOOK: Stop-work order if severe haze continues. Govt sets up haze task force; schools may face closure

THE government may issue a stop work order if the haze situation continues at hazardous levels.
The problem in Singapore officially reached crisis levels as the air pollution index entered "hazardous" territory yesterday - hitting a historical high of 321 last night.
Environment Minister Vivian Balakrishnan said at a hastily convened press conference last night that the Manpower Ministry may even issue a stop-work order depending on the severity of the situation.
And in a development that could have implications for companies with investments in Indonesia, Singapore is planning to publish satellite pictures to link specific hotspots to firms. (Source: The Business Times)

MARKET SCOOP

US: Stocks tumble after Fed signals bond tapering
Singapore smog breaches 'hazardous' level
Singapore Airlines orders 30 more Airbus A350s
Govt releases H2 industrial GLS sites
Riady dangles payout for OUE shareholders
Q2 property investment sales slip 10%

(Source: The Business Times)

UIB KAY HIAN says...

CAPITALAND LTD | BUY | TP: S$4.41

CapitaLand announced the acquisition of a 70% stake in Shanghai Guang Chuan Property Co. Ltd., a wholly-owned subsidiary of Shanghai Shentong Metro Assets Management for RMB1.95b (about S$397.5m)
The sole asset of Shanghai Guang Chuan Property is a prime site in Hanzhonglu, Zhabei District, Shanghai. CapitaLand and Shanghai Shentong Metro Group plan to jointly develop the 25,427 sqm site into a mixed development comprising residential, office and retail components
The site sits right above an interchange station for metro lines 1, 12 and 13 and enjoys a waterfront view of the Suzhou River.The site consists of two plots of land with a total GFA of 110,000 sqm
The project will commence in 2015 and is expected to be completed by 2017
CapitaLand brings its unique capabilities to integrate mixed developments seamlessly with the metro stations, while Shentong Assets brings its experience of developing and managing properties above stations and along the metro lines in Shanghai
The move will further strenghthen CapitaLand's presence in China that accounts for 38% of its value
We estimate that the acquisition could add about S$160m in pretax profits and result in a RNAV accretion of 3 cents (0.5%) a share
We leave the RNAV unchanged at this stage pending more details from the management
We have a BUY call on CapitaLand with a target price of S$4.41/share pegged at 15% discount to its RNAV of S$5.18/share
CapitaLand is trading at a steep 37% discount to its RNAV and a deep 25% discount to its long term P/B of 1.2x

CREDIT SUISSE Securities says ...

COMFORTDELGRO CORPORATION | OUTPERFORM | TP: S$2.10

We upgrade our rating for ComfortDelgro (CD) to OUTPERFORM from Neutral on earnings 'accretion' arising from acquisitions made over the last three months, which will lift our earnings estimates for the stock from FY14
In addition, the stock has fallen c.14% over the last month and now represents better value
We expect the recent acquisitions of the UK and Australian bus operations to accelerate EPS growth to c.9% for 2014E, and push EPS for 2012-14 in excess of 4% CAGR
While 4% seems low, it compares favourably to the group's c.2% EPS CAGR for the period 2007-12
As the group generally operates in mature markets, earnings growth beyond 2014 will likely be lacklustre without acquisitions
CD, however, has proven to be a prudent acquirer of overseas businesses during the past five years
We believe the group will likely be able to replicate this successful strategy beyond 2014 to enhance profitability
Our new target price of S$2.10 is based on 16x FY14E P/E
We believe higher earnings growth (via recent acquisitions) and future M&A-led earnings growth should justify a modest premium to its ten-year average P/E of 15x
In addition, the stock's FY13/14E dividend yield of 3.6-3.9% is in line with the broader market and should provide support for its stock

DMG OSK Securities says...

SINGAPORE PRESS HOLDINGS | SELL | TP: S$4.00
SPH shareholders have overwhelmingly backed the group's decision to list SPH REIT and pay a special dividend
During an extraordinary general meeting (EGM) on Tuesday morning, the first resolution to establish SPH REIT and inject Paragon and Clementi Mall assets into the REIT was carried with 99.79% approval
The second resolution of a SGD18 cent per share special dividend payout to shareholders was also passed with interests of 99.94% of shares voted in favour, which was conditional on the first resolution being passed
This outcome does not come as a surprise to us as we had expected that the special dividend payout would suffice to entice shareholders to vote in favour of SPH REIT's listing
The payout is attractive as it amounts to 75% of the company's FY12 payout and implies a boost to the stock's FY13 dividend yield to 9.7%
However, our concerns lie on the accretive use of the proceeds raised
Maintain SELL with our SOTP TP of SGD4.00



SG: Market Pulse: ComfortDelgro, KepLand (20 Jun 2013)

Stock Name: ComfortDelGro
Company Name: COMFORTDELGRO CORPORATION LTD
Research House: OCBCPrice Call: BUYTarget Price: 1.95

Stock Name: KepLand
Company Name: KEPPEL LAND LIMITED
Research House: OCBCPrice Call: BUYTarget Price: 4.59




MARKET PULSE: ComfortDelgro, KepLand
20 Jun 2013
KEY IDEA

ComfortDelGro: Good entry point


Summary:
We are upgrading ComfortDelgro to BUY as its share price has shown signs of stabilising since the partial stake sale by the SLF about a month ago. In our view, the group remains a high-quality counter with unchanged fundamentals and positive growth drivers from its overseas operations. Furthermore, while the group continues to face domestic challenges in the absence of a fare increase, we view the recent fare review delay as an indication of a more sustained and beneficial fare review structure in the long-run. We leave our fair value estimate of S$1.95 unchanged. (Lim Siyi)



MORE REPORTS


Keppel Land: Secures residential site in Shanghai


Summary:
KPLD announced that it has acquired a 17.5ha residential site in Shanghai's Seshan area for RMB1.33b (S$266m) on which it would develop ~200 landed homes with 250-350 sqm GFA each. The site is 20km away from Shanghai Hongqiao International Airport and 32km from the city centre and is KPLD's ninth project in the city of Shanghai. Assuming a total net saleable area of 60k sqm and construction costs of RMB6k psm, we estimate an RNAV accretion of 3.5 S-cents per share. We update our model for this acquisition and latest assumptions and our fair value estimate increases marginally to S$4.59 (25% discount to RNAV) from S$4.53 previously. Maintain BUY. (Eli Lee)

For more information on the above, visit
www.ocbcresearch.comfor the detailed report.


NEWS HEADLINES


- US stocks fell sharply and Treasury yields surged on Wednesday after Federal Reserve Chairman Ben Bernanke said the central bank may scale back its bond purchases this year, depending on the economic outlook.


- The Singapore government will make another 22 plots of industrial land available in 2H13, to moderate land prices and provide sufficient space for industrial end-users.


- Companies in Singapore are more upbeat now about business prospects for the next six months than they were in the first quarter of the year.


- Fitch Ratings has affirmed Genting Singapore's long- term foreign and local currency debt rating at A- and its SGD denominated perpetual capital securities at BBB.


- Investment sales of property, which cover big-ticket deals of S$10m and above, continued to drop in 2Q13.


- Iskandar Malaysia's appeal remains intact for investors optimistic about its long-term prospects, but some are turning cautious on the sustainability of the skyrocketing property prices in light of ample supply in the coming couple of years.


- Tat Hong Holdings has established a S$500m multicurrency medium term note (MTN) programme.


- Smog levels in Singapore from Indonesian forest fires hit the highest level on record as the air pollutant index breached the "hazardous" level.




Tuesday, June 4, 2013

OSPL - Good Morning S'pore - Central Dealing Desk

Stock Name: Ho Bee
Company Name: HO BEE INVESTMENT LIMITED
Research House: CIMBPrice Call: BUYTarget Price: 2.52

Stock Name: CITYDEV
Company Name: CITY DEVELOPMENTS LIMITED
Research House: Deutsche BankPrice Call: HOLDTarget Price: 11.01

Stock Name: ComfortDelGro
Company Name: COMFORTDELGRO CORPORATION LTD
Research House: NomuraPrice Call: BUYTarget Price: 2.19




Market Compass


04 June 2013~ Good Morning Singapore!


Singapore Idea Snippets:
04 June 2013~ Good Morning Singapore!

Central Execution Team - The Excellence of Execution

This product is made available by your Central Execution Team, for you as TRs of OCBC Securities to help you with your business and therefore it is confidential and only for internal circulation. It is not intended for onward circulation to non-OSPL TRs, clients or any other third party in this or any other version. Neither is this intended to be relied upon as a sole basis for any recommendation. TRs must also consider their clients' investment objectives, financial position and needs when intending to make or making any recommendation. For the front desk, by the front desk. All feedback to make this a better product is welcome.

Global Flash: While You Were Sleeping



Source: Marketwatch

Quote for the day :I don't measure a man's success by how high he climbs but how high he bounces when he hits bottom.
- GEORGE S. PATTON

Singapore: The Day Ahead

SINGAPORE DAYBOOK:Telcos backed into a corner by OTT players. As WhatsApp and Skype eat into their revenues, telcos are clutching at straws

[SINGAPORE] As telcos eye the impending Armageddon of social messaging, they will find themselves hemmed in by rocks and hard places. Worse still, beyond the prospect of falling revenues lies nothing but a yawning abyss.
Over-the-top (OTT) apps such as WhatsApp, Skype and Viber have forced roaming revenue and SMS volumes into retreat yet again for the first quarter of the year, but there is little incentive for telcos to build or buy their own apps.
Existing social messaging apps occupy a space that is particularly infuriating for traditional carriers. These OTT players are destroying revenue but creating very little of their own - with the notable exception of WhatsApp.
At SingTel's full-year earnings conference last month, top executive Allen Lew summed up the industry's dilemma, framed by falling average revenues per user (ARPUs). (Source: The Business Times)

MARKET SCOOP

S'pore PMI rises to 51.1, shows manufacturing expansion in May
Datapulse Tech's Q3 profit up 23.2%
Ramba Energy surges to record high
Singapore'sDBS has one more shot at Danamon
Singapore's water companies aim to quench China's US$850b thirst
Moody's to review for downgrade 3 banks' subdebt ratings in S'pore
Swiber mulls issue of Islamic trust certificate
Indonesia awaits MAS response on Bank Danamon
(Source: The Business Times)

CIMB Securities says...

HO BEE INVESTMENTS | OUTPERFORM | TP: S$2.52

Ho Bee announced that it will acquire Rose Court, a 157,406 sqf freehold office located at Southwark Bridge Road, Central London, through its wholly-owned subsidiary Grandiose Investments Pte. Ltd
The purchase consideration of £67.2m will be financed via a mix of internal funds and bank borrowings, scheduled to be payable in full on 24 June 2013
The property will continue to be fully leased to the Secretary of State for Communities and Local Government, with lease expiry in Sep 2018
With passing rent in the range of £4.3m per year (£27psf), this translates to an attractive initial rental yield of 6% for the acquisition
We view this as an opportunistic move by Ho Bee, in view of the current Southwark prime rents of £45psf, 63% higher than the passing rent under government lease
We expect positive rental reversion in the range of 100% in 5 years' time when the current government lease expires
We also see this as a good move by Ho Bee to increase exposure to investment properties in view of the currently slow high-end residential development sales in Singapore
We adjust our FY13-15 core EPS to factor in rental income from the acquisition and tweaks to Singapore residential sales forecasts
Our target price, still based on a 30% discount to a revised RNAV, rises by 8% to S$2.52
We maintain Outperform, with strong office leasing as a catalyst

DEUTSCHE BANK says ...

CITY DEVELOPMENTS | HOLD | TP: S$11.01

We visited City Development's launch of its latest mass market project Jewel@Buangkok which started on Saturday
The 616 unit (592,212sqft GFA) project is located within a 2 minute walk to the Buangkok MRT
Sales were dominated by local buyers and upgraders, with a firm number of first time homebuyers
The most popular units were the 2 bedroom units
Jewel@Buangkok represents CDL's third launch this year, following D'Nest and Bartley Ridge
The development is skewed towards smaller unit sizes, consisting of 82 1br units (474-581sqft), 219 2br units (689-904sqft), 139 3br units (1109-1389sqft) and 80 4-5br units (1324-2540sqft
In addition to the MRT, the project is also located near Nan Chiau Primary School, as well as Hougang Green and Compass Point malls
Overall, the project was launched at an ASP of S$1150psf, inclusive of VIP and early bird discounts, above our estimate of S$1000psf
We estimate that marking to market the latest ASPs would add approximately 7cts to our RNAV (c.0.5%)
We believe that the firm take up is reflective of the project's attractive location near the MRT, and relative resilience of the mass market segment
CDL's Bartley Ridge project has seen strong take up of 79% (154 units in April) at an ASP of S$1,278psf, while D'Nest sold an additional 92 units in April at an ASP of S$959psf (85% sold)
Looking ahead, there is still significant supply in the pipeline, and hence we believe that projects with weaker dynamics may need to compete more aggressively on pricing
We maintain our Hold recommendation on CDL, with a target price of S$11.01 pegged to a 15% discount to our RNAV of S$13.07

NOMURA Securities says...

COMFORTDELGRO CORPORATION | BUY | TP: S$2.19

As we move into 2H13, it increasingly makes sense to start anchoring returns based on 2014F earnings
As such, we raise our TP to SGD2.19, premised on our 2013/14F blended EPS of 2.9S$cent
There remains potential upside to our forecasts and valuations
We believe the group is still actively deploying its cash hoard into acquisitions which should be accretive to earnings and valuations
We estimate every SGD50mn worth of acquisitions will add ~2.4S$cent to our TP (+1%)
Separately, a fare increase could potentially add ~8S$cent to our TP (+4%) for every 1cent increase in fares
We do not profess to have any insight as to whether a fare increase will materialise, but choose to view it as an out-of-money option that comes free with the stock and which could be meaningful to earnings and valuations if it happens
In the meantime, investors are paid to wait for the upside events to materialise as the stock offers a FY13/14F dividend yield of 3.5/3.7%
Key risks include a loss of Australian bus contracts; higher-than-expected losses on DTL; regulatory changes; North-East Line breakdown; currency; higher oil price; higher staff cost



Friday, May 31, 2013

SG: MARKET PULSE: Land Transport, Swiber, SembMarine, Ezra and Ezion (31 May 2013)

Stock Name: SMRT
Company Name: SMRT CORPORATION LTD
Research House: OCBCPrice Call: HOLDTarget Price: 1.45

Stock Name: ComfortDelGro
Company Name: COMFORTDELGRO CORPORATION LTD
Research House: OCBCPrice Call: HOLDTarget Price: 1.95

Stock Name: Swiber
Company Name: SWIBER HOLDINGS LIMITED
Research House: OCBCPrice Call: BUYTarget Price: 0.86

Stock Name: SembMar
Company Name: SEMBCORP MARINE LTD
Research House: OCBCPrice Call: BUYTarget Price: 5.64

Stock Name: Ezra
Company Name: EZRA HOLDINGS LIMITED
Research House: OCBCPrice Call: HOLDTarget Price: 1.10

Stock Name: EzionHldg
Company Name: EZION HOLDINGS LIMITED
Research House: OCBCPrice Call: BUYTarget Price: 2.62




MARKET PULSE: Land Transport, Swiber, SembMarine, Ezra and Ezion
31 May 2013
KEY IDEA

Land Transportation sector: Possibility of new entrant?
The LTA recently re-iterated the possibility of introducing competition in the bus services industry. However, as with before, we do not anticipate any changes to the operating landscape in the medium term unless the government decides how it wants to strike a balance between a free-market and government assisted model. For the near-term, the street is awaiting the recommendations from the fare review committee and has already factored in some level of increase. That said, any further delays from this committee could lead to continued losses for both PTOs and even asset impairments for SMRT. We downgrade the sector to NEUTRALin light of this possibility but do not anticipate further deterioration in the share prices for both ComfortDelgro and SMRT at this juncture. Maintain our HOLD ratings on both SMRT [HOLD; FV:S$1.45] and ComfortDelgro [HOLD; FV:S$1.95] although we favour the latter for its more attractive overseas ventures. (Lim Siyi)


MORE REPORTS

Swiber Holdings: Expanding into deepwater
According to Upstream, Swiber Holdings is preparing to invest in its first large deep-water offshore construction vessel for its fleet. In particular, the company is understood to have expressed its intention to purchase a vessel similar to Ezra's Lewek Constellation. The capex of US$400-500m is huge, but considering that the unit is expected to take up to three years to build and the group has not announced any additional substantial capex plans, this may be a manageable purchase. Meanwhile, we would continue to monitor the group's cashflow from operations. Pending an official statement from the company, we do not see this as a surprise, as Swiber has expressed its intentions to expand its operations into deeper waters. Maintain BUY with S$0.86 fair value estimate. (Low Pei Han)

Sembcorp Marine: Secures US$220.5m jack-up rig
Sembcorp Marine (SMM) announced that subsidiary PPL Shipyard has secured a contract to build a jack-up drilling rig from BOT Lease Co., Ltd, a leasing company of The Bank of Tokyo-Mitsubishi UFJ which is under the umbrella of Mitsubishi UFJ Financial Group. The contract price is US$220.5m (excluding cost of BOTL's project management team and pre-operations cost), and is scheduled for delivery at end-Jan 2015. The unit is based on the proprietary Pacific Class 400 design; we note that Oro Negro had ordered a rig of similar design from SMM with a price tag of US$208.5m in Mar and Perisai Petroleum at US$208m in Feb this year. With this latest win, SMM has secured orders worth about S$2.7b YTD, accounting for 67% of our full year estimate. Maintain BUY on SMM with S$5.64 fair value estimate. (Low Pei Han)

Ezra Holdings and Ezion Holdings: Ezra divests remaining shares in Ezion
Ezra Holdings announced that it will divest its holding of 40m shares in Ezion Holdings via a placement that is fully underwritten by DBS Bank. This represents about 4.17% of Ezion's issued share capital, and was transacted at a price of S$2.25/share (4.9% discount to VWAP over 30 May 2013) for a total consideration of S$90m. Ezra will realize an estimated net gain of ~US$65.7m, and it intends to use the proceeds for working capital needs, lowering debt and fund growth of operations. We are not surprised by this move as Ezra had also previously sold off 60m shares in Ezion in Mar 2012. Maintain BUY on Ezion with S$2.62 fair value estimate and HOLD on Ezra with S$1.10 fair value estimate. (Low Pei Han)

For more information on the above, visit www.ocbcresearch.comfor the detailed report.


NEWS HEADLINES

- US stocks rose on Thursday, rebounding from the previous session's losses, as tepid economic data eased concerns the US Federal Reserve would begin to gradually scale back its policy of stimulating growth.

- WE Holdings Ltd will place 80m new shares at S$0.10224 each to raise S$7.5m in net proceeds to repay a bank loan and for general working capital purposes.

- Ascendas Hospitality Trust has launched an equity-fund exercise to raise at least S$200m to partially fund the S$300m acquisition of Park Hotel Clarke Quay.

- Del Monte Pacific Ltd announced that its application for listing by way of introduction of all the company's shares on the First Board of the Philippine Stock Exchange (PSE) was approved.

- Yongnam Holdings has secured a 5-year S$130m syndicated loan from CIMB Bank, DBS Bank, OCBC and Chinatrust Commercial Bank.

- The HDB on Thursday launched 8,000 flats for sale under the joint Build-to-Order (BTO) and Sale of Balance Flats (SBF) exercise.



Monday, May 27, 2013

OSPL - Good Morning S'pore - Central Dealing Desk

Stock Name: ComfortDelGro
Company Name: COMFORTDELGRO CORPORATION LTD
Research House: DBS VickersPrice Call: BUYTarget Price: 2.19

Stock Name: ComfortDelGro
Company Name: COMFORTDELGRO CORPORATION LTD
Research House: UOB KayHianPrice Call: BUYTarget Price: 2.32




Market Compass


27 May 2013~ Good Morning Singapore!


Singapore Idea Snippets:
27 May 2013~ Good Morning Singapore!

Central Execution Team - The Excellence of Execution

This product is made available by your Central Execution Team, for you as TRs of OCBC Securities to help you with your business and therefore it is confidential and only for internal circulation. It is not intended for onward circulation to non-OSPL TRs, clients or any other third party in this or any other version. Neither is this intended to be relied upon as a sole basis for any recommendation. TRs must also consider their clients' investment objectives, financial position and needs when intending to make or making any recommendation. For the front desk, by the front desk. All feedback to make this a better product is welcome.

Global Flash: While You Were Sleeping



Source: Marketwatch

Quote for the day :Wisdom is the reward you get for a lifetime of listening when you'd have preferred to talk.
- DOUG LARSON
-
Singapore: The Day Ahead

SINGAPORE DAYBOOK:S'pore yuan clearing to set cat among pigeons. It will raise yuan deposit rate rivalry involving HK, Taiwan

[HONG KONG] The launch of yuan clearing services in Singapore today by Industrial and Commercial Bank of China (ICBC) is likely to intensify the yuan deposit rate competition among lenders in the Lion City, Hong Kong and Taiwan, an analyst said.
As Singapore is very proactive in developing its bond market, it has strong potential to become a key yuan-denominated offshore bond centre in the region and lure some yuan deposits that are currently parked in Hong Kong and Taiwan, said Frances Cheung, senior fixed-income strategist at Credit Agricole CIB.
If that happens, it will put more pressure on banks based in Hong Kong and Taiwan to raise their deposit rates for yuan savers, Ms Cheung said. Although it is hard to predict at the moment just how much Singapore can build for its yuan savings pool, it is almost certain that the growth will be robust, she said.
ICBC's Singapore branch will launch clearing bank services for participating lenders from today. The move comes after authorities in early February picked the lender to be the city-state's yuan clearing bank. (Source: The Business Times)

MARKET SCOOP

Yoma's Q4, full-year earnings jump on higher real estate sales

(Source: The Business Times)

DBS Securities says...

COMFORTDELGRO | BUY | TP: S$2.19

According to media reports, Singapore Labour Foundation (SLF) has sold a stake in ComfortDelGro to raise S$329.8m at S$1.94/share
The total number of shares sold of about 170m, equates to 8% of CD shares
SLF held an 11.93% stake in CD prior to the sale, and we estimate its residual stake will decline to c.3.93%
Established in 1977, SLF is a statutory board of the Ministry of Manpower and it aims to improve the welfare of union members and further the trade development of trade union movement in Singapore
We understand that the marketed price range was S$1.94 to S$2.03
The reason for selling such a huge stake, at the lower end of range and at an c.11% discount from last traded price is not known
Over the years, CD evolved and expanded outside of Singapore with overseas revenues accounting for almost 50% of the Group's revenue
This may be seen as less of a strategic fit to the overall labour union movement
We thought another possible reason is that SLF could be relooking at its portfolio to release funds
We see two possible reasons: Firstly, a total of 170m shares (8%) is not small and SLF may adopt the view to dispose of it in a block rather than in tranches
Secondly, CD has appreciated by 22% YTD and 14% in the past 1 month, outpacing STI's 8.6% and 3.9% gain, respectively
Fundamentally, we do not see any changes in the operations with the change in ownership
In fact, CD just reported a reasonable set of 1Q results with net profit up by 8% y-o-y, despite cost challenges
In addition, it is also pursuing inorganic growth via bite-sized acquisitions leveraging on its strong balance sheet
Our TP of S$2.19 and BUY recommendation is retained


UOB KAY HIAN says ...

COMFORTDELGRO | BUY | TP:S$2.32

Singapore Labour Foundation (SLF) yesterday sold S$332m of ComfortDelGro (CD) shares at about S$1.94-2.02, a 7-11% discount to the last traded price of S$2.18
SLF sold 170m shares, which accounted for about 2/3 of its total holdings and about 8.1% of CD's total shares
We believe that the sell-down is unwarranted and this represents a good opportunity to buy CD at attractive levels
Maintain BUY and DCF-derived target price of S$2.32 (cost of equity 6.5% terminal growth 2%)
We like CD for its consistent ability to balance the challenging domestic public transport segment with contributions from overseas operations
Upcoming catalysts could come from value accretive acquisitions and divestments, and the roll-out of the DTL in 4Q13

MAYBANK KIM ENG Securities says...

SATS | BUY | TP:S$3.90

We see a multi-year re-rating of SATS as we believe that the company is likely to structurally increase their dividend distribution to shareholders
SATS announced special dividends in the last 3 years and we expect this to be the new normal
Even after factoring in progressive increments in dividends over the next 3 years, we forecast a net cash position of more than SGD400mn by the end of FY16E
This implies that SATS would have a sizeable war chest of c.SGD900mn, should they achieve a capital structure with net debt to equity of 0.3X by the end of FY16E
The latest results from SATS suggest that TFK had turned a corner with FY13 EBIT contribution of SGD12.1mn (FY12: SGD0.3mn)
While the weaker JPY would lead to lower contributions upon translation to SGD, we believe that the positive economic impact of a weaker JPY (eg. tourism, business travel) should result in a net positive effect on air travel demand and TFK
Either way, we expect TFK to continue leveraging on SATS's existing business relationships with various airlines to clinch more contracts
We are 8% above street view for our FY14-16E estimates, as we believe that consensus numbers may not have factored in incremental contributions from new contracts and our expectations of margin expansion as they scale up their operations
We believe that a DCF (WACC: 8.0%, terminal g: 1.0%) based valuation would best reflect the strong cash-generative nature of the company
Upgrade to BUY with TP of SGD3.90/shr




Wednesday, May 22, 2013

OSPL - Good Morning S'pore - Central Dealing Desk

Stock Name: SembMar
Company Name: SEMBCORP MARINE LTD
Research House: DBS VickersPrice Call: HOLDTarget Price: 4.70

Stock Name: ComfortDelGro
Company Name: COMFORTDELGRO CORPORATION LTD
Research House: UOB KayHianPrice Call: BUYTarget Price: 2.32

Stock Name: Kep Corp
Company Name: KEPPEL CORPORATION LIMITED
Research House: OCBCPrice Call: BUYTarget Price: 12.68




Market Compass


22 May 2013~ Good Morning Singapore!


Singapore Idea Snippets:
22 May 2013~ Good Morning Singapore!

Central Execution Team - The Excellence of Execution

This product is made available by your Central Execution Team, for you as TRs of OCBC Securities to help you with your business and therefore it is confidential and only for internal circulation. It is not intended for onward circulation to non-OSPL TRs, clients or any other third party in this or any other version. Neither is this intended to be relied upon as a sole basis for any recommendation. TRs must also consider their clients' investment objectives, financial position and needs when intending to make or making any recommendation. For the front desk, by the front desk. All feedback to make this a better product is welcome.

Global Flash: While You Were Sleeping



Source: Marketwatch

Quote for the day :Experience is a good school. But the fees are high.
- HEINRICH HEINE

Singapore: The Day Ahead

SINGAPORE DAYBOOK:Partial victory for DBS in quest for Danamon. Jakarta gives it go-ahead for smaller stake than it had sought, seeks 'reciprocity'

DBS Group's year-long effort for a full takeover of one of Indonesia's larger lenders met with mixed success yesterday, after the country's outgoing central bank governor told reporters that Singapore's largest bank had won approval to buy a smaller stake.
Bank Indonesia, the country's central bank, will allow DBS to buy up to 40 per cent of PT Bank Danamon, the sixth largest lender here with a wide branch network and deep roots with the country's emerging middle class.
In comments to reporters yesterday, Bank Indonesia governor Darmin Nasution, who steps down from his job tomorrow, said that approval for any larger stake in Bank Danamon may hinge on whether the Monetary Authority of Singapore grants his country's banks easier access to the Singapore market.
"If they want more . . . we want to see a realisation from MAS regarding our need for reciprocity," the outgoing governor told parliament members and reporters. (Source: The Business Times)

MARKET SCOOP

Exchange rate monetary policy ensures financial stability: MAS

SingTel dips on broker downgrade
Giordano closes 163 stores in China in Q1, eyes SE Asia
Keppel Reit falls after parent firm trims stake
CPF ordinary account rate remains at 2.5%
SGX in talks to sell Philippine Dealing System stake
SingTel buys back 1m shares at S$4.04-4.08 each
Plastoform to exit SGX watch-list (Amended)

(Source: The Business Times)

DBS VICKERS Securities says...

SEMBCORP MARINE | HOLD | TP: S$4.70

Sembcorp Marine (SMM) announced that its subsidiary Sembawang Shipyard Pte Ltd has exercised its voting rights to acquire all the membership interests in Equinox Offshore Brazil Cooperative U.A (EOB) and shares in Equinox Offshore ARV3 BV (EO ARV3) as EO ARV3 remained in default of its payment obligations for the conversion of the accommodation and repair vessel ARV3 due to financing difficulties
The conversion contract of a cargo/passenger vessel (ropax vessel) into a DP2 accommodation and repair vessel valued at US$140m was awarded to SMM in Dec 11 and due for delivery in 4Q12
We understand that SMM has prudently booked in the full conversion cost with zero profit recognised for this particular vessel in FY12
The completed ARV3 is a diesel-electric DP2 high specification vessel designed and equipped to provide extensive accommodation for up to 450 persons, and workshop facilities to support and service offshore facilities and projects in deep water areas
It has a back-to-back charter contract for 5 + 5 years with Petrobras
In ARV3's case, the high spec vessel comes with a long term charter contract with NOC Petrobas - a big plus point, in our view
Upon disposal, we could expect an earnings boost from profit recognition of ARV3, estimated to be around S$20-25m or 3.5-4.5% of SMM's FY13 core earnings
In addition, there could also be one-off disposal gain if it is sold at value greater than the original contract price of US$140m
We are leaving our numbers intact for now and keeping our HOLD recommendation and TP of S$4.70

UOB KAY HIAN says ...

COMFORTDELGRO CORPORATION | BUY | TP:S$2.32

ComfortDelgro (CD) proposes to acquire 100% of the issued shares of Driver Group Ltd in Melbourne, Victoria for approximately A$22m (S$27m)
The proposed acquisition, which is subject to regulatory approvals, will be made through CDC Victoria Lty Ltd, a subsidiary of ComfortDelGro Cabcharge Pty Ltd - a 51% owned subsidiary of CD
When completed in July 2013, it will further boost ComfortDelGro Cabcharge's presence in Australia where it already operates bus services in both New South Wales and Victoria
Under the proposed transaction, CDC Victoria will acquire five metropolitan bus routes and a fleet of 42 vehicles
CDC Victoria currently has a fleet of 378 buses
The business that will be acquired has an annual turnover of about A$12m (S$14.8m) with an EBITDA of A$3.8m (S$4.7m)
After adjusting for CD's effective stake in ComfortDelGro Cabcharge, the acquisition will increase EBITDA by 0.3%
Assuming a net margin of 15% for Driver Group (operating margins for CD's Australia bus business is 19%), the acquisition will be valued at 12x PE
This is in-line with global land transport peers which are trading at an average FY13F PE of 14.2x
Maintain BUY and DCF-derived target price of S$2.32 (cost of equity 6.5% terminal growth 2%)
We like CD for its consistent ability to balance the challenging domestic public transport segment with contributions from overseas operations

OCBC Securities says...

KEPPEL CORPORATION | BUY | TP:S$12.68

Keppel Corporation (KEP) announced that its wholly owned subsidiary, Keppel Real Estate Investment Pte Ltd, has entered into a sale and purchase agreement with Goldman Sachs (the placement agent) for the sale of 180m units of Keppel REIT (6.7% of total issued units of KREIT) for S$1.555/unit
The aggregate cash consideration of S$279.9m took into account KREIT's last transacted price of S$1.605/unit as at 20 May 2013 and the 30-day VWAP of S$1.5129
This is at a premium to the book value and NTA/share of S$1.31 and S$1.28, respectively, as at 31 Mar 2013
Upon completion of the sale (expected 27 May), KEP's interest in KREIT remains substantial (from 58.2% to 51.5%)
Recall that KEP earlier rewarded shareholders with dividend in specie of KREIT units; announced on 24 Jan 2013 when KREIT's share price was S$1.37
Maintain BUY on KEP with S$12.68 fair value estimate






Tuesday, May 21, 2013

SG: MARKET PULSE: Telecom Sector, Global Palm, Keppel Corp, ComfortDelGro (21 May 2013)

Stock Name: Global Palm
Company Name: GLOBAL PALM RESOURCES HLGS LTD
Research House: OCBCPrice Call: HOLDTarget Price: 0.17

Stock Name: Kep Corp
Company Name: KEPPEL CORPORATION LIMITED
Research House: OCBCPrice Call: BUYTarget Price: 12.68

Stock Name: ComfortDelGro
Company Name: COMFORTDELGRO CORPORATION LTD
Research House: OCBCPrice Call: HOLDTarget Price: 1.95




MARKET PULSE: Telecom Sector, Global Palm, Keppel Corp, ComfortDelGro
21 May 2013
KEY IDEA

Telecom Sector: Downgrade to NEUTRAL
All three telcos reported 1QCY13 results that came in within our expectations, with all of them meeting between 25% and 27% of our full-year forecasts. Going forward, other than M1 expecting moderate earnings growth, the other two are guiding for a pretty muted showing this year, with SingTel expecting stable group revenue while StarHub has eased its guidance to low single-digit revenue growth from single-digit previously. Besides the run-up in the telcos' share prices YTD, which makes the yields less attractive, a more "risk on" approach could see investors switch out of defensive stocks. As such, we downgrade our rating from Overweight to NEUTRAL on the sector. (Carey Wong)

MORE REPORTS

Global Palm: HOLD; No catalysts yet
Global Palm Resources (GPR) posted 1Q13 revenue of IDR66.8b, down 33% YoY and 4% QoQ, while reported net profit tumbled 36% YoY to IDR8.3b, meeting 29% and 25% of our full-year revenue and net profit estimates, respectively. While GPR has maintained its new planting target of 300-400ha for this year, it has made a very slow start, planting just 5ha in 1Q13 (versus 166ha in 1Q12) - the lowest new planting since 1Q11. Meanwhile, the outlook also remains muted, given the still-sluggish CPO prices and an impending increase in labour cost (with the upward revision in Indonesia's minimum wages this year). Until we see fresh progress in its land negotiation and/or acquisition of either new or existing plantations, we opt to keep our HOLD rating and S$0.17 fair value (based on 10x FY13F EPS). (Carey Wong)

Keppel Corporation: Sells 6.7% of Keppel REIT at S$1.555/unit
Summary: Keppel Corporation (KEP) announced that its wholly owned subsidiary, Keppel Real Estate Investment Pte Ltd, has entered into a sale and purchase agreement with Goldman Sachs (the placement agent) for the sale of 180m units of Keppel REIT (6.7% of total issued units of KREIT) for S$1.555/unit. The aggregate cash consideration of S$279.9m took into account KREIT's last transacted price of S$1.605/unit as at 20 May 2013 and the 30-day VWAP of S$1.5129. This is at a premium to the book value and NTA/share of S$1.31 and S$1.28, respectively, as at 31 Mar 2013. Upon completion of the sale (expected 27 May), KEP's interest in KREIT remains substantial (from 58.2% to 51.5%). Recall that KEP earlier rewarded shareholders with dividend in specie of KREIT units; announced on 24 Jan 2013 when KREIT's share price was S$1.37. Maintain BUYon KEP with S$12.68 fair value estimate. (Low Pei Han)

ComfortDelGro - Addition to Australian operations
ComfortDelGro announced yesterday that it will acquire a privately-held bus company, Driver Group Pty Ltd, for A$22m. This acquisition will add five long-term, metropolitan bus routes in the Eastern suburbs of Melbourne to ComfortDelgro's Australian operations in Victoria, and increase its fleet to 420 buses from 378. Assuming regulatory approval, this deal will be completed in Jul 2013. While the deal is relatively smaller compared to its previous acquisitions in Australia and will not have a material impact on its earnings in FY13, it demonstrates management's intent to actively grow its overseas operations and we view this positively. However, valuations for ComfortDelgro remain expensive in our view and we maintain HOLD on the counter with an unchanged fair value of S$1.95. (Lim Siyi)

For more information on the above, visit www.ocbcresearch.comfor the detailed report.


NEWS HEADLINES

- Singapore's domestic wholesale trade fell 7.3% YoY in 1Q. This was mainly attributed to a domestic decline in domestic sales of petroleum & petroleum products.

- Singapore has maintained its stronghold as Asia's Top Convention City for the 11th consecutive year, according to the latest global rankings released by the International Congress and Convention Association (ICCA)

- Plastoform Holdings has exited the SGX watch-list with effect from 21 May 2013.

- Goldman Sachs launched on Monday a sale of about US$1.1b worth of Hong Kong-traded shares in ICBC, offering to sell its entire remaining stake in the world's biggest bank.

- Morgan Stanley said on Monday it has signed an agreement to sell its Indian wealth management unit to Standard Chartered.

- Brazil will grow less than 3% this year according to the latest forecast released on Monday.





Wednesday, May 15, 2013

SG: MARKET PULSE: NOL, SingTel, Olam, Noble, Comfort, Midas, SATS, SIAE, Swiber, CSE, CWT, Dyna-Mac, UE E&C, VARD (15 May 2013)

Stock Name: NOL
Company Name: NEPTUNE ORIENT LINES LIMITED
Research House: OCBCPrice Call: BUYTarget Price: 1.38

Stock Name: SingTel
Company Name: SINGTEL
Research House: OCBCPrice Call: TRADING BUYTarget Price: 3.68

Stock Name: Olam
Company Name: OLAM INTERNATIONAL LIMITED
Research House: OCBCPrice Call: HOLDTarget Price: 1.50

Stock Name: ComfortDelGro
Company Name: COMFORTDELGRO CORPORATION LTD
Research House: OCBCPrice Call: HOLDTarget Price: 1.95

Stock Name: MIDAS
Company Name: MIDAS HLDGS LIMITED
Research House: OCBCPrice Call: BUYTarget Price: 0.595

Stock Name: SIA Engg
Company Name: SIA ENGINEERING CO LTD
Research House: OCBCPrice Call: HOLDTarget Price: 4.38

Stock Name: Swiber
Company Name: SWIBER HOLDINGS LIMITED
Research House: OCBCPrice Call: HOLDTarget Price: 0.70

Stock Name: CSE Global
Company Name: CSE GLOBAL LTD
Research House: OCBCPrice Call: BUYTarget Price: 0.99

Stock Name: CWT
Company Name: CWT LIMITED
Research House: OCBCPrice Call: BUYTarget Price: 2.08

Stock Name: Dyna-Mac
Company Name: DYNA-MAC HOLDINGS LTD.
Research House: OCBCPrice Call: HOLDTarget Price: 0.50




MARKET PULSE: NOL, SingTel, Olam, Noble, Comfort, Midas, SATS, SIAE, Swiber, CSE, CWT, Dyna-Mac, UE E&C, VARD
15 May 2013
KEY IDEA


Neptune Orient Lines - Looking at the positives


Summary:
Neptune Orient Lines's (NOL) 1Q13 results disappointed with a larger-than-expected core operating loss. Nonetheless, the figures marked a vast improvement over the same period a year ago. Revenue stayed relatively flat at US$2.37b (-0.3% YoY) and core operating losses narrowed to -US$85.2m from -US$233m a year ago following the success of the cost cutting initiatives implemented last year. Entering 2Q13, NOL could experience further downward pressure on freight rates although we remain hopeful that a combination of positive macro-data, collective industry action and lower bunker fuel costs will push NOL towards a more positive showing by 3Q13. We maintain our view for a modest recovery in FY13 for the liner and keep our BUYrating with an unchanged fair value estimate of S$1.38. (Lim Siyi)


MORE REPORTS


SingTel: FY13 results just about in line

Summary: SingTel posted its 4QFY13 results this morning, with revenue slipping 6% YoY and 3% QoQ to S$4.48b, weighed down by the weaker A$. Full-year revenue fell 3% to S$18.18b, and was 3% shy of our forecast. Reported net profit for 4Q came in at S$868.2m, down 33% YoY but up 5% QoQ; core earnings slipped 2% YoY and rose 15% QoQ to S$1.0b. Core FY13 earnings eased 1.8% to S$3.61b, and was about 4% below our forecast. SingTel has declared a final dividend of S$0.10/share, bringing the full-year payout to S$0.168 (74% of underlying net profit). For FY14, SingTel expects to consolidated revenue to remain stable, while EBITDA should continue to see low single-digit growth. It also expects to spend some S$2.5b in capex, with free cashflow coming in at around S$2b. Last but not least, it has revised up its dividend payout ratio from 55-70% to 60-75%. We will have more after the analyst teleconference later. Meanwhile, we place our Buy rating and S$3.68 fair value under review. (Carey Wong)

Olam Int'l: Decent 3QFY13 results

Summary
: Olam International Limited (Olam) saw 3QFY13 revenue climb 12% YoY (but down 4% QoQ) to S$4.72b, such that its 9MFY13 revenue of S$14.31b (+20%) met 72% of our FY13 forecast. Reported net profit gained 10% YoY (but fell 30% QoQ) to S$108.5m, while core earnings (excluding bio-asset revaluation gains etc) rose 13% YoY (down 22% QoQ) to S$92.8m. Core 9MFY13 earnings of S$240.3m met about 79% of full-year forecast. We will have more after the analyst briefing later. Until then, our Hold rating and S$1.50 fair value is under review. (Carey Wong)


Noble Group Ltd: Weak FY13 start but recovery expected


Summary:
Noble Group (Noble) reported a 1.1% YoY QoQ decline in revenue to US$22.6b, meeting 22.5% of our full-year forecast, but reported net profit tumbled 62.5% to US$41.3m, or about only 10.2% of our original FY13 forecast, weighed by losses at its Agriculture segment. Its Metals, Minerals and Ores (MMO) also did not fare too well. The only bright spark came from its Energy segment, with operating income up 6% at US$368.0m, although tonnage (Excluding gas and power volume) was flat. Noble intends to continue with its asset light strategy and also intends to focus on improving its efficiency and lowering cost amid a still-challenging environment. Still, we are cutting our FY13F earnings by 10% (FY14F by 13%), which in turn eases our fair value from S$1.19 to S$1.09. Maintain HOLD. (Carey Wong)


ComfortDelGro - Decent start to the year


Summary:
ComfortDelGro's 1Q13 results saw revenue increasing slightly by 1.8% YoY to S$870.8m on the back of broad-based growth across its segments while operating profit improved 2.8% to S$95.9m as higher staff and repairs and maintenance expenses were offset by a reduction in fuel and electricity expenditure. As a result, PATMI rose 7.9% to S$57.7m. In the coming quarters, we expect a fare increase to be implemented by the government in FY13, and the group should to continue benefiting from lower fuel costs due to the favourable fuel outlook and proactive hedges in place, which should offset sustained weakness in the SG bus business. While we continue to prefer ComfortDelgro over SMRT, we maintain our HOLD rating with an unchanged fair value estimate of S$1.95 in light of its recent ~8% appreciation. (Lim Siyi)


Midas Holdings: 1Q13 net loss wider than expected


Summary:
In line with its profit guidance issued on 10 May, Midas Holdings reported a net loss attributable to shareholders of CNY4.9m in 1Q13, versus PATMI of CNY15.3m in 1Q12. Revenue fell 12.1% YoY to CNY202.4m. While we had expected Midas to report a loss-making quarter, the magnitude was larger than our forecast for a net loss of CNY3.2m. However, revenue was within our CNY199.8m estimate. The below-expectations bottomline performance was due partially to weaker-than-estimated gross margin and largely attributed to a wider share of loss of CNY4.0m from its associated company, Nanjing SR Puzhen Rail Transport (OIR forecast: share of loss of CNY0.8m). On an operational basis, Midas was actually profitable, although profit from operations dipped 50.4% YoY to CNY18.9m. We will provide more updates after the analyst conference call. For now we have a BUY rating on Midas. However, our forecasts, 1.2x P/B target peg and S$0.595 fair value estimate are likely to be lowered given the ongoing uncertainty over the timeline of resumption of new high-speed train car orders. (Wong Teck Ching Andy)


SATS Ltd - FY13 results in-line


Summary:
SATS's FY13 results were in line with our expectations, coming in within 2% of our projections. Revenue grew 7.9% YoY to S$1,819m on the back of increases from the gateway and food businesses while operating profit increased correspondingly by 13.8% YoY to S$192.3m. Despite cost pressures related to higher staff expenses and raw material costs, SATS was able to register an improvement of 0.6ppt in operating margin to 10.6% from a year ago. FY13 PATMI was S$184.8m (+2.1% YoY). Management declared a final and special cash dividend of 6 S cents and 4 S cents, respectively, to bring the total dividends declared in FY13 to 15 S cents (FY12 total: 26 S cents), representing a payout ratio of 90.3% of PATMI. As SATS's share price has continued to appreciate in the previous weeks, we feel that many of the positives have already been priced in. Nonetheless, pending the analyst briefing later this morning, we place our HOLD rating and fair value under review. (Lim Siyi)


SIA Engineering: FY13 within expectations


Summary:
SIA Engineering Company's (SIAEC) FY13 results were in line with ours and the street's expectations. Revenue decreased by 2.0% to S$1.15b, chiefly due to lower fleet management and project revenue. Operating profit fell 1.2% to S$128m. Share of profits from associated and JV companies increased by 1.5% to S$159m, representing a contribution of 52.0% of the group's pre-tax profits. PATMI was up 0.4% to S$270m. Basic EPS of 24.51 S cents formed 98% of ours and the street's FY13 estimates. The board is recommending a final ordinary dividend of 15.0 S cents, which will bring total FY13 dividends to 22.0 S cents per share. Pending a briefing with management, we are maintaining our HOLD rating but place our fair value estimate of S$4.38 under review. (Sarah Ong)


Swiber Holdings: Good 1Q13 results


Summary:
Swiber Holdings (Swiber) reported a 59.3% YoY rise in revenue to US$309.7m and a significant rise in net profit from US$8.6m in 1Q12 to US$20.1m in 1Q13. Both revenue and pre-tax profit formed 27% of our full-year estimates, in line with our expectations, but the lower-than-expected tax rate meant that net profit accounted for 38% of our full-year forecast. Gross profit margin was lower at 16.1% in 1Q13 vs 19.8% in 1Q12. Swiber's order book stands at about US$1.1b as at May. Net gearing increased slightly from 0.95x in 4Q12 to 1.0x in 1Q13. Pending an analysts' briefing later in the afternoon, we put our hold rating and fair value estimate of S$0.70 under review. (Low Pei Han)


CSE Global: 1Q13 net profit within expectations


Summary:
CSE Global's 1Q13 net profit was flat at S$12.7m, forming about 24% of our full-year estimates and 23% of the street's. Revenue declined 11% to S$120m due to lower contribution from the Americas and the EMEA region. However, net margin improved to 10.5% (1Q12: 9.4%) as it undertook higher margin work in the Americas and the loss-making projects are nearing completion. CSE's order-book declined to S$361.1m as at end-1Q13 (end-4Q12: 384.5m). Pending an analyst briefing later, we keep our BUYrating (FV: S$0.99) unchanged. (Chia Jiunyang)


CWT Ltd: Commodity SCM expansion underway


Summary:
CWT's 1Q13 revenue increased by 39% YoY to S$1.5b, largely due to growth from its newly established Commodity SCM business. However, net profit was flat at S$27m as the start-up costs offset any incremental earnings for the new business segment. Nonetheless, the results were within our expectations. CWT's balance sheet also appeared to be stable with net gearing of 0.48x as at end-Mar 2013. We currently have a BUYrating on CWT with a FV estimate of S$2.08, and will provide further updates after our call with management. (Chia Jiunyang)


Dyna-Mac Holdings: Stay cautious


Summary:
Dyna-Mac Holdings reported revenue of S$60m (+155% YoY) and net profit of S$6.7m (+101% YoY) for 1Q13. However, gross profit margin declined to 24.4% from 28.8% in the year-ago period due to fewer variation orders during the quarter. Its order-book fell to S$113m (as at 14 May 2013) from S$134m (as at 27 Feb 2013), providing cover for only two quarters. This makes it vulnerable to any delays in the award of new contracts. We keep our HOLD rating for now and will review our S$0.50 fair value after our discussions with management. (Chia Jiunyang)


UE E&C: Construction pace expected to pick up


Summary:
UE E&C reported a 43% YoY increase in revenue to S$87.6m and a 14% YoY increase in net profit of S$4.8m in 1Q13. The improvements were mainly due to larger contribution from existing projects. However, 1Q gross profit margin fell to 10.8% from 15.4% in the year-ago quarter as some of the projects were still in preparatory stages. We expect the construction pace to pick up in 2H13. Pending our discussions with management, we keep our BUY rating and S$0.82 fair value unchanged. (Chia Jiunyang)


VARD Holdings: Earnings recovery in FY14


Summary:
VARD Holdings' 1Q revenue and net profit declined by 2% and 30% YoY to NOK2.7b and NOK188m respectively, largely due to (i) the completion of several high-margin jobs last year, and (ii) operational challenges in the Niteroi yard in Brazil. Although 1Q results were slightly lower than ours and consensus estimates, we now see positive developments that we believe would herald an earnings recovery in FY14F. Firstly, management is now more positive on Brazil and expects operations to stabilize by year-end. Secondly, order-book is at a very healthy level and management is optimistic on securing new contracts. Thirdly, management is now able to commit to longer-term investment with Fincantieri coming onboard as a controlling shareholder. Maintain BUY with unchanged S$1.52 fair value estimate. (Chia Jiunyang)

For more information on the above, visit www.ocbcresearch.comfor the detailed report.

NEWS HEADLINES


- Hotel Grand Central's 1QFY13 net profit declined 17% YoY due to a slowdown in its Australian businesses.


- Jaya Holdings' 3QFY13 net profit rose 7% YoY from US$3.8m to US$4.0m, helped by higher day rates commanded for offshore support services.


- Mewah posted a decline in PATMI by 53.6% YoY despite sales volume increasing 9.2% YoY and 18.1% QoQ.


- Sim Lian recorded a 45% YoY improvement in net profit for 3QFY13 on the back of a 37% increase in revenue.