SG: MARKET PULSE: BreadTalk, Vard, LMIRT, Yoma, KepCorp (7 Nov 2013)

Stock Name: BreadTalk
Company Name: BREADTALK GROUP LIMITED

Research House: OCBC

Price Call: SELL

Target Price: 0.77

Stock Name: Vard Holdings
Company Name: VARD HOLDINGS LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.84

Stock Name: LippoMalls
Company Name: LIPPO MALLS INDO RETAIL TRUST

Research House: OCBC

Price Call: HOLD

Target Price: 0.44

Stock Name: Yoma
Company Name: YOMA STRATEGIC HOLDINGS LTD

Research House: OCBC

Price Call: HOLD

Target Price: 0.84

Stock Name: Kep Corp
Company Name: KEPPEL CORPORATION LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 12.87

MARKET PULSE: BreadTalk, Vard, LMIRT, Yoma, KepCorp

7 Nov 2013

KEY IDEA BreadTalk Group: Same ol' same ol' BreadTalk's 3Q13 results exhibited the same traits as before. Revenue and operating profit increased following top-line growth across all three operating segments but operating margins remained depressed. In the coming quarters, we expect this trend to persist, especially with its new stated goal of having S$1b in revenue by 2016 and 2,000 stores by 2018. In our view, achieving these goals will be challenging in such a short-time as even our moderately optimistic medium-term projections has them missing the mark. More importantly, we feel that group has to address margin declines sooner rather than later as revenue growth without corresponding bottom-line increases via margin improvements will be hollow. Until then, we maintain SELL on BreadTalk with an unchanged fair value estimate of S$0.77. (Lim Siyi) MORE REPORTS Vard Holdings: Strong margins pressure Vard Holdings Limited's (VARD) 3Q13 results fell short of ours and the street's expectations, with revenue and PATMI dipping by 3.5% and 66.7% YoY to NOK2,370m and NOK76m, respectively. There was also strong margins pressure as its Niteroi yard in Brazil continued to experience cost overruns and delays. Nevertheless, the situation appears to be stabilising and we are also positive on its healthy orders intake worth NOK7.95b in 3Q13. This has boosted its orderbook to NOK19.5b as at 30 Sep 2013, versus NOK16.4b as at 30 Sep 2012. We rework our assumptions following a change in analyst coverage, lowering our FY13 and FY14 PATMI projections by 23.1% and 2.7%, respectively. Applying a PER valuation peg of 8x (approximately in-line with its average forward PER since listing) to our FY14F EPS forecast, we derive a new fair value estimate of S$0.84 (previously S$0.80). Upgrade VARD from Sell to HOLD. (Wong Teck Ching Andy) Lippo Malls Indonesia Retail Trust: 3Q13 results in-line LMIRT reported 3Q13 gross rental income of S$38.9m, up 13.6% YoY. The increase was mainly due to the acquisition of the six new malls in 4Q12, and positive rental reversions for the existing malls. Distributable income increased by 20.7% YoY to S$19.1m and DPU climbed 19.2% YoY to 0.87 S cents. Results for the quarter were in-line with ours and consensus expectations. 9M13 DPU of 2.69 S cents forms 75% of our FY13 estimate. We maintain our HOLD rating on LMIRT but place our fair value of S$0.44 under review. We will be speaking with management shortly. (Sarah Ong) Yoma Strategic Holdings: No surprises from 2QFY14 earnings Yoma reported 2QFY14 PATMI of S$3.3m, versus a loss of S$4.2m in 2QFY13. The return to profitability was mainly due to the sale of two buildings in Zone B of Star City, for which Yoma recognized S$15.1m of revenue and an incentive fee of S$2.3m, and lower staff costs. YTD PATMI now cumulates to S$3.76m and is judged to be mostly within expectations, making up 48.0% of our full year forecast for FY14. We note, however, that 2QFY14 gross margin has slipped 2.4 ppt YoY to 44.9% due to a lower contribution from Pun Hliang Golf Estate which is a higher margin project. In terms of the 2QFY14 topline, it increased 132.4% YoY to S$27.0m, again mostly due to recognition of residential sales and LDR sales at Star City. As at end Sep-13, 523 (out of 528 total units) at Star City's Building A3 and A4 were sold, up marginally from 513 units sold as at end Jun-13. Maintain HOLD with an unchanged fair value estimate of S$0.84. (Eli Lee) Keppel Corporation: Secures order for five jack-ups from Transocean Keppel Corporation's (KEP) offshore and marine arm has secured an order from returning customer Transocean to build five KFELS Super B Class jack-up rigs for US$1.1b. In addition, Transocean has options to build up to another five similar jack-up rigs with KFELS. With a price tag of about US$220m for each rig, this is more or less in line with Falcon Energy's order from KEP in Apr this year for a similar rig. We view this contract as an affirmation of KEP's leading position as a rigbuilder in the eyes of established industry players, and think that the contract likely landed in KEP's hands due to 1) the proven track record the KFELS Super B Class design has with Transocean (recent units enjoyed high revenue efficiency), and 2) the tight delivery schedule (progressive from 1Q16 to 3Q17) is safer in a pair of trusted hands. KEP has secured orders worth about S$6.4b YTD, exceeding our full year estimate of S$6b. Maintain BUY with S$12.87 fair value estimate. (Low Pei Han)

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NEWS HEADLINES - Wages are expected to increase by 4.5% in Singapore next year, according to a survey by Towers Watson. - STATS ChipPAC reported 3Q13 net profit of US$13.3m, versus US$3.2m last year. 3Q13 net profit includes an exceptional gain of US$19.6m insurance settlement on account of business disruption due to the floods in Thailand. - Baker Technology reported 3Q13 net profit of S$3.6m versus S$5.7m a year ago. - Aussino Group, which has been on the SGX watch-list since Sep 2011, has announced that it plans to issue up to US$30m in convertible senior notes to a US investment firm. - Hengyang Petrochemical has issued a profit warning for 3Q13. - Action Asia expects to report a loss for 3Q13 due to lower revenue.

SG: MARKET PULSE: Sheng Siong, CRCT, LMIRT (26 Sep 2013)

Stock Name: Sheng Siong
Company Name: SHENG SIONG GROUP LTD

Research House: OCBC

Price Call: BUY

Target Price: 0.78

Stock Name: CapitaRChina
Company Name: CAPITARETAIL CHINA TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.58

Stock Name: LippoMalls
Company Name: LIPPO MALLS INDO RETAIL TRUST

Research House: OCBC

Price Call: HOLD

Target Price: 0.44

MARKET PULSE: Sheng Siong, CRCT, LMIRT

26 Sep 2013

KEY IDEA Sheng Siong Group: No new stores not a concern Although 3Q13 is coming to a close, we are unconcerned by the lack of new store additions by Sheng Siong Group (SSG). While this development means that SSG will be unable to achieve its 10% gross floor area target for the year, the group should still experience decent top-line growth for 3Q13 from full-quarter contributions of new stores added last year. Furthermore, expected margin stability and a conducive macro environment - more dining-in of consumers and relatively subdued supermarket competition - provide price support for SSG's share price at current levels. Favouring the counter for its defensive qualities and healthy balance sheet, we maintain BUY with a slightly lower fair value estimate of S$0.78 (S$0.80 previously). A potential catalyst for the counter exists in the form of its pilot e-commerce initiative, which is likely to commence in 4Q13. (Lim Siyi) MORE REPORTS CapitaRetail China Trust: Outcome of Distribution Reinvestment Plan CRCT has announced that ~6.0m new CRCT units have been allotted and issued at an issue price of S$1.447 per unit to eligible unitholders of CRCT who have elected to participate in the Distribution Reinvestment Plan in respect of the distribution of 4.69 cents per unit for 1H13. The new units will commence trading on the SGX-ST today. With the issue of the new units, the number of issued units has increased by ~0.8% to 756,140,024. Since 3Q13 results will be announced soon, we will hold off on adjusting our model for this development. We maintain our fair value of S$1.58 FV and BUY rating on CRCT. (Sarah Ong) Lippo Malls Indonesia Retail Trust: S$150m of notes issued under MTN programme Lippo Malls Indonesia Retail Trust (LMIRT) has priced S$150m 4.25% notes due 2016. The notes will be issued under its S$750m Guaranteed Euro Medium Term Note Programme. The fundraising does not come as a surprise since management had indicated during the 2Q13 analyst conference call that LMIRT may refinance the S$147.5m term loan due June 2014 as early as late 2013. We maintain our DDM-based FV of S$0.44 on LMIRT and HOLD rating for now. (Sarah Ong)

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NEWS HEADLINES - US stocks dropped on Wed, with the S&P 500 index recording its longest decline since Dec, as a possible government shutdown overrode better-than-forecast economic reports. - The wealthy in the Asia Pacific trust their wealth managers more than high net worth individuals in the rest of the world, a wealth report has found. - OUE Limited is mulling over establishing yet another REIT to be listed on the Main Board of SGX. - Asiaphos Limited, a Singapore-based explorer and miner of phosphate in China, hopes to raise about S$24.4m in an IPO on the Catalist board. - Asia Fashion Holdings assured the market that a RMB461.5m (S$94.6m) compensation it is making to customers will not render the company "insolvent immediately". - OKH Global has entered into a placement agreement in which it will issue up to 60m new ordinary shares at 68 S cents apiece.

SG: MARKET PULSE: ECS, Lippo MIRT, Vard (22 Aug 2013)

Stock Name: ECS
Company Name: ECS HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.56

Stock Name: LippoMalls
Company Name: LIPPO MALLS INDO RETAIL TRUST

Research House: OCBC

Price Call: HOLD

Target Price: 0.44

Stock Name: Vard Holdings
Company Name: VARD HOLDINGS LIMITED

Research House: OCBC

Price Call: SELL

Target Price: 0.80

MARKET PULSE: ECS, Lippo MIRT, Vard

22 Aug 2013

KEY IDEA ECS Holdings: Beneficiary of product refresh cycle We met up with the management of ECS Holdings following its recent 2Q13 results. Revenue and PATMI rose 23.5% and 11.0% YoY to S$1,017.5m and S$9.0m, respectively. However, after adjusting for forex and other exceptional items, we estimate that core earnings declined 7.3% YoY from S$7.4m to S$6.9m, which was below our expectations. On a positive note, ECS managed to lower its net gearing ratio from 59.4% (as at end 2Q12) to 38.5% (as at end 2Q13) due to good working capital management. Looking ahead, we expect ECS to be a beneficiary of new product launches by major IT vendors such as Apple. We trim our FY13 and FY14 core PATMI forecasts by 6.2% and 3.9%, respectively. But as we also roll forward our valuations to 6x blended FY13/14F core EPS, our fair value estimate only declines marginally from S$0.57 to S$0.56. Maintain BUY. (Wong Teck Ching Andy) MORE REPORTS Lippo Malls Indonesia Retail Trust: Weakening IDR likely to affect NAV The IDR has weakened some 7.4% against the SGD since 28 Jun, with SGD1 buying IDR8558.25 as at 21 Aug, compared to IDR7922.96 on 28 Jun (Bloomberg). We understand that only ~65% of the cash flow from the properties for 2H13 are likely hedged for depreciation of IDR against SGD. In addition, the weakening of the IDR against the SGD does not bode well for the valuation of LMIRT's properties in SGD terms, which means that NAV would likely be affected negatively. To reflect a higher risk profile for LMRT, especially given the outflow of funds from emerging markets, we incorporate a higher cost of equity of 10.8%, versus 9.7% previously, and trim our DDM-based FV to S$0.44 from S$0.49. Maintain HOLD. (Sarah Ong) Vard Holdings: Secures NOK800m contract Vard Holdings Limited (VARD) announced that it has secured a new contract for the design and construction of one Offshore Subsea Construction Vessel (OSCV) worth ~NOK800m. This contract is awarded by Farstad Shipping, which is an existing customer of VARD. Delivery for this OSCV is scheduled for 3Q15, and will be used for subsea and Inspection, Maintenance and Repair (IMR) operations. Recall that VARD also recently announced on 12 Aug 2013 that it had won four Pipe Lay Support Vessels (PLSVs) contracts with an aggregate order value of ~NOK6.5b. But due to a change in analyst coverage, we are placing our Sell rating and S$0.80 fair value estimate under review. (Research Team)

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NEWS HEADLINES - US stocks ended sharply lower as investors weighed the Feds signalling that it remained on course to curb its monthly bond purchases by the end of the year. - Parkson Retail Asia's net profit for 4QFY13 fell 62.1% YoY to S$3.4m, even as its revenue inched up 0.6% YoY to S$102.9m. - PEC Ltd posted an 11% YoY increase in net profit attributable to equity-holders to S$5.06m for 4QFY13 (versus S$4.55m in 4QFY12). - Neo Group Ltd has made its maiden overseas expansion, inking a five-year licence agreement with PT Umi Sushi Indonesia to launch three sushi retail outlets in Jakarta. - TSH Australia Holdings, a wholly owned subsidiary of Tuan Sing Holdings, has received a writ of summons by Kara Investments, a unit of Morgan Stanley, and GSS III Rutgers BV. - Airlines, aviation-related operators and construction firms, and REITs with assets in Paya Lebar, stand to benefit the most from plans to expand and upgrade Changi Airport, according to brokerage houses.

SG: MARKET PULSE: SembMarine, UOB, Roxy, Cosco, LMIRT, SembCorp (2 Aug 2013)

Stock Name: SembMar
Company Name: SEMBCORP MARINE LTD

Research House: OCBC

Price Call: BUY

Target Price: 5.64

Stock Name: UOB
Company Name: UNITED OVERSEAS BANK LTD

Research House: OCBC

Price Call: HOLD

Target Price: 22.97

Stock Name: Roxy-Pacific
Company Name: ROXY-PACIFIC HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.81

Stock Name: CoscoCorp
Company Name: COSCO CORPORATION (S) LTD

Research House: OCBC

Price Call: SELL

Target Price: 0.60

Stock Name: LippoMalls
Company Name: LIPPO MALLS INDO RETAIL TRUST

Research House: OCBC

Price Call: HOLD

Target Price: 0.52

Stock Name: Semb Corp
Company Name: SEMBCORP INDUSTRIES LTD

Research House: OCBC

Price Call: BUY

Target Price: 6.48

MARKET PULSE: SembMarine, UOB, Roxy, Cosco, LMIRT, SembCorp

2 Aug 2013

KEY IDEA Sembcorp Marine: New yard opens at a time of record order book Summary: Sembcorp Marine (SMM) reported a 7.6% YoY fall in revenue to S$1.12b and a 12.5% decrease in net profit to S$124.9m in 2Q13, such that 1H13 figures accounted for about 43% of our full year estimates, which we judge to be largely within our expectations. The last quarter saw fewer projects achieving initial recognition; more are expected in 3Q13. The new Tuas yard should also see revenue contribution in 2H13. Operating margin in 2Q13 was 13.0% vs 13.1% in 2Q12. After securing new orders worth about S$3.5b YTD, the group's net order book stands at S$14.4b, a record high in SMM's history. Meanwhile the stock price has appreciated by about 7.3% since our last report on 6 May 2013, and has outperformed the STI by about 11.1% over the same period. Maintain BUYwith S$5.64 fair value estimate. (Low Pei Han) MORE REPORTS UOB: Stronger 2Q and modest rise in NIM Summary: UOB posted 2Q13 net earnings of S$783m, better than consensus estimate of S$699.9m. Net Interest Margin improved modestly from 1.70% in 1Q13 to 1.71% in 2Q13. For the Fee and Commission income, the key outperformers were its Investment-related and credit card operations which showed both YoY and QoQ improvements. Management has declared an unchanged 1H dividend of 20 cents. The group is continuing with its strategy of growing its regional franchise. For its Wealth Management business, AUM has grown from S$48b in 2010 to S$71b as of Jun 2013. We have adjusted our FY13 estimates, lowering impairment charges and increasing operating expenses. We are maintaining our HOLD rating and our fair value estimates of S$22.97, but will turn buyer at S$21.40 or lower. (Carmen Lee) Roxy-Pacific Holdings: $1.1b of revenues to drive earnings growth Summary: 2Q13 PATMI is S$19.5m (EPS: 2.05 S- cents) which increased 10% YoY due to higher property development profits. 1H13 PATMI now cumulates to S$31.2m, forming 40% of our full year forecast. We judge this to be within expectations; earnings are likely to be backloaded in FY13, particularly with an anticipated one-time boost from Wis@Changi upon its TOP in 2H13. The group now sits on S$1.1b of yet unrecognized revenues from sold units - this is equivalent to 8 times FY12 property revenues and would underpin a rigorous earnings growth profile ahead in our view. Maintain BUY with an higher fair value estimate of S$0.81 (25% discount to RNAV) versus S$0.76 previously as we update for latest sales datapoints and a reduced RNAV discount. Key catalysts in 2H13 ahead include the launch of LIV on Wilkie and an earnings boost from Wis@Changi's TOP. We also see a bonus share issue as a possibility in 2H13, which could help the counter's uneven trading liquidity. (Eli Lee) COSCO Corp (Singapore): Another weak quarter Summary: COSCO Corp (Singapore)'s revenue for 2Q13 declined by 9% YoY to S$890m, while net profit fell by 56% to S$12.0m. For 1H13, the group's net profit fell by 61% to S$21.8m, forming 45% and 29% of ours and the street's FY13 estimates respectively. As its operating weakness is more severe than what the street had expected, we think that the street would likely lower its FY13F forecasts. The group's balance sheet is debt-laden with net debt-to-equity ratio at 1.4x and S$1.3b of loans due within 12 months. Should the credit situation in China deteriorates further, the group may become vulnerable. Maintain SELL with unchanged FV of S$0.60. (Chia Jiunyang) Lippo Malls Indonesia Retail Trust: 2Q13 results as expected Summary: LMIRT posted 2Q13 gross rental income of S$40.1m, up 30.2% YoY. The increase was mainly due to the acquisition of the six new malls in 4Q12, and positive rental reversions of 15.5% for the existing malls. Distributable income increased by 19.5% YoY to S$20.5m and DPU climbed 17.7% YoY to 0.93 S cents. Results for the quarter were in line with our and consensus expectations. 1H13 DPU of 1.82 S cent forms 50.6% of our FY13 estimate. We maintain our HOLD rating on LMIRT but place our fair value of S$0.52 under review. (Sarah Ong) Sembcorp Industries: Investing in its second energy-from-waste plant in Singapore Summary: Sembcorp Industries (SCI) announced that it will invest over S$250m to build, own and operate a facility capable of producing 140 tonnes/h of steam using industrial and commercial waste collected by its solid waste management operations. This will be SCI's largest energy-from-waste plant in Singapore to date (also its second one here), and will be located on Jurong Island. The project will be funded by bank borrowings and internal resources, and will be completed in early 2016. SCI has a track record of managing such facilities, and its portfolio includes energy-from-waste, biomass and wind power facilities in the UK and China. Maintain BUY with S$6.48 fair value estimate on the stock. (Low Pei Han)

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NEWS HEADLINES - S&P 500 surpassed 1,700 for the first time, after the Fed announced continued stimulus, jobless claims fell to a five-year low and manufacturing index rose to a two-year high. - Crude palm oil prices in 2Q13 stayed flat QoQ, averaging just above RM2,300 (S$903) per tonne, a steep 30% drop from year-ago levels. - Singapore's manufacturing sector continued to outperform its regional counterparts in Jul, expanding for the fifth consecutive month despite weaker showings across the rest of Asia. - Keppel Offshore & Marine Ltd has secured a contract to build a jack-up rig for US$206m from Parden Holding, a company based in Uruguay. - Parkway Life REIT reported a distribution per unit of 2.63 S-cents for the 2Q13, up 6.1% YoY, as distributable income rose to S$15.9m.

SG: MARKET PULSE: UOB, Genting, LMIRT (3 May 2013)

Stock Name: UOB
Company Name: UNITED OVERSEAS BANK LTD

Research House: OCBC

Price Call: BUY

Target Price: 22.97

Stock Name: Genting SP
Company Name: GENTING SINGAPORE PLC

Research House: OCBC

Price Call: SELL

Target Price: 1.41

Stock Name: LippoMalls
Company Name: LIPPO MALLS INDO RETAIL TRUST

Research House: OCBC

Price Call: HOLD

Target Price: 0.52

MARKET PULSE: UOB, Genting, LMIRT

3 May 2013

KEY IDEA UOB: Above expectations 1Q UOB Group posted 1Q13 net earnings of S$722m, ahead of consensus estimate. This was buoyed by higher Non-Interest Income, which rose 12% YoY and 13% QoQ to S$708m. Fee & Commission Income jumped 17% QoQ or 25% YoY to S$453m, supported by strong double-digit growth from loans (+63%), fund management (+19%) and Investment (+18%). As 1Q accounted for about 25% of our full year estimate, we made very slight adjustments to our FY13 earnings. Based on P/B of 1.5x, we raised our fair value estimate from S$21.30 to S$22.97. While we continue to like UOB for its good cost controls and strong quarterly performance, the stock has outperformed and appreciated some 11% YTD. It is now trading close to our fair value estimate. As such, we downgrade our rating to HOLD. (Carmen Lee) MORE REPORTS Genting Singapore: 2013 outlook more cautious Genting Singapore (GS) reported 1Q13 revenue of S$669.6m, down 15% YoY and also 16% QoQ, hit by much weaker win percentage (2.12% versus 2.85% theoretical) in the premium players' business; net profit posted a decline of 44% YoY and 13% QoQ to S$115.9m. All in, a pretty muted set of numbers, as top-line only met 20% of our original FY13 forecast while bottom-line met 18% of our full-year number. Going forward, management has turned slightly more cautious, citing the still uncertain global economic outlook, especially with the recent muted economic data coming out of China. We pare our FY13 revenue estimates by 10% and core earnings by 16%. As such, our DCF-based fair value also slips to S$1.41 from S$1.52 previously. Recent run-up in share price seems slightly over-done; hence we downgrade to SELL from Hold on valuation grounds. However, we would buyers closer to S$1.30 or lower. Longer-term catalyst could come from a potential IR license overseas in markets like Japan. (Carey Wong) Lippo Malls Indonesia Retail Trust: 1Q13 results in line LMIRT posted 1Q13 gross rental income of S$39.4m, up 29.3% YoY. The increase was mainly due to the acquisition of the six new malls in 4Q12, and positive rental reversions for the existing malls. The higher gross rental income was partially offset by the effect of FX rates used for translating into SGD revenues denominated in IDR. Results for the quarter were in line with our and consensus expectations; DPU of 0.89 S cent formed 25% of ours and 26% of the street's FY13 estimate. We maintain our fair value of S$0.52 and HOLD rating on LMIRT. We estimate a FY13F yield of 6.7%. (Sarah Ong)

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NEWS HEADLINES - US stocks rose Thurs, with the S&P 500 reaching a new record, after the ECB lowered its benchmark interest rate and US jobless claims fell to a five-year low. - GuocoLand has plans for an integrated mixed-use development at the white site above Tanjong Pagar MRT station. Named Tanjong Pagar Centre, the 290m development will be Singapore's tallest building. - UOB-Kay Hian Holdings has entered into a sales and purchase agreement to dispose of a 93.47% owned subsidiary in Thailand for a total consideration of ~S$40m. - Ezra's subsea division has won a US$75m contract from Statoil. - Innopac Holdings' proposed takeover offer for ASX-listed Merlin Diamonds has received acceptances representing 42.52% of Merlin's issued and paid-up share capital in a little over one month after the offer opened for acceptance.

MARKET PULSE: ComfortDelgro, LMIRT (13 Feb 2013)

Stock Name: ComfortDelGro
Company Name: COMFORTDELGRO CORPORATION LTD

Research House: OCBC

Price Call: HOLD

Target Price: 1.95

Stock Name: LippoMalls
Company Name: LIPPO MALLS INDO RETAIL TRUST

Research House: OCBC

Price Call: HOLD

Target Price: 0.52

MARKET PULSE: ComfortDelgro, LMIRT

13 Feb 2013

KEY IDEA ComfortDelGro: Comforting results but rich valuations Summary: ComfortDelGro's (CD) FY12 results came in within our expectations with revenue increasing 3.9% YoY to S$3.5b while operating profit rose 3.3% YoY to S$412.3m as the group managed to keep a lid on operating expenses. With PATMI rising 5.6% YoY to S$248.9m, management declared a final dividend of 3.5 S cents (FY11: 3.3 S cents), taking the total dividend declared for the year to 6.4 S cents (FY11: 6.0 S cents). Investors can now look forward to an announcement in the coming months for local fare increases, which will provide much-needed relief for domestic operations. Away from home, we expect CD's overseas ventures to stay lucrative despite greater competitive pressures. However, while we raise our fair value to S$1.95 (from S$1.90 previously), we feel that the market has already priced in much of the upside. Therefore, we downgrade CD to HOLD on valuation grounds despite favouring the group over SMRT. (Lim Siyi) MORE REPORTS Lippo Malls Indonesia Retail Trust: Downgrade to HOLD Summary: LMIRT posted 4Q12 gross rental income of S$33.0m, up 35% YoY. The increase was primarily due to the contributions from Pluit Village and Plaza Medan Fair (acquired in 4Q11) and marginal contributions from the six acquisitions made in 4Q12. Results for the quarter were generally in line with our expectations; DPU of 0.74 S cents formed 97% of our estimate. NAV per unit rose 6.3% QoQ to 56.16 S cents, giving a current P/B of 0.93x. Gearing remains healthy at 24.5%. Management indicates that the average weighted all-in cost of debt for FY13 is likely to be 5.5%-5.7%. We maintain our fair value of S$0.52. Since the current unit price is near our fair value, we downgrade LMIRT to a HOLD. We estimate a FY13F yield of 6.9%. (Sarah Ong)

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NEWS HEADLINES - US stocks pushed higher on Tuesday as blue chips, led by the financial sector, closed at levels not seen in more than five years. The Dow rose 0.3% to close at 14,018.70, with 23 of 30 components finishing in positive territory. - CitySpring Infrastructure Trust reported a net profit of S$6.5m for its 3QFY13, compared with a net loss of S$3.8m in the year-ago period. - United Industrial Corp's FY12 net earnings doubled to S$391.6m, boosted by revaluation gains of its investment properties. Excluding the gains, net profit from operations would have fallen 16% to S$168.2 million. - Kian Ann Engineering will be delisted from SGX on 14 Feb 2013. Separately, Hup Soon Global Corporation said that its offerer, Spei Holdings, has proposed to its board to seek its voluntary delisting from the catalist board. - The Hour Glass reported a 7% YoY dip in turnover to S$157.9m and a 19% decline in earnings to S$14.6m for 3QFY13.

MARKET PULSE: OSIM, LMIRT, Roxy-Pacific (4 Jan 2013)

Stock Name: OSIM
Company Name: OSIM INTERNATIONAL LTD

Research House: OCBC

Price Call: BUY

Target Price: 2.14

Stock Name: LippoMalls
Company Name: LIPPO MALLS INDO RETAIL TRUST

Research House: OCBC

Price Call: BUY

Target Price: 0.52

Stock Name: Roxy-Pacific
Company Name: ROXY-PACIFIC HOLDINGS LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.54

MARKET PULSE: OSIM, Lippo Malls Indonesia Retail Trust, Roxy-Pacific

4 Jan 2013

KEY IDEA OSIM International: Weaving its magic for the new year We believe that OSIM International (OSIM) would be a key beneficiary of a recovery in economic conditions in China, which is its largest market. Looking ahead, we expect OSIM to continue its product innovation drive, with plans to launch two new massage chair models in 1H13 to augment its product portfolio. Management has also embarked on a nationwide media advertising campaign in China to increase its reach to new audiences. These initiatives, coupled with a focus on improving productivity, would help to drive its sales and profitability for FY13, in our view. Despite OSIM's recent strong share price run up, we see room for further re-rating given the improved market risk appetite and its attractive valuations versus its peers. We raise our fair value estimate on OSIM from S$1.87 to S$2.14 as we apply its peers' average forward PER of 16.4x to its FY13F EPS. Maintain BUY. (Wong Teck Ching Andy) MORE REPORTS Lippo Malls Indonesia Retail Trust: LT pipeline from Lippo Karawaci According to a Bloomberg article dated 21 Dec 2012, PT Lippo Karawaci, Indonesia's largest listed property company and LMIRT's sponsor, will have finished building about half of the 15 new malls it has plans for by 2015, in cities such as Semarang in north Java, Denpasar in Bali and Manado in north Sulawesi province. Starting from a lower base of development, we believe that some of these cities should see higher rates of retail growth than Jakarta. These malls could serve as a longer term pipeline for LMIRT. We maintain our fair value of S$0.52 and BUY rating on LMIRT. (Sarah Ong) Roxy-Pacific Holdings: Acquiring another site at Wilkie Terrace The group announced yesterday that it has agreed to acquire a freehold residential site at 13 and 15 Wilkie Terrace for S$24.5m. The land area is 9,324 sq ft; with a plot ratio of 2.1, this translates to a total GFA of 19581 sq ft and land cost of S$1,251 psf. Management indicates that it intends to amalgamate this site with a another site in its land-bank (7,9,11 Wilkie Terrace) for a residential development. We believe the price paid for the site is reasonable, especially given that the acquisition would give the group more flexibility in planning a larger scale project at the area. For this counter, however, we believe most positives are priced in at current price levels. Maintain HOLDwith an unchanged fair value estimate of S$0.54. (Eli Lee)

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

NEWS HEADLINES - US stocks fell on Thu after the Fed signalled a likely end in 2013 to its bond purchases, offsetting upbeat jobs data from the private sector. The Dow and S&P 500 index each fell 0.2% to 13,391.36 and 1,459.37, respectively, while the Nasdaq finished 0.4% lower at 3,100.57. - Singapore's manufacturing activity shrank for a sixth straight month in Dec due to further declines in new orders, new export orders and production output, as purchasing managers' index dipped to 48.6 from 48.8 in Nov. - Three plots of industrial land in Tuas released under the Industrial Government Land Sales programme in Nov drew keen interest and bids from multiple developers, suggesting that demand for industrial property remains robust. - Second Chance Properties' 1Q13 net profit fell 10% YoY to S$3.4m as revenue slid 0.2% to S$9.4m, due mainly to a decline in revenue at its gold business as a result of rising gold prices which deterred buyers.

MARKET PULSE: LMIRT, Tat Hong, PEC, Dyna-Mac, ECS (12 Nov 2012)

Stock Name: LippoMalls
Company Name: LIPPO MALLS INDO RETAIL TRUST

Research House: OCBC

Price Call: BUY

Target Price: 0.52

Stock Name: Tat Hong
Company Name: TAT HONG HOLDINGS LTD

Research House: OCBC

Price Call: BUY

Target Price: 1.70

Stock Name: PEC
Company Name: PEC LTD.

Research House: OCBC

Price Call: BUY

Target Price: 0.84

Stock Name: Dyna-Mac
Company Name: DYNA-MAC HOLDINGS LTD.

Research House: OCBC

Price Call: BUY

Target Price: 0.57

Stock Name: ECS
Company Name: ECS HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.52

MARKET PULSE: LMIRT, Tat Hong, PEC, Dyna-Mac, ECS

12 Nov 2012

KEY IDEA Lippo Malls Indonesia Retail Trust: 3Q12 results above expectations Summary: With effect from 1 May 2012, LMIRT engaged a third party operating company to co-manage its individual retail malls. The operating company is responsible for all costs directly related to the maintenance and operation of the individual retail malls, as well as pay for the rental of office and use of equipment. The operating company also has the right to collect a service charge and statutory income from the tenants. The adjustments for 2Q12 were reflected in the 3Q12 results. 3Q12 results were better than what we expected, partly due to the above arrangements. Total return for the period after tax rose 34.4% YoY to S$21.2m. 9M12 total return for the period before tax and revaluation of S$78.5m equaled 82% of our prior FY12F estimate, which we now raise to S$103m. Rolling forward our model, we raise our fair value from S$0.47 to S$0.52 and upgrade LMIRT from Hold to BUY. (Sarah Ong) MORE REPORTS Tat Hong Holdings: Steadily climbing higher Summary: Tat Hong Holdings (Tat Hong) reported a good set of 2Q13 results that were in line with ours and the street's expectations. 2Q revenue and PATMI increased by 18% and 37% YoY to S$216m and S$17.3m respectively, driven mainly by strong performances from its Crane Rental and Tower Crane segments. On a half year basis, Tat Hong's 1H12 PATMI surged by 88% to S$34.0m, making a strong comeback after three years of weak profitability (FY10-12). Looking ahead, we expect the group to utilize its placement proceeds to purchase more crane assets for deployment to the various projects in the region. This should deepen its presence and provide the next leg of growth for FY13F-14F. Given its strong growth momentum, we increased our valuation peg to 14x (previously 12x) and our fair value to S$1.70 (previously S$1.42). Maintain BUY. (Chia Jiunyang) PEC Ltd: 1Q net profit up 32% to S$3.3m Summary: PEC Ltd (PEC) reported its 1Q13 results last Friday evening. Revenue increased by 9% YoY to S$120m and net profit to shareholders by 32% to S$3.3m. Gross margin increased to 21% in 1Q13 (1Q12: 18%), due to settlement of certain variation orders. However, the gains were partially offset by higher administrative expenses (S$8.1m, +17% YoY) and other operating expenses (S$13.8m, +58% YoY). We will speak with management later and will provide further details later. We currently have a BUY rating with S$0.84 fair value estimate on its shares. (Chia Jiunyang) Dyna-Mac: 3Q12 net profit up 250% Summary: Dyna-Mac Holding Ltd (DMH) reported a strong set of 3Q12 results that were in line with our expectations. 3Q12 revenue and net profit increased by 157% and 250% YoY to S$59.8m and S$10.2m respectively, mainly due to more on-going projects and recognition of certain variation orders. We will provide further details after its briefing later today. We currently have a BUY rating with S$0.57 fair value estimate. (Chia Jiunyang) ECS Holdings: 3Q12 core earnings above expectations Summary: In line with the general weakness in the PC industry, ECS Holdings (ECS) reported a 9.5% YoY fall in its 3Q12 revenue to S$897.3m, although this was partially offset by higher demand from mobility devices (smartphones and tablets). Correspondingly, PATMI declined 8.6% to S$8.3m. Adjusting for exceptional items, we estimate core PATMI of S$8.7m, an increase of 8.3% YoY. Topline came in within our expectations but core PAMTI exceeded thanks largely to lower-than-expected operating expenses and finance costs. For 9M12, revenue slipped 2.2% to S$2,622.5m, or 72.5% of our full-year estimates. Reported PATMI decreased by 25.3% to S$22.6m, while estimated core PATMI fell 19.0% to S$22.7m, which formed 75.5% of our FY12 forecast. Looking ahead, global economic uncertainties have increased headwinds for the overall global IT industry, especially on PCs and notebooks. We expect mobility devices to form an increasing proportion of ECS' revenue, given their still robust demand. Focus would also be placed on its Enterprise Systems segment which includes developing its own cloud-based solutions and products. We will provide more details after speaking with management. We maintain our BUYrating but our S$0.52 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 edged slightly higher on Friday, boosted by a report showing improved consumer sentiment. The Dow rose 0.03% to end at 12,815.39, while the S&P 500 Index gained 0.2% to 1,379.85 and the Nasdaq ended 0.3% higher at 2,904.87. - Private-equity group Everstone Capital has offered to buy Harry's Holdings at S$0.23/share in cash, a 53% premium over Harry's closing price of S$0.15 last Friday. - Nam Cheong's 3Q12 PATMI fell 33% YoY to MYR31.6m as revenue slid 44% to MYR142m, caused by a sharp drop in turnover at its main shipbuilding segment due to the timing of revenue recognition on vessels sold. Separately, the firm said it had sold four vessels worth a total of US$45.1m, taking its order book to RM1.3b.

MARKET PULSE: Cache, First REIT, LMIRT, Sheng Siong, SIA, CRCT (25 Oct 2012)

Stock Name: CACHE
Company Name: CACHE LOGISTICS TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.30

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

Research House: OCBC

Price Call: HOLD

Target Price: 0.98

Stock Name: LippoMalls
Company Name: LIPPO MALLS INDO RETAIL TRUST

Research House: OCBC

Price Call: HOLD

Target Price: 0.47

Stock Name: Sheng Siong
Company Name: SHENG SIONG GROUP LTD

Research House: OCBC

Price Call: BUY

Target Price: 0.49

Stock Name: SIA
Company Name: SINGAPORE AIRLINES LTD

Research House: OCBC

Price Call: HOLD

Target Price: 10.85

Stock Name: CapitaRChina
Company Name: CAPITARETAIL CHINA TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.71

MARKET PULSE: Cache, First REIT, LMIRT, Sheng Siong, SIA, CRCT

25 Oct 2012

KEY IDEA Cache Logistics Trust: Strong predictable showing Cache Logistics Trust (CACHE) turned in a good set of 3Q12 results that were consistent with our expectations. DPU for the quarter edged up 2.3% to 2.144 S cents, notwithstanding an enlarged unit base from private placement done in end-Mar. As at 30 Sep, portfolio occupancy remained at 100%, while weighted average lease to expiry stood sturdy at 4.1 years. CACHE's financial position has also remained healthy. While aggregate leverage increased from 27.5% in 2Q to 32.6%, all-in financing costs improved from 4.38% to 3.57%, thanks to refinancing exercise at the end of 2Q. In addition, this has also improved its debt maturity profile and increased the amount of committed line of funding, thereby strengthening its financial flexibility significantly. We are leaving our forecasts intact as the results had panned out according to our estimates. However, we raise our fair value slightly from S$1.26 to S$1.30 on firmer cap rate assumptions. Maintain BUY. (Kevin Tan) MORE REPORTS First REIT: Another quarter of steady execution First REIT (FREIT) reported 3Q12 results which were in line with our expectations. Gross revenue increased 3.7% YoY to S$14.2m due to higher contribution from all its properties. Distributable amount to unitholders and DPU slipped 12.1% and 12.5%YoY to S$10.6m and 1.68 S cents respectively, but this was due to the absence of a special distribution which occurred in 3Q11. Looking ahead, FREIT continues to see ample growth opportunities in Indonesia's underserved healthcare market. The group would seek approval from its unitholders during an EGM for its proposed acquisition of two Indonesian properties from its sponsor Lippo Karawaci. While we like FREIT for its visible and defensive income streams which would provide stability to unitholders, we believe that this has been factored in its share price, as reflected by its FY13F P/B ratio of 1.3x. Maintain HOLD with an unchanged fair value estimate of S$0.98. (Wong Teck Ching Andy) Lippo Malls Indonesia Retail Trust: Proposal for two more acquisitions LMIRT has announced the proposed acquisitions of two retail properties, Pejaten Village, located in Jakarta, and Binjai Supermall, located in Binjai, North Sumatra. The purchase consideration for Pejaten Village is IDR748.0b (~S$96.0m). The purchase consideration for Binjai Supermall is IDR237.5b (~S$30.5m). Apart from the financing the acquisitions from the proceeds raised from the issuance of S$250m worth of notes in early Jul, LMIRT will need to raise additional funds. These two proposed acquisitions come shortly after the announcement of the proposed acquisitions of four properties on 10 Oct. The completion of the acquisitions of Palembang Square Extension and KJI took place on 15 Oct, half a month earlier than what we expected. Adjusting our model, we raise our fair value from S$0.45 to S$0.47, and maintain our HOLD rating on LMIRT. (Sarah Ong) Sheng Siong Group: The ascension continues Sheng Siong Group (SSG) registered a stellar set of 3Q12 results that came in well within our expectations. 3Q12 revenue grew 16.0% YoY to S$169.7m on the back of higher comparable same store sales and increased number of stores while net profit jumped 48.1% YoY to S$9.8m on operational efficiencies with the new Mandai Link Distribution Centre. SSG also recorded a third consecutive quarter of gross profit margin recovery (3Q12: 22.9% vs. 2Q12: 21.9%). Entering the seasonally weaker 4Q12, SSG will add an additional two stores in Ghim Moh and Clementi - locales with minimal competition and sizeable resident populations - and will end the year with 33 stores. With favourable responses to its store openings, we expect SSG to close out the year on a strong note. Maintain BUY with an unchanged fair value estimate of S$0.49. (Lim Siyi) Singapore Airlines: Spends US$7.5b to increase fleet As part of its efforts to maintain a young and modern fleet, SIA announced yesterday that it will spend US$7.5b on five Airbus A380s and 20 A350s (delivery of the new planes to begin in 2017), which will bring its total firm purchases and lease orders in place with Airbus and Boeing to 68 new wide-body aircraft. However, as part of this new order, Airbus will acquire SIA's five A340s. These planes are currently deployed in the non-stop, long-haul flight sectors between Singapore and the United States (Newark, New Jersey and Los Angeles, California respectively), and their impending removal will mark the cessation of these services in 4QCY2013 although services to the US will still be available via Tokyo and Frankfurt. On a related note, SIA also announced that it will transfer 20 B787 planes on firm order (due for delivery from 2014) to its low-cost subsidiary, Scoot, to aid in its expansion growth and to replace its existing B777 fleet. While the order is a sizable one, we are neutral on its impact given the delivery timeframe of the planes. Pending its 2QFY13 results release on 2 Nov, we maintain our HOLD rating with an unchanged fair value estimate of S$10.85. (Lim Siyi) CapitaRetail China Trust: Private placement of 57m units CRCT has announced the private placement of 57m new units, raising gross proceeds of ~S$86.1m. The private placement was upsized from the original offer of S$75.0m, due to strong demand from over 30 existing and new investors from Asia, the United States and Europe. In connection with the private placement, the manager of CRCT intends to declare an advanced distribution of CRCT's distributable income for the period from 1 Jul to 1 Nov 2012, the day immediately prior to the date on which the new units will be issued, to existing unitholders of CRCT. The new units will not be entitled to the advanced distribution. The issue price of S$1.51 per new unit represents a discount of ~5.8% to CRCT's adjusted volume weighted average price of S$1.603 per unit on the full market day on 24 Oct 2012 and subtracting the advanced distribution of approximately 3.22 S cents per unit. The manager of CRCT says that the private placement strengthens the balance sheet and provides greater capacity for potential growth opportunities. We place our fair value of S$1.71 and Buy rating UNDER REVIEW. (Sarah Ong)

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

NEWS HEADLINES - US stocks extended their losses on Wednesday, with the Dow falling 0.2%, while the S&P500 Index and the Nasdaq both ended 0.3% lower. The Fed is concerned that economic growth remains weak and will maintain its QE3 asset-purchase programme until the labour market improves substantially. - Triyards Holdings' PATMI for the year ended 31 Aug rose 421% to US$44.1m, as revenue rose 223% to US$366.9m. The strong performance was driven by the completion of existing vessel construction projects as well as the start of new landmark projects. - Hwa Hong Corp's 3Q12 PATMI fell 16.1% YoY to S$2.0m despite a 3.1% rise in revenue to S$9.5m, due mainly to higher general and administrative costs. - Pertama Holdings expects to report a loss for 1Q13 due to start-up expenses of new stores in Malaysia and lower consumer electronics prices. - Boustead Singapore will invest S$20.1m in a joint venture with a consortium of investors to develop an integrated real estate project in Tongzhou, Beijing.

MARKET PULSE: OSIM, ART, FCT, LMIR, OKP (24 Oct 2012)

Stock Name: OSIM
Company Name: OSIM INTERNATIONAL LTD

Research House: OCBC

Price Call: BUY

Target Price: 1.87

Stock Name: AscottREIT
Company Name: ASCOTT RESIDENCE TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.37

Stock Name: FrasersCT
Company Name: FRASERS CENTREPOINT TRUST

Research House: OCBC

Price Call: BUY

Target Price: 2.13

Stock Name: LippoMalls
Company Name: LIPPO MALLS INDO RETAIL TRUST

Research House: OCBC

Price Call: HOLD

Target Price: 0.45

Stock Name: OKP
Company Name: OKP HOLDINGS LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.53

MARKET PULSE: OSIM, ART, FCT, LMIR, OKP

24 Oct 2012

KEY IDEA OSIM International: Another step towards a record year OSIM International reported 3Q12 results which were within our expectations, with revenue and PATMI growing by 15.1% and 49.3% YoY to S$142.3m and S$19.6m, respectively. An interim dividend of 1 S cent/share was also declared, bringing YTD DPS to 4 S cents. Looking ahead, management remains confident of extracting more value from China's huge consumer market. We expect this to be driven by its strong product innovation, focus on middle-to-high income consumers and continued efforts to improve its productivity per man and per store. We make some minor downward adjustments to our forecasts. But as we roll forward our valuations to 14.3x FY13F EPS, we lift our fair value estimate from S$1.79 to S$1.87. Maintain BUY. (Wong Teck Ching Andy) MORE REPORTS Ascott Residence Trust: Results in-line, upping FV to S$1.37 Ascott Residence Trust's (ART) 3Q12 revenue increased by 6% YoY to S$77.4m, chiefly due to the contribution of Citadines Shinjuku and Citadines Kyoto, and better performance in the UK and China. Gross profit rose by 2% YoY to S$40.7m. 3Q12 DPU inched up 0.4% to 2.24 S cents. YTD 2012 DPU of 6.76 S cents is in-line with our expectations, forming 77% of our prior FY12 estimate of 8.8 S cents, which we now raise to 8.9 S cents. We find it encouraging that significant fractions of YTD apartment rental income are contributed by stays of <1 month and >12 months. This indicates that ART's properties are able to compete with hotels and apartments (excluding serviced residences). Updating our model, we raise our fair value from S$1.30 to S$1.37 and maintain our BUY rating on ART. (Sarah Ong) Frasers Centrepoint Trust: Ready for next growth phase Frasers Centrepoint Trust (FCT) reported a strong set of 4QFY12 results yesterday. Expectedly, the performance was driven by Causeway Point (CWP) following the substantial completion of the mall's refurbishment and full-year contribution from Bedok Point. Positive rental reversion of 8.9% was also achieved during the quarter. As at 30 Sep, FCT's portfolio occupancy was largely unchanged at 93.6% (93.7% in 3Q), but looks set to improve the asset enhancement works at CWP complete in Dec. We continue to like FCT for its pure suburban mall exposure and growth potential. Based on our understanding, the business park at One@Changi City may possibly obtain TOP by end-2012, while its retail mall occupancy may have already stabilized above 90%. Hence, we believe the injection of Changi City Point may likely happen in FY13, which should provide FCT with next level of growth. Maintain BUY with higher fair value of $2.13 (S$1.97 previously) as we update our model to incorporate firmer cap rates. (Kevin Tan) Lippo Malls Indonesia Retail Trust: Proposes two more acquisitions LMIRT has announced the proposed acquisitions of two retail properties, Pejaten Village, located in Jakarta, and Binjai Supermall, located in Binjai, North Sumatra. As at 30 Jun, the occupancy rates are 95.2% and 91.4% respectively. The purchase consideration for Pejaten Village is IDR748.0b (~S$96.0m), a 12.6% discount to the average of its independent valuations. The purchase consideration for Binjai Supermall is IDR237.5b (~S$30.5m), 5.2% less than the average of its independent valuations. Management is proposing to finance the acquisitions from the proceeds raised from the issuance of S$250 worth of notes in early Jul. These two proposed acquisitions come shortly after the announcement of the proposed acquisitions of four properties - Palembang Square, Palembang Square Extension, Tamini Square and Kramat Jati Indah Plaza (KJI) - on 10 Oct. The completion of the acquisitions of Palembang Square Extension and KJI took place on 15 Oct. We put our fair value of S$0.45 and our Hold rating on LMIRT UNDER REVIEW pending our speaking with management. (Sarah Ong) OKP Holdings Limited: 3Q12 PATMI down 50% from slower recognition OKP Holdings Limited (OKP) reported 3Q12 PATMI of S$2.4m, which was 50% lower YoY, but mostly in line with our expectations. 9M12 PATMI now cumulates to S$8.6m, decreasing 50% YoY mostly due to a slower pace of revenue recognition from construction projects, and lower gross profit margins (from 32.5% in 9M11 to 22.6% in 9M12) from current projects and cost overruns from a sewer project. Top-line for the quarter came in at S$28.5m - up 12% YoY - again mostly within expectations. We would speak with management further regarding these results and, in the meantime, maintain our HOLD rating but our S$0.53 fair value estimate is under review. (Research team)

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

NEWS HEADLINES - US stocks slumped on Tuesday, hurt by weak earnings from chemical maker DuPont and bleak outlook statements from 3M and United Technologies Corp. The Dow fell 1.8%, the biggest drop since 21 Jun, while the S&P500 Index slid 1.4% and the Nasdaq ended 0.9% lower. - Singapore inflation accelerated to 4.7% in Sep from 3.9% in Aug, driven by a sharp rise in housing and transportation costs. - Mapletree Industrial Trust's 2Q13 distributable income rose 18.4% YoY to S$37.5m, driven by contributions from acquisitions, positive rental revisions and stable occupancies across key property segments. DPU for 2Q13 increased 11.7% to 2.29 cents. - Travelite Holdings expects to report a net loss for the six months to 30 Sep due to lower demand for its products and pressure on its profit margins from rising costs.

MARKET PULSE: LMIRT, SIA, Telecoms, STE, STX-OSV, Lian Beng (11 Oct 2012)

Stock Name: LippoMalls
Company Name: LIPPO MALLS INDO RETAIL TRUST

Research House: OCBC

Price Call: HOLD

Target Price: 0.45

Stock Name: SIA
Company Name: SINGAPORE AIRLINES LTD

Research House: OCBC

Price Call: HOLD

Target Price: 10.85

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

Research House: OCBC

Price Call: BUY

Target Price: 3.81

Stock Name: STXOSV
Company Name: STX OSV HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 2.00

Stock Name: Lian Beng
Company Name: LIAN BENG GROUP LTD

Research House: OCBC

Price Call: BUY

Target Price: 0.47

MARKET PULSE: LMIRT, SIA, Telecoms, STE, STX-OSV, Lian Beng

11 Oct 2012

KEY IDEA Lippo Malls Indonesia Retail Trust: Acquiring four properties Summary: LMIRT has announced the proposed acquisitions of four properties from non-interested parties. Two properties, Palembang Square and Palembang Square extension, would be LMIRT's first malls in Palembang. The third and fourth properties are Tamini Square and Kramat Jati Indah Plaza (KJI), which are located in East Jakarta. All four properties are to be purchased at a discount to book value. Including the aggregate purchase consideration of ~S$180.7m and the acquisition fee payable to the manager, as well as professional fees and other expenses, the total acquisition fee is expected to be S$188.1m. As to be expected, management is proposing to finance the acquisitions from the proceeds raised from the issuance of S$250m worth of notes in early Jul. Incorporating the acquisitions into our model, we maintain our fair value of S$0.45 and our HOLD rating on LMIRT. (Sarah Ong) MORE REPORTS Singapore Airlines: Caution over fuel prices Summary: Despite a reported slowdown in global demand for air transport, Singapore Airlines (SIA) managed to hold its own amidst the challenges, and turn in a decent performance relative to the industry. For the first eight months of the year, passenger demand for SIA was slightly higher on the back of a similar pace of capacity expansion. Although SIA's passenger load factor was slightly lower versus the industry average, it remained within our expectations given SIA's slightly higher capacity base. Going forward, we see capacity management as essential in minimizing downward pressures on passenger yields, especially with the success of SIA's promotional fare strategy. In addition, jet fuel prices remain a key risk to profitability for the year and it could remain elevated for the rest of the year. While SIA's cargo traffic looks likely to stay weak given Asia-Pacific's greater share of global traffic, we believe most of the weakness has already been priced in. Maintain HOLD with an unchanged fair value estimate of S$10.85. (Lim Siyi) Telecoms Sector: SingTel gets BPL on non-exclusive basis Summary: SingTel has secured the broadcast rights for the 2013-2015 Barclays Premier League (BPL), further adding to its suite of soccer content. Interestingly, it was on a non-exclusive basis, meaning that SingTel is not required to make the content available to other Pay TV operators under the Cross Carriage ruling. And it also means that StarHub can separately negotiate for the same broadcast rights. While StarHub could win back some Pay TV customers should it secure the rights, we do not believe that it is crucial for the telco to do so. After all, it has done fairly well without BPL content for the past three years. It is also important to note that StarHub could be looking at a smaller pie than before. Until we see further developments in this space, we believe status quo should continue. We have an OVERWEIGHT view on the sector due to its defensive nature and relatively attractive dividend yields. (Carey Wong) ST Engineering: ST Aerospace secured S$590m of new contracts in 3Q12 Summary: Singapore Technologies Engineering (STE) has announced that its aerospace arm ST Aerospace has secured new contracts worth about S$590m in 3Q12. This total contract value is in addition to the component repair management Maintenance-By-the-Hour contract worth about US$80m (~S$102m) awarded by AirAsia in Jul this year. During 3Q12, ST Aerospace redelivered its first VIP Boeing Business Jet, a contract secured for B level check and interior modifications. Additionally, it completed airframe maintenance and modification work for 156 aircraft. We are confident that STE's order book continues to expand healthily. We maintain our fair value of S$3.81 and BUY rating. (Sarah Ong) STX OSV: Contracts for two offshore subsea construction vessels Summary: STX OSV has secured contracts for two offshore subsea construction vessels for Siem Offshore. Delivery is scheduled from Norway in 2Q14. We estimate the contract value to be around NOK1.3b (~USD230m). As contract win already forms part of our forward assumption (estimated NOK12-14b new orders over the next 12 months), we will be keeping our projections unchanged. Maintain BUY with unchanged fair value estimate of S$2.00. (Chia Jiunyang)

Lian Beng: 1QFY13 down from lumpy property recognition Summary: Lian Beng announced 1QFY13 (ended 31 Aug 2013) PATMI of S$10.5m - down 44.9% YoY - mostly due to the absence of a one-time S$7.9m disposal gain from an investment property sale in 1QFY12 and no profit contributions from the fully sold 55%-owned industrial development, M-space, which can only be recognized at TOP in FY14, as stipulated by the accounting standard INT FRS 115. 1QFY13 top-line also came in 16.5% lower YoY at S$113.4m similarly due to lower contributions from the property development segment. Looking ahead, the group expects to launch Spottiswoode Suites and Hougang Plaza, both 50%-owned, later in the financial year. We would speak with management regarding 1Q results later today and, in the meantime, put our Buy rating of Lian Beng and fair value estimate of S$0.47 UNDER REVIEW. (Research team) For more information on the above, visit www.ocbcresearch.comfor the detailed report.

NEWS HEADLINES - US stocks fell on Wednesday as Alcoa Inc. cut its global aluminium demand forecast and Chevron Corp. warned of lower earnings. The Dow declined 1% to close at 13,344.97. The S&P 500 Index fell 0.6% to close at 1,432.56. - Fraser and Neave's independent financial advisers say that the S$8.88-a-share offer by the Thai consortium is fair but not compelling. - OUE has confirmed that it was the party that made the made an offer to acquire the hospitality business of F&N for an aggregate consideration of ~S$1.4b.

MARKET PULSE: Lippo Malls Indo, Cache Logistics, Tat Hong (19 Sep 2012)

Stock Name: LippoMalls
Company Name: LIPPO MALLS INDO RETAIL TRUST

Research House: OCBC

Price Call: HOLD

Target Price: 0.45

Stock Name: CACHE
Company Name: CACHE LOGISTICS TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.26

MARKET PULSE: Lippo Malls Indo, Cache Logistics, Tat Hong

19 Sep 2012

KEY IDEA Lippo Malls Indonesia Retail Trust: Interest expense likely to hit DPU We have incorporated assumptions into our model about potential acquisitions that may be funded by the S$250m raised by LMIRT in early Jul under its S$750m MTN programme. We assume the acquisitions will be yield-accretive with initial net property yields of ~8.5%. The S$200m 3-year bonds were priced at 4.88% while the S$50m bonds were priced at 5.875%, giving a blended interest rate of ~5.1%. Since no proposed acquisitions have been announced yet, we believe that the end of this year is the earliest any acquisitions are likely to be completed. Before the acquisitions are completed, there is likely to be a drag on DPU due to the additional interest expense. We also have some concern about growth in the Jakarta retail space supply over 2012 and 2013 (+12.1% YoY and +18.2% YoY). We maintain our fair value of S$0.45 but downgrade LMIRT to a HOLD since the share price is close to our fair value. (Sarah Ong) MORE REPORTS Cache Logistics Trust: On strong footing We continue to favour Cache Logistics Trust (CACHE) for its resilient portfolio. The REIT currently owns 12 logistics warehouse properties, of which eight of them have ramp-up features. Such warehouse space is limited in Singapore as specialized planning and design specifications are required for the development. CACHE's portfolio has also remained 100% occupied since its listing in Apr 2010. In addition, the bulk of its leases are based on triple-net master lease structures with built-in annual rental escalation of 1.5-2.5%. This arrangement provides CACHE not only with high NPI margins but also stable income streams and a long weighted average lease to expiry of 4.4 years. For the rest of FY12, we expect CACHE to turn in a better set of results. While its 2Q12 DPU eased 5.0% YoY, we believe CACHE will see a lift in its DPU going forward when rental income from Pandan Logistics Hub starts to kick in from 2H12 onwards. Reiterate BUY on CACHE with a revised fair value of S$1.26 (S$1.18 previously). (Kevin Tan)

Tat Hong Holdings: Placement of 70m new ordinary shares at S$1.20 Tat Hong Holdings (Tat Hong) announced the placement of 70m new ordinary shares at S$1.20 per share, or a discount of 8% to yesterday's closing price (S$1.30). Assuming the 70m placement shares are allotted and issued, Tat Hong's share capital will be enlarged by 13.9%. The net proceeds of S$82m will be used to increase the group's crane fleet and expand the group's participation in infrastructure and oil & gas projects in the Asia-Pacific region. We will be speaking with the management later. In the meantime, we keep our BUY rating but put our S$1.39 fair value estimate under review. (Chia Jiunyang) For more information on the above, visit www.ocbcresearch.comfor the detailed report.

NEWS HEADLINES - Most US stocks fell for a second day. A gauge of home-builder sentiment showed improvement in Sep and FedEx Corp. reduced its profit forecast. The S&P 500 Index slipped 0.1% to close at 1,459.32. The Dow gained 0.1% to close at 13,564.64. - An ASEAN Trading Link connecting Bursa Malaysia and Singapore Exchange went live yesterday. - ThaiBev and TCC Assets Ltd agreed to support the sale of Fraser and Neave's stake in Tiger beer maker Asia Pacific Breweries Ltd to Heineken NV. - Olam International has won a bid for a full stake in Zambia's Northern Coffee Corporation Ltd for US$6.15m. Olam said it will commit a further US$40m as capital expenditure and pre-operative expenditure. - Ascendas India Trust has priced the S$65m 3.80% notes due 2018 to be issued by the trust.

MARKET PULSE: DBS, LMIRT, Roxy, CapLand (06 Aug 2012)

Stock Name: DBS
Company Name: DBS GROUP HOLDINGS LTD

Research House: OCBC

Price Call: BUY

Target Price: 15.94

Stock Name: LippoMalls
Company Name: LIPPO MALLS INDO RETAIL TRUST

Research House: OCBC

Price Call: BUY

Target Price: 0.45

Stock Name: Roxy-Pacific
Company Name: ROXY-PACIFIC HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.50

Stock Name: Capitaland
Company Name: CAPITALAND LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 3.32

MARKET PULSE: DBS, LMIRT, Roxy, CapLand

06 Aug 2012

KEY IDEA DBS: 2Q earnings were in line with expectations Summary: DBS Group Holdings Ltd posted 2Q12 net earnings of S$810m or 1H net earnings of S$1743m. This was in line with consensus expectation. Net Interest Margin (NIM) fell from 1.80% in 2Q11 and 1.77% in 1Q12 to 1.72% in 2Q12. It declared an unchanged interim dividend of 28 cents. Margin pressure is likely to remain for the rest of the year, but management expects to mitigate this by undertaking a few measures like increasing cross-sell, raising productivity, bringing down its cost-to-income ratio, focusing on further growing several of its key businesses (including SME and Wealth), managing its funding, etc. We have raised our FY12 earnings estimates from S$3138m to S$3252m. Based on the same unchanged 1.3x book, we increased our fair value estimate from S$15.40 to S$15.94. Retain BUY. (Carmen Lee) MORE REPORTS Lippo Malls Indo Retail Trust: Potential asset injection in the near term Summary: Lippo Malls Indonesia Retail Trust's (LMIRT) 1H12 DPU of 1.48 S cents was slightly below our expectations due to larger-than-expect impact from unfavourable forex movement. However, the portfolio operating metrics and outlook remain buoyant. As at 30 Jun, LMIRT's overall occupancy rate remained steady at 94.7% vs. 94.5 in prior quarter. This is significantly higher than Indonesia's retail industry average of 86.7%. We also understand that LMIRT launched two bonds in early Jul. This leads us to believe that another round of acquisitions may be imminent, given that its financial position was already very strong. This may potentially boost LMIRT's DPU going forward. We maintain our BUYrating on LMIRT with revised fair value of S$0.45 (S$0.43 previously) as we tweak our rental assumptions in FY13-14 to reflect better growth outlook. (Kevin Tan) Roxy-Pacific Holdings: Sharp execution on land-banking Summary: Roxy-Pacific announced 2Q12 PATMI of S$17.7m - up 8% YoY. This is in line with expectations and 1H12 PATMI now forms 49% of our FY12 forecast. Management also declared an interim dividend of 0.67 S-cents, which we expect to be recurring due to the strong cash-flow ahead from S$817.2m of progress billings currently. We note sharp execution on land-banking with four en-bloc sites acquired over the last quarter, leading to S$238m of capital being re-deployed into residential land. Previously launched projects are showing strong sales conversion rates, with the exception of Wis@Changi for which management has stopped active marketing with a view to potentially retain the office units for investment income. Maintain BUY rating with an increased fair value estimate of S$0.50 (30% RNAV disc.), versus S$0.45 previously, due to accretion from land acquisitions. (Eli Lee) CapitaLand: An addition to the London hospitality portfolio Summary: The serviced residence business unit of CapitaLand (CAPL), the Ascott Limited, has agreed to acquire a hotel in London, the 230-unit Cavendish London, for GBP158.8m (S$311m). The group expects to convert the asset into a serviced residence under the Ascott brand and rename it the Ascott St James London. The development is located on Jermyn St, in the St. James area of Mayfair, and would increase Ascott's portfolio to seven properties in Central London. At a price of S$1.35m per room, we believe that the price paid is fair and see little accretion to CAPL's RNAV at this juncture. In addition, we also note that CAPL has announced last Friday the establishment of a S$5b Euro Medium Term Note Programme, further increasing its accessibility to the capital markets and enhancing its balance sheet flexibility. Maintain BUYwith an unchanged fair value estimate of S$3.32 (25% discount to RNAV). (Eli Lee)

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

NEWS HEADLINES - US stocks jumped on Friday with better-than-expected July jobs data and optimism that the ECB may restart its bond purchasing programme. The Dow rose 1.7% to 13,096.17. The S&P 500 index climbed or 1.9% to 1,390.99. - LionGold Corp Ltd has, as at 2 Aug, received valid acceptances of ~59% of the issued and paid-up capital of Castlemaine Goldfields Limited, which is listed on the Australian Stock Exchange. - United Industrial Corporation posted 2Q12 revenue of S$139m, down 41% YoY. PATMI declined 46% to S$82m. - Global Invacom Group has acquired a 100% stake in The Waveguide Solution Limited, a UK microwave waveguide transmission specialist, for £4.75m (~S$9.27m). - Oakwell Engineering Limited has agreed to dispose its 51% stake in the issued share capital of Oakwell-Breen Pte Ltd for a consideration of S$2.3m.

MARKET PULSE: NOL, SingPost, LMIRT, Raffles Med, MMH (30 Apr 2012)

Stock Name: SingPost
Company Name: SINGAPORE POST LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 1.14

Stock Name: LippoMalls
Company Name: LIPPO MALLS INDO RETAIL TRUST

Research House: OCBC

Price Call: BUY

Target Price: 0.45

Stock Name: Micro-Mech
Company Name: MICRO-MECHANICS (HOLDINGS) LTD

Research House: OCBC

Price Call: HOLD

Target Price: 0.29

MARKET PULSE: NOL, SingPost, LMIRT, Raffles Med, MMH

30 Apr 2012

KEY IDEA Neptune Orient Lines: Shanghai-Europe rates up again; upgrade to BUY Summary: The Shanghai (Export) Containerised Freight Index (SCFI) climbed 4% WoW in the week ended 27 Apr 2012. Shanghai to Europe freight rates gained 11% WoW, while Shanghai to Mediterranean rose 13% WoW, ahead of major shipping liners' announced general rate increase in Asia-Europe freight rates on 1 May 2012. Neptune Orient Lines' (NOL) share price has fallen 17% from its recent high of S$1.45/share on 3 Apr 2012 but the correction does not seem warranted. The SCFI is currently 43% higher than this time last year and shipping liners, including NOL, are profitable at current freight rates. Although there are concerns over increasing container shipping capacity, shipping liners seem to have learnt their lesson and are now using slow steaming to manage shipping capacity and refraining from price wars. We upgrade our rating on NOL to BUYand maintain our fair value estimate of S$1.38/share. (Eric Teo) MORE REPORTS Singapore Post: Dividends likely to remain intact despite transformation Summary: Singapore Post (SingPost) reported a 2.2% rise in revenue to S$578.5m but a 11.8% fall in net profit to S$142.0m in FY12, which were within our expectations. The logistics and retail divisions posted improved revenues in 4QFY12, while mail turnover remained steady. The group is pursuing a transformation programme for its future but we do not see this impacting the group's dividend payouts. Similar to last year, SingPost has declared a final dividend of 2.5 S cents per share, bringing the total dividend for the year to 6.25 S cents. The stock price has risen by about 9.0% since we upgraded it from Hold on 5 Jan, but we still see an upside potential of 17.3% (includes forecasted dividend yield of 6.1%) based on our DDM-derived fair value estimate of S$1.14. Maintain BUY. (Low Pei Han) Lippo Malls Indo Retail Trust: NPI boosted by acquisitions Summary: Lippo Malls Indonesia Retail Trust (LMIRT) reported 1Q12 NPI of S$30.9m and distributable income of S$15.0m, up 38.0% and 18.5% YoY. The strong performance was due primarily to a full-quarter contribution from the acquisition of two retail malls in 4Q11. DPU for the quarter was at 0.69 S cents (18.6% of our full-year forecast), lower than the DPU of 1.17 S cents registered a year ago due to a 1-for-1 rights issue in 4Q11. However, on a QoQ basis, it represents a significant improvement of 30.2%. As at 31 Mar, LMIRT's portfolio occupancy stood at 94.5% (94.1% in prior quarter), well above Indonesia's retail industry average occupancy rate of ~87.6%. In addition, its aggregate leverage was also healthy at 9.2%, with no refinancing requirements until Jun 2014. We are putting our BUY rating and fair value of S$0.45 under reviewas we adjust our estimates to incorporate the results. (Kevin Tan) Raffles Medical Group: 1Q12 earnings slightly below expectations Summary: Raffles Medical Group (RMG) reported its 1Q12 results this morning. Revenue was within our expectations but PATMI was slightly below. Revenue increased 13.2% YoY and 0.9% QoQ to S$72.9m, forming 23.2% of our full-year estimates. EBIT improved 11.0% YoY but fell 20.6% QoQ to S$14.2m, while PATMI was up 10.9% YoY but declined 29.6% QoQ to S$11.6m, meeting 19.6% of our FY12 forecasts. 1Q is typically RMG's weakest quarter, which explains the significant sequential drop in its earnings. We note also that approximately 15,000 sf of 'newly created' medical space at its Raffles Hospital would begin contributing from 2Q12, and hence we are expecting a stronger 2H (versus 1H). Both its Hospital Services and Healthcare Services divisions contributed positively, with revenue growth of 15.3% and 7.4%, respectively. This was driven largely by a higher patient load and acuity. We will provide more details on the outlook of RMG after the analyst briefing today. Until then, we place our BUY rating and S$2.66 fair value estimate (24x FY12F EPS) under review. (Wong Teck Ching Andy) Micro-Mechanics: 3QFY12 results within expectations Summary: Micro-Mechanics Holdings (MMH) reported its 3QFY12 results which were in line with our expectations. Revenue declined 15.8% YoY to S$9.4m, or 2.9% higher than our forecast. Net profit slumped 47.8% YoY to S$0.9m and was just 0.4% above our projections due largely to higher-than-estimated effective tax rate. Sequentially, revenue and net profit rose 7.2% and 16.7%, respectively, despite 3Q being a seasonally weaker quarter. We believe this provides a positive signal that MMH could experience gradual improvement moving forward, in line with the recovery in the semiconductor industry. For 9MFY12, topline fell 16.8% to S$28.4m, while bottomline dipped 47.6% to S$2.9m. On a segmental basis, sales for MMH's Semiconductor Tooling (SET) and Custom Machining & Assembly (CMA) divisions decreased 13.8% YoY (+5.1% QoQ) and 24.1% YoY (+18.4% QoQ), respectively. Nevertheless, MMH managed to maintain its gross margin for its SET segment at 53.1%. Although gross margin for its CMA segment slid from 12.8% in 3QFY11 to 12.0% in 3QFY12, there was an encouraging improvement of 11.9ppt on a sequential basis. We will provide more details after the analyst briefing. Meanwhile, our HOLD rating and S$0.29 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 Friday and posted their best weekly gains in a month after better-than-expected earnings from Amazon.com and Expedia Inc boosted confidence in corporate performance. - Ho Bee's 1Q12 revenue fell 51% YoY to S$38.7m, while PATMI declined 71% to S$15.8m. - Sino Grandness posted 1Q12 revenue of RMB285.5m, up 61% YoY. PATMI increased by 81% to RMB56.7m. - Treasury China Trust reported 1Q12 revenue of S$26.0m, up 33.5% YoY. Earnings per unit increased 11% YoY to 3.0 S-cents. - Serial System's sales for 1Q12 declined 4% YoY to S$182m. PATMI declined by 43% YoY to S$1.8m.