OSPL - Good Morning S'pore - Central Dealing Desk

Stock Name: OUE Ltd
Company Name: OVERSEAS UNION ENTERPRISE LTD

Research House: UOB KayHian

Price Call: BUY

Target Price: 3.63

Stock Name: Swiber
Company Name: SWIBER HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.86

Stock Name: Tiong Seng
Company Name: TIONG SENG HOLDINGS LIMITED

Research House: DBS Vickers

Price Call: BUY

Target Price: 0.33

Market Compass

11 June 2013~ Good Morning Singapore!

Singapore Idea Snippets:

11 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 : Someone's sitting in the shade today because someone planted a tree a long time ago. - WARREN BUFFETT Singapore: The Day Ahead SINGAPORE DAYBOOK:No single brand to dominate Sports Hub WHILE the door is wide open for companies to be involved in the new $1.33 billion Singapore Sports Hub, no single commercial brand must "overshadow or dominate" the project's national identity. With construction of the mega-project in Kallang approaching the final stretch ahead of its targeted April 2014 opening, the consortium members are in talks with potential corporate partners and sponsors. Acting Culture, Community and Youth Minister Lawrence Wong said that it was important to have a strong level of corporate involvement in such a large-scale project. "Companies enable us to have more impact and outreach in sports. That's why we entered into this project on a public-private-partnership (PPP) model," he told reporters after making a site visit to the Sports Hub yesterday. (Source: The Business Times) MARKET SCOOP CNAGroup plans investment in Australia KeppelInfra unit wins $80m to date Fitchrates UOB's offshore renminbi notes 'AA-(EXP) Raffles Medical to sell 30 Bideford Rd after failing to get nod for medical centre Deutsche Bank to open 200-tonne gold storage facility in Singapore Ascottto manage 8th serviced residence in the Philippines Petra'scocoa unit sale gets European Commission nod Del Monte's major shareholder places 150m shares at PhP26.40 each (Source: The Business Times) UOB KAY HIAN says... OVERSEAS UNION ENTERPRISE | BUY | TP: S$3.63 OUE H-Trust (OUE Hospitality Trust) imminent with Mandarin Orchard (S$1,190m) and Mandarin Gallery (S$540m) confirmed as initial assets The properties will be divested to OUE H-Trust at a minimum price of S$1,705m (maximum 1.4% discount to valuations of S$1,730m), comprising gross cash proceeds of S$$1,359.5m and OUE H-Trust units worth S$345.5m Special dividend of 6-10%, assuming OUE distributes at least 30-50% of the proceeds OUE has committed to distribute up to 50% (S$305m) of the gross cash proceeds (S$610m) following the repayment of existing S$750m debt secured against the properties OUE is expected to retain a 30% stake (S$345.5m) in OUE H-Trust post-listing EGM on 25 June for shareholders to approve the divestment of Mandarin Orchard and Mandarin Gallery into OUE H-Trust and the distribution of special dividends Gearing to improve to 14.8% post-listing of OUE H-Trust from 62.1% currently Asset-light strategy with Mandarin Orchard Hotel master-leased back to OUE for a period of 15 years on an underlying fixed rental of S$45m per year The minimum divestment price of S$1,705m is S$18m (1.1%) above our built-in RNAV estimate of S$1,687m (Mandarin Orchard S$1,151m and Mandarin gallery at S$536m) for the two properties The divestment at the minimum price would result in a marginal 1 S cent accretion to our RNAV of S$4.54 However, the NTA is likely to rise 33% to S$4.59 The choice of Mr Chong Kee Hiong as CEO of OUE H-Trust should be viewed favourably by the market OUE has granted a Right of First Refusal (ROFR) to OUE H-Trust to acquire relevant hospitality assets in the pipeline REIT offers new management fee income base as OUE is expected to retain 100% interest in the REIT manager\ Maintain BUY with unchanged target price of S$3.63/share, which is pegged at a 20% discount to our RNAV of S$4.54/share OCBC Securities says ... SWIBER HOLDINGS | BUY | TP: S$0.86 According to Upstream, PEMEX is preparing to begin a bid process that aims to offer a contract to deliver and install four Ayatsil platforms The group is in the prequalification phase for the contract, and heavy-lift contractors such as Saipem, Heerema and Swiber Holdings are said to be interested The entire package is estimated to be worth ~US$300m Swiber recently saw its share price run up about 23% from 14 May (pre-1Q13 results announcement) to its close on Friday, after we upgraded our rating from Hold to Buy However we still see an upside potential of about 12% over a one year time frame Maintain BUY with S$0.86 fair value estimate DBS VICKERS Securities says... TIONG SENG HOLDINGS | BUY | TP: S$0.33 Tiong Seng Holdings (Tiong Seng)V announced it had signed a non-binding Memorandum of Understanding ("MOU") with Shwe Taung Development Co., Ltd (Shwe Taung), one of the most prominent corporations in Myanmar, to consider a joint venture to set up a precast plant in Myanmar The proposal is for a 30%-70% structure with Tiong Seng taking a minority stake This comes on the back of the group's plan to expand its precast facilities in the region - it recently acquired a piece of land in Iskandar to build a pre-cast facility The partner, Shwe Taung, is one of Myanmar's prominent corporations with a diverse business portfolio and the country's largest employer This may in the longer term be another avenue to extend its business contacts and potentially a new business arm into Myanmar The Myanmar Ministry of Construction's plan to build more than 1 million houses nationwide over the next 20 years and residential construction accounts for 51%, or US$1.5 billion, of Myanmar's total construction output In Yangon alone, demand for affordable housing is 200,000 units each year compared to only 20,000 units supplied every year

DBS Vickers (Spore): Thematic Report : Myanmar: Ride on coattails of Myanmar's reforms

Stock Name: Yoma
Company Name: YOMA STRATEGIC HOLDINGS LTD

Research House: DBS Vickers

Price Call: BUY

Target Price: 1.08

Stock Name: EzionHldg
Company Name: EZION HOLDINGS LIMITED

Research House: DBS Vickers

Price Call: BUY

Target Price: 3.00

Stock Name: Yongnam
Company Name: YONGNAM HOLDINGS LIMITED

Research House: DBS Vickers

Price Call: BUY

Target Price: 0.41

Stock Name: Tiong Seng
Company Name: TIONG SENG HOLDINGS LIMITED

Research House: DBS Vickers

Price Call: BUY

Target Price: 0.33

Stock Name: SingTel
Company Name: SINGTEL

Research House: DBS Vickers

Price Call: HOLD

Target Price: 3.80

Stock Name: SuperGroup
Company Name: SUPER GROUP LTD.

Research House: DBS Vickers

Price Call: BUY

Target Price: 5.35

Stock Name: F & N
Company Name: FRASER AND NEAVE, LIMITED

Research House: DBS Vickers

Price Call: HOLD

Target Price: 9.52

Myanmar
Ride on coattails of Myanmar's reforms

· Myanmar's growth is fast and sustainable

· Abundant opportunities in consumer, tourism, infrastructure and O&G sectors

· Direct access is limited; invest through foreign companies already in or expanding into Myanmar

Reforms have been progressive. Despite skepticisms and multiple challenges, Myanmar's sweeping reforms have resulted in further easing of sanctions on the country, which in turn is drawing new aids, more visitors and even higher interest to trade and invest in Myanmar. Foreign direct investments (FDIs) have reportedly jumped >40% to US$1.4bn in FY2013 while tourist arrivals have surged 54% to 1m. ADB projected that Myanmar GDP would expand >6% in 2013 and could grow 7-8% p.a. over the decade.

Opportunities abound, but pure plays are scarce.To ride on this theme, Yoma (BUY, TP: S$1.08) is our top pick as the most direct play on Myanmar's boom. Share price has hit new highs recently following our upgrade, but we see possible upside to our fair value pending further developments, such as progress of the Landmark project, telco license win or agricultural development amongst others.

Singapore companies expanding in Myanmar are good gateways. Singapore companies are good proxies to ride on several segments in the country's current stage of development.

Infrastructure: Infrastructure development and planning is rapidly underway. To fast track development, foreigners have been invited to bid for mobile networks, airports, and oil & gas exploration. We like Ezion (BUY, TP: S$3.00) and Interra Resources (NR, TP: S$0.57) as Oil & Gas proxies with operations there. Other potential beneficiaries include Yongnam (BUY, TP: S$0.41) in the development of airports, Tiong Seng (BUY, TP: S$0.33) to set up a pre-cast factory, and SingTel (HOLD, TP: S$3.80) in the bidding for a mobile phone license.

Hospitality: Our visit to Yangon earlier this year revealed overwhelming demand for quality hotels, service apartments and offices from the continuous influx of travelers. On this, we expect Amara (NR, FV: S$0.75) to be a beneficiary with its proposed JV for the development of a hotel.

Consumer goods/ services: Lastly, demand for consumer goods and services is poised to grow as affluence picks up. We like Super (BUY, TP: S$5.35) with its leading share in the packaged coffee market. Other companies with presence include FNN (HOLD, TP; S$9.52) with its 55%-owned brewery, and Parkson Retail Asia, which has a 70%/30% JV with Yoma for a 4,000 sqm retail store in Yangon.

Important events: Outcome of telco license (27 Jun), airport tender (July).




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Tiong Seng Holdings rated 'buy' by DBS

Stock Name: Tiong Seng
Company Name: TIONG SENG HOLDINGS LIMITED

Research House: DBS Vickers

Price Call: BUY

Target Price: 0.24

DBS Vickers Securities in a Nov 29 research report says: "Tiong Seng announced that they have been awarded a $189.5 million contract for the proposed construction of a Bedok Condominium development from United Venture Development (Bedok).

"Stock trades at a 60% discount to our estimated SOTP of 43 cents. Backed by strong earnings visibility from a solid construction orderbook over the next 2-3 years, the group's investment in its pre-cast prefabrication factory will enable it to enhance cost efficiencies and stay ahead of its peers in the years ahead.

"Concerns on the group's China property development arm should be allayed as most are located in 3rd Tier cities and a majority of project phases will only be launched towards 2H12-2013 onwards. Target price of 24 cents based on 45% discount to SOTP valuation. MAINTAIN BUY."

Tiong Seng Holdings rated 'buy' by DBS

Stock Name: Tiong Seng
Company Name: TIONG SENG HOLDINGS LIMITED

Research House: DBS Vickers

Price Call: BUY

Target Price: 0.31

DBS Vickers Securities in an Oct 18 research report says: "Tiong Seng announced that the group has been awarded the $147 million Housing Development Board (HDB) contract for the construction of 804 units for "Waterway Terraces II" in Punggol West.

"This follows the group's first contract win of $192 million for the construction of 1,072 units. While not expected to have a significant impact on the group's earnings in the current financial year, this contract will boost Tiong Seng's order book to $1.2 billion, which is well ahead of peers in the construction industry, providing the group with good earnings visibility over the next 2 years.

"Target price of 31 cents (based on 35% discount to its SOTP). MAINTAIN BUY."

Tiong Seng Holdings rated 'buy' by Kim Eng

Stock Name: Tiong Seng
Company Name: TIONG SENG HOLDINGS LIMITED
Research House: Kim Eng

Kim Eng Research in a May 11 research report says: "Tiong Seng announced a net profit of $2.1 million for 1Q11, albeit still short of our expectation. Revenue grew by 14% to $56 million, from $49 million a year ago, thanks to an increase in work done for ongoing projects such as The Wharf Residence and The Volari, as well as maiden recognition from the NUS staff housing project.

"Net profit fell by 30% y-o-y with the completion of major JV projects last year, including the Sentosa integrated resort and the MBFC Phase 1. Tiong Seng had recognised a total of $56 milion from its orderbook with gross margin rising to 13%, from 10% in 1Q10.

"There is still a strong orderbook of $1.1 billion to be recognised over the next 12-30 months, one of the highest among its listed peers. Target price of 33 cents, based on SOTP valuation. MAINTAIN BUY."

Tiong Seng - Tiong Seng started at Buy by DBS Vickers, $0.36 target

Stock Name: Tiong Seng
Company Name: TIONG SENG HOLDINGS LIMITED
Research House: DBS Vickers

DBS Vickers starts Tiong Seng Holdings (K2P.SG) at Buy with S$0.36 target price, based on 30% discount to sum-of-parts valuation, according to Dow Jones.



DBS Vickers says Singapore-based civil engineering contractor has strong $1 billion orderbook to provide earnings visibility for next few years, with projects ranging from office, residential developments to public infrastructure jobs.

“They have the ability to handle a wide spectrum of projects and thus (need) not be over-reliant on any single project category for revenues,” says the broker.



DBS Vickers notes while construction sector is labor intensive, Tiong Seng stands out using advanced construction methods which reduce time, manpower needs by up to 50%. Adds company has niche presence in 2nd-, 3rd-tier Chinese cities. Shares +6.3% at $0.255.