OSPL - Good Morning S'pore - Central Dealing Desk

Stock Name: SuperGroup
Company Name: SUPER GROUP LTD.

Research House: UOB KayHian

Price Call: BUY

Target Price: 5.60

Market Compass

04 July 2013~ Good Morning Singapore!

Singapore Idea Snippets:

04 July 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 :Continuous effort - not strength or intelligence - is the key to unlocking our potential. - WINSTON CHURCHILL Singapore: The Day Ahead SINGAPORE DAYBOOK:S'pore PMI hit two-year high in June but pullback likely in Q3. Sub-indices tracking new domestic and export orders have slipped [SINGAPORE] The Republic's manufacturing sector continued to buck the regional trend of faltering factory activity last month, as the purchasing managers' index (PMI) rose to a two-year high. But economists say that the details are more telling of what is to come: the sub-indices tracking new domestic and export orders have slipped, which is why some of them now think that a pullback in manufacturing output is likely in the current quarter, Q3. Singapore's PMI reading rose to 51.7 last month from 51.1 in May, edging away from the 50-point threshold separating growth from contraction. The PMI figures came yesterday from the Singapore Institute of Purchasing & Materials Management (SIPMM), which surveys purchasing executives in more than 150 companies to compile the index. (Source: The Business Times) MARKET SCOOP Singapore manufacturing PMI edges higher in June Midas gets S$9.08m metro contract Singapore investors prefer to hold more cash: Manulife Rolls-Royce, SIA in MOU to provide enhanced services Australian dollar hits 3-yr lows, kiwi outperforms CNA secures new systems orders worth $6m Securities and derivatives trading on SGX up in June ST Aerospace in another Dreamliner MRO partnership Court to hear Kingsmen's plea for injunction against US exhibitor (Source: The Business Times) UOB KAY HIAN says... SUPER GROUP | BUY | TP: S$5.60 We believe the stock's recent 10.4% pullback from its high offers investors an opportunity to accumulate Weaker raw material costs and positive response from its push into China's consumer branded market could be catalysts The group has soft-launched its 3-in-1 coffee in China in 1Q13, and early indications are positive From a zero base in 4Q12, 3-in-1 coffee already accounts for 2-3% of group consumer branded sales in 1Q13 The official launch in China is targeted in 3Q13 and management is excited about the prospects The instant coffee market in China is estimated at US$1.5b/annum but upside is strong, given the low consumption per capita For 2013, management is targeting to achieve 9% of its consumer branded segment sales from China (vs 2-3% as at 1Q13) The push into China could raise its budget for advertising & promotion but Super is aiming to maintain this at 13% of turnover The unrests in Myanmar are beginning to normalise and this is expected to lead to improving sales As for Indonesia (2% of consumer branded sales), consumers are beginning to exhibit signs of promotional fatigue (price war) and this could hopefully lead to more normalised competition and an easing price war However, management is upbeat on prospects in China and the Philippines, and hopes that growth in these markets will help offset weakness in Indonesia and Myanmar Overall, the group hopes to deliver a 10-15% yoy top-line growth from the consumer branded segment in 2013F There could be potential upside risk to margins should raw material costs trend down further In the absence of any major M&A or significant rise in capacity, we forecast that the group's free cash flow will be more than S$100m p.a. from 2014 onwards Super remains on our BUY list with a PEG-based target price of S$5.60 (unchanged) DMG OSK Securities says ... LEE KIM TAH HOLDINGS | BUY | TP: S$1.02 A recent spate of privatizations in the property space highlights the latent value in commercial real estate landlords Pan Pacific Hotels Group was the subject of a privatization move by UOL Group in May at a 9% premium to its last traded price This was followed by Guthrie GTS, a diversified company with real estate assets across the retail, residential and commercial sectors, which received a delisting offer from its major shareholders at a 21% premium to the last traded price We think the eventual end game for Lee Kim Tah, which has evolved from its roots as a construction company into a property developer cum landlord, is a similar privatization offer from the founding Lee family After many years of open market purchases, the Lee family today controls over 85% of the company, putting them within a whisker of the 90% shareholding level for delisting Privatization angle aside, the stock is undervalued as we believe the value of its 50% stake in Jurong Point and 75% stake in the SIPCOT Information Technology Park township development in Chennai, is not adequately reflected in its books The stock trades at 34% to our re-appraised net asset value of S$1.28, and we have a TP of $1.02 based on a 20% discount to RNAV BUY for the 22% upside potential CIMB Securities says... PARKSON RETAIL ASIA | OUTPERFORM | TP: S$1.88 We resume coverage on Parkson Retail Asia (PRA) with an Outperform call PRA's expansion in Indonesia will ramp up with the launch of 'Parkson' branded department stores The company has operated department stores under the acquired 'Centro' brand for the past two years The group's retail space is expected to increase by 57% in FY14, which is the highest in all its key markets Despite the presence of a powerful incumbent, MAPI, in the mid-to upper-middle class segment in which PRA will compete, we are positive on its execution capability We think that MAPI will probably become PRA's concessionaire, which will benefit PRA as MAPI has the exclusive distribution rights for more than 100 international brands Profitability is also expected to rise, thanks to cost savings that will accrue from a larger store network Near-term earnings are likely to be depressed by 1) a depreciating rupiah 2) a downturn in Vietnam 3) drop in consumer spending in Malaysia from the uncertainty caused by the election in 4Q Our strategists expect the rupiah to stabilise this year, and Vietnam SSSG is expected to be flat in FY13 Our S$1.88 target price is based on 22x CY14 P/E (vs. previous 20x), which is on par with the average of department store retailers The stock's catalysts are earnings delivery in Indonesia, a turnaround in Vietnam and higher-than-expected SSSG

SG: MARKET PULSE: Fortune REIT, OSIM (3 Jul 2013)

Stock Name: Fortune Reit HK$
Company Name: FORTUNE REAL ESTATE INV TRUST

Research House: OCBC

Price Call: BUY

Target Price: 7.51

Stock Name: OSIM
Company Name: OSIM INTERNATIONAL LTD

Research House: OCBC

Price Call: BUY

Target Price: 2.21

MARKET PULSE: Fortune REIT, OSIM

3 Jul 2013

KEY IDEA Fortune REIT: Affected by rising discount rates The prospect of an early tapering of US Federal Reserve's quantitative easing program has driven up bond yields and, as a result, high-yield counters such as Fortune REIT (FRT) have seen a correction in their prices. FRT's unit price has fallen 15.1% since the peak of HK$8.43 on 15th May this year (but still up 12.4% YTD). We note that rising risk-free rates will not have much impact on cost of debt for FRT given that interest cost for ~76% of FRT's debt exposure has been hedged to fixed rates with effective interest cost at 2.76%. FRT has no refinancing needs till 2015 and has a weighted term to maturity of 2.7 years. FRT's gearing continues to remain low at 23%. Accounting for the higher HK 10-year government risk-free rate (which climbed from 0.8% at the beginning of May to 2.0% currently), we raise our cost of equity assumption to 7.5% from 6.6%. We also raise our LT nominal growth rate for dividends from 1.75% to 2.0%. Our FV falls to HK$7.51 from HK$8.64. We maintain a BUY rating on FRT. (Sarah Ong) MORE REPORTS OSIM International: 2Q13 results preview OSIM International Ltd (OSIM) is scheduled to report its 2Q13 results on 30 Jul after trading hours. We forecast a 9.5% and 11.0% YoY growth in its revenue and PATMI to S$169m and S$25m, respectively. This would be driven largely by a full quarter of contribution from its recently launched uAngel Sofa-Tranzformer massage chair. We see OSIM as a beneficiary of China's immense consumer market, underpinned by a rising middle-class population and affluence. The group has established a strong brand profile in China given its near 20 years of experience there. Its share price has also remained fairly resilient despite the recent global equities sell-down, supported by its solid financial performance and decent FY13F yield of 3.0%. Maintain our BUY rating and S$2.21 fair value estimate on OSIM. (Wong Teck Ching Andy)

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

NEWS HEADLINES - Asiamedic will start Singapore's third private cord blood bank in a S$1.8m JV backed by Indian conglomerate RJ Corp chairman Ravi Jaipura and Modern Montessori International Group chairman T Chandroo. - Sinjia Land reports the signing of a Letter of Intent for participation in a development project with a total estimated gross development value of RM2.5b in Iskandar, Malaysia. - Transcu Group said S L Development Pte Ltd, which had served its unit Transcu Ltd a writ of summons last September for rental arrears and damages, has since agreed to a standstill on the enforcement of its judgment debt until July 17. - Far East Orchard is planning to expand into Australia through JVs with the Toga Group and Straits Trading Company. - Equity futures in Japan and Hong Kong rose, brushing off a decline in US stocks as the yen was supported at its one-month low and investors await reports on US employment to assess the outlook for monetary stimulus.

OSPL - Good Morning S'pore - Central Dealing Desk

Stock Name: Olam
Company Name: OLAM INTERNATIONAL LIMITED

Research House: Nomura

Price Call: BUY

Target Price: 2.30

Stock Name: MapletreeLog
Company Name: MAPLETREE LOGISTICS TRUST

Research House: OCBC

Price Call: HOLD

Target Price: 1.15

Market Compass

03 July 2013~ Good Morning Singapore!

Singapore Idea Snippets:

03 July 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 :So many people try to grow up too fast, and it's not fun! You should stay a kid as long as possible! - VANESSA HUDGENS Singapore: The Day Ahead SINGAPORE DAYBOOK:Singapore's Temasek faces key tests over China banks [SINGAPORE] Singapore's sovereign investor Temasek Holdings Pte Ltd is coming under pressure to review its large exposure to Chinese banks as the world's second biggest economy is on track for its slowest growth in more than 20 years. The city-state's AAA-rated wealth fund has poured billions of dollars into the biggest Chinese banks over the past few years including about US$2.4 billion in the Industrial and Commercial Bank of China since 2012 alone. But Chinese banks now face a difficult outlook due to credit tightening and bad loans. Banks suffered an unprecedented cash crunch last month after the Chinese central bank allowed rates to shoot to record highs to punish banks for making risky loans, and to force them to curtail dodgy lending. The state investor will shed more light on its China strategy when it presents its annual report for the year ended March later this week. (Source: The Business Times) MARKET SCOOP GLP leases 23,000 sqm to Lefeng ICPAS now known as ISCA Property love affair drives up debt levels Transcu, SingLand unit agree to delay judgment debt, explore options FEOrchardplots move into Australia UBSopens vault, joins gold rush in Singapore Mixed showing for China's Asean infrastructure fund (Source: The Business Times) NOMURA Securities says... OLAM INTERNATIONAL | BUY | TP: S$2.30 In order to enhance stakeholder communication, Olam kick-started its efforts with an Investor day in Singapore (27 June, 2013) focussing on its Edible nuts, spices & beans and Spices & Vegetable Ingredients (SVI) segments Most of the global Agri players don't participate in niche segments such as edible nuts and spices, giving Olam an opportunity to take advantage of its global, value chain presence compared to its mostly local competition Edible-nuts is a US$34bn market (Peanut: 24%, Almond: 18%, Walnut: 15% & Cashew: 14%) and Olam has a stronghold with its leadership in cashews, is the #1 peanut blancher, the #2 almond grower and a top-3 Hazelnut supplier Olam is present in 80% of the producing countries and in all the major consumer markets The company is the largest supplier of dehydrated onion, garlic, capsicum, black pepper and organic tomatoes The global spices/tomatoes market is US$10bn/US$4bn, respectively, growing at a rate of 2-3% in developed markets (~5-7% in rest of the world) Olam currently has 32%/14% and 12% share of global onion/garlic and pepper markets, respectively The edible nuts, spices and beans segment has contributed ~25-30% of Olam's overall net contribution over the past five years (~15% of Olam's revenue and ~29% of Olam's net contribution in FY12) and thus is a key driver of its profitability The segment has seen significant growth in the recent past (three-year revenue/net contribution CAGRs at 29%/36% respectively) driven by acquisitions in this space Olam's key acquisitions in this segment include - Key Foods (2007), Universal Blanchers (2007), De Francesco & Sons (2008), IMC (2009), SK Foods (2009), Timbercorp (2009) and Gilroy (2010) We expect three-year CAGRs of 7%/11% for revenues/net contribution for the segment going forward (without considering any further acquisitions) A key profit driver would be maturing almond yields and new plantations and processing facility in California and Australia, respectively DMG OSK Securities says ... EZION HOLDINGS | BUY | TP: S$3.00 As Ezion's share price has fallen 14% since its recent peak, we see this as an opportunity to accumulate We believe concerns over the impact of rising interest rates on the Group is overdone Increasing awareness of its liftboat capabilities could herald in more contract awards, leading to more EPS upgrades for Ezion We estimate that net gearing will rise to 1.14x by end-FY13 However, we are not concerned as the borrowings are backed by steady cash inflow of ~USD1.6bn from its liftboat and service rig chartering business YTD 2013, Ezion has secured USD445m new charters vs USD1.12bn in 2012 Even in a scenario of zero new charters for the rest of 2013, we see little downside risk to our earnings projections as we have not factored in new charters apart from the contracts already announced We are projecting FY13/14/15F net profit of USD117m/USD200m/USD243m, primarily driven by charter contracts secured in the past three years Based on the current pipeline of contracts, Ezion's fleet is set to expand from 15 units in 1H13 to 26 units by 1H2015 Based on our analysis, Ezion can undertake capex of USD100m in FY14 and USD500m in FY15, assuming no fresh equity raising and renewal of the perpetual securities We forecast that the new investments can deliver up to USD65m net profit, implying potential FY15F EPS revision of up to 28% Maintain BUY with a TP of SGD3.00, based on 16x blended FY13/14F EPS Key risks are charter renewals and lower level of LNG activities in Australia OCBC Securities says... MAPLETREE LOGISTICS TRUST | HOLD | TP: S$1.15 Mapletree Logistics Trust (MLT) announced that Menlo Worldwide Logistics, the subsidiary of NYSE-listed Con-way Inc, has signed a binding commitment to lease 48,700sqm at MLT's Mapletree Benoi Logistics Hub (MBLH) for a period of 10 years This agreement marks the latest expansion by Menlo in Singapore and lifts Menlo as MLT's largest tenant (contributing 3.6% of MLT's enlarged monthly gross revenue) Together with Menlo's commitment which accounts for 55% of MBLH's NLA, we understand the property is now 75% preleased, with the balance in the advanced stage of negotiation MBLH is MLT's first redevelopment project in Singapore Formerly known as 21/23 Benoi Sector, the property commenced the refurbishment in 2011 and is scheduled for completion in 4Q13 It is strategically located within the Jurong Industrial Estate and is in close proximity to Jurong Port and easily accessible via expressways When completed, MBLH will be transformed into a modern five-storey ramp-up warehouse with significantly enhanced features such as floor loading capacity of up to 40kN/sqm and a clear height of up to 12m Total GFA is expected to increase by four folds from 22,500sqm to 92,500sqm, based on an increased plot ratio from 1.4 to 2.5 We are positive on this development as it reflects continued healthy leasing demand and strong interest from major third-party logistics service providers Judging from the strong pre-commitment levels, we believe that MLT will be able to meet its estimated yield-on-cost of 8-9% (development cost of ~S$128m) In addition, we expect the long lease to further enhance MLT's already resilient lease structure We make no change to our forecasts as we have previously factored in the redevelopment project MLT is currently offering a 6.5% current yield, which is relatively attractive in our view However, as the stock appears to be fairly priced when compared to our fair value of S$1.15, we maintain HOLD on MLT

SG: MARKET PULSE: Mapletree Log, Vard (2 Jul 2013)

Stock Name: MapletreeLog
Company Name: MAPLETREE LOGISTICS TRUST

Research House: OCBC

Price Call: HOLD

Target Price: 1.15

Stock Name: Vard Holdings
Company Name: VARD HOLDINGS LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.93

MARKET PULSE: Mapletree Log, Vard

2 Jul 2013

KEY IDEA Mapletree Logistics Trust: Strong take-up rates at MBLH Mapletree Logistics Trust (MLT) announced that Menlo Worldwide Logistics has signed a binding commitment to lease 48,700sqm at MLT's Mapletree Benoi Logistics Hub (MBLH) for a period of 10 years. Together with Menlo's commitment which accounts for 55% of MBLH's NLA, we understand the property is now 75% pre-leased, with the balance in the advanced stage of negotiation. We are positive on this development as it reflects continued healthy leasing demand and strong interest from major third-party logistics service providers. Judging from the strong pre-commitment levels, we believe that MLT will be able to meet its estimated yield-on-cost of 8-9%. In addition, we expect the long lease to further enhance MLT's already resilient lease structure. However, as we have previously factored in the redevelopment project, we make no change to our forecasts. We maintain HOLD on MLT with an unchanged fair value of S$1.15. (Kevin Tan) MORE REPORTS Vard Holdings: Lower profit guidance Vard Holdings warned that its 2Q2013 financial results (due 11/7/2013) are likely to be below current consensus estimates due to difficulties in its operations in Brazil. After a recent assessment, management found further delays, cost over-runs at its Niteroi yard due to lower-than-expected productivity, additional costs for outsourcing and higher start-up costs at the Promar yard. This comes as a surprise as the group had previously guided that its Brazil operations are coming under control and would stabilize by year-end, suggesting that the situation is more fluid than initially thought. In view of the poor earnings visibility, we switched our valuation methodology to PBR. We also cut our FY13F/14F net profit estimates by 20-25%. Downgrade to HOLD with lower FV estimate of S$0.93 (previously S$1.52) using 1.5x PBR (2 std dev below). (Chia Jiunyang)

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

NEWS HEADLINES - Equity futures in Japan and Australia rose, following a rebound in US stocks on hints of improving manufacturing outlook for some of the world's biggest economies. - OKP Holdings says gross order book currently amounts to S$415.2m after it has secured an S$6.7m contract by the national water agency to carry out improvement works to Stamford Canal from Napier Road to Marina Reservoir. - CNA Group has announced and inked a Memorandum of Understanding (MOU) with TAMA Home to develop homes for the Japanese community in Thailand. - ISDN Holdings Limited has, through its 80 per cent ownership of PT Potensia Tomini Energi, been invited by the Governor of Central Sulawesi, Indonesia to develop a 126 MW hydropower plant at the Laa River in Central Sulawesi, Indonesia.

OSPL - Good Morning S'pore - Central Dealing Desk

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

Research House: DBS Vickers

Price Call: HOLD

Target Price: 9.52

Stock Name: Vard Holdings
Company Name: VARD HOLDINGS LIMITED

Research House: CIMB

Price Call: TRADING SELL

Target Price: 0.94

Stock Name: SATS
Company Name: SATS LTD.

Research House: CIMB

Price Call: HOLD

Target Price: 3.15

Market Compass

02 July 2013~ Good Morning Singapore!

Singapore Idea Snippets:

02 July 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 :Being deeply loved by someone gives you strength, while loving someone deeply gives you courage. - LAO TZU Singapore: The Day Ahead SINGAPORE DAYBOOK:Property stocks dip, but reaction measured. Falls following latest govt measures milder compared with previous curbs EVEN as property stocks fell across the board yesterday, following Friday night's announcement of a new Total Debt Servicing Ratio (TDSR), the dips were measured compared to market reaction following previous cooling measures. The FTSE ST Real Estate Index dipped 5.67 points to close at 734.24 yesterday, led by counters such as UOL Group which lost 18 cents (2.68 per cent) to end trading at $6.54 and CapitaLand which dipped 7 cents (2.27 per cent) to close at $3.01. City Developments Limited (CDL) - a proxy for Singapore's property market - lost 17 cents (1.59 per cent) to end trading at $10.53. On the other hand, Wing Tai bucked the trend, gaining one cent (0.49 per cent) to end trading at $2.06. "The negative tone of the market today was dominated by the latest property measures and also weak Chinese manufacturing data," said OCBC research analyst Eli Lee. (Source: The Business Times) MARKET SCOOP OKP gets S$6.7m Stamford Canal contract Keppel to boost KrisEnergy stake to 36% for up to US$123m Update: S'pore home prices up again, suburbs seen most vulnerable to correction Sino Grandness to spin off beverage segment in IPO KrisEnergy plans to list by Aug 15 SembMarine wins two rig orders worth US$417m HDB resale price index up 0.5% q/q in Q2 Sembcorp invests S$6.4m in water treatment tech firm (Source: The Business Times) DBS VICKERS Securities says... FRASER & NEAVE LIMITED | HOLD | TP: S$9.52 F&N's Board announced that it will appoint advisors to study and review alternative strategic options available to the group to unlock shareholder value The announcement went on to say that this may involve a segregation of the group's property-related business from its non-property related businesses No decision has yet been made on any strategic option or proposal and any option selected will proceed only upon receipt of all relevant approvals Separately, the S$4.7bn cash distribution was approved by shareholders and resolution was passed in its EGM held on 28 June 2013 Shareholders will receive S$3.28/share in cash, and based on the preliminary timeline indicated in its shareholders' circular dated 6 June 2013, F&N shares will trade ex-cash distribution on or about 19 July 2013 at 9am, and payment expected on or about 31 July 2013 The controlling shareholders, TCC Assets and ThaiBev, collectively hold about 90.32% post the General Offer which was completed in Feb 2013 The SGX-ST has granted F&N three months till 19 July to restore the public float to above 10%, or about 0.32% from the current level (9.7%) Assuming outstanding shares stay constant, this implies about 4.7m shares We are not surprised by the message, though timing of this announcement seems faster than expected In our view, the announcement is providing some insights to the plans by the new controlling shareholders, and hopefully this could garner more interest in F&N in view of the impending 19 July date to restore the free float So far, TCC and ThaiBev have remained silent on plans for F&N (save for indications for F&N to remain listed) According to the announcement, it seems that the advisors have yet to be appointed There was no indication of the timeline, but we believe the review may take some time Further to that, there could be regulatory approvals and market conditions could also be a deciding factor, for instance if a listing of its property-related business is proposed and chosen Our Hold recommendation and TP at S$9.52 are maintained Our TP is based on 15% discount to our sum-of-parts based RNAV of S$11.20 CIMB Securities says ... VARD HOLDINGS LIMITED | TRADING SELL | TP: S$0.94 Due to higher-than-expected cost overruns at its Niteroi yard as well as higher-than-expected start-up costs at its new yard, Promar, Vardhas guided that its 2Q13 earnings will be lower than consensus What is also new to us is that work for the hulls of the first two LPG carriers, which has been subcontracted to a third-party Brazilian yard (Rio Nave), is slow This has led Vard to inflate its cost estimates for that project Elsewhere, operations remain stable and Vard is expected to remain profitable Management will now focus on stabilising the Niteroi operations and ramping up the new yard While Vard had previously flagged its troubles in Brazil and we had estimated that the group's EBITDA margins for 2013 could retreat 2.2% pts yoy to 11%, we are negatively surprised by the scale of underperformance from Vard's Brazil yards Factoring in lower margins, we cut our FY13-15 EPS by 19-36% We downgrade Vard to Trading Sell from Outperform as we expect the market to focus on Brazilian issues and the stock to come under heavy near-term selling pressure Hence, we lower our target price, now based on 9x CY13P/E(previously 9x CY14 P/E), 1s.d.above its trading mean since listing) Our target implies 1.9x CY13 P/BV, 1s.d. below its trading mean since listing, which could form a floor for the stock, in our view However,a swift rebound could follow a couple of weeks later on positive news of sizeable pipe-laying support vessel (PLSV) orders As expected, Seadrill/SapuraKencana announced on Friday that it has been awarded a US$2.7bn contract from Petrobras to charter and operate three PLSVs OCBC Securities says... SATS LTD | HOLD | TP: S$3.15 SATS announced that it will sell its 40% equity interest in its Adel Abuljadayel Flight Catering Company joint venture for a cash consideration of US$18.4m (~S$23.4m), which is slightly below the book value of the asset as of 31 Mar (S$24.1m) The stake will be purchased by the JV's existing shareholder, Adel Abdulmajed S Abuljadayel, and the proposed sale will be subject to the fulfilment of certain conditions and the procurement of necessary regulatory approvals by the Saudi Arabian General Investment Authority Despite the short tenure of the JV - the 40% equity interest was only purchased back in Apr 2011 - the exit does not signal a change in management intent regarding the region Management still intends to establish a foothold in the Middle East, and will continue to pursue other attractive investment opportunities That said, the inherent difficulties in penetrating the region and sourcing for a suitable partner will mean that future opportunities will likely take the form of JVs The JV does not contribute significantly to SATS's west Asia operations as the segment is largely dominated by its Indian subcontinent JVs so the impact to its financials will be minimal With its earnings stability, positive prospects (Changi Airport passenger traffic grew 4.7% YoY for May) and healthy dividends, it is no surprise to see SATS's share price remain fairly resilient even in the face of recent market volatility Although valuations are still expensive in our view as many of the positives have already been priced in, we believe the counter will continue to hold up in the coming weeks ahead of its 1Q14 results Maintain HOLD with an unchanged fair value of S$3.15

OSPL - Good Morning S'pore - Central Dealing Desk

Stock Name: Genting SP
Company Name: GENTING SINGAPORE PLC

Research House: UOB KayHian

Price Call: SELL

Target Price: 1.17

Stock Name: MapletreeCom
Company Name: MAPLETREE COMMERCIAL TRUST

Research House: Credit Suisse

Price Call: BUY

Target Price: 1.45

Stock Name: Croesus RTr
Company Name: CROESUS RETAIL TRUST

Research House: DBS Vickers

Price Call: BUY

Target Price: 1.14

Market Compass

01 July 2013~ Good Morning Singapore!

Singapore Idea Snippets:

01 July 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 :Beauty without grace is the hook without the bait. - RALPH WALDO EMERSON Singapore: The Day Ahead SINGAPORE DAYBOOK:SC Global saves millions with QC cancellations. Step was taken after the group delisted from the stock market in March [SINGAPORE] SC Global has managed to cancel the qualifying certificates (QCs) that were issued to its developments after it delisted from the stock market in March, saving millions of dollars it would otherwise have to pay for failing to meet the sales deadline under the government's QC rules. The luxury property firm is the first to delist and obtain QC cancellations since tough additional buyers' stamp duties (ABSD) were introduced for land bought from late 2011 onwards. The duties upset listed property developers because they face a double whammy from hefty ABSD and QC charges if they fail to sell all units at their developments within the time stipulated by both rules. While SC Global would not have been hit with the ABSD for the projects it got the QC cancellations for, its case is significant because many developers and market watchers had believed that the rule was not retroactive, and would still apply to its existing projects. It was therefore seen as a test case. Yet BT understands that SC Global is not the first listed property developer here to delist and subsequently obtain QC cancellations. In 2010, Soilbuild Group became the first such company when it applied for and obtained QC cancellations when it delisted. (Source: The Business Times) MARKET SCOOP Singapore's F&N may separate property from other operations Singapore introduces new steps to cool property market Singapore's Temasek to boost US, European portfolios: report Prices of completed apartments/condos dip 0.2% in May Unilever officially opens first global leadership centre outside UK Singapore May bank lending up 1.2% from April Freight Links FY profit up 19.1%, raises dividends China Fishery says to start arbitration against Veramar No client data compromised by hacking: Eu Yan Sang (Source: The Business Times) UOB KAY HIAN says... GENTING SINGAPORE | SELL | TP: S$1.17 Expect improvement in 2Q13 EBITDA but volumes remain sluggish We reckon that Genting Singapore (GENS) could deliver a 2Q13 EBITDA in the US$350m range, reflecting a single-digit qoq fall in gross gaming revenue (GGR) but a marked improvement in win percentage We continue to expect low single-digit growth in the industry GGR in 2013, reflecting a mild contraction in mass-market GGR growth and a 5-10% rise in VIP GGR In addition, we conservatively trim our 2014 GGR growth projection to low single-digit from high single-digits Key concerns are persistent weak local patronage and sluggish VIP market, which could be impacted by China's latest effort to regulate credit extension Trim 2014 EBITDA projection by 4% to S$1.41b We expect2Q13 rolling chip volume (RCV) to contract qoq, after having recovered for the third consecutive quarter to about S$20.8b in 1Q13 (+38% yoy, +14% qoq) Although RCV at Resorts World Sentosa has bottomed out in 4Q11 and is set to moderately recover 7% in 2013, we foresee sluggish growth prospects in 2014 While we note that the RCV from mainland Chinese players, which we estimate account for over 50% of RWS's RCV, has in the past been directly correlated to RWS's credit extension policy and less impacted by the credit situation in China, we need to gauge the impact of China's effort to regulate its banks' credit practice and also crimp shadow banking While GENS continues to be comfortable with its credit extension programme, we do not expect it to expand its credit programme, noting the rise in impairment losses Our latest channel checks suggest that patronage in the mass-market gaming area remains relatively quiet, reflecting weak visitation trends by local gamers Ongoing efforts to raise mass-market momentum include sustaining 1Q13's high-win percentage of 24-25%, better market segmentation (eg players categorised from five to seven tiers), and enhancing of reward points for its 2m members Ongoing cost management exercises would eventually lift GENS's EBITDA margin While GENS continues to scout for greenfield opportunities, including opportunities in the US, we reckon that Japan would represent as the first significant tangible opportunity for GENS Maintain SELL and target price of S$1.17, pegged at 10x 2013F EV/EBITDA CREDIT SUISSE Securities says ... MAPLETREE COMMERCIAL TRUST | OUTPERFORM | TP: S$1.45 We upgrade MCT from Neutral to OUTPERFORM following its recent share price weakness, where share price has fallen some 25% from its S$1.54 peak on 14 May (second worst after CRCT) We believe the selling has been overdone as fundamentals continue to be resilient, underpinned by its quality retail assets (mainly VivoCity) and long leases at two of its three offices We view this as an opportunity to accumulate quality at cheaper valuations Despite noise concerning potential slowing visitation to Sentosa due to haze (and subsequent impact to VivoCity, due to its proximity), we understand from management that feedback from mall managers seem to suggest that shopper traffic remains strong Meanwhile, near-term vacancy risks at its offices are mitigated by the longer leases at BoaML HF and Mapletree Anson Both VivoCity and BoAML HF make up 71% of NPI At current levels, valuation for MCT is now looking attractive, where MCT now offers FY14 yields of 6.1% and trades on 1.1x P/B, in line with historical average Maintain our DDM-based target price of S$1.45, which implies 32% total return DBS VICKERS Securities says... CROESUS RETAIL TRUST | BUY | TP: S$1.14 Croesus Retail Trust (CRT) offers investors a unique exposure to the Japan retail real estate sector through a capital efficient vehicle with an initial portfolio of stable and growth-oriented assets In addition to income stability, as a Singapore listed business trust, this platform offers NAV growth potential through CRT's ability to undertake lower risk non-speculative development activities and diversify into higher growth overseas markets in the medium term as well as prospects of asset reflation in Japan in the longer run CRT's portfolio is well located near transport conveniences in prefectures that are enjoying expanding per capita GDP The trust enjoys high income certainty with a long WALE of 11.3 years and derives 44% of rental income from long term master leases with AEON CRT commands good flexibility in tenant management to optimize tenant mix and property returns as 61.5% of leases are on fixed term lease basis and 49.4% of income comes with an in-built growth engine through its variable rent component This puts CRT in a strong position when renewing 26.3% of its rental income over FY14-FY15. CRT has a visible acquisition pipeline of assets, 4 currently, in Japan and a right to negotiate to buy 2 assets in Shanghai and Shenyang from its strategic partner Marubeni in the medium term When fully purchased, this could more than double CRT's portfolio NLA. With a gearing of 43.7% vs a 60% ceiling, CRT is estimated to have debt headroom of JPY23b to fund these purchases CRT is currently trading at 8.0-8.2% FY14 and FY15 DPU yield Our DCF-based TP of S$1.14 offers a total return of c28% Our numbers have not factored in any accretion from new acquisitions Key risks include the adverse impact of a global slowdown on economic activity and consumption in Japan Socio-economic and political changes could also affect the competitive landscape and environment in which CRT operates

SG: MARKET PULSE:Market Pulse: Residential Property, SATS, Vard (1 Jul 2013)

Stock Name: Capitaland
Company Name: CAPITALAND LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 3.77

Stock Name: KepLand
Company Name: KEPPEL LAND LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 4.59

Stock Name: CapMallsAsia
Company Name: CAPITAMALLS ASIA LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 2.55

Stock Name: SATS
Company Name: SATS LTD.

Research House: OCBC

Price Call: HOLD

Target Price: 3.15

Stock Name: Vard Holdings
Company Name: VARD HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 1.52

MARKET PULSE: Residential Property, SATS, Vard

1 Jul 2013

KEY IDEA SG Residential Property: A total debt profile framework Summary: MAS announced a set of Total Debt Servicing Ratio (TDSR) requirements whereby FIs will now account for borrowers' other debt obligations when granting property loans. A TDSR limit of 60% will be imposed. We see an immediate impact that borrowers now cannot circumvent LTV and ABSD rules by purchasing homes under others while acting as loan guarantors. In addition, the TDSR framework would also be applied to the refinancing of loans. From our channel checks, this could affect, off the bat, 5%-20% of the current cross-section of buyer profiles. Over the mid-to-longer term, we see these measures further constricting financing for buyers with existing property loans. That said, the current 60% TDSR limit appears to be fairly reasonable and is not intended to cool down the property market as much as to encourage financial prudence. Maintain NEUTRAL on the domestic residential sector. We continue to prefer developers with diversified portfolio exposure and strong balance sheets. Maintain BUY on CapitaLand [BUY, FV: S$3.77], Keppel Land [BUY, FV: S$4.59] and CapitaMalls Asia [BUY, FV: S$2.55]. MORE REPORTS SATS Ltd - Middle-East exit for now Summary: SATS announced that it will sell its 40% equity interest in its Adel Abuljadayel Flight Catering Company joint venture for a cash consideration of US$18.4m (~S$23.4m), which is slightly below the book value of the asset as of 31 Mar (S$24.1m). Despite the short two-year tenure of the JV, the exit does not signal a change in management intent regarding the region. Management still intends to re-enter the Middle East, and will continue to pursue other attractive investment opportunities. In the interim, the outlook for SATS remains positive and we believe the counter's earnings stability and healthy dividends will allow it to stay resilient amidst recent market volatility. Maintain HOLD with an unchanged fair value of S$3.15. (Lim Siyi) Vard Holdings: Profit Guidance Summary: Vard Holdings warned that its 2Q2013 financial results are likely to be below current consensus estimates due to difficulties in its operations in Brazil. The group had previously guided that its Brazil operations are coming under control and would stabilize by year-end. However, after a recent assessment, management found further delays, cost over-runs at its Niteroi yard due to lower-than-expected productivity, additional costs for outsourcing and higher start-up costs at the Promar yard. These issues have adversely impacted its 2Q margin. Operations elsewhere are stable and Vard Holdings as a group remains profitable. Our FY13F net profit estimate is 6% below consensus, but we would likely revise lower after speaking with management later to get more colour. Thus, we put our Buy rating and S$1.52 fair value UNDER REVIEW. (Chia Jiunyang)

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

NEWS HEADLINES - Fraser & Neave will appoint advisers to study and review alternative strategic options available to unlock shareholder value, which may involve a segregation of its property and non-property businesses. - Sound Global says controlling shareholders are exploring a delisting proposal from the SGX, including acquiring shares not already owned for no less than S$0.70 per share. - Low Keng Huat has been awarded a S$114.3m construction contract for the design and construction of one block of a hotel development; the project expected to be completed in 1H 2015. - Singhaiyi Group shareholders approve the raising of up to S$226.5m for investing in US real estate via a rights issue and placement. - Goodland Group agrees to buy a 49% stake in a Cambodian company to undertake residential property development in Siam Reap, Cambodia. - The yen continued to appreciate against the dollar while Japanese stock futures rose after US equities and Treasuries fell at the end of last week on concerns of QE tapering measures kicking in as early as Sep.