SG: MARKET PULSE: CMA, CDLHT (30 Oct 2013)

Stock Name: CapMallsAsia
Company Name: CAPITAMALLS ASIA LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 2.55

Stock Name: CDL HTrust
Company Name: CDL HOSPITALITY TRUSTS

Research House: OCBC

Price Call: BUY

Target Price: 1.83

MARKET PULSE: CMA, CDLHT

30 Oct 2013

KEY IDEA CapitaMalls Asia: Chinese malls show underlying strength CMA reported 3Q13 PATMI of S$64.8m, which increased 4.0% YoY mainly due to profit recognition from Bedok Residences, the opening of Star Vista and a higher contribution from CMT. Adjusting for one-time items and fair value gains, 9M13 PATMI cumulates to S$179.2m, forming 93% of our full year FY13 PATMI forecast and we judge this quarter to be above expectations due to lower-than-anticipated opening costs from newly opened malls. CMA's Chinese portfolio assets continue to put up firm numbers; the overall committed occupancy rate increased to 97.2% as at end Sep 13 from 96.9% as at end Jun 13. 9M13 tenant sales were also up a healthy 9.8% (excluding Tier 1 cities: 11.0%) while 9M13 shopper traffic increased 1.5%. We rate the stock with a BUY rating and an unchanged fair value estimate of S$2.55. (Eli Lee) MORE REPORTS CDL Hospitality Trusts: 3Q13 as expected CDLHT has reported 3Q13 results that are generally in-line with ours and the street's expectations. 3Q13 revenue declined 0.8% YoY to S$35.9m. RevPAR for CDLHT's Singapore hotels had declined 6.4% YoY, driven by a 5.6% drop in average room rate. As we had anticipated, the rate of RevPAR decline was less in 3Q13 than over 1H13, which saw RevPAR fall 8.1% on the back of increased supply in the sector. 3Q13 net property income fell 1.7% YoY to S$33.0m. 3Q13 DPU is 2.64 S cents (down 2.9% YoY), bringing 9M13 DPU to 8.05 S cents, versus ours and the street's FY13 forecasts of 10.4 S cents and 11.1 S cents respectively. We maintain a BUY rating on CDLHT but place our S$1.83 fair value estimate under review. (Sarah Ong)

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NEWS HEADLINES - US stocks finished higher Tuesday with both blue-chip stocks and the S&P 500 index setting record closing highs, as results from Pfizer Inc. and an IBM stock buyback stoked momentum. - Figtree Holdings has priced its IPO on the Catalist board at 22 S cents per share in a S$12m fully placed share sale. - Sky One Holdings' collapse on Mon prompted a number of brokers to update their lists of restricted stocks this week. - Yanlord Land Group has paid 2.88b yuan (S$586m) for a site in Nanjing with a GFA of 38.6 ha, which it plans to develop as a mixed-use project. - Ezra's subsea services and offshore support services divisions have secured contracts worth US$110m. - Great Eastern Holdings has reported growth in its core insurance business although the absence of year-ago one-time gains dragged its 3Q13 bottom-line down by 54%. - Forterra Trust sank to a net loss of S$2.3m for 3Q13 from a S$8.8m net profit a year ago. - Singapore has once again taken pole position for being the most business-friendly country for the eighth year, ahead of Hong Kong and New Zealand.

MARKET PULSE: CMA (10 Sep 2013)

Stock Name: CapMallsAsia
Company Name: CAPITAMALLS ASIA LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 2.55

MARKET PULSE: CMA

10 Sep 2013

KEY IDEA CapitaMalls Asia: Stabilizing fundamentals in China Latest Chinese economic data-points has mostly been above view, painting a picture of modestly recovering fundamentals. Over the last month, the Chinese PMI, trade and inflation figures have mostly beat expectations which increasingly establishes a base case for at least a 7.5% economic growth rate this year - the target set by Chinese authorities. We look forward to Chinese industrial production and retail sales reports today, which are expected to further add to signs of recovery. We believe these are key positives for CMA and reinforces the long-term outlook of its Chinese mall portfolio, which has continued to put up firm numbers year to date. 1H13 tenants sales at CMA's Chinese malls grew at 9.5% YoY on a psf basis; excluding tier 1 cities, tenant sales grew by 11.0% YoY. Long term tailwinds from the secular growth in Chinese retail consumption remain intact, in our view. Maintain BUY with an unchanged fair value estimate of S$2.55. (Eli Lee)

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

NEWS HEADLINES - US stocks climbed on Mon, with the S&P 500 extending its longest win streak since Jul, after Chinese exports beat projections and as investors anticipated the unveiling of Apple's new iPhone models. - Tiger Airways Holdings has upped its shareholding in the capital of Indonesia's PT Mandala Airlines from 33% to 35.8%. - Amara Holdings may sell hospitality assets as a real estate investment trust. - Neo Group yesterday posted a net profit of S$2.77m for the six months ended 31 Jul 2013, almost four times the net profit of S$703,000 a year ago. - XMH Holdings share price rose 2 cents, or 4.9%, to 43 cents yesterday after the diesel engine provider announced an acquisition over the weekend. - A-Sonic Aerospace's stock took off on high volumes yesterday, following the logistics and aerospace company's revelation last week that it has started up an aircraft-leasing division. - Synear Food Holdings' independent shareholders have adhered to the recommendation of an independent financial adviser that shareholders approve a delisting plan.

OSPL - Good Morning S'pore - Central Dealing Desk

Stock Name: FirstRes
Company Name: FIRST RESOURCES LIMITED

Research House: CIMB

Price Call: BUY

Target Price: 2.22

Stock Name: CapMallsAsia
Company Name: CAPITAMALLS ASIA LIMITED

Research House: Credit Suisse

Price Call: BUY

Target Price: 2.58

Market Compass

10 September 2013~ Good Morning Singapore!

Singapore Idea Snippets:

10 Sept 2013 ~ Good Morning Singapore! Central Execution Team - The Excellence of Execution This product is made available by your Central Execution Team, for you as TRs of OCBC Securities to help you with your business and therefore it is confidential and only for internal circulation. It is not intended for onward circulation to non-OSPL TRs, clients or any other third party in this or any other version. Neither is this intended to be relied upon as a sole basis for any recommendation. TRs must also consider their clients' investment objectives, financial position and needs when intending to make or making any recommendation. For the front desk, by the front desk. All feedback to make this a better product is welcome. Global Flash: While You Were Sleeping Source: Marketwatch Quote for the day :I like criticism. It makes you strong. - LEBRON JAMES Singapore: The Day Ahead SINGAPORE DAYBOOK :US: Wall St jumps, Nasdaq ends at highest since Sept 2000. [NEW YORK] US stocks closed sharply higher on Monday, with the Nasdaq ending at its highest level since September 2000, as upbeat data from China boosted optimism about the health of the global economy. Sentiment was also lifted by merger activity and easing concerns about a potential Western-led strike on Syria. The S&P 500 closed higher for a fifth straight sessions, posting its best daily performance since Aug 1, while all 10 S&P sectors ended higher. More than 70 per cent of companies that trade on both the New York Stock Exchange and Nasdaq rose. Basic materials shares led the day's gains, rising 1.5 per cent, after China's August exports handily beat market expectations while consumer inflation held steady. US Steel Corp jumped 3.5 per cent to $19.53 while Alcoa Inc rose 2 per cent to $8.08. (Source: The Business Times) MARKET SCOOP China Minzhong's Ba3 rating on review for upgrade: Moody's LTA unveils changes to COE system,adds engine power to categories China downturn would hit Singaporeless than the 2008 global financial crisis: Moody's Analytics Neo's half-year net profit jumps on higher food catering revenue Jaya conducting review to enhance shareholder value China Minzhong says only has one set of books for audit Centurion launches S$300m MTN programme (Source: The Business Times) DBS Securities says... OUE HOSPITALITY TRUST | NOT RATED | TP: S$0.93 OUE HT is a Singapore-based REIT with an initial portfolio of two properties in prime locations - the 1051-room Mandarin Orchard Hotel, and the accompanying Mandarin Gallery retail mall The properties are collectively worth S$1.7bn as of 31 Mar13 OUE HT derives its rental income through a 15-year master lease structure which comprises of a fixed and variable income component pegged to the underlying performance of Orchard Hotel, while the Mandarin Gallery continues to enjoy robust occupancies of close to 100% We estimate that close to 66% of its income is backed by fixed rents, which is one of the highest among the Hospitality S-REITs Immediate earnings drivers will come from the Manager optimizing the performance of Mandarin Orchard through a push towards higher yielding segments like the corporate market, an additional 26 new hotel rooms and the phased refurbishment of close to 430 hotel rooms, which should lead to higher RevPAR growth in the medium term In addition, there is a visible pipeline of acquisitions targets in Singapore and China, which when acquired could potentially double its current number of rooms We have a DCF-based fair value of S$0.93, based on a WACC of 6.9%, offering potential upside of 8% Better than expected operational performance and or acquisitions is expected to be re-rating catalysts In addition, yields of 7.6%-8.0% are higher than S-REIT peers While earnings are sensitive to RevPAR changes, we expect earnings volatility to RevPAR changes to be limited given a high % of income pegged to fixed rates CIMB Securities says ... FIRST RESOURCES LTD | OUTPERFORM | TP: S$2.22 We estimate every 5% depreciation in the rupiah could boost FY13 net profit by 1.5% We maintain our EPS and target price of S$2.22, still based on a CY14 P/E of 12.3x (1 s.d. above its mean) We continue to like First Resources for its young and well-managed estates as well as its attractive P/E valuation It also stands to benefit if the rupiah stays weak relative to the US$ Hence, our Outperform call is intact First Resources posted a 28% mom jump in FFB output in July 13, thanks to better FFB yields - in line with seasonal trends This brings its 7M13 FFB production to 1.05m tonnes, a 1.1% improvement from last year However, July and 7M13 FFB yields are 22% lower yoy, due to biological tree stress and dilution from newly acquired and mature estates The July production statistics are broadly in line with our forecast of 6% FFB output growth for FY13 and the group's guidance of 0-5% growth from its nucleus estates Even if output is slightly disappointing, we believe that the Indonesian rupiah's current weakness vs. the US$ will partially offset this This is due to the fact that the group's revenue is mainly denominated in US$, while a substantial portion of its cost is denominated in rupiah We estimate that the sensitivity of our FY13 earnings to every 5% change in the rupiah is 1.5% This is based on the assumption that 42% of the group's cost of production for CPO (mainly labour), which is denominated in rupiah, will be lower in US$ terms In terms of debt, 96% of the group's borrowings are effectively US$ debt, as the group has swapped its medium-term notes (MTNs) in ringgit to US$ We are advising investors to add to their positions in First Resources as we expect 2H earnings to benefit from higher production, while the weaker rupiah may temper the yoy rise in labour costs in US$ terms The group is also relatively sheltered from a rising interest-rate scenario as we estimate that 96% of its debt are on fixed rate CREDIT SUISSE Securities says... CAPITAMALLS ASIA | OUTPERFORM | TP: S$2.58 We visited CMA's malls in Xi'an and Beijing over the weekend We spent three days visiting CapitaMall Xindicheng in Xi'an, CapitaMall Tiangongyuan site and the recently acquired Grand Canyon Mall in Beijing, as well as a few of its competitor malls in the vicinity, including VivoCity Xi'an and Intime, Lotte Mart and BHG Mall near Fengtai district, Beijing We have also included some feedback from our visit to Poly RE group's Daxing development (South Beijing) and CAPL:Henderson Land JV township development in Xi'an, La Botanica in this report Key highlights from the visit (1) Despite having only one mall in Xi'an, we believe management is likely to increase its presence there on the back of strong government initiatives on the city's economic and social development Management likens Xi'an to Chengdu five years ago (2) In line with the Beijing government's efforts to develop South Beijing, CMA has bought two malls in the past 1.5 years in Fengtai and Daxing (3) Key challenges to the China retail sector still remain - staffing, competition, etc However, CMA hopes to play on scale and its track record to mitigate some competition pressures We expect earnings momentum to improve in the coming quarters led by: (1) China, with a higher percentage (70% of China NAV) of malls opened; and (2) Singapore, with the opening of Westgate and Bedok Mall in 4Q13 (>75% and >90% pre-leased, respectively) The stock has fallen 4.9% YTD, underperforming the STI index by 1.1%. At 1.04x P/B, CMA is trading below its historical P/B average of 1.15x We reiterate our OUTPERFORM rating on CMA as we like its exposure to the more defensive retail sector, yet we expect core earnings growth to be fairly attractive (three-year CAGR of 27%) with downside risk supported by a strong recurring fee income base

SG: MARKET PULSE: CMA, SGX, FCT, Sheng Siong, ART, Starhill Global REIT (24 Jul 2013)

Stock Name: CapMallsAsia
Company Name: CAPITAMALLS ASIA LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 2.55

MARKET PULSE: CMA, SGX, FCT, Sheng Siong, ART, Starhill Global REIT

24 Jul 2013

KEY IDEA CapitaMalls Asia: Gaining good traction CMA's 2Q13 PATMI is S$245.6m, which increased 5.9% YoY mainly due to higher fair value gains for Chinese assets and ION Orchard and profit recognition at Bedok Residences, partially offset by a lower divestment gain. Excluding one-time items, we view the 2Q13 results to be mostly within expectations and YTD core PATMI now makes up 63% of our FY13 forecast. We continue to see relatively firm NPI statistics across the group's mall portfolio. In China (which makes up 51% exposure of total assets excl. cash), 1H13 tenants sales at CMA's malls grew at 9.5% YoY on a psf basis. In Singapore, shopper traffic and tenant sales are up a healthy 4.2% and 3.5% YoY, respectively. Looking ahead, CMA expects to open phase 2 of CapitaMall Jinniu in Chengdu, China in 3Q13, and Bedok Mall and Westgate in 4Q13. We rate the stock with a BUY rating and an unchanged fair value estimate of S$2.55. (Eli Lee) MORE REPORTS Singapore Exchange: Increased DPS by 1 cent Singapore Exchange (SGX) delivered FY13 net earnings of S$335.9m, exactly in line with market expectations. Securities Market saw Securities Daily Average Value (SDAV) of S$1.5b in FY13, up 10%, resulting in a 10% increase in turnover to S$363b. Derivatives Market enjoyed strong volume too, with 101m contracts traded, up 32% in FY13. Management has declared a FY13 full year dividend of 28 cents, up 1 cent from 27 cents (from FY2010-2012). This meant a final quarter payout of 16 cents (12 cents have already been paid out). Recent macro factors are pointing to uncertainty ahead, and this is likely to result in a quieter 1QFY14. In addition, this could potentially spillover into 2Q. Expenses are likely to stay high in FY14, largely from new product initiatives as well as its regulatory requirement related expenses. As we roll our estimates into FY14/15 and using the same blended 23x earnings, we are raising our fair value estimate slightly from S$7.16 to S$7.43. Dividend yield is 3.7% based on current price. Maintain HOLD. (Carmen Lee) Frasers Centrepoint Trust: Positive trends largely intact Frasers Centrepoint Trust (FCT) reported 3QFY13 DPU of 2.85 S cents, representing a YoY growth of 9.6%. This brings the 9MFY13 DPU to 7.95 S cents (+8.9%), forming 73.2% of our FY13F DPU. This is largely in line with our expectations, as we expect the remaining S$2.9m retained in 1H to be distributed in 4Q. Key drivers for 3Q performance remained Causeway Point (CWP) and Northpoint. However, pockets of weakness persisted at YewTee Point and Bedok Point. Looking ahead, FCT expects CWP and Northpoint to remain as the main engines for growth, as leases amounting to a substantial 75.6% of FCT's gross rent are up for renewal in FY14, and positive rental reversions are still expected. On its acquisition front, FCT believes that the injection of Changi City Point in FY13 now appear remote as the strata title division of One@Changi City is still ongoing. We are keeping our forecasts largely unchanged, but as we switch our valuation to dividend discount model and factor in higher risk free rates, our fair value drops from S$2.13 to S$1.96. Maintain HOLD on FCT. (Kevin Tan) Sheng Siong Group: 2Q13 results in-line Sheng Siong Group's (SSG) 2Q13 results came in within expectations with revenue and net profit increasing 8.7% and 20.8% YoY to S$159.8m and S$8.5m respectively. Gross profit and operating margins also improved YoY for the third straight quarter as an interim dividend of 1.2 S cents was declared (versus 1.0 S cent last year). In the coming quarters, the group could experience some pressures from lower same store sales and higher staff costs but we expect the impact to be minimal given the group's effective cost management initiatives and full-year contributions from new stores opened last year. In addition, the operating environment remains conducive for the group with resilient supermarket expenditure and lower inflation expectations. Reiterate BUY for SSG with a slightly lower fair value estimate of S$0.80 (S$0.82 previously). (Lim Siyi) Ascott Residence Trust: 2Q13 better than our expectations Ascott Residence Trust (ART) reported 2Q13 results that were better than our expectations but in line with the street. Revenue fell 2% YoY to S$77.4m and gross profit dropped 4% YoY to S$41.0m. However, unitholders' distribution grew 14% YoY to S$30.9m (including a reversal of over-provision of prior years' tax expense of S$2.7m), which led DPU up 3% YoY to 2.45 S cents. Average daily rates in Singapore are down ~3-7% in 2Q13. Assuming that exchange rates stay constant for the rest of the year, management believes that the whole portfolio's RevPAU for 2H13 will be flat or slightly higher than 1H13's. We adjust our earnings forecasts for FY13-14 upwards in our valuation model and, as a result, our FV moves up slightly from S$1.31 to S$1.37. Maintain a HOLDrating on ART. (Sarah Ong) Starhill Global REIT: 2Q13 DPU rose 10.2% YoY Starhill Global REIT (SGREIT) announced 2Q13 NPI of S$39.1m and distributable income of S$26.7m, up 5.2% and 14.7% YoY respectively. While the number of units outstanding was enlarged post conversion of 152.7m convertible preferred units (CPUs) into 210.2m ordinary units, income to be distributed to CPU holders declined 88.2% YoY to S$0.3m. As a result, income to unitholders was up 22.1% to S$25.6m, while DPU was up 10.2% YoY to 1.19 S cents. Together with 1Q DPU of 1.37 S cents, 1H13 DPU totaled 2.56 S cents, up 19.1% YoY. This forms 52.1%/51.2% of our/consensus full-year DPU forecasts. The positive performance, we note, was mainly attributable to strong contribution from SGREIT's Singapore portfolio and incremental revenue from its recently acquired Plaza Arcade in Australia. As at 30 Jun, SGREIT's portfolio occupancy stood at 99.6%, largely unchanged compared to 99.7% in the Mar quarter. Financial position also remains strong, with gearing at 30.3% and interest cost at 3.03% (81% fixed/hedged). We will be attending SGREIT's analyst briefing later in the morning. For now, we maintain BUY on SGREIT but place our fair value of S$0.95 under review. (Kevin Tan)

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NEWS HEADLINES - The Dow Jones Industrial Average climbed to a record close on Tuesday despite most US equities ending lower after a fall in a regional manufacturing gauge. - Aspial Corporation has sold an additional S$25m of 5% 3-year bonds at par. - Mencast Holdings' energy services division has won S$6m of long term contracts. - Ley Choon Group Holdings has commissioned a second asphalt premix plant. - Smartflex Holdings expects to report a net loss before tax for 1H13.

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.

SG: MARKET PULSE: Cache, CMA, SingTel & StarHub (25 Apr 2013)

Stock Name: CACHE
Company Name: CACHE LOGISTICS TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.45

Stock Name: CapMallsAsia
Company Name: CAPITAMALLS ASIA LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 2.55

Stock Name: SingTel
Company Name: SINGTEL

Research House: OCBC

Price Call: BUY

Target Price: 3.68

Stock Name: StarHub
Company Name: STARHUB LTD

Research House: OCBC

Price Call: HOLD

Target Price: 4.00

MARKET PULSE: Cache, CMA, SingTel & StarHub

25 Apr 2013

KEY IDEA Cache Logistics Trust: Promising start to FY13 Cache Logistics Trust (CACHE) reported 1Q13 DPU of 2.234 S cents, up 7.1% YoY. This is in line with our expectations, given that the quarterly DPU made up 26.5% of our DPU forecast. The strong performance was mainly attributable to upward rental adjustments and incremental contribution from its past acquisitions. As at 31 Mar, the portfolio assets remained 100% occupied, with a healthy weighted average lease to expiry of 3.7 years. We also understand that CACHE has secured a new tenant, Agility Logistics, for its lease at APC Distrihub during the quarter. With this, CACHE has fully addressed its lease expiry in 2013, with zero renewals due for the rest of the year. CACHE currently has an aggregate leverage of 29.2% and a stable all-in financing cost of 3.52%. This provides CACHE with ample flexibility and firepower to pursue its growth opportunities. We are maintaining our BUY rating with a higher fair value of S$1.45 (S$1.33 previously) on CACHE. (Kevin Tan) MORE REPORTS CapitaMalls Asia: Sharp execution bearing fruit CMA's 1Q13 PATMI came in at S$73.2m - up 9.6% YoY mostly due to contributions from Star Vista, four malls in Japan and Queensbay Mall, a S$6.6m gain from warehousing of two assets sold to CCDFII, better performance from CMT, ION Orchard and the China Funds, and a sale at The Orchard Residences. Excluding one-time items, we judge 1Q13 results to be somewhat above expectations. Given the H7N9 bird flu outbreak, shopper traffic for CMA's Chinese malls showed a decrease of -0.9% YoY. On a same mall basis, however, tenant sales were up +15.9% YoY. We see worsening H7N9 fears potentially reducing retail traffic over the nearer term but a sustained long-term business impact, in our view, is unlikely. Maintain BUY with an unchanged fair value estimate of S$2.55. (Eli Lee) Telecom Sector: StarHub to get BPL on cross carriage basis Summary: StarHub Ltd (STH) will be able to broadcast "live" matches of the much-coveted Barclays Premier League (BPL) for the upcoming 2013-2016 season. This after the MDA (Media Development Authority) asked SingTel to cross-carry the matches over the next three seasons even though SingTel had earlier secured the rights on a non-exclusive basis. Understandably, SingTel said it was "gravely disappointed" with the decision, adding that "it disadvantages both consumers and the industry". SingTel has also said it intends to appeal the decision and seek legal recourse if necessary. The decision came as a bit of a surprise, given that SingTel had earlier secured the rights on a non-exclusive basis. However, the MDA has ruled that the agreement between SingTel and FAPL (content owner) had restrictions that prevent other Pay TV retailers from offering the same content, thus triggering the cross-carriage ruling. It is also unclear as to how FAPL would respond to the decision. We will be speaking further with both companies to get a clearer picture on this. In the meantime, we put our ratings on SingTel [BUY, S$3.68 fair value] and StarHub [HOLD, S$4.00 fair value] under review. (Carey Wong)

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

NEWS HEADLINES - United Engineers (UE) has extended the deadline for WBL Corporation shareholders and convertible bondholders to accept their takeover offer to 5.30pm on 10 May. As at 23 Apr, UE controlled 39.64% of WBL. - Fewer development properties available for sale led Yeo Hiap Seng to report 1Q13 net profit that was 69% lower at S$15.5m versus the same period a year ago. - Courts Asia's maiden bond foray was a "blowout" - it received an overwhelming S$2.1b orders for its three-year S$125 million bonds. - Food manufacturer QAF's 1Q net profit grew 14% YoY with only a modest improvement in sales as its tax burden eased. - Hotung Investment Holdings saw its net profit for 1Q13 falling 13% YoY to NT$73m (S$3m). - Singhaiyi Group will be launching its Cosmoloft project, a 17-storey apartment tower comprising 56 units of freehold, designer lofts, on May 1.

SG: MARKET PULSE: Property Sector, First REIT, A-REIT, KepCorp, FEHT (16 Apr 2013) - Resend

Stock Name: Capitaland
Company Name: CAPITALAND LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 4.29

Stock Name: KepLand
Company Name: KEPPEL LAND LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 4.53

Stock Name: CapMallsAsia
Company Name: CAPITAMALLS ASIA LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 2.55

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

Research House: OCBC

Price Call: HOLD

Target Price: 1.31

Stock Name: Ascendasreit
Company Name: ASCENDAS REAL ESTATE INV TRUST

Research House: OCBC

Price Call: HOLD

Target Price: 2.63

Stock Name: Kep Corp
Company Name: KEPPEL CORPORATION LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 12.68

MARKET PULSE: Property Sector, First REIT, A-REIT, KepCorp, FEHT

16 Apr 2013

KEY IDEA Singapore Residential Property: Wave of launches driving firm Mar sales Summary: URA reported that a headline total of 3,072 new private homes (including 279 EC units) were sold in Mar 13, which was up 235% MoM and 1% YoY. These healthy numbers were driven by a wave of new launches after the Lunar New Year, including D'Nest (912 total units, Pasir Ris) 699 units sold at a median S$963 psf, Bartley Ridge (868 total units, Mt Vernon Rd) 367 units sold at S$1,296 psf and Urban Vista (582 total units, Tanah Merah) 348 units sold at S$1,503 psf. We see sales reflecting still firm residential demand and an environment of continued liquidity but remain cognizant of potential incremental curbs should the housing sector show excessive activity going forward. Maintain NEUTRAL on the residential property sector and we prefer developers with strong balance sheets and diversified exposure. Our top picks are CapitaLand [BUY, S$4.29], Keppel Land [BUY, S$4.53] and CapitaMalls Asia [BUY, S$2.55]. (Eli Lee) MORE REPORTS First REIT: No major impact from possible Siloam Hospitals IPO Summary: News agency Reuters reported that Lippo Karawaci (Lippo), which is First REIT's (FREIT) sponsor, is seeking to raise at least US$200m in an IPO of its Siloam Hospitals healthcare division. We do not foresee any major impact to FREIT's prospects, as we believe that FREIT would remain as an important vehicle for Lippo to implement its asset-light strategy. Moreover, FREIT has a right-of-first-refusal for the purchase of healthcare assets from its sponsor and/or any of its subsidiaries. Meanwhile, FREIT will hold an EGM on 29 Apr to seek unitholders' approval in relation to its two proposed acquisitions from Lippo. As we expect the acquisitions to be DPU accretive and value-enhancing to unitholders, we expect unit-holders to vote in favour of the proposed conditions. Maintain HOLD and S$1.31 fair value estimate on FREIT. (Wong Teck Ching Andy) Ascendas REIT: Strength reflected in price Summary: Ascendas REIT's (A-REIT) FY13 DPU totalled 13.74 S cents, up 1.3%. This is somewhat below our and street's full-year estimates of 14.0-14.2 S cents. Excluding performance fee, however, we note that DPU would have grown 3.6% to 14.05 S cents, closer to our projections. Looking ahead, A-REIT expects the positive rental reversions to persist, albeit at a slower pace. Management also pointed out there is ~10% vacancy in the multi-tenanted portion of its portfolio, which may provide upside if these spaces are leased out. During the quarter, A-REIT announced the development of DBS Asia Hub Phase 2 for S$21.8m and two new asset enhancement projects totalling S$14.0m. These initiatives, together with the announced investments, are likely to maintain its stable performance in FY14, in our view. We incorporate the results into our forecasts and roll over our valuation to FY14. Maintain HOLD with a marginally higher fair value of S$2.63 (previously S$2.60) on A-REIT. (Kevin Tan) Keppel Corporation: Secures US$226m jack-up rig contract from Falcon Summary: Keppel Corporation (KEP) announced that its O&M arm has secured a US$226m contract from Falcon Energy to construct a KFELS Super B Class jack-up rig. Recall that KEP won a US$820m contract for four jack-up rigs from Grupo R in Mar (KFELS B Class design) and a US$225m contract from Ensco in early Apr (KFELS B Class design). The latter figure includes the construction cost, commissioning, systems integration testing and project management costs. Meanwhile, the last time Keppel secured a KFELS Super B Class jack-up rig was in Mar 2011 for US$210m. This latest order brings KEP's YTD orders to about S$2.2b, accounting for about 43% of our full year order win estimate. Maintain BUY with S$12.68 fair value estimate on KEP; the group will also be announcing its results on 18 Apr 2013. (Low Pei Han) Far East Hospitality Trust: Agreement to acquire Rendezvous Grand Hotel Singapore Summary: Far East Hospitality Trust (FEHT) has entered into an agreement with The Straits Trading Company Limited (STC) to acquire Rendezvous Grand Hotel Singapore and Rendezvous Gallery (70-year old leasehold estate) for an estimated total cost of acquisition of S$270.1m. The acquisition will be financed by the proposed issue proposed issue of new stapled securities in FEHT to STC (S$68.0m), the Sponsor (S$67.8m), as well as debt facilities (S$132.2m). The pro forma effects of the acquisition for FY12 (27 Aug-31 Dec) would have been an increase in DPU from 2.09 S-cents to 2.12 S-cents. Pro-forma effect on NAV per stapled security as of 31 Dec 2012 would have been an increase from 97 S-cents to 98 S-cents. This is Far East H-Trust's first acquisition since its initial public offering in August 2012. The master leasee will be a member of the Far East Organization group of companies. We maintain a HOLD rating but place our fair value of S$1.05 under review. (Sarah Ong)

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

NEWS HEADLINES - US equity indexes fell the most in five months, with the prices of commodities dropping after disappointing growth numbers from China and bomb blasts at the Boston Marathon. - Keppel REIT's net property income increased 20.7% YoY to $34.4m primarily due to improved performance from Ocean Financial Centre and 77 King Street. - Qian Hu's 1Q13 net profit fell 88% YoY to S$62k. Revenue declined 2% YoY to S$20.2m. - K-Green Trust achieved 1Q13 profit after tax of $3.2 m, down 10% YoY. Cash flow from operating activities was S$9.8m, down 16% YoY. - Sino Gradness has reported that it received tremendous response at a Chengdu trade exhibition, with indicative orders for "Garden Fresh" juices received to-date exceeding RMB290m, ~45% more than last year.

MARKET PULSE: Residential Sector, Infrastructure Plays, STE, Transport Sector (18 Feb 2013)

Stock Name: Capitaland
Company Name: CAPITALAND LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 4.04

Stock Name: KepLand
Company Name: KEPPEL LAND LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 4.53

Stock Name: CapMallsAsia
Company Name: CAPITAMALLS ASIA LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 2.55

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

Research House: OCBC

Price Call: BUY

Target Price: 1.75

Stock Name: Tee Intl
Company Name: TEE INTERNATIONAL LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.30

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

Research House: OCBC

Price Call: HOLD

Target Price: 4.12

Stock Name: ComfortDelGro
Company Name: COMFORTDELGRO CORPORATION LTD

Research House: OCBC

Price Call: HOLD

Target Price: 1.95

Stock Name: SMRT
Company Name: SMRT CORPORATION LTD

Research House: OCBC

Price Call: HOLD

Target Price: 1.71

MARKET PULSE: Residential Sector, Infrastructure Plays, STE, Transport Sector

18 Feb 2013

KEY IDEA Singapore Residential Property: Healthy Jan sales but expect weakness ahead Summary: URA reported that a headline total of 2,269 new private homes (including 256 EC units) were sold in Jan 2013, which was up 2% MoM and 9% YoY. Excluding EC and landed-units, 2,003 units were sold in the month - up 47% MoM and 7% YoY with a sustained above-par take-up rate at 111% (versus 144% in Dec 2012). Looking ahead, we expect Feb 2013 sales figure to fall MoM due to the traditionally quiet Chinese New Year season and a limited number of new launches. Immediate data-points ahead are the launches at Trilinq (IOI Group) near the Clementi MRT Station and Urban Vista (Fragrance Group) near the Tanah Merah MRT station. We have a NEUTRAL rating on the residential property sector and prefer diversified developers with strong balance sheets and significant exposure to the Chinese property sector. Our top picks are CapitaLand [BUY, S$4.04], Keppel Land [BUY, S$4.53] and CapitaMalls Asia [BUY, S$2.55]. (Eli Lee) MORE REPORTS Population White Paper favours Infrastructure Plays Summary: After five days of intense debate, Singapore's Parliament passed the amended White Paper on Population about a week ago. We reviewed the White Paper and emphasize the following: - (i) the government will now build infrastructure ahead of demand, (ii) planning parameters of 5.8m to 6.0 million in 2020 (and 6.5 to 6.9 million in 2030) are to be used, (iii) the housing supply will be ramped up and HDB prices will remain affordable, (iv) rail network will double by 2030 with the addition of five more lines. In our view, the most direct beneficiary is the infrastructure sector (public works providers opposed to construction-developers). We highlight several niche players such as Tat Hong Holdings (BUY; FV: S$1.75), Yongnam Holdings Limited (UNRATED), TEE International (HOLD; FV: S$0.30) and TTJ Holdings (UNRATED). (Chia Jiunyang) ST Engineering: FY12 in line Summary: Singapore Technologies Engineering (STE) reported FY12 results that were in line with ours and consensus expectations. For FY12, revenue rose 6% YoY to S$6.4b, profit before tax climbed 10% YoY to S$723mm and profit attributable to shareholders rose 9% to S$576m. All sectors recorded higher PBT for FY12 versus FY11. Aerospace, Electronics, Land Systems and Marine saw PBT increase by 9%, 11%, 6% and 5% YoY respectively. Aerospace's FY12 PBT margin of 15.0% improved over FY11's 14.4%. STE expects to achieve higher revenue and PBT in FY13 versus FY12. We forecast a FY13F EPS of 19.9 S cents, and keeping a P/E peg of 20.7x, we raise our fair value from S$3.90 to S$4.12 and maintain a HOLD on STE. We estimate a FY13F dividend yield of 4.5%. (Sarah Ong) Singapore Transport: Fare review report delayed till end-May Summary: We are unperturbed by the Transport Minister's decision to delay the submission of the Fare Review Mechanism Committee's report to end-May because i) our projections already factor in price increases from mid-2QCY13, and ii) broad-based fare increases will still materialise. Although the reason for the delay is to facilitate further study of the impact of fare increases on low-income families and/or dependent groups (e.g. polytechnic students), wording in recent speeches and reiterations by the Transport Minister have been clear that commuters should be prepared to bear some of the cost increases especially after the fact that current fares have been kept affordable over recent years at the expense of public transport operators. Therefore, we leave our forecasts for both public transport operators - ComfortDelGro and SMRT - unchanged and maintain HOLD for both counters at S$1.95 and S$1.71 respectively. (Lim Siyi)

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

NEWS HEADLINES - Japan's Prime Minister Shinzo Abe is expected to announce his candidate for Bank of Japan's new governor for this week - a move with international and financial implications. - According to the median estimate of economists by Reuters, Singapore's GDP likely grew by 1.2% in 4Q2012, faster than the advance estimate of 1.1%, helped by higher production of oil rigs and pharmaceuticals. - Singapore retail sales fell 1.5% YoY in Dec last year, dragged down by weaker sales of motor vehicles. - The new head of Real Estate Developers' Association of Singapore (Redas) says, developers here are "naturally anxious" about the latest cooling measures, but they understand the government's push for a soft landing of property market and support the population roadmap. - Mapletree Greater China Commercial Trust will be launching an IPO for up to US$1.3b, the largest ever for a real estate investment trust in Singapore. According to its prospectus, the trust is offering about 1.73 million units in a range of S$0.88-0.93 each.

MARKET PULSE: ASL, Goodpack, CMA, Viz Branz, Karin, PEC, Midas (7 Feb 2013)

Stock Name: ASL Marine
Company Name: ASL MARINE HOLDINGS LTD

Research House: OCBC

Price Call: BUY

Target Price: 0.86

Stock Name: Goodpack
Company Name: GOODPACK LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 1.95

Stock Name: CapMallsAsia
Company Name: CAPITAMALLS ASIA LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 2.55

Stock Name: VizBranz
Company Name: VIZ BRANZ LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.74

Stock Name: Karin
Company Name: KARIN TECHNOLOGY HLDGS LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.295

Stock Name: MIDAS
Company Name: MIDAS HLDGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.60

MARKET PULSE: ASL, Goodpack, CMA, Viz Branz, Karin, PEC, Midas

7 Feb 2013

KEY IDEA ASL Marine: Can afford to be selective of new orders ASL Marine (ASL) reported a 7.3% YoY rise in revenue to S$83.0m and a 39.8% increase in net profit to S$10.6m in 2QFY13, such that results were in line with our expectations. Gross profit margin increased from 17.3% in 2QFY12 to 23.4% in 2QFY13 due to better margins in all three core business segments. Given ASL's busy yards and healthy order book (S$528m as at 31 Dec 2012), we understand that the group will aim to start securing orders only after Jun this year. Since our last report on 3 Dec 2012, the stock has done well, with its share price appreciating by 13.8% vs the STI's 6.7% gain over the same period. Despite this, we still see upside potential. We roll forward our valuation to blended FY13/14F earnings, still based on an unchanged PER of 10x. As such, our fair value estimate rises from S$0.82 to S$0.86. Maintain BUY. (Low Pei Han) MORE REPORTS Goodpack Limited: Promising prospects Goodpack's 2Q13 revenue increased by 6.4% YoY to US$46.4m following continued growth from its Synthetic Rubber (SR) segment. Operating profit rose by a corresponding 15.4% to US$16.2m - despite operating expenses rising by 7.1% YoY to US$31.8m - and PATMI gained 4.0% YoY to US$11.1m. We raise our FY13 and FY14 outlook on sustained improvements within the SR space as tyre demand holds up and new SR plants open in Singapore. Aided by two recent key contract wins, Goodpack stands in good stead to benefit once production from these SR plants ramp up in the middle of CY2013. As a result, we upgrade Goodpack to BUY and our fair value estimate increases to S$1.95 from S$1.85 previously. (Lim Siyi) CapitaMalls Asia: Good round-off to FY12 CapitaMalls Asia (CMA) reported 4Q12 PATMI of S$184.8m - decreasing 10% YoY mostly due to lower fair value gains from its properties in China and Singapore. This brings FY12 PATMI to S$546.0m, up 19.7%. Excluding revaluation gains and portfolio gains, FY12 PATMI adjusts to a core figure of S$175.7m, which we judge to be mostly in-line and only 3.2% below our FY12 forecast of S$181.5m. We continue to view CMA favorably and see its share price likely benefitting from dual tailwinds ahead: 1) increasing operational traction, as a larger component of CMA's portfolio becomes operational, and 2) relatively firm retail outlooks in China and Singapore. Maintain BUY with an unchanged fair value estimate of S$2.55. (Eli Lee) Viz Branz Limited: Continued margin improvement Ongoing competitive pressures in Myanmar caused Viz Branz (VB) to report a 5.6% YoY decline in 1H13 revenue to S$86.1m. However, favourable raw material costs and a reduction in administrative expenses saw operating profit and PATMI rise by 6.7% YoY to S$13.6m and 4.0% YoY to S$10.1m respectively. VB's management also declared an interim dividend of 1 S cents, which was similar to last year's interim payout. With the performance coming in within our expectations, our 2H13 forecasts remains unchanged, and we retain our fair value estimate of S$0.74. While the lack of progress on a GO will disappoint investors, we reiterate our view that a deal is likely to materialize. Maintain BUY. (Lim Siyi) Karin Technology: Leveraging on smartphones for growth Karin Technology's (Karin) 1HFY13 revenue surged 39.7% YoY to HK$2,123.3m, exceeding our expectations (54.4% of our FY13 forecast). However, estimated core PATMI of HK$26.8m (+5.1% YoY) was in line due to lower-than-expected gross margin, forming 50.1% of our full-year projection. Karin's strong revenue growth was driven largely by its Consumer Electronics Products and Components Distribution segments, which have significant exposure to the growing smartphone market. An interim dividend of 7.2 HK cents/share was declared. Our forecasted FY13F dividend yield stands at an attractive 7.7%. We retain our core PATMI projections, but raise our PE multiple peg from 6x to 7x in light of the improved market sentiment and Karin's stronger financial position. We also roll forward our valuations to blended FY13/14F EPS and our fair value estimate increases from S$0.25 to S$0.295, partially offset by a lower HKD-SGD assumption. Maintain HOLD.(Wong Teck Ching Andy) PEC Ltd: Ceasing coverage PEC Ltd reported another quarter of lackluster result with 2Q13 PATMI falling 15% YoY to S$2.6m despite revenue increasing by 11% to S$144m. Gross margin declined to 14% (2Q12: 20%) due to competitive pricing and cost pressures in both the project work and maintenance sectors. Other operating expenses also jumped 55% YoY to S$12.4m from cost increases associated with higher headcount (i.e. accommodation, transport expenses, etc). Besides the tight labour market, PEC's earnings growth is also limited by slower pace of petrochemical investments due to a change in EDB's energy policy. Meanwhile, we note that its share price has risen by almost 11% since our last report. We now see limited upside ahead and think that its earnings are likely to remain sluggish. Therefore, we CEASE COVERAGEon the stock due to the lack of medium-term price drivers and muted earnings outlook. (Chia Jiunyang) Midas Holdings: JV clinches CNY710m metro contract Midas Holdings (Midas) announced last evening that its 32.5%-owned JV company Nanjing SR Puzhen Rail Transport (NPRT) has clinched a metro contract worth CNY710m. This encompasses the supply of 24 train sets, or 104 train cars for the Ningtian Intercity Line Phase 1 project. Delivery is scheduled to take place only from 2014 to 2015, but this could lead to potential contract wins for Midas as it is a supplier of NPRT. We note that this is NPRT's second announced contract order of the year. Total contract wins amount to ~CNY1.05b for NPRT YTD. While NPRT has been a drag on Midas' earnings in FY12, we believe that its fortune would likely reverse from FY13 given its order book schedule on hand. Midas' share price is likely to react positively as a result of this announcement. Maintain BUY and S$0.60 fair value estimate, pegged to 1.2x FY13F P/B. (Wong Teck Ching Andy)

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

NEWS HEADLINES - US stocks eked out modest gains on Wed after earnings from Time Warner Inc and others reinforced a theme of steady improvement for consumer companies. The Dow ended a choppy trading day up 7.22 points, or 0.1%, at 13,986.52. - Further foreign labour curbs could jeopardise Singapore's position as a business hub for the Asia-Pacific region, according to the Singapore International Chamber of Commerce. - Nielsen's latest survey showed that Singapore could see a potential slowdown in consumer spending in 2013. - Global Logistic Properties' PATMI grew 30.7% YoY to US$112.8m in 3QFY13, boosted by fair value gains in investment properties and higher rents in China. - Pacific Andes Resources Development Limited posted a 42.5% YoY increase in 1QFY13 PATMI to HK$199.0m despite a 3.0% slip in revenue.

MARKET PULSE: CMA, A-REIT, Ezion, YZJ (16 Jan 2013)

Stock Name: CapMallsAsia
Company Name: CAPITAMALLS ASIA LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 2.55

Stock Name: Ascendasreit
Company Name: ASCENDAS REAL ESTATE INV TRUST

Research House: OCBC

Price Call: HOLD

Target Price: 2.43

Stock Name: EzionHldg
Company Name: EZION HOLDINGS LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.95

MARKET PULSE: CMA, A-REIT, Ezion, YZJ

16 Jan 2013

KEY IDEA CapitaMalls Asia: Deepening its presence in Wuhan China CapitaMalls Asia (CMA) announced yesterday that it has been awarded a 70,400 sqm land site in Wuhan, China for RMB660m (S$128m) or RMB2,700 per sqm. The envisioned development would consist of a six-storey shopping mall and two office towers to open in 2015. Estimated total GFA is 240k sqm (160k sqm retail, and 80k sqm office), with a total development cost of ~RMB 2,800m (S$543m) or RMB 12,000 per sqm. We continue to favor CMA for executing sharply on a well thought-out strategy: active capital deployment into its growth market China through deepening its operational presence in key cities. Maintain BUY with an increased fair value estimate of S$2.55, versus S$2.16 previously, as we update our model for firmer cap rate assumptions and valuations of listed holdings. (Eli Lee) MORE REPORTS Ascendas REIT: Paying premium for strength Ascendas REIT (A-REIT) reported a 4.0% YoY increase in 3QFY13 DPU to 3.62 S cents. This brings the 9MFY13 DPU to 10.68 S cents (+6.2%), forming 76% of both our and consensus full-year DPU projection. The strong performance, we note, was driven by recognition of full-quarter rental income earned from completed development projects and new acquisitions over the past year. Portfolio occupancy as at 31 Dec 2012 was also stable at 94.0% on a sequential basis. In addition, A-REIT continued to achieve positive rental reversions averaging 18.5% across all its property types in 3Q. While A-REIT has been quiet on its acquisition front in FY13, it continues to be actively involved in asset enhancement (AEI) / development activities to boost its returns on its portfolio. This should sustain its growth profile in our view. We are maintaining our HOLD rating with an unchanged fair value of S$2.43 as the stock appears fairly priced at current level. (Kevin Tan) Ezion Holdings: Secures LOI for a liftboat charter worth US$116.8m Ezion Holdings (Ezion) announced that it has secured a letter of intent from a SE Asian state-linked corporation for the charter of one unit of liftboat over a four-year period with an approximate contract value of up to US$116.8m. The liftboat is expected to be deployed in SE Asia upon its completion at end 2014, and the charter is likely to commence in 1Q15. Confirmation of this contract would further lengthen the group's earnings visibility. We will have more details after an analyst briefing this morning. For now, we maintain our BUY rating on the stock and S$2.05 fair value estimate on Ezion. (Low Pei Han) Yangzijiang Shipbuilding: Proposes warrants issue for general working capital Yangzijiang Shipbuilding (YZJ) has proposed an issue of 330m warrants at an issue price of RMB0.3072 (S$0.0605) per warrant, each with the right to subscribe for one new ordinary YZJ share at RMB7.617/share (S$1.50). The expiry date of the warrants is 29 Apr 2016. Net proceeds from the warrant issue will be about RMB92.17m (~S$18.15m), and YZJ intends to use them for general working capital purposes. Based on the warrant strike price, assuming all warrants are exercised, YZJ will receive additional proceeds of about RMB2,514m (~S$495m), which will also be used for general working capital. Pending more details from management, we put our Hold rating and fair value estimate of S$0.95 under review. (Low Pei Han)

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

NEWS HEADLINES - The S&P 500 Index rose 0.1% on Tues, with its worst performer being Apple Inc., which closed down 3.2% on concerns about slow demand for the iPhone 5. - Regarding the takeover battle for F&N, the Securities Industry Council has stated that the final time by which TCC Assets or OUE Baytown can revise their offers is 5.30pm on Jan 20, after which an auction procedure will kick in if a competitive environment still exists. - Armarda Group expects to remain loss making and report a loss for 3QFY13 ended 31 Dec 2012. - Pan Pacific Hotels Group's 367-room Parkroyal on Pickering, located across from Hong Lim Park, opens today. The introductory rate is S$238 a night. - Mun Siong Engineering has been awarded a term contract from a new customer, bringing the total number of recurring term maintenance contracts for the company to eight.

MARKET PULSE: Ezra, SPH, CMA, A-REIT, Lian Beng (15 Jan 2013)

Stock Name: SPH
Company Name: SINGAPORE PRESS HLDGS LTD

Research House: OCBC

Price Call: HOLD

Target Price: 4.05

Stock Name: CapMallsAsia
Company Name: CAPITAMALLS ASIA LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 2.16

Stock Name: Ascendasreit
Company Name: ASCENDAS REAL ESTATE INV TRUST

Research House: OCBC

Price Call: HOLD

Target Price: 2.43

MARKET PULSE: Ezra, SPH, CMA, A-REIT, Lian Beng

15 Jan 2013

KEY IDEA Ezra Holdings: Share price has run up; downgrade to HOLD Summary: Ezra Holdings (Ezra) reported a 54% YoY rise in revenue to US$278.7m and a 44% rise in gross profit to US$49.9m in 1QFY13. But higher administrative expenses, a lower share of profit of associated companies, and a higher tax rate led to a 49% fall in net profit to US$6.8m. Though the fall in core net profit is lower at 16%, the 1QFY13 amount of US$4.3m represents only about 13% of our full year core net profit estimate of US$33m, which is already one of the lowest in the street. Still, we expect better performance in 2HFY13 as the subsea division continues to grow. Ezra's share price has run up by about 18.5% since our last report on 3 Dec 2012. Due to limited upside potential, we downgrade our rating to HOLD. (Low Pei Han) MORE REPORTS Singapore Press Holdings: Circulation and ad revenues continue weak trend Summary: Singapore Press Holdings (SPH) reported 1QFY13 PATMI of S$91.1m which was 6.6% lower YoY mostly due to a reduced contribution from the Newspaper and Magazine and the exhibitions business. 1QFY13 PATMI now forms 24.3% of our annual forecast and is broadly in line with expectations. Of note, circulation revenues declined by S$1.3m (down 2.6% YoY) to S$49.0m during the quarter, while rental income for the group increased by S$1.3m (up 2.9%) to S$48.2 due to higher rental rates achieved at the Paragon. We believe that the persistent trend of falling circulation and advertisement revenues point to increasing uncertainties in SPH's core newspapers and magazines business, and would put pressure on overall operating margins over the mid to long term. However, an attractive dividend yield at 5.8% likely points to limited price downside at this juncture. Maintain HOLD with an unchanged fair value estimate of S$4.05. We would turn buyer around S$3.90 levels. (Eli Lee) CapitaMalls Asia: Retail land site acquisition in Wuhan, China Summary: CapitaMalls Asia (CMA) announced this morning that it has been awarded a retail mall land site in Wuhan, China for RMB660m (S$128m) or RMB2,700 per sqm. It is located at the junction of Jiefang Avenue and Gutian Second Road, and will be the group's fourth mall in Wuhan. The site area is 70,400 sqm and the envisioned development would consists of a six-storey shopping mall with two office towers to open in 2015. Total GFA (excluding car-park) is estimated at 240k sqm (160k sqm retail, and 80k sqm office). The total development cost for the project is ~RMB 2,800m (S$543m) or RMB 12,000 per sqm. We would speak further with management regarding this acquisition this morning and, in the meantime, maintain BUY but our fair value estimate of S$2.16 is under review. (Eli Lee) Ascendas REIT: No surprises from 3QFY13 earnings Summary: Ascendas REIT (A-REIT) released its 3QFY13 results this morning. NPI rose by 11.5% YoY to S$104.7m while distributable income increased by 13.5% to S$81.1m. DPU for the quarter came in at 3.62 S cents, up 4.0%. This brings the 9MFY13 DPU to 10.68 S cents, forming 76% of both our and consensus full-year DPU projection. A-REIT reiterated that it expects to maintain a stable performance for FY13, barring any unforeseen event and deterioration of the economic environment. We note that A-REIT only has ~2.1% of its revenue due for renewal for the remaining of its financial year and has a weighted average lease to expiry (WALE) of 3.8 years. We will be incorporating the results into our model. In the meanwhile, we place our Hold rating and S$2.43 fair value under review. (Kevin Tan) Lian Beng Group: 1HFY13 results below expectations Summary: Lian Beng Group's net profit for 1HFY13 (ending 30 Nov 2012) was below our expectations, falling 36.2% to S$19.2m (37% of our FY13 forecast). The drop in profit was mainly due to the absence of a S$7.9m one-time gain in 1HFY12 on the sale of an investment property. Revenue was broadly in line with our expectations, declining 1.2% to S$234.9m (48% of our FY13 forecast), due mainly to lower revenue recognised from property development. The order book for the group's main construction business (73% of 1HFY13 revenue) stood at S$547m at 30 Nov, with orders stretching through FY15. Its 55%-owned M Space industrial development project at Mandai Estate has been fully sold but the revenue and profit will only be recognised at the TOP date, expected in Sep 2013 (FY14). We are keeping Lian Beng UNDER REVIEW pending a change in analyst. (Research Team)

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

NEWS HEADLINES - US stocks ended mixed on Mon, with major indices weighed down by Apple Inc shares after reports that the company had cut iPhone production plans because of lower-than-expected sales. The Dow rose 0.1% to 13,507.32, the S&P 500 index fell 0.1% to 1,470.68 and the Nasdaq ended 0.3% lower at 3,117.50. - Singapore's productivity growth target of 2-3% a year this decade is challenging, but not overly ambitious, Trade and Industry Minister Lim Hng Kiang said. - Sin Heng Heavy Machinery has incorporated a heavy machinery leasing joint venture in Myanmar in a bid to secure a foothold in the country's potentially lucrative infrastructure market. - Renewable Energy Asia Group plans to build a 20-megawatt solar farm in China's Gansu province at an estimated cost of CNY226m, financed via internal resources and borrowings. - Miyoshi Precision posted a 1QFY13 net loss of S$0.7m, narrower than the S$3.4m net loss a year ago, as revenue more than doubled to S$54m, from S$22m.

MARKET PULSE: Residential Sector, S-REITs, CDL, Nam Cheong, Ezra (14 Jan 2013)

Stock Name: Capitaland
Company Name: CAPITALAND LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 4.04

Stock Name: CapMallsAsia
Company Name: CAPITAMALLS ASIA LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 2.17

Stock Name: Starhill Gbl
Company Name: STARHILL GLOBAL REIT

Research House: OCBC

Price Call: BUY

Target Price: 0.84

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

Research House: OCBC

Price Call: BUY

Target Price: 7.28

Stock Name: CapitaComm
Company Name: CAPITACOMMERCIAL TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.75

Stock Name: CACHE
Company Name: CACHE LOGISTICS TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.30

Stock Name: CITYDEV
Company Name: CITY DEVELOPMENTS LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 13.01

Stock Name: Nam Cheong
Company Name: NAM CHEONG LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.30

Stock Name: Ezra
Company Name: EZRA HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 1.30

MARKET PULSE: Residential Sector, S-REITs, CDL, Nam Cheong, Ezra

14 Jan 2013

KEY IDEA Singapore Residential Property: Barrage of measures could crack the market Summary: Authorities have implemented their most comprehensive set of property cooling measures since Sep 2009. The new measures would impact the private residential segment, public housing, ECs, and industrial property as well. We believe the latest private residential curbs, consisting of more ABSDs, tighter LTVs and higher cash down-payments, are amongst the most onerous seen thus far, and would likely crimp buyer demand significantly. We see developer stocks showing knee jerk reactions of 3%-7% price dips on these curbs but caution against buying on weakness for two reasons: 1) the latest set of cooling measures would likely have a deep and sustained impact on demand fundamentals, and 2) these curbs point to a strong political will to soften property prices and possibly more aggressive measures ahead. We downgrade the Singapore residential property sector to NEUTRAL. Our top sector picks are currently CapitaLand [BUY, FV: S$4.04] and CapitaMalls Asia [BUY, FV: S$2.17]. MORE REPORTS Singapore REITs: Still offering superior gains Summary: Since our S-REIT strategy report ("Foundation laid for growth", dated 18 Dec 2012) highlighted an expected continued interest in S-REITs, the FTSE ST REIT Index has risen by 3.8% versus STI's gain of 1.8% over the same period. Most of our preferred picks, we note, have also fared very well. In the week ahead, S-REITs will commence the results reporting period for 4QCY12. We expect majority of the S-REITs to showcase sturdy financial performance and balance sheets, aided by contributions from their investments, healthy operating metrics and active capital management. For 2013, we believe that S-REITs will continue to retain their shine in 2013, underpinned by comparatively higher yield spreads against its peers in other geographical markets, continued interest in lower-beta yield plays by investors and a generally positive sector outlook. As such, we reiterate our OVERWEIGHT view on the S-REIT sector. Our sector top picks are still Starhill Global REIT[BUY, FV: S$0.84], Fortune REIT [BUY, FV: HK$7.28], CapitaCommercial Trust [BUY, FV: S$1.75] and Cache Logistics Trust [BUY, FV: S$1.30]. (S-REITs Team) City Developments Limited: Hit by latest cooling measures Summary: We believe that City Developments (CDL) would be unfavorably affected by the most comprehensive set of property cooling measures implemented by Singapore authorities since Sep 2009. The latest private residential curbs, consisting of more ABSDs, tighter LTVs and higher cash down-payments, are amongst the most onerous seen thus far, and would likely crimp residential buyer demand significantly. Though CDL management continues to execute well on its residential strategy, we expect headwinds for the group ahead as these measures affect demand fundamentals meaningfully. We downgrade CDL to HOLD with a lower fair value estimate of S$13.01 (15% RNAV disc.), versus S$14.05 previously, as we raise the RNAV discount and incorporate lower ASPs into our model to reflect softer sector fundamentals after the latest measures. (Eli Lee) Nam Cheong Limited: Gearing up for faster growth Summary: Nam Cheong has proposed an ordinary share placement to raise S$47m. If successful, its ordinary share capital will be enlarged by about 10%. This placement comes right after its S$110m MTN issuance in Nov 2012. Taken together (and assuming the placement shares are fully taken up), the group would have raised close to S$160m. We believe this is mainly to fund a rapid expansion in its FY14F shipbuilding programme. In our view, there is still plenty of upside for shareholders despite a dilution of their interests post-placement. We also prefer to keep our BUY rating and S$0.30 FV unchanged ahead of its FY12F results next month. (Chia Jiunyang) Ezra Holdings: Soft 1QFY13 results Summary: Ezra Holdings (Ezra) reported a 54% YoY rise in revenue to US$278.7m and a 44% rise in gross profit to US$49.9m in 1QFY13. Higher administrative expenses, a lower share of profit of associated companies, and a higher tax rate led to a 49% fall in net profit to US$6.8m. Stripping out exceptional items such as fair value changes of financial instruments and forex changes, we estimate core net profit to be around US$4.3m, 16% lower than 1QFY12. This represents only about 13% of our full year core net profit estimate of US$33m, which is already one of the lowest in the street. Still, we expect better performance in 2HFY13 as the subsea division continues to grow. Ezra's share price has run up by about 23.7% since our last report on 3 Dec 2012. Pending more details from management, we put our Buy rating and fair value estimate of S$1.30 under review. (Low Pei Han)

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

NEWS HEADLINES - US stocks ended largely unchanged on Fri as investors stayed on the sidelines ahead of more company earnings releases this week. The Dow rose 0.1% to 13,488.43, the S&P 500 index ended flat at 1,472.05 and the Nasdaq ended 0.1% higher at 3,125.63. - Showflats in Singapore were quiet yesterday, after the government announced on Fri a sweeping package of property cooling measures which kicked in on Sat. - The mandatory unconditional cash offer for developer SingXpress Land closed on Fri with offerer Haiyi Holdings receiving acceptances amounting to 6.96m shares, or about 0.05% of the company, giving it a 62.23% stake in the firm.