SG: MARKET PULSE: FCOT, SATS, CapitaLand (30 Sep 2013)

Stock Name: Frasers Comm
Company Name: FRASERS COMMERCIAL TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.45

Stock Name: SATS
Company Name: SATS LTD.

Research House: OCBC

Price Call: HOLD

Target Price: 3.35

Stock Name: Capitaland
Company Name: CAPITALAND LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 3.77

MARKET PULSE: FCOT, SATS, CapitaLand

30 Sep 2013

KEY IDEA Frasers Commercial Trust: On accelerated growth mode Summary: Frasers Commercial Trust (FCOT) has essentially locked in robust growth for FY14 with lower interest costs and the redemption of its 321.9m Series A Convertible Perpetual Preferred Units (CPPUs) this year. In addition, we expect FCOT to gain from its growth initiatives embarked over the past year. For one, FCOT has completed the Precinct Master Plan and asset enhancement works for the office tower at China Square Central, and is likely to benefit from improved occupancy and higher secured rentals going forward. Moreover, FCOT has successfully completed the renewal of 511,000 sqft of the underlying leases at Alexandra Technopark and has achieved positive rental reversion of 17.4% at the property. According to the latest report by DTZ, we also note that sequential rental increments were seen within the CBD in 3Q13 on the back of better occupancy rates. This is consistent with our view that office leasing activity is likely to remain healthy. We maintain our BUY rating on FCOT with a revised fair value of S$1.45 (S$1.58 previously). (Kevin Tan) MORE REPORTS SATS Ltd: Cruise control Summary: SATS will acquire Singapore Cruise Centre (SCC) from Temasek for S$110m. This acquisition will complement SATS's existing cruise services at the Marina Bay Cruise Centre, and give it control of the ferry terminals at Tanah Merah, Pasir Panjang, and HabourFront Centre, which has an anchor client in the form of the popular Star Cruises. We view the deal favourably as it is cash generative (SCC had revenue of S$45m and PBT of S$16.7m in FY13), should enhance SAT's FY14F EPS by at least 5%, and will provide growth opportunities for its gateway and food solution businesses. We raise our fair value estimate to S$3.35 (S$3.10 previously) but maintain our HOLD rating on the counter as we foresee limited upside at this point. (Lim Siyi) CapitaLand Limited: A strong launch at Sky Vue Summary: Over the weekend, CapitaLand (CAPL) launched the 694-unit Sky Vue condominium project near the Bishan MRT station, and saw a strong sales performances with 430 units sold out of 505 units released for sale. The average selling price of the units sold was ~S$1,500 psf - which was 5% to 10% lower than those at the adjacent 509-unit Sky Habitat project. We like that the group has taken a rational approach, in terms of pricing, to move units during the Sky Vue launch. The strong sales performance will significantly reduce the group's unsold exposure in the locality from over a thousand units at Sky Habitat and Sky Vue to ~600 units currently. We continue to favor large-cap developers with strong balance sheets and diversified exposure across regional real estate markets. Maintain BUY on CAPL with an unchanged fair value estimate of S$3.77. (Eli Lee)

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NEWS HEADLINES - US stocks declined on Fri, with the S&P 500 index and Dow industrials recording their first weekly drop in four, as Wall Street remained unsettled over the lack of progress in budget negotiations on Capitol Hill, with a deadline just days away. - Tritech Group is planning to raise up to S$77.31m to help fund future expansion of its engineering and water-related businesses, including potential mergers and acquisitions. - City Developments' subsidiary Millennium and Copthorne Hotels New Zealand has increased its investment in an associate company by US$33.42m in response to a capital call. - Khong Guan Flour Milling registered a net profit of S$14.7m for the full year ended 31 Jul as it realised its gain from its quoted investment in a property development company.

SG: MARKET PULSE: Starhill Global, Cache, FCOT, CapitaLand, YZJ (25 Jul 2013)

Stock Name: Starhill Gbl
Company Name: STARHILL GLOBAL REIT

Research House: OCBC

Price Call: BUY

Target Price: 0.95

Stock Name: CACHE
Company Name: CACHE LOGISTICS TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.40

Stock Name: Frasers Comm
Company Name: FRASERS COMMERCIAL TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.60

Stock Name: Capitaland
Company Name: CAPITALAND LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 3.77

MARKET PULSE: Starhill Global, Cache, FCOT, CapitaLand, YZJ

25 Jul 2013

KEY IDEA Starhill Global REIT: Poised for further upside Starhill Global REIT (SGREIT) announced 2Q13 DPU of 1.19 S cents, up 10.2% YoY. 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, well within expectations. The positive performance was mainly due to strong contribution from its Singapore and Australia portfolios. For 2Q, we note that SGREIT's Singapore portfolio contributed 63.7% of total revenue, largely unchanged from 66.3% in 1Q. Overall occupancy also stayed stable at 99.6%, compared to 99.7% seen in previous quarter. Looking ahead, management believes the new renewal rate (+6.7%) for Toshin lease, 7.2% rental uplift from the Malaysia master leases, and continued repositioning of Wisma Atria will help to bolster SGREIT's income in 2H13. On its capital management front, SGREIT also expects its debt duration to improve from 1.2 years to 3.5 years and the percentage of its debts fixed/hedged to increase from 81% to over 90%, having secured loan facilities to refinance all its debts due in 2013. We maintain BUYwith unchanged fair value of S$0.95 on SGREIT. (Kevin Tan) MORE REPORTS Cache Logistics Trust: Solid 2Q13 scorecard Cache Logistics Trust (CACHE) turned in a firm set of 2Q13 results last evening. NPI grew 17.0% YoY to S$19.6m and distributable income increased 19.8% to S$16.6m. DPU for the quarter came in at 2.147 S cents, representing a rise of 8.4% YoY. This brings the 1H13 DPU to 4.381 S cents (+7.7% YoY), meeting 52.0%/50.9% of our/consensus FY13 DPU projections. As at 30 Jun, the overall portfolio occupancy was maintained at 100%, with a weighted average lease to expiry of 3.6 years. CACHE's aggregate leverage also held steady at 29.2% compared to 1Q. This, we note, is the second lowest gearing level among the industrial REITs listed in Singapore. While CACHE has kept mum on any likely acquisition asset, we judge that its robust financial position will put it in good stead for any attractive opportunities. Management also reiterated that there is no debt refinancing needs in the next two years, as its term loans will mature only in 2015 and 2016. In addition, 70% of its debts is hedged, thereby giving CACHE considerable certainty over its financing costs. We maintain BUY with unchanged fair value of S$1.40 on CACHE. (Kevin Tan) Frasers Commercial Trust: 28.8% jump in 3QFY13 DPU Frasers Commercial Trust (FCOT) reported 3QFY13 gross revenue of S$30.0m and NPI of S$23.1m, down 16.1% and 13.4% YoY respectively due to the divestments of KeyPoint and Japan properties. However, income available for distribution to unitholders rose by 31.2% to S$14.4m as a result of lower interest costs and savings in the Series A Convertible Perpetual Preferred Unit (CPPU) distribution post redemption of 319.7m CPPUs this year. This has led to a similar jump of 28.8% in the quarterly DPU to 2.19 S cents. For 9MFY13, DPU tallied 5.76 S cents (+16.6%), meeting 78.9% of our FY13 DPU forecast (consensus: 73.8%). As at 30 Jun, the portfolio occupancy remained strong at 98.1%, while weighted average lease to expiry was long at 4.6 years. FCOT also announced that it has completed the Precinct Master Plan and asset enhancement works at China Square Central, which should enhance portfolio and position FCOT for further growth in future. We will be speaking to management later and in the meanwhile, we maintain BUY on FCOT but put our S$1.60 fair value under review. (Kevin Tan) CapitaLand Limited: 2Q13 figures within expectations CapitaLand's 2Q13 PATMI decreased 0.7% YoY to S$383.1m. We judge this to be within expectations and 1H13 PATMI now cumulates to S$571.3m which makes up 65% of our full year forecast. 1H13 topline is S$1,844.6m, up 22.7% YoY mostly due to higher recognitions from residential projects in Singapore and China and stronger contributions from CMA and Ascott. Over 1H13, we saw 683 residential units sold in Singapore - up significantly YoY versus the 259 units sold in 1H12 - and Chinese residential sales also grew a healthy 58% YoY to 1,619 units in the first half of the year. The group reports that it foresees headwinds for the private residential market in Singapore over the near term due to recent curbs but remains positive about its businesses in China, which is underpinned by urbanization, growing affluence and increasing domestic consumption. Maintain BUY with our fair value estimate of S$3.77 under review.(Eli Lee) Yangzijiang Shipbuilding: First company on the SGX to trade in RMB The SGX has announced that Yangzijiang Shipbuilding (YZJ) will be the first company to have trading of its shares in Chinese Renminbi (RMB) on SGX's dual currency trading platform. The group's RMB-denominated shares will start trading on 5 Aug 2013. This move gives existing and potential investors the flexibility to buy and sell YZJ shares in yuan, gaining direct exposure to exchange rate fluctuations in the currency. We currently have a HOLD rating on YZJ with a fair value estimate of S$0.95, mainly due to the bleak outlook of the shipbuilding industry as well as uncertainties in China's credit and financing business.(Low Pei Han)

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

NEWS HEADLINES - US equities retreated on Wednesday on mixed earnings and increasing borrowing costs. The DJIA fell from the prior day's record close. - MTQ's 1Q14 PATMI rose 38% to S$6.5m; revenue had climbed 146% to S$94.4m. - Hisaka Holdings has announced an MoU in relation to the proposed very substantial acquisition of Temasek Regal Capital Sdn Bhd. - Sysma Holdings has completed the purchase of a 60% equity stake in GCAP Properties. - Banyan Tree is issuing S$70m of 5.75% notes due 2018.

OSPL - Good Morning S'pore - Central Dealing Desk

Stock Name: Capitaland
Company Name: CAPITALAND LIMITED

Research House: Deutsche Bank

Price Call: BUY

Target Price: 4.43

Stock Name: Kreuz
Company Name: KREUZ HOLDINGS LIMITED

Research House: UOB KayHian

Price Call: BUY

Target Price: 0.88

Stock Name: Frasers Comm
Company Name: FRASERS COMMERCIAL TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.60

Market Compass

10 June 2013~ Good Morning Singapore!

Singapore Idea Snippets:

10 June 2013~ Good Morning Singapore! Central Execution Team - The Excellence of Execution This product is made available by your Central Execution Team, for you as TRs of OCBC Securities to help you with your business and therefore it is confidential and only for internal circulation. It is not intended for onward circulation to non-OSPL TRs, clients or any other third party in this or any other version. Neither is this intended to be relied upon as a sole basis for any recommendation. TRs must also consider their clients' investment objectives, financial position and needs when intending to make or making any recommendation. For the front desk, by the front desk. All feedback to make this a better product is welcome. Global Flash: While You Were Sleeping Source: Marketwatch Quote for the day : An investment in knowledge pays the best interest. - BENJAMIN FRANKLIN Singapore: The Day Ahead SINGAPORE DAYBOOK:Softer room rates offset by strong occupancies. Upscale hotel room rates lead with 10% fall over Jan-April [SINGAPORE] After hitting a record high last year, room rates appear to have softened slightly in the first four months of 2013. But the impact is mitigated by strong occupancies. Preliminary estimates from the Singapore Tourism Board (STB) show that average room rate (ARR) for the period January to April slipped 2.2 per cent year-on-year to $253.70 while revenue per available room (RevPAR) - a performance indicator - was 2.6 per cent lower at $217.80. However, the average occupancy rate for the four months held firm, edging down just 0.3 per cent to 86 per cent. Total room revenue collected over this period was virtually flat at $940.5 million. Still, the strong occupancy is helping to keep any sharp fall in RevPAR at bay. A simultaneous drop in both the ARR and occupancy could impact RevPAR more significantly. (Source: The Business Times) MARKET SCOOP Rolls-Roycewins Singapore Airlines engine deal EU regulators okay Barry Callebaut to buy Petra Foods cocoa unit STX Pan Ocean files for court receivership in Seoul Singapore's Aaa rating reflects very sound fundamentals: Moody's Del Monte's shares to be listed in the Philippines on June 10 (Source: The Business Times) DEUTSCHE BANK says... CAPITALAND LIMITED | BUY | TP: S$4.43 Deutsche Bank hosted CapitaLand at our dbAccess Asia Conference 2013 Discussions focused on the company's China and Singapore operations, its recent acquisition in Iskandar, and plans for Australand Sales momentum in China remains firm, with sales rising 3x YoY to 955 units (RMB 1.9bn) (-19% QoQ on seasonality) The company noted that sales came primarily from its Metropolis, Pinnacle, Paragon, Loft and iPark projects, and plans to have an additional 3500 units launch ready in 2013 Meanwhile, earnings are expected to be boosted by the TOP of 3000 units in 2013 (2077 in 2H13 Moving forward, CapitaLand stated that they will engage local authorities in pursue larger tracts of land in China in landbank acquisitions The company also reiterated its strategy to focus on 8 cities in order to leverage its platform in cities with the strongest underlying fundamentals In Singapore, sales momentum also improved, with 544 units sold (S$1.3bn), up from 352 units in 4Q (S$667m) dominated by D'Leedon following recent price cuts Looking ahead, CapitaLand targets to launch Marine Pt and Bishan St 14 in 2H13 and will continue to bid for well-located sites, and targets 10% market share in Singapore The company stated that it views its recent Danga Bay acquisition (60-70% of GFA residential, 30-40% of GFA commercial) as an extension of its Singapore strategy, and believes that demand could be boosted by population migration in Malaysia to the Iskandar region, a return to Malaysia from Malaysian expats in Singapore, and finally, Singaporean investors and retirees CapitaLand also did not rule out pursuing additional acquisitions in Iskandar Finally the company stated that it is still in the midst of its strategic review for Australand, and will need to balance the decrease in earnings with capital redeployment opportunities and shareholder returns UOB KAY HIAN says ... KREUZ HOLDINGS | BUY | TP: S$0.88 We recently met up with Kreuz's management and these are our key takeaways In 2014, management plans to charter one additional third-party vessel on a long-term contract, which will ease the capacity bottleneck and allow Kreuz to bid for additional contracts We estimate that the chartered-in vessel could lift earnings by 5-15% Currently, Kreuz charters in three third-party vessels and owns another three vessels, which are expected to be fully utilised till end-13 In our view, Kreuz is likely to clinch higher-than-expected variation orders, which will more than offset the lower-than-forecasted contract wins that will be announced in 2013 As a result, we have lowered our 2013 contract wins forecast from US$200m to US$135m Kreuz's end-1Q13 order book stood at US$200m, which will be recognised over 12-18 months Ytd, we estimate that Kreuz has won contracts totalling US$60m-80m, including smaller contracts which were not announced Kreuz has an option with a Chinese shipyard to build a second deepwater subsea construction vessel for US$113.65m In our view, Kreuz is likely to exercise the option in the light of an attractive contract price and buoyant subsea activity In our view, continued improvement in Kreuz's trade receivables and gearing will drive its share price re-rating Maintain BUY with a higher target price of S$0.88 (previously S$0.68), pegged to an undemanding 2014F PE of 8.0x (previously 6.5x), which is at a 17% discount to the offshore support vessel owner segment's long term PE mean of 9.6x We have raised our target PE to reflect Kreuz's consistent execution track record, improved balance sheet position and operating cash flow OCBC Securities says... FRASERS COMMERCIAL TRUST | BUY | TP: S$1.60 Frasers Commercial Trust (FCOT) announced that it has successfully exercised its right of redemption in respect of 2.2m Series A Convertible Perpetual Preferred Units (CPPUs) This is consistent with our view that FCOT may attempt to redeem all the CPPUs in issue as the funding cost is relatively high at 5.5% A total of 12.2m CPPUs will remain outstanding after the exercise This, together with the redemption of 157.1m CPPUs in Apr, is likely to provide FCOT with further DPU uplift going forward We also understand that FCOT has been granted a provisional permission (PP) by URA for the proposed additions and alterations to the existing commercial development at China Square Central and erection of a new hotel block on 18 Cross Street, Singapore earlier this week The terms and conditions include an additional 16,000 sqm GFA for hotel use, which is equivalent to the PP first granted in Jun 2008 (already lapsed) According to the 2008 announcement, the space could potentially accommodate a 10-storey hotel tower of ~350 rooms While FCOT highlighted that it is still in the preliminary stage of exploring all options with regard to the property, we believe FCOT may possibly divest the hotel space or capitalize on its sponsor's capabilities to develop the hotel Either way, we are positive on the news as FCOT could use the proceeds from a sale to pare down its aggregate leverage or enhance its growth profile through the development (although FCOT has an estimated development capacity restriction of ~S$185m and an equity fund raising may be necessary) We continue to like FCOT for its growth potential, proactive management approach and compelling P/B of 0.97x We are keeping our forecasts unchanged but we now tweak our CAPM assumptions to reflect a higher risk-free rate Maintain BUY with revised fair value of S$1.60 (S$1.66 previously) on FCOT

SG: MARKET PULSE: Healthcare Sector, Frasers Commercial Trust (7 Jun 2013)

Stock Name: Biosensors
Company Name: BIOSENSORS INT'L GROUP, LTD.

Research House: OCBC

Price Call: BUY

Target Price: 1.60

Stock Name: Frasers Comm
Company Name: FRASERS COMMERCIAL TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.60

MARKET PULSE: Healthcare Sector, Frasers Commercial Trust

7 Jun 2013

KEY IDEA Healthcare Sector: Growth traction still healthy Companies within the healthcare sector posted relatively decent results during the recently concluded 1QCY13 reporting period. Under our coverage, Biosensors International Group's (BIG) core earnings growth of 4.1% YoY beat our forecasts, while that of Raffles Medical Group came in within our expectations (+16.0% YoY). Looking ahead, healthcare companies have largely embarked on expansionary plans to capitalise on the still robust industry fundamentals. In our opinion, these plans augur well for the medium-to-long term, but there will likely be some initial start-up costs which may impact near-term margins. We maintain our OVERWEIGHTrating on the healthcare sector. BIG [BUY; FV: S$1.60] remains our top pick, given its strong product pipeline, attractive valuations (FY14F PER of 13.6x is slightly more than 0.5 SD below its 3-year average forward PER) and decision to enhance shareholder value by recently declaring its first ever dividend since IPO. (Wong Teck Ching Andy) MORE REPORTS Frasers Commercial Trust: Development opportunity resurfaced Frasers Commercial Trust (FCOT) announced that it has successfully exercised its right of redemption in respect of 2.2m Series A Convertible Perpetual Preferred Units (CPPUs). This, together with the redemption of 157.1m CPPUs in Apr, is likely to provide FCOT with further DPU uplift going forward. We also understand that FCOT has been granted a provisional permission (PP) by URA for the proposed additions and alterations to the existing commercial development at China Square Central and erection of a new hotel block on 18 Cross Street, Singapore earlier this week. While FCOT highlighted that it is still in the preliminary stage of exploring all options with regard to the property, we believe FCOT may possibly divest the hotel space or capitalize on its sponsor's capabilities to develop the hotel. Either way, we are positive on the news as FCOT could use the proceeds from a sale to pare down its aggregate leverage or enhance its growth profile through the development. We continue to like FCOT for its growth potential, proactive management approach and compelling P/B of 0.97x. We are keeping our forecasts unchanged but we now tweak our CAPM assumptions to reflect a higher risk-free rate. Maintain BUY with revised fair value of S$1.60 (S$1.66 previously) on FCOT. (Kevin Tan)

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

NEWS HEADLINES - US stocks ended higher on Thursday, snapping a two-session losing streak, as investors eagerly awaited Friday's May employment report for clues about monetary policy. - Moody's Investors Service said that Singapore's Aaa sovereign rating and stable outlook reflect the country's very high economic, institutional, and government financial strengths, and its low susceptibility to risks from financial, economic, and political events. - Singapore is the ninth most expensive city in Asia for expatriates, according to the latest cost of living survey by ECA International. - AIMS AMP Capital Industrial REIT will further develop a property at 20 Gul Way at a cost of about S$77.2m to increase its value and boost returns to unitholders. - Ramba Energy's major shareholder Edward Seky Soeryadjaya has been approached by a potential buyer keen on a 51% stake in Ramba.

OSPL - Good Morning S'pore - Central Dealing Desk

Stock Name: CDL HTrust
Company Name: CDL HOSPITALITY TRUSTS

Research House: DBS Vickers

Price Call: HOLD

Target Price: 2.07

Stock Name: Frasers Comm
Company Name: FRASERS COMMERCIAL TRUST

Research House: OSK

Price Call: BUY

Target Price: 1.65

Stock Name: Bumitama
Company Name: BUMITAMA AGRI LTD.

Research House: UOB KayHian

Price Call: BUY

Target Price: 1.12

Market Compass

02 May 2013~ Good Morning Singapore!

Singapore Idea Snippets:

02 May 2013~ Good Morning Singapore! Central Execution Team - The Excellence of Execution This product is made available by your Central Execution Team, for you as TRs of OCBC Securities to help you with your business and therefore it is confidential and only for internal circulation. It is not intended for onward circulation to non-OSPL TRs, clients or any other third party in this or any other version. Neither is this intended to be relied upon as a sole basis for any recommendation. TRs must also consider their clients' investment objectives, financial position and needs when intending to make or making any recommendation. For the front desk, by the front desk. All feedback to make this a better product is welcome. Global Flash: While You Were Sleeping Source: Marketwatch Quote for the day :It takes a long time to grow an old friend. - JOHN LEONARD Singapore: The Day Ahead SINGAPORE DAYBOOK:S'pore must continue to be attractive to investors: PM Lee. It is critical that it retains reputation for reliability and, openness, he says [SINGAPORE] Investments are still critical to transform Singapore's economy and to upgrade workers, Prime Minister Lee Hsien Loong said at the annual May Day Rally yesterday. What's different now, however, is that the country is seeking higher-skilled and higher value-added activities that are less manpower-intensive or land-intensive. He was addressing some 1,600 people at Downtown East in Pasir Ris, including cabinet ministers, union leaders, workers and employers. Speaking for an hour in both English and Mandarin, Mr Lee said it is important that Singapore retains its reputation as an attractive place to do business. MARKET SCOOP Virgin, Tiger to push back deal deadline KepCorp regroups two infrastructure units into one new entity Investments crucial to transform economy: PM Lee Yoma extends deadline on development of Myanmar site DBS VICKERS SECURITIES says... CDL HOSPITALITY TRUSTS | HOLD | TP: S$2.07 Given the seasonally slower start to 2013, CDL Hospitality Trusts'(CDREIT) gross revenue and NPI declined marginally by 1% and 2% y-o-y to S$37.9m and S$35.8m respectively Income available for distribution (before retained income) dipped 3% y-o-y to S$ 28.7m, while DPU of 2.59 Scts was 3% lower y-o-y after a 10% retention ratio CDREIT's Singapore portfolio RevPAR was 7.9% lower y-o-y at S$191/night (occupancy rate of 87%, average daily rate of S$219/night) However, its overseas acquisitions performed well, especially the recently acquired Angsana Velavaru, which outperformed with a 28.5% y-o-y hike in RevPAR to US474/night However, given new incoming hotel supply in 2013 (4,138 rooms, +8% of current supply), we believe that further room rate hikes will be limited. We now assume that rates will remain flat y-o-y in FY13 (+3% previously) Given little upside to RevPAR in the immediate term, we do not see any re-rating catalysts But, downside to share price is limited with CDREIT trading at yields of close to 6% DMG OSK says... FRASERS COMMERCIAL TRUST | BUY | TP: S$1.65 FCOT reported 2QFY13 DPU of 1.99 cents (+14% y-o-y) Together with its 1QFY13 DPU of 1.58 cents, 1HFY13 DPU accounts for 43.4% of our full year forecast The higher dividend per unit (DPU) was mainly attributed to the redemption of convertible perpetual preferred units (CPPU) which was costing FCOT an average 5.5% annually at the DPU level Its management indicated that the pre-commitment rate in China Square Central reached a stable 92.6% from the actual occupancy of 73% With the pro-active management of its properties, the occupancy rate of FCOT's portfolio has hit a high of 95.3% (Singapore properties - 93.1%, Australia properties - 99.5%) Going forward, we expect FCOT to continue to register stronger DPU as the trust: i) reaps the full year benefit from the acquisition of another 50% of interest in Caroline Chisholm Centre and ii) benefits from CPPU buyback Given its bright prospects and strong portfolio, we favour FCOT for its attractiveness and maintain our BUY rating on this counter with a higher DDM based (COE: 7.1%; TGR: 2.0%) TP of SGD1.65 UOB KAY HIAN says... BUMITAMA AGRI | BUY | TP: S$1.12 Bumitama Agri (BAL) announced its 1Q13 production data with CPO production growth of 30.9% yoy to 116,971 tonnes (-21.3% qoq) 1Q13 production was within our expectation and is current the best among the Indonesia based companies, which had announced production in Indonesia Strong production growth in 1Q driven by its young age profile and about 10,000ha of newly mature areas that came on-stream in 1Q13 BAL is scheduled to announce its 1Q13 results on 13 May 2013 after market close We are expecting the net profit of Rp150b-Rp170b for 1Q13 (18-20% of full year estimated net profit) Maintain BUY with target price of S$1.12, based on 14x 2014F PE We like BAL for its young age profile and best oil extraction rate to support its 5-year net profit CAGR of 32%

SG: MARKET PULSE: FCOT, Global Premium, SMRT, OCBC (30 Apr2013)

Stock Name: Frasers Comm
Company Name: FRASERS COMMERCIAL TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.66

Stock Name: GP Hotels
Company Name: GLOBAL PREMIUM HOTELS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.33

Stock Name: SMRT
Company Name: SMRT CORPORATION LTD

Research House: OCBC

Price Call: HOLD

Target Price: 1.51

MARKET PULSE: FCOT, Global Premium, SMRT, OCBC

30 Apr 2013

KEY IDEA Frasers Commercial Trust: Advancing steadily Frasers Commercial Trust's (FCOT) 2QFY13 DPU came in at 1.9883 S cents, representing a 14.4% YoY growth. This is slightly above our expectations, as 1HFY13 DPU of 3.5715 S cents already formed 51.4% of our full-year DPU forecast. Key rental growth drivers for the quarter came from FCOT's Australia properties. As at 31 Mar, the portfolio occupancy remained strong at 95.3%, with weighted average lease to expiry at 4.8 years. Looking ahead, we hold our view that FCOT will continue to perform strongly. While the actual occupancy at China Square Central stood at 73.0%, a high committed occupancy of 92.6% was secured. The passing rents for several of its properties are also below the market rates, thus presenting potential for rental upside. In addition, the redemption of another 157.1m CPPUs in Apr is likely to provide further uplift in DPU. We maintain our BUY rating with a higher fair value of S$1.66 (S$1.52 previously) on FCOT. (Kevin Tan) MORE REPORTS Global Premium Hotels: No surprises in 1Q13 Global Premium Hotels (GPH) performed in line with our expectations in 1Q13. Revenue fell 2.1% YoY to S$14.6m and gross profit declined 2.9% YoY to S$12.6m. Interest expense was S$1.3m higher YoY due to the restructuring exercise undertaken by GPH pursuant to the IPO in 2Q12 and this was the primary reason that net profit contracted 32.0% to S$4.3m. Revenue and net profit came out to 23% and 24% of our full-year estimates respectively. 1Q13 hotel room revenue decreased 1.1% YoY was mainly due to the lower average occupancy rate (AOR) of 89.6%, down 2.1ppt YoY. We expect slightly better YoY performance in the remaining quarters, especially because 1Q13 was slow for the industry because of the later occurrence of Chinese New Year, which pushed back corporate travel. Using a 10% discount to RNAV, we maintain our fair value of S$0.33 and BUY rating on GPH. (Sarah Ong) SMRT Corporation: A loss-making quarter to end the year As expected, SMRT reported a loss-making 4Q13 to end the year. Although revenue grew 2.4% YoY to S$281.3m, increases in operating expenses namely staff (+28.5% YoY) and repair costs (+41.6% YoY) resulted in a net loss of S$12.1m. For FY13, SMRT reported a 30.6% YoY decline in net profit to S$83.2m despite a 5.9% YoY increase in revenue to S$1,119m. SMRT also declared a final dividend of 1 S cent (versus 5.7 S cents last year) to bring its total dividends declared to 2.5 S cents. Pending a results briefing with management, we maintain our HOLD rating on SMRT as we feel that much of the negatives have been priced in by the street. Nonetheless, we place our fair value estimate of S$1.51 under review. (Lim Siyi) OCBC: 1Q net earnings of S$696m OCBC posted net earnings of S$696m, -16% YoY or +5% QoQ, and above market expectations of S$640m (based on a Bloomberg poll). Net Interest Income fell 4% YoY and 1% QoQ to S$912m. NIM was 1.64% in 1Q13 versus 1.70% in 4Q12 and 1.86% in 1Q12. Non Interest Income fell 20% YoY and 11% QoQ to S$676m (1Q12 included higher trading income and mark-to-market investment gains from the insurance business). Loans grew 4% from the previous quarter to S$146.8b. Loans to deposits ratio also moved up from 86.2% in 4Q12 to 87% in 1Q13. We do not have a rating on OCBC. DBS and UOB will be releasing 1Q results on 2 May 2013 (Thu). The consensus 1Q13 net profit estimates are S$824m for DBS and S$660m for UOB. (Carmen Lee)

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

NEWS HEADLINES - U.S. stock climbed on Monday, and the S&P 500 closed on a record high as investors were heartened on the latest corporate earnings. - Jardine Cycle & Carriage has been appointed as Daimler AG's official partner to distribute Mercedes-Benz passenger cars and commercial vehicles and Fuso trucks in Myanmar. - Lian Beng's construction order book has reached a new high of S$1.2b after being awarded three new contracts worth a total of about S$211m. - Fragrance Group reported a 20% YoY decline in 1Q13 PATMI to S$17.6m, despite revenue climbing 17% to S$110.5m. - BH Global Marine has won a series of contracts worth a total of ~S$11m. - Hu An Cable has issued a profit guidance for 1Q13 due to a decrease in sales and an increase in expenses from the operation of the group's new plant in Yixing City, Jiangsu Province.

MARKET PULSE: FCOT, Tech Sector (8 March 2013)

Stock Name: Frasers Comm
Company Name: FRASERS COMMERCIAL TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.52

Stock Name: Venture
Company Name: VENTURE CORPORATION LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 9.08

MARKET PULSE: FCOT, Tech Sector

8 Mar 2013

KEY IDEA Frasers Commercial Trust: DPU gets another thrust Frasers Commercial Trust (FCOT) announced that it has successfully exercised the right of redemption for 157.1m Series A Convertible Perpetual Preferred Units (CPPUs). While this move is not expected, we expect it to result in an improvement in FCOT's DPU. Furthermore, this would remove any uncertainty pertaining to a possible dilution in unit base from a conversion of the CPPUs. The only trade-off, in our view, would be a higher aggregate leverage, which we believe would rise from 29.2% as at 31 Dec 2012 to ~40% assuming the CPPU redemption is fully funded by debt. We now project a full CPPU redemption in our model, as it may no longer be economical for FCOT to retain the remaining CPPUs. This raises our fair value from S$1.48 to S$1.52. Maintain BUY. (Kevin Tan) MORE REPORTS Technology Sector: Likely a backend loaded 2013 Under our tech sector coverage, only Venture Corp (VMS) managed to report earnings which exceeded our expectations for the recently concluded 4QCY12 results season. Karin Tech's core PATMI was in line, while that of ECS Holdings and Valuetronics Holdings missed. Two common trends we noted are apparent cost pressures present in the sector and a cut in dividends by some companies due to reduced profit levels and/or expansion plans in the pipeline. While near-term outlook remains muted, there are expectations that 2H13 would be brighter than 1H13, in line with an expected uptick in the global economy and contributions from new programmes. However, we maintain our NEUTRAL view on the tech sector, given the continued backdrop of political and economic uncertainties. VMS [BUY; FV: S$9.08] remains our top pick within this space. (Wong Teck Ching Andy)

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

NEWS HEADLINES - US stocks rose on Thursday, with the Dow Jones closing at another record high, as jobless claims fell to a six-week low. The Dow is up 9.4% so far in 2013. - Dairy Farm International posted a 7% decline in net profit for FY12 to US$450.2m despite a 7% increase in turnover to US$9.8b. - Hongkong Land Holdings reported net profit attributable to shareholders of US$1.4b for FY12, down 73% on the back of a 9% decline in revenue to US$1.1b. - Mandarin Oriental International posted FY12 net profit of US$72.3m, up 7% from US$67.5m a year earlier. - Thai Beverage Public Co will replace IHH Healthcare in the Straits Times Index on 18 Mar following a quarterly review of the various Singapore market benchmarks. - SC Global will be delisted from SGX on Monday, bringing to a close chairman and chief executive Simon Cheong's bid to take the company private. - Hutchison Port Holdings is beefing up its Hong Kong container terminals portfolio with the acquisition of Container Terminal 8 West in Kwai Chung, Hong Kong for HK$3.9b.

MARKET PULSE: Frasers Commercial Trust, SingPost, MP Marine (28 Jan 2013)

Stock Name: Frasers Comm
Company Name: FRASERS COMMERCIAL TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.48

Stock Name: SingPost
Company Name: SINGAPORE POST LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 1.23

Stock Name: Marco Polo
Company Name: MARCO POLO MARINE LTD.

Research House: OCBC

Price Call: BUY

Target Price: 0.56

MARKET PULSE: Frasers Commercial Trust, SingPost, MP Marine

28 Jan 2013

KEY IDEA Frasers Commercial Trust: Expect further DPU accretion Summary: Frasers Commercial Trust (FCOT) delivered 1QFY13 DPU of 1.5832 S cents, up 4.6% YoY. This is congruent with our expectations, as the DPU met 22.2% of our full-year projection. Portfolio occupancy remained stable at 94.6% compared to 4QFY12 occupancy of 94.9%. For the rest of FY13, we note that 13.7% of its leases are due for renewal, with China Square Central (CSC) forming the bulk of lease expiry (8% of total income). As the average passing rent at CSC is lower than the spot market rents, we believe positive rental reversions may be achieved upon renewal. Going forward, we maintain our view that FCOT's DPU will get further uplift going forward as it benefits from lower funding costs post refinancing of its debts and partial redemption of its CPPUs. We maintain BUY on FCOT with a higher fair value of S$1.48 (S$1.31 previously). (Kevin Tan) MORE REPORTS Singapore Post: Stock has done well; downgrade to HOLD Summary: Singapore Post (SingPost) reported a 14.5% YoY rise in revenue to S$171.0m but saw a 5.1% fall in net profit to S$39.5m in 3QFY13. Excluding one-off items, underlying net profit rose 2.5% to S$39.8m in the quarter, in line with our expectations. The group saw strong revenue performance in international mail, logistics and retail; notwithstanding the fact that 3QFY13 was the festive season, it is still encouraging to see the 11.2% QoQ growth (vs average of 7.0% in 3QFY12, 3QFY11 and 3QFY10). As a stock, SingPost has rewarded shareholders with handsome returns while providing stability and ease of mind. As it is now trading close to our fair value estimate of S$1.23, we downgrade it to HOLD due to limited upside potential, unless earnings growth from its acquisitions proves to be better than expected. (Low Pei Han) Marco Polo Marine: 1QFY13 results in line Summary: Marco Polo Marine (MPM) reported a 38% YoY drop in revenue to S$15.2m but saw a 3% rise in net profit to S$4.5m in 1QFY13, such that the latter formed about 20% of our full year net profit estimate, within our expectations. The fall in revenue was mainly due to slower progress in newbuild orders, resulting in lower shipbuilding revenue. This was offset by higher ship repair turnover, which grew 75.5% to S$8.6m in 1QFY13. Ship chartering revenue fell by 5.2% to $5.5m with the mandatory docking of an offshore vessel. Overall gross profit margin, however, increased from 25% in 1QFY12 to 39% in 1QFY13 with a higher proportion of ship repair revenue (generally commands higher margins compared to ship building). Pending further details from management, we maintain our BUY rating but put our fair value estimate of S$0.56 under review. (Low Pei Han)

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

NEWS HEADLINES - US stocks rose on Fri on positive earnings reports from Procter & Gamble and other firms. The Dow and S&P 500 index each rose 0.5%, to 13,895.98 and 1,502.96, respectively, while the Nasdaq ended 0.6% higher at 3,149.71. - The combined net profit for the 18 SGX-listed companies that have reported their 4Q12 results so far is down 35% YoY at S$1.57b. But just one - Qian Hu - posted a loss, while 12 recorded higher profits compared to a year ago. - Parkway Life REIT's 4Q12 income available for distribution rose 9.5% YoY to S$16.3m, supported by a 5% increase in gross revenue to S$24.0m and a 6.1% rise in net property income to S$22.1m. Distribution per unit rose 9.5% YoY to 2.69 S cents. - Singapore's industrial output declined just 0.6% YoY in Dec, as a 21% jump in pharmaceuticals and a 15% rise in marine and offshore engineering offset a 17% year-on-year drop in electronics, easing fears that 4Q12 GDP data would be revised downwards. - A freehold commercial property at the corner of Changi Road and Lorong 105 Changi has been put up for sale by tender after owner AIA Singapore shifted operations that used to be housed there. The site is expected to fetch over S$62m.

Market Pulse: Fraser Commercial Trust (17 Dec 2012)

Stock Name: Frasers Comm
Company Name: FRASERS COMMERCIAL TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.31

MARKET PULSE: Fraser Commercial Trust

17 Dec 2012

KEY IDEA Frasers Commercial Trust: Well-positioned for growth We are very positive on Frasers Commercial Trust's (FCOT) transformation over the past one year. At the close of 4QFY12, FCOT announced the exit of the Japan market with the divestment of its Japan properties. We like the transaction because the divestment would enhance the portfolio occupancy and weighted average lease to expiry, and reduce its gearing ratio from 36.8% to 28.6%. This will significantly strengthen its financial position and flexibility, and aid FCOT in seeking the release of 55 Market Street and Caroline Chisholm Centre (CCC) from its securitized pool. More recently, FCOT had also successfully redeemed 162.6m CPPUs, or ~47.6% of total outstanding CPPUs, in cash. With this positive development, we expect FCOT to post an improvement in the distributable income going forward. In addition, the increased stake in CCC and expected improved performance at China Square Central are likely to continue to contribute positively to its rental income. Hence, we are staying optimistic on its growth potential in FY13. Maintain BUY with an unchanged fair value of S$1.31 on FCOT. (Kevin Tan)

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

NEWS HEADLINES - US stocks fell on Fri, as investors fretted about the lack of progress in talks to avoid the fiscal cliff. The Dow ended 0.3% lower at 13,135.01, while the S&P 500 Index fell 0.4% to 1,413.58 and the Nasdaq ended 0.7% down at 2,971.33. - United Engineers has agreed to buy a 23-storey property at 79 Anson Road for S$410m in cash, funded by borrowings and internal resources. If the deal is successful, the property will be renamed UE BizHub Tower. - Scorpio East Holdings' 1H13 net loss narrowed to S$0.3m from S$0.8m a year ago, despite a 1.2% decline in revenue to S$3.5m. The group's bottomline was helped by a S$0.4m fair value gain on investment property. - Silverlake Axis has secured three new software and services contracts and the expansion of an existing contract worth a total of MYR135m from customers in South-east Asia and Africa. It expects these contracts to contribute positively to its results in the current financial year and the next. - Novo Group's 2Q13 net loss widened to US$1.2m from US$34k a year ago, as revenue slid 60% to US$38.3m. The group blamed stagnating global market conditions, the debt crisis in Europe and volatility in raw material prices for the poor performance.

MARKET PULSE: CMA, NOL, CCT, Ezra, FCOT, Suntec REIT, MMH (29 Oct 2012)

Stock Name: CapMallsAsia
Company Name: CAPITAMALLS ASIA LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 2.16

Stock Name: NOL
Company Name: NEPTUNE ORIENT LINES LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 1.38

Stock Name: CapitaComm
Company Name: CAPITACOMMERCIAL TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.62

Stock Name: Ezra
Company Name: EZRA HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 1.30

Stock Name: Frasers Comm
Company Name: FRASERS COMMERCIAL TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.31

Stock Name: SuntecReit
Company Name: SUNTEC REAL ESTATE INV TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.70

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

Research House: OCBC

Price Call: HOLD

Target Price: 0.325

MARKET PULSE: CMA, NOL, CCT, Ezra, FCOT, Suntec REIT, MMH

29 Oct 2012

KEY IDEA CapitaMalls Asia: 3Q12 results above view Summary: CMA reported 3Q12 PATMI of S$63.4m - up 70.8% YoY mostly due to Minhang and Hongkou contributions and increased management fees. We judge this set of results to be above consensus and our expectations, and 9M12 core PATMI, excluding extraordinary items, now make up 83% of our FY12 forecast, driven by faster than expected revenue growth at Minhang and Hongkou and a S$7.3m QoQ dip in admin expenses as mall-opening costs eased. We expect increased visibility of recurring earnings, as a larger component of CMA's portfolio becomes operational, and relatively firm retail outlooks in China and Singapore to be positive drivers of its share price ahead. Maintain BUY with an increased fair value estimate of S$2.16 from S$1.85 previously as we update for valuations of REIT holdings and reduce the RNAV discount to par (from 10% previously). (Eli Lee) MORE REPORTS Neptune Orient Lines: Outlook promising Summary: Neptune Orient Lines (NOL) finally reported a profitable 3Q12 after six consecutive quarterly losses. Its revenue grew 4.0% YoY to US$2.3b (vs. +6% forecast) on higher volumes while its core EBIT improved to US$74m - a much better showing versus-US$72m in 3Q11 and marginal gains of US$16m in the previous quarter. The better performance came largely on the back of significant cost savings from its Efficiency Leadership Programme (ELP) as freight rates remained lacklustre despite the peak season impact. With this improved result, we narrow our net loss projections for FY12 as we anticipate 4Q12 rates to hold up well, capacity management efforts by the industry to continue, and bunker fuel rates to remain capped at current levels. Maintain BUY with an unchanged fair value estimate of S$1.38. (Lim Siyi) CapitaCommercial Trust: Average portfolio rentals up Summary: CapitaCommercial Trust (CCT) reported 3Q12 distributable income of S$57.9m - up 11.9% YoY mostly due to contributions from Twenty Anson, higher revenues from portfolio assets and yield protection income from One George Street (OGS). This is mostly in line with expectations and we note 9M12 distributable income now makes up 75% of our FY12 forecast. As indicated in our last two reports, we have been expecting an uptick in office fundamentals and believe this was mostly validated by CCT's 3Q portfolio data-points: 1) occupancy edged up QoQ to 97.1% in 3Q12 from 96.2% in 2Q, and 2) average portfolio rent increased to S$7.53 psf - the first increase seen after seven consecutive quarters of decline from 4Q10. Maintain BUY with an increased fair value estimate of S$1.70, versus S$1.62 previously, as we update our model for firmer rental numbers and cap rates. (Eli Lee) Ezra Holdings: Monitoring operating costs Summary: Ezra Holdings reported a 49% YoY rise in revenue to US$326.3m but saw a 41% decrease in net profit to US$7.3m in 4QFY12, such that full year net profit of US$65m was ~15% below our full year estimate. Core net profit of US$15.7m accounted for 90% of our estimate. This was partly due to higher administrative expenses and a higher tax rate. We expect admin expenses to remain elevated going forward. On a more positive note, management expects an increase in margins in FY13 as offshore support and subsea vessel utilisation rises, along with higher margins for new contracts. The group has a total bid book of US$4.4b, in which a significant portion is expected to be awarded in FY13. After adjusting our estimates and accounting for the listing of Triyards, our fair value estimate for Ezra drops to S$1.30. Maintain BUY. (Low Pei Han) Frasers Commercial Trust: A brand new start Summary: Frasers Commercial Trust (FCOT) reported a strong set of 4QFY12 results that were within our expectations. FCOT also announced the completion of divestment of its Japan properties, after months of market anticipation. We view the transaction positively because the divestment would improve its portfolio occupancy and weighted average lease to expiry. More importantly, gearing ratio is expected to drop from 36.8% to 28.6%, with no debt maturing until FY15. This will significantly strengthen its financial position and flexibility, and aid FCOT in seeking the release of two properties from its securitized pool. Regarding the space vacated by MMC at China Square Central (CSC), FCOT also updated that 76% of the space has been re-leased, including 49,000 sqft by GroupM starting Apr 2013. Going forward, FCOT intends to embark on Phase 2 of refurbishment works at CSC by end-2012, which should further enhance its positioning. We are positive on FCOT's transformation, strong execution and growth potential in FY13. Maintain BUY on FCOT with an unchanged fair value of S$1.31. (Kevin Tan) Suntec REIT: Strong execution paid off Summary: Suntec REIT delivered a good set of 3Q12 results, in our view. Despite the partial closure of Suntec Singapore and Suntec City Mall for Phase 1 of the asset enhancement works (AEI) and divestment of Chijmes, DPU only showed a 7.2% YoY dip to 2.35 S cents. For 9M12, DPU totalled 7.164 S cents (-3.9%), forming 78%/77% of our/consensus full-year DPU forecasts. We note that office segment continued to be the star performer in 3Q, registering a 10.3% YoY growth in revenue to S$31.4m amid positive rental reversions. In particular, Suntec City Office achieved its second consecutive quarter of full occupancy. Leasing demand had also been strong, as evidenced by the average contracted rent of S$8.96 psf pm secured for the quarter (vs. S$8.71 in 2Q). On its Suntec City AEI, Suntec REIT reiterated that the Phase 1 works is on schedule for completion by 2Q13. We understand that pre-commitment for Phase 1 NLA improved to 71.2% from 58.5% in 2Q, and projected ROI of 10.1% remains on track. We are upgrading Suntec REIT to BUY with a revised fair value of S$1.70 (S$1.45 previously). (Kevin Tan) Micro-Mechanics: 1QFY13 results below expectations Summary: Micro-Mechanics Holdings (MMH) reported 1QFY13 results which fell short of our expectations. Revenue declined 4.6% YoY to S$9.9m, or 8.0% lower than our forecast. This was MMH's sixth consecutive quarter of YoY sales decline. Net profit slid 5.6% to S$1.2m and was 12.4% short of our projection due to weaker-than-estimated revenue and higher effective tax rate, although this was partially offset by better-than-expected gross margin. Sequentially, revenue and net profit fell 4.3% and 13.4%, respectively. Both of MMH's core segments registered YoY decline in revenue, with its Custom Machining & Assembly (CMA) division causing a bigger drag once again. Sales for this division dipped 18.4% YoY to S$1.3m, but what surprised us was the -2.4% gross margin recorded during the quarter (1QFY12: 4.8%). We would likely reduce our forecasts, and will provide more details after speaking with management. However, we believe that MMH would still report growth in both its topline and bottomline for FY13 given the low base in 2Q and 3Q FY12. For now we have a HOLDrating and S$0.325 fair value estimate on the stock. (Wong Teck Ching Andy)

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

NEWS HEADLINES - US stocks ended Friday with weekly losses after weak earnings reports and bleak forecasts added to worries about the world economy. The Dow inched up 0.03% on Friday to close at 13,107.21, while the S&P 500 Index slid 0.07% to 1,411.94 and the Nasdaq finished 0.06% higher at 2,987.95. - Mermaid Maritime won a US$530m subsea services contract through a joint venture, with its revenue share estimated at 60%-70% of the contract value. Separately, Mermaid associate Asia Offshore Drilling won a US$236.5m drilling contract. - Koh Brothers Group agreed to buy a 41% stake in Metax Engineering for S$8.2m as it sees growth potential in Metax's business and possible synergies with its own. Metax said the investment would strengthen its financial position and help it bid for more capital-intensive projects.

MARKET PULSE: FCOT, Vix Branz, United Envirotech, Tee International

Stock Name: Frasers Comm
Company Name: FRASERS COMMERCIAL TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.31

Stock Name: VizBranz
Company Name: VIZ BRANZ LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.74

Stock Name: UtdEnvirotech
Company Name: UNITED ENVIROTECH LTD

Research House: OCBC

Price Call: BUY

Target Price: 0.50

Stock Name: Tee Intl
Company Name: TEE INTERNATIONAL LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.28

MARKET PULSE: FCOT, Vix Branz, United Envirotech

9 Oct 2012

KEY IDEA Frasers Commercial Trust: Strong value proposition Frasers Commercial Trust (FCOT) announced on 28 Sep that it had completed the sale of KeyPoint for S$360.0m. We are maintaining our view that FCOT will likely use the bulk of the sale proceeds to redeem half of its Series A Convertible Perpetual Preferred Units (CPPUs) and reduce its existing debt liabilities, as the funding costs of the CPPUs and its gearing ratio are relatively high. Going forward, we are staying positive on FCOT's financial performance. Apart from a positive impact from the likely redemption of the CPPUs, FCOT is also expected to gain from interest savings as a result of the early refinancing of its S$500m term loan facility at favourable borrowing margins. In addition, the acquisition of the balance 50% interest in Caroline Chisholm Centre and direct tenant leases at China Square Central earlier this year are likely to contribute positively to its rental income. Hence, we expect FCOT to meet our FY12-13 forecasts comfortably. We are holding our FY12-13 forecasts intact as the recent developments are in line with our expectations. However, as we roll our valuations to FY13, our fair value is now raised from S$1.23 to S$1.31. Maintain BUY. (Kevin Tan) MORE REPORTS Viz Branz Limited: New substantial shareholder Lam Soon Cannery Private Limited - more commonly known for its "Knife" brand cooking oil -has purchased a 20% stake in Viz Branz (VB) at a price of S$0.735/share. While this share purchase falls short of triggering a general offer, we view this development as a positive and an important first step for an eventual overall takeover. First, VB's instant beverage business complements Lam Soon's existing operational capabilities and is a natural fit in its wide range of products. Secondly, and more importantly, given the fractured relationship between VB's two substantial shareholders, a reduced stake for its current CEO clearly signifies his intent to leave the business eventually. Although future share sales are likely to be transacted at S$0.735/share, it is only 0.7% lower than our fair value estimate of S$0.74/share. Maintain HOLD. (Lim Siyi) United Envirotech: Gets another Shandong project United Envirotech Limited (UEL)has recently announced that its 70%-owned subsidiary has signed a deal to acquire, upgrade and expand an existing industrial waste-water treatment plant in Weifang City, Shandong Province, China; this making it the company's fourth such acquisition in Shandong. We maintain our BUY rating on the stock as we believe that UEL is well placed to capture more of China's growing waste-water treatment market. Although we are maintaining our estimates and S$0.50 fair value for now, we see room for upward revisions on more contract wins. (Carey Wong)

Tee International: Acquires RM31.2m site in Cyberjaya, Malaysia Tee International (TEE) announced yesterday that it has paid MYR31.2m (S$12.9m) to acquire a freehold commercial site in the Cyberjaya, Selangor Darul Ehsan, Malaysia. The site area is ~9.5 acres and has a plot ratio of 3.0, and the acquisition would be financed by internal funds and bank borrowings. TEE expects to develop the site into a mixed use project comprising of retail and SOFO (Small Office Flexible Office) units. The site is located in the heart of Cyberjaya - 26km away from Kuala Lumpur and a key part of the Multimedia Super Corridor in Malaysia - and is in close proximity to MNC offices and institutions such as Shell, IBM and Multimedia University (MMU). This transaction is expected to have no material impact on the FY13 (ending 31 May 2013) financials. We would speak with management further regarding this acquisition and put our Hold rating and fair value estimate of S$0.28 UNDER REVIEW. (Research Team) For more information on the above, visit www.ocbcresearch.comfor the detailed report.

NEWS HEADLINES - US stocks pulled back from near five-year highs in anticipation that the earnings season will be weak. The Dow fell 0.2% to 13,583.65. The S&P 500 Index retreated 0.4% to 1,455.88. - Fraser and Neave has announced that the revaluation of certain properties has revealed an aggregate revaluation surplus of ~S$498m. - Ossia International Limited has agreed to acquire the retail and distribution business of VGO Corporation Limited for a consideration of S$18.7m. - JES International Holdings, a PRC-based shipbuilding group, has expanded into the offshore space, securing a shipbuilding contract for a Platform Support Vessel. - FDS Networks Group has entered into a disposal agreement to dispose of the entire share capital of a wholly-owned subsidiary of the company for a consideration of US$550k.

MARKET PULSE: Far East Hosp Trust, Office REITs (26 Sep 2012)

Stock Name: Far East HTrust
Company Name: FAR EAST HOSPITALITY TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.08

Stock Name: Frasers Comm
Company Name: FRASERS COMMERCIAL TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.23

Stock Name: CapitaComm
Company Name: CAPITACOMMERCIAL TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.53

MARKET PULSE: Far East Hosp Trust, Office REITs

26 Sep 2012

KEY IDEA Far East Hospitality Trust: Largest pure Singapore hospitality REIT Far East H-Trust's portfolio consists of 11 properties in Singapore, including seven hotels and four serviced residences, giving a total of 2,531 rooms/units. The trust has the largest diversified hospitality portfolio in Singapore by asset value, equaling S$2.14b. With a mix of hotels and serviced residences, the portfolio is able to ride on the up-cycle in the hotel industry, while the serviced residences would provide downside protection during economic slowdowns. The Sponsor is part of Far East Organization, which is the largest private property developer in Singapore. Three hotels and four serviced residences have been identified by the Sponsor as Sponsor Right of First Refusal (ROFR) properties which could be offered to Far East H-Trust. These properties could significantly increase the number of hotel rooms/serviced residence units in the trust by 1,242 rooms/units, or 49.1%, to 3,773. We initiate with BUY and a RNAV-based fair value of S$1.08. (Sarah Ong) MORE REPORTS Office REITS: Rental declines likely slowing in 3Q12 Due to limited supply coming online and better than expected demand, we believe office fundamentals are more benign than expected. In our view, office rentals are likely to show a more subdued dip in 3Q12 after three consecutive quarters of declines since 3Q11. In addition, core CBD vacancies also showed a reversal from a rising trend in 2Q12 to register a 0.9 ppt dip to 8.4%, and expect a similar trend for vacancies ahead. Note that since our upgrade of Office REITs to OVERWEIGHT on 21 Aug 2012, our top pick CCT has appreciated 4.0% versus the STI's 0.2% gain. Maintain OVERWEIGHT on Office REITs. Our top picks in the sector are CCT [BUY, FV: S$1.53] and FCOT [BUY, FV: S$1.23].

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

NEWS HEADLINES - US stock indexes fell Tuesday after a non-voting Federal Reserve member gave a negative take on the central bank's newest round of quantitative easing. The Dow fell 0.8% to 13,457.55. The S&P 500 Index slipped 1.1% to 1,441.59. - Temasek Holdings has entered into an agreement to sell 400m shares in SingTel as part of its portfolio rebalancing; but SingTel will continue to be the largest company in its portfolio. - Joint owners Mirvac Group (ASX: MGR) and K-REIT Asia held a topping off ceremony to celebrate the completion of the main structural works for the Sydney office building, 8 Chifley Square. - Metro Holdings has been jointly awarded the tender for a 99-year leasehold land parcel located at Prince Charles Crescent, Singapore, having an approximate site area of 23.8k sqm at the price of S$516.3m.

MARKET PULSE: FCOT, NOL, CDL and Ezra (7 Sep 2012)

Stock Name: Frasers Comm
Company Name: FRASERS COMMERCIAL TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.23

Stock Name: NOL
Company Name: NEPTUNE ORIENT LINES LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 1.38

Stock Name: CITYDEV
Company Name: CITY DEVELOPMENTS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 13.10

Stock Name: Ezra
Company Name: EZRA HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 1.35

MARKET PULSE: FCOT, NOL, CDL and Ezra

7 Sep 2012

KEY IDEA Frasers Commercial Trust: Updates on preferred units Summary: Frasers Commercial Trust (FCOT) announced that it has not exercised its right to redeem the Series A Convertible Perpetual Preferred Units (CPPUs). However, CPPU holders had successfully exercised their right to convert ~1.0m CPPUs at a conversion price of S$1.1845 per unit. We note that 878,697 new ordinary units will be issued on 1 Oct through the conversion process and ~341.5m CPPUs will be left in issue post conversion. We are currently maintaining our view that FCOT will likely redeem half of its CPPUs as the distribution rate is relatively high at 5.5% of its offer price. In view of the CPPU conversion, we now factor in the new ordinary units into our model. Our fair value, however, remains unchanged at S$1.23. Maintain BUY on FCOT. (Kevin Tan) MORE REPORTS Neptune Orient Lines: Cautiously optimistic Summary: The G6 Alliance (of which NOL belongs to) recently pulled the Loop 3 service on the Asia-Europe (AE) route after the carriers cited 'the forecast lack of improvements' in the trade lane. This latest development reiterates the softness of the AE route although the more important Transpacific route is still exhibiting encouraging signs with volume picking up and incremental rate increases holding up well. Whether the peak season will provide a much needed boost for carriers remains to be seen but we adjusted our forecasts slightly to account for the recovery in bunker fuel price and potential dip in freight rates in 4Q. The industry remains well aware that managing container shipping capacity is essential for profitability and collective efforts to withdraw service/capacity have been encouraging. Coupled with NOL's Efficiency Leadership Programme (ELP) showing significant cost savings, we maintain our BUY rating on NOL with an unchanged P/B based fair value estimate of S$1.38/share. (Lim Siyi) City Developments Limited: Tip bid for GLS tender at Tai Thong Crescent Summary: Yesterday evening, a JV between CDL and Hong Leong Holdings put in the top bid (S$245m) for a government land site tender at Tai Thong Crescent. The tender attracted eight bidders and CDL's bid was 11% above the 2nd highest. We believe the site, with a land area of 88.3k sq ft and maximum permissible GFA of 308.9k sq ft, would likely be developed into a mixed-use development of up to 19 storeys with ~265 residential units and 28 commercial units on the ground floor. The top bid translates to a land price of S$793 per sq ft GFA and an estimated project-wide breakeven ASP between S$1.2k - S$1.3k psf, which we believe is reasonable given the site location and attractive mix of use. Maintain BUY with an unchanged FV of S$13.10 (15% RNAV disc.). (Eli Lee) Ezra Holdings: Secures more subsea work Summary: Ezra Holdings (Ezra) announced that its subsea construction division, EMAS AMC, has won a contract from ABB for the installation of subsea power cables. This is part of ABB's second contract with Statoil to supply subsea HVDC light transmission systems to the Troll A platform in the North Sea. Though the contract value is not disclosed, we note that ABB has won a total of orders worth US$360m from Statoil in connection with the installation of two new compressors on the Troll A platform. Based on this and previous announcements by ABB, we estimate this latest contract to be worth around US$65m for ABB, with Ezra taking a share of it. However, there is the possibility that Ezra's win may incorporate previous work secured by ABB from Statoil. We will obtain more details from management; meanwhile we maintain our BUY rating with S$1.35 fair value estimate on Ezra. (Low Pei Han)

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

NEWS HEADLINES - The ECB has agreed on a plan to purchase an unlimited amount of short-term bonds from countries struggling to raise money in the markets. - The Dow closed at its highest level since Dec 2007, the S&P 500 Index closed at its highest level since Jan 2008 and the Nasdaq Composite Index closed at its highest level since Nov 2000. - Wee Hur Holdings has acquired Thomson View Condominium for S$590m through a new 51:49 JV with Lucrum Capital Pte Ltd. - Keppel Telecommunications & Transportation Ltd has established a S$500m Multicurrency Medium Term Note Programme. - Tiong Seng Holdings has been awarded a contract worth ~S$229m from NTUC Fairprice Co-Operative Limited for the proposed erection of a 16-storey single-user warehouse development. - Hu An Cable Holdings has sealed a RMB92.8m deal with China's State Grid Corporation.

MARKET PULSE: Biosensors, Cache Log, CRCT, FCOT, First REIT, SATS, PEC, SIA (26 Jul 2012)

Stock Name: Biosensors
Company Name: BIOSENSORS INT'L GROUP, LTD.

Research House: OCBC

Price Call: BUY

Target Price: 1.81

Stock Name: CACHE
Company Name: CACHE LOGISTICS TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.18

Stock Name: Frasers Comm
Company Name: FRASERS COMMERCIAL TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.16

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

Research House: OCBC

Price Call: HOLD

Target Price: 0.96

Stock Name: SATS
Company Name: SATS LTD.

Research House: OCBC

Price Call: HOLD

Target Price: 2.55

Stock Name: PEC
Company Name: PEC LTD.

Research House: OCBC

Price Call: HOLD

Target Price: 0.64

Stock Name: SIA
Company Name: SINGAPORE AIRLINES LTD

Research House: OCBC

Price Call: HOLD

Target Price: 10.85

MARKET PULSE: Biosensors, Cache Log, CRCT, FCOT, First REIT, SATS, PEC, SIA

26 Jul 2012

KEY IDEA Biosensors International Group: Still 'stenting' strong Biosensors International Group's (BIG) reported 1QFY13 results were within our expectations. Revenue accelerated 51.3% YoY to US$86.3m, with solid growth recorded in EMEA, APAC and China. This formed 22.7% of our full-year forecast. Core PATMI rose 17.4% YoY to US$28.3m, in line with our US$29.2m forecast. BIG managed to achieve better economies of scale and a more favourable product and geographical mix for the quarter, which helped to boost its gross margin. However, gross margin is likely to taper down in subsequent quarters as DES price cuts across various regions have yet to be fully realised. We finetune our assumptions and tweak our core PATMI estimates for FY13 and FY14 downwards marginally by 2%. Our DCF-derived fair value estimate eases from S$1.88 to S$1.81. We reiterate our BUY rating as valuations still appear attractive. (Wong Teck Ching Andy) MORE REPORTS Cache Logistics Trust: Continuing its growth track Cache Logistics Trust's (CACHE) 1HFY12 results were generally consistent with our projections, with NPI and DPU forming 47.8% and 49.1% of our full-year forecasts respectively. For 2HFY12, we remain confident that CACHE will continue to deliver sustainable distributions, given its recent initiatives on growth plans and capital management. The acquisitions of Pan Asia Logistics Centre and Pandan Logistics Hub, we note, have to yet make their full-quarter contributions to CACHE's income stream and are expected to boost the DPU going forward. CACHE also refinanced all its outstanding debts with a new S$375.0m bank facility, thereby extending its debt maturity and enlarging its pool of unsecured assets. Notably, all-in financing cost is expected to improve to 3.44% from 4.38% over the quarter. This is in line with our view that CACHE is likely to gain from interest savings going forward. We maintain our BUY rating and fair value of S$1.18 on CACHE. (Kevin Tan) CapitaRetail China Trust: Better-than-expected 2Q12 For 2Q12, CRCT's revenue rose 18.2% YoY to RMB190.2m and net property income climbed 15.0% to RMB124.4m. Income available for distribution rose 23.5% to S$16.65m. Solid rental reversions of 15.2% YoY for the portfolio were achieved (versus 13.0% for 1Q12). CapitaMall Xizhimen in Beijing saw the highest rental reversion of 28.9% on the back of a 52.1% YoY increase in shopper traffic to approximately 85k-90k people per day, following the opening of a basement connection to the subway. CapitaMall Saihan in Huhot, Inner Mongolia, registered the highest NPI growth of 38.2%. We maintain our BUY rating on CRCT and raise out fair value from S$1.44 to S$1.50. CRCT is offering an attractive FY12F dividend yield of 6.9%. (Sarah Ong) Frasers Commercial Trust: More to come Frasers Commercial Trust (FCOT) turned in a strong set of 3QFY12 results last evening. The robust quarterly performance was mainly driven by the acquisition of the balance 50% interest in Caroline Chisholm Centre (CCC) and higher income from direct tenant leases at China Square Central (CSC) following the expiry of the master lease. Leasing activities within FCOT's portfolio has also remained robust. On the capital management front, FCOT updated that it has successfully completed the early refinancing of its S$500m term loan facility using two new facilities. Notably, blended interest margin is ~1ppt lower than its previous borrowing margin. Hence, we expect FCOT to gain from interest savings going forward. Maintain BUY on FCOT with a higher fair value of S$1.16. (Kevin Tan) First REIT: Steady quarter, no surprises First REIT's (FREIT) 2Q12 results were within our expectations. Gross revenue, distributable amount to unitholders and DPU rose 6.1%, 23.1% and 22.2%YoY to S$14.0m, S$12.2m and 1.93 S cents, respectively. For 1H12, gross revenue rose 6.2% YoY to S$28.0m and constituted 47.4% of our full-year projection. DPU increased 22.2% to 3.86 S cents and formed 50.1% of our FY12 forecast if we exclude a special distribution arising from an asset divestment. Looking ahead, we believe that acquisitions are possible in 2H12, which could be financed by a combination of debt and equity, given its current rich valuations. FREIT trades at FY12F P/B of 1.23x, a significant 26% premium to the S-REIT universes' average P/B of 0.98x. Hence we downgrade FREIT from Buy to HOLD on valuation grounds, with an unchanged fair value estimate of S$0.96. (Wong Teck Ching Andy) SATS Ltd: Strong revenue growth Summary: SATS Ltd's (SATS) reported its 1QFY13 financial results that were in line with market expectations, with revenue and PATMI coming in respectively at 24% and 22% of consensus full-year estimates. SATS' 1QFY13 revenue grew 14% to S$438m though PATMI fell 9% to S$41m. But if we exclude the discontinued operations and one-offs, SATS would have shown a 4% PATMI increase. Gateway services, In-flight catering and TFK revenues grew 8%, 16% and 41% YoY respectively; while non-aviation food revenue was flat YoY in 1QFY13. SATS' staff costs, its largest expense, grew almost at the same pace as revenue growth after the group increased the workforce in its Gateway Services segment. Considering its strong revenue growth and increasing expenses, we maintain our ex-dividend fair value estimate of S$2.55/share and HOLD rating on SATS. (Eric Teo) PEC Ltd: Secures S$65m project works contracts PEC Ltd has secured S$65m worth of project works from (i) Petrochemical Corporation of Singapore, (ii) SembCorp Utilities and Terminals Pte Ltd, and (iii) Sinopec Engineering & Construction Pte Ltd. The contracts involve piping, instrumentation, electrical and civil structural works as well as installation of equipment and process furnace; and are scheduled for completion in 2013. Although the three contracts would help replenish PEC's order-book (which stood at S$246m as of end-March 2012), we fear that project margins may be thin given the stiff market competition. Therefore, we opt to keep our HOLD rating and S$0.64 fair value estimate ahead of its full-year results due out next month. (Chia Jiunyang) Singapore Airlines: Parent airline swings back to profit Singapore Airlines (SIA) last night released its 1QFY13 results. The group's revenue gained 6% YoY to S$3.8b and PATMI jumped 74% to S$78m. The parent airline (Singapore Airlines) swung back to an operating profit of S$85m, from the S$36m loss a year ago. Management said promotional fares, despite causing passenger yield to fall 3%, boosted the parent airline's passenger traffic and helped it to record a higher operating profit. However, all other business segments were less profitable. SilkAir's operating profit fell 14% YoY to S$18m and SIA Engineering's operating profit slipped 3% to S$34m. In addition, SIA Cargo's operating loss widened to S$49m from S$14m a year earlier. We will be meeting management at tomorrow's results briefing, after which we will provide more updates. We currently have a fair value estimate of S$10.85/share and HOLDrating on SIA. (Eric Teo)

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

NEWS HEADLINES - Good earnings from Boeing and Caterpillar helped the Dow climbed 0.5% to 12676.05. The S&P 500 Index moved down less than 0.1% to 1337.89. Technology shares led declines in four of the index's 10 sectors as Apple fell 4.3%. - Jardine Cycle & Carriage has disposed its entire interest in a company for an aggregate cash consideration of US$135m. JC&C is expected to recognise a net gain of ~US$56m from the disposal. Proceeds will be used to reduce borrowings and for general working capital. - Aussino Group is to acquire the entire issued share capital of Max Strategic Investments Pte Ltd, allowing Aussino to operate 21 petrol kiosks across various key cities in Myanmar, for a consideration of S$70m to be satisfied by the issue of new consolidated shares.