SG: MARKET PULSE: GPH, SingPost, NOL, Soilbuild REIT, CapitaLand (31 Oct 2013)

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

Research House: OCBC

Price Call: BUY

Target Price: 0.33

Stock Name: SingPost
Company Name: SINGAPORE POST LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 1.32

Stock Name: NOL
Company Name: NEPTUNE ORIENT LINES LIMITED

Research House: OCBC

Price Call: SELL

Target Price: 0.95

Stock Name: Capitaland
Company Name: CAPITALAND LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 3.77

MARKET PULSE: GPH, SingPost, NOL, Soilbuild REIT, CapitaLand

31 Oct 2013

KEY IDEA Global Premium Hotels: Solid performance in 3Q13 as expected The 3Q13 results for Global Premium Hotels (GPH) were in-line with our expectations. The 3Q13 results for Global Premium Hotels (GPH) were generally in-line with our expectations. Total revenue climbed 5.7% YoY to S$15.7m and gross profit rose 5.7% to S$13.6m. Finance costs declined 13.6% to S$2.0m due to partial repayment of term loans and lower average interest rate. 3Q13 net profit climbed 18.7% to S$4.9m. 9M13 revenue and EPS came to 75% and 77% of our prior respective full-year estimates. RevPAR was flat at YoY at S$97.1. Average occupancy rate was up 1 ppt YoY to 91.6%. Using a 15% discount to RNAV, we maintain our fair value of S$0.33 and BUY rating on GPH. (Sarah Ong) MORE REPORTS Singapore Post: Still delivering on rainy days Singapore Post (SingPost) reported a 32.6% YoY rise in revenue to S$203.8m and a 8.5% increase in net profit to S$35.6m in 2QFY14, such that 1HFY14 net profit accounted for 49.4% of our full year estimates. Underlying net profit increased 13.8% to S$37.3m in the quarter, in line with our expectations. We are seeing good topline growth with contributions from organic and inorganic initiatives, driven by e-commerce and regional growth via M&As. However, margins are expected to remain pressured in the medium term. As expected, the group has proposed an interim quarterly dividend of 1.25 S cents/share. Despite a challenging business environment, SingPost is still delivering a good ROE of about 43%. We also like its consistent dividends which are backed by stable operating cash flows, but see few re-rating catalysts for now. Maintain HOLD with S$1.32 fair value estimate. (Low Pei Han) Neptune Orient Lines: No surprise over weak results Neptune Orient Lines's (NOL) 3Q13 results confirmed our expectations of an absent peak season. Weaker freight rates caused a larger-than-expected drop-off in revenue (-10.4% to US$2.06b) and negated cost savings from its efficiency initiatives and efforts to manage capacity (headhaul utilisation rates remained at ~90%). As a result, 3Q13 core EBIT declined by 72.1% YoY to US$18.0m. Looking ahead, 4Q13 is likely to remain weak given the historical tendency for rates to fall QoQ (average drop of 8.8% for past three years). In addition, collective industry action remains far from ideal. With a lacklustre medium-term outlook over freight rates, we adjusting our projections downwards and our FY14F PATMI falls to a US$22m loss (+US$64m previously). Maintain our SELL on NOL with an unchanged fair value estimate of S$0.95. (Lim Siyi) Soilbuild REIT: Strong maiden results Soilbuild Business Space REIT (Soilbuild REIT) reported a stronger-than-expected set of 3Q13 (period from listing date on 16 Aug to 30 Sep) results last evening. NPI came in at S$6.9m, 2.0% higher than its prospectus forecast of S$6.8m due to higher income contribution and lower property expenses from Eightrium and Tuas Connection. Distributable income of S$6.1m and DPU of 0.76 S cents were also 3.1% and 3.0% above the respective prospectus forecasts due to higher net income and lower finance expenses. We note that Soilbuild REIT has achieved 100% retention rate for its leases, and has fully addressed its lease expiries for the year by renewing three leases (2.2% of portfolio NLA) at rental rates 7.9% higher than the preceding average passing rents. In addition, portfolio occupancy inched up to 99.8% from 99.7% as at listing date. We will be speaking to management later for more details on its outlook. In the meantime, we maintain our BUY rating and S$0.82 fair value on Soilbuild REIT. (Kevin Tan) CapitaLand Limited: Continuing strong run in residential sales CapitaLand (CAPL) reported 3Q13 PATMI of S$135.5m which decreased 8.7% YoY mostly due to lower portfolio gains recognized over the quarter. We judge this to be mostly within expectations as 9M13 PATMI now cumulates to S$706.9m which constitutes 80.3% of our full year forecast. 3Q13 topline came in at S$1047.1m, up 52.5% YoY mainly due to stronger contributions from development projects and higher rental revenue from retail malls, which is again broadly in line with our forecast; 9M13 revenues of S$2892.3m form 73.0% of our FY13 estimates. The group sold an impressive 1151 residential home units in Singapore over 9M13 versus 329 units in 9M12, and we continue to be positive on management's focus on realistic pricing and moving units in the pipeline. Residential sales in China continued the firm rate of sales seen over the year so far with 2398 homes sold in 9M13 versus 1978 homes in 9M12. Maintain BUYwith an unchanged fair value estimate of S$3.77. (Eli Lee)

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

NEWS HEADLINES - US stocks retreated from records Wed as investors assessed a Fed statement that largely matched forecasts, but also had some Fed watchers saying a policy change could come sooner than expected. - Two major overseas property investments were announced by Singapore groups yesterday - one by Pontiac Land Group in New York City and the other by GIC's property arm in Jakarta. - China Minzhong posted a 60% plunge in net profit to 48.4m yuan (S$9.8m) for 1QFY14. - Indofood Agri Resources' earnings dived 52% in 3Q13 due to the twin pressures of lower selling prices and higher production cost. - Second Chance Properties reported a record net profit of S$57m for the year ended 31 Aug, thanks mainly to profit booked on revaluation of its properties. - Eu Yan Sang International chalked up a net profit of S$1.43m for 1QFY14, up from a net profit of S$341,000 in the corresponding quarter a year earlier. - Asiasons Capital plans to take a S$25m convertible loan facility from two of its key directors as a source of standby capital.

OSPL - Good Morning S'pore - Central Dealing Desk

Stock Name: UtdEnvirotech
Company Name: UNITED ENVIROTECH LTD

Research House: DBS Vickers

Price Call: HOLD

Target Price: 0.90

Stock Name: Kep Corp
Company Name: KEPPEL CORPORATION LIMITED

Research House: OSK-DMG

Price Call: HOLD

Target Price: 11.23

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

Research House: OCBC

Price Call: BUY

Target Price: 0.33

Market Compass

22 August 2013~ Good Morning Singapore!

Singapore Idea Snippets:

22 Aug 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 : Education... has produced a vast population able to read but unable to distinguish what is worth reading. - G. M. TREVELYAN Singapore: The Day Ahead SINGAPORE DAYBOOK :US Fed mulls reverse repo plan to achieve rate target THE US Federal Reserve is considering a new tool to help drain cash from the banking system and keep short-term interest rates on target when it shifts from its current cheap-money policy, minutes of the Fed's July policy meeting showed on Wednesday. Fed policymakers were briefed during the July 30-31 meeting on the potential for creating a fixed-rate facility for overnight reverse repurchase agreements, or reverse repos. "They are setting the stage for an eventual policy tightening by sometime in 2015," said Mary Beth Fisher, head of US interest rates strategy at SG Corporate & Investment Banking in New York. Reverse repos go together with the interest the Fed pays on excess reserves and the term deposit facility as tools to control short-term interest rates when the central bank is ready to normalize rates from their rock-bottom levels. (Source: The Business Times) MARKET SCOOP Blackstone to sell London office stake to GIC: report Sembcorp joint venture to launch US$135m IPO in Oman S'pore July inflation seen accelerating for 3rd straight month CapitaLand could do strata sales at Westgate Tower Neo Group expands into Indonesia PEC's Q4, full-year earnings up; boost from core divisions Albedo's planned RTO excites market (Source: The Business Times) DBS Securities says... UNITED ENVIROTECH | HOLD | TP: S$0.90 United Envirotech was awarded RMB100m (~S$20m) BOT contract by the government of Yantai City for a municipal wastewater treatment project in Shandong Province, China This BOT is a 25-year concession to build and operate a wastewater treatment plant utilising UENV's membrane bioreactor technology (MBR) for capacities of 30,000m3/day for Phase 1, reaching 80,000m3/day upon completion of Phase 2 Under the terms of the BOT contract, the minimum off-take quantity is 70% of the design capacity for Year 1 and it will be stepped up to 100% in 4 years' time Contract value met 25% of our FY14 new win assumption of RMB400m Additional capacity from this contract is slightly higher than our forecast We had expected UENV to acquire another 50, 000m3/day of capacity with the remaining S$18m proceeds from KKR While the full designed capacity is ahead of expectation, development in phases implied that a longer time is needed to reach full utilization Hence, no material changes to our estimates No change to our forecast, S$0.90 TP and Hold call In terms of expectations, we hope to see UENV catches up on EPC contracts to meet FY assumptions whereas anymore BOT/TOT/acquisitions would pose upside to our DCF valuations of the Treatment business DMG OSK Securities says ... KEPPEL CORPORATION | NEUTRAL | TP: S$11.23 Keppel FELS bags a fresh US$280m deal with Floatel Keppel Corp (KEP) announced a new contract worth USD280m (SGD358m) to build an accommodation semisubmersible (semisub) for Floatel This is the fifth unit ordered by Floatel The price for this unit is higher than the previous order for a similar design in June 2011 at USD260m YTD offshore & marine (O&M) order win has reached SGD4.11bn, making up 69% of our FY13 new order forecast, and net order book is estimated at SGD14.2bn We keep our EPS estimates and TP unchanged We maintain Neutral rating with a SGD11.23 TP OCBC Securities says... GLOBAL PREMIUM HOTELS | BUY | TP: S$0.33 Further to its announcement dated 27 May 2013 in relation to the proposed establishment of a S$300m multicurrency medium term note programme, Global Premium Hotels (GPH) has announced that it has on 20 August 2013 established the programme, under which it may issue notes from time to time Please note that OCBC Bank has been appointed by GPH as the arranger of the programme We note that the MTN programme will increase the funding flexibility for GPH We maintain our fair value of S$0.33 and BUY rating on GPH

SG: MARKET PULSE: Consumer Sector, Telco, Bumi Armada, Global Premium (21 Aug 2013)

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

Research House: OCBC

Price Call: BUY

Target Price: 0.82

Stock Name: Petra
Company Name: PETRA FOODS LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 3.95

Stock Name: BreadTalk
Company Name: BREADTALK GROUP LIMITED

Research House: OCBC

Price Call: SELL

Target Price: 0.77

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

Research House: OCBC

Price Call: BUY

Target Price: 0.33

MARKET PULSE: Consumer Sector, Telco, Bumi Armada, Global Premium

21 Aug 2013

KEY IDEA Consumer sector: Still under pressure For 2HCY13, we expect consumer-related companies under the FTSE Straits Times Consumer Services Index (FSTCS Index) to experience lower-than-expected revenue growth as sentiment turns bearish both domestically and abroad. With weaker economic data points (e.g. Indonesia's GDP and China's slowdown) re-affirming lingering economic uncertainty, consumer companies are likely to face challenges as consumers shift away from discretionary spending. As we expect sell-offs of the sector to continue in light of these headwinds, we maintain our UNDERWEIGHT rating on the sector. Within the sector, we favour counters with defensive qualities such as Sheng Siong [BUY; FV: S$0.82] over counters with high exposure to emerging Asia consumer demand like Petra Foods [HOLD; FV: S$3.95] and counters with wafer-thin operating margins like BreadTalk [SELL; FV: S$0.77]. (Lim Siyi) MORE REPORTS Telecom Sector: 2QCY13 results mostly tracking our estimates All three telcos reported 2QCY13 results that came in within our expectations. But going forward, the outlook is generally more muted, given that the key mobile market is already quite saturated (growth is likely to come from tariff hikes rather than the addition of new subscribers). As before, the spectre of rising interest rates is making the telcos' yields less attractive (currently their forecast yields are around 4.7%), although these stocks should still have a place in any portfolio for their defensive earnings. We also do not see any potential growth drivers in a pretty saturated mobile market. Hence we maintain NEUTRALon the sector. (Carey Wong) Bumi Armada Berhad: 2Q13 results within expectations Bumi Armada Berhad reported 2Q13 results which were within our expectations. Revenue grew 25.1% YoY to MYR481.2m while PATMI of MYR112.0 represented an increase of 21.8%. For 1H13, revenue and PATMI rose 34.8% and 22.0% to MYR970.0m and MYR221.6m, forming 44.9% and 45.5% of our FY13 forecasts, respectively. This was driven largely by its OSV segment, which had a larger vessel count and also recorded an improved fleet utilisation of 87% in 2Q13 (versus 2Q12: 82%). We expect 2H13 to be a stronger half for Bumi Armada. The group's order book stood at MYR7.5b as at 30 Jun 2013 (was MYR7.9b as at end 1Q13), with extension options worth MYR4.3b. Bumi Armada currently has 12 ongoing FPSO tenders, and management believes that it stands a good chance to achieve more FPSO wins in 2H13. We place our Hold rating and fair value estimate of MYR3.74 under review due to a change in analyst coverage. (Research Team) Global Premium Hotels: Established S$300m multicurrency MTN programme Further to its announcement dated 27 May 2013 in relation to the proposed establishment of a S$300m multicurrency medium term note programme, Global Premium Hotels (GPH) has announced that it has on 20 August 2013 established the programme, under which it may issue notes from time to time. Please note that OCBC Bank has been appointed by GPH as the arranger of the programme. We note that the MTN programme will increase the funding flexibility for GPH. We maintain our fair value of S$0.33 and BUY rating on GPH. (Sarah Ong)

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

NEWS HEADLINES - US stocks mostly climbed, with the S&P 500 halting its longest losing streak this year, as retailers beat estimates and as Wall Street looked to clues about future US monetary policy. - Singapore's domestic wholesale trade dipped 1.1% YoY in 2Q13. - Ellipsiz Ltd reported a 27% YoY drop in 4QFY13 net profit to S$2.8m (versus S$3.8m in 4QFY12), which came as revenue fell 31% to S$30.7m (versus S$44.4m in 4QFY12). - Keppel FELS has won a US$280m contract with Floatel International to build a fifth accommodation semi-submersible. - Keong Hong Holdings has entered into a convertible bond subscription agreement with Kori Holdings to subscribe for a S$5m convertible bond.

SG: MARKET PULSE: Cache, Hospitality Sector, Rowsley (19 Aug 2013)

Stock Name: CACHE
Company Name: CACHE LOGISTICS TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.30

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

Research House: OCBC

Price Call: BUY

Target Price: 0.33

MARKET PULSE: Cache, Hospitality Sector, Rowsley

19 Aug 2013

KEY IDEA Cache Logistics Trust: Not resting on laurels Summary: After staying quiet for over four months following the completion of the Precise Two acquisition, we believe Cache Logistics Trust (CACHE) may now be close to striking another acquisition deal in the near term. On last Friday evening, CACHE announced the incorporation of four wholly-owned subsidiaries, including a 100% stake in Cache Polar Logistics Warehouse (Shanghai) Co., Ltd. While no further details were given regarding the purpose of these entities except they are either investment holding or warehousing and logistics service companies, we are of the view that CACHE may be looking to acquire a warehouse facility in Shanghai, China. We note that CACHE's financial position is one of the strongest among the S-REITs space. This gives CACHE the financial resources and flexibility to take on attractive acquisitions as they arise, in our opinion. We are keeping our forecasts unchanged for now, but as we transition our RNAV valuation method to the dividend discount model, our fair value is trimmed to S$1.30 from S$1.40. We maintain our BUY rating on CACHE. (Kevin Tan) MORE REPORTS Hospitality Sector: Raise hotel room supply growth forecast Summary: We understand from sources that Jul and Aug may have been showing reasonably RevPAR growth on a YoY basis for the industry as whole, in contrast to YoY contractions for 1H12. Industry sources indicate that on a same-store basis, 2-star hotels and 3-star hotels are performing the best, followed by 5-star hotels. 4-star/4.5-star hotels are doing poorly, being squeezed by competition from 3-star and 5-star hotels. This relative performance was already observed in 1H13. We remain NEUTRAL on the hospitality sector. We forecast that hotel room supply will grow at 6.5% p.a. for 2013 to 2015 (higher than the 5.8% p.a. we previously estimated), outstripping estimated hotel room demand growth of 5.4% p.a. Our top pick is Global Premium Hotels [BUY, FV: S$0.33], which is chiefly represented by the more favorable Economy category, which will see fairly low supply growth of 3.6% p.a. (Sarah Ong) Rowsley Ltd: A scenario-based analysis of value Summary:Last Thursday, Rowsley received the approval in-principle from SGX for its proposed acquisitions of RSP Group and the Vantage Bay site in Iskandar, and a 2-for-1 bonus issue of warrants. Management reports that it would dispatch a circular and convene an EGM to seek shareholder approval in due course. We note that, on 2 Aug 2013, management announced that "barring unforeseen circumstances, the deal should complete in the second half of 2013 after regulatory and shareholders' approval." In our research piece, we carry out an analysis of Rowsley's value under a successful RTO scenario, and also under a failed RTO scenario. If Rowsley's proposed deal fails, we value each existing Rowsley share at approximately S$0.034 - its book value per share as at end Jun 2013. However, if the deal succeeds, we calculate from our analysis a value of S$0.67 to S$0.85 for each existing Rowsley share (before the 2-for-1 warrant issue ex-date). (Eli Lee)

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

NEWS HEADLINES - US stocks face continued challenges and a further push off recent highs as more retailers report earnings this week and Federal Open Market Committee meeting minutes are released. - Gold traders are the most bullish in five months on signs that demand for coins and jewellery increased during a price plunge that prompted John Paulson to cut his holding for the first time since 2011. - Prime Minister Lee Hsien Loong mapped out moves in key areas like infrastructure, healthcare and education in what he described as "acts of faith" in Singapore and its people. - An 800 ha (8 sq km) area larger than Bishan or Ang Mo Kio will be freed up for new homes, offices, factories and parks once Paya Lebar Air Base relocates to a Changi site.

SG: MARKET PULSE: GAR, GPH, SingPost, StarHub, UEL (5 Aug 2013)

Stock Name: GoldenAgr
Company Name: GOLDEN AGRI-RESOURCES LTD

Research House: OCBC

Price Call: SELL

Target Price: 0.465

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

Research House: OCBC

Price Call: BUY

Target Price: 0.33

Stock Name: SingPost
Company Name: SINGAPORE POST LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 1.32

Stock Name: StarHub
Company Name: STARHUB LTD

Research House: OCBC

Price Call: SELL

Target Price: 3.82

MARKET PULSE: GAR, GPH, SingPost, StarHub, UEL

5 Aug 2013

KEY IDEA Golden Agri-Resources: Downgrade to SELL; poor 2Q13 showing Summary: Golden Agri-Resources (GAR) saw 2Q13 revenue jumped 25.4% YoY and 17.6% QoQ to US$1682.3m, but weaker margins on the back of softer CPO prices led to core earnings tumbling 52.3% YoY and 50.0% QoQ to an estimated US$55.1m. 1H13 revenue grew 8.8% to US$3112.4m, meeting 49.7% of our FY13 forecast, while net profit tumbled 41.5% to US$158.1m; core earnings slipped 40.9% to US$165.2m, or just 33.7% of our full-year forecast. In view of the worse-than-expected showing and likely more margin compression ahead, we opt to slash our FY13 core earnings forecast by 19%; this in turn drops our fair value from S$0.57 to S$0.465, now based on 11x blended FY13/FY14F EPS. We also downgrade our call from Hold to SELL. (Carey Wong) MORE REPORTS Global Premium Hotels: 2Q13 in line Summary: The 2Q13 results for Global Premium Hotels (GPH) were generally in line with our expectations. Revenue climbed 1.0% YoY to S$15.m and gross profit rose 1.1% to S$13.m. Administrative expense fell 19.4% to S$5.5m mainly due to one-off recognition of IPO expenses of S$1.4m in 2Q12. Interest expense was 9.8% higher at S$1.9m due to the restructuring exercise undertaken by GPH pursuant to the IPO in 2Q12. 2Q13 net profit climbed 36.2% to S$4.9m. 2Q13 hotel room revenue increased 1.3% YoY to S$15.1m. RevPAR was 2% higher at S$95.7, chiefly due to higher average occupancy rate of 93.1%, up 3.4 ppt. We expect 2H13 to be slightly better than 1H13 because we understand from industry sources that the sector as a whole has seen some stabilisation in Jul and Aug. Using a 10% discount to RNAV, we maintain our fair value of S$0.33 and BUY rating on GPH. (Sarah Ong) Singapore Post: In Post we still trust Summary: Singapore Post (SingPost) reported a 32.8% YoY rise in revenue to S$201.3m but saw a 2.0% decrease in net profit to S$37.3m in 1QFY14, such that the latter accounted for 25.3% of our full year estimates. Underlying net profit fell slightly by 0.9% to S$36.2m in the quarter, in line with our expectations. Margins continued to normalise as expected, while the group's cashflow generation remained strong. In line with its usual practice, SingPost has proposed an interim quarterly dividend of 1.25 S cents/share. We look forward to the group's transformation as it seeks more growth opportunities, but till then, we see limited upside potential unless earnings growth from its acquisitions proves better than expected. Still, we expect the share price to be supported by investors seeking yield (~4.8% FY14F). Maintain HOLD with S$1.32 fair value estimate. (Low Pei Han) StarHub - Offers S$300 rebate for new BPL customers Summary: StarHub Ltd has announced its "Surf & Watch" bundles specifically aimed at welcoming BPL fans home. Priced from S$47.37/month with a 24-month contract, subscribers (new and those without a contract) will get 25Mbps cable home broadband, its Deluxe HD Pack (82 channels) and a S$300 rebate; note that subscribers will have to pay SingTel S$59.90/month directly for the BPL content. According to StarHub, the rebate will be part of its Marketing & Promotions expense, and will not affect the Pay TV cost. However, as the bundle involves its older cable broadband, there could be limited appeal versus the newer NBN fibre network. We also see limited traction for existing SingTel subscribers who can continue to pay S$34.90/month for BPL. For now, we maintain SELLon StarHub with an unchanged S$3.82 fair value. (Carey Wong) United Envirotech: Decent 1QFY14 start Summary: United Envirotech Ltd (UEL) this morning reported 1QFY14 revenue of S$44.1m, +37.5% YoY (but -5.9% QoQ), meeting 14.2% of our FY14 forecast, while net profit climbed 3.5% YoY (down 13.8% QoQ) to S$6.1m, or 12.5% of our full-year forecast. According to management, the higher revenue came from a 23.3% YoY jump in Engineering revenue to S$31.2m, while recurring Water Treatment revenue surged 89.7% to S$12.9m. Note that its fiscal first quarter tends to be seasonally softer. Going forward, management intends to grow its recurring treatment income further and focus on securing more industrial wastewater treatment projects in China. We will speak more with management for further updates. For now, we place our Buy rating and S$1.03 fair value under review. (Carey Wong)

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

NEWS HEADLINES - Oil and base metal prices gained last week as positive US and Chinese economic data fuelled higher demand expectations, according to analysts. - The US dollar rallied last week as a weaker-than-forecast unemployment report and the Fed's pledge to keep buying bonds fails to erase speculation that the programme will be wound down this year. - Directors' buying was low for the second straight week while the selling was low for the ninth straight week. A total of eight companies recorded 14 purchases worth S$1.36m versus two firms with two disposals worth S$1.59m. - Pacific Healthcare Holdings Ltd has obtained approval in-principle for proposed renounceable non-underwritten rights issue of 114,748,586 new ordinary shares at an issue price of S$0.048 for each rights share, on 1-for-4 basis.

SG: MARKET PULSE: Hospitality, MLT, CapitaLand (21 Jun 2013)

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

Research House: OCBC

Price Call: BUY

Target Price: 0.33

Stock Name: MapletreeLog
Company Name: MAPLETREE LOGISTICS TRUST

Research House: OCBC

Price Call: HOLD

Target Price: 1.15

Stock Name: Capitaland
Company Name: CAPITALAND LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 4.29

MARKET PULSE: Hospitality, MLT, CapitaLand

21 Jun 2013

KEY IDEA Hospitality Sector: Hazy days While visitor arrivals increased by 6.4% in 1Q13, gross lettings for 1Q13 grew by only ~2.8% to 2.8m room nights. This means that on a per capita basis, visitor arrivals are converting into fewer room nights, continuing a trend we note for 2012. With regard to the haze, we understand from an industry source that hotel bookings are not being negatively affected just yet. However, we think a blip in hotel performance through 3Q13 is likely given that the haze could last at least several weeks. Keeping in mind the mild oversupply situation for hotels we see building up, we remain NEUTRAL on the hospitality sector. We prefer Global Premium Hotels [BUY, FV: S$0.33], a longer-term asset value play in the Economy and Mid-tier space. (Sarah Ong) MORE REPORTS Mapletree Logistics Trust: Scaling up presence in Korea Mapletree Logistics Trust (MLT) has entered into a sale and purchase agreement with supply chain management company, Oakline Co. Ltd, for the acquisition of The Box Centre in South Korea. Oakline will lease back the property for a period of six years with built-in rental escalation from second year onwards. At a purchase consideration of KRW28.75b (~S$32.0m), the property is expected to provide an initial NPI yield of 8.4%. Management expects to fund the acquisition fully by debt, which is expected to increase its aggregate leverage marginally from 34.1% as at 31 Mar to 34.6%. This is likely to add ~0.03 S cents to FY14 DPU, based on our projections. We now factor in the acquisition into our forecasts, with the assumption that it will be completed in Jul. However, we reduce our fair value from S$1.34 to S$1.15 on higher cost of equity to reflect a higher risk-free rate, higher beta and reduced market risk appetite for interest-rate sensitive stocks. We maintain HOLD on MLT due to valuation grounds. (Kevin Tan) CapitaLand Limited: Top bid for Coronation site Yesterday evening, CapitaLand (CAPL) put in the top bid of S$366 million for a 99-year leasehold landed residential site at Coronation Road. The 37,441 sqm site is located within an established landed housing estate and enjoys good accessibility to Bukit Timah Rd and Pan Island Expressway. The GLS tender attracted 12 bids and CAPL's top bid was 17% higher than the second highest bidder - signaling the group's confidence in this project. We understand CAPL intends to develop a landed project comprising semi-detached and bungalows. We expect selling prices in the range of S$1.6k - S$1.8k psf and the project to accrete 1.3 - 2.2 S-cents to CAPL's RNAV. Pending the award of the site, we would keep our fair value estimate unchanged at S$4.29 (20% discount to RNAV). Maintain BUY. (Eli Lee)

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

NEWS HEADLINES - US stocks tumbled on Thurs, with the S&P 500 suffering its worst session since Nov 2011, hit by fear that the Federal Reserve will scale back its bond buying later this year. - South Korea's Lotte Shopping Co Ltd is looking to raise US$800m to US$1b by listing a REIT in Singapore as early as this year, according to IFR, a Thomson Reuters publication. - China's flash HSBC Purchasing Managers' Index for June dropped to a nine-month low yesterday, pointing to continuing weakness in local and external demand. - Armstrong Industrial Corporation Limited said that it has received a proposal from a consortium involving its major shareholder that may result in the delisting of the company. - Former Novena Holdings CEO Toh Soon Huat is leading a group of 17 investors, including a unit of mainboard-listed Serial System, to pump a total of S$15.04m into Jubilee Industries Holdings. - ISDN Holdings Limited plans to raise up to S$111.6m in gross proceeds from the issue and exercise of warrants. - Stamford Tyres Corporation posted an 18.5% rise in earnings for its full fiscal year ended April 30, boosted by a one-time gain from the sale of its stake in an associate.

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: Hospitality Sector, Starhill Global (5 Mar 2013)

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

Research House: OCBC

Price Call: BUY

Target Price: 0.33

Stock Name: Starhill Gbl
Company Name: STARHILL GLOBAL REIT

Research House: OCBC

Price Call: BUY

Target Price: 0.98

MARKET PULSE: Hospitality Sector, Starhill Global

5 Mar 2013

KEY IDEA Hospitality Sector: Potential oversupply situation Summary: Despite visitor arrivals climbing 9% in 2012, the total gross lettings for Singapore hotels was stagnant at 10.7m room nights. It is likely that the average length of stay has declined further from the 3.7 days in 2011, e.g. down to 3.45 days, and larger proportions of tourists may be staying in non-hotel accommodations. We understand from talking to industry players that 1Q13 operational figures for Singapore hotels are likely to be lackluster. For 2013-2015, we forecast hotel room demand growth of 5.4% p.a., lower than the projected 5.8% p.a. increase in room supply. We remain NEUTRAL on the hospitality sector. Our top pick is Global Premium Hotels [BUY, FV: S$0.33], which we believe is a longer-term asset value play. GPH is currently trading 32% below its NAV of S$0.39. (Sarah Ong) MORE REPORTS Starhill Global REIT: Poised for growth Summary: We are positive on Starhill Global REIT's (SGREIT) performance going forward. SGREIT announced that the acquisition of Plaza Arcade in Perth, Australia has been completed last Friday. At an NPI yield of 7.8%, we expect the transaction to be DPU accretive, adding 0.08 S cent to SGREIT's DPU on an annualised basis. Apart from the maiden contribution by Plaza Arcade, SGREIT is also likely to get a boost in its 1Q13 DPU, due to the distribution of ~S$3.8m accumulated net rental arrears expected to be received from Toshin during the quarter. Further upside in rent is possible when next lease renewal exercise comes in Jun, given that Orchard Road rental and occupancy rates have been holding up well. In addition, SGREIT may possibly benefit from interest savings following the refinancing of its term loan maturing in Sep. We maintain BUY with an unchanged fair value of S$0.98 on SGREIT. (Kevin Tan)

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

NEWS HEADLINES - US stocks closed higher Monday after strength in defensive stocks shook off early morning losses following a measure to cool China's real-estate bubble. The Dow rose 0.3%. - The latest purchasing managers' index (PMI) showed that Singapore's manufacturing economy contracted in Feb from the previous month. - CSC Holdings said it had inked over S$400m worth of deals so far this year, including works on the Klang Valley Mass Rapid Transit in Malaysia. - BBR Holdings said it won S$61.6m in new contracts between last Nov and Jan this year. - China Minzhong Food Corporation said that PT Indofood Sukses Makmur has doubled its shareholding interests from 14.95% to 29.33%. - Independent directors of Macquarie International Infrastructure Fund asked shareholders to vote to amend the management fee arrangements at the AGM later this week. - The Public Transport Council has raised the penalty for not meeting bus Quality of Service (QOS) standards by up to 20x to show that it is serious about non-compliance.

MARKET PULSE: OSIM, Global Premium Hotels, Yoma (1 Feb 2013)

Stock Name: OSIM
Company Name: OSIM INTERNATIONAL LTD

Research House: OCBC

Price Call: BUY

Target Price: 2.19

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

Research House: OCBC

Price Call: BUY

Target Price: 0.33

Stock Name: Yoma
Company Name: YOMA STRATEGIC HOLDINGS LTD

Research House: OCBC

Price Call: SELL

Target Price: 0.71

MARKET PULSE: OSIM, Global Premium Hotels, Yoma

1 Feb 2013

KEY IDEA OSIM International: Ends FY12 on a high OSIM International (OSIM) reported a strong set of 4Q12 results which were within our expectations. For FY12, revenue and PATMI of S$601.7m (+8.7%) and S$86.9m (+25.9%) formed 99.7% and 100.9% of our projections, respectively. A positive surprise in the form of a special dividend of 1 S cent/share was declared, on top of a final dividend of 1 S cent/share. This brings total FY12 DPS to 6 S cents, or a yield of 3.3%. Looking ahead, OSIM's focus would remain on driving product innovation and improving productivity. We raise our FY13 EPS forecast by 2.2% on higher margin assumptions, which in turn bumps up our fair value estimate from S$2.14 to S$2.19, still pegged to 16.4x FY13F EPS. Maintain BUY. (Wong Teck Ching Andy) MORE REPORTS Global Premium Hotels: Asset value play, raise FV to S$0.33 Global Premium Hotels (GPH) performed in line with our expectations in 4Q12. 4Q12 revenue increased by 6.8% YoY to S$15.2m. EBIT margin fell 1.4 ppt YoY to 50.7%, partially due to increase in staff costs in relation to the general wage increases and additional staff required for Fragrance Riverside. As part of comprehensive income in 4Q12, revaluation of the land and hotel buildings led to a gain of S$83.7m, equivalent to 10.1% of 30 Sep 2012's PPE. The revaluation gain contributed to a dramatic 25% QoQ climb in NAV per share to 38.98 S cents. Lowering our capitalisation rates, which were previously too conservative, especially given that the majority of GPH's properties are freehold, we raise our FV from S$0.29 to S$0.33 (using a 10% discount to RNAV) and maintain a BUY on GPH. GPH is trading at an undemanding P/B of 0.69x. (Sarah Ong) Yoma Strategic Holdings: Most positives priced in - Downgrade to SELL Yoma Strategic Holdings (Yoma) reported 3QFY13 PATMI of S$3.7m, increasing by S$2.3m YoY mostly due to higher sales of residences and land development rights. This brings 9MFY13 PATMI to S$1.9m, which is mostly in line with our expectations but below consensus estimates. Topline for the quarter came in at S$13.0m, up 32.1% YoY, again driven by stronger property sales. At current price levels, while we acknowledge that the company holds meaningful franchise value as a leading developer in Myanmar, we see most positives to be already priced in, even under our most optimistic assumptions. We downgrade our rating on the company to a SELL based on a 12-month fair value estimate of S$0.71 (20% premium to RNAV), but caution that the anticipated 1-for-4 rights issue ahead would likely be supportive of the share price over the nearer term. (Eli Lee)

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

NEWS HEADLINES - US stocks fell on Thu after a report showing a rise in jobless claims, but benchmark indexes still ended the month higher. The Dow slid 0.4%, the S&P 500 index fell 0.3% and the Nasdaq ended flat. - Companies in both the manufacturing and services sectors expect business prospects to be weak in 1H13 as global economic growth remains sluggish, a survey by the EDB showed. - Private education provider Overseas Education Limited, owner of the Overseas Family School at Paterson Road, launched its IPO yesterday. It aims to raise S$56.1m and will be the first mainboard listing this year. - Residential property and hotel developer Fragrance Group's FY12 net profit rose 24% to S$102m, supported by a 36% increase in turnover to S$420m. - Innopac Holdings is launching a bid to take over Australian diamond mining and exploration company Merlin Diamonds for up to A$59.4m.

Market Pulse: SG Hospitality Sector (18 Dec 2012)

Stock Name: AscottREIT
Company Name: ASCOTT RESIDENCE TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.37

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

Research House: OCBC

Price Call: HOLD

Target Price: 0.29

Stock Name: CDL HTrust
Company Name: CDL HOSPITALITY TRUSTS

Research House: OCBC

Price Call: HOLD

Target Price: 1.91

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

Research House: OCBC

Price Call: HOLD

Target Price: 1.02

Stock Name: Genting SP
Company Name: GENTING SINGAPORE PLC

Research House: OCBC

Price Call: HOLD

Target Price: 1.33

MARKET PULSE: SG Hospitality Sector

18 Dec 2012

KEY IDEA SG Hospitality Sector: Muted outlook for 1H13 While the hospitality industry had a good start to the year with 1Q12 RevPAR growth of 14%, the performance weakened dramatically in 2Q12 and 3Q12, and for the first 10 months of the year, RevPAR declined 3.3% YoY (preliminary statistics). While we remain optimistic about longer-term supply and demand dynamics of the hospitality industry through 2014, we think that a muted outlook for tourism in 1H13 will weigh on the price performance of hospitality counters in the coming months. Our channel checks indicate that hotel bookings up to Chinese New Year are still weak, and we believe that 2013 will see fewer MICE events. We are downgrading the hospitality sector from Overweight to NEUTRAL. Our top pick is Ascott Residence Trust [BUY, FV: S$1.37]. We also have a BUY rating on Global Premium Hotels [FV: S$0.29], and HOLD ratings on CDL Hospitality Trusts [FV: S$1.91], Far East Hospitality Trust [FV: S$1.02] and Genting Singapore[FV: S$1.33]. (Sarah Ong)

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

NEWS HEADLINES - US stocks rose on Mon, with financials leading the gains, buoyed by hopes of progress towards a deal to avoid the fiscal cliff as senior Republican John Boehner and President Obama met again for further discussions. The Dow ended 0.8% higher at 13,235.39, while the S&P 500 Index rose 1.2% to 1,430.36 and the Nasdaq finished 1.3% higher at 3,010.60. - Singapore home sales fell 44% MoM and 36% YoY in Nov to 1,087 units, the lowest level in 11 months, as developers slowed project sales ahead of the holiday season, data from the Urban Redevelopment Authority show. - Jackspeed Corp has sold a factory in Tampines with a floor area of 1,342 sq m for S$5.55m in cash as part of its plans to rationalise its resources. - Global Logistic Properties has signed two leases totalling 361k sq ft to Chinese e-commerce firm Vipshop - one in Jiangsu Province for 290k sq ft and another in Beijing for 70k sq ft.

MARKET PULSE: Sheng Shiong, Global Premium Hotels, Marco Polo Marine, Wilmar (5 Dec 2012)

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

Research House: OCBC

Price Call: BUY

Target Price: 0.55

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

Research House: OCBC

Price Call: BUY

Target Price: 0.29

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

Research House: OCBC

Price Call: BUY

Target Price: 0.56

Stock Name: Wilmar
Company Name: WILMAR INTERNATIONAL LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 3.52

MARKET PULSE: Sheng Shiong, Global Premium Hotels, Marco Polo Marine, Wilmar

5 Dec 2012

KEY IDEA Sheng Siong Group: Strong growth ahead We upgrade Sheng Siong Group's (SSG) FY13/14 revenue growth to 10% (previously 5% and 3% respectively) on the back of full-year contributions from the eight new stores opened in FY12. The absence of further price competition amongst the Big 3 supermarket chains and lingering doubts over the macro-environment will also provide support for this defensive counter. In addition, we anticipate a continuation of the 90% net profit dividend payout policy, which will further enhance its attractiveness in FY13 and beyond. As we roll our projections forward, our discounted cash flow to equity valuation increases to S$0.55 from S$0.49 previously. Maintain BUY. (Lim Siyi) MORE REPORTS Global Premium Hotels: Growing economy hotel supply The economy-tier segment of the Singapore hotel industry is seeing increasing levels of competition given the hotel room supply for this category is set to grow at 7.2% p.a. over 2012-2014, faster than the other three hotel tiers. Among the economy-tier hotels, Fragrance hotels under Global Premium Hotels (GPH) should perform relatively well, given GPH's operational experience and market share. We have a cautious outlook for the near-term performance of the Singapore hospitality sector as a whole in 1Q13, but remain optimistic for the longer term. We maintain our fair value of S$0.29 (using a 10% discount to RNAV) and BUYrating on GPH. GPH intends to distribute at least 80% of net profit after tax for FY12; we estimate an attractive FY12F dividend yield of 5.7%. (Sarah Ong) Marco Polo Marine: Starts book building process for BBR listing Marco Polo Marine (MPM) announced this morning that its 49%-owned associate, PT Pelayaran Nasional Bina Buana Raya Tbk (BBR), has obtained the pre-effective letter of BBR's IPO registration statement from the capital market supervisory agency, Bapepam-LK. This letter instructs BBR to publish its abridged prospectus and start the book building for the IPO. As mentioned in our earlier report (28 Nov 2012), we think there is a possibility of BBR listing on the Jakarta Stock Exchange in the coming months. As BBR's offshore vessel fleet grows, it may be able to brand itself as an entity for investors to gain exposure to Indonesia's offshore sector. There are currently relatively few of such companies listed in Indonesia. Maintain BUY with S$0.56 fair value estimate. (Low Pei Han) Wilmar: Two fined for insider trading The Monetary Authority of Singapore (MAS) has fined two executives from Wilmar for insider trading where both men were involved in the company's due diligence exercise on Kencana Agri's plantations. Goh Ing Sing - Head of the company's Plantation Division and Keu Haw Gee - Plantation Director for Kalimantan and Sumatra were fined S$110k and S$50k respectively. Wilmar said it takes a serious view of the matter and regrets that it has happened. However, it has decided to retain the services of both men in their respective present capacities, noting that both of them are based in Indonesia and the scope of responsibilities lies in the daily operations of the company's plantations. Nevertheless, Wilmar said it will review, reinforce and strengthen the company's internal controls relating to the handling of non-public material information. The news is likely to have some negative knee-jerk reaction on the company's share price, but we do not expect it to have any lasting impact. Maintain BUY with S$3.52 fair value. (Carey Wong)

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

NEWS HEADLINES - US stocks ended lower on Tue, as politicians traded more barbs and proposals to avoid the fiscal cliff but made little progress. The Dow fell 0.1%, while the S&P 500 Index and Nasdaq each ended 0.2% lower. - Singapore's manufacturing activity shrank in Nov for a fifth straight month, with the PMI coming in at 48.8, but up slightly from Oct's 48.3. - Cambridge Industrial Trust plans to buy an industrial property at Jurong Port Road for S$43m. The current owner HG Metal Manufacturing has agreed to lease back the property for seven years. - Sapphire Corp has agreed to sell three plots of vacant land in Malacca for a total of MYR14.2m, as part of its strategy to liquidate its non-core assets. The proceeds from the sale will be used for the group's working capital. - Novo Group expects a loss for the six months ended 31 Oct, mainly due to the decline in its trading business caused by fluctuating raw material prices, stagnating global market conditions and the heightened economic uncertainty.

MARKET PULSE: Venture, GPH, Noble, UOL, City Dev, Wilmar, Valuetronics (9 Nov 2012)

Stock Name: Venture
Company Name: VENTURE CORPORATION LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 9.22

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

Research House: OCBC

Price Call: BUY

Target Price: 0.29

Stock Name: Noble Grp
Company Name: NOBLE GROUP LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 1.28

Stock Name: UOL
Company Name: UOL GROUP LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 5.48

Stock Name: CITYDEV
Company Name: CITY DEVELOPMENTS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 13.10

Stock Name: Wilmar
Company Name: WILMAR INTERNATIONAL LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 3.06

Stock Name: Valuetronics
Company Name: VALUETRONICS HOLDINGS LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.21

MARKET PULSE: Venture, GPH, Noble, UOL, City Dev, Wilmar, Valuetronics

9 Nov 2012

KEY IDEA Venture Corp: Look beyond the short-term Venture Corp (VMS) reported a 8.1% YoY decline in its 3Q12 PATMI to S$32.6m despite revenue increasing 4.3% to S$608.9m. Topline was within our expectations, although bottomline missed due to weaker-than-expected margins. For 9M12, revenue of S$1,795.0m (-0.3%) and PATMI of S$101.7m (-14.2%) formed 72.7% and 67.7% of our FY12 estimates, respectively. The general sentiment among VMS's customers remains weak in the near-term, but we believe that its product pipeline from both new and existing customers would yield more meaningful contribution in FY13. While we pare our FY12 revenue and PATMI estimates by 1.6% and 9.1%, respectively, we leave our FY13 forecasts intact. We opine that investors should position themselves for the expected recovery in VMS's business in FY13, and hence roll forward our valuations to 15x FY13F EPS. This raises our fair value estimate from S$8.72 to S$9.22. Coupled with an attractive FY12F dividend yield of 7.1%, we maintain our BUY rating. (Wong Teck Ching Andy) MORE REPORTS Global Premium Hotels: Maintain FV of S$0.29 Global Premium Hotels (GPH) registered 3Q12 results that were below our expectations. 3Q12 revenue increased by 8.1% YoY to S$14.9m. EBITDA margin fell 6.6 ppt to 59.8% (excluding one-off expenses of S$0.5m for 3Q12). 9M12 EPS of 1.34 S cents equaled 72% of our prior FY12F estimate of 1.87 S cents, which we now lower to 1.75 S cents. GPH has begun construction of its new mid-tier Parc Sovereign Hotel located at Tyrwhitt Road in Aug 2012. An independent valuer has estimated a gross development value S$150m, implying a potential fair value gain of S$42m. We have incorporated the Tyrwhitt site development into our RNAV model. We maintain our fair value of S$0.29 (using a 10% discount to RNAV) and a BUY rating. GPH intends to distribute at least 80% of net profit after tax for FY12; we estimate an attractive FY12F dividend yield of 5.8%. (Sarah Ong) Noble Group Ltd: Downgrade to HOLD Noble Group (Noble) reported 3Q12 revenue of US$22.7b, though up 9% YoY, it was down 6% QoQ. Net profit came in at US$75.2m; while it had reversed a net loss of US$17.5m a year ago, it missed the street's US$155m forecast. For 9M12, revenue grew 15% to US$69.8b, meeting 75% of our FY12 forecast, while net profit climbed 17% to US$380.1m, or 68% of our full-year number. Estimated core earnings (without disposal gains) of US$282.9m formed just 50% of our forecast. We expect Noble to see a negative knee-jerk reaction to its lower-than-expected earnings (we have also cut our FY12 and FY13 forecasts to incorporate still-weak margins). We also downgrade our call to HOLD, given that the stock has risen some 21% since our upgrade on 14 Aug. But we believe Noble should start looking towards a reasonable recovery next year; and we have moved our valuation to FY13 with a higher 12x (versus 10.5x blended previously) peg, which keeps our fair value unchanged at S$1.28. (Carey Wong) UOL Group: 3Q12 earnings - no surprises UOL reported 3Q12 PATMI of S$87.8m, down 13% YoY mostly due to lower development profits and renovation works at Pan Pacific Singapore. We judge this set of results to be mostly within expectations and, excluding fair value and other gains, adjusted 9M12 PATMI cumulates to S$258.2m which makes up 74% of our annual FY12 forecast. This being so, we see the market likely taking a neutral view on 3Q numbers. We expect new residential launches at Bright Hill and St. Patrick Rd in 1H13, with Bright Hill likely to come first around Mar-Apr 2013. Management continues to execute well, and upcoming launches would be key catalysts for the share price over the mid-term. Maintain HOLD with a higher fair value estimate of S$5.48 (30% RNAV disc.), from S$5.26 previously mostly due to updated valuations of listed holdings. (Eli Lee) City Developments Limited: Top bid for Sengkang EC site City Developments Limited (CDL) put in the top bid of S$135m (S$296 psf) for an EC site at Sengkang West Way/Fernvale Link. The tender attracted a total of six bidders and CDL's bid was only 0.1% above the second highest bid. This site, with a total GFA of 455k sf, is located near Layar LRT station, Fernvale Point and the upcoming Seletar Mall, and the development is expected to consist ~380 units. We estimate breakeven and selling ASPs at S$S$600 psf and S$720 psf, respectively; the latter generally in line with price levels at comparable projects, such as Twin Waterfalls and Riverparc Residence, over the first three quarters of FY13. We expect this acquisition to accrete 1.5 S-cents to RNAV but leave our fair value estimate unchanged at S$13.10 (15% RNAV disc.) pending approval of this acquisition. Maintain BUY. (Eli Lee) Wilmar: Stronger 3Q12 showing Wilmar International Limited (WIL) reported a stronger set of 3Q12 results, with reported net profit jumping 26% YoY to US$405.8m, even though revenue slipped 6% to US$12.3b, aided by better performance at most key segments (except for Oilseeds & Grains and Plantations & Palm Oil Mills). Excluding non-operating items, net profit came in around US$388.0m, from US$451.4m a year ago. 9M12 revenue inched up 2% to US$33.8b, meeting 73% of our full-year estimate, while reported net profit fell 29% to US$778.7m; core net profit fell 41% to US$766.0m, but still met 80% of our FY12 estimate. While management maintains its positive long-term outlook, we note that near-term challenges remain. We will be speaking with management later to get further updates. Until then, we place our Hold rating and S$3.06 fair value under review.(Carey Wong) Valuetronics Holdings: 2QFY13 core earnings above expectations Valuetronics Holdings Limited (VHL) reported its 2QFY13 results this morning. Revenue from continued operations was flat YoY at HK$595.5m (+0.2%), or 11.6% below our forecast. Reported PATMI plunged -88.5% YoY to HK$3.3m as VHL incurred hefty termination expenditure and provision for impairment on property, plant and equipment (PPE) from its Licensing division (announced its decision to cease operations during its 1QFY13 announcement). Adjusting for this and other exceptional items, we estimate core PATMI of HK$31.5m, a 34.1% YoY increase, and this exceeded our HK$26.2m projection. With regards to its Licensing division, VHL said that it does not expect to incur further provision for termination expenditure and impairment losses for PPE. Looking ahead, challenging conditions in the manufacturing industry such as rising labour costs are expeced to continue and we expect this to place some pressure on VHL's margins. We will provide more details after the analyst briefing next week. We maintain our HOLD rating but place our S$0.21 fair value estimate under review.(Wong Teck Ching Andy)

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

NEWS HEADLINES - US stocks extended losses for a second day despite upbeat data showing that jobless claims fell last week, as investors fretted about the looming fiscal cliff and Europe's troubles. The Dow fell 0.9% to 12,811.32, while the S&P 500 Index slid 1.2% to 1,377.51 and the Nasdaq 1.4% lower at 2,895.58. - The ECB held its main interest rate at 0.75%. The euro zone's economy is weak and not improving, ECB president Mario Draghi warned. - Sim Lian Group's 1Q13 PATMI slumped 64% YoY to S$37.4m as revenue fell 28% to S$190m, mainly due to lower revenue contribution from two projects that obtained their TOP a year earlier. - GP Batteries' 2Q13 PATMI fell 88% YoY to S$0.3m as revenue slid 1% to S$200m, mainly due to lower sales in Europe. Its bottom line was also hurt by losses at associates and foreign exchange losses due to a weaker US$. - Food Junction Holdings' 3Q12 net loss attributable to shareholders widened to S$5.4m, from S$0.8m a year ago, as revenue declined 0.6% to S$13.9m, mainly due to permanent and temporary closures of some food courts.

MARKET PULSE: Global Premium Hotels, UE E&C, Dyna-Mac (24 Sep 2012)

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

Research House: OCBC

Price Call: BUY

Target Price: 0.29

Stock Name: UE E&C
Company Name: UE E&C LTD.

Research House: OCBC

Price Call: BUY

Target Price: 0.71

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

Research House: OCBC

Price Call: BUY

Target Price: 0.62

MARKET PULSE: Global Premium Hotels, UE E&C, Dyna-Mac

24 Sep 2012

KEY IDEA Global Premium Hotels: Dominant player with track record of growth Summary: Global Premium Hotels (GPH) develops, owns and operates Economy-tier and Mid-tier hotels, and is the second largest operator of Economy-tier hotels in Singapore. GPH currently operates 23 hotels in Singapore with a total of 1,738 rooms under the well-known "Fragrance" (Economy-tier - 22 hotels) and the "Parc Sovereign" brands (Mid-tier - 1 hotel). Out of the 23 hotels, 22 are wholly owned by the group, and 19 of them are on freehold land. From 2006 to 2011, GPH grew its portfolio of rooms by an impressive CAGR of 10.9% p.a. from 1,034 rooms to 1,738 rooms. GPH will continue its expansion with the development of a ~260-room Parc Sovereign hotel at the Tyrwhitt Road site which it has recently acquired from its parent, Fragrance Group. The hotel will expand the total room count under GPH's management by ~15% and based on third party valuers' and management's estimates, could potentially result in a S$42m accretion. We initiate with a BUY and a fair value of S$0.29. (Sarah Ong) MORE REPORTS UE E&C: Top bid for Prince Charles Crescent Summary: A consortium comprising Wing Tai's Wingstar Investment, Metro Australia Holdings and UE E&C's Maxdin put in a top bid of S$516.3m, or S$960 psf ppr, for a 99-year leasehold residential site at Prince Charles Crescent, beating the next closest bid by a mere 1.45%. Based on our estimates, the break-even price for the new development would be around S$1,450 psf ppr and the selling price S$1,650 psf ppr. We also expect UE E&C to provide construction services (worth an estimated S$150-200m) for the new development. We expect URA to announce the winning bid in the coming weeks. In the meantime, we are keeping our projections and S$0.71 fair value estimate unchanged. Maintain BUY. (Chia Jiunyang) Dyna-Mac: US$42m of fabrication orders Summary: Dyna-Mac Holdings has secured three fabrication orders worth a provisional sum of US$42m from SBM Offshore, Subsea 7 and Keppel Offshore and Marine. The orders were for the fabrication and assembly of topside modules, metering skids, subsea spools and other accessories. After deducting work done in the current quarter and new orders received from customers, we estimate Dyna-Mac's current order-book to be around S$200m and would last to 4Q12 or 1Q13. We currently have a BUYrating with S$0.62 fair value estimate. (Chia Jiunyang)

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NEWS HEADLINES - US stocks edged lower Friday, with the Dow registering its first weekly loss in three weeks after a late-afternoon selloff. The Dow fell 0.1% to 13,579.47. The S&P 500 Index slipped less than 0.1% to 1,460.15. - First REIT is to acquire an integrated hospital and hotel in Manado and a hospital in Makassar, Indonesia for a total of S$143m, which will raise its total asset size to S$782m. - Gul Technologies Singapore has received a formal proposal from Greenwich Pacific Pte. Ltd. seeking the voluntary delisting of the company from SGX-ST. - Perennial China Retail Trust has issued S$130.0m in principal amount of 6.375% fixed rate notes due 2015 under its S$500m Multicurrency MTN programme. - TA Corporation announced that ~90% of the units were snapped up at the preview of its latest development, Gambir Ridge.