OSPL - Good Morning S'pore - Central Dealing Desk

Stock Name: SembMar
Company Name: SEMBCORP MARINE LTD

Research House: DBS Vickers

Price Call: HOLD

Target Price: 4.80

Stock Name: Genting SP
Company Name: GENTING SINGAPORE PLC

Research House: Golman Sachs

Price Call: SELL

Target Price: 0.67

Stock Name: Kreuz
Company Name: KREUZ HOLDINGS LIMITED

Research House: OSK-DMG

Price Call: BUY

Target Price: 1.16

Market Compass

07 November 2013~ Good Morning Singapore!

Singapore Idea Snippets:

07 Nov 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 : Your success and happiness lies in you. Resolve to keep happy, and your joy and you shall form an invincible host against difficulties. - HELEN KELLER Singapore: The Day Ahead SINGAPORE DAYBOOK :F&N spat with Myanmar partner turning ugly. MEHL starts arbitration process, saying it has clear right to buy over F&N's 55% stake. [SINGAPORE] An ugly spat is unfolding between Fraser and Neave (F&N) and a Myanmar state-owned enterprise - at a time when Singapore companies are flocking to the emerging market that is just about to leave its pariah status behind for good. Myanma Economic Holdings Limited (MEHL), the joint venture partner of F&N in Myanmar Brewery, yesterday said that it had a "clear right" to buy out the Singapore conglomerate's stake in the beer-making business - which it values at US$246 million - adding that the deal is not political in nature. The Myanmar military-linked investment firm, which holds 45 per cent of Myanmar Brewery, has commenced arbitration proceedings to claim F&N's 55 per cent stake in the brewery, the company said in a statement yesterday. F&N has described MEHL's arbitration claims as having no basis, and added that MEHL was also significantly undervaluing the asset. F&N said that it has engaged lawyers and "intends to vigorously resist the claim". (Source: The Business Times) MARKET SCOOP Singapore fund to sell US$350m of Glencore convertible bonds STATS ChipPac's 3Q revenue down 1.8% BreadTalk's Q3 profit flat; revenue up 22% CWT's net profit drops 53 per cent in Q3 to $19.2m SingTel to launch new mobile game portal, WePlay S'pore to become global insurance hub by 2020: MAS Aussino to raise US$30m in convertible notes (Source: The Business Times) DBS VICKERS Securities says ... SEMBCORP MARINE | HOLD | TP: S$4.80 Excluding S$1m disposal gain, recurring net earnings grew 11% y-o-y and 19% q-o-q to S$128.6m in 3Q13 Sales jumped 86% y-o-y and 48% q-o-q to S$1.66bn, with initial contributions from 5 new rigs Operating margins fell further to 10.0% from 11.8% in 2Q13 and 13.7% in 1Q13, the lowest since 2Q09 Associates income dived 67% to only S$4.2m due to weaker contributions from Cosco Shipyard Group. 9M13 earnings account for just 66% and 63% of our previous forecast and consensus' FY13 estimates, respectively Order book declined by 6%(S$0.9bn) to S$13.5bn during the quarter YTD, SMM has secured new projects worth S$3.9bn, or 79% of our new order wins assumption of S$5bn, and is on track to meet our expectations Construction of the first drillship for Petrobras is ahead of schedule with 48% completed, and is planned to be towed to Brazil in Mar 2014 The second drillship is expected to commence initial recognition of revenue in 1Q14 The construction of SMM's yard in Brazil is also on schedule YTD, global jack up orders amounted to 51 units, higher than the 19 units ordered in 2012 and 43 units in 2011 Jack up enquiries from the Gulf of Mexico remain buoyant, and FPSO demand should recover in the near future The robust sector fundamentals are underpinned by upbeat E&P capex and replacement demand for the aged fleet (c.60% of jack up and semi-submersible fleet > 25 years old) as oil prices stay above US$90/bbl We have trimmed FY13E/14F net earnings by 7% as we have assumed lower EBIT margins of 11.8%/12.1% vs 12.0%/12.4% previously and lower assoc income from Cosco As we roll over our SOTP valuation to FY14F earnings, TP increases marginally from S$4.70 to S$4.80 Maintain HOLD We believe margin recovery and strong order wins are required for the stock to re-rate GOLDMAN SACHS says ... GENTING SINGAPORE | SELL | TP: S$0.67 3Q13 headline net profit came in at S$4mn (-84% yoy; -65% qoq). 9M13 net profit of S$26mn (-68% yoy) was only 47%/42% of FY13E GSe/Bloomberg consensus The miss was due to lower-than-expected 3Q13 GM of 7.4% (1H13: 10.7%; GSe: 11.0%) because of a sizeable S$52mn write off, which we suspect was largely driven by project cost overruns COS did not provide any details on provisions We believe they likely came primarily from COS's offshore order book, which we think may contain too many non-repeat and first time (i.e. low margin and risky) orders COS said it does not rule out the possibility that it could take more provisions We note that on its recently cancelled drillship order from Dalian Deepwater (due to severe delivery delays), it has thus far received only 22% of the total payment That said, according to COS, there are some interested parties enquiring about the drillship with whom COS hopes to close a deal and consequently recoup the remaining outstanding payments The weak 3Q13 net profit was compounded by continued increase in leverage (net D/E rose further to 103% vs. 1H13 of 87%) and negative operating cash flow due to rising working capital needs (as a result of current orders having unfavorable payment terms) COS expects to secure more jackup orders, but is cautious on the commercial shipbuilding market despite the recent Baltic Dry Index rebound, as it is unconvinced of a sustainable recovery given still significant vessel oversupply in the market Maintain Sell We cut 2013/14/15E EPS 20%/4%/3%% mainly to factor in higher provisions Reflecting this, we lower our 12-m FY14E EV/GCI-CROCI/WACCbased TP to S$0.67 (S$0.70 prior) Risks: Stronger-than-expected recovery in macro conditions; stronger-than-expected execution in new products OSK DMG Securities says... KREUZ HOLDINGS LTD | BUY | TP: S$1.16 Kreuz is the subject of a takeover offer by private equity fund SEA9 Pte Ltd at a price of SGD0.80 per share Unusually, the method of acquisition is by scheme of arrangement, which aims to bypass a general offer We believe that the offer price undervalues Kreuz, given its long-term growth potential Our recommendation to shareholders is DO NOT ACCEPT, reiterating our SGD1.16 TP and DCF-value of SGD2.25 per share 31% discount to TP, 64% discount to DCF-value The offer price values Kreuz at a mere 7.4x FY13F P/E, resulting from the interplay between a weak seller and a strong buyer The offer price implies a 31% discount from our 12-month TP, and a 64% discount from our DCF-value of the company at SGD2.25 per share, based on a 10.6% WACC Factoring in the growth from the diving support vessels (DSVs) sector, we believe that Kreuz' earnings can grow to USD69.4m in FY15F and USD92.2m in FY16F from USD39.7m in FY12 At those earnings, its shares will be worth SGD2.07-2.61 at the same 10x P/E. SEA9 stands to achieve a 226% return in three years by taking Kreuz private now and potentially re-listing it later at an even higher multiple than at takeover Swiber (SWIB SP, NR) will recognise a USD90.6m gain upon deal completion However, we note that Kreuz accounted for 22-202% of the former's earnings in the last six quarters, and 50% overall for FY12 Swiber is selling its crown jewel for a one-time gain at the expense of future growth and profitability In this case, the combined stakes of Swiber's and Kreuz' directors already stands at 73.69%, almost at the requisite 75% to achieve "shareholder approval" The scheme of arrangement will then be brought to court, which can then sanction a compulsory acquisition of minority shareholders' stakes In this case, the minorities have little chance against the Goliath of the majority, and we expect the deal to go through We do, however, stand by our valuations and recommend that investors DO NOT ACCEPT

OSPL - Good Morning S'pore - Central Dealing Desk

Stock Name: Genting SP
Company Name: GENTING SINGAPORE PLC

Research House: DBS Vickers

Price Call: HOLD

Target Price: 1.64

Stock Name: Genting SP
Company Name: GENTING SINGAPORE PLC

Research House: UOB KayHian

Price Call: HOLD

Target Price: 1.42

Stock Name: Genting SP
Company Name: GENTING SINGAPORE PLC

Research House: OCBC

Price Call: HOLD

Target Price: 1.47

Market Compass

06 November 2013~ Good Morning Singapore!

Singapore Idea Snippets:

06 Nov 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 : All action results from thought, so it is thoughts that matter. - SAI BABA Singapore: The Day Ahead SINGAPORE DAYBOOK :Temasek appoints Wing Tai head as deputy chairman [SINGAPORE] Wing Tai Holdings chief Cheng Wai Keung, 63, has been appointed deputy chairman of Singapore investment firm Temasek Holdings. The well-known property developer and businessman's new appointment at Temasek took effect on Monday. He has been a non-executive director on Temasek's board since September 2011, and is also a member of its executive committee. Mr Cheng's appointment comes some three months after Temasek appointed Lim Boon Heng its new chairman. Mr Lim took over from S Dhanabalan, who had served as Temasek's chairman for 17 years. Mr Dhanabalan said then that a new chairman does not mean a change in direction for Temasek as "the chairman together with the board and management determine which direction to take". (Source: The Business Times) MARKET SCOOP BBR cautious despite Q3 profit jump Oct PMI rises, points to pick-up in S'pore manufacturing Swiber Holdings plans to sell Kreuz stake for US$206m Chip Eng Seng Q3 net profit down 10% to S$27.2m Singapore's COSCO Corp Q3 net profit falls 61% Singapore's Sembcorp Marine Q3 net profit rises 12.3% on year SATS Q2 profit down 3.2% to S$48.7m UOB Q3 net profit up 3.3% PCRT's Q3 DPU dips to 0.95 cents (Source: The Business Times) DBS VICKERS Securities says ... GENTING SINGAPORE | HOLD | TP: S$1.64 3Q13 EBITDA came in at S$347m (+15% y-o-y, +12% q-o-q), bringing 9M13 EBITDA to 71% and 75% of consensus and our estimates respectively After 2 quarters of unfavourable luck factor, VIP win rate rebounded to 2.9-3.0% (2Q13: 2.5%; 3Q12: 2.8%) Similar to MBS, rolling chip continued to see strong growth (+58% y-o-y, +19% q-o-q) across the board This helped to cushion impact from lower mass volume (tables: -10% y-o-y/q-o-q; slots: -5% y-o-y, -9% q-o-q) If not for the higher property tax (due to one-off prior year adjustment) and impairment losses (5% of receivables vs 2Q13's 3%, largely expected given strong VIP volume growth), EBITDA margin would have improved 3.4ppts y-o-y, 4.2ppts q-o-q to 53.6% Western Zone continues to ramp up, with visitor arrivals still rising (non-gaming +27% y-o-y, 7% q-o-q to constitute 22% of revenue) RWS' overall GGR market share improved by 3ppts to 51%, driven by an improvement in the VIP segment to 54% (based on rolling chip), making up for the slide in the mass segment to 44% VIP is increasingly contributing a bigger chunk of RWS' GGR (60% vs 2Q13: 53%; 3Q12: 50%) Management turning less cautious as market uncertainty reduces with US QE tapering put on hold and global recovery on track Nevertheless, we would watch the mass segment closely given lower local visitors and slower tourist arrivals growth, along with rising cost pressures from restrictions on foreign labour Limited clarity on new venture, which could take another 12 months to materialise (potential M&A in Asia with minimum 12% IRR target) As for Japan, gaming liberalisation may be delayed to 1Q14 from end-2013 although the gaming bill will likely be introduced at the current diet session Japan could emulate Singapore by introducing an entry fee for locals We see GENS and Las Vegas Sands as front-runners given their strong IR track record Maintain Hold, but raise TP to S$1.64(from S$1.42) based on regional sector average of 13x FY14F EV/EBITDA For gaming exposure, we prefer stocks leveraged to Macau and Philippines (Sands China, SJM, Travellers) given stronger growth potential UOB KAY HIAN says ... GENTING SINGAPORE | HOLD | TP: S$1.42 9M13 EBITDA of S$907.9m contributed 73% of our full-year forecast, in line with our expectations, as we expect a stronger 4Q due to seasonality factor GENS's win percentage improved to slightly above the theoretical win percentage of 2.85% in 3Q13 (2Q13:2.5%, 1Q13: 2.1%), contributing largely to the upswing in EBITDA margin to 44.7% from 43.9% in 2Q13 However, the margin gains were slightly offset by lower contribution from the lucrative mass-marke 3Q13 rolling chip volume (RCV) grew to an estimated S$20.2b (+15% qoq, +58% yoy), with GENS's RCV market share standing at 54%, gaining RCV market leadership for the first time since 2Q11 While management did not elaborate on the growth factors, our channel check suggests the strong RCV growth was partly attributed to a baccarat tournament held during the quarter In the conference call, management sounded upbeat on sustaining a modest to moderate the RCV growth trend Worryingly, the mass segment defied previous flattish growth trends, contracting 10% qoq and 10% yoy in 3Q13 Looking ahead, we expect this segment to improve in 4Q13 due to year-end school holidays across the region Impairment-to-receivables rose to 4.9% in 3Q13 (2Q13: 3.5%) as management adopted a more prudent recognition stance While receivables continued to rise in tandem with RCV growth, management has made cumulative provisions amounting to about 38% of total receivables as of 3Q13 Management shared its optimism on Japan's gaming bill to be tabled in the upcoming Diet session in two weeks' time, and expects the gaming bill to be passed in 1H14 If successful, we expect the first Japan casino to open in 2020 at the earliest, given the lengthy legislation and construction process involved We gauge that recently, GENS is more sanguine in engaging meaningful M&A activities We note that management has been actively scouting for sizeable M&A opportunities within Asia, especially after raising S$2.3b through perpetual securities in 2012 Maintain HOLD and target price of S$1.42,based on 12x 2014F EV/EBITDA We think GENS is fairly valued with share price having rallied 18% from its Aug13 low as investors gradually priced in an 'option value' for potential greenfield and M&A opportunities Entry price is S$1.30 Prefer Genting Bhd (GENT/Target: RM12.74, or 8.5x 2014F EBITDA) within the Genting group of companies as it is a major laggard following the regional gaming sector's re-rating Moreover, GENT offers a complete exposure to any greenfield and M&A opportunities within the Genting group OCBC Securities says... GENTING SINGAPORE | HOLD | TP: S$1.47 Genting Singapore (GS) reported its 3Q13 results last evening, with revenue climbing 16% YoY and 10% QoQ to S$776.8m, while adjusted EBITDA gained 15% YoY (+12% QoQ) to S$347.4m, as both gaming (saw higher volume in the premium player segment) and nongaming (daily visitation exceeded 18k) segments performed better As a result, net profit jumped 75% YoY and 38% QoQ to S$193.0m, versus our S$190m forecast 9M13 revenue inched 1% lower to S$2154.4m, meeting 73% of our full-year forecast, while net profit also slipped 1% to S$449.1m, or 80% of our FY13 estimate Looking ahead, management has turned slightly more positive, as compared to the previous quarter, after seeing a better spread of VIP customers coming from SE Asia and not just China; although it notes that the global economic environment is still relatively unpredictable Building on its track record (RWS has again been named the best IR for the 3rd consecutive year at the 23rd Annual TTG Travel Awards), GS says it is seriously pursuing opportunities in the gaming, leisure/entertainment and hospitality sectors in the region Management believes that it could have something to announce within the next 12 months Meanwhile, GS is also watching the developments in Japan closely and it expects the legislative passage of the IR Executive Law in early 2014 With margins expected to stabilize from here as more of its nongaming operations enter into steady state, we bump up our FY13 and 14 earnings forecasts by 2.5% while leaving our revenue numbers unchanged Our DCF-based fair value also inches up from S$1.41 to S$1.47 But given the limited upside from here, especially after the pre-results run-up, we maintain our HOLD rating We would be buyers closer to S$1.40

SG: MARKET PULSE: Genting Singapore, ART (5 Nov 2013)

Stock Name: Genting SP
Company Name: GENTING SINGAPORE PLC

Research House: OCBC

Price Call: HOLD

Target Price: 1.47

Stock Name: AscottREIT
Company Name: ASCOTT RESIDENCE TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.39

MARKET PULSE: Genting Singapore, ART

5 Nov 2013

KEY IDEA Genting Singapore: 3Q13 as expected; but limited upside Genting Singapore (GS) reported 3Q13 earnings (attributable to shareholders) of S$193.0m, versus our S$190m forecast, as both gaming and non-gaming segments performed better. Going forward, management has turned slightly more positive, as compared to the previous quarter, after seeing a better spread of VIP customers coming from SE Asia and not just China. It is also seriously exploring gaming and non-gaming opportunities in the region; and expects to announce something in the next 12 months. In line with the continued margin improvement, we up our DCF-based fair value from S$1.41 to S$1.47. But given the limited upside, we maintain our HOLD rating and would be buyers closer to S$1.40. (Carey Wong) MORE REPORTS Ascott Residence Trust: S$253.7m underwritten rights issue ART has launched an underwritten renounceable rights issue to raise approximately S$253.7m. Existing unitholders can subscribe for one right unit at S$1 each for every existing five units held. This represents a discount of approximately 22.5% to the closing price of S$1.29 per unit as at 4 Nov. The Ascott Limited, which owns 45.3% of ART, has undertaken to subscribe in full its allotment of rights units. Those who do not wish to subscribe for the rights units may sell their rights entitlements during the nil-paid rights trading period. Approximately S$204.9m (or 80.8% of the gross proceeds) will be used to pay down debt (bringing gearing from 41.1% to ~35%) and S$45.0m (17.7% of gross proceeds) will be used for capex and AEI, etc. Management has indicated that the chief motivation of the rights issue is to ensure financial flexibility, particularly for potential acquisitions in Asia that it hopes to close in 1H14. Management is comfortable bringing gearing back up to low 40s in percentage terms. We maintain our BUY rating on ART and FV of S$1.39 (pre-rights FV; ex-rights FV of S$1.325 from 12 Nov). (Sarah Ong)

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

NEWS HEADLINES - US stocks settled with modest gains on Mon as investors took a cue from upbeat earnings and shook off fears the market is overdue for a correction. - Fraser and Neave will not enforce a non-compete agreement that would have banned Heineken International from selling soft drinks in Singapore until Nov 2014. - Yongmao Holdings reported a net profit of RMB14.9m (S$3m) for its 2QFY14, up 76.4% YoY. - Superbowl Holdings posted a 61.3% plunge in 3Q13 net profit to S$1.1m. - Progressive revenue recognition from three residential projects helped property group Hiap Hoe to more than double its 3Q13 net profit to S$33.3m. - Sky One Holdings posted a smaller 1H14 net loss as its old businesses suffer from weak demand. - Kreuz Holdings yesterday posted a 60.3% YoY surge in 3Q13 net profit to US$16.6m. - Viking Offshore & Marine has entered into separate strategic agreements with two co-founders of Labroy Marine in a move to venture into the mainstream offshore rig-building and rig charter market.

OSPL - Good Morning S'pore - Central Dealing Desk

Stock Name: Starhill Gbl
Company Name: STARHILL GLOBAL REIT

Research House: UOB KayHian

Price Call: BUY

Target Price: 0.93

Stock Name: Genting SP
Company Name: GENTING SINGAPORE PLC

Research House: Nomura

Price Call: HOLD

Target Price: 1.52

Stock Name: Yangzijiang
Company Name: YANGZIJIANG SHIPBLDG HLDGS LTD

Research House: DBS Vickers

Price Call: BUY

Target Price: 1.32

Market Compass

25 September 2013~ Good Morning Singapore!

Singapore Idea Snippets:

25 Sept 2013 ~ Good Morning Singapore! Central Execution Team - The Excellence of Execution This product is made available by your Central Execution Team, for you as TRs of OCBC Securities to help you with your business and therefore it is confidential and only for internal circulation. It is not intended for onward circulation to non-OSPL TRs, clients or any other third party in this or any other version. Neither is this intended to be relied upon as a sole basis for any recommendation. TRs must also consider their clients' investment objectives, financial position and needs when intending to make or making any recommendation. For the front desk, by the front desk. All feedback to make this a better product is welcome. Global Flash: While You Were Sleeping Source: Marketwatch Quote for the day : The iPod completely changed the way people approach music. - KARL LAGERFELD Singapore: The Day Ahead SINGAPORE DAYBOOK :Reit flotations shore up Q3 property investment sales. Third-quarter tally of more than $13b highest since Q3 2007 [SINGAPORE] Property investment sales - which refer to big-ticket transactions of at least $10 million - have crossed $13 billion this quarter, roughly double the previous quarter and the strongest showing since Q3 2007. This quarter's figure has been buoyed by three real estate investment trust flotations (involving nearly $5.7 billion in asset sales), two government land sale sites (at Telok Ayer Street and in Yishun totalling $2.35 billion to Frasers Centrepoint) and the $1.16 billion sale of Grand Park Orchard hotel (including Knightsbridge mall) to Bright Ruby Resources, controlled by a Du family from China. Industry observers are not counting on a repeat performance next quarter. Figures from Savills Singapore show that investment sales have risen to $13.4 billion from $6.4 billion in Q2 and $8.7 billion in Q3 last year. (Source: The Business Times) MARKET SCOOP Geo Energy units ink mining related deals Ley Choon bags 4 contracts worth S$30.6m this month Singapore casinos trump Macau with tourism aces Singapore industrial output seen edging up in Aug: poll Smaller pre-school operators to receive S$40m boost over 5 years NTU, 360ip launch S$5.6m centre to promote SME growth in S'pore (Source: The Business Times) UOB KAY HIAN says... STARHILL GLOBAL REIT | BUY | TP: S$0.93 Upgrade to BUY (from HOLD) with a marginally higher target price of S$0.93 (from S$0.92) Starhill is offering the highest yieldsfor a Singapore-centric retail REIT with a forward yield of 6.4%, which is 40-100bp above comparable retail S-REITs and is 60bp above the sector average yield of 5.8% P/B for Starhill is also the lowest amongst its retail S-REIT peers at 0.89, 20bp below the sector average of 1.09 Locking in long-term financing following the drawdown of S$422m 3-year and 5-year loans and ¥700b (S$88m) 3-year loans All-in-cost of debt for the new loans is a favourable 2.4%, compared with an average interest rate of 3.03% as at 2Q13 Following the refinancing, Starhill Global REIT (Starhill) will not have any refinancing requirements until 2015 Building sustainability for the long termas although the new loans will only result in marginal cost savings, due to the lower proportion of yen-denominated loans (11% of outstanding loans from 19%), the refinancing enables Starhill to extend its debt maturity (3.5 years from 1.2 years in 2Q13) and lock in the current low financing costs In addition, Starhill has also fixed or hedged 94% of its debt via interest rate swaps and caps, limiting cost upside The new loans are also unsecured, enabling Starhill to raise the proportion of unencumbered assets to 79% from 42% This, coupled with the credit rating upgrade by Standard and Poor's (to BBB+), will mitigate the impact of rising interest rates on Starhill's distributions NOMURA Securities says ... GENTING SINGAPORE | NEUTRAL | TP: S$1.52 Action: Upgrade to Neutral; Street expectations more realistic Following a 40% cut in street FY13F EBITDA estimates since 2012, we feel that our revised FY13/14F EBITDA estimates of S$1.26bn/1.4bn are a much more realistic assessment of Singapore's baseline gaming revenue potential, taking into account a volatile win % and seasonal fluctuations With Singapore tourist arrivals moderating to single digits (YTD arrivals up 8% y-y), and this being reflected in Sentosa traffic, we forecast a mid-high single digit growth in RWS's top-line We argue that our and consensus earnings have limited downside risks now, and this should support the share price at current levels We tweak our FY13F/14F EBITDA estimates by -7%/+5% to build in a weak performance in 1Q13F due to a lower win rate However, we now value GENS at mid-cycle, as we no longer see a reason for it to trade at a discount given limited earnings downside We raise GENS to Neutral, with a TP of S$1.52/share (5% upside) Valuation: Target 12.5x adj FY14F EV/EBITDA, historical average Following a transfer of coverage, we ascribe a 12.5x adj multiple to FY14F EBITDA to value GENS, which is its historical average This implies a 25% discount to Macau-listed names' average multiple Macau stocks have seen a re-rating driven by mass market volumes, which are unlikely to occur in Singapore, and are additionally supported by better yields, RoE Catalysts: Upside possible through overseas ventures (eg Japan) With Singapore's market maturing, upside in GENS's earnings is possible either through a sharp upswing in VIP volumes / win rate (difficult to forecast) or a deployment of its huge cash balance in overseas ventures, like Japan, where there are uncertainties on timing and competition DBS Securities says... YANGZIJIANG SHIPBUILDING | BUY | TP: S$1.32 Yangzijiang is hosting a yard visit on 25 Sept in conjunction with the launching ceremony of its first 10k TEU containership Launching is the most important stage of construction, marking the birth of a new ship All the blocks are mounted and joined, and the vessel should be ready to "float" at this stage The on-track construction progress of Yangzijiang's first large containership is a confidence booster The first batch of seven 10k TEU containership orders will likely yield better gross margins of 15-20% vs earlier expectation of low teens, in the light of favourable steel cost and forex as well as smooth execution As such, we are lifting FY14F shipbuilding gross margins by 2ppts to 18% We are also raising order win assumption for FY14 to US$2.5bn (from US$2bn), on the back of active shipbuilding enquiries and the sizeable US$2.87bn worth of options that could be exercised in the coming quarters Taking these into account, our FY14F net profit is raised by 6.3% to Rmb2.2 bn We have also introduced FY15 earnings and have incorporated property income from FY15 We have changed our valuation methodology from price to book, to SOTP, to better reflect valuation for the various segments of shipbuilding, investment and property While some investors have concerns regarding Yangzijiang's investment segment, it is a supplementary business for Yangzijiang and its weighting should fall as the shipbuilding segment recovers Bad debts have been minimal with proper evaluation processes and risk management procedures in place As one of the most cost efficient yards in China, Yangzijiang is the best proxy to the shipbuilding recovery

OSPL - Good Morning S'pore - Central Dealing Desk

Stock Name: Genting SP
Company Name: GENTING SINGAPORE PLC

Research House: Credit Suisse

Price Call: BUY

Target Price: 1.75

Stock Name: EzionHldg
Company Name: EZION HOLDINGS LIMITED

Research House: UOB KayHian

Price Call: BUY

Target Price: 2.85

Stock Name: Silverlake
Company Name: SILVERLAKE AXIS LTD

Research House: OSK-DMG

Price Call: BUY

Target Price: 0.82

Market Compass

28 August 2013~ Good Morning Singapore!

Singapore Idea Snippets:

28 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 : The only means of strengthening one's intellect is to make up one's mind about nothing, to let the mind be a thoroughfare for all thoughts. - JOHN KEATS Singapore: The Day Ahead SINGAPORE DAYBOOK : F&N exits buildings, keeps drinks in hand. Frasers Centrepoint to be spun off into listed entity via in specie distribution of stock [SINGAPORE] Fraser and Neave (F&N) plans to spin off its property business into a new listed entity via an in specie distribution of stock, taking its largest step yet towards breaking up one of Singapore's most storied conglomerates. F&N said yesterday that it will distribute, for free, two shares of Frasers Centrepoint Ltd (FCL) for every one F&N share held. After unwinding intercompany loans, FCL will then be listed by introduction, targeted for November or December. Following the exercise, F&N will no longer hold any shares in FCL, and its remaining key businesses will be food and beverage (F&B), and printing and publishing. (Source: The Business Times) MARKET SCOOP CAO leases first fuel oil storage space in Singapore Yale opens controversial college in Singapore New flat-type for multi-generation families launched Income ceiling for housing grant raised to $6,500 S'pore PR to wait 3 years to buy HDB resale flat Maximum tenure for HDB housing loans cut to 25 years Business receipts of services sector up 7.7% in Q2 (Source: The Business Times) CREDIT SUISSE Securities says... GENTING SINGAPORE | OUTPERFORM | TP: S$1.75 We continue to rate GENS at OUTPERFORM, in anticipation of a 2H13 recovery in EBITDA (assuming VIP win rates normalise) Potential progress on gaming legislation in Japan could also be a wildcard catalyst The positives: Singapore has seen a strong rebound in VIP volumes YTD (+34% YoY) Both GENS and LVS have enjoyed new highs in quarterly rolling chip volumes At the same time, impairment levels have remained broadly stable, in the range of S$32-45mn per quarter in the past six quarters (compared to a high of S$57mn in 3Q11) Historical average EV/EBITDA valuations suggest 26% potential upside to GENS' stock price GENS is also trading at a 25% discount to the Macau average FY14E EV/EBITDA of 3x The market is sceptical about Japan but should there be progress on gaming legislation, we believe GENS' stock price could benefit. GENS' track record in Singapore and its strong balance sheet put it in a good position to compete in new markets, in our view Management is optimistic on an initial step in casino gaming legislation by year end The negatives: Whilst we expect the VIP win rate to recover in 2H13 and drive a meaningful half-on-half recovery in EBITDA, it is unlikely to make up for the shortfall from the exceptionally low rate in 1H13 As such, we have cut FY13E EBITDA to S$1.3 bn and rolled forward our TP to S$1.75 (from S$1.80) The authorities are considering tighter measures against civil service members who are frequent patrons of the casinos, potentially requiring disclosure on the frequency of visitations This followed an incident involving a civil service graft case whereby the money allegedly misappropriated was gambled away at a casino UOB KAY HIAN says ... EZION HOLDINGS | BUY | TP: S$2.85 We met up with management last week Ezion continues to be the only player in the liftboat market in Asia Its fleet of liftboats and service rigs has increased to 27 units from 17 a year ago Ytd, Ezion has won seven new charter contracts Given the high ROE of these projects, it is a surprise that thus far, competition to Ezion has still not emerged Management gave its rationale: Liftboats operating in Asia are niche assets as their designs have been modified from the original American designs For competition to emerge, Ezion's competitors would need to offer designs that are suitable for Asian waters For asset investors who are non-oil & gas specialists, they may not have adequate knowledge of Asian offshore oil & gas market - and hence the confidence - to invest in these niche assets A liftboat is usually used to facilitate the maintenance of a fixed offshore oil & gas production platform North America has a fleet of 250 liftboats servicing 3,257 fixed platforms, or a ratio of 13 platforms per liftboat The liftboat fleet in Southeast Asia (SEA), the Middle East and West Africa comprises only 62 units against a fixed platform market of 3,266 units, or a ratio of 53 platforms per liftboat Obviously, there is a large potential demand for liftboats in these markets Traditionally, these markets use work barges (together with other offshore support vessels) in fixed platform maintenance but they post higher safety risks than liftboats as they are less stable Despite the large potential demand, Ezion's management feels real demand still needs to be "created" by convincing Asian oil companies of liftboats' superior productivity With an expected lower demand for housing loans going forward (following the latest round of government measures on the Total Debt Service Ratio), banks are looking for alternative avenues of lending, including corporate lending Ezion continues to be courted by bankers and interest rates for new projects remain unchanged at 5% p.a We expect a sharp earnings ramp-up over 2013-15 with net profit more than trebling as more liftboats and service rigs commence operation Ezion's fleet comprises 28 liftboats and service rigs (excluding a liftboat sold in Mar 11) Twelve units have yet to commence operation Following its breakthroughs in Indonesia, Malaysia and Vietnam, we expect Ezion to announce more new charter contracts Ytd, it has clinched seven new contracts There are seven funding options available for new projects These include include: a) internally-generated cash flows, b) sale-and leaseback transactions, c) a higher debt level, and d) JVs While net gearing as of end-2Q13 was 101%, this is expected to fall rapidly to 69% and 46% by end-14 and end-15 respectively because of strong operating cash flows All projects that have been announced - including those that have not commenced operation - are fully funded We maintain our earnings forecasts Project execution remains the key risk Our target price of S$2.85 is pegged at 11x 2014F fully diluted EPS (adjusted for dividends on perpetual securities and preference shares) This is 15% above the long-term 1-year forward PE mean of 9.5x for the offshore support vessel-owner segment of the offshore & marine sector DMG OSK Securities says... SILVERLAKE AXIS | BUY | TP: S$0.82 In line with expectation, SILV reported stellar 4QFY13 results with PATAMI of MYR59.8m (+31.4% y-o-y) on the back of a MYR110.2m revenue (+14.6% y-o-y) With the final dividend of 1.1 cent, the stock is now trading at an attractive 4.1% yield with strong growth potential We put our forecasts and TP under review pending the company's analysts briefing Our most recent TP was SGD0.82 and maintain BUY Silverlake Axis (SILV)'s FY13 revenue came in flat y-o-y at MYR398.6m as a result of the decline in hardware sales (-80% y-o-y) as well as the fall in contribution of software project services (-44% y-o-y) We see no signs of concern as hardware sales hardly generated any profits during the year while the amount of software project related work performed through the year was low as most of the major projects - for CIMB Thailand, CIMB Singapore, Thanachart-Siam City Bank and Hong Leong EON Bank - were already close to the completion On the other hand, SILV saw strong revenue growth in software licensing (+89% y-o-y), healthy revenue increase in maintenance services (+18% y-o-y) as well as the fresh contribution from the group's newly acquired insurance software business The change of revenue mix as a result of major project completions resulted in a jump in software licensing revenue, which in turn drove up the margins and profitability Both the FY13 gross and net profit margins jumped by 9ppts to 63% and 49% respectively Yield at an attractive 4.1% In view of its record profitability and robust balance sheet, the group declared a final dividend of 1.1 cents/share, largely in line with our expectation The full-year FY13 dividend aggregate of 3.1 cents/share translates to an attractive yield of 4.1%, based on the stock's last closing price of SGD0.75

SG: MARKET PULSE: SCI, CityDev, Genting, Hyflux, StarHub, Wilmar, Ezion, YZJ, FEHT (7 Aug 2013)

Stock Name: Semb Corp
Company Name: SEMBCORP INDUSTRIES LTD

Research House: OCBC

Price Call: BUY

Target Price: 6.48

Stock Name: CITYDEV
Company Name: CITY DEVELOPMENTS LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 11.38

Stock Name: Genting SP
Company Name: GENTING SINGAPORE PLC

Research House: OCBC

Price Call: HOLD

Target Price: 1.41

Stock Name: Hyflux
Company Name: HYFLUX LTD

Research House: OCBC

Price Call: HOLD

Target Price: 1.215

Stock Name: StarHub
Company Name: STARHUB LTD

Research House: OCBC

Price Call: SELL

Target Price: 3.82

Stock Name: Wilmar
Company Name: WILMAR INTERNATIONAL LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 3.25

Stock Name: EzionHldg
Company Name: EZION HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 2.62

Stock Name: Yangzijiang
Company Name: YANGZIJIANG SHIPBLDG HLDGS LTD

Research House: OCBC

Price Call: HOLD

Target Price: 0.95

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

Research House: OCBC

Price Call: HOLD

Target Price: 1.01

MARKET PULSE: SCI, CityDev, Genting, Hyflux, StarHub, Wilmar, Ezion, YZJ, FEHT

7 Aug 2013

KEY IDEA Sembcorp Industries: Steady performance in utilities Sembcorp Industries (SCI) reported a 6.3% YoY fall in revenue to S$2.5b and a 13.3% decrease in net profit to S$165.4m in 2Q13, such that 1H13 figures accounted for about 45% of our full year estimates. There was slower order book drawdown in the marine division in the quarter as fewer projects achieved the initial recognition milestone, while 1H13 revenue from the utilities division accounted for about 47% of our full year estimate. As expected, Singapore power spreads were weaker in 1H13 compared to 1H12, but overseas utilities helped to bump up net profit in the quarter. Going forward, management expects the utilities business to deliver a "steady performance" in 2013 despite intensified competition in the Singapore market. Maintain BUY with S$6.48 fair value estimate. (Low Pei Han) MORE REPORTS City Developments Limited: A dimmer residential sales outlook CDL's 2Q13 PATMI increased 48% YoY to S$203.8m, mostly due to disposal gains from an industrial site at 100G Pasir Panjang. 1H13 PATMI now cumulates to S$341.5m which makes up 49% of our full year forecast. We judge this to be mostly in line with our expectations. In 2H13, CDL is expected to launch the 380-unit Lush Acres EC project and a mixed development at MacPherson/Upper Serangoon Rd (266 residential and 28 retail units). Due to recent property curbs, the group expects stronger headwinds and moderating transaction volumes and prices in 2H13. In addition, management indicates that a situation of residential oversupply could ensue in 2014. While navigating a more onerous risk-reward landscape ahead, we believe that CDL could take a more measured approach to land-banking over FY13-14. Maintain HOLD with a lower fair value estimate of S$11.38 (20% RNAV disc.), versus S$12.04 previously, mainly due to a higher discount to RNAV reflecting a dimmer residential sales outlook. (Eli Lee) Genting Singapore: Decent 2Q13 showing; but upside limited Genting Singapore (GS) reported a better-than-expected set of 2Q13 results, with adjusted EBITDA margin recovering back to 44% from 37.3% in 1Q13. 1H13 revenue met around 50% of our full-year forecast, while net profit was nearly 64% of our FY13 figure. Going forward, management still remains slightly cautious about the slower growth outlook for China; but notes that it has yet to see much impact on its Chinese customers. Given the slightly better-than-expected showing, we opt to raise our net profit forecasts for FY13 and FY14 by around 3.5% each; but this has little impact on our DCF-based fair value, which remains at S$1.41. Given the limited upside from here, we maintain HOLD. Longer-term catalyst could come from a potential IR license overseas in markets like Japan, which is still a 2015 or 2016 story. (Carey Wong) Hyflux: 1H13 tracking below forecast Hyflux Ltd reported that its 2Q13 revenue fell 24.6% YoY (but rebounded 11.1% QoQ) to S$138.4m, while net profit came in around S$17.7m, +3.0% YoY and 119.9% QoQ. 1H13 revenue of S$262.9m fell 17.6% and met about 36.0% of our full-year forecast. While net profit climbed 2.1% to S$25.2m, it only met 32.8% of FY13 estimate, and we were expecting it to cover about 40%. Hyflux declared an interim dividend of S$0.007/share, same as 1H12. While the company continues to show a relatively healthy order book of S$2731m, we believe that the outlook may still be muted, given the credit crunch situation in China. As such, we are lowering our FY13 estimates for revenue by 9.6% (FY14 by 11.1%) and earnings by 12.8% and 14.0% respectively. Our fair value correspondingly falls to S$1.215 (based on 20x blended FY13/FY14F EPS). We maintain our HOLD rating; but we do not rule out any near-term knee-jerk reaction. (Carey Wong) StarHub Ltd: Decent 2Q13 showing; but risks remain StarHub Ltd reported a decent set of 2Q13 results, with revenue down 0.7% YoY (+1.2% QoQ); net profit improved 15.9% YoY and 10.3% to S$100.6m. StarHub declared a quarterly S$0.05/share dividend as guided. For 1H13, revenue slipped 1.2% to S$1166.9m, or about 46.4% of our full-year forecast, while net profit climbed 9.5% to S$191.8m, meeting 53.2% of FY13 estimate. For 2013, StarHub has kept its previous guidance; it also does not expect the BPL cross-carriage to have a material financial impact. Despite the decent 2Q13 showing, we opt to keep our FY13 estimates, as potential margin pressures are likely to emerge in 2H. Maintain SELLon the stock with an unchanged DCF-based fair value of S$3.82. (Carey Wong) Wilmar: 1H13 results slightly below expectations Wilmar International Limited (WIL) posted its 2Q13 results last evening, with revenue easing 5.4% YoY (+2.2% QoQ) to US$10426.3m, on lower CPO prices (but was alleviated by volume growth in other segments). While net profit jumped 86.5% YoY to US$218.5m (mainly due to the loss in its Oilseeds & Grains segment in 2Q12), it was still down 30.7% QoQ, likely hit by lower crushing margins in the quarter. For 1H13, revenue slipped 4.0% to US$20626.8m, meeting 41.5% of our full-year forecast, while net profit climbed 43.1% to US$533.9m, or about 40.1% of our FY13 forecast. WIL declared an interim dividend of S$0.025/share, versus S$0.02 in 1H12. We will have more after the analyst briefing at noon. We maintain HOLD on the stock but place our S$3.25 fair value (based on 12.5x FY13F EPS) under review. (Carey Wong) Ezion Holdings: Operations remain strong Ezion Holdings (Ezion) reported a 80.9% YoY rise in revenue to S$67.2m and a 28.8% increase in net profit to S$36.2m in 2Q13, such that 1H13 net profit accounted for 55% of our full year estimates. Excluding a one-off disposal gain in 1Q13, core 1H13 net profit represented 49% of our full year estimates, in line with expectations. Gross profit margin remained strong at 46.3% in 2Q13 vs 45.9% in 2Q12 and 44.9% in 1Q13. Looking ahead, more assets are expected to be deployed, and there should be more contributions from the commencement of the APLNG and GLNG projects this year. Meanwhile, Ezion is proposing a bonus share issue of one bonus share for every five existing ordinary shares. Pending an analysts' briefing later in the morning, we maintain our BUY rating but put our fair value estimate of S$2.62 under review. (Low Pei Han) Yangzijiang Shipbuilding: Still a steady ship Yangzijiang Shipbuilding (YZJ) reported a 12% YoY rise in revenue to RMB4.4b and a 8% decrease in net profit to RMB811.7m in 2Q13, such that 1H13 net profit accounted for 54% of our full year estimates, within expectations. Gross margin in the shipbuilding related segment dropped from 24.2% in 2Q12 and 25.9% in 1Q13 to 20.6% in 2Q13, while gross margin in the group's investment division remained high. YZJ has secured 27 effective shipbuilding contracts worth US$1.01b in 1H13 with four other options converted into effective orders in Jul 2013. As growth in the shipbuilding industry remains slow, management is looking at its investments business to weather through challenging times. Pending an analysts' briefing later, we maintain our HOLD rating but put our fair value estimate of S$0.95 under review. (Low Pei Han) Far East Hospitality Trust: 2Q13 below expectations Far East Hospitality Trust (FEHT) has announced 2Q13 results which we judge to be below our expectations and the street's. Gross revenue for was S$29.3m or 7.9% lower than the IPO prospectus forecast. In addition, RevPAR for the hotels was S$168, 11% lower than the forecast of S$189. The serviced residences, however, generally performed in line with expectations, with RevPAU of S$230, versus S$228 in the forecast.As a result, we see net property income and income available for distribution coming at S$26.9m and S$23.2m, which are 6.8% and 4.1% below the IPO forecasts, respectively. 2Q13 distribution per stapled security was 1.43 S cents which we view to be below expectations. We place our FV of S$1.01 and Hold rating on FEHT UNDER REVIEW. We will be speaking with management later today. (Sarah Ong)

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

NEWS HEADLINES - US stocks extended losses into a second day Tue as Fed official Charles Evans said the economy should be able to shoulder reduced Fed asset purchases later this year. - Rotary Engineering posted a net profit increase to S$5.1m in 2Q13 from S$1.03m in 2Q12, with a 13% YoY increase in revenue to S$126.2 million. - The Hour Glass Ltd posted a net profit attributable to shareholders of S$8.8m for 1QFY13, down 6% YoY, on the back of higher operating expenses amid a more competitive marketplace. - Vallianz Holdings reported a 29% fall to US$1.89m in 2Q13 net profit attributable to shareholders.

OSPL - Good Morning S'pore - Central Dealing Desk

Stock Name: Genting SP
Company Name: GENTING SINGAPORE PLC

Research House: UOB KayHian

Price Call: SELL

Target Price: 1.17

Stock Name: MapletreeCom
Company Name: MAPLETREE COMMERCIAL TRUST

Research House: Credit Suisse

Price Call: BUY

Target Price: 1.45

Stock Name: Croesus RTr
Company Name: CROESUS RETAIL TRUST

Research House: DBS Vickers

Price Call: BUY

Target Price: 1.14

Market Compass

01 July 2013~ Good Morning Singapore!

Singapore Idea Snippets:

01 July 2013~ Good Morning Singapore! Central Execution Team - The Excellence of Execution This product is made available by your Central Execution Team, for you as TRs of OCBC Securities to help you with your business and therefore it is confidential and only for internal circulation. It is not intended for onward circulation to non-OSPL TRs, clients or any other third party in this or any other version. Neither is this intended to be relied upon as a sole basis for any recommendation. TRs must also consider their clients' investment objectives, financial position and needs when intending to make or making any recommendation. For the front desk, by the front desk. All feedback to make this a better product is welcome. Global Flash: While You Were Sleeping Source: Marketwatch Quote for the day :Beauty without grace is the hook without the bait. - RALPH WALDO EMERSON Singapore: The Day Ahead SINGAPORE DAYBOOK:SC Global saves millions with QC cancellations. Step was taken after the group delisted from the stock market in March [SINGAPORE] SC Global has managed to cancel the qualifying certificates (QCs) that were issued to its developments after it delisted from the stock market in March, saving millions of dollars it would otherwise have to pay for failing to meet the sales deadline under the government's QC rules. The luxury property firm is the first to delist and obtain QC cancellations since tough additional buyers' stamp duties (ABSD) were introduced for land bought from late 2011 onwards. The duties upset listed property developers because they face a double whammy from hefty ABSD and QC charges if they fail to sell all units at their developments within the time stipulated by both rules. While SC Global would not have been hit with the ABSD for the projects it got the QC cancellations for, its case is significant because many developers and market watchers had believed that the rule was not retroactive, and would still apply to its existing projects. It was therefore seen as a test case. Yet BT understands that SC Global is not the first listed property developer here to delist and subsequently obtain QC cancellations. In 2010, Soilbuild Group became the first such company when it applied for and obtained QC cancellations when it delisted. (Source: The Business Times) MARKET SCOOP Singapore's F&N may separate property from other operations Singapore introduces new steps to cool property market Singapore's Temasek to boost US, European portfolios: report Prices of completed apartments/condos dip 0.2% in May Unilever officially opens first global leadership centre outside UK Singapore May bank lending up 1.2% from April Freight Links FY profit up 19.1%, raises dividends China Fishery says to start arbitration against Veramar No client data compromised by hacking: Eu Yan Sang (Source: The Business Times) UOB KAY HIAN says... GENTING SINGAPORE | SELL | TP: S$1.17 Expect improvement in 2Q13 EBITDA but volumes remain sluggish We reckon that Genting Singapore (GENS) could deliver a 2Q13 EBITDA in the US$350m range, reflecting a single-digit qoq fall in gross gaming revenue (GGR) but a marked improvement in win percentage We continue to expect low single-digit growth in the industry GGR in 2013, reflecting a mild contraction in mass-market GGR growth and a 5-10% rise in VIP GGR In addition, we conservatively trim our 2014 GGR growth projection to low single-digit from high single-digits Key concerns are persistent weak local patronage and sluggish VIP market, which could be impacted by China's latest effort to regulate credit extension Trim 2014 EBITDA projection by 4% to S$1.41b We expect2Q13 rolling chip volume (RCV) to contract qoq, after having recovered for the third consecutive quarter to about S$20.8b in 1Q13 (+38% yoy, +14% qoq) Although RCV at Resorts World Sentosa has bottomed out in 4Q11 and is set to moderately recover 7% in 2013, we foresee sluggish growth prospects in 2014 While we note that the RCV from mainland Chinese players, which we estimate account for over 50% of RWS's RCV, has in the past been directly correlated to RWS's credit extension policy and less impacted by the credit situation in China, we need to gauge the impact of China's effort to regulate its banks' credit practice and also crimp shadow banking While GENS continues to be comfortable with its credit extension programme, we do not expect it to expand its credit programme, noting the rise in impairment losses Our latest channel checks suggest that patronage in the mass-market gaming area remains relatively quiet, reflecting weak visitation trends by local gamers Ongoing efforts to raise mass-market momentum include sustaining 1Q13's high-win percentage of 24-25%, better market segmentation (eg players categorised from five to seven tiers), and enhancing of reward points for its 2m members Ongoing cost management exercises would eventually lift GENS's EBITDA margin While GENS continues to scout for greenfield opportunities, including opportunities in the US, we reckon that Japan would represent as the first significant tangible opportunity for GENS Maintain SELL and target price of S$1.17, pegged at 10x 2013F EV/EBITDA CREDIT SUISSE Securities says ... MAPLETREE COMMERCIAL TRUST | OUTPERFORM | TP: S$1.45 We upgrade MCT from Neutral to OUTPERFORM following its recent share price weakness, where share price has fallen some 25% from its S$1.54 peak on 14 May (second worst after CRCT) We believe the selling has been overdone as fundamentals continue to be resilient, underpinned by its quality retail assets (mainly VivoCity) and long leases at two of its three offices We view this as an opportunity to accumulate quality at cheaper valuations Despite noise concerning potential slowing visitation to Sentosa due to haze (and subsequent impact to VivoCity, due to its proximity), we understand from management that feedback from mall managers seem to suggest that shopper traffic remains strong Meanwhile, near-term vacancy risks at its offices are mitigated by the longer leases at BoaML HF and Mapletree Anson Both VivoCity and BoAML HF make up 71% of NPI At current levels, valuation for MCT is now looking attractive, where MCT now offers FY14 yields of 6.1% and trades on 1.1x P/B, in line with historical average Maintain our DDM-based target price of S$1.45, which implies 32% total return DBS VICKERS Securities says... CROESUS RETAIL TRUST | BUY | TP: S$1.14 Croesus Retail Trust (CRT) offers investors a unique exposure to the Japan retail real estate sector through a capital efficient vehicle with an initial portfolio of stable and growth-oriented assets In addition to income stability, as a Singapore listed business trust, this platform offers NAV growth potential through CRT's ability to undertake lower risk non-speculative development activities and diversify into higher growth overseas markets in the medium term as well as prospects of asset reflation in Japan in the longer run CRT's portfolio is well located near transport conveniences in prefectures that are enjoying expanding per capita GDP The trust enjoys high income certainty with a long WALE of 11.3 years and derives 44% of rental income from long term master leases with AEON CRT commands good flexibility in tenant management to optimize tenant mix and property returns as 61.5% of leases are on fixed term lease basis and 49.4% of income comes with an in-built growth engine through its variable rent component This puts CRT in a strong position when renewing 26.3% of its rental income over FY14-FY15. CRT has a visible acquisition pipeline of assets, 4 currently, in Japan and a right to negotiate to buy 2 assets in Shanghai and Shenyang from its strategic partner Marubeni in the medium term When fully purchased, this could more than double CRT's portfolio NLA. With a gearing of 43.7% vs a 60% ceiling, CRT is estimated to have debt headroom of JPY23b to fund these purchases CRT is currently trading at 8.0-8.2% FY14 and FY15 DPU yield Our DCF-based TP of S$1.14 offers a total return of c28% Our numbers have not factored in any accretion from new acquisitions Key risks include the adverse impact of a global slowdown on economic activity and consumption in Japan Socio-economic and political changes could also affect the competitive landscape and environment in which CRT operates

SG: MARKET PULSE: Genting Singapore, Marco Polo Marine, Midas (6 Jun 2013)

Stock Name: Genting SP
Company Name: GENTING SINGAPORE PLC

Research House: OCBC

Price Call: HOLD

Target Price: 1.41

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

Research House: OCBC

Price Call: HOLD

Target Price: 0.51

Stock Name: MIDAS
Company Name: MIDAS HLDGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.54

MARKET PULSE: Genting Singapore, Marco Polo Marine, Midas

6 Jun 2013

KEY IDEA Genting Singapore: Upgrade to HOLD on valuation Genting Singapore (GS) recently saw a pretty sharp tumble in share price, falling some 14% to a recent low of S$1.41, after we downgraded our call from Hold to Sell; this on the company posting slightly softer-than-expected 1Q13 results on 2 May. We have already pared our estimates after its 1Q13 results and we see no need for any revision for now. But we upgrade our rating from Sell to HOLD as the current share price is hovering around our unchanged DCF-based fair value of S$1.41. (Carey Wong) MORE REPORTS Marco Polo Marine: Ceasing coverage After BBR's listing on the Indonesia Stock Exchange early this year, Marco Polo Marine (MPM) has been increasingly branding itself as an entity for investors to gain exposure to Indonesia's growing offshore sector. Demand for larger sized AHTS vessels in Indonesia is expected to increase, benefitting owners such as MPM. Meanwhile, the ship repair business has seen a slow-down, which management thinks is seasonal. The ship chartering business, on the other hand, provides a steady base load of earnings. The long-term future of MPM looks bright, but time would be needed for significant earnings growth and a re-rating of the stock. We last rated MPM a HOLD with a fair value estimate of S$0.51. Due to a re-allocation of internal resources, we are ceasing coverage on this counter. (Low Pei Han) Midas Holdings: JV NPRT and consortium partners clinches CNY1.1b metro contract Midas Holdings (Midas) announced that its 32.5%-owned JV company Nanjing SR Puzhen Rail Transport (NPRT) has, together with its consortium partners Shanghai ALSTOM Transport Electrical Equipment and ALSTOM Transport S.A., clinched a CNY1.1b metro contract. This is for the supply of 29 train sets (or 174 train cars) for the Nanjing Metro Line 4 Phase 1 project. Delivery is scheduled from 2014 to 2016. Although NPRT's percentage share of the contract was not disclosed, we believe that it may be around the 70-75% range, after taking reference from previous contract wins by NPRT and its consortium partners. This would equate to a contract amount of ~CNY770-825m for NPRT, which is a sizeable win, in our opinion. Maintain BUY on Midas, with an unchanged fair value estimate of S$0.54, pegged to 1.1x FY13F P/B. (Wong Teck Ching Andy)

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

NEWS HEADLINES - US stocks tumbled on Wednesday for a second session as data on US private-sector job growth darkened views of the monthly nonfarm-payrolls report to be released in two days. - United Fiber System is starting afresh its bid to acquire Jakarta-listed coal miner PT Golden Energy Mines through a reverse takeover deal. - A tight labour market continued to raise workers' salaries last year, although the 2012 growth rate was lower compared to 2011 due to weaker economic conditions, says a new Ministry of Manpower report. - Singapore's future competitiveness will be enough to keep it as the most competitive city in Asia and the third most competitive city globally in 2025, according to a projection by the Economist Intelligence Unit. - Tiong Woon Corporation has entered into a MOU to sell its oil & gas services subsidiary to Metech Energy Corp for S$18m. - Two companies in the overseas real estate business, Dolphin Capital Asia and Shenton Wealth Holdings, have recently been put on MAS Investor Alert List.

Citi stays optimistic on Genting Singapore

Stock Name: Genting SP
Company Name: GENTING SINGAPORE PLC

Research House: Citigroup

Price Call: BUY

Target Price: 1.85

Genting Singapore’s 1Q13 results beat expectations solidly on a hold-adjusted basis, Citigroup says, adding normalizing for the low 2.12% VIP hold, adjusted EBITDA would have been around $400 million, 6% above its forecast. It notes reported adjusted EBITDA was $255 million, down 34% on-year. Because of the less-favorable VIP hold rate at GENS’ Resorts World Sentosa vs rival Marina Bay Sands’ 2.51%, RWS captured around 45% of total 1Q13 market share vs 4Q12’s 51%, it estimates.

“The two Singapore casinos delivered stronger-than-expected VIP rolling volume growth, but they were both dragged down by subpar VIP hold,” it says, adding “VIP recovery remains the key driver in the market, while mass gross gaming revenue will likely show little growth, reflecting subdued local demand.” Citigroup remains optimistic on the Singapore market’s growth and expects RWS to benefit from easy comparisons near-term.

It lowers GENS’ FY13 earnings forecast on 1Q13’s weak hold, but raises its 2014-15 earnings forecasts by 6%-7% on the better-than-expected VIP volume recovery. It keeps a Buy call and raises its target to $1.85 from $1.80. The stock is down 8.4% at $1.475.

SG: MARKET PULSE: UOB, Genting, LMIRT (3 May 2013)

Stock Name: UOB
Company Name: UNITED OVERSEAS BANK LTD

Research House: OCBC

Price Call: BUY

Target Price: 22.97

Stock Name: Genting SP
Company Name: GENTING SINGAPORE PLC

Research House: OCBC

Price Call: SELL

Target Price: 1.41

Stock Name: LippoMalls
Company Name: LIPPO MALLS INDO RETAIL TRUST

Research House: OCBC

Price Call: HOLD

Target Price: 0.52

MARKET PULSE: UOB, Genting, LMIRT

3 May 2013

KEY IDEA UOB: Above expectations 1Q UOB Group posted 1Q13 net earnings of S$722m, ahead of consensus estimate. This was buoyed by higher Non-Interest Income, which rose 12% YoY and 13% QoQ to S$708m. Fee & Commission Income jumped 17% QoQ or 25% YoY to S$453m, supported by strong double-digit growth from loans (+63%), fund management (+19%) and Investment (+18%). As 1Q accounted for about 25% of our full year estimate, we made very slight adjustments to our FY13 earnings. Based on P/B of 1.5x, we raised our fair value estimate from S$21.30 to S$22.97. While we continue to like UOB for its good cost controls and strong quarterly performance, the stock has outperformed and appreciated some 11% YTD. It is now trading close to our fair value estimate. As such, we downgrade our rating to HOLD. (Carmen Lee) MORE REPORTS Genting Singapore: 2013 outlook more cautious Genting Singapore (GS) reported 1Q13 revenue of S$669.6m, down 15% YoY and also 16% QoQ, hit by much weaker win percentage (2.12% versus 2.85% theoretical) in the premium players' business; net profit posted a decline of 44% YoY and 13% QoQ to S$115.9m. All in, a pretty muted set of numbers, as top-line only met 20% of our original FY13 forecast while bottom-line met 18% of our full-year number. Going forward, management has turned slightly more cautious, citing the still uncertain global economic outlook, especially with the recent muted economic data coming out of China. We pare our FY13 revenue estimates by 10% and core earnings by 16%. As such, our DCF-based fair value also slips to S$1.41 from S$1.52 previously. Recent run-up in share price seems slightly over-done; hence we downgrade to SELL from Hold on valuation grounds. However, we would buyers closer to S$1.30 or lower. Longer-term catalyst could come from a potential IR license overseas in markets like Japan. (Carey Wong) Lippo Malls Indonesia Retail Trust: 1Q13 results in line LMIRT posted 1Q13 gross rental income of S$39.4m, up 29.3% YoY. The increase was mainly due to the acquisition of the six new malls in 4Q12, and positive rental reversions for the existing malls. The higher gross rental income was partially offset by the effect of FX rates used for translating into SGD revenues denominated in IDR. Results for the quarter were in line with our and consensus expectations; DPU of 0.89 S cent formed 25% of ours and 26% of the street's FY13 estimate. We maintain our fair value of S$0.52 and HOLD rating on LMIRT. We estimate a FY13F yield of 6.7%. (Sarah Ong)

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NEWS HEADLINES - US stocks rose Thurs, with the S&P 500 reaching a new record, after the ECB lowered its benchmark interest rate and US jobless claims fell to a five-year low. - GuocoLand has plans for an integrated mixed-use development at the white site above Tanjong Pagar MRT station. Named Tanjong Pagar Centre, the 290m development will be Singapore's tallest building. - UOB-Kay Hian Holdings has entered into a sales and purchase agreement to dispose of a 93.47% owned subsidiary in Thailand for a total consideration of ~S$40m. - Ezra's subsea division has won a US$75m contract from Statoil. - Innopac Holdings' proposed takeover offer for ASX-listed Merlin Diamonds has received acceptances representing 42.52% of Merlin's issued and paid-up share capital in a little over one month after the offer opened for acceptance.