SG: MARKET PULSE: KSH, CWT, BreadTalk, Global Palm, Nam Cheong (13 Aug 2013)

Stock Name: KSH Hldg
Company Name: KSH HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.73

Stock Name: CWT
Company Name: CWT LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 1.68

Stock Name: BreadTalk
Company Name: BREADTALK GROUP LIMITED

Research House: OCBC

Price Call: SELL

Target Price: 0.77

Stock Name: Global Palm
Company Name: GLOBAL PALM RESOURCES HLGS LTD

Research House: OCBC

Price Call: HOLD

Target Price: 0.17

Stock Name: Nam Cheong
Company Name: NAM CHEONG LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.35

MARKET PULSE: KSH, CWT, BreadTalk, Global Palm, Nam Cheong

13 Aug 2013

KEY IDEA KSH Holdings: 1QFY14 PATMI up 165% to S$11.4m KSH's 1QFY14 PATMI increased 165% YoY to S$11.4m due to stronger contributions from both the property development and construction business segments. 1QFY14 PATMI now constitutes 24% of our full year forecast and, this being so, we judge this set of results to be in line with expectations. The group's order book stands at S$402.0m as at end Jun 2013 which we view to be a relatively healthy level. We continue to look forward to KSH's 45% Beijing condo project beginning sales this year which could be significant for KSH's earnings profile into FY15. In Singapore, new launches at NeWest and KAP Residences have shown firm performances to date; 85 out of a total of 136 units at NeWest have been sold at a median price of S$1,399 psf and at KAP Residences, 140 out of 142 units sold for a median price of S$1,789 psf. Maintain BUY with an unchanged fair value estimate of S$0.73. (Eli Lee) MORE REPORTS CWT Ltd: 2Q13 in line with expectations CWT reported a decent set of 2Q13 results that were in-line with our expectations. Revenue jumped 66% YoY to S$1.7b, driven by higher contribution from its newly established Commodity business. However, the group incurred higher administrative expenses and higher financing costs. Consequently, net profit eased 6% YoY to S$18.1m for 2Q13. The group also announced a new leadership team - headed by Adam Slater and Alan Kuek - at its Commodity business, replacing former employees who have left the team. We still like CWT, but lowered our valuation peg for its Commodity business to a conservative 9x (previously 12x) after its recent management reshuffle. This in turn lowered our SOTP valuation to S$1.68 (previously S$2.08). Maintain BUY. (Chia Jiunyang) BreadTalk Group: Improvement in 2H13 unlikely BreadTalk's 2Q13 results disappointed despite double-digit revenue growth to S$126.5m as operating profit fell by more than expected (15.1% YoY to S$3.8m) and operating profit and PATMI margins remained low at 3.0% and 2.4% respectively. In the coming months, we expect this trend to persist in light of its ongoing store expansion and the two non-performing restaurant brands (Ramen Play and Carl's Jr), which will remain a drag on overall performance. With a FY13F dividend yield of 1.1%, the investment proposition is unattractive in our view and the counter remains expensive at current valuations, especially given the low-single digit margins. We maintain SELL on BreadTalk with an unchanged fair value estimate of S$0.77. (Lim Siyi) Global Palm: Terrible season continues Global Palm Resources (GPR) posted 2Q13 revenue of IDR84.1b, down 21% YoY (but +26% QoQ), hit by softer CPO (crude palm oil) prices as well as lower volume sold. Reported net profit tumbled 70% YoY and 27% QoQ to IDR6.1b; excluding forex, core net profit still fell 69% YoY and 19% QoQ to IDR9.4b. For 1H13, revenue fell 26% to IDR150.9b, meeting 45% of our full-year forecast, while net profit slipped 57% to IDR14.4b, or just 27% of our FY13 estimate. We will be speaking with management shortly; but in the meantime, we place our Hold rating and S$0.17 fair value under review. (Carey Wong) Nam Cheong Ltd: 2Q net profit jumped 81% YoY Nam Cheong Limited's 2Q13 revenue and net profit jumped by 84% and 81% YoY to RM275m and RM41m respectively, driven by increase in shipbuilding activity. 1H net profit was RM76m and formed 50% and 46% of ours and the street's FY13F estimates. We will provide further updates after its briefing later. In the meantime, we keep our BUY rating and S$0.35 FV estimate unchanged. (Chia Jiunyang)

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

NEWS HEADLINES - US stocks closed a low-volume, light-news session with slight losses on Mon, though the technology-dominated Nasdaq Composite managed a gain. - A KPMG study in Singapore last week says 82% of assets on companies' balance sheets these days are based on estimates. - Kingsmen Creative has won the dismissal of a lawsuit brought against it and its subsidiary, Kingsmen Exhibits Pte Ltd (KE), in the US. - Super Group reported a net profit of S$36.5m for its 2Q13, up 108% YoY from S$17.5m. - QAF posts 64% plunge in 2Q13 net profit as higher costs and expenses took a toll despite a rise in revenue for the maker of Gardenia bread. - Del Monte Pacific Limited's earnings grew 2% YoY in 2Q13, despite a higher rise in revenue, as one-off dual listing expenses and unrealised foreign exchange loss affected the bottom line.

SG: MARKET PULSE: KSH, Yoma, Valuetronics, Sembcorp Marine, SIA (28 May 2013)

Stock Name: KSH Hldg
Company Name: KSH HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.73

Stock Name: Yoma
Company Name: YOMA STRATEGIC HOLDINGS LTD

Research House: OCBC

Price Call: HOLD

Target Price: 0.87

Stock Name: Valuetronics
Company Name: VALUETRONICS HOLDINGS LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.195

Stock Name: SembMar
Company Name: SEMBCORP MARINE LTD

Research House: OCBC

Price Call: BUY

Target Price: 5.64

Stock Name: SIA
Company Name: SINGAPORE AIRLINES LTD

Research House: OCBC

Price Call: SELL

Target Price: 10.00

MARKET PULSE: KSH, Yoma, Valuetronics, Sembcorp Marine, SIA

28 May 2013

KEY IDEA KSH Holdings: A strong year of performance Summary: KSH reported 4QFY13 PATMI of S$14.0m, up 85% YoY mostly due to an increase in profit contributions from development projects held by its associates and JVs. On a full year basis, FY13 PATMI is S$36.3m which increased a strong 98%. We judge this to be somewhat above our expectations (our FY13 PATMI forecast is S$30.7m) as the pace of revenue recognition at JV development projects came in faster than anticipated. Management proposed a final dividend of 1.15 S-cents per share. Likely catalysts ahead includes major pipeline launches at Hong Leong Garden (NeWest), King Albert Park and Seletar Garden which would all likely take place this year. In China, KSH's 45% Beijing condo project could also begin sales this year. We view a potential firm performance at this project to be significant for KSH's earnings profile which could sustain earnings growth into FY15 by contributing an estimated S$23m net earnings upon TOP. Maintain BUY with an unchanged fair value estimate of S$0.73. (Eli Lee) MORE REPORTS Yoma Strategic Holdings: Catalysts ahead - upgrade to HOLD Summary: Yoma reported 4QFY13 PATMI of S$11.5m, up 452% YoY mostly due to a S$9.1m one-time gain. FY13 PATMI cumulates to S$14.4m and, excluding one-time gains, is judged to be generally in line with our forecast. We see the completion of the Landmark Project acquisition as a key catalyst for the share price ahead but note that management has raised the possibility of another deadline extension. That said, the signing of a Heads of Agreement with the Hong Kong and Shanghai Hotels Group and other preparations by Yoma for site development points to a good level of confidence that they would acquire the site eventually, in our view. Sales at launched projects remain firm, with 491 out of total 528 units sold in buildings 3 and 4 at Star City. In addition, management showed a strong deal-making record in FY13 and is in the midst of acquiring more land sites and establishing businesses in tourism, retail, agriculture and automobiles. Upgrade to HOLD with an increased fair value estimate of S$0.87 (20% premium to RNAV), versus S$0.71 previously, as we incorporate firmer valuations for the Landmark Project and Yoma's existing land bank into our model. (Eli Lee) Valuetronics Holdings: Starting on a fresh page Summary: Valuetronics Holdings Limited's (VHL) FY13 results were within our expectations. Revenue from continuing operations fell 3.4% to HK$2,210.2m, or just 0.6% shy of our forecast. Net profit from continuing operations fell 26.1% to HK$118.4m, while net losses from its now discontinued Licensing division widened by 32.7% to HK$39.8m, resulting in overall PATMI decline of 39.6% to HK$78.7m. Excluding exceptional items, we estimate that core PATMI for FY13 fell 14.7% to HK$103.7m (1.1% above our estimate). VHL also slashed its FY13 DPS from HK$0.17 to HK$0.08. This was below our HK$0.11/share forecast but still translates into a decent yield of ~6.0%. We foresee an improvement in VHL's bottomline and DPS in FY14 as it does not expect to incur any further expenses for its Licensing business. We maintain our HOLD rating but raise our fair value estimate slightly from S$0.19 to S$0.195 due to a marginal 2.7% increase in our FY14 core PATMI forecast. (Wong Teck Ching Andy) Sembcorp Marine: Secures US$596m jack-up rig order from Noble Summary: Sembcorp Marine (SMM) announced that subsidiary Jurong Shipyard has secured a US$596m contract for a newbuild ultra-high spec jack-up rig for use in the United Kingdom sector in the North Sea from Noble Corporation. There is also an option for an additional unit. Calling it the "most advanced and versatile of its kind in the industry", this rig will be constructed based on the Gusto MSC CJ70 design, and is in line with an enhanced version of Statoil's "Cat J" specifications. Indeed, we note that the last Gusto MSC CJ70 order secured by SMM had a price tag of US$450m in Mar 2011. With this latest win (scheduled for delivery in 1Q16), SMM has secured orders about US$2.4b YTD, accounting for around 60% of our full-year estimate. Maintain BUY with S$5.64 fair value estimate. (Low Pei Han) Singapore Airlines - Grounds another cargo plane Summary: Singapore Airlines (SIA) announced that it will park another cargo freight plane until May 2014 in an effort to cut its cargo capacity further. This will be the second freighter taken out of service with the first pulled out in Dec 2012. As a recap, in its recent FY13 results, SIA Cargo experienced an operating loss for its second straight year. While the move is a welcomed one in light of the weak air cargo market, particularly in Asia-Pacific, we still expect operating losses for the division in FY14 and assert that a turnaround is unlikely even with capacity cuts as cargo yields remain depressed. Overall, SIA as a group continues to face competitive pressures from other premium carriers, and management has yet to take any concrete steps to invigorate its business prospects. Therefore, we maintain our SELL rating on SIA with an unchanged fair value estimate of S$10.00. (Lim Siyi)

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

NEWS HEADLINES - Healthway Medical Corp will issue up to 97.5m new shares to raise as much as S$10m to fund its expansion plans in China and its obligations in an associate company that is eyeing a listing. - Soilbuild Construction Group enjoyed a strong debut yesterday, with shares closing up 44% at 36cts. - Technics Oil and Gas Limited has been awarded contracts worth a total of S$10.6m for the supply of Air Spread Systems from Singapore. - Hiap Seng Engineering has reported a net loss of S$4.5m for 4Q13, a widening from the S$2.2m for the same period last year. - Fragrance Group has signed a mandate letter for a S$1b multicurrency medium term note programme. - Business receipts for the services industry in Singapore rose 6.3% YoY in 1Q13, said Singapore's Department of Statistics yesterday.

SG: MARKET PULSE: KSH, Rotary, ST Engineering (11 Apr 2013)

Stock Name: KSH Hldg
Company Name: KSH HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.73

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

Research House: OCBC

Price Call: HOLD

Target Price: 4.12

MARKET PULSE: KSH, Rotary, ST Engineering

11 Apr 2013

KEY IDEA KSH Holdings: More earnings growth momentum likely We recently met with KSH management and keep intact our FY13E and FY14E forecasts at S$30.7m (up 68% YoY) and S$53.0m (up 72% YoY), respectively, which are underpinned by progress billings for already-sold projects in Singapore. Beyond FY14, we see earnings growth momentum likely continuing due to the upcoming launch of its Beijing condo project this year (Liang Jing Ming Ju Phase 4) which would contribute an estimated S$23m net earnings upon TOP. We also understand management is also focused on launching Phase 1 of its 533-hectare Gaobeidian township project (GBD), located 30 mins away from Beijing city via high-speed rail. For upcoming FY13E results, we expect final dividends in the range of 0.5 - 1.5 S-cents and possibly a bonus share issue as well. Maintain BUYwith an increased fair value estimate of S$0.73, versus S$0.62 previously, as we now incorporate accretion from Liang Jing Ming Ju into our SOTP valuation model and raise our PE multiple for the construction segment from 4x to 5x, in line with peers trading at 5-7 times. (Eli Lee) MORE REPORTS Rotary Engineering Ltd: Ceasing coverage Rotary Engineering Ltd (Rotary) had a difficult year in 2012, as it battled escalating cost over-runs on its US$745m SATORP mega-project and repeated delays on its S$260m Fujairah Oil Terminal project. In 4Q12, the group appeared to be making progress on its SATORP project, although the non-controlling deficit is still a thorny issue. The group recently secured S$42m of project work in Singapore's Jurong Island, and S$300m of EPC work in Pulau Busing. However, the tighter foreign labour market in Singapore could mean lower project margins over the medium term horizon. Coupled with the uncertainty at its SATORP JV, it may still be too early for investors to buy its shares, which are currently trading at 1.4x PBR. Meanwhile due to a reallocation of resources, we have decided to CEASE COVERAGE. (Chia Jiunyang) ST Engineering: ST Aerospace won S$480m of contracts in 1Q13 ST Engineering (STE) announced that its aerospace arm, Singapore Technologies Aerospace Ltd (ST Aerospace) has secured new contracts worth about $480m in 1Q13. The contracts are for airframe, component and engine maintenance, as well as engineering and development, which will be carried out through its global maintenance, repair and overhaul (MRO) network. As this is in line with our expectations, we maintain our fair value estimate of S$4.12 and HOLD rating on STE. (Sarah Ong)

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

NEWS HEADLINES - Malaysians will choose their next government on May 5 after the Election Commission fixed the nomination of candidates on April 20. - Forterra Trust, formerly Treasury China Trust (TCT), is set to divest itself of its Central Plaza property in Shanghai for US$266.7m. - Resale prices of non-landed private residential properties edged up in the first quarter, despite fewer transactions taking place, data from the Singapore Real Estate Exchange showed. - GKE Corporation, previously Van der Horst Energy Limited, has injected an additional HK$31.3m (S$5m) into its wholly owned subsidiary GKE Holdings (HK) through a share subscription at HK$1 per ordinary share.

SG: MARKET PULSE: Sembcorp Marine, FCT, KSH, TEE (3 Apr 2013)

Stock Name: SembMar
Company Name: SEMBCORP MARINE LTD

Research House: OCBC

Price Call: BUY

Target Price: 5.64

Stock Name: CapitaMall
Company Name: CAPITAMALL TRUST

Research House: OCBC

Price Call: BUY

Target Price: 2.32

Stock Name: KSH Hldg
Company Name: KSH HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.62

Stock Name: Tee Intl
Company Name: TEE INTERNATIONAL LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.30

MARKET PULSE: Sembcorp Marine, FCT, KSH, TEE

3 Apr 2013

KEY IDEA Sembcorp Marine: More prudent on margins Sembcorp Marine (SMM) is currently building a 82.5ha yard in Brazil to undertake drillship construction, amongst others. Should inflation in Brazil continue to be unrelenting, SMM may face further margin pressures from labour costs, especially since there is already a shortage of skilled labour in the country. Over the longer term, however, we believe that SMM's foray into the drillship business puts it in good stead to secure more drillship orders, diversifying its product range. In the shorter term, however, we prefer to be more prudent on the group's operating margin assumptions, and lower these to 12.1% and 12.3% for FY13F and FY14, respectively (2012: 12.5%). As such, our SOTP-based fair value estimate slips from S$5.84 to S$5.64. Maintain BUY. (Low Pei Han) MORE REPORTS Frasers Centrepoint Trust: Downgrade to HOLD - fair value hit Frasers Centrepoint Trust (FCT) has enjoyed a good run-up in its unit price, clocking a 7.0% return YTD and 40.8% return YoY. This compares significantly to the 5.7% YTD and 31.4% YoY increase seen by the FTSE ST REIT Index. Now trading near its historical high and our fair value, FCT is the most expensive (P/B of 1.40x) when compared to its local retail peers (1.18x) and the S-REITs sector average (1.17x). As such, we believe that most of the good news has been priced in. While the asset injection of Changi City Point into FCT's portfolio may possibly be a catalyst to its unit price and DPU growth, the timeline is uncertain as the regulatory procedures for the strata division into its retail, business park and hospitality components is a lengthy process. In view of the limited upside potential in the near term, we now downgrade FCT from Buy to HOLDon valuation grounds. We recommend switching FCT to CapitaMall Trust [BUY, S$2.32 FV] as a cheaper alternative to blue-chip local retail play with exposure to equally resilient suburban portfolio assets. (Kevin Tan) KSH Holdings: Awarded S$60m JTC construction contract KSH announced yesterday that it was awarded a S$60m construction contract by Jurong Town Corporation ("JTC") for a district cooling system plant at Ayer Rajah Ave. We understand management wanted to diversify their condominium-heavy construction book with a public project, and gross margins continue to exceed a 10% hurdle rate. In 2013 to date, order book replenishment now cumulates to S$202m - tracking somewhat above forecast and exceeding the S$161m total last year. The order book now stands at S$489m. Given its momentum, we are reviewing our valuation of KSH's construction segment - currently pegged at 4 times FY13E earnings versus 5-7 times seen at peers. We also see upcoming launches at key property projects (Hong Leong Gardens, Seletar Gardens and King Albert Park) to be potential catalysts ahead. We will speak further with management later today and, in the meantime, reiterate BUY while our fair value of S$0.62 is under review. (Eli Lee) TEE International: Joint bid for Myanmar airport project TEE International, Yongnam Holdings and Samwoh Corp have joined forces to participate in a consortium with JGC Corp and a unit of Changi Airport International to tender for the construction and operation of Myanmar's new international airport. TEE and Samwoh will each take a 25% stake in a special purpose vehicle (SPV) that will in turn supply up to 60% of the project consortium's equity. Yongnam will own 50% of the SPV and represent it in all negotiations involving the project. We are neutral on the announcement, pending further updates, and we maintain our fair value estimate of S$0.30 and HOLD rating for TEE. (Conrad Tan)

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

NEWS HEADLINES - The Dow and S&P 500 reached record closing highs, as health insurers gained on Medicare-reimbursement news and US factory orders climbed in Feb. - WE Holdings proposes a rights cum warrants issue, which could raise S$10.10m under maximum subscription, to strengthen its balance sheet and fund expansion into resources businesses in Myanmar. - Kreuz Holdings has secured a subsea installation contract worth ~US$25.0m from a third-party client. Estimated completion is by the fourth quarter of this year. - Boustead Singapore has divested its entire shareholding in OM Holdings Limited, an ASX-listed manganese mining company, for a total sales consideration of AU$18.5m. - Radiance Investment Pte. Ltd has agreed to subscribe for an aggregate of 51m new ordinary shares in the capital of Pacific Healthcare Holdings Ltd at the price of S$0.0828 per share. - ISDN Holdings has entered into a non-legally binding MOU with Tun Thwin Mining Co., Ltd to explore joint partnerships in energy opportunities in Myanmar.

SG: MARKET PULSE: KSH Holdings, Nam Cheong Ltd (1 Apr 2013)

Stock Name: KSH Hldg
Company Name: KSH HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.62

Stock Name: Nam Cheong
Company Name: NAM CHEONG LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.30

MARKET PULSE: KSH Holdings, Nam Cheong Ltd

1 Apr 2013

KEY IDEA KSH Holdings: Acquiring stake in 160 Changi Road redevelopment Summary: KSH would acquire a 30% stake in 160 Changi Rd, located at the corner of Changi Rd and Lorong 105 Changi, for S$20.4m. Assuming a 50:50 retail and office breakdown and selling prices of S$2.8k and S$1.8k for retail and office, respectively, we estimate a 1.5 S-cents accretion to KSH's RNAV. We like that KSH has re-deployed capital expendiently into new projects after raising S$13.9m in mid-Mar 2013, and believe this points to a well thought-out plan for capital management and growth. Maintain BUY with an increased fair value estimate of S$0.62 versus S$0.61 previously. Our SOTP methodology conservatively values KSH's construction segment at 4x FY13E earnings and its property segment at a 40% RNAV discount. This being so, its fair value estimate could re-rate signficantly if construction order book replenishment continues unabated and/or upcoming launches perform well. (Eli Lee) MORE REPORTS Nam Cheong Ltd: US$72m contract for six vessels Summary: Nam Cheong Ltd announced that it has sold six vessels worth a total of US$72.1m to two of its existing customers. Two 5,150 bhps Anchor Handing Towing Supply (AHTS) vessels were sold to Icon Offshore Berhad, one of Malaysia's largest OSV group, while four Emergency Response and Rescue Vessels (ERRVs) were sold to a Singapore-based company that provides ship management and chartering services. The six vessels will be built in one of its sub-contracted yards in China with expected deliveries between 2Q13 and 4Q14. We continue to like Nam Cheong for its exposure to the buoyant offshore market in Malaysia and its close ties with Petronas-licensed companies. Its build-to-stock shipbuilding programme enables it to capture the strong domestic vessel demand, while its build-to-order business model helps lower its overall risk profile. Maintain BUY with unchanged fair value estimate of S$0.30. (Chia Jiunyang)

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

NEWS HEADLINES - US equities ended 1Q on a positive note with both the S&P 500 and the Dow at new highs. - Keppel REIT has completed the acquisition of a 50% interest in Mirvac (Old Treasury) Trust, which has entered into a development agreement with the State of Western Australia to deliver a new office tower to be built in Perth. - Banyan Tree Holdings has acquired the remaining 6.57% interest in its subsidiary, Maldives Bay Pvt Ltd for a consideration of US$2.6m, funded by internal resources. - Loyz Energy completed the divestment of its sanitary ware operations on 31 Mar for S$9m. - Armarda's associate CMSCG and China Telecom Satellite jointly begin marketing activities mobile satellite handsets and mobile satellite airtime services for 20 key Chinese distributors. - China Great Land Holdings' subsidiary has entered into a binding MOU for a proposed joint venture with Sanya Wan Jia, a Chinese property developer.

SG: MARKET PULSE: Ezion Holdings, KSH Holdings (22 Mar 2013)

Stock Name: EzionHldg
Company Name: EZION HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 2.35

Stock Name: KSH Hldg
Company Name: KSH HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.61

MARKET PULSE: Ezion Holdings, KSH Holdings

22 Mar 2013

KEY IDEA Ezion Holdings: Secures service rig contract with good ROE Ezion Holdings (Ezion) announced that it has secured a charter contract worth about US$48.2m over a three year period to provide a service rig for an international oil and gas major for work in the Arabian Gulf. The unit will be deployed before end 2013 after refurbishment and upgrading in a Middle Eastern yard. We estimate a good ROE of slightly more than 55% for this project, vs a forecasted ROE of 22% for Ezion in FY13. Ezion's stock price has appreciated by about 18% YTD vs the STI's 3% rise over the same period. However, we still see an upside potential of more than 15% over a one-year time frame. We tweak our earnings estimates, and based on 12x blended FY13/14F core earnings, our fair value estimate rises from S$2.33 to S$2.35. Maintain BUY. (Low Pei Han) MORE REPORTS KSH Holdings: Placement exercise to raise S$13.9m KSH recently conducted a placement for 30.9m new shares and 4.1m existing treasury shares at 40.8 S-cents per share. This was at a 5.2% discount to the weighted average traded price of 43.0 S-cents on 11 Mar 2013 and raised S$13.9m of capital for the group. Shortly after the placement, KSH deployed S$1.9m to increase its stake in its Beijing condominium project (Liang Jing Ming Ju, Phase 4) from 26.24% to 45.00%. Pending further visibility on capital deployment, we are overall neutral on this placement but note it would increase the size of the public float and possibly improve the counter's trading liquidity, which has been low historically. Maintain BUY on KSH. Our fair value estimate dips mildly to S$0.61 from S$0.62, due to a mild dilution effect, but our forecast for buoyant earnings growth over FY13-14 remains unchanged. (Eli Lee)

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

NEWS HEADLINES - US stocks slumped on Thurs, suffering their biggest drop in nearly a month, pressured by weak euro-zone economic data, escalating worries over the banking crisis in Cyprus and disappointment with Oracle's earnings. - China's flash PMI released by HSBC yesterday rebounded in Mar, dispelling fears that recovery in the world's second largest economy was running out of steam. - Singapore's CPI likely climbed 4.1% YoY in Feb, compared with a rise of 3.6% in Jan, according to a Reuters poll, due to higher food prices during the Lunar New Year holidays. - S-REITs are seeking to improve their financial flexibility by increasingly opting for unsecured funding rather than secured funding, according to Moody's Investors Service. - Four build-to-order (BTO) projects offering 3,898 new flats were launched on Thursday in three non-mature towns: Bukit Batok, Punggol, and Sengkang. - ST Engineering's US shipyard, VT Halter Marine, has landed an exercised option for a barge unit from Bouchard Transportation "in the region of US$100m". - Saizen REIT has acquired a residential property in Japan for S$9.9m. - Rickmers Maritime's S$101.7m rights issue has received a collective 39.9% undertaking with the latest pledge of support from Capital Research and Management Company.

MARKET PULSE: KSH Holdings, Biosensors, Olam Int'l, SIA, StarHub, LMIRT (8 Feb 2013)

Stock Name: KSH Hldg
Company Name: KSH HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.62

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

Research House: OCBC

Price Call: BUY

Target Price: 1.63

Stock Name: Olam
Company Name: OLAM INTERNATIONAL LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 1.50

Stock Name: SIA
Company Name: SINGAPORE AIRLINES LTD

Research House: OCBC

Price Call: HOLD

Target Price: 10.85

Stock Name: StarHub
Company Name: STARHUB LTD

Research House: OCBC

Price Call: HOLD

Target Price: 4.00

MARKET PULSE: KSH Holdings, Biosensors, Olam Int'l, SIA, StarHub, LMIRT

8 Feb 2013

KEY IDEA KSH Holdings: Another quarter of strong growth KSH reported 3Q FY13 PATMI of S$8.1m, which surged 179% YoY mostly due to contributions from its property development segment as the group recognized earnings from The Boutiq, Cityscape@Farrer Park and Rezi 26. 9M FY13 earnings now cumulate to S$22.3m, up 108.3% YoY and forming 73% of our FY13 forecast. The group has sold a significant portion of launched projects, and we expect progress billings from already sold projects to underpin earnings growth ahead. Maintain BUY with an increased fair value estimate of S$0.62, versus S$0.50 previously, as we lower the RNAV discount for its property segment from 50% to 40% to reflect a lower risk profile given a larger percentage of projects sold, and raise our PE multiple for its construction segment from 3.0x to 4.0x - a level closer in line with that of its peers. (Eli Lee) MORE REPORTS Biosensors International Group: Revenue guidance lowered Biosensors International Group (BIG) reported a disappointing set of 3QFY13 results which missed our below-consensus estimates. Revenue fell 4.0% YoY to US$81.3m, dragged down by weak licensing and royalties revenue (-37.8% YoY), and was 11.2% below our forecast. Core PATMI declined 9.2% YoY to US$24.3m, falling short of our forecast by 20.3%. BIG also lowered its revenue growth guidance for FY13 from 20-30% to 15-20% due to weaker-than-expected licensing and royalty revenue from Japan. However, product revenue growth is expected to remain robust. We pare our FCFE-based fair value estimate from S$1.69 to S$1.63 as we incorporate lower core PATMI projections and BIG's recent fixed notes issuance in our model. We believe that proceeds for the latter would be used for earnings accretive acquisitions. Maintain BUY. (Wong Teck Ching Andy) Olam Int'l: 1HFY13 results slightly ahead Olam International (Olam) reported 1HFY13 results which were slightly ahead of our forecast. Revenue grew 24.3% to S$9589.5m, meeting 48.1% of our FY13 projection; while estimated core net profit came in around S$147.6m, also meeting around 48.4% of our FY13 estimate. However, its net gearing increased from 1.95x in 1HFY12 to 2.21x in 1HFY13. Management meanwhile is in the process of recalibrating its operations after the Muddy Waters' incident. While we see the recalibration exercise as positive, we do not intend to make any changes to our forecasts just yet. But we are pushing our 10x valuation from FY13F EPS to blended FY13F/FY14F EPS and our fair value improves from S$1.44 to S$1.50. Maintain HOLDfor now. (Carey Wong) Singapore Airlines: Premature optimism Singapore Airlines's (SIA) 3Q13 results came in below our expectations with operating profit declining 20.4% YoY to S$131.0m. Although revenue held up well during the seasonal travel peak, it came at expense of declining passenger yields (YoY basis) following increased promotional activity, which offset some savings from favourable fuel prices during the quarter. Only with gains from non-operating segments did the Group post a 5.4% YoY improvement in PATMI to S$142.5m. The operating environment remains challenging for SIA with competition heating up and jet fuel prices inching upwards. Coupled with the lack of any near-term catalysts, we temper our optimistic outlook and lower our FY13/14 forecasts accordingly. Given the short run-up in its share price, we maintain HOLDat an unchanged fair value estimate of S$10.85. (Lim Siyi) StarHub Ltd: FY12 results in-line; HOLD StarHub Ltd posted FY12 results that were mostly in line, where revenue rose 4.7% to S$2421.6m, or just 0.8% above our figure, while net profit jumped 13.9% to S$359.3m, and 2.5% above our estimate. Full-year dividend came in at S$0.20 as guided. For FY13, StarHub expects to see single-digit revenue growth, with EBITDA margin on service revenue likely to be about 31% (versus 32.3% in FY12). StarHub says it also intends to maintain its annual cash dividend of S$0.20/share, or S$0.05 per quarter. However, it raised its capex guidance to ~13% of operating revenue (versus 11% in FY12), which includes the payment of the leasehold land and the construction of its cable TV network transmission centre. Separately, StarHub announced that CEO Neil Montefiore will retire by end of Feb; COO Tan Tong Hai will step up to replace him in Mar. Biggest change to our model would be the increased capex guidance, otherwise, we are keeping our FY13 revenue and earnings largely unchanged. However, as we are pushing out DCF valuation to FY13 to FY16, our fair value improves from S$3.75 to S$4.00. But given the limited upside from here, we keep our HOLDrating. (Carey Wong) Lippo Malls Indonesia Retail Trust: 4Q12 results in line LMIRT posted 4Q12 gross rental income of S$33.0m, up 35% YoY. The increase was primarily due to the contributions from Pluit Village and Plaza Medan Fair (acquired in 4Q11) and marginal contributions from the six acquisitions made in 4Q12. Total revenue fell 11% to S$33.0m (equivalent to gross rental income in 4Q12). This is because of the absence of the service charge and utilities recovery following the outsourcing of the operational services to a third party operating company with effect from 1 May 2012. Net property income margin was at 93.4%, down 3.2 ppt QoQ. 4Q12 results were generally in line with our expectations; DPU of 0.74 S cents formed 97% of our estimate. We will speak further with management regarding these results and, in the meantime, put our FV of S$0.52 and Buy rating UNDER REVIEW. (Sarah Ong)

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

NEWS HEADLINES - US stocks pulled back on Thurs after a strong start to the year. The Dow finished down 0.3% at 13,944.05. It was down as much as 1% intraday. - F&N reported 1QFY13 revenue of S$913m (+17% YoY) and PBIT of S$161m (+14% YoY). With a disposal gain of S$4.8b on Asia Pacific Breweries, PAT totaled S$4.9b. - Saizen REIT has declared a 1HFY13 distribution of 0.66 S cents per unit (+4.8% HoH), representing an annualised yield of 7.0% based on yesterday's closing price of S$0.188. - Z-Obee Holdings' 3QFY13 revenue climbed 44% YoY to US$44.5m and PAT was US$7.6m, up 390% YoY. - Raffles Education posted 2QFY13 revenue of S$33.1m, up 2% YoY. PATMI increased by 39% YoY to S$4.9m.

MARKET PULSE: KSH, Suntec, SGX, CCT, FCT, TEE (23 Jan 2013)

Stock Name: KSH Hldg
Company Name: KSH HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.50

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

Research House: OCBC

Price Call: BUY

Target Price: 1.94

Stock Name: SGX
Company Name: SINGAPORE EXCHANGE LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 6.80

Stock Name: CapitaComm
Company Name: CAPITACOMMERCIAL TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.75

Stock Name: FrasersCT
Company Name: FRASERS CENTREPOINT TRUST

Research House: OCBC

Price Call: BUY

Target Price: 2.13

Stock Name: Tee Intl
Company Name: TEE INTERNATIONAL LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.28

MARKET PULSE: KSH, Suntec, SGX, CCT, FCT, TEE

23 Jan 2013

KEY IDEA KSH Holdings: Secures Q Bay contract; order book up 45% KSH reported that it has received the LOA for the main contract works for Q Bay Residences. This contract win - worth a hefty S$142.3m - is one of the largest awarded to KSH in recent years, and would boost its construction order book by ~45% to more than S$460m. Construction for the project would commence in Apr 2013 for a total length of 33 months and, with an anticipated net profit margin above 10%, would contribute more than S$14m of net profits, adding significant incremental visibility to construction earnings ahead. With a good track record of execution from management and a solid earnings growth profile (YoY earnings growth forecasted at 68% in FY13 and 73% in FY14), KSH remains one of our top value picks in the small-cap universe. Potential catalysts ahead include new contract wins and the anticipated launch of Hong Leong Gardens in 1H13. Maintain BUY with an unchanged fair value estimate of S$0.50. (Eli Lee) MORE REPORTS Suntec REIT: Positioning well for growth Suntec REIT posted an encouraging set of 4Q12 results last evening. Despite registering a 41.3% YoY decline in NPI to S$30.6m, DPU for the quarter came in at 2.326 S cents, down only 6.2%. Office segment continued to perform during the quarter, raking up 11.1% growth in revenue amid positive rental reversions and consistently high occupancy of 99.7%. This helped to cushion the softness at its retail segment, which experienced a 27.6% decline in revenue. Suntec City Phase 1 AEI is on track for completion by 2Q13 and 83% of its NLA had been pre-committed (71.2% in 3Q), Phase 2 AEI will commence on Mar and 37% pre-commitment had already been secured. Based on the timeline, we believe that 2Q may face the largest impact on its rental income, thereby prompting the REIT to utilise the Chijmes sales proceeds to mitigate the fall in DPU. We now tweak our model assumptions to factor in the better-than-expected results and a possible S$10m distribution from the divestment proceeds in FY13. Our fair value in turn is raised from S$1.70 to S$1.94. Maintain BUY.(Kevin Tan) Singapore Exchange: Limited price drivers ahead Singapore Exchange (SGX) posted 2QFY13 net earnings of S$76.3m, up 16.7% YoY, supported by better securities and derivatives income. For the Securities business, daily average traded value rose 8% YoY to S$1.2b. For the Derivatives business, daily average volume hit a record of 358,532 contracts, up 30% YoY. Its clearing house, the Singapore Exchange Derivatives Clearing (SGX-DC), has become a qualifying Central Counterparties (CCP) since 14 Jan 2013. The positive momentum in early 3QFY13 means that 2HFY13 is likely to be better than 1HFY13, and we raised our full year net earnings to S$317m. SGX's share price has done well since our last report, up 10%, but we see limited upside from current level. As such, we advocate locking in some profits and re-entering at lower price levels. Maintain HOLD with fair value estimate of S$6.80. (Carmen Lee) CapitaCommercial Trust: FY12 results within expectations CapitaCommercial Trust (CCT) reported 4Q12 distributable income of S$58.3m - 7.0% higher YoY. This cumulates to a FY12 distributable income of S$228.5m, up 7.4% YoY, which is within expectations and make up 101% of our forecast. (FY12 DPU is 8.04 S-cents; 4.7% distribution yield based on last closing price.) The growth in distributable income was mainly due to higher contributions from HSBC Building and the 20 Anson acquisition, partially off-set by negative reversions at 6 Battery Rd and the redevelopment of the Market St Car Park. Portfolio occupancy remained stable at 97.2% as of end 4Q12, versus 97.1% in the previous quarter. Average rentals of remaining leases expiring in 2013 are at S$7.48 - significantly lower than current Grade A levels of S$9.58 - and we expect continued positive rental reversions over FY13. We would speak further with management regarding these results and, in the meantime, put our Buy rating and fair value estimate of S$1.75 UNDER REVIEW. (Eli Lee) Frasers Centrepoint Trust: Continued growth in 1QFY13 Frasers Centrepoint Trust (FCT) delivered 1QFY13 NPI of S$27.1m and distributable income of S$21.8m, up 9.1% and 10.8% YoY respectively. The strong performance was driven mainly by Causeway Point (+9.1% YoY) and Northpoint (+5.2%). DPU for the quarter came in at 2.40 S cents, representing a YoY growth of 9.1%. This meets 22% of both our and consensus FY13F DPU estimates. Operationally, we note that a total of 62,341 sqft of NLA (7.1% of total portfolio NLA) was renewed at an average rental reversion of 5.2% in 1Q. In addition, portfolio occupancy improved from 93.6% in prior quarter to 97.2%, boosted by a 8.7ppt QoQ improvement in occupancy at Causeway Point to 96.4%. Management expects occupancy at the mall to trend up further when more tenants commence their operations from Jan onwards. We will be tuning into the results teleconference this morning. For now, we maintain our BUY rating but place our S$2.13 fair value under review. (Kevin Tan) TEE International: Thai associate buys industrial land for THB46.5m TEE International's 49%-owned Thai associate, Chewathai Ltd, has acquired a 450,922 sq ft piece of freehold industrial land in Thailand's Rayong Province for THB46.5m (S$1.9m). TEE intends to build factories on the property for leasing purposes, at an estimated cost of THB200m, and construction is expected to be completed in Sep 2013. The acquisition of the land will be financed by internal funds and bank borrowings and is not expected to have any material impact on the company's earnings or assets for FY13 (ending 31 May). We maintain our HOLD rating on TEE and fair value estimate of S$0.28. (Conrad Tan)

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

NEWS HEADLINES - US stocks rose on Tue as investors cheered positive earnings reports from Travelers and other companies. The Dow rose 0.5% to 13,712.21, the S&P 500 index gained 0.4% to 1,492.56 and the Nasdaq ended 0.3% higher at 3,143.18. - Foreigners' share of private home purchases in Singapore is expected to decline further in 1H13, from 6.3% last year, given the higher additional buyer stamp duty rates imposed on them under the recent property cooling measures, property consultants say. - Mapletree Industrial Trust's 3Q13 distributable income rose 6.9% YoY to S$37.7m, supported by a 7.7% increase in net property income to S$49.1m. Its distribution per unit rose 7.4% to 2.32 S cents.

MARKET PULSE: CityDev, KSH, Olam, Swiber, STX OSV, Valuetronics, Viz Branz, Midas, KSE (15 Nov 2012)

Stock Name: CITYDEV
Company Name: CITY DEVELOPMENTS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 13.10

Stock Name: KSH Hldg
Company Name: KSH HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.50

Stock Name: Olam
Company Name: OLAM INTERNATIONAL LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 1.80

Stock Name: Swiber
Company Name: SWIBER HOLDINGS LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.65

Stock Name: STXOSV
Company Name: STX OSV HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 1.69

Stock Name: Valuetronics
Company Name: VALUETRONICS HOLDINGS LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.20

Stock Name: VizBranz
Company Name: VIZ BRANZ LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.735

Stock Name: MIDAS
Company Name: MIDAS HLDGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.505

Stock Name: KS Energy
Company Name: KS ENERGY LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.83

MARKET PULSE: CityDev, KSH, Olam, Swiber, STX OSV, Valuetronics, Viz Branz, Midas, KSE

15 Nov 2012

KEY IDEA City Developments Limited: Looking ahead to Redhill launch in 4Q12 CDL reported 3Q12 PATMI of $134.5 which showed a marginal YoY increase (1.8%) over 3Q11. Recognition at development projects kept mostly in pace with the previous quarter and we judge this set of results to be generally in line with expectations. HAUS@SERANGOON GARDEN and Up@Robertson Quay have 86 and 48 units sold to date, respectively. In addition, The Palette and Bartley Residences are over 94% and 92% sold, respectively. Looking ahead to 4Q12, we expect CDL to launch the 508-unit condominium development (the Echelon) near Redhill MRT station and, in 1H13, another 912-unit project in Pasir Ris Grove. Hotel subsidiary M&C reported 3Q12 PATMI of GBP30.7, down 47.5% YoY due to the absence of disposal profit in 3Q11. YTD overall REVPAR was up 4.9%, with a particularly strong showing from London (up 10.2% YoY) from the Olympic games. Maintain BUYwith an unchanged fair value estimate of S$13.10 (15% RNAV disc.). (Eli Lee) MORE REPORTS KSH Holdings: Healthy earnings and dividends growth KSH reported 2QFY13 PATMI of S$9.8m, up a whooping 90% YoY mainly due to increased contributions from the construction business and project recognition from Cityscape@Farrer Park. We judge this set of results to be mostly in line with expectations as 1HFY13 PATMI now made up 46% of our FY13 forecast. We note the pace of profit recognition at Cityscape@Farrer in 2QFY13 (through share of results of associates) was somewhat below expectations - S$2.1m versus an expected S$3.5m-S$4.5m - but this was offset by higher profits from the construction segment. Management also announced an interim dividend of 1.35 S-cents, up 35% from a 1.0 S-cent interim dividend last year. KSH's order book continues to be healthy at S$375m as of end Sep 12, down 10% QoQ versus S$416m as of end Jun 12. Maintain BUY with an unchanged S$0.50 fair value estimate (50% discount to RNAV). (Eli Lee) Olam Int'l: 1QFY13 results mostly in line Olam International Limited (Olam) reported 1QFY13 revenue of S$4689.1m, though up 45% YoY, it was down 9% QoQ; but still met 24% of our full-year forecast. Reported net profit came in at S$43.2m, up 26% YoY but down 61% QoQ. We estimate that core earnings (excluding financial and biological revaluation gains) fell 16% YoY and 18% QoQ to S$28.4m, meeting around 8% of our FY13 estimate; but we still deem its results to be in line as 1Q typically contributes just 5-10% of its full-year earnings due to the unique seasonal pattern of its portfolio. As its results were mostly in line with our forecast, we are keeping our estimates unchanged. As such, our fair value also remains at S$1.80, or 12.5x FY13F EPS. Given the limited upside, we maintain our HOLD rating. (Carey Wong) Swiber Holdings: First dividend since FY05 Summary: Swiber Holdings (Swiber) reported a 92.6% YoY rise in revenue to US$265.3m but saw a 45.8% fall in net profit to US$7.3m in 3Q12, such that 9M12 net profit accounted for about 80% of our full year estimates, within expectations. Gross margin declined from 16.6% in 3Q11 to 14.1% in 3Q12, but was similar to 2Q12's 14.2%. Meanwhile, net debt to equity rose from 0.89x in Jun 2012 to 1.00x in Sep 2012. As of Nov 2012, Swiber's order book stood around US$1.4b vs. US$1.6b as at Aug. The group has also proposed an interim dividend of S$0.01/share. Meanwhile, we would be monitoring the group's operating cashflows. Maintain HOLDwith slightly lower fair value estimate of S$0.65 (prev. S$0.66). (Low Pei Han) STX OSV: Subdued 3Q STX OSV reported a fairly muted set of 3Q12 results that were below ours and the street's expectations. 3Q revenue and net profit to shareholders declined by 27% and 39% YoY to NOK 2.5b and NOK 228m respectively. On a sequential basis, revenue and net profit fell by 26% and 18% respectively. The weaker performance in 3Q12 was mainly due to slower pace of revenue recognition during the tail end of shipbuilding. Its yards reported generally stable operations, but the slow order intake (only NOK 900m in 3Q) may lead to under-utilization in its Norwegian yards in 2013. In view of this and the weaker-than-expected 3Q results, we reduce our fair value estimate to S$1.69 (previously S$2.00), Maintain BUY.(Chia Jiunyang) Valuetronics Holdings: Dearth of near-term catalysts Valuetronics Holdings Limited's (VHL) 2QFY13 PATMI plunged 88.5% YoY to HK$3.3m as it incurred hefty one-off termination expenses and provisions due to the cessation of its Licensing business. Revenue from continued operations was flat at HK$595.5m, or 11.6% below our forecast. However, we estimate that core PATMI came in at HK$31.5m, a 34.1% YoY increase, which exceeded our HK$26.2m projection. Looking ahead, we believe that sales from its largest customer would likely moderate, while there is also a strong sense of caution amongst its major customers. We trim our FY13 and FY14 revenue estimates by 9.7% and 10.6%, but raise our core PATMI forecasts by 8.0% and 6.5%, respectively, on higher margin assumptions. Applying a lower 4x (previously 4.5x) peg and rolling forward our valuations to blended FY13/14F core EPS, our fair value estimate falls from S$0.21 to S$0.20. While estimated 8.9% yield is attractive, we maintain HOLD given the lack of near-term catalysts. (Wong Teck Ching Andy) Viz Branz Limited: Faith will be rewarded Viz Branz (VB) reported a decent 1Q13 performance with continued margin improvements. Although revenue declined slightly, PATMI grew 17.4% YoY to S$4.5m following favourable raw material costs and effective cost control measures. With the performance coming in within our expectations, our FY13 outlook for VB remains unchanged, and we retain our fair value estimate of S$0.74. While there is no update on further share purchases by Lam Soon, we reiterate our optimism that an eventual general offer will materialize in the near-term. Given the recent price correction of the counter - and a supportive price base of S$0.735 from Lam Soon's partial stake purchase - we feel that an investment opportunity has presented itself. With a potential upside of nearly 10%, we upgrade VB to BUY. (Lim Siyi) Midas Holdings: 3Q12 net loss wider than expected Midas Holdings (Midas) reported a 21.8% YoY dip in its 3Q12 revenue to CNY202.7m, which was 6.0% below our projection. As a result of higher operating expenses, finance costs and a share of loss of CNY7.0m from its associated company, Nanjing SR Puzhen Rail Transport, Midas registered a loss before tax of CNY1.6m, which matched our estimate. However, net loss of CNY6.1m (3Q11: CNY27.4m PATMI) came in worse than our CNY1.3m forecast due to higher-than-expected income tax expenses. Midas' net gearing ratio also increased from 2.2% in 3Q11 and 22.5% in 2Q12 to 23.7% in 3Q12 as it increased its borrowings to finance its working capital requirements and capacity expansion plans. We expect this to translate into higher finance costs for the group in 4Q12 and FY13 and will thus adjust our estimates accordingly. More details will be provided after the analyst conference call. We still opine that FY12 would be a non-event for Midas and investors should instead focus on the likelihood of a recovery in its business operations in FY13, in line with the Chinese government's commitment to expand its rail transport system. We maintain our BUYrating but our S$0.505 fair value estimate is under review. (Wong Teck Ching Andy) KS Energy: Another profitable quarter KS Energy (KSE) reported a 21.9% YoY rise in revenue to S$161.3m and a net profit of S$14k in 3Q12 vs net loss of S$11.5m in 3Q11. 9M12 revenue and operating profit accounted for 80% and 73% of our full year estimates. 9M12 net profit was also within expectations, amounting to S$391k vs our full year estimate of a net loss of S$3.5m. Revenue growth was driven by the distribution business in 3Q12, while the drilling segment had a relatively stable quarter. More assets are expected to be deployed over the next 12 months, and we expect the earliest signs of a more significant recovery only in 2Q13. Pending a call with management, we maintain our HOLD rating but put our fair value estimate of S$0.83 under review. (Low Pei Han)

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

NEWS HEADLINES - US stocks slid further on Wednesday as worries about the fiscal cliff continued to weigh heavily on sentiment. The Dow slumped 1.5% to 12,570.95, despite surprisingly good results from Cisco Systems, while the S&P 500 Index fell 1.4% to 1,355.49 and the Nasdaq ended 1.3% lower at 2,846.81. - Otto Marine reported 3Q12 PATMI of US$4.7m, reversing a US$16.2m loss a year earlier. The improvement was supported by an 84% YoY jump in revenue to US$78.4m, with the increase coming mainly from its chartering and subsea services segments.

MARKET PULSE: KSH, DBS, SMRT (1 Nov 2012)

Stock Name: KSH Hldg
Company Name: KSH HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.50

Stock Name: DBS
Company Name: DBS GROUP HOLDINGS LTD

Research House: OCBC

Price Call: BUY

Target Price: 15.94

Stock Name: SMRT
Company Name: SMRT CORPORATION LTD

Research House: OCBC

Price Call: HOLD

Target Price: 1.71

MARKET PULSE: KSH, DBS, SMRT

1 Nov 2012

KEY IDEA KSH Holdings: Expect Cityscape boost in quarterly results ahead Summary: We conducted an independent visit to Cityscape@Farrer Park yesterday and found that 61% (152 out of 250 total units) have been sold to date, up significantly from 22% sold as of end Jun 2012. After visually inspecting the construction site, we judged it likely that progressive recognition for Cityscape would begin in 2QFY13 and boost earnings (to be announced in mid Nov 2012) by an estimated $3.5m to S$4.5m. This would drive a substantial YoY increase over last year's quarterly PATMI of S$5.2m. Since we have upgraded KSH to a Buy on 21 Sep 2012, its share price has appreciated 31%. We still see significant upside at current price levels , however, against our fair value estimate of S$0.50 (40% discount to RNAV). In particular, we see the upcoming results as a postitive near-term catalyst, while the company's fundamentals continue to strengthen as sales conversions continue at a healthy pace across its property developments. Reiterate BUY as our key small-cap conviction idea. (Eli Lee) MORE REPORTS DBS: Stronger-than-expected 3Q Summary: DBS Group Holdings released its 3Q results this morning and net earnings of S$856m, +12% YoY or 6% QoQ, was better than street expectations of S$801m (based on Bloomberg consensus number). While Net Interest Income rose 10% YoY and marginally by 1% QoQ to S$1332m for the quarter, the main reason for the better bottom-line was due to a sharp decline in allowances for credit and other losses. This fell 76% YoY and 47% QoQ to S$55m. Net earnings for the 9-month period came in at S$2599m, up 13%. Net Interest Margin continued on the downtrend for another quarter, down from 1.77% in 1Q12 and 1.72% in 2Q12 to 1.67% for this quarter. We will provide more details after the briefings later today. Meantime, we are likely to review our estimates and put our Buy rating and fair value estimate of S$15.94 under review. (Carmen Lee) SMRT Corporation: Uninspired but still okay Summary: SMRT's 2Q13 results came in within our expectations although operating expenses outpaced revenue growth. Revenue grew 7.7% YoY to S$281.2m on the back of higher ridership and full contribution from the Circle Line (CCL) while operating profit fell 3.5% YoY to S$40.6m following increases in operating expenses. SMRT also declared an interim dividend of 1.5 S cents (as compared to 1.75 S cents last year). While SMRT's electricity hedges had yielded encouraging cost savings and will continue to do so in 2H13, we lowered our estimates on the likelihood of higher operating expenses i.e. greater staff, repairs and maintenance costs. Nonetheless, our DDM-derived valuation of S$1.71 (assuming a 60% full-year PATMI payout) remains unchanged. Maintain HOLD. (Lim Siyi)

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

NEWS HEADLINES - US stocks ended mixed on Wednesday as trading resumed in the aftermath of Hurricane Sandy. The Dow fell 0.1% to 13,096.46, weighed by Walt Disney, while the S&P 500 Index ended almost flat at 1,412.16. The Nasdaq slid 0.4% to 2,977.23, dragged down by Facebook and Apple. - Jardine Cycle & Carriage's 3Q12 PATMI rose 12% YoY to US$323m, despite a 2% dip in revenue to US$5.33b, as operating costs also fell. Slowing demand for heavy equipment and lower crude palm oil prices are affecting profitability at its Astra International unit, while its other motor interests also face difficult trading conditions. - Sin Heng Heavy Machinery's 1Q13 PATMI more than doubled to S$3.3m, from S$1.6m a year ago, on the back of a 36% rise in revenue to S$43m. The strong performance was contributed by higher revenue from both its equipment rental and trading businesses.

MARKET PULSE: KSH Holdings, ASL Marine (21 Sep 2012)

Stock Name: KSH Hldg
Company Name: KSH HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.50

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

Research House: OCBC

Price Call: BUY

Target Price: 0.82

MARKET PULSE: KSH Holdings, ASL Marine

21 Sep 2011

KEY IDEA KSH Holdings: Earnings growth at deep value - upgrade to BUY Summary: Due to a rapid sales pickup at a key project, Cityscape@Farrer Park, we now forecast for FY13 (ending Mar 13) earnings to surge 68%. Similarly, we expect FY14 earnings to increase 73%. We see sustained earnings growth as a key price catalyst ahead, particularly as continued market liquidity seeks out deep value laggards like KSH (0.6x trailing PB, 3x FY13E PE). We also note KSH has been actively buying back shares near current levels - which management views as severely undervalued - and has a mandate to purchase up to a quarter of its free float, with ample cash (S$53m) to do so. Finally, we see a major re-rating as likely imminent given KSH's transition, over the last two years, from a cash-hoarding contractor to an property player actively managing shareholders' capital - deploying capital into accretive site acquisitions and returning excess cash via dividends and share buy-backs. Upgrade KSH to BUY as our key small-cap conviction idea. Our FV increases to S$0.50, from S$0.26 previously, as we lower the RNAV discount to 50% to reflect active capital management, better-than-expected real estate execution, and a still resilient construction order book. (Eli Lee) MORE REPORTS ASL Marine: A worthy stock amidst the rising tide Summary: Announcement of QE3, while long-expected, has helped buoy sentiment across the board. However, amidst the rising tide, investors are well-advised to pick stocks that can stand the test of time. In the small-mid cap space, ASL Marine's (ASL) diversified business model means it is positioned to capitalise on the recovering newbuild market (driven by offshore support vessels), while still being supported by its healthy shiprepair and chartering operations. Management has turned more positive but more importantly, we also expect the group to double its capex to about S$115m (mainly to expand shipcharter fleet and deepen waterfront) in FY13 compared to just S$67m in FY12. With an upside potential of about 27%, we maintain our BUY rating on the stock with S$0.82 fair value estimate. (Low Pei Han)

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

NEWS HEADLINES - The Dow rose 0.14% to 13,596.93, posting its third consecutive gain. The S&P 500 Index fell 0.05% to 1,460.26. Stocks dropped in early Thursday trading, with weak China economic data and higher-than-expected US jobless claims. Indexes reclaimed most of the lost ground. - United Envirotech's 70%-owned subsidiary has signed a deal to acquire an industrial wastewater treatment plant in Shandong, China. The first phase of the project will cost RMB120m (S$23.2m). - Sarin Technologies has launched a new version of its best-selling rough-diamond planning software - the AdvisorTM 5.0, which can further improve the value of the polished diamonds derivable from the rough raw material. - TA Corporation will preview the group's latest residential development, Gambir Ridge, which is located close to the Bartley and Woodleigh MRT stations. - Advanced Systems Automation has agreed to acquire 45% of the issued shares of Auramas Teknologi Sdn Bhd for a consideration of MYR7.7m, to be satisfied by a MYR100k cash payment and an allotment and issue of shares for the remaining MYR7.6m. - Texchem-Pack Holdings has subscribed for an additional six million shares in Texchem Polymers Sdn Bhd for MYR6m (S$2.4m).

MARKET PULSE: Noble, ComfortDelgro, Tat Hong, SingTel, CDL, STX OSV, CSE Global, KSH

Stock Name: Noble Grp
Company Name: NOBLE GROUP LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 1.28

Stock Name: ComfortDelGro
Company Name: COMFORTDELGRO CORPORATION LTD

Research House: OCBC

Price Call: HOLD

Target Price: 1.53

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

Research House: OCBC

Price Call: BUY

Target Price: 1.39

Stock Name: SingTel
Company Name: SINGTEL

Research House: OCBC

Price Call: BUY

Target Price: 3.68

Stock Name: CITYDEV
Company Name: CITY DEVELOPMENTS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 11.53

Stock Name: STXOSV
Company Name: STX OSV HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 2.00

Stock Name: CSE Global
Company Name: CSE GLOBAL LTD

Research House: OCBC

Price Call: BUY

Target Price: 0.80

Stock Name: KSH Hldg
Company Name: KSH HOLDINGS LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.25

MARKET PULSE: Noble, ComfortDelgro, Tat Hong, SingTel, CDL, STX OSV, CSE Global, KSH

14 Aug 2012

KEY IDEA Noble Group Ltd: Upgrade to BUY with new S$1.28 FV Noble Group (Noble) reported 1H12 revenue of US$47,069.0m, meeting 54.4% of our original FY12 forecast; core earnings came in around US$230.3m, or 40% of our full-year forecast. On its financial position, Noble notes that it currently has about US$6.2b worth of liquidity headroom, which management believes "eliminates any refinancing risk in the short and medium term". It adds that it expects to receive some US$800m in 2H12 from the Gloucester-Yancoal merger and sale of a tank farm asset in Brazil. Noble further expects the market stress to provide it the opportunity to attract talent and invest in attractive assets to support its franchise. To account for the 1H12 performance, we are raising our FY12 revenue forecast by 7.9% but paring our core earnings by 2.8% on weaker margin assumptions. As we are also pushing out our valuations from FY12F EPS to blended FY12/13F EPS (still based on 10.5x), our fair value improves from S$1.21 to S$1.28. We also upgrade our call from Hold to BUY. (Carey Wong) MORE REPORTS ComfortDelgro: Stable 1H12 results ComfortDelgro announced a 5.7% YoY increase in revenue to S$1.7b on the back of broad-based growth across all but one segment and better overseas performance. We do not anticipate any surprises for CD in 2H12 and expect revenue to continue its broad-based growth across its various segments. In addition, any corresponding increases in operating expenses will be controlled i.e. through fuel hedges and effective management. As for CD's current price valuation, we deem the recent strength and resilience is a reflection of the market's desire for safe and stable yields given uncertain global economic climate. We stand by our conservative payout assumption of 50% of PATMI for our dividend-discount model as CD has consistently paid dividends of around 50-53% of its PATMI over the past four years. Leaving our earnings estimates unchanged, we maintain HOLD at S$1.53. (Lim Siyi) Tat Hong: Recovery back in full swing Tat Hong Holdings (Tat Hong)'s 1Q13 net profit attributable to shareholders tripled to S$16.7m (1Q12: S$5.5m) such that the quarter earnings formed 24% and 31% of ours and the street's full year estimates. Revenue jumped by 36% YoY to S$215.3m and overall gross margin increased by nearly four percentage points to 39.2% on better pricing and higher utilization rates. Unlike a year ago when the group faced a cyclical weakness in construction activities, business disruptions from the Queensland floods and management issues with its China operations, Tat Hong is now making a strong comeback on the prospect of continued growth (from increased infrastructure spending) across the region. We maintain our BUY rating and further raise our fair value estimate to S$1.39 (previously S$1.21) on the improved earnings outlook. (Chia Jiunyang) SingTel: Soft start to FY13 SingTel reported its 1QFY13 results this morning, with revenue falling 1.6% YoY to S$4533.0m, meeting around 24% of our full-year forecast; impacted by the 3% depreciation in the AUD against the SGD. Core net profit (excluding exceptional items) slipped 2.6% to around S$850.0m, or 22.9% of our FY13 estimate. One of the key reasons for the fall was due to lower Associates' contribution, which fell 14.7%, mainly due to the weakening of the regional currencies (especially INR and IDR against the SGD). Meanwhile, SingTel has affirmed its previous guidance for FY13, where consolidated revenue should grow at low single-digit level and EBITDA to remain stable; also estimates free cash flow to be around S$2.6b, after spending around S$950m capex in Singapore and A$1.1b in Australia; also expects ordinary dividends from regional mobile associates to grow. We will have more after the analyst teleconference. Until then, we place our Buy rating and S$3.68 fair value under review. (Carey Wong) City Developments Limited: First take on 2Q12 results City Developments (CDL) reported 2Q12 PATMI of S$137.7m, which was down 38% YoY mostly due to the absence of gains from the Corporate Building disposal and sale and leaseback of Studio M in 2Q11. 2Q12 revenues came in S$787.8m, down 20% YoY. We view these results to be broadly in line with consensus and our expectations. We continue to see healthy take-up rates at launched projects with 1,299 units sold in 1H12 (1H11: 809) and the group expects to launch two projects in 2H12, which are 508-unit and 912-unit condominiums projects at Alexandra Rd and Pasir Ris Grove respectively. The hotel subsidiary, Millennium & Copthorne, reported 1H12 PATMI of GBP58.4m, down 6% though RevPar was up 4.6% for a like-for-like basis. We would be speaking with management later regarding 2Q12 results and in the meantime, put our Buy rating with fair value estimate of S$11.53 (20% RNAV discount) under review. (Eli Lee) STX OSV: 2Q12 results in line STX OSV's 2Q12 revenue increased by 21.6% YoY to NOK3.3b and net profit remained flattish at NOK279m (+2.6% YoY), such that 1H12 net profit formed 44% of our full year estimates. 2Q order intake was nearly NOK 5.0b, bringing its order-book to NOK18.3b. The group also announced a special interim dividend of 13 S cts (versus last year's interim dividend of 5 cents) - a more than doubling in dividend payout from the previous year. Pending a teleconference later, we keep our Buy rating but put our S$2.00 fair value estimate under review. (Chia Jiunyang) CSE Global: 2Q net profit of S$22m CSE Global reported a decent set of 2Q12 results, with net profit attributable to shareholders reverting to S$21.1m from a loss of S$7m in the year-ago period. The results were in line with ours and the street's expectations. 2Q net orders were S$115m, bringing the outstanding orders to S$370m as of end of June 2012. We will meet up with the management later for more updates. In the meantime, we keep our Buy rating and put our S$0.80 fair value estimate under review. (Chia Jiunyang)

KSH Holdings: 1QFY13 numbers broadly within expectation KSH reported 1QFY13 PATMI of S$4.3m, up 66% YoY mostly due to higher profits from the construction business and a disposal gain from the sale of an investment property in China. We judge this result to be within expectation as 1QFY13 PATMI now makes up 30% of our FY13 forecast - tracking marginally above due to the disposal gains. 1QFY13 topline of S$55.2m increased 35.3% YoY again due to increased revenues from the construction business and the investment property disposal. The construction order book stands of ~S$416m as of end Jun 12, which we view as relatively healthy. We would speak further with management regarding these results later today and, in the meantime, put our Hold rating with a $0.25 fair value estimate under review. (Eli Lee) For more information on the above, visit www.ocbcresearch.comfor the detailed report.

NEWS HEADLINES - US stocks dropped following a poor reading on Japan's economic growth. The Dow fell 0.3% to 13,169.43. The S&P 500 dropped 0.1% to 1,404.11. - Wheelock Properties reported a 31% YoY increase in 2Q12 PATMI to S$48.5m. Revenue had jumped 72% YoY to S$116.6m. - Boustead Singapore posted 1Q13 PATMI of S$12.2m, up 43% YoY. Revenue rose 25% YoY to S$113.35m. - Bukit Sembawang saw 1Q13 PATMI fall 40% YoY to S$27.7m. Revenue had declined 13% YoY to S$105m. - Metro Holdings registered 1Q13 PATMI of S$14.8m, versus S$3m a year ago. Revenue climbed 3.7% YoY to S$44.2m. - Tiong Seng posted 2Q12 PATMI of S$9.7m, up 6% YoY. Revenue soared 55% YoY to S$130m.

MARKET PULSE: OSIM Intl, KSH Holdings (8 Jun 2012)

Stock Name: OSIM
Company Name: OSIM INTERNATIONAL LTD

Research House: OCBC

Price Call: BUY

Target Price: 1.61

Stock Name: KSH Hldg
Company Name: KSH HOLDINGS LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.25

MARKET PULSE: OSIM Intl, KSH Holdings

8 Jun 2012

KEY IDEA OSIM International: Stronger position to weather a storm We expect OSIM International's (OSIM) earnings momentum to continue in FY12, underpinned by innovative product launches and its strong focus on improving productivity and operational efficiencies. We believe that OSIM is on track to deliver earnings that would exceed consensus' expectations of S$81.2m in FY12. OSIM has also developed a stronger brand equity and is in a better financial health since the last financial crisis, in our opinion. This would enable to group to withstand the current macroeconomic uncertainties. Recent share buyback activities would also enhance shareholder value and lend support to its share price. We retain our forecasts, BUY rating and fair value estimate of S$1.61, which implies total potential returns of 42.8%. (Wong Teck Ching Andy) MORE REPORTS KSH Holdings: Execution at redevelopments to be key The BCA is forecasting a 16% to 34% dip in total construction demand to S$21b-S$27b in 2012, with the bulk of the dip expected to come from lower private demand (S$8b - S$12b in 2012 versus S$16.8b in 2011). KSH has historically been focused on private projects given higher margins, and the weakened outlook would likely put downward pressure on its construction business over the mid-term. With net gearing at a low 4.1% and its expertise in construction, we see KSH well-poised to add value as a JV partner with larger developers. Already we have seen KSH taking stakes in the redevelopment of Hong Leong Garden Shopping Centre, Seletar Garden and 11 King Albert Park. We see execution at KSH's redevelopment projects to be key drivers for the share price ahead and could offset, to an extent, the weaker private construction outlook. Maintain HOLD rating at an unchanged S$0.25 fair value estimate. (Eli Lee)

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

NEWS HEADLINES - US stocks lost much of Thursday's gains following Bernanke's comments that the Fed would review the economy before making a decision on further stimulus. - The People's Bank of China on Thursday lowered benchmark interest rates on loans and deposits. The one-year benchmark deposit rate will fall from 3.50% to 3.25% effective today. - SGX is launching dual-currency trading for ETFs on Jun 15th, enabling investors to trade foreign-currency denominated ETFs in Singapore dollars. - Olam International is acquiring Kayass Enterprises SA, a Nigerian maker of dairy and beverage products for US$66.5m. - Riverstone Holdings has awarded construction contracts amounting to ~MYR13m as part of its expansion plans to meet the increasing market demand for the group's cleanroom and healthcare gloves.