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

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

Research House: OCBC

Price Call: BUY

Target Price: 0.86

Stock Name: Goodpack
Company Name: GOODPACK LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 1.95

Stock Name: CapMallsAsia
Company Name: CAPITAMALLS ASIA LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 2.55

Stock Name: VizBranz
Company Name: VIZ BRANZ LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.74

Stock Name: Karin
Company Name: KARIN TECHNOLOGY HLDGS LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.295

Stock Name: MIDAS
Company Name: MIDAS HLDGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.60

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

7 Feb 2013

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

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

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

Market Pulse: SIAEC, Valuetronics, FEHT, Karin, Yangzijiang, DBS, CDL (6 Feb 2013)

Stock Name: SIA Engg
Company Name: SIA ENGINEERING CO LTD

Research House: OCBC

Price Call: HOLD

Target Price: 4.38

Stock Name: Valuetronics
Company Name: VALUETRONICS HOLDINGS LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.19

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

Research House: OCBC

Price Call: HOLD

Target Price: 1.02

Stock Name: Karin
Company Name: KARIN TECHNOLOGY HLDGS LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.25

Stock Name: Yangzijiang
Company Name: YANGZIJIANG SHIPBLDG HLDGS LTD

Research House: OCBC

Price Call: HOLD

Target Price: 0.95

Stock Name: DBS
Company Name: DBS GROUP HOLDINGS LTD

Research House: OCBC

Price Call: BUY

Target Price: 15.94

Stock Name: CITYDEV
Company Name: CITY DEVELOPMENTS LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 13.01

MARKET PULSE: SIAEC, Valuetronics, FEHT, Karin, Yangzijiang, DBS, CDL

6 Feb 2013

KEY IDEA SIA Engineering: 9MFY13 slightly below expectations SIA Engineering Company's (SIAEC) 9MFY13F results were slightly below our expectations. Revenue increased by 1.1% to S$863.2m, chiefly due to an increase in materials and line maintenance revenue. Operating profit thus stayed roughly flat (+0.1% YoY) at S$97.2m. Share of profits from associated and JV companies increased by 0.3% to S$118.8m, representing a contribution of 51.5% of the group's pre-tax profits. PATMI was up 0.7% YoY to S$204.2m. This formed 72.6% of our previous FY13F estimate of S$281.4m, which we now reduce to S$274.0m. Still using a P/E peg of 17.1x and our basic EPS forecast of 25.6 S cents for 4QFY13F-3QFY14F, we reduce our fair value estimate from S$4.48 to S$4.38 and maintain our HOLD rating on SIAEC. (Sarah Ong) MORE REPORTS Valuetronics Holdings: Another challenging quarter Valuetronics Holdings Limited's (VHL) 3QFY13 results were below our expectations. Revenue from continuing operations fell 16.3% YoY to HK$508.1m, or 10.5% below our forecast. Estimated core PATMI declined 17.9% to HK$23.9m and fell short of our projection by 16.2%. This was driven by a slowdown in demand from some of its customers, while ASP pressures also exacerbated the challenging operating conditions. On a positive note, VHL ended the Dec-quarter with a healthy net cash balance of HK$234.7m, which would act as a buffer in light of the still uncertain macroeconomic environment. We pare our FY13 and FY14 revenue forecasts by 5.0% and 4.3%, and our core PATMI projections by 9.3% and 7.4%, respectively. We also roll forward our valuations to 4x FY14F EPS, and our fair value estimate is lowered from S$0.20 to S$0.19. Maintain HOLD. (Wong Teck Ching Andy) Far East Hospitality Trust: Results in line for 1 Aug 2012-31 Dec 2012 Far East Hospitality Trust (FEHT) reported its first results since listing for the financial period 1 Aug 2012-31 Dec 2012 that were generally in line with our expectations (the actual results are from 27 Aug to 31 Dec 2012 since FEHT was listed on 27 Aug 2012). While gross revenue, at S$42.2m, was 0.7% lower than the pro-rated forecast in the prospectus, net property income of S$38.8m was 0.2% higher than the forecast as a result of lower operating expenses. Active management of finance costs and other trust expenses helped to lift its income available for distribution 4.5% above its forecast to S$33.6m. We maintain our HOLDrating on FEHT and put our fair value of S$1.02 under review. We will be meeting management shortly. (Sarah Ong) Karin Technology: 1HFY13 core PATMI within expectations Karin Technology's (Karin) 1HFY13 revenue exceeded our expectations but core PATMI was in line due to lower-than-expected gross margin. Revenue surged 39.7% YoY to HK$2,123.3m and formed 54.4% of our FY13 forecast. Reported PATMI jumped 47.5% YoY to HK$33.7m. However, after adjusting for exceptional items, we estimate that core PATMI came in at HK$26.8m (+5.1% YoY) and constituted 50.1% of our full-year projection. Karin's robust topline growth was driven largely by its Consumer Electronics Products segment, which reported a 56.7% increase in sales, although this also resulted in margin compression given the high volume, low margin nature of the business. Karin declared an interim dividend of 7.2 HK cents/share, higher than the 7 HK cents/share in 1HFY12 (3.5 HK cents of interim and special DPS each). Karin also returned to a net cash position of HK$69.4m in 1HFY13 (2HFY12: net debt of HK$31.7m), aided by strong free-cashflows generated of HK$99.7m. We will provide more updates after speaking with management. We maintain our HOLD rating on Karin but our S$0.25 fair value estimate is under review. (Wong Teck Ching Andy) Yangzijiang Shipbuilding: Ups stake in Xinfu yard Yangzijiang Shipbuilding (YZJ) announced last evening that it has acquired an additional 20% interest in Jiangsu Yangzi Xinfu Shipbuilding for US$18m (~RMB 112.1m). Following this, YZJ will hold an 80% interest in the Xinfu yard, which has a huge production area of about 166ha (YZJ's old yard: 20ha, new yard: 201ha, Changbo yard: 29ha) and is therefore ideal for building large vessels. As mentioned by management previously, the group has plans to build VLCCs, large containerships (e.g. 10,000 TEU) and other vessels in this yard. Meanwhile, YZJ has also acquired the remaining balance of 40% interest in Shanghai Henggao Ships Design Co for RMB6m. The latter is engaged in the detail and production design for merchant ships. These acquisitions are still relatively small in comparison to the group's cash position - YZJ had net cash and held-to-maturity assets of RMB2.6b as at Sep 2012. Maintain HOLD with S$0.95 fair value estimate on YZJ. (Low Pei Han) DBS: Slightly below expectations 4Q DBS posted 4Q12 net earnings of S$760m this morning (excluding divestment gains of S$450m), and this is slightly below market expectations of S$788m (based on Bloomberg poll). For the full year, net earnings came in at S$3,360m (+17.4% excluding divestments or S$3,809m including divestment gains). The board has declared a final dividend of 28 cents, bringing full year payout to 56 cents per share (same as 2011), and the shares will be quoted ex-dividend on 13 May 2013. Loans grew 8% from end 2011 or 4% from 3Q12 to S$210.5b. Net Interest Margin continued to ease off, down from 1.73% in 4Q11 and 1.67% in 3Q12 to 1.62% in 4Q12. For the year, double-digit declines in Stockbroking and Investment Banking due to weak equity markets were compensated for by double-digit gains for Wealth Management and Cards. We will provide more updates after the results briefing. Do note that our previous call on the stock was a BUY with a fair value estimate of S$15.94. We will review our estimates after the briefing. (Carmen Lee) City Developments Limited: Top bid at GLS tender for Commonwealth Ave site Yesterday evening, City Developments (CDL) was part of a consortium that put in the top bid of S$562.8m at a GLS tender for a residential site at Commonwealth Ave. We understand that CDL would have a 30% stake in this project. The tender attracted three bidders in total, and CDL's bid was 2.4% above that of the second highest bidder. The site has a land area of 12.1k sqm and a maximum GFA of 59.2k sqm, and is across the street from the Queenstown MRT station - an attractive location. We estimate breakeven and selling ASPs of S$1.35k psf and S$1.6k psf, respectively, for the 99-year condominium project with ~700 units and expect this transaction to accrete 4 S-cents to CDL's RNAV. Recent transactions over the last twelve months at Alexis, the last private condominium (freehold) launched in that area, were at ASPs of S$1.65k psf. Maintain HOLD on CDL with our fair value estimate of S$13.01 (15% discount to RNAV) under review. (Eli Lee)

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

NEWS HEADLINES - US stocks rebounded on Tue to recoup much of Mon's losses, boosted by news of a leveraged buyout of computer maker Dell. The Dow rose 0.7% to 13,979.30, the S&P 500 index gained 1% to 1,511.29 and the Nasdaq ended 1.3% higher at 3,171.58. - FJ Benjamin Holdings' 2Q13 net profit fell 73% YoY to S$1.3m as turnover slid 12% to S$97m, due to lower revenue from its operations in North Asia and weaker spending in Singapore and Malaysia during the festive season. - Stamford Land Corp's 9M13 net profit fell 47% YoY to S$18.6m, as turnover slid 53% to S$196m, due to a plunge in revenue from its property development segment. - Lorenzo International, Ziwo Holdings and Sinotel Technologies each separately warned of full-year losses for 2012 while United Food Holdings said it will report a loss for 4Q12.

MARKET PULSE: Karin Tech, Global Palm, Keppel Land (23 Nov 2012)

Stock Name: Karin
Company Name: KARIN TECHNOLOGY HLDGS LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.25

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

Research House: OCBC

Price Call: HOLD

Target Price: 0.19

Stock Name: KepLand
Company Name: KEPPEL LAND LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 3.49

MARKET PULSE: Karin Tech, Global Palm, Keppel Land

23 Nov 2012

KEY IDEA Karin Technology: An Apple for a Christmas cheer We expect Karin Technology (Karin) to be a key beneficiary of recent new product launches by Apple, given the latter's leadership position in the smartphones and tablets space. Karin has the license to sell the full range of Apple products through its In-Smart retail stores in Hong Kong, which includes the iPhone 5, iPad Mini and fourth-generation iPad. However, the limiting growth factors would be supply constraints and low margins on these products, in our opinion. Management would also strive to increase focus on higher margin network security products and enterprise software solutions to mitigate this. We maintain our HOLDrating and S$0.25 fair value estimate on Karin, still based on 6x FY13F core EPS. Prospective FY13F dividend yield remains attractive at 8.2%. (Wong Teck Ching Andy) MORE REPORTS Global Palm: Still no catalyst yet Global Palm Resources (GPR) has slashed its planting target by >60% to 300-400 ha for 2012 as it now faces increasing difficulties in its negotiation with the local population. Instead, management continues to be on the lookout for acquisitions to boost its plantation size; and believes that the process to be easier now with the drop in CPO (crude palm oil prices). Nevertheless, we note that rising inventory levels could remain an issue which could see stockpiles rising further in 4Q12 and even 1Q13 due to continued strong CPO production and muted demand. Unless there is a sharp recovery in CPO prices or a sizable brown-field acquisition, we do not see any catalyst in sight. Maintain HOLDwith an unchanged fair value of S$0.19 even as we roll forward our 10x peg from blended FY12/FY13 to FY13F EPS. (Carey Wong) Keppel Land: Establishes US$3bn multicurrency MTN program Keppel Land (KPLD) announced that it has established a US3bn Multicurrency Medium Term Note Program. As of end Sep 12, KPLD's net gearing is a healthy 21% and we see this program adding significant incremental financial flexibility to its balance sheet, particularly as the group continues to look into allocating capital into accretive land acquisitions. That said, we continue to see limited catalysts for the share price ahead given limited visibility for major launches and MBFC T3 divestment over the near term. Maintain HOLD with an unchanged fair value estimate of S$3.49 (35% discount to RNAV). (Eli Lee)

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

NEWS HEADLINES - US consumer sentiment rose slightly in Nov to the highest since Sep 2007, boosted by rising wages and an improving jobs market, but tempered by uncertainty about the fiscal cliff. US markets were shut yesterday for Thanksgiving. - Cambridge Industrial Trust has secured from its existing lenders a S$100m bridging loan to finance the purchase of properties and a S$50m revolving credit facility to fund various asset enhancement initiatives within its portfolio. - Technics Oil and Gas's 4Q12 PATMI declined 6% YoY to S$2.4m, despite a 10% rise in revenue to S$25m. Its gross profit margin fell due to more contract engineering contracts that command relatively lower margins being recognised. - Magnus Energy Group has received an A$2.7m payment for the sale of its entire investment in Acer Energy.

MARKET PULSE: MLT, Karin (30 Aug 2012)

Stock Name: MapletreeLog
Company Name: MAPLETREE LOGISTICS TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.19

Stock Name: Karin
Company Name: KARIN TECHNOLOGY HLDGS LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.25

MARKET PULSE: MLT, Karin

30 Aug 2012

KEY IDEA Mapletree Logistics Trust: Portfolio optimization via capital recycling Summary: Mapletree Logistics Trust (MLT) announced on 28 Aug that it will acquire Hyundai Logistics Centre in Gyeonggi-do, South Korea for a consideration of ~S$24.6m. Separately, MLT entered into an agreement to divest 30 Woodlands Loop in Singapore for S$15.5m. We understand that the sale proceeds will be redeployed to partially fund the acquisition in South Korea. We view both transactions positively as it clearly reflects MLT's capability to optimize portfolio returns through proactive asset management. The capital recycling initiative and overseas acquisition were also spot on with projections made in our S-REIT sector published a week ago. We now tweak our forecasts to accommodate the two transactions. Our FY13-14F DPUs are raised by 0.3-0.7%, but there is no change to our fair value of S$1.19. Maintain BUY. (Kevin Tan) MORE REPORTS Karin Technology: Good proxy to Apple Summary: Karin Technology (Karin) reported a 35.3% YoY surge in revenue to HK$1,712.9m and a 22.0% jump in PATMI to HK$36.9m for 2HFY12. After adjusting for exceptional items, we estimate that core PATMI would instead have declined 12.1% YoY to HK$21.4m, which was below our expectations. For FY12, revenue of HK$3,232.3m (+49.1%) was 1.8% above our forecast; while estimated core PATMI of HK$46.9m (-7.2%) was 14.1% below our projections. A final dividend of 7.1 HK cents/share was declared, bringing total FY12 dividends to 14.1 HK cents/share, or a yield of ~8.4%. Looking ahead, we believe that Karin's Consumer Electronics Products segment would remain as its main revenue driver given its license to sell the full range of Apple products at its retail stores. We raise our FY13 revenue forecast by 6.9% but lower our core PATMI estimate by 7.6% on lower margin assumptions. Maintain HOLD, with a lower fair value estimate of S$0.25 (previously S$0.265). (Wong Teck Ching Andy)

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

NEWS HEADLINES - US stocks on Wednesday closed slightly up. The Federal Reserve reported gradual economic expansion across its 12 districts. The Dow ended at 13,107.48, less than 0.1% higher. The S&P 500 Index rose 0.1% to 1,410.49. - GuocoLeisure announced FY12 PATMI of US$77.7m, down 3.6%. Revenue had slipped 5.4% to US$369.8m. - GuocoLand's FY12 PATMI of S$63.2m was down 48%. Revenue had declined 1% to 678.5m. - Dukang Distillers' FY12 net profit was RMB218.1m, up 29.8%. Revenue had increased 28.1% to RMB1.827b. - Lum Chang's FY12 PATMI of S$21.0m was up 31% versus restated FY11. Revenue had increased 48% to S$282.9m. - Swee Hong posted FY12 net profit of S$5.48m, down 55.5%. Revenue had increased by 15.2% to S$97.3m. - CFM Holdings reported FY12 PATMI of S$543k, up 33.1%. Revenue had declined by 9.3% to S$47.4m.

MARKET PULSE: Olam, Micro-Mechanics, Sembcorp Marine, Karin (29 Aug 2012)

Stock Name: Olam
Company Name: OLAM INTERNATIONAL LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 1.80

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

Research House: OCBC

Price Call: HOLD

Target Price: 0.325

Stock Name: SembMar
Company Name: SEMBCORP MARINE LTD

Research House: OCBC

Price Call: BUY

Target Price: 6.09

Stock Name: Karin
Company Name: KARIN TECHNOLOGY HLDGS LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.265

MARKET PULSE: Olam, Micro-Mechanics, Sembcorp Marine, Karin

29 Aug 2012

KEY IDEA Olam Int'l: Cautious FY13 outlook Olam International Limited (Olam) saw FY12 revenue rising 8.2% to S$17.1b, but reported net profit fell 13.7% to S$370.9m, which missed our forecast. It also declared a lower dividend of S$0.02 (versus S$0.03 in FY11). Going forward, Olam expects to see some uncertainty and volatility in the near term, but remains positive on the Agri-industry prospects. In light of the still muted outlook, we pare our estimates for FY13 revenue by 9.8% and core earnings by 6.2%. Hence even as we roll forward our unchanged 12.5x peg to FY13F EPS (from blended FY12/FY13 previously), our fair value drops to S$1.80. Maintain HOLD and would only consider accumulating around S$1.60 or better. (Carey Wong) MORE REPORTS Micro-Mechanics: Decent showing amid tough environment Micro-Mechanics Holdings (MMH) reported 4QFY12 results which beat our expectations. Revenue declined 6.8% YoY to S$10.3m, while net profit fell slightly by 0.4% YoY to S$1.4m, such that FY12 revenue and net profit of S$38.8m (-14.4%) and S$4.2m (-38.2%) exceeded our estimates by 2.8% and 7.3%, respectively. A final dividend of 2 S cents/share was declared, bringing total FY12 dividends to 3 S cents/share. This was similar to FY11 and our forecast, and translates into a yield of 7.7%. Looking ahead, sentiment within the semiconductor industry remains cautious, while cost pressures are also apparent. MMH is seeking to mitigate this via the implementation of more automated processes to improve its efficiency and lead time. We keep our FY13 projections and introduce our FY14 estimates. Maintain HOLD and S$0.325 fair value estimate, still based on 9x FY13F EPS. (Wong Teck Ching Andy) Sembcorp Marine: FPSO contract materialises, as expected Sembcorp Marine (SMM) announced that it has secured a contract worth US$674m for the construction of eight modules and module integration works for two FPSO vessels from Tupi B.V. (a consortium owned by Petrobras Netherlands, BG Overseas and Galp Energia E&P). Scheduled for completion in 60 months, the two FPSOs will be deployed in Brazil. Tupi also has a similar contract option to construct four modules and module integration work for an FPSO which can be exercised within 18 months. As mentioned in our earlier reports (8 Aug, 22 Aug 2012), SMM is expected to secure FPSO work from Petrobras and hence this latest announcement is within our expectations. With this contract win, SMM has secured contracts worth about S$9.1b YTD, accounting for 95.9% of our full year estimate. Maintain BUY with S$6.09 fair value estimate. (Low Pei Han) Karin Technology: 2HFY12 core earnings below expectations Karin Technology's (Karin) 2HFY12 revenue was within our expectations but core PATMI missed. Revenue jumped 35.3% YoY and 12.7% HoH to HK$1,712.9m, while reported PATMI surged 22.0% YoY and 61.3% HoH to HK$36.9m. But after adjusting for forex effects and other exceptional items, we estimate that core PATMI would instead have decreased 12.1% YoY and 16.2% HoH to HK$21.4m. For FY12, revenue accelerated by 49.1% to HK$3,232.3m, or 1.8% above our forecast. This growth was driven largely by its Consumer Electronics Products segment (now separated from the IT Infrastructure segment for reporting purposes), which entails the selling of a full range of Apple products through Karin's retail stores. Reported PATMI for FY12 grew 15.7% to HK$59.7m. We estimate that core PATMI fell 7.2% to HK$46.9m, which was 14.1% below our projections. On a positive note, a final dividend of 7.1 HK cents/share was declared, bringing total FY12 dividends to 14.1 HK cents/share, or a yield of ~8.8%. This is in line with our forecast and compares favourably to FY11's DPS of 12 HK cents. We will provide more details after the analyst briefing. For now, we place our Hold rating and S$0.265 fair value estimate under review. (Wong Teck Ching Andy)

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

NEWS HEADLINES - US stocks ended mostly lower on Tuesday as investors weighed mixed economic reports and were cautious ahead of possible central-bank moves. The Dow fell 0.17% to 13,102.99. The S&P 500 Index slipped 0.08% to 1,409.30. - Sim Lian Group's FY12 net profit was S$229.1m, up 14%. Revenue climbed 3% to S$764m. - Eu Yan Sang's FY12 net profit was down 35% to S$16.4m. Revenue had risen 9% to S$289.9m. - Loyz Energy has clinched its first major onshore exploration and production agreement in the US and says that the contract could potentially contribute quickly to earnings and cash flow. - Magnus Energy posted a FY12 net loss of S$684k, versus PATMI of S$1.51m for FY11. Revenue had fallen 12.7% to S$48.3m.

Karin Technology downgraded to 'hold' by OCBC

Stock Name: Karin
Company Name: KARIN TECHNOLOGY HLDGS LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.27

OCBC Investment Research in a Feb 15 research report says: "Topline jumped 68.6% and 20.0% h-o-h to HK$1,519.4 million, meeting 61.2% of our full-year projections. Gross margin of 5.9% represented a 3.6ppt y-o-y and 0.8ppt h-o-h drop, due largely to a change in product mix and intense competition from various components and enterprise hardware products.

"Reported PATMI rose 6.8% y-o-y but declined 24.4% h-o-h to HK$22.8 million. Adjusting for forex effects and exceptional items, we estimate that core PATMI would instead have slipped 2.6% y-o-y but increased 4.9% h-o-h to HK$25.5 million, or 44.4% of our FY2012 forecasts.

"A dividend of 7 HK cents (inclusive of a 3.5 HK cent special dividend) was declared, versus 5 HK cents in 1HFY11. Rolling forward our valuation to 6x blended FY12/13F core EPS, we obtain a new fair value estimate of 27 cents (28 cents previously). DOWNGRADE TO HOLD."

MARKET PULSE: CapitaLand, STX OSV, Olam, Goodpack, Tat Hong, Karin, Marco Polo Marine, Rotary, Sakari, SIAEC & ST Engineering (15 Feb 2012)

Stock Name: Capitaland
Company Name: CAPITALAND LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 3.11

Stock Name: STXOSV
Company Name: STX OSV HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 2.25

Stock Name: Goodpack
Company Name: GOODPACK LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 1.70

Stock Name: Olam
Company Name: OLAM INTERNATIONAL LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 2.63

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

Research House: OCBC

Price Call: BUY

Target Price: 1.09

Stock Name: Karin
Company Name: KARIN TECHNOLOGY HLDGS LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.27

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

Research House: OCBC

Price Call: HOLD

Target Price: 0.43

Stock Name: Sakari
Company Name: SAKARI RESOURCES LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 2.06

Stock Name: Rotary
Company Name: ROTARY ENGINEERING LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.61

Stock Name: SIA Engg
Company Name: SIA ENGINEERING CO LTD

Research House: OCBC

Price Call: BUY

Target Price: 3.88

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

Research House: OCBC

Price Call: BUY

Target Price: 3.01

MARKET PULSE: CapitaLand, STX OSV, Olam, Goodpack, Tat Hong, Karin, Marco Polo Marine, Rotary, Sakari, SIAEC & ST Engineering

15 Feb 2012

KEY IDEA CapitaLand: Outlook mostly intact Summary: CAPL reported 4Q11 PATMI of S$476.6m, down 20% YoY. Adjusting for one-time items, we estimate 4Q11 PATMI at S$221.9m - in line with our expectations. About 1,500 residential units were sold in China over FY11 and we see anemic Chinese sales in FY12 as buyer restrictions are likely to stay. In Singapore, 844 units were sold in FY11. A key launch ahead is Sky Habitat at Bishan which we believe would perform well. Major Shanghai malls, Minhang and Hongkou, opened for operations in FY11 and we forecast CMA's core earnings to increase 84% from S$120m in FY11 to S$221m in FY12, partially offsetting slowing residential sales. We maintain our BUY rating and adjust our fair value to S$3.11 from S$2.76 previously, mostly due to higher valuations for listed entities. (Eli Lee) MORE REPORTS STX OSV: Stellar 4Q results STX OSV reported a stellar set of 4Q results, which were above our and the street's expectations. Revenue declined by 12.9% YoY to NOK3.1bn, while net profit jumped 116.6% to NOK638m during the quarter. The exceptional high profitability in 4Q was mainly due to successful project deliveries and the release of risk contingencies at the end of complex projects. On a full year basis, revenue increased slightly by 4.4% YoY to NOK12.4bn, while net profit increased by 54.6% YoY to NOK1.6bn, supported by stable operations and productivity improvements. The group has recommended a 10 S cents dividend. We maintain BUY and raised our fair value estimate to S$2.25 (from S$1.60 previously) on higher order intake assumptions. (Chia Jiunyang) Olam Int'l: 1HFY12 results mostly in line Olam International Limited posted 1HFY12 revenue of S$7,716.4m, up 18.8%, meeting 40.8% of our FY12 estimate; core net profit fell 13.2% to around S$ S$132.8m, which still met 42.8% of our full-year forecast; this is also in line with the group's historical seasonality where it typically achieves around 35-40% of its earnings in the first half. Going forward, management remains positive of its prospects in 2HFY12; and is also on track to achieve US$1b net profit by FY16. As its results were mostly in line with our forecast, we will leave our estimates intact for now. Our fair value also remains unchanged at S$2.63 (18x FY12F EPS). Maintain HOLD. (Carey Wong) Goodpack Limited: Outlook and growth stable Goodpack reported 1HFY12 results that were in line with our expectations: revenue grew 22.2% YoY to US$87.2m while PATMI climbed 8.1% YoY to US$22.5m. Both figures constituted 53.4% and 55.3% of our FY12 projections respectively. Going forward, we expect demand for Goodpack's IBCs in 2HFY12 to remain stable at close to current levels as its main revenue segments, the natural and synthetic rubber businesses, continue to be supported by the automotive industry. In addition, price increases of between 9-12% on new IBC three-year contracts will take effect in 2HFY12 and provide some downside protection for Goodpack should demand taper off in the face of deteriorating macro-economic conditions. Reiterate BUY at an unchanged fair value estimate of S$1.70. (Lim Siyi) Tat Hong Holdings: Recovery underway Tat Hong Holdings (Tat Hong) reported a set healthy set of 3Q12 results with revenue and net profit increasing by 43% and 178% YoY to S$196m and S$13m respectively, attributable mainly to higher levels of activity across all divisions. Over a nine months period, net profit was S$31m (a 40% YoY increase), and represented 71% of our FY12F estimates. As the 3Q12 results marked a fourth consecutive quarter of improvement and with net margins reverting back to 6-7% (4Q11: 2.5%; 1Q12: 3.5%; 2Q12: 6.9%; 3Q12: 6.6%), we are optimistic of a steady recovery. Maintain BUY with unchanged fair value estimate of S$1.09 (on 10x FY13F EPS). (Chia Jiunyang) Karin Technology: Sequential improvement likely Karin Technology (Karin) reported 1HFY12 revenue of HK$1,519.4m (+68.6%) which topped our forecasts; but estimated core earnings of HK$25.5m (-2.6%) missed our expectations. This was due largely to lower-than-expected gross margin and higher effective tax rate. Top-line and core PATMI met 61.2% and 44.4% of our full-year projections, respectively. Karin's strong revenue growth was driven by a 131.8% surge in its IT Infrastructure segment, which more than buffered declines in its Components Distribution and ICAD segments. A dividend of 7 HK cents (inclusive of a 3.5 HK cent special dividend) was declared, versus 5 HK cents in 1HFY11. Looking ahead, we opine that Karin's new IT retail store operations could be its next leg of growth. We pare our core PATMI forecasts and obtain a new fair value estimate of S$0.27 (S$0.28 previously) after rolling forward our valuation to 6x blended FY12/13F core EPS. Downgrade to HOLD. (Wong Teck Ching Andy) Marco Polo Marine: 1QFY12 results within expectations Marco Polo Marine (MPM) reported a 26.8% rise in revenue to S$24.6m and a 8.5% increase in net profit to S$4.4m in 1QFY12, within ours and the street's expectations. The group's shipyard operations now accounts for 76.4% of total revenue with correspondingly lower contributions from ship chartering as associate BBR has been assuming more of the chartering business. However, BBR's profits were impacted by one-off forex losses in 1QFY12. The group's businesses are growing steadily, and the stock currently has an upside potential of about 17% based on our fair value estimate of S$0.43, but this is within our 30% range for small cap stocks. Hence we maintain our HOLD rating. (Low Pei Han) Rotary Engineering: Secures US$34m contract for storage tanks in Saudi Arabia Rotary Engineering announced that it has secured a US$34m EPC contract to build 17 field storage tanks in Saudi Arabia. Work is scheduled to start in Jun and is expected to be completed around middle of 2013. In the same announcement, Rotary also said that it has chalked up more than S$100m worth of contracts over the last several months. We will speak to management to get more clarity. In the meantime, we put our Hold recommendation and S$0.61 fair value estimate UNDER REVIEW. (Chia Jiunyang) Sakari Resources: Strong 4Q11 showing Sakari Resources Limited (SRL) posted a strong set of 4Q11 results, with revenue jumping 42.4% YoY and 40.4% QoQ to US$312.6m, aided by higher ASPs of coals sold in the quarter. Net profit was up 139.0% YoY and 97.3% QoQ at US$73.0m, the highest in any quarter, as sales of higher-value coal from Sebuku's Northern Leases helped to lift ASP to US$100/ton. For the full-year, revenue climbed 30% to US$1,013.6m, or 7.4% above our forecast, while net profit surged 116% to S$190.3m, or 17.9% above our estimate. Meanwhile, SRL is continuing with its policy of paying 60% of its net profit as dividend - this by declaring a final dividend of 5.83 US cents, bringing the total to 10.07 US cents for FY11. We will be attending an analyst conference call later in the evening, and until then, we place our Hold rating and S$2.06 fair value under review. (Carey Wong) SIA Engineering: JVs progressing well SIA Engineering Co Ltd (SIAEC) last night announced new developments to its recent joint ventures with SAFRAN and Panasonic Avionics Corp. SIAEC signed an agreement with Messier-Bugatti-Dowty, a division of the SAFRAN Group, to appoint SIAEC as its authorised repair centre (ARC) to provide MRO services for Messier-Bugatti-Dowty wheels and brakes. Separately, SIAEC and Panasonic Avionics Corporation announced the official opening of Panasonic Avionics Services Singapore (PACSS), a joint venture owned by SIAEC (42.5%) and Panasonic Avionics Corporation (57.5%). Singapore-based PACSS will provide MRO of IFEC systems and components for aircraft transiting at Changi Airport. SIAEC said both announcements are not expected to have a material impact on its financial performance in FY12. With an estimated dividend yield of 4.5%, we currently have a fair value estimate of S$3.88 per share and BUY rating on SIAEC. (Eric Teo) ST Engineering: New 10-year MRO contract ST Engineering (STE) last night announced its aerospace arm has been awarded an engine maintenance, repair and overhaul (MRO) contract to support Korean LCC Eastar Jet. The contract value is estimated to be ~US$15m (S$18.8m) per year. And the engines will be maintained by ST Aerospace's engine facilities located in Singapore and Xiamen, China. Pending the FY11 results announcement, our Buy rating and fair value estimate of S$3.01/share on STE is currently UNDER REVIEW. (Eric Teo)

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

NEWS HEADLINES - European finance ministers have postponed a meeting (originally scheduled for today) on the Greek debt crisis to 20 Feb. The euro traded close to a one-week low. - Moody's mass downgrade of the creditworthiness of European countries yesterday had little market impact. The downgrade echoes those from Standard & Poor's and Fitch last month. - The Hour Glass Ltd reported an 18% YoY increase in revenue for 3QFY12 ended Dec 2011 to S$170m, and net profit increased 66% to S$18.4m. The group is cautiously optimistic about luxury retail sentiment. - Global Logistic Properties' 3QFY12 ended Dec 2011 saw revenue increase 19% YoY to US$145m and NPAT increased by 3% to US$86m.

MARKET PULSE: Cache Logistics, Karin, Ezra & KSH Holdings (10 Jan 2012

Stock Name: CACHE
Company Name: CACHE LOGISTICS TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.14

Stock Name: Karin
Company Name: KARIN TECHNOLOGY HLDGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.28

Stock Name: Ezra
Company Name: EZRA HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 1.36

Stock Name: KSH Hldg
Company Name: KSH HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.30

MARKET PULSE: Cache Logistics, Karin, Ezra & KSH Holdings

10 Jan 2012

KEY IDEA Cache Logistics Trust: Poised to repeat its success Cache Logistics Trust (CACHE) is due to release its 4QFY11 results on 18 Jan. We project that the REIT would deliver healthy performance in its gross revenue and DPU, bolstered by additional rental income from its recent acquisitions. While the Singapore economy growth is anticipated to moderate in 2012, we believe the impact to CACHE's financial performance is likely to be limited. Pertaining to the recent anti-speculative measures taken by government in the industrial space, we are of the view that it will be beneficial to CACHE, as we expect better stability in the end-user demand as well as opportunities for asset injection. Maintain BUY rating and S$1.14 fair value. (Kevin Tan) MORE REPORTS Karin Technology: Visit to Hong Kong and Shenzhen operations We visited Karin Technology's (Karin) offices in Shenzhen and Hong Kong recently. The group also celebrated its 35th anniversary last week. According to management, Karin achieved profitability every year since its first year of operations. We believe that broad-based growth opportunities exist for Karin, and like the group for its attractive dividend yield and experienced management team. Nevertheless, macroeconomic risks, especially from the euro zone debt crisis, form the biggest threat to Karin's operations, in our opinion. But we have already lowered our valuation peg on the group recently to account for this. With potential total returns of c.31% now, we upgrade Karin from Hold to BUY. Fair value estimate remains unchanged at S$0.28. (Wong Teck Ching Andy) Ezra Holdings: Secures up to NOK600m worth of contracts Ezra Holdings (Ezra) announced that its subsea division, EMAS AMC, has won two contracts from Statoil for mooring chain and riser replacements in the North Sea on the Norwegian Continental Shelf. The total contract value is about NOK425m (~US$70.5m) and could rise to NOK600m assuming contract options are exercised. Engineering and planning work will commence immediately, and offshore operations will take place in 3Q12. Execution risk should be lower as EMAS AMC has done similar work for Statoil previously in 2009. We estimate that Ezra's subsea order book has exceeded US$800m with these new contracts, nearing its US$1b short-term order book target. Maintain BUY with S$1.36 fair value estimate. (Low Pei Han) KSH Holdings: New S$110m Seastrand contract KSH announced that it has secured a S$110m construction contract for the Seastrand condominium development at Pasir Ris. This contract win was awarded by a JV between Far East Organization and a Fraser Centrepoint Limited subsidiary, and brings KSH's order-book up to S$467m. We expect the market to react positively to this event. This win is in line with our expectations for order book growth to S$600m-S$800 in FY12-13, and we anticipate healthy profit margins over 10%. The Seastrand contract is expected to take place over 30 months and KSH would build nine residential blocks with 473 units, in addition to other facilities. Our valuation model currently factors in such contract wins and hence our fair value estimate remains unchanged at S$0.30. Maintain BUY. (Eli Lee)

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

NEWS HEADLINES - US Consumer borrowing surged in November by the most in 10 years, increasing by US$20.4b to US$2.48t. The advance was almost twice the highest forecast given by economists surveyed by Bloomberg. - German industrial output of investment and consumer goods fell in November. Industrial output fell 0.6% from October, during which it had risen 0.8%. - F&N's Australian subsidiary has announced today that it appointed a contractor in a A$99.7m construction contract for its Queens Riverside's 'QIII' apartments in East Perth's new urban quarter. - Keppel Offshore and Marine's US subsidiary has landed a US$150m deal from long-time customer Diamond Offshore, to build and upgrade a semisubmersible rig. - Synear Food said it expects a loss for the forth quarter ended 31st December 2011 as a result of bad publicity regarding a batch of its products. - CDL has received over 800 e-applications for its 466-unit executive condominium project, The Rainforest, by 5pm yesterday.

Market Pulse: PEC, Karin Tech (26 Aug 2011)

Stock Name: PEC
Company Name: PEC LTD.

Research House: OCBC

Price Call: BUY

Target Price: 1.12

Stock Name: Karin
Company Name: KARIN TECHNOLOGY HLDGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.315

Market Pulse: PEC, Karin Tech (26 Aug 2011)

FOCUS

PEC: Losses from associates and JVs

Summary: PEC Ltd's 4Q revenue and net profit fell by 19% and 64% to S$101m and S$3.5m respectively. On a full year basis, FY11 revenue was S$407m, in line with our expectations. However, net profit fell 24% YoY to S$32m, 20% shy of our estimates. This was mainly due to an unexpected S$6.7m of losses from associates and JVs in 4Q, which had wiped out gains from the previous three quarters. The company's balance sheet remained strong with S$159m in cash and S$0.9m in debt. To reflect the strength of its cash position, we switched to SOTP valuation and obtained a fair value estimate of S$1.12 (versus S$1.23). Maintain BUY. (Chia Jiunyang)


Karin Technology: Ends FY11 with strong results

Summary: Karin Technology (Karin) announced a strong set of 2HFY11 results which beat ours and the streets' estimates. Revenue surged 57.3% to HK$1.3b while net profit increased 22.4% to HK$30.2m. For FY11, revenue jumped 38.7% to HK$2.2b, which exceeded our forecasts by 15.1%. Net profit accelerated by 52.6% to HK$51.6m. This was boosted by fair value gains on investment properties (HK$6.0m) and derivative instruments (HK$1.3m) as well as forex gains of HK$5.1m, although offset by impairment of trade receivables (HK$8.2m) and write-down of obsolete inventories (HK$3.0m). Excluding forex effects and these exceptional items, we estimate that core earnings would have increased by 87.8% to HK$50.5m. This came in 18.2% above our estimates. A final dividend of 7 HK cents/share was declared, bringing total declared dividends for FY11 to 12 HK cents/share (versus 8.2 HK cents/share in FY10). An analyst briefing will be held later this afternoon. We are likely to revise our projections upwards, although our fair value estimate would be impacted by continued weakness in the HKD versus the SGD. Hence we place our BUY rating and S$0.315 fair value estimate UNDER REVIEW. (Wong Teck Ching Andy)


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



NEWS HEADLINES

- S&P reaffirmed Singapore's AAA rating but warned that the country remains vulnerable to external economic shocks due to its small and open economy.

- Shares of the three local banking groups lost more ground this week amid concerns over the level of asset deterioration the banks would suffer if a recession hit, as well as expected slowdown in loan growth.

- Tiger Airways said it will be seeking a rights issue to raise S$155m in net proceeds for its expansion plans in Asia as well as to support its operations in Australia.

- Australia's Lend Lease group is selling a 25% stake in 313@somerset; the other 75% will continue to be held by a fund managed by the group.

- Eu Yan Sang's 4QFY11 profit soared 68% YoY to S$5.5m attributable mainly to increase in retail sales in Hong Kong, Malaysia and Singapore.

- Amtek Engineering reported a surge in 4QFY11 net profit to US$9.62m, thanks to higher revenue, stable margins and an absence this round of a non-recurring plant closure charge.

- Government agencies launched four more residential sites - in Loyang, Flora Drive, Pasir Ris and Yishun - that can yield 1,885 units in total for sale by tender yesterday.

- Singapore is said to have attracted Manchester United in part by assuring a speedier approval process for its IPO. The club is also believed to be seeking to raise US$1b to reduce its debts.

Karin Technology Holdings rated 'buy' by OCBC

Stock Name: Karin
Company Name: KARIN TECHNOLOGY HLDGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.315

OCBC Investment Research in a June 23 research report says: "We believe that Karin Technology (Karin) could be poised for double-digit growth in both its top and bottom-line for FY11, having already performed strongly in 1H11.

"This is due to the still encouraging operating environment which Karin operates in, although the increasing uncertainty stemming from the tepid U.S. economic growth and EU sovereign debt crisis could dampen its growth prospects. We continue to like Karin for its diversified product and service offerings and increasing emphasis placed on 'green' technology.

"Prospective dividend yield remains attractive at 8.7%, which could lend some level of support to its current share price. Fair value estimate of 31.5 cents, still based on 8x blended FY11/FY12F EPS. MAINTAIN BUY."