Lian Beng Group gets 'buy' call, 72.5-cent target from UOB Kay Hian

Stock Name: Lian Beng
Company Name: LIAN BENG GROUP LTD

Research House: UOB KayHian

Price Call: BUY

Target Price: 72.50

SINGAPORE (May 22): UOB Kay Hian has started coverage on Lian Beng Group with a "buy" rating and price target of 72.5 cents.

With a projected FY2016 dividend yield of 4.7%, growing recurring income driven by rental from investment properties, and nearly $90 million of development profits yet to be recognised, Lian Beng offers "good value" at its current price, according to UOB Kay Hian analyst Loke Chunying.

Lian Beng kept at 'hold' with 65 cents fair value by OCBC

Stock Name: Lian Beng
Company Name: LIAN BENG GROUP LTD

Research House: OCBC

Price Call: HOLD

Target Price: 0.65

SINGAPORE (Jan 13): OCBC is maintaining its "Hold" call on Lian Beng with an unchanged fair value estimate of 65 cents as its divestment into hotel development looks to be paying off.

In 1HFY15 ended Nov, the construction company announced a PATMI of $35.5 million, up 105.2% y-o-y. This was due to its share of results of associates and joint ventures improving from a loss of S$9.6 million in 1HFY14 to a profit of $21.5 million in 1HFY15.

SG: MARKET PULSE: Lian Beng, Keppel Corp (11 Oct 2013)

Stock Name: Lian Beng
Company Name: LIAN BENG GROUP LTD

Research House: OCBC

Price Call: BUY

Target Price: 0.58

Stock Name: Kep Corp
Company Name: KEPPEL CORPORATION LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 12.87

MARKET PULSE: Lian Beng, Keppel Corp

11 Oct 2013

KEY IDEA Lian Beng: 1QFY14 results marred by marketing expenses Lian Beng announced 1QFY14 PATMI of S$7.3m - down 30.9% YoY - mostly due to increased selling and marketing expenses incurred at development projects and the cessation of tenant leases at Hougang Plaza. Topline for 1QFY14 came in 44.2% higher YoY at S$163.5m; due to a shift in revenue mix with a heavier percentage contribution from the construction segment, overall gross margins continue to dip - falling from 14.1% in 1QFY13 to 12.2% in 1QFY14. We note that Lian Beng continues to enjoy a firm construction book of S$1.2b, which would buttress forward revenues to an extent, and also a strong balance sheet with S$200.7m in cash with a fairly benign net gearing of 25.2%. That said, we see increasing uncertainties in the domestic residential space from recent cooling measures which could result in headwinds for the group's property development business going forward. Rated BUY with a fair value estimate of S$0.58.(Eli Lee) Keppel Corporation: Secures another Mexican order Keppel Corp's offshore and marine arm has secured a contract from Central Panuco S.A. De C.V., a subsidiary of Mexico's Perforadora Central, to build a KFELS B Class jackup rig worth US$240m, including owner furnished equipment. Scheduled for delivery in 4Q 2015, the jackup rig is intended for operations in offshore Mexico, and is the 13th KFELS B Class jackup rig that has been ordered for the Mexican market since 2010. Recall that KEP just won a US$440m order to build two similar design rigs for Clearwater in early Oct. KEP was won a total of S$5.2b orders YTD, accounting for about 87% of our full year estimate. Maintain BUY with S$12.87 fair value estimate. (Low Pei Han)

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

NEWS HEADLINES - US stocks soared on Thu, with the Dow notching its best one-day point gain since Dec 2011, after House Republican leaders proposed a temporary extension of the nation's debt ceiling. - Shares of key executives of Blumont Group have come under forced selling as SGX maintains trading restrictions on the company's stock and those of two others for a fifth day today. - The recent volatility in its share price has caused gold miner LionGold Corp to call off talks over a potential offer for Minera IRL, a Latin American precious metals mining company. - CapitaLand's The Ascott has extended its footprint to Thailand's Eastern Seaboard economic region with a contract win to manage a 133-unit serviced residence in Sri Racha district, Chonburi province. - Centurion Corporation issued its inaugural S$100m 5.25% notes due 2016 yesterday. The offering was close to two times subscribed.

MARKET PULSE: LMIRT, SIA, Telecoms, STE, STX-OSV, Lian Beng (11 Oct 2012)

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

Research House: OCBC

Price Call: HOLD

Target Price: 0.45

Stock Name: SIA
Company Name: SINGAPORE AIRLINES LTD

Research House: OCBC

Price Call: HOLD

Target Price: 10.85

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

Research House: OCBC

Price Call: BUY

Target Price: 3.81

Stock Name: STXOSV
Company Name: STX OSV HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 2.00

Stock Name: Lian Beng
Company Name: LIAN BENG GROUP LTD

Research House: OCBC

Price Call: BUY

Target Price: 0.47

MARKET PULSE: LMIRT, SIA, Telecoms, STE, STX-OSV, Lian Beng

11 Oct 2012

KEY IDEA Lippo Malls Indonesia Retail Trust: Acquiring four properties Summary: LMIRT has announced the proposed acquisitions of four properties from non-interested parties. Two properties, Palembang Square and Palembang Square extension, would be LMIRT's first malls in Palembang. The third and fourth properties are Tamini Square and Kramat Jati Indah Plaza (KJI), which are located in East Jakarta. All four properties are to be purchased at a discount to book value. Including the aggregate purchase consideration of ~S$180.7m and the acquisition fee payable to the manager, as well as professional fees and other expenses, the total acquisition fee is expected to be S$188.1m. As to be expected, management is proposing to finance the acquisitions from the proceeds raised from the issuance of S$250m worth of notes in early Jul. Incorporating the acquisitions into our model, we maintain our fair value of S$0.45 and our HOLD rating on LMIRT. (Sarah Ong) MORE REPORTS Singapore Airlines: Caution over fuel prices Summary: Despite a reported slowdown in global demand for air transport, Singapore Airlines (SIA) managed to hold its own amidst the challenges, and turn in a decent performance relative to the industry. For the first eight months of the year, passenger demand for SIA was slightly higher on the back of a similar pace of capacity expansion. Although SIA's passenger load factor was slightly lower versus the industry average, it remained within our expectations given SIA's slightly higher capacity base. Going forward, we see capacity management as essential in minimizing downward pressures on passenger yields, especially with the success of SIA's promotional fare strategy. In addition, jet fuel prices remain a key risk to profitability for the year and it could remain elevated for the rest of the year. While SIA's cargo traffic looks likely to stay weak given Asia-Pacific's greater share of global traffic, we believe most of the weakness has already been priced in. Maintain HOLD with an unchanged fair value estimate of S$10.85. (Lim Siyi) Telecoms Sector: SingTel gets BPL on non-exclusive basis Summary: SingTel has secured the broadcast rights for the 2013-2015 Barclays Premier League (BPL), further adding to its suite of soccer content. Interestingly, it was on a non-exclusive basis, meaning that SingTel is not required to make the content available to other Pay TV operators under the Cross Carriage ruling. And it also means that StarHub can separately negotiate for the same broadcast rights. While StarHub could win back some Pay TV customers should it secure the rights, we do not believe that it is crucial for the telco to do so. After all, it has done fairly well without BPL content for the past three years. It is also important to note that StarHub could be looking at a smaller pie than before. Until we see further developments in this space, we believe status quo should continue. We have an OVERWEIGHT view on the sector due to its defensive nature and relatively attractive dividend yields. (Carey Wong) ST Engineering: ST Aerospace secured S$590m of new contracts in 3Q12 Summary: Singapore Technologies Engineering (STE) has announced that its aerospace arm ST Aerospace has secured new contracts worth about S$590m in 3Q12. This total contract value is in addition to the component repair management Maintenance-By-the-Hour contract worth about US$80m (~S$102m) awarded by AirAsia in Jul this year. During 3Q12, ST Aerospace redelivered its first VIP Boeing Business Jet, a contract secured for B level check and interior modifications. Additionally, it completed airframe maintenance and modification work for 156 aircraft. We are confident that STE's order book continues to expand healthily. We maintain our fair value of S$3.81 and BUY rating. (Sarah Ong) STX OSV: Contracts for two offshore subsea construction vessels Summary: STX OSV has secured contracts for two offshore subsea construction vessels for Siem Offshore. Delivery is scheduled from Norway in 2Q14. We estimate the contract value to be around NOK1.3b (~USD230m). As contract win already forms part of our forward assumption (estimated NOK12-14b new orders over the next 12 months), we will be keeping our projections unchanged. Maintain BUY with unchanged fair value estimate of S$2.00. (Chia Jiunyang)

Lian Beng: 1QFY13 down from lumpy property recognition Summary: Lian Beng announced 1QFY13 (ended 31 Aug 2013) PATMI of S$10.5m - down 44.9% YoY - mostly due to the absence of a one-time S$7.9m disposal gain from an investment property sale in 1QFY12 and no profit contributions from the fully sold 55%-owned industrial development, M-space, which can only be recognized at TOP in FY14, as stipulated by the accounting standard INT FRS 115. 1QFY13 top-line also came in 16.5% lower YoY at S$113.4m similarly due to lower contributions from the property development segment. Looking ahead, the group expects to launch Spottiswoode Suites and Hougang Plaza, both 50%-owned, later in the financial year. We would speak with management regarding 1Q results later today and, in the meantime, put our Buy rating of Lian Beng and fair value estimate of S$0.47 UNDER REVIEW. (Research team) For more information on the above, visit www.ocbcresearch.comfor the detailed report.

NEWS HEADLINES - US stocks fell on Wednesday as Alcoa Inc. cut its global aluminium demand forecast and Chevron Corp. warned of lower earnings. The Dow declined 1% to close at 13,344.97. The S&P 500 Index fell 0.6% to close at 1,432.56. - Fraser and Neave's independent financial advisers say that the S$8.88-a-share offer by the Thai consortium is fair but not compelling. - OUE has confirmed that it was the party that made the made an offer to acquire the hospitality business of F&N for an aggregate consideration of ~S$1.4b.

MARKET PULSE: CMA, OSIM, Sheng Siong, Lian Beng, CDLHT (27 Jul 2012)

Stock Name: CapMallsAsia
Company Name: CAPITAMALLS ASIA LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 1.85

Stock Name: OSIM
Company Name: OSIM INTERNATIONAL LTD

Research House: OCBC

Price Call: BUY

Target Price: 1.82

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

Research House: OCBC

Price Call: BUY

Target Price: 0.49

Stock Name: Lian Beng
Company Name: LIAN BENG GROUP LTD

Research House: OCBC

Price Call: BUY

Target Price: 0.47

Stock Name: CDL HTrust
Company Name: CDL HOSPITALITY TRUSTS

Research House: OCBC

Price Call: BUY

Target Price: 2.04

MARKET PULSE: CMA, OSIM, Sheng Siong, Lian Beng, CDLHT

27 Jul 2012

KEY IDEA CapitaMalls Asia: Chinese retail conditions remain healthy CMA announced 2Q12 PATMI of S$232.0m - up 40.7% YoY mostly due to a S$64.6m divestment gain (net-tax), offset partially by lower revaluation gains. Accounting for one-time items, we estimate 2Q12 core PATMI at S$39.0m which is somewhat below view due to a slower than expected rental income ramp-up in China. Management also declared an interim dividend of 1.625 S-cents, and a formal dividend policy to pay out at least 20% of annual PATMI. 1H12 shopper traffic and tenant sales (psf) in CMA's Chinese malls were up 10.7% and 11.6% YoY respectively, underscoring still healthy retail conditions. We pare our FY12 core PATMI estimate, however, by 16% to account for softer income growth from China. Despite this, our fair value estimate rises to S$1.85 (10% RNAV discount) versus S$1.79 previously, mostly due to stronger valuations for listed holdings. We believe CMA's valuation appears undemanding at this juncture. Maintain BUY. (Eli Lee) MORE REPORTS OSIM International: Special dividend surprise OSIM International Ltd's (OSIM) 2Q12 revenue of S$154.7m (+11.6% YoY) was similar to our forecast, but PATMI of S$22.5m (+20.1% YoY) exceeded our projection by 9.1% due to better-than-expected margins. Another positive surprise came from a special declared DPS of 1 S cent (on top of a 1 S cent/share interim dividend). The stronger bottomline growth was driven by a favourable product mix, better productivity and continued rationalisation of stores. We raise our FY12 and FY13 PATMI estimates by 3.6% and 2.9%, respectively. Despite ongoing concerns over China's slowing economy, we believe OSIM could be a laggard play as it continues to execute well on driving its productivity gains and product innovation. Our new FY12 PATMI estimate implies a robust 26.8% growth over FY11. Reiterate BUY with a revised fair value estimate of S$1.82 (previously S$1.61) as we roll forward our valuations to 14.3x blended FY12/13F EPS.(Wong Teck Ching Andy) Sheng Siong Group: Interim dividend declared There were no surprises in Sheng Siong Group's (SSG) reported 2Q12 results. Revenue grew 5.2% YoY to S$146.9m while net profit inched lower by 2% YoY to S$7m. In terms of SSG's 1H performance, revenue grew 4.6% YoY to S$306.7m and net profit increased 41.5% YoY to S$23.9m to form 47.3% and 54.2% of our FY12 top and bottom-line projections respectively. SSG also declared an interim dividend of 1 cent per share. Going forward, with the increased possibility of Singapore's growth falling below 1% this year, consumer spending as a whole is poised to decline further as consumers tighten up. This scenario should bode well with SSG as consumers transition from F&B spending to eating-in more. As such, we expect revenue growth to hold firm and offset the upward cost pressures from staff wages and rent. Leaving our FY12/FY13 projections unchanged, we maintain our fair value estimate of S$0.49 and BUYrating. (Lim Siyi) Lian Beng Group: Decent performance in 4QFY12 Lian Beng Group (LBG) reported that its 4QFY12 revenue fell 13% YoY to S$111.4m while PATMI remained flat at S$11.5m. LBG's operating margin climbed an impressive 3.6ppt to 14%, but the impact of one-off items resulted in no growth in its PATMI. Management also recommended final and special dividends totalling S$0.02/share. In full-year comparison, LBG's revenue in FY12 fell 12% to S$445.0m but PATMI rose 8% to S$52.1m. Revenue growth in ready-mixed concrete was particularly strong, jumping 83% in FY2012. LBG's order book contracted to S$652m at end-FY12. However, the order book is still robust since it is twice the size of its construction revenue in FY12. We maintain our fair value estimate of S$0.47/share and BUY rating on LBG. (Eric Teo) CDL Hospitality Trusts: 2Q12 roughly in line with expectations CDLHT announced this morning 2Q12 income available for distribution of S$29.8m, which was 17.7% higher YoY. 2Q12 DPU is 2.92 S-cents per share. The results were roughly in line with expectations and YTD DPU of 5.70 S-cents now makes up 47% of our current full-year forecast. 2Q12 revenue rose 6.0% YoY to 38.4m, versus +19.0% for 1Q12. The growth in 2Q12 revenue for CDLHT was due to a 5.9% growth in RevPAR for the Singapore hotels (excluding Studio M Hotel) and the recognition of a full quarter's revenue contribution (91 days) from Studio M Hotel as compared to only 59 days in 2Q 2011. On the other hand, contribution for 2Q 2012 from the Australia hotels was lower by S$0.16m as compared to the year-ago period due to weaker Australian dollar translation for the quarter. We are meeting management later today and, in the meantime, put our Buy rating with a fair value estimate of S$2.04 UNDER REVIEW. (Sarah Ong)

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

NEWS HEADLINES - US stocks jumped with optimism following comments by ECB President Mario Draghi that the organization is ready to do whatever it takes to preserve the common-currency union. The Dow climbed 1.67% and the S&P 500 Index rose 1.65%. - Parkson Retail Asia (PRA) has agreed to acquire 41.8% stake in Sri Lanka's leading fashion retailer, Odel PLC, for S$13.6m. The proposed acquisition will trigger a general offer which will result in PRA being the largest shareholder. - GUL Technologies Singapore has reported a 63% YoY increase in PATMI to US$7.45m for 2Q12. Revenue climbed 20% to US$74.24m. - STATS ChipPAC's second quarter net profit plunged to US$8.9m, versus US$19.2m for the year-ago period. Falling revenue was exacerbated by higher labor costs due to currency movements.

MARKET PULSE: Venture Corp, Roxy-Pacific, Hyflux, CapitaMall Trust, Lian Beng (4 May 2012)

Stock Name: Venture
Company Name: VENTURE CORPORATION LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 9.41

Stock Name: Roxy-Pacific
Company Name: ROXY-PACIFIC HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.45

Stock Name: CapitaMall
Company Name: CAPITAMALL TRUST

Research House: OCBC

Price Call: SELL

Target Price: 2.02

Stock Name: Lian Beng
Company Name: LIAN BENG GROUP LTD

Research House: OCBC

Price Call: BUY

Target Price: 0.47

MARKET PULSE: Venture Corp, Roxy-Pacific, Hyflux, CapitaMall Trust, Lian Beng

4 May 2012

KEY IDEA Venture Corp: Optimism on 2H12 Venture Corp (VMS) reported a 13.7% YoY decline in its 1Q12 PATMI to S$35.5m on the back of a 2.3% drop in revenue to S$574.3m. This was within our expectations, although topline and bottomline formed only 22.3% and 20.6% of our full-year forecasts, respectively. We expect progressive improvement in VMS's business momentum, with FY12 likely to be a back-end loaded year. Management guided that sentiment from its customers remains encouraging, with an anticipated pickup in orders, especially in 2H12. We maintain our projections, BUY rating and S$9.41 fair value estimate. Key risks to our estimates include a sharp deterioration in the macro economy and depreciation of the USD versus the SGD. (Wong Teck Ching Andy) MORE REPORTS Roxy-Pacific Holdings: Marred by lumpy revenue recognition ROXY reported 1Q12 PATMI of S$9.0m, down 10% YoY mostly due to lower development numbers as we await revenue recognition from projects yet to begin construction. With this in mind, we judge 1Q12 results, marred by lumpy recognition, to be broadly on track for our FY12 forecast. 1Q12 topline came in at S$38.1m, similarly down 24% YoY due to the impact from the construction gap. ROXY recently acquired Jade Towers in the Upper Serangoon area, via an en-bloc process, for S$106.27m. We estimate a breakeven cost at around S$1,250 psf and anticipate ASPs of S$1,450 psf. We continue to favor the company for its spot-on execution and note torrid sales conversion at recently launched projects, Eon@Shenton, Natura@Hillview and the Millage. We raise our fair value estimate to S$0.45 (S$0.62 pre-bonus-shares), mostly due to accretion from Jade Towers and a lower RNAV discount of 25%. Maintain BUY. (Eli Lee) Hyflux: 1Q12 earnings below expectations Hyflux Ltd posted its 1Q12 results last evening, with revenue growing 60% YoY to S$138.9m, meeting 23.5% of our full-year estimate; but due to lower gross margin, net profit only grew 4% to S$7.7m, or just 10.3% of our FY12 forecast. By segments, Hyflux continues to derive 92% of its revenue from the municipal sector, up further from the 81% in 1Q11. We believe that the Tuaspring project contributed around S$90.6m (+387%), although slightly shy of the S$112m that we had been expecting. Due to lower margin assumptions, we are paring our FY12 earnings forecast by 14% and FY13 by 11%; this in turn reduces our fair value from S$1.55 to S$1.35 (still based 18x FY12 EPS). Maintain HOLD. (Carey Wong) CapitaMall Trust: Sale of Hougang Plaza for S$84m gain CapitaMall Trust (CMT) announced it has agreed to sell Hougang Plaza to Oxley Bloom Pte. Ltd. for S$119.1m. CMT expects to realize a net gain of S$83.8m, based on the latest book valuation of S$34m as of end-FY11. Hougang Plaza is a 99-year leasehold three-storey shopping mall (NLA 73,353 sq ft) with an occupancy rate of 100% currently and make up about 0.5% of CMT's net property income in 1Q12. At the sale price, we estimate a divestment yield at ~2.0% and expect the new owners to actively explore options for redevelopment. In addition, with S$1.2b of cash already on CMT's balance sheet and its share price trading at a relatively tight yield of 5.5%, we think its deployment of the sales proceeds could shed further light on the odds of making a bid for CMA's stake in the ION ahead. We would speak with management further regarding the sale and, in the meantime, maintain BUY with our fair value estimate of S$2.02 under review. (Eli Lee) Lian Beng Group: Redevelopment JV and acquisition Lian Beng Group (LBG) announced it is forming a joint-venture, Oxley Bloom Pte. Ltd., with Oxley Holdings Limited. Oxley Bloom has received the acceptance of its tender to purchase Hougang Plaza at 1189 Upper Serangoon Road at the purchase price of S$119.1m. Oxley Bloom intends to redevelop Hougang Plaza, which is a 99-year leasehold three-storey neighbourhood shopping mall with a land area of ~57,047 square feet. LBG will finance its share of this investment by internal resources and/or bank borrowings. Separately, LBG also disclosed it has on 30 Apr 2012 completed the acquisition of Sim Hup Co Pte Ltd at a purchase consideration of S$5.38m and Sim Hup is now a wholly-owned subsidiary of the group. Management said both transactions are not expected to have any material impact on its financial performance for the current financial year ending 31 May 2012. We maintain our fair value estimate to S$0.47/share and BUY rating on LBG. (Eric Teo)

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

NEWS HEADLINES - US stocks fell as growth in the retail sector was slower-than-expected, with several chains like Target Corp and Gap Inc. missing April sales estimates. The S&P 500 Index dropped 0.8%. - Great Eastern recorded 1Q12 PATMI of S$262.5m, up 65% YoY. Profit from insurance operations had climbed 45% to S$226.4m. - Cerebos posted 1Q12 PATMI of S$25.3m, down 13% YoY. Revenue had climbed 4% to S$241.2m. - Cityspring Infrastructure Trust registered 4Q12 PATMI of S$7.3m, versus a loss of S$7.0m a year ago. Revenue was up 17% YoY to S$129m. - Creative trimmed its 3Q12 loss from US$13m a year ago to US$1.5m. Revenue had decreased by 21% YoY to US$44.9m. - Paper manufacturer UPP Holdings plans to restructure and it may enter infrastructure-related businesses. The focus would be on emerging markets in SEA, especially Myanmar.

OCBC cuts Lian Beng's price target

Stock Name: Lian Beng
Company Name: LIAN BENG GROUP LTD

Research House: OCBC

Price Call: BUY

Target Price: 0.47

OCBC Investment Research lowered its price target on Singapore construction firm Lian Beng Group to $0.47 from $0.51 and cut this year’s earnings estimates, citing slow growth in its construction business.

Lian Beng’s shares were flat at $0.41, and have gained 19% since the start of the year. OCBC kept its buy rating.

The broker cut its revenue and net profit estimates on Lian Beng for the year ending June 2012 by 16 and 10% respectively.

“The street, including ourselves, had previously not expected Lian Beng’s execution of construction projects to slow,” OCBC said after the company’s results.

Lian Beng said its nine-month net profit rose 10% to $40.5 million from a year ago, helped by improving gross profit margins. Revenue fell 12% to $333.7 million, mainly due to lower construction work recognised.

OCBC said the company’s order book fell to $742 million from $772 million at the end of the second quarter.

 

MARKET PULSE: Starhub, MLT, World Precision, Swiber, Tiger Airways, Lian Beng & NOL (27 Mar 2012)

Stock Name: StarHub
Company Name: STARHUB LTD

Research House: OCBC

Price Call: HOLD

Target Price: 3.10

Stock Name: MapletreeLog
Company Name: MAPLETREE LOGISTICS TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.20

Stock Name: Swiber
Company Name: SWIBER HOLDINGS LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.61

Stock Name: TigerAir
Company Name: TIGER AIRWAYS HOLDINGS LIMITED

Research House: OCBC

Price Call: SELL

Target Price: 0.60

Stock Name: Lian Beng
Company Name: LIAN BENG GROUP LTD

Research House: OCBC

Price Call: BUY

Target Price: 0.51

Stock Name: NOL
Company Name: NEPTUNE ORIENT LINES LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 1.38

MARKET PULSE: Starhub, MLT, World Precision, Swiber, Tiger Airways, Lian Beng & NOL

27 Mar 2012

KEY IDEA StarHub: Announces Euro 2012 pricing StarHub has announced the pricing for the UEFA Euro 2012 football tournament which will start from 8 Jun to 2 Jul; all viewers (regardless of whether they are from StarHub or SingTel) will be able to purchase the Pay-Per-View pack, with an early bird discounted price of S$58.85 before 30 Apr, instead of S$69.55. The Euro 2012 event is also the first test of the new cross-carriage mandate of exclusive content. But with the steeper pricing, we believe that StarHub is likely to just break even at best. And following the recent run-up since its 4Q11 results announcement, there is limited upside from here to our unchanged S$3.10 fair value. Hence from a valuation ground, we downgrade it to HOLD. (Carey Wong) MORE REPORTS Mapletree Logistics Trust: Acquires two warehouses in South Korea Mapletree Logistics Trust (MLT) announced last Friday evening that it had entered into separate Sale and Purchase agreements to acquire two cold storage warehouses in South Korea for an aggregate purchase price of KRW63.5b (~S$71.3m). We note that both acquisitions are expected to be DPU-accretive, with initial NPI yields of 9.5-9.9%. Funding for the investments is expected to come from the proceeds raised from the recent issuance of its S$350m perpetual securities. In addition, MLT's aggregate leverage post all acquisitions announced to date is likely to reach ~39%. We now factor in the two acquisitions into our forecasts. This raises our FY13-14F revenue and distributable income by 2.4-3.9%. Our RNAV-based fair value, however, remains at S$1.20. Maintain BUYon MLT. (Kevin Tan) World Precision Machinery: Good growth prospects We visited World Precision Machinery's operations in Danyang City, Jiangsu Province last week. World Precision is China's third largest metal stamping machine player by market share. With Phase 1 of its factory in Shanyang scheduled for completion in 2H12, the company will continue the shift its product mix towards high-performance machines. The company will be beneficiary of China's 12th Five Year Plan (2012-2017), under which the high-end machinery and equipment industry is one of seven strategic industries identified. Management is optimistic about its long-term prospects. We DO NOT have a rating on World Precision Machinery. (Sarah Ong) Swiber Holdings: Consortium wins US$273m contract Swiber Holdings (Swiber) announced that it has secured a US$273m contract through a local collaboration with ACS subsidiary Dragados Offshore for offshore construction work in the Gulf of Mexico. The undisclosed customer is likely to be PEMEX, and work entails the procurement, transportation and installation of pipeline. However, as the project will be executed through a consortium group with Dragados and Swiber, we will obtain more details regarding Swiber's work scope and the group's portion of the entire US$273m contract. Meanwhile, work will commence immediately and will carry on into 2013. Swiber's stock may see a positive knee jerk reaction with this development, and pending more details from management, we put our Hold rating and fair value estimate of S$0.61 under review. (Low Pei Han)

Tiger Airways: Mandala returns to the skies Tiger Airways (TGR) this morning announced that its 33%-owned associated company PT Mandala Airlines (Mandala) of Indonesia will be starting sales of tickets today. For the start, Mandala will offer flights from Jakarta to Medan and Jakarta to Kuala Lumpur for all-in fares starting from IDR519,900 (~S$71) and IDR329,900 (~S$45), respectively. The restructured Mandala is also scheduled to make its maiden flight on 5 Apr 2012. While there is clear progress in Mandala's return to operations, we maintain our SELL rating and fair value estimate of S$0.60/share on TGR due to the less than encouraging recent operating statistics and persistently high jet fuel prices. (Eric Teo) Lian Beng Group: Purchasing vessels Lian Beng Group (LBG) last night announced it has 1) agreed to buy a flat top deck cargo barge for S$900k from Hathaway Marine Pte. Ltd.; 2) been awarded contracts to build two flat top deck cargo barges worth a total of $2.92m for a subsidiary of ASL Marine Holdings Ltd.; and 3) agreed to acquire three tug boats for a total consideration of S$2.94 million from Kemudi Santun Sdn Bhd. LBG said these vessel purchases are to meet its own logistics requirements for the transportation of raw materials, such as sand and granite, into Singapore. These transactions are not expected to have a material impact to the group's financial performance for the financial year ending 31 May 2012. We maintain our BUY rating and fair value estimate of LBG at S$0.51/share. (Eric Teo) Neptune Orient Lines: Issues perpetuals Neptune Orient Lines (NOL) this morning announced it has mandated DBS Bank as the global coordinator and DBS Bank, The Hongkong and Shanghai Banking Corporation, Oversea-Chinese Banking Corporation and Standard Chartered Bank as joint lead managers in the issuance of S$-denominated perpetual capital securities. Subject to market conditions, this proposed transaction is expected to be launched after investor meetings in Singapore commencing today. NOL said proceeds from this issuance will be used for general corporate funding purposes and investments. We will provide more updates after NOL's briefing on this issue later today. We currently have a HOLD rating and a fair value estimate of S$1.38/share on NOL. (Eric Teo) For more information on the above, visit www.ocbcresearch.comfor the detailed report.

NEWS HEADLINES - US stocks rose sharply after Fed Chairman Bernanke indicated that low interest rates are required to help support the labour market. The Dow Jones Industrial Average climbed 1.23% to close at 13,241.63. - CapitaMalls Asia has been included as constituent stock of the Hang Seng Global Composite Index and the Hang Seng Foreign Companies Composite Index. - Fragrance Group has announced that it has lodged a preliminary prospectus with the MAS regarding a proposed restructuring and listing of its hotel ownership and management business. - Progen Holdings announced that it has signed a non-confidentiality and non-disclosure agreement with a European-based leading manufacturer of innovative materials for heating and cooling systems. The companies will evaluate possibilities of cooperation. - Singapore Press Holdings is enlarging its stake in Blu Inc. (Holdings) Malaysia Sdn. Bhd. from 50% to 71.4%.

Lian Beng Group rated 'buy' by Maybank-Kim Eng

Stock Name: Lian Beng
Company Name: LIAN BENG GROUP LTD

Research House: Kim Eng

Price Call: BUY

Target Price: 0.71

Maybank-Kim Eng Research in a Mar 14 research report says: "We estimate that the spin-off and listing of Lian Beng's subsidiaries in Taiwan could propel its valuation from 62 cents to 71 cents.

"To recap, Lian Beng has proposed to spin off two subsidiaries and list them on the Taiwan Stock Exchange. We expect Lian Beng to raise about $29 million from the expected sale of 30% stake in the subsidiaries, based on a PER valuation of 11.5x and FY2012 forecast earnings of $9.3 million.

"Buy now and be rewarded by the imminent Taiwan listing of Lian Beng's subsidiaries and potential special dividends of up to 1.6 cents per share. This is in addition to the stock's attractive ex-net cash FY12 PER of 1.7x, and a dividend yield that is already nearly 5.0%. MAINTAIN BUY."

OIR BITES: Lian Beng Group and Tee International - Part of consortium to redevelop Seletar Garden

Stock Name: Lian Beng
Company Name: LIAN BENG GROUP LTD

Research House: OCBC

Price Call: BUY

Target Price: 0.51

Stock Name: Tee Intl
Company Name: TEE INTERNATIONAL LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.36

OIR BITES: LIAN BENG GROUP & TEE INTERNATIONAL 12 Mar 2012

PART OF CONSORTIUM TO REDEVELOP SELETAR GARDEN Both Lian Beng Group (LBG) and Tee International (TEE) separately announced they are part of the consortium, Oxley YCK Pte. Ltd., that acquired Seletar Garden for S$96.2m. The acquisition has been accepted by the vendors of Seletar Garden and Oxley YCK will redevelop it, pending the necessary approvals from the relevant authorities. The consortium is made up of Oxley Holdings, Unique Consortium and Goldprime Investment with a shareholding distribution of 55%, 35% and 10% respectively. Goldprime Investment is a wholly-owned subsidiary of LBG while Unique Consortium is a 20%-owned associated company of TEE. Both LBG and TEE have said this property redevelopment JV will not have a material impact on their respective financial performance for the financial year ending 31 May 2012. We maintain our BUY rating and fair value estimate of LBG at S$0.51/share, as well as our BUY rating and fair value estimate of TEE at S$0.36/share.

MARKET PULSE: SPH, Lian Beng and TEE International (12 Jan 2012)

Stock Name: SPH
Company Name: SINGAPORE PRESS HLDGS LTD

Research House: OCBC

Price Call: BUY

Target Price: 3.99

Stock Name: Lian Beng
Company Name: LIAN BENG GROUP LTD

Research House: OCBC

Price Call: BUY

Target Price: 0.51

Stock Name: Tee Intl
Company Name: TEE INTERNATIONAL LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.30

MARKET PULSE: SPH, Lian Beng and TEE International

12 Jan 2012

KEY IDEA Singapore Press Holdings: Retail landlord strategy coming along nicely Singapore Press Holdings (SPH) reported 1Q12 PATMI of S$97.5m or 6 S-cents per share, down 4.7% YoY. This was mainly due to a poorer performance from the Newspaper and Magazine segment, offset by added contributions from Clementi Mall. 1Q12 PATMI formed 26.3% of our FY12 forecast and is broadly in line with expectations. Clementi Mall contributed S$9m to revenues as it ramped up into full operations this quarter, its contributions buttressing earnings significantly. We like the visibility of recurring income from a suburban retail mall, and believe management's strategy of building a stable counterweight to the print business is coming along nicely. Upgrade to BUY at a fair value estimate of S$3.99 and expected dividends of S$0.24 in FY12. (Eli Lee) MORE REPORTS Lian Beng: Reasonably decent 1HFY12 showing Lian Beng reported a reasonably decent set of 1HFY12 numbers that were just slightly below our expectations. The group recorded YTD sales of S$237.7m, down 4.7% YoY, but 1HFY12 profits of S$30.5m showed a 33% improvement. The sales decline is attributed to lower recognition of construction contract revenue while the net profit jump was contributed by gains from the sale of its property at New Industrial Road. Without which, we estimate that net profit would have been largely flat. Construction remains an important revenue driver (73% of total revenue) and given that Lian Beng still holds a sizeable net order book of S$772m, we expect its earnings to improve when it picks up pace on the execution of its newly awarded contracts. We maintain our BUY rating and fair value estimate of S$0.51. (Benjamin Lim) TEE: Higher overseas contribution, better margins TEE saw 34% and 19.4% YoY decline in revenue and net profits respectively due to lower revenue recognition from local projects. Going forward, we expect the group to pick up pace on several overseas projects, which typically provide better margins. Management believes that FY13 will be a more representative year of its operations. Factoring in slower execution, but stronger margins from overseas projects, we update our assumptions and lower our fair value estimate to S$0.30 (previously S$0.34). With an expected dividend yield of around 5%, total anticipated return on the stock is ~33%; therefore we maintain our BUY rating. (Benjamin Lim)

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

NEWS HEADLINES - US manufacturing and mining helped led the largest annual employment increases in five years in 2011. Employers added a total of 1.64m workers in 2011, the best since 2006, after a 940k increase in 2010. - Cooper futures rose to a four-week high with the anticipation that China's will pursue monetary easing and thus drive metal demand. Zinc, tin and lead prices also rose, while nickel dropped. - CapitaLand's wholly-owned serviced residence business unit, The Ascott Limited, has secured a new management contract for its first Citadines Apart'hotel in Surabaya, Indonesia. The 288-unit property is scheduled to open in 2014. - China Fishery drops plan for HK dual listing due to persisting poor market conditions. The proposed flotation was first announced in December 2010 and was delayed multiple times before. - SPH's flagship paper, The Straits Times (ST), will launch an Android application next Monday to garner subscriptions through all-in-one packages that will also comprise the daily ST newspaper.

Lian Beng Group rated 'buy' by DMG

Stock Name: Lian Beng
Company Name: LIAN BENG GROUP LTD

Research House: DMG

Price Call: BUY

Target Price: 0.71

DMG & Partners Securities in a Jan 11 research report says: "Lian Beng Group's (LBG) 2QFY12 earnings were in-line with our estimates, coming in at $11 million, easing 5.2% y-o-y on the back of lower construction work recognised.

"LBG is set to ride on Singapore's current building boom and its ventures in private residential and industrial developments will help boost its bottom line. LBG's net cash per share of 15.6 cents (1QFY12: 14.2 cents) would be invested into its property business.

"On the back of strong order books of $772 million (1QFY12: $761 million), we estimate LBG's FY2012 earnings to come in at $53.5 million, which suggests a prospective P/E of 3.5x (peers at 6.3x blended FY11 and FY12 P/E). Target price of 71 cents, based on a target P/E of 7x FY12 earnings. MAINTAIN BUY."

Lian Beng Group rated 'buy' by OCBC

Stock Name: Lian Beng
Company Name: LIAN BENG GROUP LTD

Research House: OCBC

Price Call: BUY

Target Price: 0.51

OCBC Investment Research in a Dec 2 research report says: "Lian Beng (LBG) announced earlier this week that it has won two new construction contracts, worth a total of almost $98 million.

"The bigger $84.5 million contract relates to construction work for Mandai Estate, for which LBG holds a 55% stake in. The smaller, but not less significant, $13.2 million contract was awarded by HDB. With the latest contracts win, LBG's net order book goes above S$850m.

"We continue to like LBG for its strong order book, track record in both public and private residential projects and undemanding valuations. We find that despite applying a discount rate to capture the likely economic slowdown ahead, LBG still appears attractively priced.

"The updated fair value estimate of 51 cents (previously 55 cents, lower due to change of valuation method) still shows potential upside of about 46%. MAINTAIN BUY."

Market Pulse: Commodity Sector & Lian Beng (24 Nov 2011)

Stock Name: Lian Beng
Company Name: LIAN BENG GROUP LTD

Research House: OCBC

Price Call: BUY

Target Price: 0.55

Market Pulse: Commodity Sector & Lian Beng (24 Nov 2011)

FOCUS

Commodities Sector: Outlook remains mixed at best

Summary: Looking back at the Sep quarter results, soft commodity plays under our coverage generally did better, with most coming close to our expectations. Meanwhile, the biggest surprise came from Noble, which reported a net loss of US$17.5m - its first in 14 years. In any case, even for those companies that performed within expectations, we note that there were increased signs of margin pressures, despite healthy volume growths. Renewed weakness in the US economy and uncertainties over the EU sovereign debt issues have exacerbated the risk of the economy slipping into a "down cycle". Even though we maintain a NEUTRAL weight on the sector, we attach a downside bias to our rating, as we could see a faster-than-expected deterioration in the global economies, especially in China. Our pick in the sector is Golden Agri. (Carey Wong)

Lian Beng: Another new addition for development.

Summary: Lian Beng recently announced that it has acquired the site of Dragon Mansion at Spottiswoode Park Road for S$130m. Together with its recent Midlink Plaza acquisition, the group has deployed around S$260m in recent months to acquire land resources. Given these sites' good locations and the potential opportunity for LBG's construction arm to win the related construction contracts, we believe these additional development resources are positive for the group. We factor in the financial impacts of these new sites and its strong sales so far for Mandai Industrial development and this raises our earnings estimates for FY12/FY13 by around 8% and 17% respectively. This in turn raises our fair value estimate to S$0.55, implying potential upside of 60%, therefore, maintain BUY. (Benjamin Lim)

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

NEWS HEADLINES

- The European crisis worsened further after a German government bond auction flopped with only EUR 3.64b out of EUR 6b worth of 10-year bunds taken up by investors.

- European banks clamoured for emergency funds from the ECB on Tuesday, borrowing the most since early 2009 in a clear sign that the eurozone's financial institutions are having trouble obtaining credit at reasonable rates in the open market.

- Singapore's inflation remains stubbornly high at 5.4% in October, on the back of higher rentals, transport and food costs.

- On the first day of the property's launch, Capitaland sold more than 350 apartments in its 583-unit Bedok Residences condominium with an average selling price of S$1,350 psft.

- Newly listed property and construction group TA Corporation has secured two new construction contracts from Allgreen Properties and its subsidiary worth S$271m.

- Hisaka Holdings' net profit for the fiscal year ended Sep 30, 2011 dropped 30.5% YoY to S$6.4m, mainly due to the slowdown in global manufacturing. It has also proposed a final dividend of half a cent per share.

Lian Beng Group rated 'buy' by Kim Eng

Stock Name: Lian Beng
Company Name: LIAN BENG GROUP LTD

Research House: Kim Eng

Price Call: BUY

Target Price: 0.62

Kim Eng Research in a Nov 22 research report says: "Lian Beng's 50:50 joint venture with Centurion Properties bought the 68-unit, freehold Dragon Mansion at Spottiswoode Park for $130 million last week.

"The redevelopment can yield 118,943 sq ft of GFA, implying a sale price of $1,093 psf ppr and an estimated breakeven of $1,580 psf. With the addition of Dragon Mansion, Lian Beng has an attributable unsold landbank of 84,574 sq ft.

"We expect the group's earnings to continue to be largely (over 60%) driven by construction, backed by a strong orderbook of $761 million excluding the expected contracts from Mandai Estate ($66 million including the construction of worker's dormitory), Midlink Plaza ($45 million) and Dragon Mansion ($42 million). Target price of 62 cents, pegged at 6x FY May12F PER. MAINTAIN BUY."

Market Pulse: Bumi Armada & Lian Beng (11 Oct 2011)

Stock Name: Lian Beng
Company Name: LIAN BENG GROUP LTD

Research House: OCBC

Price Call: BUY

Target Price: 0.51

Market Pulse: Bumi Armada & Lian Beng (11 Oct 2011)

FOCUS

Bumi Armada Berhad: Good geographical spread and strong orderbook

Summary: Bumi Armada Berhard is a leading offshore oil & gas service provider based in Malaysia. It owns and operates one of the largest fleets of OSV in South East Asia. Its FPSO fleet is also growing rapidly; and the group hopes to undertake 2 FPSO projects annually. We believe the FPSO business will provide the next stage of growth. The long-term outlook for the FPSO market is positive as production increasingly moves into more remote locations and deeper waters. Taking into account the group's strong growth momentum, we value its shares at 18x FY12s EPS giving a fair value estimate of M$3.36. As the stock looks fairly valued at current price level, we initiate coverage with HOLD. (Chia Jiun-Yang)

Lian Beng: Promising start to FY12

Summary: Lian Beng's 1QFY12 results showed impressive top-line improvement due to steady contribution from its core construction business, as well as concrete and property development segments. Revenue grew 21% YoY; unadjusted net profit increased 76%. The sharp earnings increase is attributable to gains from sale of a property. Net of this non-recurring item, the net profit was up 6%. We continue to like Lian Beng for its excellent track record, strong order book and undemanding valuations. We maintain our BUY rating, with a fair value estimate of S$0.51, based on 5x FY12 core EPS, for a potential upside of 53%. (Benjamin Lim)

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

NEWS HEADLINES

- New research has found that U.S. household income declined more in the two years after the recession ended than it did during the recession itself.

- Singapore President Tony Tan said that the nation can still grow 3 - 5% despite tougher conditions.

- The Securities Industry Council is reviewing the Singapore Code on Takeovers and Mergers to improve disclosure and to protect minority shareholder interest should the takeover fail.

- Sky China Petroleum yesterday said that Ernst & Young has quit as its auditors with immediate effect.

- Ezra Holdings and its 46.5%-owned associate is expected to get a boost from a FPSO vessel charter, with Vietnam's Chim Sao offshore oil project hitting first oil yesterday.

- A unit of Ryobi Kiso Holdings and its joint-venture partner have secured a 51.2b dong (S$3.2m) piling contract to provide foundation works for a luxury apartment project in Vietnam.

- Food Junction Holdings warned that it expects a loss for the Jul-Sep quarter, attributed mainly to the closing of its Malones Cafe and Restaurant operation in Suzhou, China.

- According to Jones Lang Lasalle, redevelopment of CK Tang's department store and the Marriott Hotel into a hotel-cum-commercial building would yield a market value of S$350m, which is S$10m less than the store's current net book value.

Market Pulse: Lian Beng, Midas, Keppel, Biosensors and PEC Ltd (04 Oct 2011)

Stock Name: Lian Beng
Company Name: LIAN BENG GROUP LTD

Research House: OCBC

Price Call: BUY

Target Price: 0.52

Stock Name: MIDAS
Company Name: MIDAS HLDGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.435

Stock Name: Kep Corp
Company Name: KEPPEL CORPORATION LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 12.12

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

Research House: OCBC

Price Call: BUY

Target Price: 1.68

Stock Name: PEC
Company Name: PEC LTD.

Research House: OCBC

Price Call: BUY

Target Price: 1.12

Market Pulse: Lian Beng, Midas, Keppel, Biosensors and PEC Ltd (04 Oct 2011)

FOCUS

Lian Beng: Initiate with BUY - Strong order book with room for more

Summary: We initiate coverage on Lian Beng Group with a BUY rating - TP of S$0.52 (derived from applying 5x P/E on its FY12F earnings) implies c.54% upside from here. Lian Beng's current order book is one of its strongest in history and yet it is trading at a steep discount to peers. We like Lian Beng for 1) their track record in both private residential and public housing construction projects; 2) its strong order book giving management room to focus on improving margins; and 3) its undemanding valuations. (Research Team)

Midas Holdings: Double whammy; but still a BUY

Summary: The outlook for Midas Holdings (Midas) has grown increasingly murky in recent times, due to accidents involving both high-speed and metro trains in China in Jul and Sep this year respectively. Media reports have also surfaced that China has postponed construction of 80% of its railway projects, which seems substantial, in our view. Any delay in contract tenders would affect the earnings visibility of upstream railway parts suppliers such as Midas. Despite the current overhang on China's rail transport sector, we opine that the long-term prospects are still positive, driven by the fundamental need to fulfil China's rising transportation needs and continued economic development. We are keeping our estimates for now until there is greater clarity on the Chinese government's railway policies. Nevertheless, given the macroeconomic uncertainties and significant de-rating of China's railway sector related stocks, we see the need to lower our valuation peg on Midas to 8x blended FY11/FY12F EPS (previously 16x), in-line with the average forward PER of its railway parts manufacturing peers. Consequently, our fair value estimate is reduced from S$0.805 to S$0.435. Notwithstanding this, we are maintaining our BUY rating on valuation grounds. (Wong Teck Ching Andy)

Keppel Corporation: US$199m contract for rig refurbishment and upgrade

Summary: Keppel Corporation (KEP) announced that it has secured a contract for its high-spec KFELS B Class rig from Safin Gulf FZCO (Safin) worth US$199m. Delivery time is shorter with completion scheduled for 3Q12 as the rig will be a refurbishment and upgrade of a KFELS B Class jack-up rig that Keppel FELS purchased earlier this year. The earlier delivery is valued by Safin as the tight jack-up market has resulted in dwindling yard slots for the local rig builders. We believe this is the reason why KEP could command such a high price for the refurbishment and upgrade work since a typical newbuild of similar design is also about the same price - Gulf Drilling had ordered a KFELS B Class Bigfoot jackup worth US$197m in May 2011 while Japan Drilling had ordered a KFELS Super B Class jackup for US$210m in Mar 2011. KEP has secured S$7.8b worth of contracts YTD, accounting for 92% of our full estimate. Maintain BUY with fair value estimate of S$12.12 on KEP. (Low Pei Han)

Biosensors International Group: Completes acquisition of remaining 50% stake in JWMS

Summary: Biosensors International Group (BIG) announced that it has completed its acquisition of the remaining 50% stake in JW Medical Systems (JWMS) from Shandong Weigao Group Medical Polymer (Shandong Weigao). As a result, Shandong Weigao has received (i) a cash payment of S$160m; (ii) 260m new ordinary shares, making it a key shareholder of BIG; and (iii) US$120m principal amount of 4% convertible notes due 2014. We believe that BIG would now be able to concentrate on increasing its penetration into the Chinese DES market given JWMS's strong positioning there. The group would also be able to leverage on Shandong Weigao's experience in China. We had already incorporated this acquisition in our assumptions and consolidated JWMS's numbers in our estimates from 3QFY12 onwards. As such we retain our forecasts and fair value estimate of S$1.68. Given an attractive upside potential of 45.4% from current price level, we reiterate our BUY rating on the stock. (Wong Teck Ching Andy)

PEC Ltd: Contract wins of S$45m

Summary: PEC yesterday announced recent contract wins worth S$45m, including one with JGC Corporation to provide steel structure, piping and electrical & instrumentation works for a refinery in Singapore for an oil major, bringing its current order-book past the S$300m mark. We believe the market impact will be neutral. Recall PEC's order-book was already at S$300m as of end-June. Thus, we believe part of the S$45m contract wins would be used to replenish order-book that were used up during the quarter ended Sep. Maintain BUY with fair value estimate of S$1.12. (Chia Jiunyang)


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

NEWS HEADLINES

- US manufacturing data unexpectedly accelerated in Sep - the Institute for Supply Management (ISM) factory index climbed to 51.6 from 50.6 in Aug.

- Prices of HDB resale flats and mass-market private condominiums climbed in 3Q11. URA's flash estimates show that overall private home price index rose 1.3% QoQ, albeit slower than the 2% increase in 2Q.

- Reflecting the buoyant industrial property market last year, JTC posted a total surplus of S$918m for the FY ended 31 Mar, +39%.

- Avic International Investments - which recently acquired the Singapore listing status of Sino-Environment following a scheme of arrangement announced yesterday that building of two vessels on its order books will be suspended.

- Ascendas REIT has bought Ascendas Z-Link, a business park property in Zhongguancun Software Park. It is their maiden purchase in Beijing.

- SATS clarified news reports and stressed that ongoing discussion for sale of UK unit is not complete yet - discussions are at a stage where there is no certainty that a definitive agreement may be arrived at.

- Stamford Land has signed a memorandum of understanding for the sale of three hotel properties in Australia for an indicative consideration of A$316m.

Lian Beng Group rated 'buy' by DMG

Stock Name: Lian Beng
Company Name: LIAN BENG GROUP LTD

Research House: DMG

Price Call: BUY

Target Price: 0.71

DMG & Partners Securities in a Sept 20 research report says: "Lian Beng Group (LBG) announced that it would be listing two of its subsidiaries on the Taiwan Stock Exchange. If shareholders' approval is obtained during the EGM, we estimate the listing to take place six to nine months from now.

"With $149.9 million cash on hand (excluding the potential IPO proceeds), LBG is well positioned to accumulate land bank for property development. On the back of strong order books of $839 million (as at May 11) and a good track record of project wins, we estimate LBG's FY2012 earnings to come in at $53.5 million, which suggests a prospective P/E of 3.4x.

"Trading at a mere 3.4x prospective P/E, we believe it has the capacity to trade up to the sector average of 7x for a target price of 71 cents. MAINTAIN BUY."

Lian Beng Group rated 'buy' by DMG

Stock Name: Lian Beng
Company Name: LIAN BENG GROUP LTD

Research House: DMG

Price Call: BUY

Target Price: 0.715

DMG & Partners Research in an Aug 1 research report says: "Lian Beng Group's (LBG) 4QFY11 earnings were in-line with our estimates, coming in at $11.6 million, up 73.8% y-o-y, on the back of strong construction demand. FY2011 was a record year, with earnings hitting $48.2 million, well within our expectations of $47.6 million.

"LBG is set to ride on Singapore's current building boom, from both public and private projects and its ventures in private residential and industrial developments will help boost its bottom line. Despite the 8.3% run up in price over the last two weeks, it still trades at 3.8x prospective P/E - cheaper than its peers.

"LBG has declared a total of 1.6 cents per share as dividends. This translates to a decent dividend yield of 4.1%. A higher target price of 71.5 cents (83.3% upside), based on a target P/E of 7x FY12 earnings. MAINTAIN BUY."

Lian Beng Group rated 'buy' by DMG

Stock Name: Lian Beng
Company Name: LIAN BENG GROUP LTD
Research House: DMG

DMG & Partners Securities in an Apr 18 research report says: "Lian Beng Group's (LBG) 3QFY11 earnings were in-line with our estimates after stripping away one-off gains. We raise our FY2011 and FY2012 earnings by 7.5% and 12.4% respectively, on the back of higher other income and gain from sale of investment property.

"LBG is set to ride on Singapore's current building boom, from both public and private projects and its ventures in private residential and industrial developments will help boost its bottom line. With its robust order book, strong financial position and strong earnings growth, we think LBG is able to double its dividend payout to 1.6 cents, which works out to a decent yield of 4.4%.

"Despite the 14% run up in price since our initiation last week, it still trades at 4x prospective P/E - way cheaper than its peers. Target price of 67 cents (86% upside), based on a target P/E of 7x FY11/12 blended earnings. MAINTAIN BUY."